The Boomers' Pontius Pilate moment

How symbolic that legislators all skip DC early for the weekend as the sequestration mechanism kicks in.

A new low point for the worst generation of political leadership that America has seen in well over a century.

And yet, it's the leadership we deserve.  The larger public's unwillingness to deal with fiscal issues is the underlying core of stalemate.  A close-but-evenly divided electorate gets us a do-nothing Congress.

The upside for me?  The soured gov and biz climate in US makes US companies that much more eager for brokered business opportunities abroad.  Takes a bit of the usual arrogance off the top.

Wikistrat post @ CNN-GPS: What should the government cut?

Editor’s Note: The following piece, exclusive to GPS, comes from Wikistrat, the world's first massively multiplayer online consultancy.  It leverages a global network of subject-matter experts via a crowd-sourcing methodology to provide unique insights.

America is in the midst of yet another long-term government deficit problem that we once thought we had licked in the go-go Nineties.  Remember when we were going to retire the federal debt?

Just like back then, political candidates now regularly foam at the mouth about which “redundant” federal agencies they’d whack the minute they set foot inside the Beltway. This begs the question: What activities are inherently federal?

According to the Preamble of the U.S. Constitution, the legitimate candidates should cover one of the following goals:

• Form a more perfect union
• Establish justice
• Ensure domestic tranquility
• Provide for the common defense
• Promote the general welfare, and
• Secure the blessings of liberty to ourselves and our posterity...

Hmmm.  Not as clear as one might hope for.

Like most people, we spot a lot of wiggle room in that list, so this week’s Wikistrat exercise involves asking our global community of experts what should be kept and what should be ditched in the coming federal budget wars. The following is our list of lists!

Read the entire post at CNN's GPS blog.

How to lose the globalization game

Disturbing piece by John Bussey in the WSJ, noting how, as Congress dithers on free trade pacts regarding Colombia, Panama and South Korea, our competitors are moving ahead with their own and on that basis expanding their export presence while US firms cannot due to the higher tariffs suffered.  The US soybean industry (a big deal here in Indiana) alone thinks it's losing $3B in ag exports.  Boeing says it's losing out to Airbus in South Korea. The list goes on and on.

Our problem is that we try to legislate all sorts of additional regulations into the FTAs, attempting to force this or that "fairness" on the counterparty in terms of how they treat their environment, labor, etc.  We use the excuse of the FTA to attempt all manner of socio-economic engineering and, in doing so, make the deal so complex that it lingers in legislative limbo sometimes for years on end.

It is a fascinating method of shooting our economy in the foot and then wondering why we lose the race, especially since, if you want real socio-economic progress in any country, the fastest way to achieve it is to foster income growth and let the locals manage it on their own timetable and agenda.

But that would be too easy, make too much sense, and preserve too many American jobs.

Time's Battleland: If US wants to steer global rules on drones, it needs to dominate global sales

Financial Times story last week (US urged to rethink export controls on drones) re: Paris Air Show cites multiple US defense corporate sources complaining that unless the US Government lifts some of the restrictions, the world's "insatiable appetite" for drones will be exploited by other nations' military-industrial complexes . . . 

Read the entire post at Time's Battleland.

Chart of the day (1): Federal budget as % GDP

From WSJ op-ed by George Shultz and others.

It is said that a truly socialist European country has a government outlay above 40% of GDP--a fate projected here for the 2040s.

The thing is, you know a lot of that is demographic aging, which will likely take off dramatically in coming decades thanks to new technologies.

So redefine old age and Social Security?  We would seem to have no choice.

A problem of success, no doubt, but a challenge of transformational scope nonetheless.

The challenge of bounding federal cybersecruity

WAPO piece on the search for federal cybersecurity by way of reader David Emery.  

A wonderfully summarizing segment:

Indeed, one sign of the private sector's engagement is an increase in the number of leading technology firms that, spurred by government contracting rules, have adopted a common lexicon to describe computer configurations and vulnerabilities. The increasing adoption of these protocols by firms such as Symantec, McAfee and Microsoft is making more feasible the automated monitoring of networks to detect and patch vulnerabilities more rapidly, officials say.

The Department of Homeland Security - which is responsible for protecting civilian government systems and helping to secure commercial networks - would like to see such "continuous monitoring" applied across the entire federal government and beyond, said Phil Reitinger, deputy undersecretary of the National Protection and Programs Directorate.

"We certainly want to build out a fundamentally more secure ecosystem that can be adopted by the private sector as well," he said.

Despite such advances, experts say that DHS remains beset by bureaucratic challenges, a lack of authority to demand results from civilian agencies, and a plethora of other priorities - including combating domestic terrorism, securing the borders and enforcing immigration laws.

DHS has struggled to implement Einstein 3, a program that is supposed to detect and block malicious software before it enters government networks.

More than a year after the department said it was moving forward, the program remains in pilot mode, in part because DHS has been unsure whether to use technology from private industry or from the ultra-secret National Security Agency. The agency has powerful electronic surveillance capabilities, but its involvement might raise privacy concerns.

You have everything here in microcosm:  the positive role of creating a common pubic/private-sector language, a great role for the government to play; the difficult choice of militarizing (intelligencizing?) the technology to go for more security or keeping it commercial to better manage boundary conditions with the private-sector-dominated critical infrastructure?; the privacy fears; the unclear rules; etc.

Nice piece.

Charts of the Day: a nation on entitlements

WSJ story on "obstacles to deficit cutting."

Tempting to look at administrations and spot oddities (Ike and Nixon and GW Bush--all up! but JFK and LBJ barely rise!), but you know it can't be all that simple (time lags for new policies to take effect, other more important factors like demographic changes).  

Still, an undeniable trend.  Automatically bad?  I always like to point out that states that send more tax dollars to DC and receive less tend to shade Blue while states that eat more tax dollars than they provide tend to tint Red, so I'm always reticent to assume political identification--and thus corresponding judgment--on this basis.

I suspect that, in order of magnitude, it's the aging factor first, then the healthcare burden and then breakdown of the family.  

So are we as "socialist" as we imagine ourselves to be?

Check out this second chart:

Oh well, I suppose we can always try harder.

As the "virus" of socialism goes, it appears we have the swine flu variety:  spread widely but thinly.

The "technocracy boom" reflects a more complex era

NYT’s David Brooks on what he’s calling the “technocracy boom,” or the double-whammy intrusion of government in national security beyond the normal boundaries (the whole Priest-Arkin series in WAPO) since 9/11 (blame it on Bush-Cheney) and in the economy since the financial crisis began (blame it on Obama-Biden). In sum, just a ginormous growth in government activity that assumes all this expertise is usefully applied and not a similarly huge waste of resources.

Yes, it’s unfair for Obama to take the bulk of the heat for the twin developments, but politics is all about timing and timing is often a matter of luck—good and bad.

Still, hard to argue against our government getting smarter in this increasingly complicated age.

Cash squeeze means more privatization in local US gov

Despite all the public resistance to foreign investment in public infrastructure here, this WSJ story reports that cities are moving into privatization of services in a big way, to include everything from janitors to cops:

After years of whittling staff and cutting back on services, towns and cities are not outsourcing some of the most basic functions of local government, from policy to trash collection.

Despite the usual concerns voiced, cities say they have little choice.

Expect California, with its $19B deficit, to lead the way in terms of local experimentation.