So Nice (Summer Samba)

Get ready for a January weekend of warm weather nostalgia with Bebel Gilberto

  

  

When Google cars get hungry

Sorry for these video clips in a row, but this prank amused me. I'm just a little lazy this week I guess. Enjoy.
   

The space toilet

Just in case you ever wondered -- and who hasn't? -- here's a short talk that explains the mechanics of space toilets.
    

Hidden boundaries

Hidden boundaries by Raymond A. Foss

Soon the walls will be buried
the old stone walls
under the lichen, the leaves, the needles
buried under the snow

Now merely obscured
their straight edges muted
the boundaries merely hidden
under the weight of autumn

The leaves of this season added
to the litter on the ground
the nesting places for many
keeping warm under the layers

The straight lines marking
boundaries no longer with meaning
in another season
when others worked this land
  

Don't anger me

Another fight scene to get you over the hump in hump day. I'm not exactly sure how they end up on the bridge, or when the rope got tied around the bad guys' waists, but it is all a fortuitous turn of events for our hero.
  

Stratfor and Harriette Nelson

In this Stratfor article George Friedman discusses the declining fortunes of the American middle class and wonders what effect the continuation of that trend would have on American power.

It is an interesting read, rarely does Friedman come across so pessimistic.

For the Hot Stratfor Babe, since the article discusses the middle class of yore, I turned to American television's portrayal of the nuclear family and middle class during the 1950s.

After careful consideration, and a wealth of candidates to choose from, I finally selected Harriette Nelson from the Ozzie and Harriette Show.

I doubt the show is even remotely familiar to our younger readers, but it was a hoot in an odd sort of a way. One of the great mysteries of it was what Ozzie, the wise father, did for a living. He sure never appeared to have had a job or done a lick of work in his life.


The Crisis of the Middle Class and American Power
By George Friedman, Founder and Chief Executive Officer, January 8, 2013

Last week I wrote about the crisis of unemployment in Europe. I received a great deal of feedback, with Europeans agreeing that this is the core problem and Americans arguing that the United States has the same problem, asserting that U.S. unemployment is twice as high as the government's official unemployment rate. My counterargument is that unemployment in the United States is not a problem in the same sense that it is in Europe because it does not pose a geopolitical threat. The United States does not face political disintegration from unemployment, whatever the number is. Europe might.

At the same time, I would agree that the United States faces a potentially significant but longer-term geopolitical problem deriving from economic trends. The threat to the United States is the persistent decline in the middle class' standard of living, a problem that is reshaping the social order that has been in place since World War II and that, if it continues, poses a threat to American power.

The Crisis of the American Middle Class

The median household income of Americans in 2011 was $49,103. Adjusted for inflation, the median income is just below what it was in 1989 and is $4,000 less than it was in 2000. Take-home income is a bit less than $40,000 when Social Security and state and federal taxes are included. That means a monthly income, per household, of about $3,300. It is urgent to bear in mind that half of all American households earn less than this. It is also vital to consider not the difference between 1990 and 2011, but the difference between the 1950s and 1960s and the 21st century. This is where the difference in the meaning of middle class becomes most apparent.

In the 1950s and 1960s, the median income allowed you to live with a single earner -- normally the husband, with the wife typically working as homemaker -- and roughly three children. It permitted the purchase of modest tract housing, one late model car and an older one. It allowed a driving vacation somewhere and, with care, some savings as well. I know this because my family was lower-middle class, and this is how we lived, and I know many others in my generation who had the same background. It was not an easy life and many luxuries were denied us, but it wasn't a bad life at all.

Someone earning the median income today might just pull this off, but it wouldn't be easy. Assuming that he did not have college loans to pay off but did have two car loans to pay totaling $700 a month, and that he could buy food, clothing and cover his utilities for $1,200 a month, he would have $1,400 a month for mortgage, real estate taxes and insurance, plus some funds for fixing the air conditioner and dishwasher. At a 5 percent mortgage rate, that would allow him to buy a house in the $200,000 range. He would get a refund back on his taxes from deductions but that would go to pay credit card bills he had from Christmas presents and emergencies. It could be done, but not easily and with great difficulty in major metropolitan areas. And if his employer didn't cover health insurance, that $4,000-5,000 for three or four people would severely limit his expenses. And of course, he would have to have $20,000-40,000 for a down payment and closing costs on his home. There would be little else left over for a week at the seashore with the kids.

And this is for the median. Those below him -- half of all households -- would be shut out of what is considered middle-class life, with the house, the car and the other associated amenities. Those amenities shift upward on the scale for people with at least $70,000 in income. The basics might be available at the median level, given favorable individual circumstance, but below that life becomes surprisingly meager, even in the range of the middle class and certainly what used to be called the lower-middle class.

The Expectation of Upward Mobility

I should pause and mention that this was one of the fundamental causes of the 2007-2008 subprime lending crisis. People below the median took out loans with deferred interest with the expectation that their incomes would continue the rise that was traditional since World War II. The caricature of the borrower as irresponsible misses the point. The expectation of rising real incomes was built into the American culture, and many assumed based on that that the rise would resume in five years. When it didn't they were trapped, but given history, they were not making an irresponsible assumption.

American history was always filled with the assumption that upward mobility was possible. The Midwest and West opened land that could be exploited, and the massive industrialization in the late 19th and early 20th centuries opened opportunities. There was a systemic expectation of upward mobility built into American culture and reality.

The Great Depression was a shock to the system, and it wasn't solved by the New Deal, nor even by World War II alone. The next drive for upward mobility came from post-war programs for veterans, of whom there were more than 10 million. These programs were instrumental in creating post-industrial America, by creating a class of suburban professionals. There were three programs that were critical:

1 - The GI Bill, which allowed veterans to go to college after the war, becoming professionals frequently several notches above their parents.

2 - The part of the GI Bill that provided federally guaranteed mortgages to veterans, allowing low and no down payment mortgages and low interest rates to graduates of publicly funded universities.

3 - The federally funded Interstate Highway System, which made access to land close to but outside of cities easier, enabling both the dispersal of populations on inexpensive land (which made single-family houses possible) and, later, the dispersal of business to the suburbs.

There were undoubtedly many other things that contributed to this, but these three not only reshaped America but also created a new dimension to the upward mobility that was built into American life from the beginning. Moreover, these programs were all directed toward veterans, to whom it was acknowledged a debt was due, or were created for military reasons (the Interstate Highway System was funded to enable the rapid movement of troops from coast to coast, which during World War II was found to be impossible). As a result, there was consensus around the moral propriety of the programs.

The subprime fiasco was rooted in the failure to understand that the foundations of middle class life were not under temporary pressure but something more fundamental. Where a single earner could support a middle class family in the generation after World War II, it now took at least two earners. That meant that the rise of the double-income family corresponded with the decline of the middle class. The lower you go on the income scale, the more likely you are to be a single mother. That shift away from social pressure for two parent homes was certainly part of the problem.

Re-engineering the Corporation

But there was, I think, the crisis of the modern corporation. Corporations provided long-term employment to the middle class. It was not unusual to spend your entire life working for one. Working for a corporation, you received yearly pay increases, either as a union or non-union worker. The middle class had both job security and rising income, along with retirement and other benefits. Over the course of time, the culture of the corporation diverged from the realities, as corporate productivity lagged behind costs and the corporations became more and more dysfunctional and ultimately unsupportable. In addition, the corporations ceased focusing on doing one thing well and instead became conglomerates, with a management frequently unable to keep up with the complexity of multiple lines of business.

For these and many other reasons, the corporation became increasingly inefficient, and in the terms of the 1980s, they had to be re-engineered -- which meant taken apart, pared down, refined and refocused. And the re-engineering of the corporation, designed to make them agile, meant that there was a permanent revolution in business. Everything was being reinvented. Huge amounts of money, managed by people whose specialty was re-engineering companies, were deployed. The choice was between total failure and radical change. From the point of view of the individual worker, this frequently meant the same thing: unemployment. From the view of the economy, it meant the creation of value whether through breaking up companies, closing some of them or sending jobs overseas. It was designed to increase the total efficiency, and it worked for the most part.

This is where the disjuncture occurred. From the point of view of the investor, they had saved the corporation from total meltdown by redesigning it. From the point of view of the workers, some retained the jobs that they would have lost, while others lost the jobs they would have lost anyway. But the important thing is not the subjective bitterness of those who lost their jobs, but something more complex.

As the permanent corporate jobs declined, more people were starting over. Some of them were starting over every few years as the agile corporation grew more efficient and needed fewer employees. That meant that if they got new jobs it would not be at the munificent corporate pay rate but at near entry-level rates in the small companies that were now the growth engine. As these companies failed, were bought or shifted direction, they would lose their jobs and start over again. Wages didn't rise for them and for long periods they might be unemployed, never to get a job again in their now obsolete fields, and certainly not working at a company for the next 20 years.

The restructuring of inefficient companies did create substantial value, but that value did not flow to the now laid-off workers. Some might flow to the remaining workers, but much of it went to the engineers who restructured the companies and the investors they represented. Statistics reveal that, since 1947 (when the data was first compiled), corporate profits as a percentage of gross domestic product are now at their highest level, while wages as a percentage of GDP are now at their lowest level. It was not a question of making the economy more efficient -- it did do that -- it was a question of where the value accumulated. The upper segment of the wage curve and the investors continued to make money. The middle class divided into a segment that entered the upper-middle class, while another faction sank into the lower-middle class.

American society on the whole was never egalitarian. It always accepted that there would be substantial differences in wages and wealth. Indeed, progress was in some ways driven by a desire to emulate the wealthy. There was also the expectation that while others received far more, the entire wealth structure would rise in tandem. It was also understood that, because of skill or luck, others would lose.

What we are facing now is a structural shift, in which the middle class' center, not because of laziness or stupidity, is shifting downward in terms of standard of living. It is a structural shift that is rooted in social change (the breakdown of the conventional family) and economic change (the decline of traditional corporations and the creation of corporate agility that places individual workers at a massive disadvantage).

The inherent crisis rests in an increasingly efficient economy and a population that can't consume what is produced because it can't afford the products. This has happened numerous times in history, but the United States, excepting the Great Depression, was the counterexample.

Obviously, this is a massive political debate, save that political debates identify problems without clarifying them. In political debates, someone must be blamed. In reality, these processes are beyond even the government's ability to control. On one hand, the traditional corporation was beneficial to the workers until it collapsed under the burden of its costs. On the other hand, the efficiencies created threaten to undermine consumption by weakening the effective demand among half of society.

The Long-Term Threat

The greatest danger is one that will not be faced for decades but that is lurking out there. The United States was built on the assumption that a rising tide lifts all ships. That has not been the case for the past generation, and there is no indication that this socio-economic reality will change any time soon. That means that a core assumption is at risk. The problem is that social stability has been built around this assumption -- not on the assumption that everyone is owed a living, but the assumption that on the whole, all benefit from growing productivity and efficiency.

If we move to a system where half of the country is either stagnant or losing ground while the other half is surging, the social fabric of the United States is at risk, and with it the massive global power the United States has accumulated. Other superpowers such as Britain or Rome did not have the idea of a perpetually improving condition of the middle class as a core value. The United States does. If it loses that, it loses one of the pillars of its geopolitical power.

The left would argue that the solution is for laws to transfer wealth from the rich to the middle class. That would increase consumption but, depending on the scope, would threaten the amount of capital available to investment by the transfer itself and by eliminating incentives to invest. You can't invest what you don't have, and you won't accept the risk of investment if the payoff is transferred away from you.

The agility of the American corporation is critical. The right will argue that allowing the free market to function will fix the problem. The free market doesn't guarantee social outcomes, merely economic ones. In other words, it may give more efficiency on the whole and grow the economy as a whole, but by itself it doesn't guarantee how wealth is distributed. The left cannot be indifferent to the historical consequences of extreme redistribution of wealth. The right cannot be indifferent to the political consequences of a middle-class life undermined, nor can it be indifferent to half the population's inability to buy the products and services that businesses sell.

The most significant actions made by governments tend to be unintentional. The GI Bill was designed to limit unemployment among returning serviceman; it inadvertently created a professional class of college graduates. The VA loan was designed to stimulate the construction industry; it created the basis for suburban home ownership. The Interstate Highway System was meant to move troops rapidly in the event of war; it created a new pattern of land use that was suburbia.

It is unclear how the private sector can deal with the problem of pressure on the middle class. Government programs frequently fail to fulfill even minimal intentions while squandering scarce resources. The United States has been a fortunate country, with solutions frequently emerging in unexpected ways.

It would seem to me that unless the United States gets lucky again, its global dominance is in jeopardy. Considering its history, the United States can expect to get lucky again, but it usually gets lucky when it is frightened. And at this point it isn't frightened but angry, believing that if only its own solutions were employed, this problem and all others would go away. I am arguing that the conventional solutions offered by all sides do not yet grasp the magnitude of the problem -- that the foundation of American society is at risk -- and therefore all sides are content to repeat what has been said before.

People who are smarter and luckier than I am will have to craft the solution. I am simply pointing out the potential consequences of the problem and the inadequacy of all the ideas I have seen so far.

The Crisis of the Middle Class and American Power is republished with permission of Stratfor.

Scene from a trombone

David Finlayson of the New York Philharmonic, a trombone and a GoPro camera. What could be finer this Tuesday morning?
  

Nude dancers

Click any image to enlarge

Oh, admit it... even though you knew my title was one of my usual cheesy attempts to lure traffic you couldn't resist clicking the link anyway. At any rate, these pictures are from N.Y. based photographer Shinichi Maruyama. He assembled hundreds of individual photographs into the composite images showing the nude dancer in motion (via Ubersuper).

By the way, I end the series with Marcel Duchamp's Nude Descending a Staircase for comparision purposes. I think I like his version much more.

Next Door Neighbor Blues

Monday morning, sort of the start of the workweek blues by Gary Clark Jr.

  

  

Norman Rockwell's photos

Click any image to enlarge

In the past we've seen how pinup painters used photographs to compose their works. More traditional painters, like Norman Rockwell in these examples, employed the same technoque (source La boite verte).

Stratfor and Q'orianka Kilcher

In this Stratfor article Scott Stewart reminds us that Mexican drug cartels are driven by business rather than political motives, with control of the lucrative drug smuggling route from Central and South America being their core business.

He goes on to discuss cocaine smuggling. Cocaine originates in the triangle of Columbia, Peru and Bolivia and with the U.S. aggressively closing down its traditional smuggling route through the Caribbean, it has become more important to the Mexican cartels, which can squeeze more profit from it as they now control the most lucrative route of Cocaine into the U.S.

For the article's Hot Stratfor babe, since Peru was mentioned I decided to go with a Peruvian actress and, after processing my vast and encyclopedic knowledge of Peruvian actresses, the natural choice for the honor was Q'orianka Kilcher.

Well, OK, OK... Ms Kilcher, who is best known for playing Pochahontas in the film The New World, is only partly of Peruvian descent, was actually born in Germany and raised there and in the U.S., and has had her career in Hollywood rather than Lima, but let us not quibble over minor details.

 Q'orianka is also known for, along with her activist Mother, chaining herself to the White House fence in a protest.


Mexico's Cartels and the Economics of Cocaine
By Scott Stewart, Vice President of Analysis, January 3, 2013

At Stratfor, we follow Mexico's criminal cartels closely. In fact, we are currently finishing our 2013 cartel forecast, which will be released later this month. As we analyze the Mexican cartels, we recognize that to understand their actions and the interactions between them, we need to acknowledge that at their core they are businesses and not politically motivated militant organizations. This means that although violence between and within the cartels grabs much of the spotlight, a careful analysis of the cartels must look beyond the violence to the business factors that drive their interests -- and their bankrolls.

There are several distinct business factors that have a profound impact on cartel behavior. One example is the growing and harvesting cycle of marijuana in the Sierra Madre Occidental. Another is the industrialization of methamphetamine production in Mexico and the increasing profit pool it has provided to the Mexican cartels in recent years. But when we are examining the transnational behavior of the Mexican cartels, the most important factor influencing that behavior is without a doubt the economics of the cocaine trade.

The Cocaine Profit Chain

Cocaine is derived from the leaves of the coca plant, and three countries -- Colombia, Peru and Bolivia -- account for all the coca harvested in the world. Turning coca into cocaine hydrochloride is a relatively simple three-step process. Once the leaves of the coca plant are harvested, they are rendered into what is known as coca paste. From there, the coca paste is processed into cocaine base, which eventually becomes cocaine hydrochloride. The process involves several precursor chemicals: kerosene, sulfuric acid, sodium carbonate, hydrochloric acid, potassium permanganate and acetone. Most of these chemicals are readily available and easily replaced or substituted, making them difficult for authorities to regulate.

According to figures from the U.N. Office on Drugs and Crime, coca farmers in Colombia receive $1.30 for each kilogram of fresh coca leaf. In Peru and Bolivia, where the leaf is air-dried before being sold, farmers receive $3.00 per kilogram.

For the fresh leaf used in processing in Colombia, it takes somewhere between 450 and 600 kilograms of coca leaf to produce 1 kilogram of cocaine base, depending on the variety of coca plant used (some varieties have a higher cocaine alkaloid content). At $1.30 per kilogram, this means that it costs somewhere between $585 and $780 to purchase the coca leaf required to produce one kilogram of cocaine base. One kilogram of cocaine base can then be converted into roughly one kilogram of cocaine hydrochloride, which is commonly referred to as cocaine.




As cocaine progresses from the production site to the end users, it increases in value. According to figures provided by the Colombian National Police, a kilogram of cocaine can be purchased for $2,200 in the jungles in Colombia's interior and for between $5,500 and $7,000 at Colombian ports. But the price increases considerably once it leaves the production areas and is transported closer to consumption markets. In Central America cocaine can be purchased for $10,000 per kilogram, and in southern Mexico that same kilogram sells for $12,000. Once it passes through Mexico, a kilogram of cocaine is worth $16,000 in the border towns of northern Mexico, and it will fetch between $24,000 and $27,000 wholesale on the street in the United States depending on the location. The prices are even higher in Europe, where they can run from $53,000 to $55,000 per kilogram, and prices exceed $200,000 in Australia. The retail prices per gram of cocaine are also relatively high, with a gram costing approximately $100-$150 in the United States, $130-$185 in Europe and $250-$500 in Australia.

Along the supply chain there is also quite a bit of "cutting," which is when substances are added to the cocaine to dilute its purity and stretch profit. According to the Colombian National Police, the purity of cocaine leaving the country is about 85 percent. By the time it reaches the United Kingdom, purity is 60 percent, and it drops further to about 30 percent at the retail level, according to the U.N. World Drug Report 2012.

Cartel Behavior

There has been a thriving two-way flow of contraband goods across the U.S.-Mexico border since its inception. Mexican organized crime groups have been involved in the smuggling of marijuana to the U.S. market since the U.S. government began to restrict marijuana in the early 1900s, and Mexican organized criminals profited handsomely during the Prohibition era in the United States. As U.S. demand for illicit drugs increased in the second half of the 20th century, Mexican organizations branched out to become involved in smuggling other types of drugs, including pharmaceuticals and black tar heroin; poppy cultivation was also introduced to Mexico in the 1930s.

These Mexican organized crime syndicates, such as the Guadalajara cartel, also began to traffic cocaine into the United States in the late 1970s, but for many years the Mexican organizations worked as junior partners for the powerful Colombian cartels in Medellin and Cali. Mexico was a secondary route for cocaine compared to the primary route through the Caribbean. As a result, the Colombians pocketed the lion's share of the profit made on cocaine trafficked through Mexico and the Mexicans received a fee on each kilogram they transported. (However, they did not assume any of the risk of losing shipments between South America and Mexico.)

In the late 1970s and the 1980s -- the early phase of Mexican involvement in the cocaine trade -- Central American middlemen such as Juan Matta-Ballesteros were also heavily involved in the flow of cocaine through Mexico. They moved cocaine from South America to Mexico, becoming wealthy and powerful as a result of the profits they made.

As U.S. interdiction efforts, aided by improvements in aerial and maritime surveillance, curtailed much of the Caribbean cocaine flow in the 1980s and 1990s, and as the Colombian and U.S. governments dismantled the Colombian cartels, the land routes through Central America and Mexico became more important to the flow of cocaine. It is far more difficult to spot and seize contraband moving across the busy U.S.-Mexico border than it is to spot contraband flowing across the Caribbean.

This increase in the importance of Mexico allowed the Mexican cartels to gain leverage in negotiations with their Central American and Colombian partners and to secure a larger share of the profit. Indeed, by the mid-1990s the increasing importance of Mexican organizations to the flow of cocaine to the United States allowed the Mexican cartels to become the senior partners in the business relationship.

In a quest for an even larger portion of the cocaine profit chain, the Mexican cartels have increased their activities in Central and South America over the last two decades. The Mexicans have cut out many of the middlemen in Central America who used to transport cocaine from South America to Mexico and sell it to the Mexican cartels. Their efforts to consolidate their control over Central American smuggling routes continue today.

This move meant that the Mexican cartels assumed responsibility for the losses incurred by transporting cocaine from South America to Mexico, but it also permitted them to reap an increasing portion of the profit pool. Instead of making a set profit of perhaps $1,000 or $1,500 per kilogram of cocaine smuggled into the United States, the Mexican cartels can now buy a kilogram of cocaine for $2,200 or less in South America and sell it for $24,000 or more to their partners in the United States.

But the expansion of the Mexican cartels did not stop in Central America. According to South American authorities, the Mexican cartels are now becoming more involved in the processing of cocaine from coca leaf in Colombia, Peru and Bolivia. There have also been reports of seizures of coca paste being smuggled to cocaine processing laboratories in Honduras and Guatemala. The use of these Central American processing laboratories, which are run by Mexican cartels, appears to be a reaction to the increased efforts of the Colombian National Police to crack down on cocaine laboratories and the availability of cocaine processing chemicals.

U.S. counternarcotics officials report that today the Mexican cartels are the largest players in the global cocaine trade and are steadily working to grab the portion of cocaine smuggling not yet under their control. But the efforts of the Mexican cartels to increase their share of the cocaine profit are not confined to the production side; they have also expanded their involvement in the smuggling of South American cocaine to Europe and Australia and have established a footprint in African, Asian and European countries. Furthermore, they have stepped up their activities in places like the Dominican Republic and Haiti in an attempt to increase their share of the cocaine being smuggled through the Caribbean to the U.S. market. As seen by recent operations launched by U.S. law enforcement, such as Operation Xcellerator, Operation Chokehold and Operation Imperial Emperor, the Mexican cartels have also been increasing their presence at distribution points inside the United States, such as Chicago, Atlanta and Dallas, in an effort to increase their share of the cocaine profit chain inside the United States.

While marijuana sales have always been an important financial source for the Mexican cartels, the large profits from the cocaine trade are what have permitted the cartels to become as powerful as they are today. The billions of dollars of profit to be had from the cocaine trade have not only motivated much of the Mexican cartels' global expansion but have also financed it. Cocaine profits allow the Mexican cartels to buy boats and planes, hire smugglers and assassins ("sicarios") and bribe government officials.

Cocaine is a product that has a very limited and specific growing area. Consequently, that distinct coca growing area and the transportation corridors stretching between the growing area and the end markets are critically important. With a business model of selling cocaine at over 10 times the cost of acquisition -- and even greater over the cost of production -- it is not surprising that the competition among the various Mexican cartels for the smuggling corridors through Mexico to the United States has become quite aggressive.

Mexico's Cartels and the Economics of Cocaine is republished with permission of Stratfor.

California Dreaming

Get ready for a weekend of wishing you were somewhere else
with Martin und Luka.

 

Answering a fire alarm in 1920s NY City

This is a video of the procedure NY City fire fighters used in the 1920s. About 2:20 in there are a lot of shots from a camera mounted on the fire truck as it navigates the chaotic traffic. At points they have to drive on sidewalks to make it through the busy streets. It is absolutely hair raising.

Found via Kottke.
  

We'll need a bigger pub for this lot

Above is a video of Michael van Gerwen throwing 17 perfect darts during a match. I'm not up on darts so I don't know, but the announcer seems to think that is a remarkable feat. What amazed me was the size and enthusiasm of the crowd, and it isn't a small venue.
 

Stratfor and Joan Blondell

In this Stratfor article, in the wake of the release of the unclassified version of the State Department's Accountability Review Board report on Benghazi, Scott Stewart returns to discuss the funding of security at diplomatic missions.

He reviews a history of prior security lapses, and the funding cycle that has chased them.

With all the talk of money, and for no real good reason, the Busby Berkley film The Goldiggers of 1933 sprang to mind and so Joan Blondell, one of its female leads, was selected to represent the article as its Hot Stratfor Babe.

Ms Blondell was born into a vaudeville family and, after winning a beauty contest, she signed a contract to Warner Brothers. She was very much a creature of the studio system, starring in dozens of movies before moving on to television.


The Benghazi Report and the Diplomatic Security Funding Cycle
By Scott Stewart, Vice President of Analysis, December 27, 2012

On Dec. 18, the U.S. State Department's Accountability Review Board released an unclassified version of its investigation into the Sept. 12 attack on the U.S. Consulate in Benghazi, Libya. U.S. Ambassador to Libya Christopher Stevens and three other Americans were killed in the attack, so the report was widely anticipated by the public and by government officials alike.

Four senior State Department officials have been reassigned to other duties since the report's release. Among them were the assistant secretary of state for diplomatic security; two of his deputy assistant secretaries, including the director of the Diplomatic Security Service, the department's most senior special agent; and the deputy assistant secretary responsible for Libya in the State Department's Bureau of Near Eastern Affairs.

The highly critical report and the subsequent personnel reassignments are not simply a low watermark for the State Department; rather, the events following the attack signify another phase in the diplomatic security funding cycle. The new phase will bring about a financial windfall for the State Department security budgets, but increased funding alone will not prevent future attacks from occurring. After all, plenty of attacks have occurred following similar State Department budgetary allocations in the past. Other important factors therefore must be addressed.

Predictable Inquiries

The cycle by which diplomatic security is funded begins as officials gradually cut spending on diplomatic security programs. Then, when major security failures inevitably beset those programs, resultant public outrage compels officials to create a panel to investigate those failures.

The first of these panels dates back to the mid-1980s, following attacks against U.S. facilities in Beirut and Kuwait and the systematic bugging of the U.S. Embassy in Moscow. These security lapses led to the formation of the Secretary of State's Advisory Panel on Overseas Security, chaired by former Deputy CIA Director Adm. Bobby Inman. The law that passed in the wake of the Inman Commission came to be known as the Omnibus Diplomatic Security and Antiterrorism Act of 1986, which requires that an accountability review board be convened following major security incidents.

There are a few subsequent examples of these panels. Former Chairman of the U.S. Joint Chiefs of Staff Adm. William Crowe chaired an Accountability Review Board following the bombings of U.S. embassies in East Africa in 1998. And after the Benghazi attacks, an Accountability Review Board was chaired by former U.S. Ambassador Thomas Pickering. The Dec. 18 report was the findings of the Pickering board.

Predictably, the review boards, including Pickering's, always conclude that inadequate funding and insufficient security personnel are partly to blame for the security breaches. In response to the reports, Congress appropriates more money to diplomatic security programs to remedy the problem. Over time, funds are cut, and the cycle begins anew.

Funding can be cut for several reasons. In times of financial austerity, Congress can more easily cut the relatively small foreign affairs budget than it can entitlement benefits budgets. Cuts to the overall State Department budget generally result in cuts for security programs.

Moreover, rivalries among the various State Department entities can affect spending cuts. The Diplomatic Security Service's budget falls under the main State Department budget, so senior diplomats, rather than Diplomatic Security Service agents, represent the agency's interests on Capitol Hill. Some within the security service do not believe that senior diplomats have their best interests at heart when making the case for their budgets -- at least until a tragedy occurs and Congressional hearings are held to air these problems. For their part, others in the department resent the Diplomatic Security Service for the large budgetary allocations it receives after a security failure.

More than a Matter of Funding

With Congress and the presumed next Secretary of State John Kerry now calling for increased spending on diplomatic security, the financial floodgates are about to reopen. But merely throwing money at the problems uncovered by the accountability review boards will not be enough to solve those problems. Were that the case, the billions of dollars allocated to diplomatic security in the wake of the Inman and Crowe commission reports would have sufficed.

Of course, money can be useful, but injecting large sums of it into the system can create problems if the money provided is too much for the bureaucracy to efficiently metabolize. Government managers tend to spend all the money allocated to them -- sometimes at the expense of efficiency -- under a "use it or lose it" mentality. Since there is no real incentive for them to perform under budget, managers in a variety of U.S. government departments spend massive amounts of money at the end of each fiscal year. The same is true of diplomatic security programs when they are flush with cash. But the inevitable reports of financial waste and mismanagement lead to calls for spending cuts in these programs.

If the U.S. government is ever going to break the cycle of funding cuts and security disasters, the Diplomatic Security Service will need to demonstrate wisdom and prudence in how it spends the funds allocated to them. It will also be necessary for Congress to provide funding in a consistent manner and with an initial appropriation that is not too big to be spent efficiently.

Beyond money management and a consistent level of funding, the State Department will also need to take a hard look at how it currently conducts diplomacy and how it can reduce the demands placed on the Diplomatic Security Service. This will require asking many difficult questions: Is it necessary to maintain large embassies to conduct diplomacy in the information age? Does the United States need to maintain thousands of employees in high-threat places like Iraq, Afghanistan and Pakistan at the expense of smaller missions, or can the critical work be done by hundreds or even dozens? Is a permanent U.S. presence even required in a place like Benghazi, or can the missions in such locations be accomplished by a combination of visiting diplomats, covert operatives and local employees?

At the very least, the State Department will need to review its policy of designating a facility as a "special mission" -- Benghazi was designated as such -- to exempt it from meeting established physical security standards. If the questions above are answered affirmatively, and if it is deemed necessary to keep a permanent presence in a place like Benghazi, then security standards need to be followed, especially when a facility is in place for several months. Temporary facilities with substandard security cannot be allowed to persist for months and years.

Host Countries

As they consider these issues, officials need to bear in mind that the real key to the security of diplomatic facilities is the protection provided by the host country's security forces as dictated by the Vienna Convention. If the host country will not or cannot protect foreign diplomats, then the physical security measures mandated by security standards can do little more than provide slight delay -- which is what they are designed to do. No physical security measures can stand up to a prolonged assault. If a militant group armed with heavy weaponry is permitted to attack a diplomatic facility for hours with no host government response -- as was the case in Benghazi -- the attack will cause considerable damage and likely cause fatalities despite the security measures in place.

The same is true of a large mob, which given enough time can damage and breach U.S. embassies that meet current department security standards. The U.S. Embassy in Tripoli, a state-of-the-art facility completed in 2009, was heavily damaged by a mob of pro-Gadhafi supporters in May 2011 and rendered unserviceable.

In another example, a large crowd caused extensive damage to the U.S. Embassy in Tunis and the adjacent American School just three days after the Benghazi attack. In that incident, Tunisian authorities responded and did not provide the attacking mob the opportunity to conduct a prolonged assault on the embassy. Though the mob caused millions of dollars worth of damage to the compound, it was unable to breach the main embassy office building. Without host country security support, there is little that can be done to assure the safety of U.S. diplomats, no matter what happens to security budgets.

The Benghazi Report and the Diplomatic Security Funding Cycle is republished with permission of Stratfor.

Hero vs ninjas and fat men

With the holidays it isn't exactly hump day, but that's no reason not to have a fight to get you over the hump. In this one our hero has to rescue a friend who is being held by the Japanese for some sort of nefarious experimentation.

The world's most effective hangover cure

Should you, after a night of New Year's Eve revelry, have woken up with a splitting headache, your pants on backwards and a gap of several hours in your memory, then you'll need a quality hangover cure.

Lucky for you I have just the thing straight from the doctors of Mongolia: all you need is some pickled sheep's eyes -- and who doesn't keep a stoclkof those handy? -- and tomato sauce. Mix it together and guzzle it down. You'll be feeling chipper in no time.

Have a good New Year.
   

Hot Stratfor Babe of the Year - 2012

At the end of the year it is customary to review the past 12 months for highs or lows. We at Flares would never break that custom, and so we review the Year's worth of Hot Stratfor Babes, actually a year and 3 months to give late comers a chance,  to see who got the largest number of page views and hence the crown of Hot Stratfor Babe of the Year.

So, without further ado, let's see who won.

Runners Up...

Mary Remmy: Hot Stratfor Babes are international in flavor, but surprisingly Nollywood, the Nigerian film industry, made a strong showing this year. Ms Remmy is the first of two Nigerian actresses to make the list. I'm not sure if it is the Stratfor Boka Haram articles drawing the traffic, or if African fans are eager for news about their movie stars.

Angie Cepeda: this sultry Columbian actress started her career in beer comercials and moved up to television and eventually the movies. Of course being named a Hot Stratfor Babe is probably one of her prouder achievements, and making this list as 3rd runner up is icing on the cake.

Genevieve Nnaji: our second Nollywood star on the list, this actress and model is enormously popular in Africa where she is compared to Julia Roberts in terms of appeal. As is the case with many Hot Stratfor Babes she has also decided to launch a singing career.

Maite Perroni: the first runner up, this Mexican actress has been very busy starring in Spanish language telenovas. She also speaks English well, so there is a chance that she will try to make the jump to English-language Hollywood films.

The 2012 Hot Stratfor Babe of the Year...

Lucy Lawless: Ms Lawless, famed for her role as Xena the Warrior and Possibly Lesbo Princess absolutely crushed her competition, garnering more votes than the other 4 combined. Our congratulations to Lucy for her hard earned victory in the 2012 Hot Stratfor babe competition.

What Are You Doing New Year's Eve?

Monday morning, sort of the start of the workweek blues by Nancy Wilson.

 

Good riddance to 2012

Physically, 2012 has been a rough year for me. I was a passenger in 2 car accidents: in the first a drunk rear-ended us as we were parked at a red light in a turning lane, and in the second an oblivious kid left turned into out front end. Then I flopped over in Miami and broke my shoulder. My posts have been terse these last couple of months because it is still a pain to type too much.

Ah well, I should look at the bright side, 2013 is bound to be better, and if not I'm sure the Obamacare death panel will put me out of my misery in no time at all.

Regardless, I'm glad to be seeing this year come to an end. As for now, I'm busy pouring over the candidates for Hot Stratfor Babe of the Year and it should be up by tomorrow.