One Hand Washes the Other: the LightSquared Saga

Financially oriented prelude(s) to a post:

I am staggered at how easily the concepts of Democracy and the Rule of Law – two of the pillars of the modern world – have been brushed aside in the interests of political expediency.

And this as well:

Bond and Currency markets are now so rigged by policy makers that I have no meaningful insights to offer…

Now, on with the countdown!

From the annals of crony capitalism, rent-seeking, and regulatory capture it is revealed that the regulatory concerns regarding LightSquared, a world-class GPS signal-killer, appear to have been brushed aside in the interests of political and personal expediency.

Before Barack Obama became president, he was personally an investor in SkyTerra [the company that would become LightSquared]. [Philip] Falcone’s Harbinger Capital Partners [LightSquared’s financial backers] donated $50,000 to Obama’s inaugural committee on Jan. 20, 2009, according to the Center for Responsive Politics. At the time, Falcone was still looking for the FCC’s sign-off on his hedge fund’s desire to purchase a majority stake in SkyTerra . The George W. Bush administration had failed to green-light the deal.

According to White House visitor logs, Obama’s new FCC chairman, Julius Genachowski, a classmate of the president’s from Harvard Law School, met with White House Personnel Director Don Gips on Feb. 18, 2009. Gips’ personal financial disclosure forms show he had between $250,000 and $500,000 of his personal finances invested in SkyTerra via stock options. Gips bundled at least $500,000 in donations to Obama’s 2008 election campaign, and served on the advisory board of Obama’s White House transition team.

Snip.

On the same day Goldberg [Henry Goldberg of Harbinger’s law firm, Goldberg, Godles, Weiner & Wright] sent that email to [FCC International Bureau Chief Howard] Griboff — July 24, 2009 — SkyTerra asked the FCC to allow it to delay the launch of a new satellite because there was a “potential delay in [its] delivery.” The FCC approved the request, but later denied a near-identical one for SkyTerra competitor GlobalStar based on “extenuating circumstances” in 2010. This appeared to be one in a long line of instances in which the FCC favored SkyTerra, the future LightSquared, over GlobalStar.

Snip.

…later, Falcone and his wife each donated the maximum legally allowed — $30,400 each — to the Democratic Senatorial Campaign Committee.

Of course, largely ignored is the effect of the LightSquared network on GPS. To quote myself, should LightSquared be looking for a new logo, something like “The first full-fail 4G network” or “SkyJam”?

Using the military as a social engineering sandbox

The fact the U.S. military serves as a social engineering sandbox for the civilian authorities in the three branches of government isn’t new. But now, the U.S. Navy and its handlers, led by Secretary of the Navy Ray Mabus, have become the best of the best; the poster child of the poster children. The Navy has won the politically correct Golden Ticket.

Not content to merely support the DADT roll-away, the Secretary of the Navy is out naming ships for American heroes like John Murtha and trying to do the same for Caesar Chavez.

What’s next, the USS Alger Hiss? A fleet of Chevy Volts for all those on shore duty?

While the President may have directed the Global War on Terror be renamed Overseas Contingency Operations, and acts of terrorism are Administration-described as "man-made disasters" or the Fort Hood massacre as "workplace violence," there’s much more.

Now, it’s the Navy’s war on common sense and man-made intellectual disasters. How so? Instead of buying fuel at market prices, about $4 per gallon, the Navy has decided to buy 450,000 gallons of non-food biofuels — at a cost of $16 per gallon.

From the Fox News link above:

The purchase is being authorized by an executive order under the Obama administration’s "we can’t wait" campaign.

Administration officials gave no indication why they’re not going through Congress, instead using a program that was established to promote rapid job growth by bypassing congressional debate.

For those who think political correctness doesn’t exist (and sometimes drive things) in the military, think again.

 

“Commercial” Space Collapse?

We all know there’s really only one sure way to make money in, to, through, of from space: sell space-related goods and services to the government.

Now, if $7.3 billion in proposed cuts to "commercial imagery contracts" hit GeoEye and DigitalGlobe, what will be the effect on the rest of the space industry? How much would the cuts in space services cascade over into satellite and booster builds and shared overhead, to especially include "new" space?

While Lockheed-Martin, Boeing, and Northrop Grumman likely have sufficient capitalization, lines of credit, product diversity, and flex in their workload (to of course include layoffs), what about, in particular, SpaceX as well as some of the other less well-knowns?

Sea Launch was a recent example of operating on (or beyond) a shoestring and when they suffered a launch failure, their house of space cards collapsed. While Sea Launch has since come out of bankruptcy in a several-year-long re-org, are the situations analogous?

Given what appears to be a world-wide glut of launch capacity (India, China, and Russia, as well as SpaceX and all the traditional players), it will be interesting to see how things pan out. Of course, then there are possible cuts of great significance to NASA and mil space as well.

 

Is Smart Power as Smart as the Smart Car?

Sticking the word "smart" in front of almost anything is a practice that must end.

As evidence, I offer the Smart Car, the worst car of the last decade, and calls for more Smart Power.

We’re all aware, of course, that our stupid cars and our stupid power just won’t cut it anymore.

What is Smart Power? It’s merely another effort to grab more mission, manpower, and money for the diplomatic corps. Just how does that make it "smart," anymore than giving $56 billion to TSA to make air travel safer (or not)?

We’ve ended up in the current State Department/Department of Defense configuration we have for a reason. If circumstances have changed, let the appropriators argue it out, but don’t besmirch logic and reality by jamming ‘smart’ in front of something that may make sense and work, or may not.

A better way to advocate for the hopes (no disrespect intended, but that’s what they are) imbedded within the Smart Power call would be instead to simply use the most correct tool for the job. (Just don’t use the terms "toolbox" or "quiver," which should also be similarly banned from the vernacular, unless talking carpentry or archery.)

 

How Goes The Reset?

The famed Russian reset, the defining foreign policy victory of the Administration, is dead. I’m shocked, shocked!

Why did such a thing happen?

Because the Russians have played the ‘reset’ out for all it’s worth (to them, anyway). They’re now staking out/probing regarding positions to take for either a new American president, or are pondering throwing more sand in the Vaseline of the security/diplomacy machinery of the administration, should President Obama win a second term.

In a market environment, the buyer gives up something (money, usually) for item(s) he wants at a price he’s willing to pay. Similarly, the seller sells at a price he’s willing to sell at. Everyone wins.

In a nation-state environment, win-win is not nearly so prevalent, perhaps because things are less transaction oriented and more promise oriented.

In fact, in the case of the Russian reset, the events (a New START treaty significantly skewed in Russia’s favor, promises of Russian support for Iranian sanctions, and promises of sustained U.S./NATO access to Afghanistan) were wins for Russia that provided benefits (cash, power, and prestige) and cost them literally nothing. The outcomes of the “reset” to the U.S. were temporary and mild benefits at best and a permanent and perhaps profound weakening at worst.

The lesson is that Russia is in it for Russia (or maybe better said, Russia’s leaders are in it for themselves). What’s so hard to understand about that truth?

 

Welcome to the New Duck and Cover

When you look at the popular culture, the duck and cover era of civil defense (CD) in the 1950s and early 1960s is often mercilessly mocked. The reason is likely because it seemed insane to take shelter under a desk when nuclear weapons are landing nearby.

However, in those days, the miss distances of the weapons were quite significant, far greater than they are today. As such, they were inclined to be used against soft targets like cities and industrial areas, and less so against hardened military targets. Duck and cover was actually a reasonable bit of preventive guidance for these inaccurate city killers.

However, modern nuclear weapon delivery systems have far greater accuracy. For example, the Claremont Institute’s MissileThreat.com says a Trident D-5 has 90 meter accuracy. Duck and cover might make a real difference when a weapon misses its target by two miles; not so much when that miss distance is down to 300 feet.

But here we are, fifty years later after the duck and cover era and it would appear much of the world (the parts of the world that make good targets for those who would disrupt our security) is stuck with… duck and cover. What’s up with that?!

First, there is the general weakening and unilateral disarmament of the U.S. nuclear umbrella associated with New START but also with the administration’s decision to depend more on conventional forces (which by the way are likely headed in one direction; down) for U.S./allied security needs. Next, there’s nuclear proliferation (North Korea and Pakistan; Iran’s apparently imminent nuclear breakout; likely growth in Chinese nuclear weapons and certain growth in delivery systems) and even greater missile proliferation. Finally, we’re certain to have less-capable-than-hoped for missile defenses as a result of expected defense cuts.

What’s left? Duck and cover, folks, duck and cover.

Not that there’s anything inherently wrong with taking shelter, and it’s certainly prudent. In fact, given the high-return/low-risk and cost of civil defense, it seems our CD capabilities should be our first step without ignoring the other aspects of deterrence (missile defense; reliable, capable, and available nuclear weapons, delivery systems, and warning methods; conventional capabilities; diplomacy; etc.) which are all part of the deterrence recipe.

When your options are only limited to duck and cover, your approach becomes one of hope (“I sure hope those nuclear weapons miss us!”) and it’s generally well-known within military circles that hope is not a substitute for strategy.

Finally, hope-is-not-a-strategy also explains why the UAE, Kuwait, Saudi Arabia, South Korea, and Japan have vital interests (and investments) in missile defense.

National Evangelical Association Preaches To The Saved Regarding Nuclear Weapons

The Washington Post ran an anti-nuclear weapons column written by the National Evangelical Association (NEA, but not the National Education Association lobby, headquartered at 1201 16th Street Northwest, Washington DC 20036). I suspect the Post ran this article because it agrees with their political sensibilities (versus, for example, running an NEA column advocating reducing the approximately one million abortions performed each year in the U.S.). Anyway, the NEA has come up with a corporate position on nuclear weapons that reflects the following:

We question the acceptability of nuclear weapons as part of a just national defense.

Hmm. I question your question.

I’m not sure if the above is a long-recycled NEA talking point (if so, they’re Green!) or not, but since the United States has had nuclear weapons for over 60 years, did they think of bringing this concern up earlier? Regardless, there’s more:

In our globalizing world, security cannot be obtained by threatening retaliation after a nuclear strike. Instead, our security – as well as our commitment to seeking genuine peace – requires that we eliminate the very possibility of such an attack.

Well, if the NEA wants to cross the security bridge, why not go all the way? What can be done to obtain security and to eliminate the very possibility of a nuclear attack (or any attack of any sort, for that matter)?

Of course, that’s a rhetorical question and history seems to indicate there are no security guarantees, only prudent courses of action (and I don’t think the NEA is providing a stealthy call for more missile defense). Nuclear weapons are not designed to be all security things to all the peoples’ security needs at all security times. They are (for example) an ill-fit to prevent social unrest in Greece, human rights violations in China, the repression of women in the Arab states, the meltdown of the Euro, a worldwide pandemic, or even reality television like A Kardashian Wedding: The Mulligan.

The NEA uses an old chestnut, the appeal to authority, to make their case:

As nonpartisan statesmen like George Shultz, Sam Nunn, Henry Kissinger and William Perry have written, the logic of deterrence fails to guard against the dangers of our post-Cold War era. Against these perils, the very existence of nuclear weapons may be more of a liability than an asset.

The NEA also appeals to THE authority, God, and they even reference two pieces of Scripture, Genesis 1:27 and Romans 12:14.

But what are the NEA’s goals, nuclear-wise? It’s a mashed-up laundry list of common sense items and a dash of delusion (along with a splash of self-limiting U.S. behaviors):

Re-examining the moral and ethical basis for the doctrine of nuclear deterrence

Maintaining the taboo against nuclear use

Achieving verified mutual reductions in current nuclear stockpiles

Ratifying the Comprehensive Test Ban Treaty

Increasing safeguards against accidental use

Resolving regional conflicts

Preventing the unauthorized spread of fissile material

Continuing dialogue on the effects of possession and threatened use of nuclear weapons

Another hmm, a big one: there were two World Wars in a thirty year period that are estimated to have killed well over 100 million people and with countless others wounded. What about the World Wars since the introduction of atomic/nuclear weapons? Let’s just round it off to zero. Is this luck, or is it possible nuclear weapons have introduced more warfighting discretion and restraint by the world’s political leaders? (Granted, this line of thinking is not provable, but it is suggestive.)

Yes, there have also been plenty of not-natural deaths post World War II, but they can be largely charged to the state-sanctioned non-nuclear butchery of men like Joe Stalin and Mao Tse-tung.

When the wheels finally fell off the Soviet Union two decades ago, they were forced to deal with issues like nuclear stockpile reductions, physical security, and proliferation. The United States aided Russia greatly in these efforts and even drew down its own weapons count dramatically. Yet today, the world is more multi-proliferated than it’s ever been. What’s up with that?!

It seems to me that it’s safe to say the NEA is preaching to the saved on this entire issue. But who are the saved, you ask? The arms controllers and their like here in the friendly confines of the U.S., the UN, and Western Europe; the ones who favor U.S. nuclear disarmament without addressing the reality of nuclear proliferation or the need for nuclear deterrence.

Has the NEA has ever considered how Iran or North Korea view their nuclear weapons programs? It seems to me that those two nations (as well as China and Russia) would certainly be pleased were the U.S. to self-limit, or better yet, disarm. Perhaps the NEA will submit their piece to the Tehran Times or the Pyongyang Yeller for further support of their position.