Oh, How Easy To Forget…And How Quickly Priorities Can Change

By Anton Wahlman

Times go by, and even within a generation, people forget major events.

16 years ago, Yugoslavia was in the middle of a civil war that broke up the country into at least a half dozen countries.

26 years ago, the United Kingdom declared war on Argentina and sent the Royal Navy to war over The Falkland Islands.

36 years ago, Arab terrorists took the Israeli Olympic delegation at Munich hostage and proceeded to murder all of them. A year later, all of the countries surrounding Israel including Egypt and Syria, proceeded to attempt the invasion of Israel.

46 years ago, the US failed its attempted invasion of Cuba at The Bay of Pigs, which was followed by the Cuban Missile Crisis when the world came minutes away from total war.

56 years ago, the US and the UN were fighting a Chinese-assisted invasion by North Korea of South Korea, and General MacArthur threatened to drop a nuke on the enemy, at which point President Eisenhower fired him.

66 years ago, the US had just declared war on Germany, Japan and Italy, and proceeded to go all the way to victory after 450,000 Americans fell.

76 years ago, Adolf Hitler was leading the election campaign for the German National Socialist Workers’ Party (Nationalsocialistische Deutsche Arbeiterpartei, or NSDAP), in which he won and became head of the government. The only major world leader who protested and warned that this was bringing destruction to the world was Winston Churchill, an obscure right-wing back-bencher.

86 years ago, the US was experiencing unprecedented economic growth, but the German government thought it was harmless to increase the money supply, so it started printing money, which generated hyperinflation, followed by a depression and 40% unemployment.

96 years ago, the US government was debating 3 new policies that were implemented the following year: (a) prohibition of pot/drugs, (b) introducing the income tax, which previously had not existed and (c) requiring the use of passports for international travel.

Sen. John McCain’s very vigorous mom Roberta was born 96 years ago, when drugs were legal, there was zero income tax and passports didn’t exist.

Many Americans have conveniently forgotten these historical events. What’s more surprising is that some Americans now also see September 11, 2001 – only little over 6 years ago – as a fading memory.

In this context, you may have missed it in all the coverage of Super Tuesday, but Director of National Intelligence Mike McConnell gave his annual national security threat assessment to the Senate Intelligence Committee last week.

For anyone who still doubts that the United States and our allies are in a fight for our existence, Director McConnell’s testimony should put those doubts to rest.

Here’s part of what he said:

“Al Qaeda is improving the last key aspect of its ability to attack the U.S.: the identification, training, and positioning of operatives for an attack in the Homeland. While increased security measures at home and abroad have caused al Qaeda to view the West, especially the U.S., as a harder target, we have seen an influx of new Western recruits into the tribal areas since mid-2006. We assess that al Qaeda’s Homeland plotting is likely to continue to focus on prominent political, economic, and infrastructure targets designed to produce mass casualties, visually dramatic destruction, significant economic aftershocks, and/or fear among the population.

We judge use of a conventional explosive to be the most probable al Qaeda attack scenario because the group is proficient with conventional small arms and improvised explosive devices and is innovative in creating capabilities and overcoming security obstacles. That said, al Qaeda and other terrorist groups are attempting to acquire chemical, biological, radiological, and nuclear weapons and materials (CBRN). We assess al Qaeda will continue to try to acquire and employ these weapons and materials — some chemical and radiological materials and crude weapons designs are easily accessible, in our judgment.”

What priorities will change after the next terrorist attack? Who will be blamed for failing to stop it? Will we blame our unguarded borders against Mexico and Canada? Will we blame the lack of biometric IDs? Will we blame the insufficient ability to wiretap suspected terrorists? Will there be calls to do what we did with the Japanese during World War 2? (internment camps)

I don’t know what will be the precise dynamics in the media spin, but what I do know is that the political debate will shift dramatically at that point, and instantaneously, suddenly reminding us of 9/11 and various other turning points in history. We will be “shocked” to find out that we had become complacent and hadn’t urgently addressed so many “obvious” holes in our security, such as our unguarded borders and lack of terrorist tracking.

Wall Street is Voting on the Candidates – In Need of a “Cold Shower”?

By Anton Wahlman

Proper schooling includes the study of the things in life that have withstood the test of time. This includes objects of art (Leonardo da Vinci), literature (Shakespeare) and politics (the Declaration of Independence, the Constitution). These are items in life who are classical because they are each fundamental in their own disciplines.

With the most interesting political campaign in a generation in full swing, it is worth reflecting on the extent to which what is being discussed in these political debates will go down in history 25, 50, 100 or more years down the road as “classical” – or important in the eyes of history.

Let me suggest that at this point in the political season, as interesting as the fights may be from a multiplicity-of-candidates perspective, the actual content of the issue disagreements isn’t fought in a particularly classic way. What do I mean by that?

First, let’s define what is the classic debate in politics. It is pretty simple, actually. Everything that is done in the world, every dollar that is spent, is either done so by someone who is in charge of himself (or the family/children), or by someone who has taken the resource or forced it to be directed in any other (involuntary) way. That’s the government, which taxes, spends and regulates. For this reason, the classical debate in politics is very simple: Should the government tax/spend and/or regulate something, or should it not? If the individual is in control of his property, it is capitalism, but if the government regulates it and/or taxes/spends it, the thing in question falls in the column of socialism.

Almost every viewpoint in politics can easily be analyzed in this manner – capitalism vs socialism. It used to be a big geopolitical struggle between the free world and The Soviet Union, but the geopolitical struggle has now been replaced by the desires of radical islam and of ever-growing government at home.

In this context, the current debate of taxes and spending is pretty pathetic. Let’s start with Obama and Clinton. They are both in favor of raising Federal income taxes to well over 40%, raising the capital gains taxes from 15% to well over 40%, and probably also raising the corporate income tax from 35% to that over-40% rate. In other words, doing their best to make sure that the value of all companies on the stock exchanges will see their values tumble dramatically. By reducing corporate profits, and the share of those profits that go to their owners, it is a most basic corporate finance iron law 101 that the values must decline. Hence, a major reason for the stock market decline over the last couple of months. If there is a chance Obama or Clinton may actually raise those taxes in 2009, better sell those shares now before they go down another 20%. This is pretty simple – and prudent – risk management by those who own shares.

The most baffling point about the proposed Clinton/Obama tax hikes is their concurrent reaction to the recent market downturn and fears of recession. Both candidates are in favor of immediate tax breaks to avert a recession!

Hmmm, the economy is going South because of the fear of 2009 tax hikes, so therefore the same people who are proposing those tax hikes now want immediate tax cuts! Why doesn’t anyone call these deeply self-contradictory candidates on this evident inconsistency? It should be the first question in every interview/debate.

Unfortunately, the current crop of Republicans are not doing too much better in these departments either. While they pay lip service to avoiding tax hikes, and in some cases propose some (mild) tax cuts – such as a cut in the Federal income tax rate from 39.6% to 30% – they are fairly silent on specifics with respect to overall government spending. This year, the Federal government spends approximately $3 trillion, or $10,000 for each of us 300 million Americans. That’s up dramatically from 1962, when the Federal budget was $100 billion, or some $500 for each of approximately 200 million Americans.

None of the leading Republican contenders – McCain, Romney, Giuliani or Huckabee – have the courage to spell out specifically what – if anything material – they would cut from this giant $3 trillion bureaucracy. None of them has proposed abolishing a single government department, as far as I know. None of them points this out in socialism vs capitalism terms. All of them have bought into the principle that big government is here to stay, only that it should grow at perhaps 2% per year instead of 7% or whatever.

What we are left with here is therefore the cowardly Mexican standoff between Republicans and Democrats: Clinton/Obama are unwilling to accurately describe their plans for taxing and spending as a step into a future of socialism, and McCain/Romney/Giuliani/Huckabee are unwilling to admit that they are unwilling to change the status quo by anything but a rounding error.

There is therefore nothing classical about this fight at all.

Rather, the current in-fighting in the two parties focus almost exclusively on personalities and resumes – not actual policies in the context of the eternal struggle between capitalism and socialism. Someone is for “hope” and “change”, whereas someone else is for “experience” and “judgment.” But is someone willing to take a stand for and against socialism and capitalism?

Not any of the leading candidates, that’s for sure. With some degrees of difference in general direction, they have all basically bought into the model of big government, and the debate is about fine-tuning its size. Granted, it is important for the future of the stock market, economic growth and prosperity whether taxes are at 8%, 28% or 48%, but it doesn’t address the issue of the very fat $3 trillion annual Federal budget.

There is only voice pointing out that the Emperors have no clothes in terms of the narrow scope of the debate: Ron Paul. He points out that almost all of our $3 trillion budget is unconstitutional and socialist. The original constitution spells out that the only legitimate functions of the Federal government are the maintenance of a judiciary and a defense against foreign enemies. If we had a constitutional government today, it would cost somewhere well below $1 trillion, or well below $3,333 for each of us 300 million Americans.

Example in point: The framers of the constitution had as a key objective to make sure that the government does not get its hands on the education of our children. “Public” (socialist) schools didn’t exist until all of the founders of our constitution had died, in 1848, coincidental with Karl Marx’s publication of Das Kapital. I’m not a conspiracy theorist, but I couldn’t help noticing…

Yet today, the Republican candidates for President (except for Ron Paul) don’t propose the abolition of “public” schools. Same thing for other big budget items such as social security, medicaid and medicare. All these things are, in fact, socialist programs and therefore not-so-coincidentally unconstitutional.

So there you have it – today’s political debates have been reduced from comparing the classical differences between socialism and capitalism, to emotional nonsense such as whether we need a President who is for “change” and claims to be able to “unite the country.” How do you “unite” the views of the person who will see a huge tax hike to pay for some government program with the bureaucrats and the alleged beneficiaries of such a program?

America needs a cold shower of hard and fundamental choice: Should we follow the constitution and dramatically deflate the size of the government budget and its millions of regulations, or should we march forward into full-fledged socialism? We know where Obama/Clinton stand, although they dare not say it. Unfortunately, we also know that McCain/Romney/Giuliani/Huckabee aren’t proposing much more than “holding the line.”

The stock market has been voting in recent months, and its verdict isn’t all that rosy, as it starts to discount the probability of a leap into more socialism in 2009 and beyond. In the meantime, the rest of us can also vote our conscience – Ron Paul.

Turbo iPhone Broadband – 700Mhz War Zone – Game Theory At It’s Best

In this made for Tech TV reality series, the 700Mhz auction is going on as we speak.  I’m pulling for Google.  What people don’t realize is that if the 700Mhz auction goes Googles way we might see a national network very fast.   This will allow Google to add the ‘middle mile’ to their metro edge wifi networks (by passing the incumbent telcos) plus have a edge solution in 700Mhz.  Go Google Go!

I spent three years working in the wifi broadband and wimax area.  Currently deploying wimax and wifi metronetworks is expensive and not reliable.  A 700Mhz rollout is very viable and relatively inexpensive with the increased distances and small low cost antennas. 

I pinged a friend Chris Anderson, Founder of LRC MultiComm, an expert in rolling out big wireless broadband networks.  He summed up the 700Mhz auction best.  Chris says “I think it’s great especially for mobile data, television DTV applications… It’ll rev-up your iPhone. Finally a frequency that’ll burn through walls!

What I find most interesting in this saga is the game theory that must be going on right now.  All those negotiation strategist must be having a blast.  This is the tech policy verison of the NFL draft.  Where is the live stream and commentary?

The best bloggers covering this 700Mhz War Zone Tech Reality Series are:

Digital Daily from All Things D – John Paczkowski and ArsTechnica’s Eric Bangeman and RCR Wireless News and Cynthia Brumfield of ip democracy (must read for broadband policy news and thought leadership). 

My favorite blog for years, which has been one of the early blogs in wireless, is Dailywireless.org – very deep technical insight.  

However the best post so far goes Bryan Gardiner of Wired.com has a very strong blog post that intersects the business implications while digging in into the tech issues and benefits.  Nice post Bryan.

There will be three more rounds of bidding today, and the auction will continue until companies stop bidding, which could take weeks or even months. If you want to keep tabs on the bidding yourself, the FCC posts results 10 minutes after each round ends on the results page.

Update: Round three has ended, and the total has now climbed to $3.203 billion. Block D is still stuck at $472 billion, while bidding on Block C has risen to $1.493 billion.