Thursday, 16 August 2012

The Sequestration Episode

Some smart folks, associated with the George Mason University….sat down and looked at the looming sequestration episode to occur in January and its impact on the DC area.

For those who weren’t aware….sequestration was this default fix-all, cure-all, screw-all, recession-all solution that both parties invented. The curious end to sequestration involves the District of Columbia that folks haven’t thought much of.

DC doesn’t have any real industry or business operations. The US government is what makes jobs and growth in DC…..the rest simply survives off the cash flow, from coffee shops to the BMW dealerships in the area.

Well….according to the smart guys, if sequestration goes through…the effect on DC is simple. There would be looking at a loss of 65k federal jobs in the national capital area, and another 96k contractor jobs (these are the type that pay $70k or more per year).

The numbers presented via Stephen Fuller (the director of the Center for Analysis) (compliments of WTOP)……are $50 billion regional dollars lost. So you can take an area the size of Atlanta, and discuss a $50 billion loss and 170k unemployed folks being staged all within a short period of time. Then, you start to watch folks get real nervous.

In DC…..so far, nothing much except a general feeling that it’d best not happen. If you went into Atlanta and just said that 150k folks would be laid off in the upcoming January….things would be fairly hostile. The same would be true if you went into San Francisco and just said 100k folks who make over $50k a year…..wouldn’t be working in the new year.

My “ripple” assumption? I’d be taking a guess that 100k people….unassociated with the government or contracting…..would likely be temporarily let go or just plain terminated…on top of the 170k, so it’s really closer to 270k unemployed folks in DC.

The local airport? You can figure at least fifteen fewer flights a day from Ronald Reagan International, and probably the same number from Dulles. The local subway commuter crowd? I’d be guessing they could run ten percent fewer trains and buses. The coffee shops in the region? I’d be guessing at least forty percent of them could completely shut down. You can figure that pizza delivery, restaurant sales, and pub operations would all kinda feel financial pains….with some surviving and some dissolving by the summer of 2013.

Then you get into a housing crisis…..at least a thousand homes bound to flip over to the banks by October of 2013, and another three thousand by the summer of 2014. Folks would use their savings to keep some hope alive, but if the jobs didn’t come back….DC would be a dead zone for future employment. You’d be better off to just give up and move off to Dallas or St. Louis.

Sequestration was supposed to be this huge threat to force everyone to the table and find a budget answer. In the end, everyone from both parties saw it as a political tactic….thinking the other folks would give in and find a solution. They never did.

My humble guess? As warning notices go out in early November, the election will occur. The election results don’t really matter. I’d hope that the dimwits can figure a suspension to this deal and postpone the mess for 100 days….putting this off in March for a full solution. If they don’t do a decision by then? Well….forget the local Christmas purchasing power in DC for Thanksgiving week, and prepare for a massive recession. It’d be best to move stocks into bonds by this point and settle down for a long dry spell….until the next four-year election.

The worst of the scenario? A bunch of Congressmen and Senators would be standing there in January, with folks walking out the front door and still arguing over who had the best plan. They’d all probably jump up and offer grants to study the effect of unemployment in the national capital region, and some university professor would be guaranteed a job for two or three years while talking to 270k unemployed folks.

That Julian Dimwit

Ecuador finally stood up and issued out an asylum deal to the WikiLeaks guy….Julian Assange. This means Julian walks out of the embassy in London….boards a plane to Ecuador….and for the rest of his life….he kinda has to stay in three or four South American countries which have no extradition treaty with the UK or Sweden.

Well....if the UK agreed that it would allow safe passage out of England. And they just plain said today....they absolutely will not allow such passage.

It’s hard to imagine a lifestyle like this. You volunteer to put yourself in a third-world country….which has no real technology base. You have no real friends in Ecuador. You don’t have any reputation or knowledge of Ecuador. You have never even been to Ecuador. You can’t travel to any “real” country from this point on.

What happens now? I'm guessing that Julian will stay on in the Ecuadorian embassy for months and months, and months. I went back to read up on Julian. The guy never had a father in the house....he more or less was this intellectual kid whose mother continually told him not to trust the government. There are various episodes where he got into trouble, and then talked the authorities into letting him go. For all of this stupid and dumb stuff that he's done in life.....he's never spent a day in jail or prison.

In the south, we have this expression....."man-up".  It means when you've done something pretty stupid....you come to a point where you admit the screw-up....do months or years in jail and just go on in life.  Julian's answer is.....I just don't have to go to prison....there's always a plan "B" solution to avoid jail.

There’s something wrong with the logic of Julian Assange, if you ask me. If you’ve done something stupid…..as he apparently has…..just fess up and take the simple consequences. It’s not like you transported drugs via Turkey, or sneaked illegal’s across the US border, or ran a meth lab in Mobile.

Yeah, he just might end up living the rest of his life in some Ecuadoran-building in London.....watching British news each day, and accepting the fact that each phone call is monitored.  The cops know you want to sneak out and they've got six guys always waiting for this rainy evening when things might work out.  It's a pretty sad life.....if you ask me.

My Debate Questions

If I Had Ten Questions for the President’s Debate:

First, if you had three things to do and create a better jobs market for America….what would you do?

Second, if Congress wrote all this tax code, enabling a guy to make a million dollars but pay no taxes….how would you change it, or would you change it, or could you change it?

Third, if neither party can work out compromises in both the House and Senate….what’s the answer?

Fourth, is it Presidential to appear on nightly entertainment TV shows?

Fifth, are all Americans equal in creation?

Sixth, which matters the most….good five-star fried chicken or the social values of a chicken franchise?

Seventh, do you have any real opinion on the designated hitter rule in baseball?

Eighth, if you had to go out and borrow another eight billion from China tomorrow…..to help finance US government operations….would you have any ill feelings?

Ninth, if you taxed the heck out of every American corporation and millionaire….like eighty-eight percent, and still didn’t have enough money to run the government…..who would you tax next?

Tenth and final, is blame a good way of connecting to people and helping to making make folks happy?

The Tulsa Comedy

This is how things unfolded.

The deputy police chief had determined that his department needed to attend a Muslim event at a Islamic center in the local area. It kinda got fixed up as a meet-and-greet deal to start with….which kinda included a 45-minute prayer service. The original message from the deputy police chief said it was all voluntary and twenty-five of the guys under him….ought to attend. Well….no one signed up.

So some time passes and the deputy police chief now says….it’s mandatory for a supervisor and two of the guys to go along and attend. The Captain in charge of operations makes this known, but still no volunteers. There’s a problem here also….in that the Captain is a devote Christian and just wasn’t going to be a part of this whole religious ceremony…..period.

So the Deputy Chief has docked the Captain’s pay for two weeks, got the Captain onto a graveyard shift, and noted enough to keep promotion out of reach for at least a year.

Things are now simmering a bit in Tulsa….where this occurred, and the court system will get invited into the mess. It’s hard to figure what the deputy chief’s whole plan in the begging was, and which political figure was pushing on to create some theater-like situation for a news episode.

You can imagine the Channel Nine news folks…..showing 60 seconds of some video clip…..a couple of cops in uniform…..all lined up…..shaking hands with various Islamic guys. Makes for a pretty nifty gimmick. I’m guessing no one on the city council wants to admit in public that they pushed the deputy police chief on this issue.

So they will have to promise this deputy police chief a fair amount to avoid telling the whole story in court. What the Captain wants….is back-pay and put back into his normal situation…..the graveyard shift cancelled, and promotion to be back on track. I suspect the judge involved…..really doesn’t want to open a can of worms here…..it’d make the political party involved look bad.

The end result? The deputy police chief just stands there and acts stupid, and gets promoted in a year for being a good asset to the city council. Whoever nominates the guy for the promotion….is likely the idiot connected to the Islamic episode. The Captain gets fixed up and most of the cops on the staff will laugh over this whole thing. It’s hard to imagine how you’d run a government operation and force folks to attend some religious deal that disagrees with you. But this is America, and anything is possible….even idiot city council guys who order deputy police chiefs to do stupid things.

If You Got to Go

The news came out today that US Army General William "Kip" Ward is under investigation.  General Bond is in charge of our Africa Command....based out of Stuttgart, Germany.  The deal?  Well....some folks have said that the General took some family folks along with him on some of these Africa trips, spent a heck of a lot of money on flights and hotels.

I lived out of Germany for a number of years and know the general travel costs of getting around.  Nothing.....that has to do with Africa travel.....is cheap.

Even if you were sitting in Frankfurt, Germany....which has the most flights out to Africa of any European airport.....it doesn't help that much.

Once you arrive at your destination.....then comes the various rental vehicles.  You figure the General travels with some entourage, so he needs at least five or six vehicles.  They'd have to all be SUVs, so you can figure $2k a day just spent on vehicles along.  Then comes gas prices at the country you are visiting.  Toss in the per diem of each place you are going to.....probably $125 minimum for each person per day.  Then there's the hotel issue.  If you want a hotel with security and a real restaurant.....then it'll run $300 a day for the room for each person.  Suddenly, a simple four-day trip out to one country in Africa is around $60k for the General and his entourage.

My humble guess is that a couple of guys will investigate and be rather shocked at the regular cost for anyone to move around Africa on twenty trips a year.  The General's job?  That's the interesting thing.  He was supposed to go out and be seen as a positive figure in US military authority within Africa.

What happens now?  I'm guessing the next couple of guys will write a couple of rules.  No more than six trips a year into Africa.  No real entourage other than three people.  In five or six years.....some Senator will comment that the head of the Africa Command never seems to travel or be seen, and note this as a serious problem.

Full circle.....you got it.

So I feel sorry for the General.  If you had to pick a place where travel costs are silly.....this is it.  And the US made it a big deal to be seen and heard in the region.