Roadblock

Posted June 22, 2010 by bluffcityed
Categories: Jon's Posts

I was at a round table yesterday where the speaker stated their view on congress in the following fashion.

congress was not created to pass good laws.  congress was created to stop bad laws from becoming law

On the one hand, if you believe that the framers created the United States with the idea that states should reign supreme, then the notion that congress exists essentially as a road block to potential expansion of federal power makes perfect sense.  However, I would like to believe that congressmen care more about passing positive legislation than killing bills that they do not agree with.  Do individual congressmen attempt to kill bills that they don’t agree with?  Of course.  But when you look at the facts of how much legislation goes into congress each year and how much comes out, you get about 10,000 bills going in and around 400 coming out the other end of the funnel, a 4% success rate.

Despite all the outcry about the federal government’s encroachment on states rights, this seems to suggest that the best block on the expansion of federal power is congress itself.  When you start to get into the ins and outs of congressional committees and house rules, you find that passing a bill is a highly complicated and intricate process that dwarfs anything that schoolhouse rock ever taught us as kids.  However, it’s still a good basic summary of the process.

Lockheed Martin Part II

Posted June 19, 2010 by bluffcityed
Categories: Uncategorized

From the person who will hence forth be known as Publius, who also attended the Lockheed Martin dinner this past Wednesday, some more thoughts on the presentation:

At its best, Dr. Trice’s 30-minute PowerPoint presentation effectively conveyed the importance of America’s aerospace and defense (A&D) industry and demonstrated the perhaps underappreciated challenges faced by defense contractors: inefficient government procurement systems, whimsical political decision-making, and astronomical research and development costs, to name a few. He also gave a succinct history of the industry, logically explained why the A&D market consolidated, and showed big defense companies to have more diverse operations than expected. But his finest point came during the question and answer period. When asked by a fellow student whether the U.S. military was perpetually preparing to fight the last war, Dr. Trice responded by listing innovations that have originated with private A&D firms over the years and previewed some developments to come. Military advancements such as new armor suits, communication devices, and satellite technology are expected to save lives in the near-team, even as the nation begins to withdraw from ongoing overseas engagements. And innovations related to cyber-security, logistics management (including radio-frequency package tags), and information transmission show promise for spillover effects into the broader economy.

However, Dr. Trice often used hyperbolic language designed to obfuscate the true size and power of America’s A&D industry, no doubt aimed at derisively debunking the supposed myth of the Military Industrial Complex. While most interns seemed to drink this alluring tonic, to the more skeptical of interns his disposition only served to arouse greater suspicion. Three points stood out:

1)       “I wish I was in the business of making Frosted Flakes. That’s where the money is. We’re a niche company.” While no one is claiming A&D is bigger than the food industry, this struck many as an odd point. After all, Lockheed has a higher market cap than Kellogg (the maker of Frosted Flakes), has a higher average salary than Kellogg, and has seen their stock price grow over twice as much over the past ten years as Kellogg. If Dr. Trice had invested in Kellogg or had been employed there as a median or average worker instead of at Lockheed Martin, he would most assuredly be less well-off.

2)       “Lockheed is small potatoes.” This is similar to the above point. Lockheed generates more revenue than Pepsi or Coca-Cola, than Apple or Intel, than Best Buy or Sears, than Time Warner or Comcast, than Disney or News Corp, and on and on. It is true that many companies with smaller revenues are seen as much more valuable, but in terms of actual money received (as well as net profit) there are few potatoes larger than Lockheed.

3)       “We have a very poor customer.” To some this seemed to be almost insulting to a country that accounts for over 50% of all A&D spending worldwide, that allocates 49% of its discretionary spending to the Department of Defense, and that has single-handedly, as Dr. Trice would later admit, caused a boom in the A&D sector over the past ten years. This was especially puzzling coming from Lockheed, who are more reliant on the government than other A&D firms. According to Washington Technology, Lockheed received more in government contracts than any other company in the country; they received more than Northrop Grumman (2nd) and General Dynamics (6th) combined.

Overall, it was tough reconciling how a small potatoes company could account for such a large portion of U.S. exports, how a company that couldn’t pay its employees or shareholders like a cereal company could be so competitive hiring top talent, or how a government so difficult for an industry could simultaneously give them so much of its tax dollars. That being said, Dr. Trice was an engaging speaker and the burritos were delicious.

This American Life and the News

Posted June 19, 2010 by bluffcityed
Categories: Jon's Posts

Good week this week.  I’ve become more involved in the office, now am trained to give tours of the US Capitol (yes, I am again a tour guide) and have actually gotten to do some writing around the office.

One of the things I’ve come to enjoy the most is the numerous news sources available to a student like me.  In Madison, we have the two city papers, wispolitics, a few blogs and two campus news papers (not counting the onion).  Here in DC, we have several national news papers available each day in the office, news sources that specifically cover what is going on at the hill, and more magazines and national publications than I know what to do with.

It’s wonderful to have access to so many learned people and to get so many insights into life on this hill.  Especially this week when law makers are discussing measures such as a comprehensive climate change bill and what amounts to a $50 billion bail out for state and local governments to avoid cutting social services such as firemen and policemen.  You quickly gain an understanding of who knows what’s going on and who’s just making partisan noise to get some good soundbites for their campaigns.

I’ve also come to understand that the magic number up here on the hill and in DC as a whole is 60.  60 votes in the senate are needed to avoid a minority filibuster.  For those of you that don’t follow the hill’s proceedings, a senate rule states that any member may hold the floor “as long as he or she is able,” which amounts to letting them speak until they literally collapse from exhaustion.  This unfettered speaking right is called the filibuster.  The longest on record is Senator Strom Thurmond’s filibuster of the Civil Rights Act, which took up 24 and 1/2 hours all on his own.  And when the minority gains the floor, they can yield to each other and perpetually hold up all other actions in the senate.  Therefore all legislation in DC is measured by its ability to get 60 votes in the Senate, which is what really matters in the end.  I personally feel that there are enough other mechanisms put into the legislative system to kill any legislation that doesn’t have strong support that the filibuster is not necessary, but it’s a very cherished part of the Senate tradition.

As I write this, I’m listening to Ira Glass on “This American Life” talk about the State of New York’s budget crisis.  One quote by David Patterson, the Democratic Governor of New York, summarizes my feelings about government during the recession:

we’ve asked government to take on too many tasks that cost too much money, and we find ourselves in this quagmire

This isn’t to say that government has failed in its goals.  Instead, I believe it says that we’ve taken on too many projects and now find ourselves in a recession where we are unable to finance these projects, despite their good intentions.  We need to have a very frank discussion in this country about the limits we face and how best to use our resources, which are NOT infinite.  To bring it full circle, this is a conversation that legislators in Washington DC don’t seem to want to have.  Right now, they instead seem content to pay lip service to the idea of cutting spending, but their actions indicate that they really don’t believe that this is a conversation that must be had.

Lockheed Martin Part I

Posted June 16, 2010 by bluffcityed
Categories: Badger Sightings, Jon's Posts

Hey all.  Today several of us Madison alumni visited Lockheed Martin, one of the military’s big 5 military contractors.  Military spending makes up approximately 4% of the United State’s GDP.  The VP of Lockheed Martin, Bob Trice (pictured below) is a UW Madison alumni who graciously offered us dinner and some time in their flight simulators.  While I had some issues with the content of Mr. Trice’s presentation, such as his labeling of military/industrial spending as “small potatoes” when compared to overall economic spending, more on that topic will be written tomorrow by my roommate Paco.

While it wasn’t a Badger sighting, tonight I also had the pleasure of meeting a former Drum Major of the Michigan Marching band (2002-2004) named Matt Cavanaugh.  He has been working for Lockheed Martin as an engineer for a number of years.  We had a long conversation about the differences in band culture, performance styles, and Drum Major philosophies (for those that don’t know, I was the Drum Major at UW-Madison from 2008-2009).  He’s also the guy who claims to have invented the Maize out at Michigan, and I have no reason to doubt him.  We also talked a lot about leadership and how no course can prepare you for the things you’ll learn about leading an organization like being in Marching Band.

One of my favorite aspects about Washington DC is that it is a small world, and that you can make connections with just about everyone if only you’re willing to take the initiative and talk with them.  Chances are that if you open up and have the courage to interact with those around you on the subway or at the lunch counter, you’ll find something that the two of you have in common!

Tune in tomorrow for Paco’s take on the Lockheed Martin and a report from my tour of the White House!

The Public Beating Has Not Gone Out of Style

Posted June 16, 2010 by bluffcityed
Categories: Jon's Posts

Though it was my day off, I spent most of my time on the hill watching the Senate in session and the House Energy and Commerce Committee.  Not much to talk about on the Senate front.  The room was completely empty except for three Senators who made speeches supporting or detracting President Obama’s handling of the BP oil crisis and his speech tonight.  However, on the house side…

Let me start by saying that I didn’t attend the whole hearing.  It was extremely crowded and I was only able to spend an hour watching it.  However, I came in right as the BP Executive in America started his Q & A, so I think I picked the right time.

About half of the hearing was legitimate questions about BP and other oil companies operations (see my previous post for a complete list of who attended).  A good summary of the entire hearing can be found via the NY Times here.  Rep. Dingle (Michigan) asked several questions about BP’s working with the Dept. of Interior staff, technical questions about equipment, etc.  It was also established through a question from Rep. Burgess (TX) that there is no new idea for stopping the spill, and that it will continue for the foreseeable future in its present fashion until relief wells are completed (est. August).  It should also be noted that each of these executives were there voluntarily and were not brought before the committee via subpoena.  But the other half…

Lets just say that it was a highly entertaining hearing at some points, because it seemed that some of the Congressmen were simply out to embarrass the oil Execs.   You can watch the entire thing yourself here (though it’s 4 hours long).  Rep. Markey (Mass) started his questioning by noting that each of the five oil companies had the exact same plan for cleaning up a spill in the Gulf of Mexico, but had simply changed the colors of the front page (all the reports were almost completely identical to each other). There was also a contact listed for a Professor who, though an expert in oil policy, has been deceased for 4 years, and references to handling cleanup involving walruses, which Rep. Markey noted have not inhabited the gulf for 3 million years.  He, Rep. Upton (Mich), Rep. Waxman (Cal), and Rep. Stupak (Mich) all proceeded to pile on, hammering BP and the oil execs on everything from their underestimating of the spill total to accusing the oil execs of all quoting from the same script (which I don’t doubt). It served as a chance for the Congressmen to get out some of their frustration on the people who have put us in this situation, for better or for worse.  In other words, a good old fashioned public beating.

From what I saw, it seems that one of the main goals of the hearing wasn’t necessarily to figure out what to do now that the spill has occured, although that was discussed.  It was in part to let the Reps. rake the oil execs over the coals for things that quite honestly, they could not prevent.  One exec was pushed so far by Rep. Stupak to say, and I quote:

when these things happen, we are not well equipped to handle them

There are risks that go along with drilling for oil and although safe when the proper safety measures are instituted, it is difficult to respond to a crisis of this magnitude simply because we don’t have the resources available.  A point was made that contingency clean up plans were done for spills as large as 200,000 barrels a day, but these same plans were unable to effectively cope with 40,000 barrels a day (the current estimated rate of the leak).  The point is that even with the best planning in the world, the reality is that there is only so much that can be done in a situation like this. Is it a good idea for oil companies to have the resources and materials on hand to deal effectively with a spill like this? Yes.  Is the statistical likelihood of such a spill occurring enough to warrant that kind of investment?  Probably not.  Hence the situation we are in.  So I leave off the question: knowing now what happens when the deep water drilling goes wrong, knowing our capabilities, despite all the safety precautions, is it worth it to continue drilling?

Oh yeah, I forgot to mention.  Of the 7 Congressmen I saw testify, I counted 4 that specifically referenced the oil-soaked pelicans in the Gulf.  Nothing like a little provocative imagery to try and get the crowd (or nation in this case) on your side.

“So I know who’s a** to kick”

Posted June 15, 2010 by bluffcityed
Categories: Uncategorized

Tomorrow the House Committee on Energy and Commerce will be holding  a hearing entitled “Drilling Down on America’s Energy Future:  Safety, Security, and Clean Energy.” I plan on attending, so check back for a synopsis later in the day.  The star witnesses include:

  • Rex Tillerson, Chairman and Chief Executive Officer, ExxonMobil
  • John Watson, Chairman and Chief Executive Officer, Chevron Corporation
  • James Mulva, Chairman and Chief Executive Officer, ConocoPhillips
  • Lamar McKay, President and Chairman, BP America, Inc.
  • Marvin Odum, President, Shell Oil Company

1st Poll!

Posted June 13, 2010 by bluffcityed
Categories: Uncategorized