Friday, March 14, 2008

Can Junior's Protection Racket Last?

Friday, 07 March 2008


The elephant is great and powerful, but prefers to be blind.
David Halberstam, The Best and the Brightest (1972)
(Here's an aside on the future of the "national security" system. Please bear with me as I work on it.)

The US national security budget is nearly $700 billion a year (much more if the total costs of Iraq/Afghanistan are thrown in), more than the rest of the world combined. Unfortunately, within that entire budget there isn't a single research organization or think tank that is seriously studying, analyzing or synthesizing the future of warfare and terrorism. Fatally, most of the big thinkers working on the future of warfare do their critical work in their spare time, usually while working other jobs to put food on the table for their families. In sum, this deficit in imagination will soon be the critical determinant on whether the national security bureaucracy remains relevant in a rapidly changing global security environment. That relevance is the key to its future.

Here's why. The need for relevancy became apparent on 9/11, when a small group of attackers hit the US without regard, or even a passing thought, to the trillions the US had previously invested in national security. The public's response, this first time, was to pour more trillions to correct that failure. When another unanticipated situation occurs again (and it will, likely in a increasingly rapid succession as small group warfare climbs an exponential ramp of productivity improvements), the public will not be as generous as they were the first time to a legacy organization that can't/won't do the job we pay it for. In fact, the public's displeasure will likely be expressed in a series of major defunding events for the national security bureaucracy. Here's the process that will cause it:

  • Funding will already be very scarce. The combination of demographically driven entitlement spending (the first baby boomers retire this year), ballooning deficits (funded by harder to get and more expensive debt), and an inability to raise new federal revenue (money under pressure moves global) means that money will be very tight. As a result, the Federal government's discretionary budget will suffer significant and prolonged shrinkage.
  • A need to show results. Given insufficient funding over a prolonged period, much more attention will be paid to the returns of investment from government programs (a result of too many programs chasing an ever tighter budget in an increasingly transparent society). Those programs that don't perform well, will fall under the axe. Further, citizens, who increasingly view themselves as customers of government security services rather than passive recipients, will be increasingly critical of failures from programs that cost plenty but deliver little. ( Let's hope this includes all the corporations involved in this mess. It's not the U.S. Army who has effed everything to kingdom come. Can you spell Blackwater? KBR? Halliburton? Just for starters?
  • Competition from below. New, grass roots efforts at the state and local levels will compete favorably against national programs. As in: if the federal bureaucracy can't protect us, we will do the job ourselves locally (New York City has already paved that pathway with its own counter-terrorism center). Expect a fight between local and federal, a fight where the local wins.
In short, the next black swan is likely to do the opposite of what the national security bureaucracy thinks. Rather than be the driver of massive rounds of new funding, it could turn it into a husk of its former self.

Given that simply remaining relevant will become the key to future public funding of our national security system, will the bureaucracy react to save its own hide? Likely not. The smart money is on a failure to change, irrelevance, and organizational dissolution.

NOTE: If you could get the top 20 people in the warfare/tech futures space under the same virtual roof and focused their output, the result would be complete dominance of the idea space. Low cost. High value. Within a year, their output would dominate the press and policy.

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. I.U. has no affiliation whatsoever with the originator of this article nor is I.U endorsed or sponsored by the originator.)

The Nazis, Fascists and Communists were political parties before they became enemies of liberty and mass murderers.

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