Saturday, January 21, 2012

Getting Real About STOVL

This is a cross-post from the Marine Corps Gazette Blog.  For more background behind my thoughts, see this post and this Marine Corps Gazette article.

Thom Shanker from the NYT reports this morning about Secretary of Defense Leon Panetta's decision to take the F-35B Lightning II off of probation. The B variant is a short take-off/vertical landing (STOVL) jet capable of taking off from short landing strips or the deck of an amphibious ship (as opposed to a catapult-assisted launch and an arrested landing on a full-sized carrier). The Marine Corps' story is that STOVL is needed for (a) use in amphibious scenarios and (b) expeditionary scenarios where landing sites are limited. Shanker alludes to this in discussing "the importance to the Marine Corps of coming up with a replacement for its Harrier jump-jet, which has proved its value in countering insurgencies and terrorists in rugged, remote areas."

Friday, January 20, 2012

The Arc of Enterprise

In an email between colleagues yesterday, one pointed out an article in Joint Forces Quarterly and labelled it as subpar.  That's putting it nicely.  My sole contribution to the discussion was to state that this is what happens when we are overspecialized.  I didn't elaborate in the email, but I will here.  I'm still working through Richard Rumelt's Good Strategy/Bad Strategy, which I highly recommend, and a few days ago encountered a section entitled "The Arc of Enterprise."  What we are seeing today in the military, and in the government more generally, is a familiar phenomenon in business, and in health for that matter.  When you get too fat for your own good due to an advantageous "resource position," you start to not only lose the race, but to lose your own vision of how to run the race.  This need not be a terminal decline, but it must be recognized to be corrected.

Wednesday, January 4, 2012

Must Reading: The Great Deleveraging

FT's Alphaville blog has must reading for anyone trying to understand our economy these days.  They quote Bill Gross of the bond company Pimco, a market authority, in his attempt to describe the Great Deleveraging we are seeing.  I touched on this in a previous post that tried to explain our balance of payments crisis and the underlying structural imbalances.  Gross is talking about the private lending that buoyed the system and underwrote these imbalances.

Since 1971, when the U.S. went off the gold standard and the Bretton Woods system evaporated, banks have been able to use "credit and the expansion of debt to drive growth and prosperity" with no anchor.  Credit became "a substitution for investment in tangible real things - plant, equipment, and an educated labor force."  The Great Recession of 2008 marked the limit of this credit expansion, or leveraging.  Gross goes on to say, "The financial markets are slowly imploding - delevering - because there's too much paper and too little trust."  Because the system cannot create any more credit, it must deleverage.