Drones, dollars, and the open-source insurgency

Yesterday, I wrote on the massive new $636 billion "defense" spending bill passed by the House of Representatives. An article in today's Wall Street Journal should make us further question the efficacy of this type of high-technology spending. A MQ-1 Predator drone costs some $4.5 million dollars each. They have a wingspan of approximately 48 feet, weigh 2,250 lbs. when loaded, have a range of over 2,000 miles, and have a ceiling altitude of 25,000 ft. They can be loaded with two hellfire missiles, making them available for a combination of reconnaissance, combat or support roles. The MQ-9 Reaper drone, the larger and more-heavily armored cousin of the Predator, cost about $10.5 million each. The Air Force maintains a fleet of 195 Predators (total cost ~$877.5 million) and 28 Reapers (total cost ~ $294 million). The New York Times reported earlier this year that they are flying 34 daily surveillance patrols in Afghanistan and Iraq, up from 12 in 2006. They transmit some 16,000 hours of video each month. Insurgents can spend $25.95 to purchase Skygrabber, a program available on the internet which allows them to intercept the video transmitted by these drones.

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U.S. House approves funding to maintain the empire

As distinct from other peoples, most Americans do not recognize -- or do not want to recognize -- that the United States dominates the world through its military power. Due to government secrecy, our citizens are often ignorant of the fact that our garrisons encircle the planet. This vast network of American bases on every continent except Antarctica actually constitutes a new form of empire -- an empire of bases with its own geography not likely to be taught in any high school geography class. Without grasping the dimensions of this globe-girdling Baseworld, one can't begin to understand the size and nature of our imperial aspirations or the degree to which a new kind of militarism is undermining our constitutional order. ---Chalmers Johnson
It is with the context provided by that quotation from historian Chalmers Johnson that one must understand today's news that the House of Representatives has approved funding today for defense maintaining the empire. The level of spending has been approved at $636.3 billion dollars-- nearly two-thirds of a trillion dollars(see related post on how much a trillion really is) to maintain our network of more than 800 military facilities in more than 140 countries around the world. That spending includes $128.3 billion for fighting our current wars, although Afghanistan is expected to require an additional $30 billion to fund the most recent troop increase.

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So who wants to be a billionaire?

Clusterstock has detailed and easy-to-follow instructions to making ridiculous amounts of easy money. Start by forming a bank, hire all of your friends as bankers and raising some capital. After those preliminary steps, the hard part is done:

STEP 4: Borrow $9 billion from the Fed at an annual cost of 0.25%. STEP 5: Buy $10 billion of 30-year Treasuries paying 4.45% STEP 6: Sit back and watch the cash flow in. At this spread, you should be earning at least 4% per year on your $10 billion of capital, or $400 million. Sure, there's some risk that the Fed will grow a backbone and raise short rates, but there's not much risk. (They have an economy to fix and banks to secretly recapitalize). And in any event, if the Fed raises short rates, making your $1 billion will just take a bit longer. (And if they REALLY raise rates, causing you to actually lose money, it will be someone else's problem.)

Continue ReadingSo who wants to be a billionaire?

Obama, Afghanistan, and deja vu all over again

First, some background:

  • May 1, 2003 President George W. Bush, while standing in front of a "Mission Accomplished" banner, declares "Major combat operations in Iraq have ended."
  • October 27, 2007 Presidential candidate Barack H. Obama, speaking on the Iraq War, declares "I will promise you this: that if we have not gotten our troops out by the time I am president, it is the first thing I will do. I will get our troops home, we will bring an end to this war, you can take that to the bank."
  • November 4, 2008 Candidate Obama is elected to the presidency.
  • January 20, 2009 Obama's inauguration.
  • January 21, 2009 First full-day of Obama's presidency passes with no sign that he intends to bring the troops home.
  • February 18, 2009 President Obama orders 17,000 additional soldiers to Afghanistan.
  • February 27, 2009 President Obama declares "Let me say this as plainly as I can: By August 31, 2010, our combat mission in Iraq will end." Ok, so it's not the "first thing he will do", but he will definitely do it. Someday. For sure, all the troops from Iraq will be out by 2011. It's hard to tell though, the 2012 elections will be right around the corner by that point...

Continue ReadingObama, Afghanistan, and deja vu all over again

Denialist Wall Street Journal admits Peak Oil has arrived

The trickle of Peak Oil articles has turned into a flood recently. First came the chief economist for the International Energy Agency (IEA), Dr. Fatih Birol, with the shocking announcement that "My main motto never changes, the era of low oil prices is over." Then there were the whistleblowers at the IEA who alleged that the IEA's rosy forecasts of rising production timed perfectly to satisfy rising demand had been rigged at the request of the United States. "We have entered the Peak Oil zone. I think that the situation is really bad," one whistleblower said. Then, Warren Buffet made his "all-in" wager on rail transportation. Now, even the Wall Street Journal has capitulated. Last week, they ran a front-page story titled "Oil officials see limit looming on production". The actual Wall Street Journal site requires a subscription, but it has been mirrored a number of places online if you're interested. The first paragraph of the story reads:

A growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.

Continue ReadingDenialist Wall Street Journal admits Peak Oil has arrived