Why CEO's Earn Their Pay

John Phipps provides a quote from Davos, via the NYTimes . (The context is a clueless CEO trying to prep for a PR appearance.)

Sensitive But Unclassified--Bureaucratic Boundary Setting

Elizabeth Williamson in the Post had an article on Sensitive But Unclassified (SBU) markings (things like "For Official Use Only", etc.). These are stamps that government agencies use when they can't justify a "Confidential, Secret, or Top Secret" classification. It seems that they pose a big threat to the information sharing deemed essential to combat terrorism, because each different marking carries its own rules for dissemination and there are 108 different ones. So if the FBI sends info to the state police who relay it down to county sheriffs things can get confused. There's a committee working on simplifying this (to improve the "information-sharing environment").

Why so many SBU's? It's a combination of reasons.

• The official classification system is limited and rigid--only three markings so they have been amplified by modifications.
  
• Bureaucrats are scared--suppose this paper leaks to the Post, that would be embarassing. Or even if it reaches the local gossip. (The Plame affair revealed that even deputy Secretaries of State can love their gossip.)
• There's the high school clique reaction: we know something you don't, ha ha ha.
• Most of all, bureaucrats love to set boundaries and SBU's are a way of marking them.
  

Is it all bad? No. I'm reading William Easterly's "The White Man's Burden". He makes the point that a bureaucracy (foreign aid/foreign development type agency) that tries to do everything (and that has multiple "principals" to report to) is prone to failure. So a bureaucracy that is focused on doing one thing is more apt to be successful.

The problem we have in homeland security is that our bureaucracies have each had their own objective(s). When the global war on terrorism came along, we superimposed new objectives on the old and we still haven't straightened things out yet.

Iraq as a Land of Free Enterprise

"Imperial Life in the Emerald Palace", about which I blogged here, notes several instances where Bremer's people wanted to reform Iraq into a free market economy. Remember that when you read this George Buddy quote of a Guardian article on Iraq, the reporter interviewing a Sunni insurgent who says:

"'I used to attack the Americans when that was the jihad. Now there is no jihad. Go around and see in Adhamiya [the notorious Sunni insurgent area] - all the commanders are sitting sipping coffee; it's only the young kids that are fighting now, and they are not fighting Americans any more, they are just killing Shia. There are kids carrying two guns each and they roam the streets looking for their prey. They will kill for anything, for a gun, for a car and all can be dressed up as jihad.'

Rami was no longer involved in fighting, he said, but made a tidy profit selling weapons and ammunition to men in his north Baghdad neighbourhood."

Nice to know we're making progress.

"Industrial" Farmers

John Phipps has an interesting piece on "industrial" agriculture here (pdf)

Imperial Life and Harvard Business

Just finished reading Imperial Life in the Emerald City, by Rajiv Chandrasekaran (spelled the name without looking, though I did doublecheck--guess I'm not senile quite yet). Interesting, depressing, in line with Tom Ricks Fiasco, Woodward's State of Denial, etc. A couple of comments from a bureaucratic standpoint:

• one of the things an established bureaucracy does is reproduce itself. In other words, it develops patterns of recruitment and training for its employees. The American effort in Iraq, whether Garner's effort or the Coalition Provisional Authority, wasn't a developed bureaucracy. As a result, the recruitment seems to have been haphazard and the training nonexistent. I'm sort of reminded of an old cartoon, perhaps from Disney, where the lead character, an inventor, puts together a super-duper vacuum cleaner, turns it on, and the suction pulls in everything that isn't firmly nailed down. Iraq seems to have had the same effect: pulling in a bunch of young aspiring types, some older people nearing the end of their working life with expertise that might relate to CPA's needs, and a few people in the middle of their careers. It was a natural reaction to the situation: no planning, reliance on who knows who (which leads to political connections being importance), etc.
• a number of bureaucracies ended up in Iraq: CPA, State, DOD, contractors. What's striking is management's failure to ensure the bureaucracies were permeable. It would have been a much smaller book if he didn't have the anecdotes about bureacratic conflicts within the US occupation.

The picture of the insularity of the Green Zone (the "Emerald City") reminded me of Long Binh in Vietnam.

Finally, it seems to me that Harvard should revoke and disown a certain MBA.

EWG Has a Blog

Because I often blog on farm programs, it's appropriate to welcome Ken Cook and his Environmental Working Group to the world of blogging here. I don't expect to agree with him most of the time, but differences make the world interesting.

The Twists and Turns of Public Policy

NY Times has a business article saying that commodity index firms are investing more money in commodity futures, perhaps leading to more volatility. Meanwhile, Tom Friedman reports in his op-ed that his daffodils bloomed in January (mine didn't) and voices a call for a Green New Deal. And the Times world news has an article whose lede (first time I've used that term--gosh, I feel all knowledgeable and hip) is:

"Facing public outrage over the soaring price of tortillas, President Felipe Calderón abandoned his free-trade principles on Thursday and forced producers to sign an agreement fixing prices for corn products."

We liberals want to fight global warming, so we encourage ethanol production, particularly when we're seeking the Presidency and it's primary time in Iowa. But on other days we also complain about farm programs, as undeserved rewards to big industrial agribusiness. Those of us focused on foreign lands worry about the impacts of cheap US corn on poor Mexican peasant farmers, observing that if they can't be kept on the farm, they'll end up in the US.

But that's last years politics. Now it seems that demand for ethanol, sparked by high oil prices and government supports, has taken off at the same time the uncounted millions of Chinese have earned enough money to start eating meat, good corn-fed meat, sending corn prices high. (Soybeans are up too, but not as high.) So high corn prices are bad for the Mexican poor, who need protection. (Not sure if high corn prices will drive the urban worker to the U.S, but it won't help the evolution of democracy in Mexico.) Of course, capping the corn price in Mexico hurts those farmers remaining on the land.

Meanwhile, the volatility of corn prices resulting from the market dynamics (demand is relatively inelastic--it takes lots of meat eating Chinese and new ethanol plants to move the price) may be accentuated by boomer money flowing into index funds that seek the next hot commodity (gold and copper have had their runs, now it's time for ag commodities).

What's missed here is the relationship of farm programs and volatility. Farm commodities are much more volatile than other commodities (just watch your California navel oranges go up in price). Over the years, that uncertainty has led to the creation of programs to lessen risk, which continues even now.

Sentence of the Year! (So Far)

"After watching today's procession, it occurred to me that people inside the Beltway (a precondition for service) are far more normal than they get credit for."

From John Dickerson's piece on the Scooter Libby trial in Slate.

Post Stories on Ag Programs--Followup III

Two pieces by Jeff Harrison, a former House Ag staffer, critique the Post stories on agriculture. They are:

• here(the website of the US Rice Federation)
  
• and here a link provided by Jim Wiesemeyer--media savant. I first Jim met back in the payment-in-kind days (1983), not that we've kept up any contact since.
  

In this, as in most things governmental, one needs a grain of salt. (For example, Wiesemeyer spoke to the US Rice Federation and included a slide showing farm real estate values. The data thereon are inconsistent with Harrison's claim that current real estate values are 23 percent below the 1981 peak.)

IRS and Privacy

LA Times has an article on how law enforcement is tapping IRS records. A quote:

"The law that requires agencies to create privacy impact assessments can be waived to protect classified, sensitive or private information, according to the E-Government Act of 2002. Hohn, who composed the privacy assessment, said it left out some information so tax evaders and terrorists wouldn't know how law enforcement is targeting them.

The point, Hohn said, is "not to reveal your strategy."

This quote is contrary to one of my long-held positions: it's okay for the government to accumulate data on me provided I'm notified periodically of what it holds (as the Social Security Administration does with the wage information it has). That gives me the chance to protest and to get incorrect data changed or deleted.

Law enforcement certainly doesn't like the idea--they like to imagine themselves to be hunters/detectives who accumulate information then capture their suspects. Telling suspects, hey, we just opened a dossier on you for possibly contributing money to a terrorist organization in Lebanon (apparently the sort of thing most common in the context of the article) means you can't build a case to take to trial and build your career on. But I'm not sure we want FBI agents to build their careers on that. I think the public might be safer using "deterrence" (the good guys are capable and on the job) rather than post-crime "punishment".