Crime of the Century

A Story of Suckers, Dupes, and Crooks

A 700 billion dollar bailout and 318 billion dollars in stimulus packages; a trillion dollars above and in addition to the normal federal budget, all geared toward rescuing our economy. This is a number so huge that it defies our ability to truly conceive of just how big it actually is. The entirety of our national net public debt is just over five trillion, to give that number some perspective.

So how did we get here in the first place? The answer is complex, and, sadly, is a tail of gross incompetence and criminal mismanagement. Yet it is critical that people understand how this happened. Therefore, allow me to guide you on a journey through some basic economics, some history, and some dot connecting.

Expectation, the Foundation of a Stable Economy

It is a basic tenet of economics that the reason monetary policy works is because when the central bank announces a planned action, it actually does that action. Because the management of interest rates is a prime mover of how people invest in the economy, if people believe that the central bank will do what it says it will do, they will behave according to the announced policy. There is a temptation, then, for a central bank to make an announcement, and then not follow through. This sort of behavior frequently happens in countries experiencing financial difficulties in order to get a short-term alteration in investment and spending behavior; usually where the central bank is controlled by the government. However, once the trust in the word of the bank is broken, uncertainty is introduced, as expectations can no longer be counted upon. At that point the economy begins to break down.

That expectations drive behavior is important to understand in the context of the current economic crisis. When the Fed announces an alteration in interest rates, our expectation is that said alteration will take place, thus, there is a great deal of trust in the American banking system.

For people in the US who are currently approaching retirement age or have already retired, the expectation throughout their business life has been that the return on safe investments, such as government bonds, savings and loans, and bank CDs, will be between 6 and 8 percent. This rate is essentially the Fed rate plus 2 percent. Because these investments were considered safe, people concentrated wealth in these investments in such a way that they could live on the interest returns in retirement, hopefully without digging into principal too much, and thus leaving an endowment to their next generation. These investments were made based upon the expectation that the returns on these investments would remain consistent.

The Tricky Business of Controlling Inflation

Those of you old enough to remember the 1970’s may remember a term coined in that era: stagflation. Up until that period, monetary policy was largely set based upon a device called the Phillips Curve. The Phillips Curve was a product of Keynesian economic thought, and held that there was a persistent negative relationship between unemployment and inflation. As one went up, the other went down.

The economic shock of the oil embargo during that decade caused a circumstance in which both inflation was high and growing, and so was unemployment; a situation which, according to the Phillips Curve, could not happen. As a result, economists such as Milton Friedman strongly criticized the use of government intervention to control the economy, and advocated a return to more market based economics. This situation gave rise to the monetarists, whose prime motivation in monetary policy was to control inflation. Those who remember the Volker recession of the 1980’s will recall that this was a recession induced by the Federal Reserve Bank solely in an effort to reduce inflation.

Since that time, the Fed has used monetary policy almost exclusively to keep inflation in check. Occasionally it would use interest rates to create economic stimulus, but only so long as inflation did not rise as a result.

The problem, of course, is how do you measure inflation? It is done by measuring changes in the price of a certain basket of goods that consumers typically purchase, called the Consumer Price Index. And here is where we experience our first disconnect between the Fed and consumers. The CPI is based upon the consumption of urban dwellers only. Furthermore, it is not strictly a cost of living index, but includes the prices of recreational and electronic goods, which have a known negative cost to value relationship. Thus, the increase in the cost of bread and milk is offset by the decrease in the cost of that computer you purchased two years ago. Thus, while you and I watch our rent, food, and medical costs climb through the roof, the inflation rate appears to remain low.

Some studies have shown that if inflation were measured today using the same basket of goods as used in the 1970’s, we would be experiencing double digit inflation. (A good article on why this is can be found at: http://www.creditwritedowns.com/2008/04/cpi-understates-inflation.html).

Because of the perception that we have had very little inflation in our economy, the Fed has been all to happy to stand on the economic accelerator by keeping interest low, pretty much since the mid-1990’s.

The Housing Boom (As in “Here, Hold This Grenade”)

It’s oft been said that the American dream is to own a home. In bygone years, it’s a dream typically reserved for people who are able to save. But when inflation rates are low, money is cheap and there is an abundance of it to lend. When money stays cheap, borrowing becomes easier, barriers to entry get lowered, and speculators enter the market. Under these conditions, prices rise.

In our case, money stayed cheap, and as a result housing boomed. Because the interest rates were set by the Fed at such low levels for such an extended period of time, people began to conceive of housing not as a long term investment in their family’s future, but as a short-term commodity investment based upon the anticipation that housing prices would continue to rise. And rise they did over a period of a number of years. Some houses saw as much as a doubling of price in only a few years, a tripling in less than ten.

Because of the confluence of the tremendous rise in the price of homes combined with the over-abundance of cheap loans and available cash, loans began to be structured in more and more creative (read riskier) ways. Hence the rise of stated-income (i.e. no disclosure of actual income) and interest only (until that bubble payment hits) loans. Such loans were made with the understanding that no-one would be in them for the long term. They were made exclusively on the speculation that housing prices would continue to rise.

Leveraging: Keep the Money Flowing

At this stage in the narrative a critical term must be explained; the concept of leveraging. Leveraging is essentially the borrowing of money for purposes of investing that money someplace in which the interest rate is higher than that at which it was originally borrowed. How much a bank is leveraged is a measure of how much it has borrowed for this purpose above its actual net worth.

In the case of the housing market, investment banks were borrowing money in order to invest it in the mortgage industry. Because low interest rates created a tremendous incentive to purchase housing, investment banks would borrow money at even lower rates to provide more available funding for home loans.

Here’s where we arrive at our first moral hazard. The incentive to maximize the return on these investments created an incentive to provide loans to riskier home purchasers because they could be charged a slightly higher interest rate. These riskier loans offset the lower rate loans, and thus made the overall mortgage backed investments look on the whole a lot better than they actually were. And, because of the influx of lendable cash, mortgage brokers were incentivized to generate borrowers and thus create loan deals that appeared attractive in the short-term and provide them to people who had utterly no hope of paying the loans in the long-term. It was simply expected that they could sell the property at a higher price in the very near term before they ran into problems.

Talk is Cheap, but Your Money is Worthless

So where did the investment banks get all this money to pump into mortgage backed investments? Remember all the folks at the beginning of this narrative who had invested all their lives in safe places?

When the interest rates are lowered, returns on investments like CDs and so forth also go down. This is not so bad if the rates are lowered for a short period, but when they stay low over a period of years, the returns that retirees expected to live on go down. In this case, way down. Those who invested all their lives expecting to see a return of 6 or 8 percent actually saw returns of around 2 percent. That 60 or 70 thousand a year they expected to retire on is now around 20. So people who made these investments are left with a stark choice: either eat away at the principle or find a new place to invest.

When interest rates are low, money has no value, thus it’s difficult to find safe places to invest that will pay a return worth the trouble. Because retired people have no capacity to recover losses, the stock market is no option. Their only option was the only game in town: IRAs.

An IRA, or Individual Retirement Account, is a form of retirement account that offers certain tax advantages, and gives the investor some control over where their funds are invested. And, dressed up as a bond investment, was the only high-paying secure rated investment around: mortgage-backed securities. Some IRA accounts were vested as highly as 80 percent in these securities.

Which gets us to our first mystery of criminal proportion. These investments were all rated AAA by the rating companies. This is despite the fact that in order to get the leveraged returns, the return rate depended upon the provision of riskier home loans to people whose only hope of staying solvent was a continued housing boom and the sale of their home within a year or two.

Unfortunately for investors, this information was either not disclosed, or obscured by the exuberance of salesmen anxious to cash in on the boom.

Expectation: Another Word for Trust

So let’s recap from the perspective of the safe investor. After working all of his adult life and investing steadily in safe places with the expectation that the return would be a consistent 6 to 8 percent, finds at the end, when he can no longer recoup losses, that his returns are no longer high enough to continue to live on.

But still trusting in the system, our safe investor seeks an alternative place to put his nest egg and finds it in IRAs vested heavily in mortgage backed securities disguised as bonds. They are rated AAA by rating agencies, so he has no need to fear volatility because he has an expectation that the ratings are trustworthy.

Nevertheless, the entirely predictable housing bubble collapse occurs, as the risky loans begin to turn into foreclosures. As this begins to happen, returns on investments in mortgage backed securities decline as the higher risk/higher interest loans begin to default. And what happens when the returns begin to decline? Divestiture by short-term investors (these folks are not our retirees, but money movers playing the markets).

Very rapidly we start to see bank failures. One must ask at this stage why the decrease in returns in a single market, mortgage backed securities, could have such a profound affect on the solvency of banks. As it turns out, it’s due to leveraging. Typically your local depository bank only leverages a maximum of fifteen times its net worth, usually in a broad portfolio. But as it turned out, investment banks such as Bear Stearns, Lehman Brothers, etc. were leveraged out as much as 35 times their net worth, mostly in mortgage backed securities. If that’s not bad enough, Freddie Mac was leveraged 70 times its net worth. By leveraging themselves so far into a single market, these investment banks were left holding the bag once the investment returns began to decrease and divestiture accelerated.

By now the trust of our secure investor has been violated three times: first by the expectation on return to his initial investment due to the past behavior of the Federal Reserve, next by the investment rating houses, then by the investment banks themselves. But then it really starts to get ugly.

And complicated. The first investment bank to have trouble is Bear Sterns. As we all know, they were the first to receive a federal bailout, setting up a new expectation. When the bailout occurred, bond values held though the firm actually increased in value. But then came Lehman Brothers.

Lehman Brothers was the next investment bank to experience liquidity problems, but in their case, the federal bailout was not forthcoming. Investors who saw what happened at Bear Sterns had reason to feel safe with the expectation that if anything happened to their investment bank, they would get bailed out as well. They were wrong. Here’s where things get complex… and murky.

The composition of the bonds is not only mortgage backed securities, but all kinds of other debt as well, such as student loans, and so forth. Thus, a bond can hold pieces of many different forms of debt, and many different instances of those debts. This is further complicated by the fact that portions of these bonds can be divided among several investors. There is no real visibility by the investor into exactly what the composition of the bond is.

The value of these bonds is stated as a mark to market. The stated value in the case of mortgage backed securities is the current appraised market value, which in this case, is the value of the cash revenue of people making payments. Because of that usage, the real value of these securities is continually in flux. If they go up, it was a good year and the government collects taxes. If they go down, they become write-offs. When the higher-risk mortgages began to default, the mark to market value of those securities went to zero. That does not mean that there is no asset, the house still exists after all and has some value, but because the borrower had stopped making payments, the value of the security became nothing.

When the mark to market value of those securities went to zero, Lehman Brothers experienced a liquidity problem. In other words, it no longer had enough cash to cover its debt obligations (that of the investor). For reasons that still remain a mystery, the US government apparently used a magic eight-ball to determine whether these investments were worth protecting. When no bailout was forthcoming, Lehman Brothers went into Chapter 11 Bankruptcy, and sold the assets to an investment group at eight cents on the dollar.

The investment group then turned to the insurer, since these bonds were, after all, insured, to make up the other 92 cents. The insurance company defaulted. By now we all know that the government then bailed out insurance giant AIG to the tune of 160 billion dollars. What we don’t know is where that bailout money went. Those who were invested in Lehman Brothers are getting nothing. Their bonds still have some value, but no one is too excited about cashing in at eight cents on the dollar. Meanwhile, the insurance and investment groups are now engaged in an exercise in trying to figure out exactly what the value of the securities actually is. Remember how mark to market values are determined? The process could take years and those unlucky enough to have had expectations of consistent government behavior can do nothing but sit on their hands and hope the process gets resolved. Meanwhile, ninety percent of their investment in AAA bonds has evaporated.

Trust violation number four is the failure of government to act consistently in its bailout policy, causing people to leave their investments alone when divestiture at a higher value would have been a sounder move. Trust violation number five is the bailout of insurance companies who then continue to default on the assets which they insured with no government directive to the contrary.

Solve the Problem: Screw the People

One critical element to remember in all of this is that a huge portion of our national savings resides in pension plans and retirement accounts. This is money that typically seeks safe investments. Why that is is easy to understand: once you retire you cannot recoup losses. The owners of these assets have had their trust in the system violated on a monumental scale. And now they see that in order to fix the system, unheard of amounts of money are being handed to the very people who violated their trust in the first place. It’s simply astonishing that anyone wonders why there is no credit available. When every safe investment has been taken away, then huge portions of asset portfolios are bilked, and perpetrators are handed huge sums of money in reward, what could possibly be a motivation to reinvest in the system?

Sadly, you’re not going to find many details of this event in the American press. Simply stated, American journalists are not sophisticated, educated, or even smart enough to put any of this together. Sadly, you’ll have to look to the foreign news sources like the London Times to find the details of all this.

At any point in time the Federal Reserve Chairman could have put a stop to this by bringing interest rates back up to a reasonable level. Instead, now they’ve lowered them even further, and soon to be lowered to zero. Not surprisingly, it’s not working. The federal government is pumping a trillion dollars into bailouts and stimulus packages. It, too, is not working and is unlikely to.

The reason is all too obvious. Our economy is in this situation due to either colossal incompetence or through colossal corruption; more likely a colossal amount of both. The only real solution is the restoration of trust, and trust requires accountability. So far we have had none of that.

The people who rated mortgage backed securities as AAA bonds either committed fraud or were criminally negligent. They need to be held accountable.

The Federal Reserve Chairmen who continued to keep interest rates ridiculously low over such long periods despite fore-knowledge that the CPI grossly underestimates the actual rate of inflation in the cost of living, and that these rates were causing a runaway boom in the housing industry should be investigated for corruption and held responsible for driving retirement savings out of secure investments and into investment banks.

The investment bank captains who leveraged their firms way beyond a reasonable amount (and paid themselves ridiculous salaries to boot, see this piece on Robert Rubin: http://online.wsj.com/article_email/SB122826632081174473-lMyQjAxMDI4MjA4MzIwNjM2Wj.html) violated the trust of their investors and must be held accountable.

The politicians who only two years ago were praising Freddie Mac, and legislated the seeds of this fiasco are just as, if not more, responsible than anyone else by cheering on the train wreck while it was happening instead of taking steps to halt it. And now they think the solution is to increase our net national debt by 20 percent in one fell swoop and hand the windfall to the very people who put us here to begin with.

Expectations are the key to a stable economy, and only trust in the system allows for reliable expectations. If we expect the system to be untrustworthy, and at this stage that should be exactly our expectation, then our economy cannot recover. Trust is the problem and accountability is the solution. So long as there is none of the latter, there will be none of the former.

A Farewell to Fire & Movement

This year saw a long, eventful, encouraging, and frustrating summer. Lots of good things have happened to me this year. I got to brief the assistant Secretary of State, Paula DeSutter on deterrence, got to do presentations at several conferences and universities, and managed to get through my qualifying exams in one piece.

But along with the good things has come a fair amount of frustration, much of it having to do with being Editor of Fire & Movement magazine. To be frank, F&M has been a bit of a strange ride from the outset. On the one hand, it’s opened several doors and allowed me to network and become friends with a number of people whom I’d not have met otherwise. It’s given me a voice in the hobby, and, to some extent, in the milieu at large. For that alone it’s been a great experience.

But right from the start, it was clear that the magazine came equipped with a fair amount of baggage. In my early efforts to try and convince publishers to send review copies of games there was a fair amount of resistance. Many were convinced that, because they had already sent games in the past that never actually got reviewed, their games were going directly into Decision Games’ used game store Desert Fox. Others had their own reasons for not wanting to participate owing to some past disagreement with the publisher. One game publisher even threatened to sue me personally if I so much as mentioned his company in the pages of the magazine.

Despite these early problems, I pushed on with my agenda of trying to get better content. As a result of these efforts I managed to get articles from such people as Thomas P.M. Barnett of Pentagon’s New Map fame, and Dr. Richard Andres, Special Assistant to the Secretary of the Air Force, the highest ranking civilian in that service. Yet, while I thought such pieces would make a big difference, from my perspective as editor they were hardly noticed. Some folks commented on Barnett’s piece, no one even mentioned Andres’s. Instead, though, we got flak for including articles that updated older games, or complaints about one page of basic wargame tactics in each issue.

But the proof of whether or not the effort was paying off would be in circulation growth. As of this day I have no idea what the circulation of F&M is, whether it’s grown, contracted, or just stayed the same. The one thing I’ve learned about working with Decision Games over the past several years is that they are an information black hole. Around three of four issues into my editorship I wanted to run a survey to try and solidify the direction of the magazine. I wrote the survey and got DG to put in a blow-in card for responses. I never got a single piece of information on that survey. DG kept it all.

But my experiences with them are certainly not unique, and apparently not as bad as some other’s, relatively speaking. Whatever stains the publisher may have on their record, they transfer easily. Although I’ve never been an employee of Decision Games, and have acted strictly as a contractor throughout my editorship or any other of my dealings with them, the stigma of it remains.

F&M was frequently regarded as a Decision Games house organ. This was a perception I struggled mightily to overcome, yet it persists despite numerous issues that had no DG content at all, or had negative reviews of their games. But if it were just that, I wouldn’t care.

There are (let’s now say “were”) a few publishers that, despite not sending review games to F&M, I felt deserved to be covered in F&M’s pages nevertheless. Primary among those was MMP. In the past I’d purchased, or a reviewer purchased, an MMP game for purposes of F&M review. We were happy to do it. At one point, however, I was trying to convince Brian Youse to provide us with review copies, when in stepped an individual accusing me of double standards because DG didn’t send him a free game to review for Paper Wars. DG has a rather dumb policy of not sending out review copies of anything with retail value over $100.00, one that I had nothing to do with and that applied to F&M as well. This individual went so far as to accuse me of colluding with DG on the matter. (The same individual showed up in the International Gamer Awards forum cautioning against including me because I was a “DG employee.”) Suffice it to say we never got any review copies from MMP. I still have the utmost respect for their work and believe that they are one of the premier publishers in the industry. But I stopped purchasing their games for review, nevertheless. The pettiness of the event left a bad taste.

Unfortunately it didn’t stop there. In later issues of F&M I started a column called Scenarios, which was to contain new scenarios for popular games. Scenarios for Memoir ’44, ATS, and Gunslinger have appeared in the column so far. I had hoped to include an ASL based scenario or two as well, as I know that many of F&M’s readers are ASL enthusiasts. Despite several attempts, we never got one. What I did get though was a midnight phone call from a fanatic member of the Southern California ASL Group, who accused me of being a “Decision Games thief” and expressing his disgust at my audacity in requesting a scenario from their group. That was on top of the letter I received from an officer of the group claiming that several members had raised concerns about my request owing to my and Decision Games questionable business practices, and as a result was banned from their little cabal. All that for offering to run one of their scenarios in the F&M scenario column; apparently F&M is beneath the dignity of ASL, which I gather has ascended to some higher plain of gaming existence, which low-lifes such as myself can only aspire to. Some lucky fellow got my entire ASL collection a few weeks later for the happy sum of 800 dollars.

Finding content for the magazine was always a challenge, and I was never entirely happy with what we got. The quality of the reviews was uneven, as were many of the features. A lot of folks don’t want to hear this, but this hobby has lost a lot of its brain trust, and many designers are simply coasting or copying. But they’re also a persnickety bunch. Writers often expected that, after sending me four or five versions of their work over the course of months, I had some magic sorting method to keep track of it all. And when something went in that was not current, I’d get an earful, sometimes in public. The problem of version management was complicated by the fact that any related online content went through DG, and they had, understandably, little interest in maintaining a version history. Had I not needed the content so badly, I’d have rejected any second draft with a note saying “submit when you’re done!”

Sadly, rejecting pieces was something I wish I could have done more of (yes, I ended the sentence with a preposition. Deal with it). The largest portion of my time as editor was not doing editing, but complete rewriting. Sorry to say that many folks out there don’t write anywhere near as well as they think they do; some don’t write at all. Despite the urge to reject, I was often struggling to get content right up to deadline.

But when you get right down to it, F&M was, for me, a charity. I got paid the whopping sum of $550.00 per issue. Out my own pocket I paid for layout, art, review game shipping, and comp copy mailing to contributors and publishers. DG would supply me with about a dozen issues, about all of which I would mail out to folks who contributed in some way. When I got done with all of the expenses, I was pretty much doing it for free, occasionally even paying for the privilege.

As of last month Decision Games decided that they would no longer support F&M with review copies of S&T or WaW magazines. What’s more, it’s no longer even advertised in their dispatches (at least I couldn’t find it). Over the course of my editorship I’ve tried to get advertisers into the magazine. Despite sending several their way, they closed the deal on none of them. So I’m forced to ask myself, if the publisher doesn’t care, why do I?

For me, the downside of F&M now outweighs the upside. To their credit, DG never tried to influence my editorial direction or force me to put in or alter content. But the fact is that with the baggage must come at least some commitment to see it succeed. That commitment appears to be gone. F&M was a great experience, but it is an experience that for me must come to an end.

I resigned as editor of Fire & Movement effective as of issue 150, meaning I will submit two more issues before departing. I wish whoever takes over the best of success and I’ll be happy to help them out in any way I can.

As for the future, who knows? I have a couple ideas I’m kicking around, but it’s hard to imagine any print venture having much success given the Internet. We’ll see.

CyberWar: A Threat Worth Considering

In the May 31 issue of the National Journal there was a report that speculation is growing throughout defense and security establishments that the recent blackouts in Florida and the Northeast, which occurred shortly after the US Navy demonstrated its ability to shoot down a satellite, was in fact caused by hackers emanating from China, specifically the PLA.

One can never be certain whether reports such as this are simple hysteria, or are based upon real evidence. Another rumor that circulated recently in the Pentagon was that the Southern California wild fires that destroyed so much near San Diego were actually set by Al Qaeda. As someone who spends a fair amount of time looking at terrorism data, I’d place that rumor in the possible but unlikely bin.

But the hacking rumor seems like it may have more substance. According to Tim Bennett, former president of the Cyber Security Industrial Alliance, U.S. intelligence officials have claimed that the PLA gained access to a network that controlled electric power systems serving the Northeaster U.S. Forensic systems analysis had confirmed that the sources was indeed the PLA.

Bennett’s claim was corroborated by a second information security expert, who said that the intention was probably to map the power system, but accidentally triggered the blackouts when they succumbed to a “what happens if I pull on this moment.”
Map the power system? Now why would they want to do that? The less paranoid may say that it’s because the Chinese have large infrastructure problems of their own and wish to learn how we do it. I suppose that’s reasonable enough, but it seems to me there’s plenty of ways to get our help on that legitimately. What’s more, then why would it be done by the PLA?

The Chinese have a tradition of asymmetric warfare, and have invested heavily in cyberwarfare initiatives. DoD and other government agencies have reported huge spikes in cyber attacks on all of their systems, as hackers attempt to gain access and compromise security. This is information that I can personally verify in that I’ve heard these claims come directly from the senior leadership of the Air Force.

But this information is not compartmentalized in the halls of the Pentagon. Representative Jim Langevine said that his staff has examined several hacker networks and claims that the results have shown that China is the primary concern for invasive hacking on American systems.

But the handiwork of Chinese hackers has not been limited to government. The private economic sector has been hit especially hard by cyber attacks. Businesses have related stories in which their Chinese counterparts already knew all of their bottom line positions and would open negotiations there. In 2007, while visiting Beijing, clandestine spyware programs were discovered on devices used by Commerce Secretary Carlos Gutierrez that were designed to remove information from those systems.

Stephen Spoonamoore, CEO of Cybrinth, a computer security firm, claims that executives from the Fortune 500 companies had document stealing code planted on their computers while traveling in China.

The attacks on the civilian sector have not gone unnoticed in Washington either. Because most of the infrastructure in the U.S. is privately owned, the government finds it difficult to compel operators to better monitor systems. Of further concern is that much of the security software unitized is designed by others, often off-shore. The concern is that the existence of backdoors or other problems may not become known until after the damage has been done.

The defense department declared for the first time in 2007 that attacks against U.S. Government sites have come largely from China. In March, Air Force General Kevin Chilton, chief of U.S. Strategic Command claimed that the Pentagon has its own cyberwar plan. In a statement to the Senate Armed Service Committee he asked appropriators for an “increased emphasis” on cyberwarfare in order to conduct “network warfare.” Currently the Air Force is in the process of setting up Cyberspace Command, comprised of 160 individuals at a handful of bases.

The issue has not escaped notice by the President. President Bush has crafted an executive order to layout out a broad plan to shore up government network defenses. This ambitious plan comes with an ambitious price tag of 30 billion dollars (the entire budget of Homeland Security is 50 billion).

Unfortunately, “The U.S. government doesn’t really have a policy on the use of these techniques,” says Michael Vatis, former director of the FBI’s National Infrastructure Protection Center. “They take place, and people have strong suspicions…. But as long as they’re not able to prove it, there’s very little that they can do about it. And so there’s often not as much outrage expressed.” I think this attitude is unfortunate, but it’s common. Because I spent a dozen years doing professional programming, I know several well placed IT professionals in industry and government. Few if any feel that there’s a significant threat.

Yet, if Chinese hackers are able to map our energy grids, and then shut them down by hacking into our systems, one has to wonder what else they’ve accomplished. It seems foolish that this threat should be taken as lightly as it is by the civilian sector especially.

In their now infamous book Unrestricted Warfare, by PLA Colonels Qiao Liang and Wang Xiangsui, the point is made unequivocally that cyberwarfare is an essential part of Chinese conflict planning with the United States. Russia has also shown the effectiveness of Cyberwarfare in their recent trysts in Eastern Europe. All of this begs the question, why is Cyber Command composed of only 160 people?

In the last round of SBIR RFPs issued by the DoD, there are several initiatives to find ways to train people on the threats of hacking and cyberwarfare. But unfortunately, no initiatives were present for training on how to combat it, or, more importantly, how to incorporate offensive and defensive cyber warfare measures into doctrine, planning, or strategy. So far it seems that the approach to cyber warfare is underdeveloped at best, criminally negligent at worst.

To relate all of this to wargaming, it seems to me that if the old SPI were around today, this is a warfare topic they’d be tackling. Joseph Miranda has made some efforts to design abstract games on the topic, but few seem that interested. This is unfortunate. Cyberwar may in fact be the number one warfare methodology in the 21st century, affecting us economically and socially, not to mention militarily. And, given the technological dependence of today’s armed services, it seems to me it should be a top concern for those involved in defense planning.

Lately I’ve seen several talented designers show interest in designing new games on NATO/Warsaw Pact conflict of the 1980s. I don’t get it. We stand on the verge of new vistas in the development and advancement of modern conflict doctrine, yet our best minds are preoccupied with the war that never happened. Our hobby has a legacy; one that placed our best designers of the 1970’s and ‘80s into professional positions of planning the real thing. Where is that legacy of designers today?

Cyberwar, it appears, is a reality, and one that is much more significant and threatening than most of us probably imagined. I encourage you, whether designer or player, to think about how we can incorporate cyberwarfare into our gaming lexicon. Someone, clearly, has to do it. Why not us?

Fourth Generation Warfare and All That

There is a debate out there as to whether the notion of Fourth Generation Warfare (4GW) as a theory is of any value. Dr. Antulio J. Echevarria, II recently published an article entitled Fourth-Generation War and Other Myths (http://www.strategicstudiesinstitute.army.mil/Pubs/display.cfm?pubID=632), in which he criticizes the idea quite emphatically. I contend that he and others miss the point.

I’ve read a fair amount of the 4GW literature, and to be honest, I’ve never considered it to be a theory, and by the strictest definition, it isn’t. From my perspective, it’s little more than a mnemonic used to describe general yet significant changes in the way warfare is conducted given the evolution of the international system (to include such things as globalization, modernization, proliferation, and whatever other “ations” you care to include). I think as a definition for that sort of concept, 4GW fares well enough.

To my mind, this is where Echevarria really falls down in his analysis. By elevating 4GW to the status of theory, from which, supposedly, we can derive propositions, generate hypotheses, test, and thus infer new conclusions, he undermines his own critique.

Broadly speaking, the crux of his argument is that 4GW as a theory (which it isn’t) is flawed primarily because is rests upon a poor understanding of history; the fallacy of nontrinitarian warfare, and the myth of Westphalia. To my mind this is sort of like saying that the theory of relativity is flawed because it rests upon the misconception of Newtonian physics. My point being that for relativity, the conception of Newtonian physics is irrelevant.

Echevarria claims that nontrinitarian warfare is a non-concept because trinitarian warfare is present in all forms of conflict and therefore is a non-concept in and of itself. The problem here is that the context from which Clausewitz was coming was that the only entities that mattered in the international system were states, who behaved as unitary actors (this concept is obviously borrowed from Realism, but it is applicable nevertheless). When he is referring to directing war towards some end, he is discussing war qua war in the political context. What 4GW conceives of as nontrinitarian warfare is the violation of the concept that war is being conducted for the political ends of the state. What people thinking in terms of 4GW are seeing in this context is the combination of weak governance and globalization/modernization pressures that have allowed the advent of non-state actors who conduct warfare in the transnational arena for transnational ends. While this sort of thing is not so new in the broad construct of history, it is certainly new to our era.

Echevarria then goes on to say that 4GW fails because it apparently relies on the notion that the modern state system sprung from the loins of Westphalia overnight. Why it would depend upon this being so he doesn’t explain. What’s more, I’m not aware of any such claim in the 4GW literature that I’ve read. I think this point is, frankly, a bit silly.

But the thing is, aside from the two cases above, Echevarria really doesn’t seem to have much to say about what 4GW is actually doing wrong. He makes the wild claim that anyone using the term is undermining their own credibility, but he makes no real case to substantiate it, and frankly the statement smacks of pettiness. He makes a brief case for the inaccurate prediction of 4GW analysts that non-state actor groups, rather than executing “Judo throws” are instead providing public goods to the groups they claim to represent. Somehow he seems to think that this very act he describes as contrary to the 4GW claim that non-state actor groups try to undermine government, does not in fact undermine government. Frankly, I can’t think of a better “Judo throw” than for a non-state actor group to provide a public good that the established regime cannot or will not provide.

In one paragraph he describes the use of traditional weapons used in Rwanda and Sudan as things that 4GW fails to account for. Yet this failure in accounting is simple to explain when you consider that 4GW as a concept is strictly Amerocentric, which is to say that it is addressing the asymmetric threat environment of the US, not the symmetric environment internal to third world countries. He also makes, what I think, is a serious gaff when he tries to say that 4GW’s assertion that US capabilities are designed to operate in the nation-state framework is incorrect because in the past the US has successfully operated under the constraints of alliances. It is clear that Echevarria does not understand that this is a level of analysis issue, and that alliances are part of the nation-state construct. What 4GW is saying here is that the US capabilities are ill-suited to deal with non-state actors, which they are, largely due to political constraints, but also due to issues involving the military industrial complex.

In his discussion of the third incarnation, he describes the sequencing of generations of warfare as artificial. Of course it is. If we were to take that as invalidation, then every theory we’ve ever held would be invalidated. But what he seems to misunderstand is that the generational concept is largely applicable to the evolution of doctrine more than anything else, and I think that evolution is quite distinguishable.

Finally, Echevarria makes several statements as counters to 4GW that are, frankly, empirically questionable. His insinuation of the relationship between terrorism and globalization has not panned out in empirical work, he seems to conflate globalization with modernization, which are different concepts, and he seems convinced that a theory is set in stone the moment it is conceived.

I suppose by now you see that I’m not a big fan of this paper. That said, I think he makes one good point, which is that there are some who are trying to operate within the construct of 4GW as something separate from traditional insurgency. I believe this is a mistake. In fact, I think it is a mistake to promote 4GW beyond simple mnemonic device for describing the conditions of modern insurgency and terrorism, and thus the need to address them from a new doctrinal point of view. Constrained to that, I think 4GW is an important concept. But it does not rise to the level of a theory, in my opinion.

Violent Non-State Actors in the Middle Eastern Region

Just had my paper, Violent Non-State Actors in the Middle Eastern Region, published in Small Wars Journal. Here's a link.

http://smallwarsjournal.com/mag/docs-temp/88-compton.pdf

Those interested in the topic may find it of interest, and I'd be happy to hear any feedback.

Here's the abstract:

The existing body of quantitative research concerning violent non-state actors is sparse at best. It is characterized by disparate definitions of non-state actor violence, and largely fails to discriminate between insurgency, civil war onsets, and terrorism. It also has conflicting theories and conclusions. Meanwhile, defining legitimacy in Arab governments and its affect on non-state actor violence is also problematic. In this paper I look strictly at non-state actor violence perpetrated by actors originating from Middle Eastern States. I use four separate data sources, including the ITERATE, RPC, World Development Indicators, and Witches Brew Homogeneity datasets to relate such factors as RPC, GDP, National Power, levels of instability, and societal homogeneity to examine the notion of opportunity and cause as factors in the advent of non-state violent actors. I find some support among this data for the notion that correlation exists between legitimacy of governance, societal homogeneity, perceptions of wealth inequality and legitimacy, and number non-state actor terror attacks.

Of Rebels and Selectorates

This summer I’ve spent a lot of time reading and researching irregular warfare, especially in terms of presenting an operational level game that deals extensively with the subject, namely Millennium Wars Advanced. As much as I believe MWA is a breakthrough design, it’s also made apparent to me some of the limitations of trying to approach the subject from a two-player near-peer adversarial perspective.

One interesting book I read through this summer is The Rebel’s Dilemma by Mark Lichbach. The book is decidedly academic in approach, but it makes some interesting points. I looks at the formation of rebel groups from two theoretical perspectives. The first is a psychological one, as exemplified by Gurr’s Why Men Rebel. The gist is that perceived inequalities form cleavages which magnify into revolt at some point. The other is the Collective Action approach, in which rebellion is analyzed from the game theoretical perspective of prisoner’s dilemma. The first overstates the likelihood of rebellion, the other understates it.

The rebel’s dilemma is a simple one: how does he overcome the free-rider problem of collective action, whereas the government’s problem is to increase the difficulties in overcoming that hurdle.

This is an interesting starting premise for a game, one in which two players might vie, through cards or whatever, to increase or decrease the chances for rebellion. Interesting as that may be, it’s still fairly abstract with respect to actual issues on the ground. But more importantly, it fails to account for other issues.

Dr. Richard Andres makes an interesting point in his article The New Role of Air Strike in Small Wars: A response to Jon Compton. He states that, “counterinsurgencies are not won by U.S. armed forces, ground or air; they are won by indigenous governments.” While ultimately this statement is, I believe, true, the principle tool for dealing with insurgency must be military, at least in the short term. The proper handling of insurgency via military means can just as easily decrease chances for victory as poor political policy choices. So what we have is a three player perspective game: insurgent, political policy maker, and military operations control.

But there are further constraints. Rebels are not just constrained by the political capacity of the government they wish to overthrow, but also by the socio-economic and physical environment as well. Both the Rebel and the government can affect this environment, but it must be accounted for in a meaningful way. Is their capacity to recruit increased or decreased by the rising tide of expectations? The presence of more police on the corner? The strong-armed tactics employed by autocratic rulers?

But lest we think that the policy setter can set any policy he likes, we face yet another constraint, that which Bruce Bueno de Mesquita would call the selectorate, or the body of supporters who keep the regime in power. Typically the more autocratic ruler, the smaller the selectorate, the easier it is to gore their oxes with any reforms that may be put into place. So now we have four perspectives and an environment: The rebel, the policy setter, the military controller, and the selectorate. What a complicated web we weave.

So here’s a unique setup for a game. We have three separate decision making actors on the side of the status quo: the policy setter, the military controller, and the selectorate. Ultimately the game looks more and more political. The Policy maker must adjust policy to maximize the free-rider problem of the rebel, yet do so in a way that keeps the military loyal and the selectorate tolerant. The military commander must manage the rebels operationally in such a way that they don’t actually increase rebel support, while still doing enough proactively to demonstrate that they are in fact doing the wishes of the policy maker. The selectorate (which could include the military controller) must insure that the policy maker is maximizing their benefits at all times by applying pressure (the threat of support removal). Meanwhile, the rebel player must act to set one group off against the other, while manipulating the environment in such a way that it becomes less and less hospitable to the government.

Sounds like an interesting multiplayer game that I have no idea how design as a board game (as a computer game I’m full of ideas).Our treatment of this topic in the wargame industry has been sparse, and I think we might consider taking this topic more seriously. So who’s up to the task?

Black Swans

Sometimes seemingly unrelated conversations can come full circle and illuminate the bulb of fresh thinking. In a recent issue of F&M I penned a brief editorial about my experiences at a MORS conference. To my surprise, someone actually read it. Somewhat less to my surprise, that someone disagreed with my findings.

In the editorial I mentioned two related concerns that I had about the complete dependence of professional wargame designers on computers and the quality of research that was going into them. The first was the black box phenomenon, in which a user has to simply take the game qua training tool at face value. He has no way to know or verify that the assumptions, theories, and research in the game are valid. He may only use the interface and get a result.

The second was that some of the research I actually saw being incorporated was simply invented. Now presumably that was only a temporary situation, but, given concern number one above, how would I ever know? My basic point in the editorial was to shill for board wargames as a serious tool because they did not suffer from the lack of transparency problem, therefore could be evaluated for content as well as utilized for results.

The fellow I mentioned above who took some umbrage to my comments was Michael Ottenberg, Principal Military Operations Analyst for AT&T, currently working in the Office of the Secretary of Defense, and highly respected in the field. I was honored to find that he, in fact, had read Fire & Movement, and what is more, will be sending me a rebuttal piece for publication in the near future. I greatly look forward to that.

Mr. Ottenberg’s point of view was that the wargames that are produced in the field are highly researched and vetted affairs, and that cases where assumptions, theories, or research are simply made up don’t exist due to the levels of scrutiny involved. He and I discussed this point in some detail at a later MORS conference. Yet, another event occurred at this MORS conference that is of interest, but first I must regress a few years.

Sometime in 2005 I was sitting in a classroom listening to a lecture on how bureaucracies changed over time. To be honest, I don’t remember the lecture in enough detail to recount the theory. I can only remember thinking that whomever dreamed it up had never spent a day trying to get a piece of paper submitted at a local motor vehicles office. What was important about this lecture, however, was that I was so struck by how wrong I thought the theory was that a new one occurred to me on the spot. I coined it SHF Event Theory.

My theory was simple. Bureaucracies have a vested interest to remain unchanged. They must continually justify their existence, well beyond the period when the need for whatever public good they provide has ceased to exist. Thus, a bureaucratic institution remains monolithic, even though they exist in a dynamic environment. The longer it remains unchanged, the less relevant it becomes to the current status quo. What causes change are SHF Events. These are unpredicted, unanticipated major events that upset the system to such an extent that the inadequacy of the existing bureaucratic structure is revealed, and it is changed. Thus, the only thing that drives bureaucratic, and thus institutional change, is SHF Events.

At the time I had several other irons in the fire, so I shelved the idea for later development. Fast forward to the MORS conference where I’m sitting next to Michael Ottenberg watching a slide presentation on developing a discipline of study for wargaming, when a slide comes up showing a book called The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb. This is a book that Peter Perla has been recommending wargame designers and developers read for some time, and so, like a good soldier, I went to the book store and procured a copy. Much to my surprise and amazement, here was my SHF Event Theory applied not just to institutional change, but to the entire course of history. Taleb’s position is that all of history is not driven by previous events, but rather by, what he calls, black swans, or completely unpredicted, unanticipated major events that radically upset the system (sound familiar?).

This idea poses some interesting intellectual challenges. First of all, it puts our whole research paradigm in question. In predictive analysis, we depend entirely upon past data trends to predict the future. Even when we develop systems to model larger dynamic systems, we are faced with the inadequacy of using a closed system to model an open one (reality). Commonly when we utilize data in these systems we play statistical tricks, such as logging variables to reduce the effects of trending or multicollinearity, and particularly the biasing effects of outliers. Often, we drop these outliers altogether so that the model behaves “reasonably.” But if Taleb is correct, it is these very outliers that are driving the system. The sad truth is that we have no accepted way to deal with that. There are likely to be quants (“quants" are the loving term applied to folks who do quantitative research, such as myself) who will claim that they can be accounted for, but I challenge them to show me the econometric text that contains the method. Our complete inability to predict even the likelihood of a black swan event would demonstrate the inadequacy of such techniques. The truth is that we’re still largely using very complex methods to essentially say that “it’s sunny today so it will probably be sunny tomorrow.”

I’m still reading The Black Swan, so I don’t know what Taleb’s conclusions are going to be yet, but I can take a guess. For some time I’ve said that the quantitative vs. qualitative debate in academia and elsewhere has to be the stupidest disagreement I’ve ever witnessed. The two are symbiotic. Although black swans are probably not ever going to be predictable (after all, then they wouldn’t be black swans), we can reasonably anticipate where there are vulnerabilities to them. For instance, while we could not have predicted the events of 9/11, we certainly could have anticipated our vulnerability to such an attack. The work of anticipating these vulnerabilities can only be accomplished in the context of both qualitative and quantitative methods. What’s more, I think that wargaming offers a particularly good venue for doing exactly that. In fact, I think that wargaming, if given the opportunity, would excel at this particular task.

Unfortunately, we have some serious problems of our own to overcome. Let me regale you with a personal experience to demonstrate the point. Last year we at MCS Group submitted our game Battle for Baghdad to the Serious Games Showcase and Challenge. Not only did we not place, we weren’t even allowed to compete. Why? Because Battle for Baghdad is a board game. Now we didn’t submit the game to the Serious COMPUTER Games Showcase and Challenge, and a careful reading of the entry restrictions mentioned nothing about the game having to be computerized. The implication is, of course, clear. A board game obviously is not considered a serious game. In fact, we were greatly encouraged by the panel to convert the game to computer and resubmit the next year. We’re not going to.

Battle for Baghdad is a game about various political factions (who control military and other forces) vying for control of the city of Baghdad during U.S. occupation. The entire point of the game is to be able to creatively deal with the other faction heads to negotiate or strong arm your way to your own particular factional goals, while maneuvering to prevent other factions from reaching theirs. The game simply cannot be done remotely on a computer without losing much of the point of it. All of this was completely lost on the panel. It wasn’t a computer game, so it wasn’t serious.

This is a serious case of, what I call, glass navel syndrome (you figure it out). Here is a group so completely married to a particular media that they can’t even acknowledge that some other media presentation may have something important to say; which is the same as the quant vs. qual debate. One thing I understood from Michael Ottenberg was that the games he works on and, by implication, that are generally done within the professional wargame industry, must have every assumption vetted with real data. The implication is that where data doesn’t exist, potential interactions are simply dropped or ignored. As a quant, I know that most data is incomplete, that we have relatively little data to work with on most things, and that often the data that we do have is simply crap. Therefore, games that must endure vetting to that extent must face severe limitations in their capacity to teach, but especially predict. Such must be especially the case when dealing with games that deal more with the social science end of the spectrum, as opposed to those that are modeling the impact of a guided missile.

The reality is that many of the things we seek to model in a wargame simply can’t be measured quantitatively. Battle for Baghdad is a prime example of this fact. The game relies entirely upon qualitative research, case studies, and regional history to synthesize its message. What’s more, Battle for Baghdad allows for the occurrence of black swans through creative play, which is something that will never happen no matter how many times you fire up your copy of Joint Operations.

As a community of practitioners I strongly believe that we have to abandon our particular methodology affiliations and become generalists, open to all methodologies: quantitative, qualitative, and even to black swans. Wargames are a hybrid methodology that dictates a broad spectrum approach. Not doing so leaves us vulnerable to SHF Events. And in case you’ve been wondering, it stands for Shit Hits the Fan.

The Demise of Secretary Wynne

Recently I was privileged to witness a small piece of history. While visiting a friend at the Pentagon, I stood next to the office door of Secretary of the Air Force Michael W. Wynne as he left the building for the last time. After he left, and while all the rooms were still empty, I was given a quick tour of the offices. Surrounded by giant paintings of airpower, it was difficult not to reflect upon the current situation and how he got there.

My friend is Special Assistant to Secretary Wynne, Dr. Richard Andres, and once the Secretary had left, we sat down and had a long discussion on current topics. Rick and I have discussed our opinions on air power and the military many times before, and while I consider myself to be service agnostic, Rick is very much biased toward the Air Force, and I think with good reason.

Something I’ve often heard Rick say, and I believe he is correct, is that the Army does not understand air power. Often their plans minimize its use, and their after action reports under report its effectiveness. Case in point, the surge in Iraq. While sitting in Ricks E ring office, he asked me point blank whether or not I believed a 20% increase (or “surge”) in troop strength could really make much difference to the situation. It was obviously a baited question, but it wasn’t one I had to think about much. To my mind, the increase could not have been that effective; there had to have been some fundamental doctrinal change in order for that small an increase to have had the dramatic effect that it’s had. Prior to this discussion, I’d already been pondering the issue for some time.

Sadly, civilians like me who do not have a clearance are left to fend for themselves when it comes to gathering information. Between the coverage of American Idol contestants and Britney Spears’ mental condition, we’re occasionally treated to an update of what’s going on in the world. Taken at face value, all we ever needed in Iraq was an extra 20% troop strength and we’d have had the place stabilized years ago. Unfortunately the penetrating analysis of CNN only goes about that far, but the more discerning among us know that that cannot possibly be the whole story.

But the Army hasn’t helped the perception. According to them, those extra boots on the ground was all that it took to better stabilize the country. Petraeus has even said as much in his testimony to congress and in the reports he’s signed off on in the field. So here is where Rick drops the bomb.

Rick’s office was unconvinced. So they initiated an investigation to see exactly what had changed, other than boots on the ground. As is turned out, not only had the number of troops on the ground increased by 20%, but air strike missions had also increased by 400%. What’s more, air munitions released had increased by over 1000%, all since the beginning of the surge.

What had changed was clear. It wasn’t the extra boots on the ground that was turning the tide, it was the increase in HUMINT and the ability to hit a target with precision munitions from the air within a time frame of only 7 minutes. Gatherings as small as only 3 insurgents were being targeted for strikes, while predators and forces on the ground monitored the movements of any suspected insurgent. This aggressive doctrinal change was preventing insurgents from gathering, planning, and pulling off operations. It was classic COIN (COunter INsurgency) operations, conducted almost entirely from the air. But if we accept the Army’s version of things, it never happened.

One reason that I like to consider myself service agnostic is that I happen to think that service rivalries are counter productive to the national interest. This discussion so far is but one example. Once upon a time, the defense budget was stated simply as an amount, and the services then vied with one another for their slice of that pie. The role of the SECDEF was more or less an arbiter of the struggle. The various services consistently requested 30% over what was available in order to justify an increase in their share. Because oversight between the services and their budget allotments was scarce, there were many overlaps in procurement, each vying to accomplish the same mission. It wasn’t until Robert Strange McNamara and his controversial “Wizkids” that this inefficient and redundant process was overhauled in the 1960s. Vestiges of it still remain today. The most apparent are the service rivalries.

As I said earlier, Rick is fond of saying that the Army does not understand airpower. He’s right, they clearly do not; so much so that they are unaware of the role air power has and is playing in Iraq. Once the news of the percentage increases I mentioned earlier circulate more broadly, the Air Force will certainly rub the Army’s nose in it, further discouraging the Army from wanting to think about airpower.

I was not at the Pentagon just to visit with Rick. I also met with several folks in the Irregular Warfare office in PA&E, OSD (Program Analysis and Evaluation, Office of Secretary of Defense). I had a long discussion there with one old timer who was very direct about the current situation at the Pentagon. He related that the perception of the Air Force among the other services and civilians was that they were arrogant. So much so, in fact, that it was hampering communication and cooperation with them.

The Air Force has good reason to feel proud of itself. They command the largest share among the services of the defense budget, at just under 30%, their capability is unmatched by any other nation, they are perhaps the most progressive of the services in soliciting new warfighting ideas from the civilian sector, and, as they are now demonstrating, can put in place an array of sensors and firepower that is very effective at COIN operations.

Unfortunately, all of this has been done in a culture that appears to take its own prestige too seriously. The figures on percentage increases I mentioned earlier were not just compiled to help build a broad consensus picture of force effectiveness in Iraq, they were also done to discredit the Army’s take on the situation. That is the sort of thing the old timer in PA&E was talking about. However, I’m not letting the Army off the hook either. That they should not even consider the contribution of the Air Force in the effectiveness of the surge in Iraq can charitably be described as petty. At worst it should be described as damagingly misleading, especially for future doctrine planners.

In the news we are lead to believe that Secretary Wynne (and Air Force Chief of Staff Gen. Michael Moseley) was fired due to the mistaken shipment of nuclear detonators to Taiwan. This is nonsense.

Right now the Air Force has a problem. Its fleet of transports and tankers are aging and need to be replaced. However, the policy in Washington, or at least that of the SECDEF, is that we are at war, and that all procurement must be for the war effort. Instead of obeying the policy of the civilian head of the DoD, Wynne went to congress and advocated to update the fleet. I’d have fired him too.

Wynne is correct to want to replace the ageing fleet. However, the outside observer must ask a simple question: why wasn’t the Air Force dealing with this problem before now? Given that the Air Force commands the largest share of the defense budget, and given that it seems to have had the foresight and budget to develop and procure a fighter plane that not even our own Navy is capable of flying against in a world where the adversaries we’re actually fighting don’t even have an air capability, one wonders what is going on in the planning. Again, it comes down to prestige over substance. As early as the 1960’s, Enthoven and Smith in their book How Much is Enough identify the tendency of the services to develop and procure new items at the expense of the readiness of the inventory they already possess. The F-22 is a classic example of this tendency.

Although I felt privileged to be present at the Pentagon as Secretary Wynne departed the building for the last time, there is no doubt in my mind that he deserved to be fired. Under his watch he allowed a culture to exist that valued its own prestige over readiness and cooperation. He defied his civilian boss in order to improve readiness of the Air Force infrastructure while billions of dollars were sunk into a fighter that is, by most measures, unnecessary. Perhaps the new Air Force leadership can make headway, but only time will tell.