Wednesday, January 25, 2023

Cutting Cost Centers

Begin With Budget Cuts to Military
Nicholas Johnson
The Gazette, January 25, 2023, p. A6

Republican Grover Norquist thought government should shrink enough he could drown it in a bathtub.

The current House seems to share that goal. Where should they begin?

Peter Drucker was called the founder of modern management. American and Japanese businesses owe him big time for his proposed reforms. One was the concept of cost centers, tackle the big stuff.

So what’s the largest cost center? That’s easy. Military appropriations.

We want to protect our people and borders. There are good reasons for having a military. The question is: how much?

The administration’s request for $733 billion is more than the defense spending of the next nine nations combined! Might that be figurative and literal overkill? [Photo credit: U.S. Strategic Command; the ultimate cost of the USS Gerald R. Ford aircraft carrier, R&D and construction, was $17.5 billion. See "SOURCES," below.]

We have 750 bases in 80 countries. Programs and operations are so vast few if any know how much money went where or what happened to it. Accountants say it’s simply impossible to audit the military.

As the House’s own website reports, “the founders felt that war should be difficult to enter.” They believed giving the House sole constitutional power “to declare war” would increase that difficulty. Members would be paying the price financially and with their children.

Today? Not so much. There’s no draft. Congress can be generous — $64 billion for Lockheed, $42 billion for Raytheon. In return, defense contractors are generous campaign donors. This year Congress boosted its generosity with $58 billion more than the $773 billion requested.

Defense spending is designed to keep things from happening outside our borders. Civilians don’t use or even touch the weapons.

Domestic spending makes things happen inside our borders. The Declaration of Independence says the purpose of government is to secure our unalienable rights to life, liberty, and pursuit of happiness. These rights not only increase our quality of life with things we can touch and use — education, food, health care, housing, and highways -- they improve our economy.

What’s worse, there’s evidence our defense spending is not doing us that much good.

As Abraham Maslow wrote, “If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.” How’s that hammer been working for us in Vietnam, Iraq, Afghanistan, and elsewhere?

China isn’t perfect. Maybe we aren’t either. But China is helping build other countries’ infrastructure, economic growth — and China’s access to their resources. The U.S. showcasing “my military is bigger than yours” may create more wartime allies — and wars — but few true friends.

Some of America’s “best and brightest” are at the top of the military. They know the human costs of war. They approach it with the analytical rigor of the Powell Doctrine. (Questions like: “What non-military strategies might be better? What’s our exit strategy? Why will conditions become, and stay, better after we leave?”)

We pride ourselves on “civilian control of the military.” There are times when we might have been better off with military control of the civilians.

Defense appropriations. The best place to start cutting cost centers.

Nicholas Johnson, when U.S. Maritime Administrator, had some responsibility for military sealift during the Vietnam War.

Grover Norquist. “Grover Norquist,” Wikipedia, (“Norquist favors dramatically reducing the size of government.[12] He has been noted for his widely quoted quip from a 2001 interview with NPR's Morning Edition: "I'm not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub."[55][56]”)

Cost Centers/Peter Drucker. Peter Drucker, Wikipedia, ("the founder of modern management." [2] [ Denning, Steve (August 29, 2014). "The Best Of Peter Drucker". Forbes.] . . . "The fact is," Drucker wrote in his 1973 Management: Tasks, Responsibilities, Practices, "that in modern society there is no other leadership group but managers. If the managers of our major institutions, and especially of business, do not take responsibility for the common good, no one else can or will."[25])

Troy Segal, “Profit Center: Characteristics vs. a Cost Center, With Examples,” Investopedia, Dec. 07, 2020, ("Peter Drucker coined the term "profit center" in 1945.")

Sayantan Mukhopadhyay, "Cost Center vs Profit Center," WallStreetMojo, ("Cost Center is that department within the organization responsible for identifying and maintaining the organization’s cost as low as possible by analyzing the processes and making necessary changes in the company. . . . Management guru, Peter Drucker first coined the term “profit center” in 1945. After a few years, Peter Drucker corrected himself by saying that there are no profit centers in business, and that was his biggest mistake. He then said that there are only cost centers in a business and no profit center. If any profit center existed for a business, that would be a customer’s check that hadn’t been bounced.")

The USS Gerald R. Ford aircraft carrier. Photo from Alexander Timewell, "Making History on USS Gerald R. Ford as Deployment Nears," U.S. Strategic Command, Oct. 4, 2022, and see
Cost: Fox Van Allen, "Meet the US Navy's new $13 billion aircraft carrier; The USS Gerald R. Ford (CVN 78) is the most technologically advanced warship ever built," CNET, Dec. 10, 2019, ("The Ford itself will cost US taxpayers $12.8 billion in materials and labor. This doesn't take into account the $4.7 billion spent in research and development of the new carrier class." Total $17.5 billion)

Defense Appropriations. “U.S. Defense Spending Compared to Other Countries,” May 11, 2022, (chart: “The United States spends more on defense than the next 9 countries combined” [$801 B vs. $777 B])

Bill Chappell, “The Pentagon Has Never Passed An Audit. Some Senators Want To Change That,” NPR, May 19, 2021, (“The Pentagon and the military industrial complex have been plagued by a massive amount of waste, fraud and financial mismanagement for decades. That is absolutely unacceptable," said Sen. Bernie Sanders, I-Vt., who co-sponsored the bill with Sen. Chuck Grassley, R-Iowa, along with Sens. Ron Wyden, D-Ore., and Mike Lee, R-Utah.

Despite having trillions of dollars in assets and receiving hundreds of billions in federal dollars annually, the department has never detailed its assets and liabilities in a given year. For the past three financial years, the Defense Department's audit has resulted in a "Disclaimer of Opinion," meaning the auditor didn't get enough accounting records to form an assessment. . . . But critics note that all federal agencies, including the Pentagon, have been under the same requirement to undergo an independent financial audit since the early 1990s. Every other federal department has satisfied audit requirements since fiscal 2013, when the Department of Homeland Security had its first clean audit.”)

“FY23 Defense Budget Breakdown; Army, Air Force, and Navy-Marine Corps budget and contracting priorities,” Bloomberg Government,,appropriation%20for%20this%20fiscal%20year (“President Joe Biden’s proposed $773 billion budget for the Defense Department . . .. ‘Yearly U.S. Defense spending on contractors; Total defense spending on contractors in the past five years,’ 2021 – $408.8 Billion, 2020 – $448.9 Billion”)

John M. Donnelly, “Pentagon: Hill added $58 billion to current defense budget; Additions included money for disasters, war in Ukraine, ships and more,” Roll Call, July 14, 2022, (“Defense Department appropriations legislation for the current fiscal year funded more than $58 billion worth of military projects that the administration did not request, according to a first-of-its-kind Pentagon report.”)

“Defense Primer: Department of Defense Contractors,” Congressional Reference Service, Dec. 19, 2018,,Afghanistan%2C%20Syria%2C%20and%20Iraq. “List of Defense Contractors,” Wikipedia,

“Military-Industrial Complex,” Wikipedia,

“GOVERNMENT CONTRACTOR DEMOGRAPHICS AND STATISTICS IN THE US,” Zippia, (“How Many Government Contractor Are There In The Us? There are over 5,138 Government Contractors in the United States.”)

Military bases. Doug Bandow, “750 Bases in 80 Countries Is Too Many for Any Nation: Time for the US to Bring Its Troops Home, CATO Institute, Oct. 4, 2021, (“some 750 American military facilities remain open in 80 nations and territories around the world. No other country in human history has had such a dominant presence. . . . Washington has nearly three times as many bases as embassies and consulates. America also has three times as many installations as all other countries combined. . . . “These bases are costly in a number of ways: financially, politically, socially, and environmentally. US bases in foreign lands often raise geopolitical tensions, support undemocratic regimes, and serve as a recruiting tool for militant groups opposed to the US presence and the governments its presence bolsters. In other cases, foreign bases are being used and have made it easier for the United States to launch and execute disastrous wars, including those in Afghanistan, Iraq, Yemen, Somalia, and Libya.”)

Top Defense Contractors. “Top 100 Defense Companies for 2022,” Defense News, (Top 5 with Defense Revenue in billions: Lockheed Martin ($64.4), Raytheon Technologies ($42), Boeing ($35), Northrop Grumman ($31.4), General Dynamics ($31))

Founders’ intentions. U.S. House of Representatives, History, Art & Archives, “Power to Declare War,” (“Like many powers articulated in the U.S. Constitution, Congress’ authority to declare war was revolutionary in its design, and a clear break from the past when a handful of European monarchs controlled the continent’s affairs. . . . Like George Mason of Virginia, the founders felt that war should be difficult to enter, and they expected congressional debate to restrain the war-making process. . . . For the Members, to declare war against a foreign power is to send their constituents, their neighbors, their family, and even themselves into harm’s way.”)

Constitutional provisions. “The Congress shall have Power To . . . provide for the common Defence and general Welfare of the United States.” —U.S. Constitution, Article I, section 8, clause 1

“The Congress shall have Power . . . To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water; “To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years; “To provide and maintain a Navy; “To make Rules for the Government and Regulation of the land and naval Forces; “To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions; “To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress” —U.S. Constitution, Article I, section 8, clauses 11–16

Declaration of Independence. National Archives, Milestone Documents, “Declaration of Independence (1776),” (“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed . . .”)

Our hammer. “Law of the Instrument,” (“The law of the instrument, law of the hammer,[1] Maslow's hammer (or gavel), or golden hammer[a] is a cognitive bias that involves an over-reliance on a familiar tool. Abraham Maslow wrote in 1966, "If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail."[2])

The Powell Doctrine. Nicholas Johnson, “The Powell Doctrine” in “Afghanistan: Our Unaffordable War to Nowhere,”, Aug. 29, 2017,

“Powell Doctrine,” Wikipedia, (“The Powell Doctrine states that a list of questions all have to be answered affirmatively before military action is taken by the United States: Is a vital national security interest threatened? Do we have a clear attainable objective? Have the risks and costs been fully and frankly analyzed? Have all other non-violent policy means been fully exhausted? Is there a plausible exit strategy to avoid endless entanglement? Have the consequences of our action been fully considered? Is the action supported by the American people? Do we have genuine broad international support?[2]”)

Eisenhower’s Military-Industrial Complex. National Archives, Milestone Documents, President Dwight D. Eisenhower’s Farewell Address (1961), Transcript, Jan. 17, 1961, (“America's leadership and prestige depend, not merely upon our unmatched material progress, riches and military strength, but on how we use our power in the interests of world peace and human betterment. . . . there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. . . . This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence-economic, political, even spiritual-is felt in every city, every state house, every office of the Federal government. . . . In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. . . . only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together. . . . this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect. . . . [The conference] table, though scarred by many past frustrations, cannot be abandoned for the certain agony of the battlefield. . . . Together we must learn how to compose difference, not with arms, but with intellect and decent purpose. . . . To all the peoples of the world, I once more give expression to America's prayerful and continuing inspiration:

We pray that peoples of all faiths, all races, all nations, may have their great human needs satisfied; that those now denied opportunity shall come to enjoy it to the full; that all who yearn for freedom may experience its spiritual blessings; that those who have freedom will understand, also, its heavy responsibilities; that all who are insensitive to the needs of others will learn charity; that the scourges of poverty, disease and ignorance will be made to disappear from the earth, and that, in the goodness of time, all peoples will come to live together in a peace guaranteed by the binding force of mutual respect and love.”)

Speech writer Malcolm Moos. “Malcolm Moos,” Wikipedia, (“Moos joined President Eisenhower's staff as a special assistant in 1957 and became his chief speech writer in 1958. Among the many speeches Moos wrote for President Eisenhower, he wrote Eisenhower's valedictory speech which warned of the influence of the military-industrial complex in 1961.[3]”)

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Tuesday, January 10, 2023

Cut the Tax Talk

Cut Out the Tax Cut Talk
Nicholas Johnson
The Gazette, January 10, 2023, p. A6

To borrow from The Who’s concluding lines to a song, “Meet the New Year, Same as the old year.”

It’s not that our joys-and-sorrows balance doesn’t leave a lot to be thankful for, compared with most of the world’s people. But we still have more serious challenges than we can surmount — most beyond their “Best if solved by” dates.

So why am I limiting myself to just one? It’s like “why did French men kiss women’s hands?” “Because you have to start somewhere.”

I’m starting with taxes.

Politicians, including some Iowa officeholders, use “tax cuts” as a sure election winner — and coverup for opposing a program.

But letting re-election and taxes trump public needs is like cutting into the front of the line at the checkout counter.

As they say in Rochester, “Hold the Mayo, let’s take another look at this.”

The initial relevant issues are (1) What kind of lives do we want for ourselves and our fellow Homo sapiens — in our families, communities, states, nation, and world? (2) Given those goals, what programs will be most helpful and efficient in reaching them? And (3) for each of those programs, what is the most effective and economical way of providing them? [Photo source: wikimedia/commons.]

Only after reaching consensus on the answers to those questions need we address the administrative details — including funding sources.

Look around. There are many. The philanthropy of individuals and institutions totals $500 billion annually. There are 2 million nonprofits. A quarter of Americans volunteer an average of 50 hours a year — a $184 billion value “for free.” Twothirds of us help our neighbors. Most churches have helping programs. Public-spirited corporations contribute money, participate in community programs, provide training and health care for employees.

And yes, there will be occasions when a tax-funded government program, or assistance, is the most economical and effective source.

But we need to begin with “what do we want?” and “what’s the best way to get it?”

By now you’re thinking of a version of that question for the Lone Ranger, “Who’s this ‘we’ you’ve been talking about, Nick?” Ah, you got me. Yes, I was including you — as well as, sadly, the much larger population of millions who never read this column.

How do we go from a column to a coordinated national movement? For it is the coordination that is most difficult. There are already numerous organizations, institutes, foundations, think tanks, academic centers, governmental units, and journalists working on slices. Health care, housing, nutrition, mental health, climate change, transportation, education, international relations and trade, and more.

What we need is a single source, with a website, that provides links to the best proposals in each category. An organization that will promote universities’ and other institutions’ multiple ongoing discussions like The Gazette’s annual “Iowa Ideas.”

Finally, we’ll need more emphasis on experiential high school civics beyond reading, discussion and exams. Also organizations that give their members the experience of achieving desirable change opposed by the powerful.

How’s that for a New Year’s aspiration?
Nicholas Johnson is a dreamer, but he’s not the only one.

The Who. The Who, “Won’t Get Fooled Again,” (“Meet the new boss/Same as the old boss”)

World & Iowa wealth. “Distribution of Wealth,” Wikipedia, (“Global inequality statistics A study by the World Institute for Development Economics Research at United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. The bottom half of the world adult population owned 1% of global wealth.[10] A 2006 study found that the richest 2% own more than half of global household assets.[11]

According to the OECD in 2012 the top 0.6% of world population (consisting of adults with more than US$1 million in assets) or the 42 million richest people in the world held 39.3% of world wealth. The next 4.4% (311 million people) held 32.3% of world wealth. The bottom 95% held 28.4% of world wealth. The large gaps of the report get by the Gini index to 0.893, and are larger than gaps in global income inequality, measured in 2009 at 0.38.[12] For example, in 2012 the bottom 60% of the world population held same wealth in 2012 as the people on Forbes' Richest list consisting of 1,226 richest billionaires of the world.

A 2021 Oxfam report found that collectively, the 10 richest men in the world owned more than the combined wealth of the bottom 3.1 billion people, almost half of the entire world population. Their combined wealth doubled during the pandemic.[13][14][15]”)

Credit Suisse, “Global Wealth Report 2022,” Sept. 20, 2022,,of%20UHNWIs%20will%20reach%20385%2C000.

Hand kissing. “Hand-Kissing,” Wikipedia,

Tax Cuts. Erin Murphy, “Iowa Gov. Kim Reynolds signs into law $1.9 billion in tax cuts; Democrats say a flat tax mostly benefits high wage earners,” The Gazette, March 1, 2022, (“It is the third significant tax cuts legislation signed in the five years that Reynolds has been governor.”)

Hold the Mayo. Sean Baker, “Rochester as seen through seven decades of popular culture,” MedCityBeat, Aug. 27, 2019, (“AIRPLANE! “Alright, give me Hamm on 5, hold the Mayo.” In 1980, the film Airplane! pulled Mayo Clinic into the world of slapstick comedy. In this scene, Captain Clarence receives a call from a physician regarding a patient on the plane headed to Mayo Clinic for an organ transplant. The live heart for the transplant can be seen bouncing on the doctor’s desk.” With associated YouTube clip from movie)

Funding Sources. “Giving USA: Total U.S. Charitable Giving Remained Strong in 2021, reaching $484.85 Billion,” Indiana University Lilly Family School of Philanthropy at IUPUI [Indiana University-Purdue University Indianapolis], June 21, 2022,,-reaching-$484.85-billion.html?id=392#:~:text=Giving%20USA%202022%3A%20The%20Annual,%24466.23%20billion%20contributed%20in%202020 (“Giving USA 2022: The Annual Report on Philanthropy for the Year 2021, released today, reports that individuals, bequests, foundations and corporations gave an estimated $484.85 billion to U.S. charities in 2021. Total charitable giving in 2021 grew 4.0% over the revised total of $466.23 billion contributed in 2020.”)

“Value of Volunteer Time,” Independent Sector, April 18, 2022,

International Labour Organization, “Volunteer Work Measurement Guide,” May 2021,

Volunteer Hub, “Best Practices: 40 Volunteer Statistics That Will Blow Your Mind,” (“2. One out of four Americans volunteer, two out of three Americans help their neighbor according to a study performed by The Corporation for National & Community Service. 7. Volunteerism has a value of over $184 billion dollars; 16. Volunteers, on average, spend 50 hours per year donating their time to the greater good. 17. Over 71% of volunteers work with only one organization each year. 22. There are more than 1.8 million active nonprofits in the United States alone.”)

Civics. See “SOURCES” for Nicholas Johnson, “Civics Can Save Us,” The Gazette, Sept. 7, 2022, p. A5,

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