Long War: As American influence in the Mideast slowly ebbs, Iran is cautiously moving to fill the resulting vacuum. The CIA is leaking information to the media detailing how Iran is beginning to arm the rage rebels in Bahrain, sending riot control equipment and expertise to Syria, and reaching out to the Houthi rebels in Yemen. Iran is also sending advanced missiles to Hamas and Hezbollah. The CIA media leak is a cry for help, an attempt to mold American public opinion.
During a big conference in Berlin, the Sec. General of NATO today said the Atlantic alliance's goal in Libya is for Gaddafi to stop shelling civilians, not regime change. Hillary Clinton is at that conference and she contradicted NATO by saying the goal is to remove Gaddafi. Leon Panetta (CIA Director) and Mrs. Clinton are trying to push the US back into the Long War, but Obama is not listening, at least for now.
The President is alarmed at the media reaction to Congressman Paul Ryan's budget plan that slashes $6 trillion dollars of spending over the next 10 years. In general the media doesn't like the plan but it calls Ryan courageous and agrees that the era of cuts has begun. In response, Obama gave a speech outlining his ideas for budget cuts. The speech was intellectually dishonest; example: Obama himself has said that the tax code needs to be flattened, the overall rate lowered while loopholes are closed, which makes it revenue neutral. Rich people enjoy a lower rate but they lose all their tax deductions, making it a wash. Ryan's budget calls for this exact same formula. Obama now attacks tax code flattening in shrill terms as tax cuts for millionaires and billionaires. Obama is panicking over the domestic spending cuts coming down the pike.
Several months ago, when the President was in a calm state of mind, he called for a restructuring of the CIA. The Agency's drone fleet was to be massively expanded and half the Pentagon's Special Forces soldiers were to be transferred to Langley. This way a CIA rapid reaction force would be in place when a Long War hot spot flared, like Libya. The CIA could react to a flare up without the Army or USMC putting boots on the ground. CIA combat deaths would be classified and public opinion controlled.
The problem with this plan is the Pentagon needs all its Special Forces soldiers and then some. So actually executing the plan would mean a big expansion of Special Forces, every soldier transferred to Langley would need to replaced. This cost money and expanding the drone fleet would also cost money. Obama backed away from his own plan for this reason.
Someday this restructuring will take place, but apparently not for a while. The Long War is at the same place now as the Cold War was in the late 1940s, the basic architecture for fighting the lengthy global conflict is evolving, although at a much slower pace than the CW.
Specific Stocks: Since Obama's speech most defense stocks have been getting shredded. Irobot, however, is way up and Harris Corp is holding its own. These are really Long War type defense companies so the market is saying there is some hope. Only time will tell.
Thursday, April 14, 2011
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