Of Furloughs Past and Future

December, 1995 stands out pleasantly in my memory as the year of my extended winter break. 

The quads were not yet a year old and Megan and the older kids and I were all still snugly ensconced at the in-laws, returning to our little townhouse just once or twice a week, and that only to check the mail. 

We were well past those early post-natal weeks of shift-work in which John, Luke, Amy, Kerry and I would take the late night feeding and Megan and her Mom and/or Dad would take the middle of the night/pre-dawn session.  Indeed, come Christmas season, the quads were more-or-less sleeping through the night.  It was a peaceful time, and, as ever, I was in full holiday mode and looking forward to a few days off with the family.

I was working at the State Department at the time, and, in all honesty, I really wasn’t paying all that much attention to the crescendo of doom-and-gloom talk about a Government shut-down.  The fiscal year had ended in September with no new budget agreed and the Government had been running on a temporary “Continuing Resolution” since, pending a full budget agreement.  Hell, in November we’d fumbled through a mini-furlough in the absence of a CR extension so I figured that should’ve been enough to get the White House and Gingrich and his crew to come to terms.

And, yet, a week before Christmas, on December 19, they shut us down.  All “non-essential” workers (a phrase which really put things in perspective) were furloughed and, similarly, all non-essential services (don’t get me started) were suspended.   Perfect.  Christmas-time.  Home for the holidays.  Good stuff.

But it didn’t stop.  And we weren’t getting paid.  

If we hadn’t been living with Grandma and Grandpa at the time it coulda got real hairy because the Government didn’t get around to re-opening shop until January 6, 1996 (a Saturday, strangely enough).

Except it didn’t.

That very evening, snow began to fall all along the East Coast.  The Blizzard of 1996 was underway.  Monday morning – January 8 - came and went with snow still falling, piling up as deep as four feet.  Washington was paralyzed.  There was no work to get back to…

Towards the third week of my holiday-with-no-end (truly appreciated though, trust me), I found myself digging trenches in chest high snow outside my in-laws garage.  In a first-and-only experience for me, at the end of a long and aimless trench, I even got to carve out a little snow cave near the basketball hoop.  Morgan and Brennan may have run in and out of it a time or two, but I think I enjoyed the project far more than they did.

But the streets were clearing, and a return to work was imminent.

Except it wasn’t.

On Friday the 12^th we got hit by Round 2 of the blizzard, piling another foot or so of fresh powder on the already-graying heaps from the first punch.  

We dug out – again – over the weekend.  And yet, again, a return to work was delayed – just for one more day - by a freak warm spell Sunday that resulted in the roads in and around Washington running like Potomac tributaries.

All-in-all, it was almost a month off work.  And, ultimately, those of us furloughed actually did get paid. 

I look back on the whole experience with great fondness.

But America at that time was in the midst of a remarkable economic boom, blossoming around the at-that-time strange phenomenon we’ve now come to know and love as the Internet.  While the shut-down and furloughs had a not insignificant economic impact (all quantified online somewhere by the Congressional Research Service), it was bearable, and, in fact, largely forgotten.

Today, America is in economic dire straits.  Today, a shut-down and furlough would be a much more painful experience.

Barring some last minute deal, as of tomorrow, March 1, 2013 the “sequester” we’ve become rhetorically inured to over the last couple of months– already once-delayed - will go into effect, a result of the Government’s inability to agree a Fiscal Year 2013 budget.  

What will this mean?  Automatic budget cuts totaling well over $1 trillion over the next ten years.  In 2013 alone, we’re talking about $85 billion in reductions.  

How we got to this point aside, I would think that most reasonably-minded people would agree that we have been living beyond our means and some sort of change is necessary.  This, it seems, is the change we will get.

In the context of the impending sequestration, Most Federal Agencies have in recent days or weeks referenced potential furloughs of as many as tens of thousands of employees for as long as weeks at a time, starting as soon as April.

But that’s just the beginning.

You see, in the absence of an agreed budget (which has not been unusual under the Obama Administrations), the U.S. is currently operating, again, under a Continuing Resolution – one which expires at the end of March.  If there is no budget agreement before March 27 and/or no new or extended CR, the Government – for the first time since 1996 – will be unfunded.  Shut down time.

This is not 1996.  Shotgun sequestration-inspired furloughs will be hard-felt, but a Government-wide furlough bomb could be disastrous, not just for the individuals impacted, but for our still very precarious economy.  Such will not be the stuff of fond extended holiday memories.

Yet, there is a ray of hope…

The spectre of a full Government shut-down, coupled with the pain of a few weeks of sequestration, might just be enough to get the White House and Congressional Republicans to align around a proper budget, which, in turn, could result in the agreement on and execution of well-thought-out and strategic budget cuts and disciplines rather than the blunt and automatic cuts of the sequester.

Fingers crossed.  For everyone.

A New Chapter (our Culture of Fear)..

Recently, a $100 million U.S.-based cyber-security firm – Mandiant - released a very detailed report (link) tracing numerous and long-running cyber incursions and data infiltrations into and from the U.S. back to a specific building in China, the home of an elite People’s Liberation Army (PLA) cyber unit.

 

What made this Report stand out from other such documents issued in the past – like security firm McAfee’s infamous “Shady Rat” report from 2011 (link) – was its remarkable forensic focus, right down to identifying three unique individual hackers.

 

Both the Mandiant and McAfee Reports labeled China the chief perpetrator, and both Reports spotlighted the U.S. as by far the most significant victim. Both Reports cite tera- and petabytes of information exfiltrated from U.S. networks and companies, referencing a potential transfer of wealth unlike anything that has occurred in human history.

 

I personally assume that - likely as not - there is some truth to these Reports' general depiction of Chinese Government-sponsored cyber activity. Why would they not 'fess up?  I dunno, why did Clinton lie about getting a hummer in the Oval Office? Go figure...

 

The U.S. cannot hold itself out as somehow innocent of cyber-malevolence – witness Stuxnet and Flame – but, select U.S. Government officials have quite clearly stated that U.S. Government-sponsored cyber activity does not extend to the theft and transfer of valuable intellectual property, or trade, operational, procedural or transaction-related secrets.

 

I personally assume that these U.S. Government officials are sincere in their representations that the U.S. limits its cyber-warfare to disruption and non-commercial espionage.

 

So where does this leave us?

 

Based on the preponderance of available evidence, we can assume with great confidence that governments are actively and passively supporting cyber incursions into other countries’ networks and businesses. From a track record perspective, it would appear (at least from public accounts) that China is leading in the theft of IP, and the U.S. has the upper hand in terms of demonstrated cyber-disruptive capability.

 

So what next?

 

We can trust that the brief flurry of media and hyperbolic political attention to the Mandiant Report release was only the first wave. U.S. Sinophobes will ratchet up the tension with China and the Chinese Government will continue to deny, obfuscate and otherwise seek to maintain the effective status quo.

 

What’s wrong with this picture?

 

In the name of “fear,” we’re poised to give up more stuff. Jobs, investment, peace of mind, and, yes, civil liberties.

 

With respect to everything but the latter point (other than to say that our surrender of rights and liberties in the wake of 911 did not stop then - law enforcement, intelligence and other authorities are increasingly empowered to tap, surveil, track, imprison and even, in the most outrageous of circumstances, kill us –and increasingly without warrant or accountability) , since the dawn of the Cold War, ours has increasingly been a fear-based society. With all best intent (more often than not anyway), the U.S. Government has time and again tipped the scales towards fear in setting policy.

 

Yes, when the Wall fell and the Internet blossomed, we experienced a brief almost decade-long respite. But hope was dashed and fear returned when the dotcom bubble burst and the WTC towers fell.

 

And now, with our subsequent mis-adventures in Iraq and Afghanistan - in part well-intended, in greater part, perhaps not –seemingly almost played out (although we will almost certainly one day reap a bitter harvest from the seeds we’ve sown in those countries), we move on to new chapters in fear: Cyber and China (and, increasingly, Iran, which is an utter quagmire, and, frankly, given our history in that country, we cannot hope for much beyond containment at this point).

 

Cyber threats (most specifically, for now, China-based) are the new platform for Government reactionaries to monger fear around, supplanting terrorism, just as terrorism filled the gap left at the end of the Cold War (following that brief and blissful gap of the post-Soviet-Internet-boom 90’s).

 

Are the threats real? Yes. Must they be addressed?  Yes.  But, they should be addressed in the context of the globalized world in which we live, and in an economic era defined by an ever-elusive recovery. In other words, heralding Aebbe the Younger (as introduced in a blog post late last year), we ought not cut off our economic nose to spite our cyber face.

 

Consider: In December of last year, The Rhodium Group (www.rhg.com) - a well-respected U.S.-based economic research house with a regular focus on China and Chinese outbound investment – released a Note on “Chinese FDI in the United States in 2012“ which highlighted that “Chinese firms completed U.S. deals worth $6.5 billion, a 12% increase from the previous record of $5.8 billion in 2010. This new record reflects both the growing determination of Chinese firms to expand overseas and the attractiveness of U.S. markets and assets to these investors.”

 

Good stuff. Our economy needs such injections of capital and jobs.

 

Yet, just this month, Rhodium issued a Paper on “Chinese Investment: Europe vs. the U.S.” which spotlighted that “After a similar take-off phase in Chinese investment in 2008, patterns diverged in the past two years with Europe receiving almost twice as much investment as the US… Chinese telecommunications equipment firms…spent more than three times as much in Europe than in the US, where ...firms have seen their business prospects diminished by intervention from US government officials, members of Congress and the security community.”

 

Ugh. So in the name of cyber-fear, we sacrifice investment, jobs, innovation and more affordable broadband. Are we cyber-safer for the sacrifice?  Nope.  Do we know something the Europeans don’t? Nope, not that either - we’re just tipping the scales to fear again.

 

Balance in our approach is absent, and very much in demand.  In yet another previous blog post – some months ago – I suggested that the U.S. and China had reached a MAD point ala the U.S. and the Soviets half a century ago, except in terms of cyber rather than nukes. I continue to believe (and hope) that the two countries will convene around some agreement defining lowest common denominator acceptable cyber-behavior (e.g. we’ll steal secrets from each other but won’t crash any planes or markets), and then multilateralize it.

 

Would such an initiative undo the cyber (and other) tensions between the U.S. and China? Of course not. But it would be a step towards a rational policy solution that might balance fear with the all-too-real realities of globalization.

 

Stay tuned…