In H.G. Wells 19th Century science fiction classic “The Time Machine” a Victorian gentlemen invents a time machine. He hurdles forward thousands of years to the distant future and finds a world where mankind degenerates into two distinct species, Eloi and Morlocks. The Eloi live in a decaying Garden of Eden in a life of complete ease. The Morlocks dwell in the subterranean darkness, tending the dirty industries which feed and cloth the Eloi. For payment the Morlocks took only one thing…the flesh of the Eloi.

 

Let’s examine how H.G. Wells describes each race and their relationship to each other.

Wells writes of the Eloi: I could find no machinery, no appliances of any kind. Yet these people were clothed in pleasant fabrics that must at times need renewal, and their sandals… were fairly complex specimens... Somehow such things must be made.

 

Now compare this to America by simply going to your local Wal-Mart. The car your drive there was probably built overseas or built in America with foreign parts. Once you arrive at Wal-Mart, try to push your way past the hordes of illegal immigrants (doing “work Americans won’t do anymore”) to buy anything made in America. Good luck. On the way home don’t forget to fill up that car with Arab gas. The world sells us most of our finished goods, cars, clothes, electronics, energy, and an ever growing portion of our food. We only make “services” with which to service each other, and even this sector is slipping away.  

Wells writes of the Eloi: ...I soon discovered about my little hosts...was their lack of interest. They would come to me with eager cries of astonishment, like children, but like children they would soon stop examining me and wander away after some other toy…  

Wells couldn’t describe us any better than he does in this passage. American’s are known for their short attention span and even shorter memories. We flip from one diversion to another, easily distracted. We play video games, obsess over sports and are addicted to reality television. We invented the disease ‘ADHD’.  With terms like ‘failure to launch’ true adulthood is delayed for a growing portion of our ‘20- and 30-somethings.’ We’re becoming a society of fickle, spoiled children.

The only thing Wells didn’t foresee was video games. If he had, he might have described the Morlocks taking away the docile, fattened and stupid Eloi for slaughter while they still clutched their Wii remotes in their pale, pudgy hands. Speaking of ‘pale and pudgy...’ 

Wells continues to describe the Eloi: …I perceived that all had…the same soft hairless visage, and the same girlish rotundity of limb. Seeing the ease and security in which these people were living…there is no necessity - for an efficient family, and the specialization of the sexes with reference to their children's needs disappears. 

America is getting more “rotundity of limb” every year, our families are disappearing, and we’re definitely not addressing our children’s needs. We’re also witnessing the blurring of the sexes with the acceptance (no, embracing) of homosexuality, metrosexuality, radical feminism, and the transgender/sexual movement.

Homosexuals are adopting children and the need for traditional male roles is openly discouraged by our culture. More child rearing responsibilities are being foisted upon the state every year.  Senator Hillary Clinton once said, “It takes a village to raise a child.” No, it takes a village to raise an Eloi.

So what of the dreaded Morlocks, denizens of the underground industrial labyrinths? Can I make a fair comparison between them and the modern Chinese?  

Wells writes of the Morlocks: So, in the end, above ground you must have the Haves, pursuing pleasure and comfort and beauty, and below ground the Have-nots, the Workers getting continually adapted to the conditions of their labor…I wondered vaguely what foul villainy it might be that the Morlocks did under the new moon… the Morlocks made their garments, I inferred, and maintained them in their habitual needs, perhaps through the survival of an old habit of service…clearly, the old order was already in part reversed. The Nemesis of the delicate ones was creeping on apace. Ages ago, thousands of generations ago, man had thrust his brother man out of the ease and the sunshine. And now that brother was coming back changed… Great shapes like big machines rose out of the dimness, and cast grotesque black shadows, in which dim spectral Morlocks sheltered from the glare. The place, by the by, was very stuffy and oppressive, and the faint halitus of freshly shed blood was in the air. 

This passage brings to mind a recent 60 Minutes segment about American companies outsourcing computer recycling to China. It was this story which made me first think about the similarities of the Time Machine to today’s American/Chinese relationship.  Read the passage below from the article. then re-read Wells’ passage above.

This is a story about recycling - about how your best intentions to be green can be channeled into an underground sewer that flows from the United States and into the wasteland. 60 Minutes followed the trail to a place… in southern China - a sort of Chernobyl of electronic waste - the town of Guiyu…Women were heating circuit boards over a coal fire, pulling out chips and pouring off the lead solder. Men were using what is literally a medieval acid recipe to extract gold. Pollution has ruined the town. Drinking water is trucked in. Scientists have studied the area and discovered that Guiyu has the highest levels of cancer-causing dioxins in the world. They found pregnancies are six times more likely to end in miscarriage, and that seven out of ten kids have too much lead in their blood.

"These people are not just working with these materials, they're living with them. They're all around their homes. The situation…is actually pre-capitalist. It's mercantile. It reverts back to a time when people lived where they worked, lived at their shop. Open, uncontrolled burning of plastics. Chlorinated and brominated plastics is known worldwide to cause the emission of polychlorinated and polybrominated dioxins. These are among the most toxic compounds known on earth…We have a situation where we have 21st century toxics being managed in a 17th century environment” 

“The air I breathe in every day is so pungent I can definitely feel it in my windpipe and affecting my lungs. It makes me cough all the time," one worker (said)…the 60 Minutes team passed by a riverbed that had been blackened by the ash of burned e-waste.

While not a subterranean realm, it’s still an abysmal, man-made industrial hell. It is a malignant place where there is no sunshine and “great shapes rise out of the dimness and cast grotesque black shadows. A place stuffy and oppressive which changes there very people which live and work there. 

What of the evolving relationship between America and China?  

In 2005, “The Big Picture” financial blog released this insightful article. As far as I can tell, it met with little fanfare. Some of these 2005 predictions are chilling (emphasis mine):

The Peoples Bank of China (PBOC) announced to day that they are effectively

taking over the interest rate responsibilities from the US Federal Reserve…The Fed’s inability to significantly impact long rates anymore is what led to the outsourcing. 

…today's actions are the net result of the United States consuming far more goods or services than it produces. Because of that, the Chinese have accumulated nearly a trillion dollars of US Treasuries. That makes them a de facto player in setting our interest rate policy and impacting our economy. 

As we have been writing for quite some time now, the Real Estate Complex has been the most robust segment of the U.S. economy. If the Chinese can succeed (where the Fed failed) in raising U.S. long rates, the strongest part of the US economy is at risk. While we know real estate had to slow eventually, the question is how fast will it occur, and how dramatically. 

In an unlikely – but possible – scenario, the Chinese can, at will, and without ever firing a shot, inflict as much economic damage on the U.S. as if we were at war. Armed conflict becomes unnecessary when countries can net impact their competitors as if they were at war. 

What is not uncertain, however, is that our Current Account Deficit has granted a degree of control and authority to another sovereign nation over our own economy. The net results of that may be determined over the coming decade.

To emphasize the impact of the Big Picture’s 2005 predictions, in 2007 China flooded the US market with toys painted with lead-based paint. In a stunning development, Mattel Toy Company issued an apology to the Chinese manufactures, not the American public. Time Magazine wrote “Mattel needs China just as much as China needs Mattel, and it cannot afford to jeopardize its relationship with the country that produces 65% of its toys.”  

China forced an American corporate giant to grovel. The Morlocks now have the upper hand.

I'm not saying the Chinese are becoming mosters, I'm saying both nations are entering into an unhealthy and dangerous arrangement, one which is transforming us into something neither side truly wants to become. Where will this new relationship between America and China lead? Maybe H.G. Wells said it best… 

The Upper-world people might once have been the favoured aristocracy, and the Morlocks their mechanical servants: but that had long since passed away…These Eloi were mere fatted cattle, which the ant-like Morlocks preserved and preyed upon.

Wake up, America. You are being eaten.

Already the Eloi had begun to learn one old lesson anew. They were becoming reacquainted with Fear.

Here’s an economics lesson for the American serviceman. Reach into your pocket and pull out a dollar bill. Its value isn’t set by gold or any precious metal, only law and world currency markets determine its worth. Why, then, would someone buy mere paper not backed by a tangible asset? For the same reason you might buy stock in a company. Foreigners buy our dollars because they know America has the greatest return on investment of any endeavor in history.

Historically, America is where the world’s smart money runs in troubled times. But now America finds itself in hard times. No longer a manufacturing giant, we’re now a consumer economy shouldering crippling public and private debt. The US is hemorrhaging trillions in real estate and corporate wealth while embroiled in two expensive wars. A 2007 BBC survey found America’s standing abroad ranking only above Israel, North Korea and Iran. With all this gloom, does the world’s smart money still consider America a safe bet?

Absolutely, and the US serviceman has something to do with it.

Since the early 1990s America led the way building the post-Cold War global economy, an international free trade system. For better or worse, the United States is the lynchpin holding it all together. When the world buys our dollars and debt they essentially cast a vote of confidence not only in America, but the global economic system we helped establish. This is true, even during the current crisis, due in large part to the US military.

Defense critics point out the US spends more on defense than the next 14 nations combined. True, but we also directly or indirectly protect those 14 nations’ access to international trade. From Bangkok to Baghdad, international merchants know goods and services flow unhindered because of US military power. This arrangement benefits our friends and rivals alike. China, the world’s manufacturing superpower, exported $1.2 trillion in goods last year, but China doesn’t protect the international trade routes on which she so strongly depends. Nor is it African ships leading the charge against pirates off Somalia or OPEC armies guaranteeing the flow of oil through the volatile Persian Gulf region. It’s the American fighting man and woman who keep global trade free.

Foreign nations may rail against US military power in public, but privately they vote with their money. They understand two important facts: our forces operate with immense restraint and in strict adherence to law; and no international coalition can yet match America’s military prowess. Would China act with our humanity and restraint? Can the U.N. match our decisiveness and competence should they become protectors of the global economy? This is why, rhetoric aside, the world trusts us to protect the global market.

For this reason our leaders must tread carefully. Recently, Rep. Barney Frank (D-Mass) called for a 25% cut in the defense budget. One lesson the financial crisis taught us is risk assumed by one global player is risk assumed by all. If America can’t or won’t protect the global trade system our national stock will surely go down. Investors will take their money elsewhere and other nations will fill the power vacuum we leave behind. What will our dollars and debt be worth then?

The 21^stcentury US Military isn’t just protecting our homeland or hunting down terrorists, but ensuring the global economy remains free.  If you’re an American serviceman reading this, you truly hold that dollar in your hands. It isn’t backed by gold...

...It’s backed by steel. 

This weekend and over the next month they’ll send their high-powered lobbyist to gain assurances from their pet senators and congressmen that their key programs will remain safe from any future cuts.  Our legislators will try to put on their best face and tell them all is well. All the while they’ll quietly send their staffers to the Pentagon...Those staffers will tell the Pentagon budget planners…to start planning deep cuts. They’ll give these planners draconian bottom lines and tell them to meet them - period...Over the next few months rumors of the deep budget cuts will seep outside the Pentagon. Small programs, big programs – nothing will be sacred...The Air Force will get hit hardest since it’s currently the least favored branch among the political elites.... Don’t hold your breath on a new replacement rescue helicopter...Expect early retirement for various weapons systems...

Let’s see where we stand one month and over a trillion dollars later:

(Leaders) will assure defense contractors defense spending will remain strong: According to Rueters, "U.S. Defense Secretary Robert Gateson Tuesday struck an upbeat note about the future outlook for U.S. defense spending, citing strong bipartisan support for U.S. national security goals." 

Deep defense cuts: I guess Sec. Gates hasn't been talking to the movers and shakers in the upcoming Democratic congressional super-majority. Two weeks ago this story hit the papers:  "After the November election, Democrats will push for a second economic stimulus package that includes money for the states' stalled infrastructure projects, along with help paying for healthcare expenses, food stamps and extended unemployment benefits, U.S. Rep. Barney Frank said Thursday...(He) also called for a 25 percent cut in military spending, saying the Pentagon has to start choosing from its many weapons programs..."

Congress is already looking for offsets to pay for the bailout and stimulus packages.

 'Big programs, small programs, nothing will be sacred'…expect early retirement for various weapon systems’: According to Inside Defense and the Air Force Times, the service will cut over 300 frontline fighter aircraft by 2010, almost a decade ahead of schedule. This is about 15% of the services fighter force, significant by any standard.

Don’t hold your breath on a new rescue helicopter:  On 23 October the Washington Times reported the Air Force postponed awarding the CSAR-X helicopter until sometime next year, leaving it for the next presidential administration. The tanker is also now delayed until the next administration is seated.

1. After the election the Pentagon likely faces an openly hostile congress and administration in time of active war. Rep. Barney Frank’s 25% cut comment is a clear message of things to come.
2. Never has the Pentagon had to maintain a sustained forward force posture and active combat operations while America was so deep in debt (public and private).
3. Never has so much of that debt been held by potential hostile powers. He who holds the debt makes the rules.
4. Never has America experienced a deep recession as a consumer, not manufacturing or farming, economy. The Pentagon keeps many of America’s remaining heavy industry on life support, what happens to them in a shrinking economy and lower defense spending is uncertain.
5. The Pentagon has yet to factor in the new realities of global free trade into its acquisitions or defense posture. Its current budgeting and acquisitions framework hasn’t fundamentally changed since America was a creditor nation and General Motors ruled the world.
6. Never has the Pentagon had to rely of foreign sources, many potentially hostile for three critical items: funding (via investment in US debt), energy, and critical technologies. This is the true national security issue of our time.
7. What happens if we enter a period of increased inflation due to our current massive bailout and stimulus spending? This is a real possibility. A severely weakened dollar will discourage foreign (i.e. Chinese) investment in the debt & dollar. Inflation makes everything more expensive – like fuel for fighter jets or computer chips for guidance systems. A defense budget passed one year may assume a 5% inflation rate, but face 10% inflation when executed. Though the government doesn’t officially factor it in, energy is one of the biggest drivers for actual inflation.
8. Never has the Pentagon had to rely on an all-volunteer force during times of sustained combat operations. This has resulted in enormous personnel costs for a relatively small force. The only good news here is a poor economy makes for good recruiting and gives the Pentagon more flexibility in reigning in benefits.

All of these factors will come into play in the next 24 months and beyond to reshape how America defends herself and her global interests. I won’t venture anymore predictions other than hold on…its going to be a bumpy ride.

http://www.military.com/news/article/lawmakers-protest-35b-af-tanker-deal.html.

Listen to the comments by several of our esteemed legislators:

"The Air Force process was so badly flawed that it was skewed to favor one bid," said Sen. Pat Roberts, R-Kan. "What should have been a boon to American taxpayers is instead an embarrassment to American taxpayers."

Sen. Patty Murray, D-Wash., called the Air Force's decision "an insult to our workers" and also raised questions about the fairness of the selection process. "The rules were changed on Boeing time and time again in order to keep a foreign competitor at the table," Murray charged.

The Wall Street Journal (WSJ) quotes Kansas Republican Representative Todd Tiahrt, “We are going to fund the tanker; the question is, which one are we going to fund? I think we’re going to fund the 767 being offered by Boeing.”

If congress is worried about the competition being “flawed” and “the rules being changed,” why didn’t they say something before the contract was awarded? Because nothing was wrong with the competition, they just didn’t like the outcome. Don’t be shocked, but I submit some members of Congress are putting the needs of lobbyist and special interest ahead of the needs of the military.

The WSJ quoted Washington State Democratic Rep. Norm Dicks as saying, “We’re going to try eliminating the funding. We’re going to try to make a fight on funding of this regular bill.” A member of the defense subcommittee of the House Appropriations subcommittee is openly threatening to outright kill the tanker program because he didn’t like the outcome.

Other congressmen are rallying to Boeing’s cause, to include Sens. Maria Cantwell (D-Wash) and Pat Roberts (R-Kan), as well as Reps. Todd Tiahrt (R-Kan), Jay Inslee (D-Wash), and Dave Reichert (R-Wash). According to the Government Executive (GE) Online these congressmen will use extreme measures to kill the tanker deal:

Sen. Patty Murray, D-Wash., who led the protest, said the bipartisan opposition to the deal is weighing all of the options to short-circuit the Air Force's decision. One risky approach might be an attempt to abrogate any contracts between the Pentagon and Northrop Grumman-EADS -- an option that could send the dispute into U.S. courts and drag out the actual building of the plane by years.

This situation is out of control, and I fear its going to get worse. Boeing and Northrop are expected to do what’s best for their stockholders. However, our lawmakers should know better. Sadly, they can be expected to do what’s in the best interest of the lobbyist who fill their campaign coffers (and might even look after the interest of the voters, if the two happen to coincide). No one in this debate has asked what’s in the best interest Airmen who fly and fight our never-ending wars.  

Even of Northrop starts building KC-45 tankers today, we will fly the KC-135 until its 80 years old. This borders on criminal neglect. Take off, pressurize, depressurize, and land - over and over and over for 80 years while flying combat missions…insanity.

Boeing only has one chance to win this competition, by attacking the institution itself; they must discredit the Air Force selection process. They’ve already started.

On April 18^th several stories simultaneous appeared in The Hill, Washington Post and WSJ not only about the tanker controversy, but raising questions about how the Air Force generally handles contracts. The Hill investigated Air Force shipping rules, inferring its processes were “complicated” and “Lawmakers are befuddled…” and appeared confused by the “lack of clear guidance…poor training…resulting in inefficiency and unnecessary costs to the taxpayer.” One these “befuddled” and “confused” lawmakers was Rep. Soloman Ortiz (D-TX). He serves on a House Armed Services subcommittee, just like Rep. Dicks.  Ortiz recently asked the General Accounting Office (GAO) to investigate how much money the Air Force wasted via its transportation procedures.  Also on April 18^th, the Post ran a story about the Pentagon and FBI’s probing Air Force contracts. The investigation revolves around Commonwealth Research Institute (CRI), no bid contracts, and the suicide of a senior Air Force acquisitions official. This story has been in the press for six months; the Washington Post story was mostly a rehash of old news. For some reason, however, the Post felt the need to rehash the issue now. This was the same day the Hill and the WSJ ran their stories on the tanker deal. A day later AFX ran an online story about the tanker deal, with generous quotes dedicated to the Washington and Kansas congressional delegations.

I’m not saying Boeing is calling in markers with congress and the press in an effort to discredit the Air Force.  However, this quote from Rep. Dicks in GE does nothing to put my suspicions to rest.  

The protestors accused the Air Force of stacking the deck against Boeing and, as Dicks complained, "doing tricky things" to justify the award to Northrop-EADS. "They bent over backward to make sure Boeing didn't get it," he fumed.

As GE also reports, the Boeing congressional contingent argues this deal hurts American workers.

Opponents of the contract argued that U.S. security is undermined when contracts for American weapons systems and technology are granted to foreign companies, and contended that defense dollars should not be spent abroad. "We need to keep our taxpayers' dollars here at home to help our country's economy," Murray said.

That’s a great argument, but one as hollow as a rotten log. Hyperlink to the ‘On the Issues’ websites below to learn how each of these congressmen and women voted on free trade legislation.

http://www.ontheissues.org/House/Norm_Dicks_Free_Trade.htm

http://www.ontheissues.org/House/Jay_Inslee_Free_Trade.htm

http://www.ontheissues.org/International/Maria_Cantwell_Free_Trade.htm

http://www.ontheissues.org/Senate/Patty_Murray.htm

http://www.ontheissues.org/House/Dave_Reichert.htm#Free_Trade

http://www.ontheissues.org/Senate/Pat_Roberts.htm#Free_Trade

http://www.ontheissues.org/House/Todd_Tiahrt.htm#Free_Trade

It’s ironic, but Boeing lost to Northrop-EADS because of indirect and unintentional help of these staunch free trade advocates. The Northrop/Aerobus victory is, in essence, a vindication of the legislation they’ve fought so hard to champion. Aerobus is in their debt. These congressmen and women are literally fighting their own legislative legacy. It would be funny…no, hilarious, if it didn’t put thousands of Airmen in jeopardy.