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May 4 2013

May 6, 2013




How to Moderate Climate Change: Plant More Trees to Avoid Warming

By Catherine Griffin

Apr 29, 2013 10:55 AM EDT


How do we moderate climate change? Plant more trees. A new study reveals that plants can actually release gases that help form clouds and cool the atmosphere. That’s sure to provide some incentive for drought-stricken areas.

Researchers have known for quite some time that aerosols, which are particles that float in the atmosphere, tend to cool the climate as they form cloud droplets which reflect sunlight. These aerosols can come from many different sources, including human emissions. However, the effects of a biogenic aerosol, which is particulate matter that originates from plants, aren’t as well-studied.

Plants actually release gases that, after atmospheric oxidation, tend to stick to aerosol particles. This causes the original particles to grow and reflect more sunlight. This also serves as the basis for cloud droplets.

In order to understand a bit more about this phenomenon and how it might affect our climate, researchers collected data at 11 different sites from around the world. They measured the concentrations of aerosol particles in the atmosphere, along with the concentrations of plant gases and temperature. They also reanalyzed estimates for the height of the boundary layer, which is the layer of air closest to Earth in which gases and particles mix effectively. This layer actually changes with weather, which made it a key variable in the scientists’ estimates.

So what did researchers find? They discovered that as temperatures rise, there’s an increase of natural aerosols which have a cooling effect on the atmosphere. In other words, plants actually reacted to changes in temperature and aided in the cooling effect.

That’s not going to save us from climate change, though. The effect of enhanced plant gas emissions on climate only countered about one percent of warming. However, that effect had far more of an impact on the regional scale; it could potentially counter 30 percent of warming in more rural, forested areas where anthropogenic emissions of aerosols were much lower in comparison to the natural aerosols.

While this study may show that trees won’t have a major impact on cooling, it does show how they might affect something else. The research could have major implications for climate models.

“Aerosol effects on the climate are one of the main uncertainties in climate models,” said lead researcher, Pauli Paasonen, in a press release. “Understanding this mechanism could help us reduce those uncertainties and make the models better.”

The findings are published in the journal Nature Geoscience.



Open Source Tech is Driving Big Changes in Government

By Joseph Marks and Mark Micheli

April 26, 2013


Open source technology is now visible everywhere in government from the basic operating systems that federal computers run on to the blogs, websites and social media tools they use to communicate with the public. Red Hat, which helps companies manage, maintain and secure open source tools, including the operating system Linux, has been at the forefront of much of this adoption.

Nextgov sat down with Red Hat CEO James Whitehurst recently to talk about how open source is changing government, where it’s had the greatest impact and where he sees it going in the future. (The interview has been edited for length and clarity).


Nextgov: Can you tell us a little about open source’s initial path into government?

Whitehurst: Enterprise open source is about 10 years old. When you think broadly about early adopters, it was two main sectors: financial services and the intelligence community. People think of open source now as low cost but the initial interest was because of high performance. The financial community used it because running Linux [the most common open source operating system] was faster for doing trading platforms. Then the major investment banks all moved over and that’s rippled through financial services.

There was a similar dynamic in government. The largest sector for us, both in the U.S. and globally, is the intelligence community and that was primarily around security. We actually partnered with the [National Security Agency] and wrote the security regime that says use enterprise Linux. This would’ve been in the early 2000s. It’s called SE Linux, or security enhanced Linux. So, they deployed it broadly and it went from the Intel community to the military. Now, I think, every Army vehicle has Linux on it on a little server. From there it moved to civilian agencies and that’s more related to cost than performance.

There’s a classic story we tell about joining those two early adopters. We had a collaboration in the mid-2000s with the Navy, which was looking to upgrade its missile defense. When someone shoots a missile at a ship you want to be able to react very quickly. There’s something called a real time kernel you can put in an operating system where you get a guaranteed maximum performance to run an instruction. It’s actually a bunch of changes that say the longest code path possible in the worst-case situation can be no longer than X for this operation. It’s a lot of work to do that. We did that with the Navy for missile defense but it’s now used by every major stock exchange because you also want a real time kernel when you’re running a trading platform so you have a maximum guaranteed time to get a trade done.


Nextgov: If open source is secure enough for NSA where does the anxiety about it come from?

Whitehurst: The biggest confusion is between open source vs. enterprise open source. Open source is a development model. In this development model, the source code is free and open so anybody can download it and use a version. What people get concerned about is ‘am I downloading bugs? Am I downloading something I don’t have a license for?’ The simple answer to that is ‘yeah that’s right.’ But that’s the role a company like Red Hat plays. We know the vintage of every line of code and we have strong security. So when you download from Red Hat you know it’s secure. Commercial open source is a very different animal from the free stuff.


Nextgov: How is Red Hat doing with government sales?

Whitehurst: In general we’re growing at 20-ish percent per year for subscription sales and software sales. That’s somewhat faster in the government and with budgets basically flat that’s a nice solid growth rate.


Nextgov: Has that changed with sequestration?

Whitehurst: We’ve had a few consulting engagements trimmed on the margins but overall we haven’t seen a major impact yet.

We have two different vectors we sell on. One is innovation. We say “modern architectures are all built on open source so let me tell you about that.” When the economy is going well and budgets are growing, we go in with that message. When times are tough, we go in with value, value, value. We say replace Unix [a standard type of operating system] with Linux and you’re going to free up dollars on day one.


Nextgov: Do you think IT is more sequestration-resistant or recession-resistant?

Whitehurst: That’s always been the theory in IT, that it replaces dollars elsewhere. I don’t think IT will be immune. We have seen new project starts decline, so it can impact the trajectory of growth a little. I don’t think it’s as bad in IT, but you can see flat-ish budgets if not down. We’ll have to wait and see how it plays out.


Nexgov: Is government contributing to open source?

Whitehurst: SE Linux and all the work we did with the NSA on that is one prime example. One irony is that Red Hat Enterprise Linux is the most secure open source operating system certified by the Russian military and the reason is because of the SE Linux work the NSA did.


Nextgov: So if the U.S. military and the Russian military both have SE Linux how can it be secure?

Whitehurst: Well it’s secure because people can look at every line and say “we don’t see a way to pierce this.” The other security component is the policies about “if I have this password what do I get access to on this system,” etc.

The only difference between the U.S. and the Russian versions is that the Russian scientists look at every line of the source code and then we have to compile it on a Russian computer. It’s exactly the same as [the U.S. version] but they want to see it compiled on their system before that source code turns into ones and zeroes to make sure nobody slipped anything in.


Nextgov: What market share does open source have in government?

Whitehurst: It’s hard to really tell. I’d say the government overall looks similar to commercial markets where Red Hat represents about a 20-ish percent share of server operating systems and about half [of all operating systems] are open source now. We’re more heavily weighted in defense and intel and a little underweighted in civilian the same way we’re over-weighted in financial services and under weighted in, say, healthcare.


Nextgov: Will open source ever have 100 percent share?

Whitehurst: It will be approaching some number less than 100. There will always be a need for an IBM mainframe for some very specific applications. Also Outlook only runs on Windows servers and there’s a set of applications that are tied to the Windows franchise.


Nextgov: What do you see in the future for open source?

Whitehurst: When open source was first applied as a development tool people looked at traditional categories of software that had been around for 20 years and open source commoditized things that had gotten older and longer in the tooth. That was why Linux was cheaper than Unix.

But in the past 10 years with the birth of these web 2.0 companies they do everything in open source. All of a sudden, it’s not as much about commoditizing existing categories. It’s that new stuff is happening first in open source. The easy example is big data. It’s tough to name a single propriety innovation in big data. They’ve all come out of open source.

We’re at an inflection point where more innovation is happening first in open source and we’re going to get to a point where most of it is hanging there. When that happens, we’re going to see fewer vendors building a propriety solution and guessing what customers want and more vendors saying ‘okay what are the technologies that the large factories of the future — the Googles and Amazons and Facebooks — are using and then taking that technology and applying it to customers.

There are a lot of implications when we shift to a model where IT is less about inventing intellectual property and selling it and more about sharing intellectual property and adding value on top of it. In the past if you were a [chief information officer] at an agency you sat down with a company and said: “Is this a vision I believe in? Are the financials of this company stable long term? Is this something I want to invest in?”

Now you’ll be saying: “Here’s a technology. How powerful is the community that’s using this technology? How stable is that community? Do I want to invest my business in it?” All of a sudden companies become less important to where and how technologies are emerging.


Nextgov: That basically seems like the Red Hat model.

Whitehurst: There are very few companies Red Hat’s size that made it, that didn’t either fail or get gobbled up. One of the reasons we were able to do it is, when we were smaller, part of our sales pitch was ‘you don’t have to trust Red Hat is going to be around. You just have to trust that Linux will be around. We can go away.’

One of our biggest challenges is customers can say: ‘I’m not getting enough value, I’m not going to renew this subscription but I’ll keep the code thank you very much.’ But that keeps us on our toes, trying to build a business model where we’re always providing value.


DARPA: New Threats Demand New Technologies

Agency shifts focus to layered capabilities and cyber as a tactical weapon, as budget constraints and new threats affect plans.


By Patience Wait, InformationWeek

April 26, 2013


The Defense Advanced Research Projects Agency is adjusting its approach to the development of new defense technologies to reflect the fiscal realities facing federal agencies and evolving nature of national threats.

“Our mission is unchanged — to prevent and create technological surprise,” DARPA director Arati Prabhakar said at a Pentagon briefing in which she presented a new framework for the agency’s research and development. However, she added, “it’s going to be a very challenging environment for an extended period of time.”

The agency’s primary strategic objectives are to demonstrate “breakthrough capabilities” for national security, help drive a highly capable U.S. technology base and ensure that DARPA itself delivers on its mission.


Three factors are driving that mission, according to Prabhakar. One is the emergence of new threats. Rather than addressing risks posed by adversarial countries alone, the military must be prepared to deal with criminal enterprises, terrorist organizations and ill-intentioned individuals, all of which have access to new kinds of weapons, including cyber threats.

A second factor is the rapid pace of technological change, especially in the area of components for military systems. Many tech components are no longer manufactured in the U.S., introducing an added element of risk to the military’s systems and networks, Prabhakar said.

The third factor is financial. Sequestration has cut $202 million from DARPA’s fiscal 2013 budget of $2.9 billion, resulting in furloughs of employees and an 8% budget cut across programs. Prabhakar cautioned that DARPA’s ability to invest in R&D may not return to business as usual.

“There’s a critical shift in how society allocates resources to national security,” she said. “I’m not talking about sequestration. I’m really talking about fiscal pressures that could shape a different future.”

To deal with the complexities of modern warfare, DARPA seeks to develop integrated and layered systems that can continue to give the military a decisive edge. Examples of technologies that could increase in potency when used in this way include “adaptive electronic warfare,” manned and unmanned systems, tactical cyber capabilities, and advanced intelligence, surveillance and reconnaissance.

“Modern warfare may be too complex for a single new capability to deliver sustained superiority across a variety of scenarios,” according to the document, titled “Driving Technological Surprise: DARPA’s Mission In A Changing World.”

The agency’s investment strategy is to use advanced, commercially available technologies where possible while encouraging new development at universities, government labs and private sector companies, as well as through its own programs.

Cyber is an area of increased focus. “We all view cyber as a critical threat to our military, and national security more broadly,” Prabhakar said. “It’s a tool that can be part of our military suite of capabilities.”

DARPA’s so-called Plan X program is aimed at developing capabilities that will give the U.S. military an advantage in cyber warfare, but there will be no single weapon or capability that does that, Prabhakar said.



Amid oil boom, Texas legal fight grows over right to take land for pipelines

Dallas Morning News


Staff Writer

Published: 28 April 2013 09:15 PM


From the early days of the Texas oil industry, the power of oil companies to seize land for pipelines has been sacrosanct.

Oil runs society’s cars and heats its homes, and the argument has long been that the need to get it to the public outweighs the violation of property rights of a limited number of landowners.

But after nearly a century of giving the industry carte blanche, Texas is considering whether to rein in the granting of eminent domain rights for pipelines.

The Texas Railroad Commission, which regulates pipelines, has opened up its rulebooks. The Legislature is debating competing bills about how and where eminent domain is decided. And courtrooms are filled with lawsuits from landowners facing down the pipeline companies.

“We’ve started seeing serial litigation,” said James Mann, an Austin attorney representing the Texas Pipeline Association. “Pipelines are established as absolutely necessary … so any one of us can stop at any gas station in the state, fill up their tank, drive to Austin and complain about eminent domain.”

What’s changed is a ruling Texas Supreme Court ruling in March 2012, confirmed in August, that a pipeline carrying carbon dioxide from Louisiana to Texas failed to prove it qualified for eminent domain rights. In the process the court upheld landowners’ right to challenge, and it found the Texas Railroad Commission needed to do more in checking companies’ assertions that they were opening their pipelines up to other companies — a requirement for eminent domain status.

No one believes the Supreme Court decision will end eminent domain rights for pipelines altogether, but companies are now expected to have to prove they qualify through some form of public hearing.

“It could slow down the process,” said Railroad Commission Chairman Barry Smitherman. “I want to wait and see what the Legislature does. If the Legislature doesn’t address … [the court ruling], we will address it.”

Drillers are already having trouble finding pipeline space to transport their oil.

The oil boom has pushed drilling activity in Texas to levels not seen since the 1980s.

In West Texas’ Permian Basin, production is up more than 30 percent since last year, to 1.2 million barrels a day. And the existing infrastructure of pipelines running to Oklahoma and the Gulf Coast, along with regional refineries, is taking just about all the oil it can handle, the U.S. Energy Information Administration reported in February.


Lots of oil to move

Pipelines are being expanded or having their flows reversed, which will eventually more than double existing capacity. But for now, producers have to find new ways to get their oil out of West Texas.


“Producers are now being forced to evaluate long-distance trucking options to reach markets situated on the Gulf Coast and rail options to reach markets on the East and West Coasts,” wrote Spencer Falls, president of Dallas-based EnMark Services Inc. The boom “has outpaced the existing infrastructure in the Permian Basin necessary to move crude out of the region.”

And barring a sharp drop in oil prices, production in Texas and North Dakota is only expected to increase in the years ahead.

Already roads in and around Texas’ oil fields are getting battered from the increased truck traffic, prompting protests from local politicians who want the state to cut them in on oil revenue.

State Rep. Jim Keffer, R-Eastland, chairman of the House Energy Resources Committee, described the lagging infrastructure as an unfortunate byproduct of a boom economy.

“We’re way behind the curve and need to get out in front of this or we’re going to compound the problem,” he said in a recent interview.

Two competing bills in the House address the Supreme Court ruling.

While Rep. Tryon Lewis, R-Odessa, wants to leave authority with the Railroad Commission, legislation sponsored by Rep. Rene Oliveira, R-Brownsville, would place those decisions in the hands of the state administrative courts.

“The railroad commissioners get so much of their contributions from the oil and gas industries, there are questions about how independent they are,” said JJ Garza, Oliveira’s chief of staff. “The question is: What is the correct balance that provides as much protection as possible for landowners to ensure their property is not being taken needlessly for a project that is not public?”

Smitherman countered that case examiners within the Railroad Commission, who would hear the eminent domain cases, are kept independent of the commissioners.

In the meantime, the pipeline companies and the landowners continue to battle it out in court.


Keystone XL

Most of the attention is focused on four landowners fighting the Keystone XL pipeline, which, once completed, will connect oil sands deposits in Alberta with refineries along the Gulf Coast.

Julia Trigg Crawford, a former corporate recruiter who took over her family farm three years ago, said last spring’s Supreme Court ruling gave her and other landowners hope where there had not been much before.

“It’s our land, and we don’t believe they have the right to take it,” she said in an interview. “This is a Canadian corporation taking a product that wasn’t even made here to go through my land to go to a refinery to probably to be exported another country.”

Opponents of the XL pipeline were struck a blow April 19 when the Texas Supreme Court decided it would not hear a case brought by Rhinoceros Ventures Group Inc. against TransCanada.

With TransCanada moving ahead on construction, the court cases are not expected to stop the pipeline — just determine what the company ultimately must pay the landowners.

But the oil industry and property rights advocates are watching carefully to see how far the Supreme Court is willing to go in protecting landowners.

“Texas is a very powerful private property state,” said Lynn Blais, a law professor at the University of Texas in Austin. “The exercise of eminent domain is a very powerful tool. Generally it’s supposed to be exercised by the government.”



Lack of Competition Might Hamper Health Exchanges

By Christine Vestal, Staff Writer


Part One of Two Parts


The White House sums up the central idea behind the health care exchanges in the new federal health law with a simple motto: “more choices, greater competition.”

But even some stalwart supporters of the Affordable Care Act worry that in many states, people won’t have a lot of health insurance choices when the exchanges launch in October.

Health economists predict that in states that already have robust competition among insurance companies—states such as Colorado, Minnesota and Oregon—the exchanges are likely to stimulate more. But according to Linda Blumberg of the Urban Institute, “There are still going to be states with virtual monopolies.” Currently Alabama, Hawaii, Michigan, Delaware, Alaska, North Dakota, South Carolina, Rhode Island, Wyoming and Nebraska all are dominated by a single insurance company. The advent of the exchanges is unlikely to change that, according to Blumberg.

Competition aside, the exchanges face a number of technical and logistical problems. No less a figure than Montana Sen. Max Baucus, one of the chief Democratic authors of the ACA, said in a hearing earlier this month that he sees “a huge train wreck coming” when the exchanges open for business. Meanwhile, a March survey by the Kaiser Family Foundation indicates a majority of Americans still don’t know what a health insurance exchange is, and skeptics wonder how many eligible individuals will show up.

The exchanges were conceived as private marketplaces operating within federal guidelines. They are designed to give Americans who do not get health insurance from their employers the opportunity to choose from an array of private insurance plans, and to generate competition between insurers that will lead to lower premiums.

Individuals and businesses with up to 100 employees will be able to shop on the exchanges, and people who can’t afford coverage on their own will get government subsidies to help them. About 26 million Americans are expected to purchase health insurance through the exchanges.

But it is unclear how many insurance carriers will decide to seek approval for selling their products through these online marketplaces. Insurance companies have been mostly silent about their plans, with some citing uncertainty about federal and state rules as a reason for holding back.

Some fear that any uptick in competition will bypass those states where doctors are in short supply and the number of hospital systems is limited. A recent analysis by the American Medical Association found that a single insurance company held 50 percent or more of the market in nearly 38 percent of local markets nationwide.

On top of this lack of competition, some of the new federal regulations may push up premiums, at least in the short term. For example, under the health care law insurers will have to cover everyone, including people with pre-existing health conditions. Insurers are likely to raise their premiums to cover the cost of insuring these people who are less healthy.

The mandate that everybody must have insurance is intended to balance this new cost by adding a huge number of young, healthy people to the risk pool. Many of these people, figuring they wouldn’t need health care, have been taking their chances without coverage. But because the federal penalties for not having insurance are so small, especially before 2016, many of the healthiest people may continue to decline coverage.

The Society of Actuaries, which is aligned with the insurance industry, predicts that insurance rates for individuals may increase by as much as 32 percent over the first few years of the exchanges, according to a March report. The Obama administration argues, however, that while premiums may rise for certain people in the short term, in the long run the new federal rules will lead to lower premiums.

Cheryl Smith helped run an early exchange in Utah, and as a consultant she now helps other states develop their own marketplaces. But even though she is a strong believer in the concept, she doubts the exchanges will spur competition in the short term.

“You can talk in theory about how competition will thrive in these exchanges, but the health plans don’t actually have a lot of time to get product on the shelf,” she said. “If you don’t have product on the shelf, where’s the competition?”


Will insurers come?

Under the federal health law, states had the choice of developing their own exchanges or letting the federal government do it for them. Even after the administration extended the deadline to early this year for states to declare what they would do, only 16 states and the District of Columbia chose to run their own exchanges. Seven others chose partnerships with the federal government. That left the federal government responsible for building exchanges in 27 states.

In addition, the U.S. Department of Health and Human Services is supposed to set up a “data hub” that all 50 exchanges will need to plug into to determine whether an individual or family is eligible for Medicaid or federal tax subsidies. U.S. Health and Human Services Secretary Kathleen Sebelius earlier this month assured Congress that the technology would be unveiled in time for the October launch of the exchanges, even though Republicans in Congress last year failed to approve the funding needed to complete the project.

Another cause for concern is the Obama administration’s recent proposal to scale back a requirement that small businesses offer their employees a menu of insurance policies. If the proposal is adopted, companies with fewer than 100 employees could offer a single policy to their workers, as they have in the past. Without employee choice, critics say, the small business exchange will do little to pressure insurers to develop lower-priced options.

But supporters of the health law are confident that competition and lower prices will ultimately come. In the meantime, they say, consumers will be better off. Today many Americans pay high premiums if they are sick or old—if they can find coverage at all. They also run the risk of purchasing policies that don’t cover certain medical conditions or limit the total dollar amount of claims. In addition to the new pre-existing condition rule, the health law sets a minimum set of benefits; prohibits lifetime caps on claims; and mandates that insurance companies participating in the exchanges spend at least 85 percent of their revenue on health care.


Big New Market

Despite the federal rules, millions of potential customers will be a powerful draw for insurance companies to participate in the exchanges. Furthermore, the federal government is expected to provide about $350 billion in subsidies to people who can’t afford to purchase insurance on their own.

On top of that, if all states eventually choose to expand Medicaid, the federal government will pour another $952 billion into the health care market over the next 10 years, much of which will go to Medicaid managed-care companies and other private insurers.

Some predict that new insurance carriers, made up of hospitals and large physician practices, will emerge. As it becomes more difficult for traditional carriers to make a profit under the federal health law, the most successful new players may be provider organizations that can control medical costs by avoiding duplication and errors and more carefully coordinating the care they provide, said Rick Curtis, director of the Institute for Health Policy Solutions.

Furthermore, Medicaid managed-care companies, which are used to providing care to low-income people, may decide to offer commercial plans on the exchanges. According to Jeff Van Ness of the Association of Community Affiliated Plans, between one-quarter and one-third of the group’s 58 nonprofit safety net health plans are expected to offer products on the exchanges in 26 states the first year.


New Health Exchanges Unlikely to End Insurance Monopolies in Some States

By Christine Vestal, Staff Writer


Part Two of Two Parts

In Alabama, if you get your health insurance through your employer and you lose your job, you quickly realize there aren’t a lot options for purchasing coverage on your own. Blue Cross and Blue Shield of Alabama has had a virtual monopoly in the state since the Great Depression, and today it covers a whopping 89 percent of Alabamians.

In part, Blue Cross and Blue Shield is dominant in Alabama simply because it has been there for so long—it sold its first policy in 1936—and potential newcomers have found it difficult to convince hospitals and doctors to give them favorable prices so they can compete with the entrenched carrier. But it also has to do with Alabamians themselves: On average, residents of the state are poorer and less healthy than other Americans, making them more expensive to cover and thus less attractive customers.

The lack of competition in nearly a dozen states could present problems when the insurance exchanges that are part of the Affordable Care Act launch in October. The exchanges are supposed to give Americans who do not get health insurance from their employers the opportunity to choose from an array of private insurance plans. The idea is to generate competition between insurers that will lead to lower premiums.


Individuals and businesses with up to 100 employees will be able to shop on the exchanges, and people who can’t afford coverage on their own will get government subsidies to help them pay their premiums. About 26 million low-income Americans are expected to receive subsidies to purchase health insurance through the exchanges.

But in states with a dominant insurance carrier, competition and lower prices may not arrive for quite some time.

A recent analysis by the American Medical Association found that a single insurance company held 50 percent or more of the market in nearly 38 percent of local markets nationwide. And in 30 states, a single insurance company covers more than half the people who purchase insurance individually, according to the Robert Wood Johnson Foundation.

The dominance by a single insurance company is particularly pronounced in Alabama, Hawaii, Michigan, Delaware, Alaska, North Dakota, South Carolina, Rhode Island, Wyoming and Nebraska.

In general, multiple insurance companies are eager to compete in states that have a large number of health care providers and a lot of people who can afford to pay premiums. A relatively young and healthy population is also an attraction. In states that don’t have those characteristics, competition can be sparse.

Alabama ranks 45th in the nation in overall health status, and 46th in median household income, according to the United Health Foundation and the U.S. Census Bureau, respectively. Over the decades, a few major insurance carriers have tried to dip their toes into Alabama, but most pulled out after just a few years.

In other states, there are different reasons for the lack of competition. In Wyoming, for example, the problem is that the state has relatively few health care providers and people have to travel long distances to get care.

Wyoming has only 18.7 physicians per 10,000 people, ranking it 47th in the U.S., according to the Kaiser Family Foundation. By comparison, New York has 34.8 physicians per 10,000 people, Maryland has 35.3 and Massachusetts has 39.7. The national average is 25.7.

Blue Cross Blue Shield of Wyoming dominates the market. Do Wyoming consumers want more choices? “Sure they do,” said Tom Hirsig, Wyoming’s insurance commissioner. But Hirsig said it’s a huge challenge for new carriers to develop provider networks in Wyoming. “My sense right now is that the individual market inside the exchange is not going to be stacked with lots of competition.”

A shortage of hospitals is the problem in Rhode Island, where there are just 11 hospitals owned by two companies. Health Insurance Commissioner Christopher Koller said Rhode Islanders would like other options, but he isn’t sure they’ll have them when the state’s exchange launches in October.

Big Changes

The vast majority of Americans get health insurance coverage through their employers. Millions of low-income Americans qualify for Medicaid, and seniors can sign up for Medicare. But for people outside of these groups, there are few good options when it comes to health insurance.

Many of these Americans pay high premiums if they are sick or middle-aged—if they can find coverage at all. They also run the risk of purchasing policies that don’t cover certain medical conditions or limit the total dollar amount of claims. That’s why so many of them go without insurance altogether.

The health insurance exchanges are designed to change that. The policies that are included on the menu will have a uniform set of benefits and pricing structures that will be easy for people to understand and compare.

In addition, the new health law will make it illegal to deny coverage to people who have pre-existing conditions. It also will mandate a minimum set of benefits; prohibit lifetime caps on claims; and require insurance companies participating in the exchanges to spend at least 85 percent of their revenue on health care.

The hope is that this new pool of previously uninsured people will attract insurers to enter new markets, creating competition where none exists now. Poor states across the South and West have the largest share of uninsured people, and thus hold the greatest potential for insurers to cash in on the $350 billion the federal government plans to spend over the next 10 years to help low-income people buy insurance.

Furthermore, the exchanges should allow smaller companies and non-profits to market their products more effectively, challenging entrenched incumbents. “When you go online, the Blue of Alabama won’t look so much bigger than the next plan,” said Andy Hyman of the Robert Wood Johnson Foundation. The exchange is meant to be an “equalizer,” Hyman said.

What’s Wrong With Monopolies?

Carriers that dominate a particular state often argue that they hold onto their position by keeping prices down. “There are lots of national carriers out there who would provide a product that is less expensive than what is in the market, if they could,” said Kim Holland, director of state affairs for the Blue Cross and Blue Shield Association. “We’re not so naïve as to think that if we don’t price our products correctly our customers won’t find another alternative.”

Some economists note that in some cases, a dominant carrier can use its heft to negotiate the best prices with hospitals and then pass along those savings to consumers. In some markets, dominant insurers are akin to utilities, explained Paul Ginsburg, director of the Center for Studying Health System Change. “You don’t necessarily need more than one,” he said.

Ginsburg said large carriers are likely to get better prices from hospitals and doctors, because providers can’t do without them. “I suspect that consumers have actually benefitted from high [market] concentration. It’s really a bigger problem for physicians,” he said.

Despite having the least competitive health insurance market in the country, Alabama’s individual premium prices compare favorably with neighboring states and are below average for the nation.

But the AMA, which represents doctors, disputes the idea that big insurers always secure the best prices for consumers. They point to national studies showing that when insurance companies merge and acquire smaller companies, their profits go up and so do their premiums.

Exchange Experience

Two states, Massachusetts and Vermont, already have exchanges, and offer a glimpse of what the future might hold.

When Massachusetts launched its exchange in 2007, new players did not immediately burst into the market. One new carrier, Centene Corporation, joined the exchange to offer a limited network of providers for Medicaid beneficiaries. Competition in the individual market remained relatively unchanged.

But Massachusetts already had a relatively competitive market, so existing carriers competed with each other to create new, lower-cost plans in response to market demand—and pressure from state officials to keep costs down. Despite the emergence of low-cost plans, however, average premium prices have continued to rise.

Earlier this month, Vermont became the first state in the nation to publish preliminary health insurance rates for its exchange. Not unexpectedly, the tiny state of only 626,000 residents did not attract any new insurance companies. And the price of the plans offered on the exchange? They cost about as much as what Vermonters were paying before.


Pentagon Report: Iran Could Test an Intercontinental Ballistic Missile by 2015

April 25, 2013

A new Pentagon assessment of Iran’s military power maintains that in two years time, Iran could flight-test an intercontinental ballistic missile capable of striking the United States, given “sufficient foreign assistance”, is provided to Tehran. The new assessment reiterated a longstanding estimate of the U.S. intelligence community. Iran could test such a missile by 2015 with assistance from nations like North Korea, China or Russia. Pyongyang is already in the process of developing the KN-08, an extended range ballistic missile that can reach the US West Coast. The missile’s range could be extended to provide the missile an intercontinental strike capability. Pyongyang and Tehran have been collaborating and exchanging technologies regarding ballistic missiles and nuclear weapons for many years; both countries are seeking to match the two technologies to acquire nuclear weapons delivery capabilities. U.S. experts agree that North Korea and Iran could be capable of developing and testing few ICBM class missiles based on liquid propellants, but doubt they could acquire solid-propelled weapons in the near future. The lengthy pre-flight procedures required for fuelling liquid-propelled missiles means that such weapons cannot be mass-fired without warning, as the shorter range missiles could, therefore, providing the defender time to respond, employ missile defense or conduct preemptive attack.


An unclassified portion of the “Annual Report on Military Power of Iran,” dated January 2013 and made available by the Pentagon today, also states that Iran is continuing to develop both the “technological capabilities applicable to nuclear weapons” and “ballistic missiles that could be adapted to deliver nuclear weapons.” In December 2012 US sources were sceptical about Iran’s ability to reach such milestone by 2015. Tehran encountered a major obstacle in 2011, after an explosion killed 21 people during a test, among the casualties was Hasan Tehrani Moghaddam, who was in charge of the country’s missile program.


The Defense Department adds that Iran “continues to develop technological capabilities applicable to nuclear weapons” and is “proceeding with uranium enrichment and heavy-water nuclear reactor activities in violation of multiple U.N. Security Council resolutions.”

Iran “also continues to develop ballistic missiles that could be adapted to deliver nuclear weapons,” it states. Despite “increased pressure resulting from sanctions” imposed by the United Nations, there “has been no change to Iran’s national security and military strategies over the last year,” according to the report.


In the past Iran was reportedly working on ‘Project Koussar’, a ballistic missile capable of reaching targets at ranges of 4000 – 5000 km. These missiles, sometime referred to as Shahab 5 and Shahab 6 were believed to be based on different propulsion used on the Shahab 3. Some sources indicated the Iranians were erlying on the RD-216 originally developed for the SS-5 IRBM and also used to with the Kosmos SL8 satellite launcher.

James Clapper, the director of national intelligence, told the Senate Select Committee on Intelligence last month that “we do not know if Iran will eventually decide to build nuclear weapons.” The U.S. government’s 17 intelligence agencies, according to Clapper, “judge Iran would likely choose a ballistic missile as its preferred method of delivering a nuclear weapon, if one is ever fielded,” he said in the U.S. intelligence community’s annual worldwide threat assessment. These missiles are capable of delivering a weapon of mass destruction, he said.


“In addition, Iran has demonstrated an ability to launch small satellites, and we grow increasingly concerned that these technical steps — along with a regime hostile toward the United States and our allies — provide Tehran with the means and motivation to develop larger space-launch vehicles and longer-range missiles, including an intercontinental ballistic missile,” according to Clapper.


Lockheed Martin Estimates Sequestration Impact in 2013 to Exceed US$800 million

April 23, 2013


The world’s largest defense contractor Lockheed Martin assesses the potential effect of sequestration measures taken by the US Government could reduce its 2013 net sales by approximately $825 million. Lockheed Martin was the first major defense company to comment on the scale of sequestration impact on its performance since the drastic measures took effect last month.

The company reported today its net sales decreased 2 percent in the first quarter of 2013, to $11.1 billion; the business activity generated $2.1 billion. The company invested $0.5 billion for repurchasing 5.1 million shares, thus increasing net earnings 14 percent over the first quarter of 2012. With $761 million in net earning reflecting an $2.33 “Earnings per diluted share”, reflecting an increase of 15 percent over Q1/2012.

“While the impact of sequestration on our business has been limited to date, we continue to work closely with our customers to better understand the future impact sequestration may have on our programs. Despite the challenging budget environment, we will continue to innovate and deliver value to our customers and shareholders.” said Lockheed Martin Chief Executive Officer and President Marillyn Hewson, “Our team delivered strong results this quarter by focusing on program execution and delivering on our commitments to customers.” After considering the potential sequestration estimate along with its first quarter 2013 results, the Corporation has revised the 2013 outlook to indicate that the Corporation expects its net sales to be near the low end of the range provided in January ($44,500 million)

In January, the Corporation provided an outlook for 2013 premised on the assumptions that the U.S. Government would continue to support and fund programs through March 2013, that FY 2013 budget will be approved by the Congress at a level consitent with the President’s proposed defense budget and that sequestration would not go into effect. Although sequestration is currently in effect, the company said that customers have not yet informed it of specific decisions taken in response of this act, except in some very limited circumstances. However, the situation is expected to change in the coming months. Expecting sequestration measures bearing impact on Department of Defense and other federal procurements, Lockheed Martin expects its 2013 revenues to be within the low margin of the amount projected in January 2013.

“Sequestration reductions will be achieved through delaying and deferring new program starts, versus modifying or restructuring existing programs that have contractually obligated schedule and delivery requirements” the company commented. Nevertheless, other market-wide implications of Sequestration could cause ‘collateral effects’, such as significant rescheduling or termination activity with the Corporation’s supplier base, contractual actions including partial or complete terminations, severance payments made to the Corporation’s employees, facilities closure expenses, and impairment of assets or goodwill, all these have the potential to align the Corporation’s cost structure to a lower sales base.

Aeronautics sales were down over US$ 0.5 billion from $3,706 in Q1/2012, primarily due to lower sales in F-16, C-130J and C-5 programs. Missiles and Fire Control sales increased $222 million over the same quarter last year, attributed to JASSM program. Mission Systems and Training unchanged but improved their operating profit by 28 percent.


China’s Huawei Bails on the United States

By Adam Pasick

April 24, 2013


There’s only so much abuse that a giant network equipment manufacturer repeatedly accused of threatening US national security can take.

“We are not interested in the US market any more,” Huawei executive vice president Eric Xu said at the company’s annual analyst summit on Wednesday, as reported by the Financial Times.

“Don’t get me wrong, I’d love to get into the U.S. market,” Chief Technology Officer Li Sanqi added in an interview with IDG. “[But] we today face reality. We will focus on the rest of the world, which is reasonably big enough and is growing significantly.”

Huawei has been a punching bag in Washington for years, with congressmen labeling the company a trojan horse for cyberwarfare by China. It has come under additional scrutiny following the suspicious death in Singapore of an American engineer who was working on a cutting-edge military technology project that may have violated US export rules. Computer files found in his apartment included a proposal for Huawei to collaborate on the project.


Congress Bulls Into China’s Shop

Posted by Stewart Baker on Mar 25, 2013 at 05:54 PM | Permalink


Anger over Chinese cyberespionage continues to mount in Congress, and it’s beginning to show in legislation. Not just the bills Congressmen introduce, the ones Congress passes.

Demonstrating remarkable bipartisan angst about Chinese hacking and the risks in Chinese high tech equipment, Congress has added tough sanctions to the continuing resolution that funds the federal government and is now awaiting the President’s signature. The sanctions provision bars federal government purchases of IT equipment “produced, manufactured or assembled” by entities “owned, directed, or subsidized by the People’s Republic of China” unless the head of the purchasing agency consults with the FBI and determines that the purchase is “in the national interest of the United States”:


Sec. 516. (a) None of the funds appropriated or otherwise made available under this Act may be used by the Departments of Commerce and Justice, the National Aeronautics and Space Administration, or the National Science Foundation to acquire an information technology system unless the head of the entity involved, in consultation with the Federal Bureau of Investigation or other appropriate Federal entity, has made an assessment of any associated risk of cyber-espionage or sabotage associated with the acquisition of such system, including any risk associated with such system being produced, manufactured or assembled by one or more entities that are owned, directed or subsidized by the People’s Republic of China. (b) None of the funds appropriated or otherwise made available under this Act may be used to acquire an information technology system described in an assessment required by subsection (a) and produced, manufactured or assembled by one or more entities that are owned, directed or subsidized by the People’s Republic of China unless the head of the assessing entity described in subsection (a) determines, and reports that determination to the Committees on Appropriations of the House of Representatives and the Senate, that the acquisition of such system is in the national interest of the United States.

This could turn out to be a harsh blow for companies like Lenovo that have so far escaped the spotlight trained on Huawei and ZTE. But it may also bring some surprises for American companies selling commercial IT gear to the government. It’s not clear that they even know which of their suppliers and assemblers are directed or subsidized by the Chinese government. Where the IT system is manufactured doesn’t answer the question; sanctions will depend not on where the system is made but on whether the company that supplies it is tainted by close ties to China’s government.


It will make life equally awkward for the Obama Administration, which has been slowly and hesitantly toughening its stance on Chinese cyberespionage. The CR language will force the pace of retaliation, probably faster than the administration would like. But the statutory alternative to implementing the ban is for the administration to certify purchases as in the national interest — possibly over the objections of FBI analysts who mistrust the gear.


The continuing resolution passed both houses with this provision in it; the President could in theory refuse to sign it. But this is a much-anticipated funding bill that heads off a government shutdown. With Congress having for once avoided a Perils-of-Pauline crisis, it’s politically impossible for the President to put Pauline back on the railroad tracks — especially so the government can buy suspect equipment from China. A veto is even less palatable than living with the provision.


The American Dream, Downsized

The middle class now worries more about holding on for dear life than about climbing the ladder to riches.

National Journal

By Amy Sullivan

Updated: April 26, 2013 | 1:35 p.m.
April 25, 2013 | 8:20 p.m.


The Grain Exchange Room in Milwaukee’s old Chamber of Commerce building is a dazzling display of Gilded Age opulence. Its ornate faux-marble columns soar three stories high, and an intricately carved balcony overlooks what is believed to have been the world’s first commodities-exchange trading pit. This temple to business and success was a fitting location for Mitt Romney’s victory speech after the Wisconsin primary a year ago, on the night he eclipsed his last remaining rival for the Republican presidential nomination.

Romney used the occasion to lay out his vision of an “opportunity society led by free people and free enterprises.” Barack Obama, he charged, didn’t believe in opportunity: When the president went after the “1 percent,” he wanted only to turn the United States into “one of those societies that attack success.” Romney’s supporters cheered.

In Chicago, the Obama team cheered, too.

Led by Obama’s chief pollster, Joel Benenson, the campaign had spent 2011 examining Americans’ views on economic security and the American Dream. They concluded that something fundamental had changed. It used to be political gospel that a candidate couldn’t risk talking about inequality because such a stance was so easily caricatured as an attack on the rich and because even working-class Americans believed they had an opportunity to be rich someday. But as Benenson explained in a recent interview, “There has been a recalibration of the American mind-set when it comes to economic change.”

What his polling found is that middle-class Americans are much more concerned about holding onto what they’ve got than in pursuing more. The Pew Economic Mobility project, the Allstate/National
Journal Heartland Monitor Poll, and other studies have arrived at similar conclusions. When Pew asked Americans in 2011 if they preferred financial stability or moving up the income ladder, 85 percent of respondents chose the safer, surer future.

If that seems like a defensive crouch, it is. The American middle class is broadly defined as households earning two-thirds to twice the median income, or about $35,000 to $100,000 a year. The beginning of the 21st century was a “lost decade” for the middle class, Harvard economist Lawrence Katz said, but the decline has been under way for decades. In the early 1970s, middle-class households earned 62 percent of the national income; today, they bring in just 45 percent. These households are more vulnerable, economists say, than at any time since World War II.

The Great Recession exacerbated this decline. Sixty percent of the job losses in those years occurred in middle-income jobs. The recovery, instead of restoring those jobs, has replaced them with low-wage positions. And the middle class, which once drove American prosperity with its purchasing power and stability, is shrinking. Middle-class households make up barely half the population today, down from 61 percent in 1971. People aiming to reach the middle class, or to stay there, have ample reason to worry.

Middle-class Americans’ anxieties and the shift in how they define the American Dream had consequences for the 2012 election. Romney spoke in the language of economic risk: “The promise of America has always been that if you worked hard, had the right values, took some risks, that there was an opportunity to build a better life for your family and for your next generation.” Compare that with Obama describing the “basic bargain in America,” a formulation he has used since his U.S. Senate campaign in 2004: “If you’re willing to work hard and play by the rules, you should be able to find a good job, feel secure in your community, and support a family.” So, which guy won?

But if the American Dream, and the understanding of what it means to be middle class, is changing, the reverberations will go far beyond a single election. They speak to the very story Americans tell about themselves. We were once a nation of strivers, raised on Horatio Alger and Bill Gates, confident of the possibility of moving upward. If Americans now aim simply to avoid slipping backward, they will have decided that the American Dream is but a reverie.


The United States was already mired in the economic disaster known as the Great Depression when historian James Truslow Adams, in his 1931 book, The Epic of America, first turned “American Dream” into a commonly recognized phrase. The dream may have been put on hold for many Americans at the time, but Adams sought to remind his fellow citizens, “It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable.”

The cars and high wages would come soon enough, during the economic boom that followed World War II. Agricultural workers moved into towns and cities for higher-paying jobs, and the GI Bill financed higher education for millions of veterans. Americans’ entrepreneurial spirit, backed by capital and opportunity and pent-up consumer desires, sent the economy soaring. And unlike in earlier eras of rising prosperity, the gains weren’t limited to those at the top but were distributed relatively equally across economic classes. The result: an expanding, robust middle class.

Almost overnight, it became not just possible but expected that young marrieds would fare better than their parents had. A middle-class family bought a house, put a car (or two) in the driveway, and raised children who ran around a safe neighborhood and later went to college with their parents’ support. Or the kids might skip college and enter the workforce with a secure, often union-protected, job that allowed them to enjoy a middle-class lifestyle and live in the same neighborhoods as bankers, teachers, and salesmen.

Erin Currier runs the Pew Economic Mobility Project, which has done two national polls about how Americans interpret the American Dream. “When people talk about their parents,” she said, “it’s in terms of what they were ‘able’ to do. They were able to buy their own home. They were able to attend college. They were able to send their kids away to summer camp. These were accomplishments, and they set the standard.”


Being middle class has always meant two separate things: affluence (having a solid income) and security (being able to maintain your quality of life from year to year). For the first several decades after World War II, those appeared to be one and the same. Social norms such as low divorce rates, workplace norms such as lifelong employment and generous benefits, and government-run social insurance helped to insulate people from life’s twists and turns. A high income guaranteed economic security—this was easy to assume.

That assumption began to change in the 1970s. U.S. manufacturing started to slow, then contract, battered by competition first from Germany and Japan, and later from China and East Asia. Successive oil crises wreaked havoc on energy costs. A period of inflation and sluggish growth produced a mashed-together word, “stagflation.” And the increasing use of corporate revenues to benefit shareholders instead of workers undermined the social contract between labor and management.

These developments took a toll on workers’ incomes. The hourly compensation of the average U.S. worker rose by nearly 94 percent, adjusted for inflation, between 1948 and 1973, but by only 10 percent from 1973 to 2011, according to the Economic Policy Institute. “Even after recovery started, typical wages have continued to fall,” said Tyler Cowen, an economist at George Mason University. “And education and health care costs continue to go up—at somewhat slower rates than before, but they’re still nasty price surprises.” Families spend, on average, 75 percent more for health insurance (adjusted for inflation) than they did a generation ago.

This squeeze between income and expenses has rattled many Americans’ assumptions of economic security. “Some of the stuff that really matters is hard to quantify in terms of money,” said John Schmitt, senior economist at the Center for Economic and Policy Research in Washington. “It’s about economic security. It’s about how many hours you work, how much of a return you get for the education you have, how much security you have in terms of health insurance and retirement.” About half of all workers have a retirement plan at their job, approximately the same as in the 1970s, Schmitt explained, but most of these plans don’t guarantee a particular payout, thereby shifting market risk from the employer to the individual.

Nor can Americans count on a steady and rising income. Incomes have been volatile. Yale political scientist Jacob Hacker has developed an Economic Security Index to measure the increasing variability of Americans’ economic lives. In 2009-10, as the effects of the Great Recession coursed through the economy, roughly a fifth of all Americans saw their household income drop by at last 25 percent, by Hacker’s estimate, creating greater economic insecurity than at any time since the Depression.

Not everyone is convinced that middle-class incomes have declined, however. Such fears are exaggerated, according to Scott Winship, a Brookings Institution sociologist. Citing Congressional Budget Office figures that count health benefits as well as income, he found that “prior to the Great Recession, the 2000s looked as good as the ’90s and better than the ’80s in terms of household income. And we have to remember that Hispanic immigration was continuing to increase, and that exerted a steady downward pull on income.” The overall economic trends, Winship argues, continue to be robust.

One trend that can’t be questioned is the drop in American household wealth. In 2010, median family net worth sank to around $77,300, a decline of nearly $50,000 from the years just before the financial crisis and close to $30,000 less than it was in 2001, according to the Federal Reserve Board. A shriveled nest egg can turn a stint of unemployment from an inconvenience into a catastrophe.

A racial disparity in household wealth has left African-Americans even less secure. A recent Pew study found that white families experiencing a job loss in the past decade had amassed greater wealth than African-American families with unbroken employment.

Security is also a casualty of a restructuring in the U.S. job market. A stark example is the “permatemp” employee. In nearly every industry—from engineering to law and accounting to journalism—the fastest-growing job category is contract workers. They are often the victims of downsizing who were given the “opportunity” to perform their old job but without employment security or benefits and sometimes with a cut in pay. These “labor flexibility practices” have been increasing over the past 30 to 40 years, said Susan Lambert, a University of Chicago expert on low-skilled jobs. “Our current economic downturn has really heightened their use.”

If they make a decent income, are permatemps middle class? Not by the standards of the past. But by the diminished redefinition, maybe they are: earning a middle-class living—for the moment.


The easiest way to see how much people value stability is to look at what happens when they lose it. During the past decade, more and more Americans saw their incomes fluctuate and their savings dwindle. Even when hit with unexpected life events—a lost job, an illness—they didn’t scale back their expectations or lifestyles. Instead, they took on more debt to preserve what they could.

Outwardly, the middle class still looked vibrant. But, in reality, many of those homes, cars, and pricey college degrees weren’t emblems of affluence but rather symbols of an overextended, overleveraged economy. Political leaders were hardly bystanders in promoting a culture of debt. Washington’s response to rising income inequality was to provide easy credit to consumers and to encourage everyone to buy a home, or so Raghuram Rajan, former chief economist at the International Monetary Fund, argued in his 2010 book, Fault Lines.

When the Great Recession struck, millions of Americans found they could no longer keep up with the debt they had taken on, triggering a chain reaction of default and retrenchment. The suburban house was now underwater. The two cars the parents needed for work became two car loans to shoulder as gasoline prices shot up. The college education entailed loans that brought stifling debts.

“The measures of the American Dream that brought about a sense of comfort and control and pride,” Benenson said, “became symbols of debt and risk. And that has people becoming a little more cautious, weighing risk more carefully in their lives. They have seen the consequences of taking an extra car loan or refinancing their homes. They thought the people who had tamed risk for them—banks, mortgage lenders—hadn’t done it.”

Benenson believes that many Americans have experienced a “come to Jesus” moment regarding their personal finances and are trying to commit themselves to more prudent stewardship. After U.S. credit-card debt topped $843 billion in the first part of 2010, it has slowly but steadily fallen. Average debt loads dropped in all 50 states in 2010; last fall, Moody’s Analytics found that U.S. consumer debt had sunk to 2006 levels. Personal savings rates are finally starting to rise nationwide, after a long decline.

Signs show that hard times have also prompted Americans to reevaluate what they want out of life. Not, perhaps, at first glance. Participants in focus groups convened by the Pew Economic Mobility Project are asked to draw a picture of the American Dream. Nearly everyone’s sketch is the same—two adults, some kids, and a dog in front of a house with a fence. (Even cat owners end up drawing a dog.) It is the set of Leave It to Beaver, sans canine, unchanged since the 1950s.

And yet, “when we delve deeper and ask people to explain what these symbols mean,” project manager Currier said, “they are all about security. It’s being able to afford a house. Having a healthy family and kids. Living in a safe neighborhood. A pet means you can afford a little extra. You have what you need and no more. It became clear that for the individuals we spoke to, the American Dream was much more about feeling they could sleep well at night than about getting ahead.”


If these changes in American attitudes and behaviors merely dated to the Great Recession, they might not last. But the recession simply punctuated a set of underlying economic trends that were several decades in the making. That may be why, even as the economy has recovered, insecurity hasn’t subsided much. As in earlier business cycles, employers aren’t hiring many workers as their profits bounce back; many are looking to downsize further and scale back employee benefits.

Above all, the recession made clear that the old rules—work hard and you will be rewarded with a comfortable, stable life—are no longer in effect. “This was a dramatic event that caused a lot of upheaval, not just financially and economically, but in terms of how they viewed the American economy overall,” Obama pollster Benenson said. “One of the big sources of concern for the people we talked with was that they didn’t recognize any new rules in this environment. All of the rules they had learned about how you succeed, how you get ahead—those rules no longer apply, and they didn’t feel there was a set of new rules.”

No wonder Americans are skeptical that their children will be better off than they are—a core element in the American Dream. A startling 59 percent of respondents to a 2011 Pew survey said it would be harder for their children to move up the income ladder than it was for them. The path to rising higher isn’t as clear as it was.

The older, ambitious model of the American Dream has even drawn some critiques. In the 1990s, the Clinton administration said Washington should “attempt to help all American households become homeowners.” After the housing market collapsed, the Treasury Department declared in 2011 that the Obama administration’s policy “does not mean all Americans should become homeowners.”

A similar downsizing of dreams popped up in last year’s campaign for the Republican presidential nomination, when former Sen. Rick Santorum of Pennsylvania called Obama a “snob” for thinking everyone should attend college. (Obama jumped to clarify that he meant community colleges and job training, too.) Economic research shows the advantage of a college diploma; a Georgetown University study last summer found that the unemployment rate for recent graduates of four-year colleges was 6.8 percent, compared with nearly 25 percent for recent high school grads. Even so, a majority of Americans tell pollsters (54 percent in last fall’s Heartland Monitor survey) they are skeptical that a college education is worth the burden of student loans.

Reducing one’s risk in pursuit of housing or education isn’t necessarily irrational. But a middle class that is increasingly characterized by risk aversion essentially rewrites our national narrative, the one that highlights ordinary people who take risks and create new opportunities and industries.

Scaling back may also mean accepting that people who haven’t yet made it into the middle class never will. “A growing body of evidence suggests that the United States, far from being the land of opportunity celebrated in our history and our literature,” economist Isabel Sawhill has written, “is instead a country where class matters after all, where upward mobility is constrained, especially among those born into the bottom ranks.” That isn’t a phrase likely to be inscribed on a national monument anytime soon, but for millions of Americans, it’s the new reality–and it hurts.



Sequester forces OPM to cut pension overtime


Apr. 29, 2013 – 03:14PM |


The Office of Personnel Management announced Monday it has suspended all overtime for its employees working on processing federal retirees’ pensions.

In a blog post, Associate Director of Retirement Services Ken Zawodny said the steep budget cuts known as the sequester forced OPM to suspend overtime for employees in his division. Zawodny also said OPM will reduce its call center hours by nearly three hours each weekday to save money. The overtime suspension took effect Sunday, and OPM did not say when overtime might be resumed.

The move will throw a wrench into OPM’s recent successful effort to speed up its processing of new retirees’ pensions and whittle down its backlog of unresolved cases. In January 2012, former OPM Director John Berry unveiled a plan to fix the decades-old problem by hiring more people to process pensions, overhauling how the agency processes claims and answers calls from the public, and authorizing more overtime to specialists who have proven they can accurately and swiftly adjudicate claims.

Since then, OPM has cut its backlog of unprocessed claims by 40 percent, from 61,108 in January 2012 to 36,603 in March 2013. Once OPM got its new pension processors hired and trained last summer, their productivity surpassed the agency’s expectations, and helped it weather a massive buyout-driven spike in retirements earlier this year.

Zawodny said the cancellation of overtime and shortening of call center hours will make it harder for OPM to respond as quickly as it would like.

“While it is our hope that process improvements developed over the past year will ameliorate some of the adverse effects of these necessary actions, retirees should expect an increase in the time required to process their claims or respond to inquiries,” Zawodny said.

Until Monday, OPM’s call center was open between 7:30 a.m. and 7:45 p.m. Eastern time, Monday through Friday. Call center hours are now 7:40 a.m. to 5 p.m. Eastern time, Monday through Friday.


Cyber-Conflict Escalates in Midst of North Korean Tensions


By Robert Lemos | Posted 2013-04-29

Nation-state attacks through the Internet continue to escalate, with a massive surge in cyber-reconnaissance activity appearing to come from North Korea at the same time as the country ratcheted up its nuclear rhetoric, according to security experts.

In February, attackers operating from North Korean Internet addresses probed U.S. servers more than 1,000 times, up from the previous average of fewer than 200 probes per month, according to managed security firm Solutionary. In addition, a massive reconnaissance operation—-consisting of another 11,000 probes from servers in North Korea—was directed at a single financial institution, wrote Jon Heimerl, Solutionary’s director of strategic security, in the brief analysis.

The attacks seem to coincide with North Korea’s apparent nuclear test on Feb. 12, he said.

“There do appear to be several parallels between escalated verbal rhetoric and escalated cyber-attacks,” Heimerl wrote. “It is evident that, whether government influenced or not, that the dual path of aggression is a new way of facing the world, at least from North Korea.”

The Internet has increasingly become the medium for deniable nation-state activity. From China’s cyber-espionage to the United States’ and Israel’s alleged attack on Iran’s nuclear program using the Stuxnet worm, cyber conflict has become a staple of nations’ covert military intelligence and reconnaissance operations.

In February, for example, incident-response firm Mandiant released a report detailing the connections between an intelligence unit of China’s People’s Liberation Army and widespread attacks on U.S. companies and interests. In a blog posted on April 24, security firm Cyber Squared said that analysts using the firm’s Threat Connect forum had found that those attacks had continued unabated and defied prediction, by hardly changing their tactics.

“Many within the global security industry, both public and private sectors, speculated that the group’s tactics, tools and procedures (TTPs) would change drastically in response to the disclosure,” the firm stated in the post. “As of late April 2013, Chinese cyber espionage threat groups have clearly continued their activity … (and) in fact, there has been little change.”

The United States is currently considering a variety of options in response to Chinese unabashed hacking, including trade sanctions and other diplomatic pressure, the prosecution of Chinese nationals in U.S. courts and striking back at the Chinese through cyber-space, according to officials cited in an Apr. 22 article in the Wall Street Journal.

The U.S. government has also signaled that cyber-operations have become a priority in the latest budget. The Obama administration plans to boost spending on cyber-security operations by $800 million to $4.7 billion, while cutting other Pentagon programs by nearly $4 billion.

The attacks emanating from North Korean IP space favor financial services, but show only slight preferences among other industries. Many other attacks focused on education, manufacturing and business services, according to Solutionary’s data. The company expects that North Korea—and other nations with smaller military forces—to focus on Internet operations to achieve their national aims.

“Given the more hard-line government in North Korea, we expect escalations like this to continue, and to become even more evident in other conflicts around the globe,” Solutionary’s Heimerl wrote.


Daniel Kessler: The Coming ObamaCare Shock

Millions of Americans will pay more for health insurance, lose their coverage, or have their hours of work cut back.


In recent weeks, there have been increasing expressions of concern from surprising quarters about the implementation of ObamaCare. Montana Sen. Max Baucus, a Democrat, called it a “train wreck.” A Democratic colleague, West Virginia’s Sen. Jay Rockefeller, described the massive Affordable Care Act as “beyond comprehension.” Henry Chao, the government’s chief technical officer in charge of putting in place the insurance exchanges mandated by the law, was quoted in the Congressional Quarterly as saying “I’m pretty nervous . . . Let’s just make sure it’s not a third-world experience.”

These individuals are worried for good reason. The unpopular health-care law’s rollout is going to be rough. It will also administer several price (and other) shocks to tens of millions of Americans.

Start with people who have individual and small-group health insurance. These policies are most affected by ObamaCare’s community-rating regulations, which require insurers to accept everyone but limit or ban them from varying premiums based on age or health. The law also mandates “essential” benefits that are far more generous than those currently offered.

According to consultants from Oliver Wyman (who wrote on the issue in the January issue of Contingencies, the magazine of the American Academy of Actuaries), around six million of the 19 million people with individual health policies are going to have to pay more—and this even after accounting for the government subsidies offered under the law. For example, single adults age 21-29 earning 300% to 400% of the federal poverty level will be hit with an increase of 46% even after premium assistance from tax credits.

Determining the number of individuals who will be harmed by changes to the small-group insurance market is harder. According to the Medical Expenditure Panel Survey, conducted by the Department of Health and Human Services, around 30 million Americans work in firms with fewer than 50 employees, and so are potentially affected by the small-group “reforms” imposed by ObamaCare.

Around nine million of these people, plus six million family members, are covered by employers who do not self-insure. The premium increases for this group will be less on average than those for people in the individual market but will still be substantial. According to analyses conducted by the insurer WellPoint for 11 states, small-group premiums are expected to increase by 13%-23% on average.

This average masks big differences. While some firms (primarily those that employ older or sicker workers) will see premium decreases due to community rating, firms with younger, healthier workers will see very large increases: 89% in Missouri, 91% in Indiana and 101% in Nevada.

Because the government subsidies to purchasers of health insurance in the small-group market are significantly smaller than those in the individual market, I estimate that another 10 million people, the approximately two-thirds of the market that is low- or average-risk, will see higher insurance bills for 2014.

Higher premiums are just the beginning, because virtually all existing policies in the individual market and the vast majority in the small-group market do not cover all of the “essential” benefits mandated by the law. Policies without premium increases will have to change, probably by shifting to more restrictive networks of doctors and hospitals. Even if only one third of these policies are affected, this amounts to more than five million people.

In addition, according to Congressional Budget Office projections in July and September 2012, three million people will lose their insurance altogether in 2014 due to the law, and six million will have to pay the individual-mandate tax penalty in 2016 because they don’t want or won’t be able to afford coverage, even with the subsidies.

None of this counts the people whose employment opportunities will suffer because of disincentives under ObamaCare. Some, whose employers have to pay a tax penalty because their policies do not carry sufficiently generous insurance, will see their wages fall. Others will lose their jobs or see their hours reduced.

Anecdotal evidence already suggests that these disincentives will really matter in the job market, as full-time jobs are converted to part time. Why would employers do this? Because they aren’t subject to a tax penalty for employees who work less than 30 hours per week.


There is some debate over how large these effects will be, and how long they will take to manifest. However, the Bureau of Labor Statistics reports on a category of workers who will almost surely be involuntarily underemployed as a result of health reform: the 10 million part-timers who now work 30-34 hours per week.

These workers are particularly vulnerable. Reducing their hours to 29 avoids the employer tax penalty, with relatively little disruption to the workplace. Fewer than one million of them, according to calculations based on the Medical Expenditure Panel Survey, get covered by ObamaCare-compliant insurance from their employer.

In total, it appears that there will be 30 million to 40 million people damaged in some fashion by the Affordable Care Act—more than one in 10 Americans. When that reality becomes clearer, the law is going to start losing its friends in the media, who are inclined to support the president and his initiatives. We’ll hear about innocent victims who saw their premiums skyrocket, who were barred from seeing their usual doctor, who had their hours cut or lost their insurance entirely—all thanks to the faceless bureaucracy administering a federal law.

The allure of the David-versus-Goliath narrative is likely to prove irresistible to the media, raising the pressure on Washington to repeal or dramatically modify the law. With the implementation of ObamaCare beginning to take full force at the end of the year, there will be plenty of time before the 2014 midterm elections for Congress to consider its options.

For those like Health and Human Services Secretary Kathleen Sebelius, who told a gathering a few weeks ago at the Harvard School of Public Health that she has been “surprised” by the political wrangling caused so far by ObamaCare, there are likely to be plenty of surprises ahead.

Mr. Kessler is a professor of business and law at Stanford University and a senior fellow at the Hoover Institution.


‘Impossible’ to include sequester in 2014 defense budget, Dempsey says

The Hill

By Jeremy Herb – 04/30/13 03:11 PM ET


Joint Chiefs Chairman Gen. Martin Dempsey said Tuesday that it was “literally impossible” for the Pentagon to incorporate $52 billion in cuts under sequestration in its 2014 budget.

Dempsey pushed back against criticism from Republicans, who have argued the Pentagon should have lived by the budget caps set by the sequester in the 2014 budget. The Pentagon requested a base budget in 2014 of $526 billion, $52 billion above the budget caps under sequestration.

Dempsey said that because sequestration didn’t take effect until March 1, the Pentagon wouldn’t have had the time to prepare a completely separate budget for that scenario.

“It would be literally impossible for us to have done,”Dempsey told reporters at a lunch hosted by The
Christian Science Monitor. “We would have to have done two budgets. And that’s not possible, particularly when you’ve got furloughs. There wasn’t a neglect — it was a practical matter of literally what was possible for us to ask the services to do.”

The president’s 2014 budget didn’t ignore sequestration altogether. But its solution of averting the automatic budget cuts through a mix of taxincreases and spending cuts is dead on arrival in the Republican-led House, and there’s little momentum right now for another solution to fix the cuts.

President Obama did not signal a lot of optimism for a solution at a press conference Tuesday.

“I think there’s a genuine desire on many of their parts to move past not only sequester but Washington dysfunction. Whether we can get it done or not, we’ll see,” he said.

Dempsey said that with the debt-ceiling fight looking to be pushed back until the fall, it doesn’t appear that there’s a force to get some kind of budget deal.

“It does now appear we will live with what we’re living with out into the fall,” he said.

Dempsey said that the Pentagon has not decided how it is going to address the 2014 budget being $52 billion above the sequester caps. He said a decision “hasn’t been made” whether to submit an alternate budget or work with Congress to make the cuts.

The Pentagon can make the cuts in a targeted fashion in 2014 if it chooses, but if the budget remains above the budget caps, the cuts would take place across the board.

Sen. John McCain (R-Ariz.) and others urged Dempsey and Defense Secretary Chuck Hagel at a hearing earlier this month to detail where the $52 billion cut would come from. They argued that if the public and lawmakers knew what effect the reductions would have, there might be more political will to try and stop sequestration.

Congress did pass a fix to stop Federal Aviation Administration furloughs this week, which prompted McCain to blast lawmakers for fixing that but ignoring the cuts to the military.

The budgets passed by the House and Senate last month also did not take sequestration into account in 2014, setting defense spending at roughly the same level as the president’s request.

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Drones: When the Future Sneaks Up on You


30 April 2013

By Chris Anderson

Last month, at a Congressional hearing, Sentator Patrick Leahy quoted an FAA prediction that there would be “as many as 30,000 small, lightweight unmanned vehicles [drones] operating in the national airspace by the end of this decade”. That was considered a lot. And he was talking about seven years from now.

Guess what. There are more than 30,000 such small, lightweight drones in Americaalready. My own company sells more than 10,000 a year, and we’re just one of many. We’ve been at it for nearly four years.

Drones are not just remote-controlled aircraft (there are hundreds of thousands of those, which have been flown by hobbyists for decades); instead, they’re computer-controlled unmanned aircraft capable of autonomous flight, following GPS waypoints and otherwise executing pre-programmed missions and controlling on-board cameras. A decade ago, this was the sole domain of the military. Today, you can buy one for less than $550.

How is it possible that Senator Leahy and the Federal Aviation Administration don’t have any idea how many such drones there are in America?

The simple answer is that they’re stuck in the past. The FAA typically tracks aircraft from aerospace companies that go through a certification process. They’ve assumed that the only people who can make drones, which are after all highly complex flying robots, are such firms.

And until about five years ago, that was true. But now, thanks to consumer smartphones and the economies of scale of Apple and Samsung, the tiny sensors and powerful processors needed for drone autopilots are available to anyone. Indeed, they can be bought at Radio Shack. Anybody can make or buy a drone today, and we’ve even created a website called DIY Drones to show you how. It currently has more than 38,000 members flying drones today. So much for the government prediction that “up to 30,000″ drones might be here by 2020.

Before you despair for the FAA and Senator Leahy’s ability to track technology’s progress, remember that this sort of disconnect is always what happens with disruptive change. When technologies come from big, regulated companies like the aerospace industry and defense contractors, the government can count them. But when they come from the grass roots, like our own DIY Drones community of amateurs and hobbyists, they’re off the radar (so to speak).

We’ve seen this time and time again. In 1993, when I was at the Economist magazine, I wrote the publication’s first report on the Internet. In it, I described a scene at the FCC, the agency that regulates telecommunications networks.

[A researcher] recalls visiting America’s Federal Communications Commission in 1990 and seeing an official excitedly waving two charts. One, from the FCC, showed the traditional telecoms investment, worth several billion dollars and growing at the same rate as for the past few decades. The other, from the Commerce Department, showed all network infrastructure investment–including office PC networks and private long-distance data networks.

It had started at about the same level as the few years earlier, but had grown exponentially to double that figure by the late 1980s. The gap was widening rapidly, representing something altogether new; something, the FCC official admitted, “we know nothing about.”

It was the foundation for the Internet, even though the true importance of that development did not become clear for another decade.

Now, twenty years later, the FAA is about to realize that it’s making the same mistake with drones. This technology is no longer something that goes through a regulatory approval process and comes from companies that file paperwork in Washington DC. You can buy drones in the shopping mall. Children fly them on weekends in the park. The Chinese make them in toy factories and sell them by the tens of thousands. The technology has democratized and it’s now fast, cheap and out of control.

It’s like the Internet all over again.


The 5 Agencies with the Most Out of Touch Senior Leadership

By Mark Micheli

April 30, 2013

The growing disconnect between the SES and the rest is real—and growing. The Partnership for Public Service released data in mid-April showing that, government-wide, members of the SES are more positive than other employees, scoring 18.6 points higher in the annual Best Places to Work in the Federal Government rankings, with respect to job satisfaction and commitment.

This widening gap in satisfaction tells us where leaders in the federal government are most out of touch with what’s happening on the ground in their organizations. The gap was lowest—meaning, where the SES and other employees had the most similar job satisfaction scores—at the Department of Defense, Department of Commerce, Social Security Administration, Department of Justice, Department of Veterans Affairs and NASA.

The gap between the SES and the rest—that is, where the SES and other employees were found to be most out of touch with respect to job satisfaction—was highest at the following five organizations:

Most Out of Touch Senior Leadership

  1. Department of Homeland Security (Gap: 26.0)
  2. Department of Agriculture (Gap: 24.2)
  3. Department of the Navy (Gap: 23.2)
  4. Department of the Air Force (Gap: 21.4)
  5. Department of Transportation (Gap: 20.3)

Lara Shane of the Partnership for Public Service recently wrote on Excellence in Government that the difference between the SES and other employees have grown increasingly stark.

There was at least a 20-point gap between senior executives and other employees on four out of 10 workplace categories the Partnership and Deloitte rank in Best Places to Work, including performance based rewards and advancement, leadership, support for diversity and strategic management. There was an alarming 46.5-point gap on the survey question, “Promotions in my work unit are based on merit,” with close to 80 percent of senior executives agreeing with the statement in contrast to only 30 percent of all other employees.

Senior executives and their employees were more aligned on issues such as pay and work/life balance, but those are also the two categories members of the SES gave the lowest marks to. On two of the questions in the work/life balance category, “My workload is reasonable,” and I have sufficient resources to get my job done,” employees were slightly more positive than senior executives. These were the only questions in the 84-question survey where SES members had a lower score than all other employees.

Read the full report here (pdf) and find more information about the best places to work in the federal government below:



Pentagon may soon clear use of Apple, Samsung, BlackBerry devices

Wed, May 1 2013

By David Alexander


WASHINGTON (Reuters) – The Pentagon is expected to clear Apple, Samsung and BlackBerry mobile devices for use on Defense Department networks in the next few weeks, part of an effort to ensure the military has access to the latest communications technology, a spokesman said on Wednesday.

The decision will set the stage for an intensified struggle for Pentagon customers among BlackBerry devices, Apple’s iPhones or iPads and units using Google’s Android platform such as Samsung Electronics’ phones. The Pentagon currently has some 600,000 users of smart phones, computer tablets and other mobile devices.

The Pentagon unveiled a plan in February aimed at giving the military services a much broader range of choices among mobile devices. The department currently has 470,000 BlackBerry users, 41,000 Apple users and 8,700 people with Android devices. Most Apple and Android systems are in pilot or test programs.

“We are working towards establishing a multi-vendor environment that supports a variety of devices and operating systems, to include Samsung, Apple and BlackBerry,” said Lieutenant Colonel Damien Pickart, a Pentagon spokesman.

“A key objective of the plan is to establish a department-wide mobile enterprise solution that permits the use of the latest commercial technology such, as smart phones and tablets,” he added.

Several mobile devices and operating systems are currently going through a security review and approval process with the Defense Information Systems Agency, Pickart said.

Once the devices have cleared the process for creating a STIG – for Security Technical Implementation Guide – Pentagon organizations will be able to order them knowing that they have the necessary security configuration to be used on the Defense Department’s internal networks, he said.

Pickart said Samsung’s Knox version of Android currently is going through the security review process, with a decision expected in the next two weeks.

A full security review for Apple’s iOS 6 system is expected in early May, and BlackBerry has submitted security plans for its BlackBerry 10, BlackBerry PlayBook and BlackBerry Device Service, with a decision expected in two weeks.

The security reviews are part of the Commercial Mobile Device Implementation Plan unveiled by the Pentagon in February.

Major General Robert Wheeler, deputy chief information officer, told reporters at the time that the effort aimed to ensure the Pentagon’s mobile devices, wireless infrastructure and mobile applications remain “reliable, secure and flexible enough to keep up with the fast-changing technologies of today.”



Navy unveils first squadron of drones

The Associated Press

Published: Thursday, May. 2, 2013 – 1:48 am

CORONADO, Calif. — The Navy is inaugurating its first squadron with unmanned aircraft, formally adopting drone technology amid debate over its growing use in warfare.

Military officials will launch the maritime strike squadron called “Magicians” on Thursday at the Naval Air Station North Island base on Coronado, near San Diego.

The squadron will have eight manned helicopters and a still-to-be-determined number of the Fire Scout MQ-8 B, an unmanned helicopter that can fly 12 continuous hours, tracking targets.

Lt. Aaron Kakiel says the squadron will be aboard the Navy’s new littoral combat ship in about a year.

He says most Navy drones now are operated by contractors overseen by military personnel.

The squadron’s creation comes 100 years after the formation of the first Navy air detachment.

The Air Force has various drone squadrons.


Read more here:


Is U.S. manufacturing making a comeback — or is it just hype?

Washington Post

By Brad Plumer, Updated: May 1, 2013

It’s hardly news when a U.S. firm moves its manufacturing operations abroad to China. But what about when a Chinese company sets up a factory in the United States?

Back for good? Or still hurting? (Ty Wright/BLOOMBERG)

That actually happened in January, when Lenovo, a Beijing-based computer maker, opened a new manufacturing line in Whitsett, N.C., to handle assembly of PCs, tablets, workstations and servers.

The rationale? The company is expanding into the U.S. market and needs the flexibility to assemble units for speedy delivery across the country, says Jay Parker, Lenovo’s president for North America.

But also — and this was crucial — the math added up. While it’s still cheaper to build things in China, those famously low Chinese wages have risen in recent years. “We reached the point where we could offset a portion of those labor costs by saving on logistics,” Parker says.

U.S. firms that have long operated abroad are making similar moves: Caterpillar, GE and Ford are among those that have announced that they’re shifting some manufacturing operations back to the United States. And economists are now debating whether these stories are a blip — or whether they signal the beginning of a major renaissances for American manufacturing.

It’s easy to be skeptical. So far, the effect on jobs has been modest. Since January 2010, the United States has added 520,000 manufacturing jobs — and of those, just 50,000 have come from overseas firms moving here, according to the Reshoring Initiative. (That includes 115 in the new Lenovo plant.) That’s a decent number, but it pales beside the 6 million factory jobs that the Bureau of Labor Statistics says vanished between 2000 and 2009.

And all those reshoring anecdotes might just be that — isolated anecdotes. In March, Jan Hatzius of Goldman Sachs pored over the data on U.S. trade and manufacturing and found that the manufacturing gains since 2010 have mainly just been a cyclical bounce-back from the recession and nothing more. “Evidence for a structural renaissance is scant so far,” he wrote.

Yet the optimists counter that the logic of a manufacturing comeback remains compelling. Besides the shrinking wage gap between China and the United States, the productivity of the American worker keeps rising. Shipping costs are rising, making outsourcing more costly. And the surge in shale gas drilling gives the United States a wealth of cheap domestic energy to bolster industries such as petrochemicals.

All that could combine to make U.S. factories more competitive in the years ahead, not just with Europe and Japan, but with the manufacturing behemoth in China. This shift likely won’t mean the United States will have 19 million manufacturing workers again, the way it did in the 1980s. For one thing, automation is still a powerful force. And the types of jobs that come back will be very different from the ones that vanished. Still, any significant uptick in domestic manufacturing after a decades-long decline could bolster the economy and spur innovation.

“I think it’s fair to say this hasn’t all registered in the data just yet,” says Scott Paul, the president of the Alliance for American Manufacturing, in response to Hatzius’ points. “But we’re starting to lay the groundwork where we’ll start to see a real effect three to 10 years from now.”

Laying the groundwork

Reuters – A laborer works at a textile mill last month in Huaibei, China.

So what does that groundwork look like? For many analysts, the narrowing of the wage gap between China and the United States is the most significant factor. China has been getting wealthier, and its factory workers are demanding ever-higher wages. Whereas the gap in labor costs between the two countries was about $17 per hour in 2006, that could shrink to as little as $7 per hour by 2015, says Dan North, an economist with Euler Hermes, a credit insurer that works with manufacturers.

“If you’re a U.S. company and the advantage is only $7 per hour, suddenly it may be worth staying home,” North says. “If I stay here, I have lower inventory costs, lower transportation costs. I’m closer to my market, I can have higher-quality production and I can keep my technology.”

This notion appears to be catching on. In February 2012 survey from the Boston Consulting Group (BCG), 37 percent of U.S. manufacturers with sales above $1 billion said they were considering shifting some production from China to the United States. The factors they pointed to were not only that wages and benefits were rising in China, but the country is also enacting stricter labor laws and experiencing more frequent labor disputes and strikes.

“Companies are realizing it’s not as easy to do things in China as they thought,” says Hal Sirkin, a senior partner at Boston Consulting Group who has been predicting the convergence of labor costs since 2011.

The flip side is that American workers are becoming more attractive — for a mix of reasons. Worker productivity has been rising steadily over the years. But also, BCG says, the decline of U.S. organized labor is luring some multinational corporations home, particularly to the nonunion South. Unions, for their part, have often responded by allowing wages to fall in order to keep jobs in the United States. Ford started bringing back production from China and Mexico after an agreement with the United Auto Workers let the company hire new “second-tier” workers at lower wages.

As a result, Sirkin’s research at BCG suggests that some industries could slowly migrate back from China. That includes industries such as plastic and rubber, machinery, electrical equipment and computers and electronics.

Nor is it just China. BCG also found that the United States is on pace to have lower manufacturing costs than Europe and Japan by 2015. Already, companies in those regions have been moving production here. Nissan, Honda, and Toyota are ramping up their exports from the United States. In 2008, Ikea opened a new furniture factory in Danville, Va., to cut shipping costs. The European aerospace company Airbus has just broken ground for a new factory in Mobile, Ala.

America’s glut of cheap natural gas from shale fracking is also attracting a smaller subset of industries. Factories being built in Texas and Pennsylvania will convert natural gas into ethylene, a key ingredient in plastics and antifreeze. An Egyptian company, Orascom Construction, is building a $1.4 billion fertilizer plant in Iowa near a natural-gas pipeline. (That said, it’s unclear whether cheap natural gas will have any broader impacts beyond a few industries — as a recent note from Morgan Stanley points out, energy is still a small fraction of costs for most industries.)

Most of the evidence that “reshoring” is happening is still very much anecdotal, and there’s a limit to how far it is likely to go. For one thing, North says, the industries most reliant on cheap labor — including textiles and mass-produced clothing — will likely never return to the United States. Moreover, China has built up a formidable manufacturing infrastructure that will keep many companies there, even as labor costs shift.

“Chinese suppliers have now developed dense supplier networks that now have their own capabilities for introducing new products,” says Suzanne Berger, a political science professor at the Massachusetts Institute of Technology who studies manufacturing. “And, of course, China is a market that’s growing extremely rapidly — so many companies will want to stay in close proximity to those customers.”

What’s more, several experts noted, the Chinese government may well try to prevent the gap in labor costs from narrowing — either by subsidizing domestic firms or through other policies. “I don’t think you want to underestimate the willingness of China to protect its manufacturing,” says Paul. “Even in the face of steep odds.”

But the early signs are notable. Sirkin points out that his model of labor costs didn’t predict that companies would start coming back to the United States until 2015: “We’ve already seen more movement than we expected.”

Industry has changed

Two of Eastman Kodak’s most successful cameras (Gary Cameron/REUTERS)

Policymakers’ efforts to bolster domestic manufacturing, however, will have to take into account how dramatically the industry has changed since the 1980s.

In a recent report, an MIT task force described how the U.S. manufacturing landscape is no longer dominated by large firms such as Dupont, IBM and Kodak that could handle every aspect of production themselves. Instead, the future of manufacturing will consist of smaller firms that may not always have enough money to train workers, commercialize new products and procure financing on their own.

“There are these holes in the ecosystem, and we have to think of another way to provide all these capabilities if we want to see manufacturing revived,” says Berger, a co-author of the report.

Some firms have partnered with local universities or governments to develop these capabilities, she says. In Rochester, N.Y., for instance, the demise of Kodak meant that there was no longer a dominant company paying to train new skilled workers. So smaller firms in the optics industry banded together to plan new community college curricula and fill the gap.

In New York, the state government has tried to support semiconductor manufacturing by bringing together private firms, research labs and degree programs to share common facilities, expensive equipment, training and research.

The Obama administration is spending $1 billion to fund similar hubs around the country. The first is the National Additive Manufacturing Innovative Institute in Youngstown, Ohio, which will focus on the development of 3-D printing and other processes for manufacturing objects from digital models.

According to the MIT report, such partnerships have the potential to be far more effective than the old model of handing out tax breaks for manufacturers. That’s because they don’t leave a state or locality at the mercy of a single firm that could leave at any time.

How many jobs will return?

There’s also the key question of how many jobs are likely to come back. The United States has 11.9 million manufacturing employees, and experts tend to agree we’re unlikely to see a return even to the much-diminished levels of the 1990s, when there were more than 17 million factory positions:

President Obama has set a more modest goal of 1 million new manufacturing jobs by the end of his second term. But Paul of the Alliance for American Manufacturing says the country is behind pace to achieve even that “reasonable goal.”

The new manufacturing jobs, meanwhile, will also be different from the jobs of old. For one, many plants are now setting up in the nonunion South, and organized labor has largely been shut out of the manufacturing renaissance. On balance, all of the job gains since 2009 have been nonunion. And, unlike 30 years ago, manufacturing jobs no longer have higher average annual earnings than the typical private-sector worker.

At the same time, technological advances will continue to displace factory jobs in the United States and elsewhere. Germany and China — two manufacturing titans — are slowly losing positions because of automation. A report last fall by the McKinsey Global Institute found that the price of robots relative to the cost of human labor has fallen 40 to 50 percent since 1990, and that trend is expected to continue.

Paul, however, points out that Germany has lost jobs at a much slower pace than the United States over the past decade, which suggests that there’s room for improvement. “There’s nothing inevitable about the sort of steep declines we’ve seen here.” Similarly, the recent Morgan Stanley report, which is skeptical about a sustained renaissance, argues that at the very least the United States has halted the “draining away of manufacturing capacity to China.”

What’s more, experts point out that there are still plenty of other advantages to bringing manufacturing back home. Manufacturing firms tend to spend more on research and development than other businesses, and recent research has focused on the fact that the act of building things can lead to key innovations. Procter & Gamble and Gillette are two companies known for their run-of-the-mill products — diapers and razors — that have turned innovations in the manufacturing process into a key part of their business.

What’s more, the MIT report says, manufacturing can be a potent driver of other service-industry jobs. A small company in Ohio that makes protective sleeves for pipelines, say, will be in a good position to offer technical support for oil platforms and other companies.

“We have the wrong picture if we think on the one hand there’s manufacturing and on the other hand services,” Berger says. “And the idea that we’re going to just go from one to the other is wrong. Almost all valuable things are some bundle of manufactured goods plus services attached.”


Will Bureaucracy Keep The U.S. Drone Industry Grounded?

by Martin Kaste

April 30, 2013 3:18 AM

Paul Applewhite of Applewhite Aero isn’t allowed to fly this 3-pound Styrofoam plane. That’s because he has added circuitry to make it autonomous — it can find its way to specified coordinates — which means it’s an unmanned aerial vehicle requiring a special testing permit.

Americans are suspicious of drones. Reports of the unmanned aerial vehicles’ use in war zones have raised concerns about what they might do here at home. For instance, in Seattle earlier this year, a public outcry forced the police department to abandon plans for eye-in-the-sky UAV helicopters.

The backlash worries Paul Applewhite, an aerospace engineer with 10 years of experience at companies like McDonnell Douglas and Sikorsky. He now runs his own startup company, Applewhite Aero, in an industrial park on the south side of Seattle. Applewhite is developing drones — or UAVs, as the industry calls them. He shows off a 3-pound Styrofoam plane he has dubbed the Invenio.

“We bought the airframe and the motor off of an online hobby shop,” he says. To make it a UAV, he added a GPS antenna and a circuit board that allows it to fly autonomously. He hopes to sell it to aid agencies; medical teams could use it to fly tissue samples back to a lab, for instance. They’d enter the coordinates, and the Invenio would find its way back.

That’s the theory. The reality is, Applewhite can’t know for sure what his plane can do, because he’s not allowed fly it.

The Federal Aviation Administration bars the use of UAVs for commercial purposes. That means, even though it’s perfectly legal for hobbyists to fly small UAVs, Applewhite may not, because he’s in business.

He has applied for a special test permit, called a certificate of authorization, but that process has dragged on since last August.

“We’ve generated a 62-page document that we’ve submitted to the federal government,” he says, and he assumes he’ll have to meet personally with regulators in Washington, D.C., before he’s allowed to make a few short flights with his modified toy.

“Quite frankly, I could do what I need to do in a cow pasture,” he says. “I just need some legal and efficient way to test this aircraft.”

Applewhite is quick to stress his respect for the FAA’s thoroughness in the interest of safety. But in the case of lightweight experimental UAVs, he says, that thoroughness threatens to stifle startups like his — and perhaps a whole nascent industry. He says he’s losing valuable time while potential customers go elsewhere.

“A lot of our universities that are developing [UAV] training programs, they’re buying a vehicle from Latvia,” he says. “I think I could compete on that, but I just can’t test mine in the United States.”

Developers say the U.S. light drone industry is being overtaken by manufacturers in Israel and Australia; Seattle’s controversial police UAVs came from Canada.

The FAA won’t comment on the permitting process for UAV tests. Heidi Williams, vice president for air traffic services and modernization at the Aircraft Owners and Pilots Association, defends the FAA’s cautious approach.

“Their primary mission is ensuring that the airspace environment that we all operate in is safe,” says Williams, who is also a pilot. “Things that are really tiny or small to see, sometimes can be very close before you actually have time to see them and react and avoid them.”

UAV developers admit there’s still no reliable way to “teach” small drones to avoid other aircraft, but they say there’s little danger as long as they’re tested at low altitudes, away from airports — the same rules that already apply to radio-controlled hobby aircraft.

Juris Vagners, a professor emeritus of aeronautics at the University of Washington, helped pioneer UAVs in the 1990s. “There was some paperwork, but it wasn’t anything like what’s going on today,” he says. Now the permitting process verges on the absurd. During a recent application, he says, it took a couple of months to satisfy the FAA that the University of Washington is, in fact, a public institution.

Vagners blames the red tape on the public’s hostility toward drones.

“As everyone can’t help but be aware, there’s the whole big flap about privacy issues,” Vagners says. “And the approach that is being taken by the FAA is basically a one size fits all.”

For example, commercial developers of 3-pound modified toy airplanes find themselves having to apply for an “N-number” — the same flying license plate that’s required for Cessnas and 747s.

Some frustrated American companies are now taking their prototypes to Mexico and Australia for testing. In Canada, the Canadian Centre for Unmanned Vehicle Systems is offering access to a test site among the flat farm fields of southern Alberta. One American drone developer has already used the facility, which is run by Sterling Cripps. He marvels at the bureaucratic hurdles for UAVs, both in Canada and in the U.S.

“Here’s the hypocrisy: Our governments allow us to fly UAVs over war-stricken, terrified civilians in other lands, but the moment you bring them back to our precious neck of the woods, where we’re not getting shot at, where we have insurance, we have lawyers, they won’t allow it,” Cripps says.

Regulators say they will allow it — eventually. Congress has given the FAA until September 2015 to come up with a plan for integrating commercial UAVs to the domestic airspace. As part of that process, the FAA will pick six sites around the country for UAV testing. The sites are expected to be selected by the end of the year.

That’s an eternity to UAV developers like Paul Applewhite. “We have a technology — we have an industry — that could be ours for the taking,” Applewhite says. “We’re losing it because we can’t test the vehicles.”


Drones can be positive and negative for the ag industry

May 1, 2013

By Heather Hetterick & Matt Reese

Just a few years ago, it would seem more like something out of a bad sci-fi film. But today, the possibility of an unmanned aerial vehicle (UAV) floating over a farm taking pictures or video is a reality.

The unnerving whirring sound and ominous silhouette across the blue rural sky have triggered many opinions and possibilities for the agricultural community.

Rory Paul feels that UAVs, or drones, have many more positives than negatives. Paul is the owner of Volt Aerial Robotics in St. Louis and he sees tremendous potential for their use in agriculture.

“There are several applications we see developing. The simplest one is crop scouting. You could use a simple system like a helicopter or quad copter. The farmer can stand at the side of the field and get a bird’s eye view. There are huge advantages here because right now an agronomist can only see a small fraction of the field. If you see a problem, you get a picture of it and know exactly where it is,” he said. “The next application is mapping. You can use a fixed-wing UAV and you actually map the field creating an up-to- date digital map of the field. This allows the farmer to look at nutrient issues to develop an application plan and, technically, we could probably use precision spot spraying.”

In the distant future, he believes we could see other applications including pollination and population counts.

Paul first saw the potential for UAV use in agriculture while in South Africa.

“I am originally from South Africa where a large seed supplier had been using radio controlled helicopters to monitor their breeding operations. I saw what they were doing and I was hooked,” Paul said. “Here is the U.S., some big farmers are using traditional aircraft and aerial photography, but it is expensive. You can do the same thing with this for so much less. With conventional aerial photography it can cost $3 per acre. By using this technology is literally costs cents on the dollar and you can take so many more photos for less money. That can make a huge impact on farming decisions.”

There are many options with this technology.

“You have a broad price range. A farmer could put together a system for as little as $1,500. The professional grade system I sell for ag use is $10,000, and that comes out of the box and is ready to operate,” he said. “A military grade UAV system can cost $35,000.”

The systems can operate anywhere from 20 minutes to an hour at a time and can fly up to 15 miles away from the operator, though regulations prohibit them from leaving the sight of the operator. Paul came to the U.S. in 2005 with his ideas but soon found a setback with Federal Aviation Administration (FAA) regulations.

“Commercial use of this technology is not permitted. You can fly them recreationally, but you cannot take that information and include it into any kind of commercial operation,” Paul said. “The FAA regulation against commercial use, though, apparently infringes upon private property rights. FAA is supposed to have a plan in place by 2015, but we could see the situation fan out longer. At the same time, there is tremendous interest in this because it makes sense and farmers are just going to go out and do it. Depending on the day, the FAA could say farm use is commercial or not.”

And, while there are plenty of positive farm applications with UAVs, there are also some concerns. People for the Ethical Treatment of Animals (PETA) generated quite a bit of attention when they announced that they would be monitoring hunters with drones, and in the fine print, farms. Paul said the PETA scheme was more about generating attention than an actual monitoring effort.

“If PETA gets one UAV system, so what? I don’t think it has much merit. As far as I am concerned, it is more of a marketing propaganda tool than something that is actually practical, but any farmer who sees a UAV over his property should notify the FAA straightaway and inform them of that,” he said. “In Pennsylvania, one of these systems was actually shot down by a group of hunters. It has actually happened more than once. This is a gray area right now, but aircraft have rights of access to the air space and shooting one of these down is ill advised. Use the laws that are in place. Get the FAA involved and let them restrict PETA’s activities.”

Currently, the legalities surrounding UAVs are murky at best.

“It is as clear as mud,” said Kristi Kress Wilhelmy, an agricultural attorney at Barrett, Easterday, Cunningham & Eselgroth, LLP. “It used to be that you as a landowner owned from the air to the heavens, but then we got airplanes and the law changed. Now a person can commit a trespass if a person enters or directs an object such as a drone into the area between the land and a certain level in the sky, but that level has not been clearly defined in the courts. It could arguably be 500 feet, so could a drone be trespassing if it is below 500 feet? Maybe, but that drone has to be interfering with the use of your property in some way in order to collect damages. Is it causing anxiety to your animals or a risk of injury? Then it is arguably a trespass or a nuisance. But these are all questions that have never been addressed by the courts.”

It would also be difficult to argue that the UAV is violating your privacy.

“Is it a violation of your privacy? Arguably no. If I am in my backyard where a passerby could see me, I do not have a reasonable expectation of privacy,” she said. “If someone repeatedly operates the drone at a particular location, it could rise to the level of stalking. What if there is a microphone on the drone? There are laws against wire-tapping. There are many unanswered questions about this and I do not believe these questions are adequately addressed in the law. The FAA is starting to make some rules and regulations about drones, but, for now, if you shoot the drone down it is clearly the destruction of private property.”

The issue then becomes whether you had lawful justification to do so.


Pentagon prepares to ask Congress for break from ‘sequester’

By David Lawder and David Alexander | Reuters

May 1, 2013

By David Lawder and David Alexander

WASHINGTON (Reuters) – The Pentagon is preparing to ask Congress soon for more authority to shift funds to cope with automatic spending cuts, confronting lawmakers with another exception to the “sequester” just days after they gave a break to the flying public and the airline industry.

The request may be sent to the House of Representatives’ Appropriations Committee as early as next week, a House Republican aide said on Wednesday.

The Pentagon won increased budget flexibility in March, but officials have told members of Congress they believe it was insufficient to cover shortfalls in training and operations.

The Defense Department move would follow closely the fix last week to ease airline flight delays caused by the temporary furloughs of air-traffic controllers by the Federal Aviation Administration.

The cuts, known as “sequestration,” were originally hatched by Washington in 2011 as a way to force the White House and Congress to find an alternative budget deal rather than have spending cuts kick in automatically.

But policymakers failed to reach such a deal earlier this year and the cuts – totaling $109 billion for the current fiscal year – took effect on March 1.

Defense spending has taken the single biggest hit from the automatic cuts, with a $46 billion reduction through the September 30 end of the fiscal year.

One House aide said the request would cite a shortfall in war-fighting because of higher than expected costs of withdrawing from Afghanistan.


Pentagon officials paved the way for the move in testimony to congressional committees over the past few weeks in which they expressed worries about the sequester’s impact on military readiness, particularly with tensions rising in Syria and Korea.

“With the events in the world today, with Korea, Syria, Iran, the continued fight in Afghanistan … the discussion on readiness could not come at a more critical time,” General John Campbell, Army vice chief of staff, told a U.S. Senate panel on April 17.

“The reality is that if sequestration continues as it is … we risk becoming a hollow force,” he added.

Members of Congress from states with a heavy military presence have been urging a shift of funds since the sequester took effect and might be hard-pressed to vote against it.

An April 18 bipartisan letter from Virginia senators and representatives urged Defense Secretary Chuck Hagel to move quickly to prevent furloughs and loss of pay for “thousands of Virginians.”


The Defense Department is preparing the request to shift funds, said Lieutenant Colonel Elizabeth Robbins, a Pentagon spokeswoman, but has not “yet specified the timing or the amount” it wants to transfer, or “reprogram” in budget jargon.

Congress last week approved a similar request from the Justice Department to shift $313 million within its budget to avoid furloughing some 60,000 employees.

Robbins said it was not yet clear whether the Pentagon would submit several different reprogramming requests or one large omnibus-style request, but the budget shifts would be sought “soon.”

The Pentagon was one of several government agencies that won some budget flexibility in a stop-gap government funding measure passed in late March.

That allowed more than $10 billion that was locked up in other accounts to be shifted to the Pentagon’s operations and maintenance account, which funds training exercises and military readiness.

While that has helped, it did not make up for the deep budget cuts brought on by the sequester. The Army alone is facing about a $13 billion shortfall in training, operations and Afghanistan war costs, Army Secretary John McHugh and Army Chief of Staff General Ray Odierno told lawmakers last week.


Top general: 5 bad habits for the Pentagon to fix

The Pentagon has not had to do any serious belt-tightening for years, and Gen. Martin Dempsey, the nation’s top military officer, says some budget disciple could be beneficial.

By David Cook | Christian Science Monitor – Tue, Apr 30, 2013


Gen. Martin Dempsey, the nation’s top ranking military officer, says there are at least five areas in US defense operations where bad habits have developed, which tighter Pentagon budgets will force the military to fix.

General Dempsey, who is chairman of the Joint Chiefs of Staff, earlier this month told The New York Times that, “We’ve been living with unconstrained resources for 10 years, and, frankly, we’ve developed some bad habits,” which he vowed to overcome.

At a lunch with reporters hosted by the Monitor Tuesday, Dempsey was asked to be specific about the bad habits he saw. He immediately listed five areas which, he cautioned, were “not an all inclusive list.”

Here, in the general’s own words, is the list, in the order he gave it.

•”In our acquisition programs … there is certainly room to become more efficient.”

•”Over the years, our health-care costs have exceeded expectations in a, no-pun intended, unhealthy way.”

•”On infrastructure – and these are places where we could use the help of the United States Congress, actually – we haven’t had to reduce the scope and scale of our infrastructure accounts. I think we will have to do so under the budget authorities that we see coming our way.”

•”Even in operations, I think there [are] times when we probably overinvested. We might be able to accomplish the task in different areas of the world with fewer resources, if we forced ourselves to think about how to do that.”

•”Our reliance upon contractors is excessive, in particular in certain aspects of the use of contractors.”


Dempsey noted that under the Budget Control Act of 2011 “we were tasked to find $487 billion” in savings. In addition, the budget sequester will cut defense spending another $42.7 billion in the current fiscal year and, if it continues until 2023, “takes you to another $500 billion,” Dempsey said.

“It is not just a cliché to say that when you have all the resources you need, you no longer have the responsibility to think. So we are thinking,” Dempsey told a roomful of reporters. “We are trying to think our way through this challenge. And I think we will find opportunities to retain our level of effectiveness while becoming more efficient.”

But the general warned that, at some point, efficiency savings would be insufficient to meet the budget targets, and defense capabilities would be affected. “You know, you can’t wring that towel out too tightly,” he said of efficiency gains. And speaking of the combined cuts imposed by the Budget Control Act and by sequestration, he added, “There is a point at which you just can’t do that by becoming more efficient.”


Defense Secretary Chuck Hagel has ordered Deputy Defense Secretary Ashton Carter and Dempsey to conduct a review of strategic choices facing the Pentagon with a target completion date of May 31.

“What you will see come out of the [Defense Secretary’s] strategic choices management review is that we will have to look at those places where we have grown most and decide whether that growth is justified, and my suspicion is we will find that, in many cases, it is not all justified,” Dempsey said.


BBC News

2 May 2013 Last updated at 14:05 ET

Robotic insect: World’s smallest flying robot takes off

By Victoria Gill Science reporter, BBC News


Scientists in the US have created a robot the size of a fly that is able to perform the agile manoeuvres of the ubiquitous insects.

This “robo-fly”, built from carbon fibre, weighs a fraction of a gram and has super-fast electronic “muscles” to power its wings.

Its Harvard University developers say tiny robots like theirs may eventually be used in rescue operations.

It could, for example, navigate through tiny spaces in collapsed buildings.

The development is reported in the journal Science.

Dr Kevin Ma from Harvard University and his team, led by Dr Robert Wood, say they have made the world’s smallest flying robot.

It also has the fly-like agility that allows the insects to evade even the swiftest of human efforts to swat them.

This comes largely from very precise wing movements.

By constantly adjusting the effect of lift and thrust acting on its body at an incredibly high speed, the insect’s (and the robot’s) wings enable it to hover, or to perform sudden evasive manoeuvres.

And just like a real fly, the robot’s thin, flexible wings beat approximately 120 times every second.

The researchers achieved this wing speed with special substance called piezoelectric material, which contracts every time a voltage is applied to it.

By very rapidly switching the voltage on and off, the scientists were able to make this material behave like just like the tiny muscles that makes a fly’s wings beat so fast.

As an insect’s wings move through the air, they are held at a slight angle, deflecting the air downward.

This deflection means the air flows faster over the wing than underneath, causing air pressure to build up beneath the wings, while the pressure above the wings is reduced. It is this dierence in pressure that produces lift.

Flapping creates an additional forward and upward force known as thrust, which counteracts the insect’s weight and the “drag” of air resistance.

The downstroke or the flap is also called the “power stroke”, as it provides the majority of the thrust. During this, the wing is angled downwards even more steeply.

You can imagine this stroke as a very brief downward dive through the air – it momentarily uses the weight of the animal’s own weight in order to move forwards. But because the wings continue to generate lift, the creature remains airborne.

In each upstroke, the wing is slightly folded inwards to reduce resistance.


“We get it to contract and relax, like biological muscle,” said Dr Ma.

The main goal of this research was to understand how insect flight works, rather than to build a useful robot.

He added though that there could be many uses for such a diminutive flying vehicle.

“We could envision these robots being used for search-and-rescue operations to search for human survivors under collapsed buildings or [in] other hazardous environments,” he said.

“They [could] be used for environmental monitoring, to be dispersed into a habitat to sense trace chemicals or other factors.

Dr Ma even suggested that the robots could behave like many real insects and assist with the pollination of crops, “to function as the now-struggling honeybee populations do in supporting agriculture around the world”.

The current model of robo-fly is tethered to a small, off-board power source but Dr Ma says the next step will be to miniaturise the other bits of technology that will be needed to create a “fully wireless flying robot”.

“It will be a few more years before full integration is possible,” he said.

“Until then, this research project continues to be very captivating work because of its similarity to natural insects. It is a demonstration of how far human engineering ingenuity has reached, to be mimicking natural systems.”

Dr Jon Dyhr, a biologist from the University of Washington who also studies insect flight, said these flying robots were “impressive feats of engineering”.

“The physics of flight at such small scales is relatively poorly understood which makes designing small flying systems very difficult,” he told BBC News, adding that biological systems provided “critical insights into designing our own artificial flyers”.


Rasmussen Reports

What They Told Us: Reviewing Last Week’s Key Polls

Bottom of Form

Saturday, May 04, 2013

The flight delay gambit didn’t work.

In response to the recent sequester spending cuts, the Federal Aviation Administration decided to furlough air traffic controllers rather than finding savings in other areas of its budget, prompting airport delays across the country. But even after the delays, only 24% of voters think the sequester cut too much, unchanged from early March just after the government spending cuts took effect. Nearly twice as many still believe the sequester didn’t cut enough.

Fifty-six percent (56%) of Americans think the federal government targets areas that hurt the public the most to increase opposition to spending cuts. Most also think Congress’ quick response to the delays highlights how the legislators look out for themselves first.

Although just 16% of Americans were personally affected by the delays or knew someone who was, Congress in rare bipartisan fashion passed legislation to stop the furloughs – and the delays. Fifty-one percent (51%) believe it is possible for the FAA to make modest spending reductions without causing flight delays.

“Congress’ quick action probably resulted from the fact that the nation’s elites were impacted rather than the public at large,” Scott Rasmussen says. “Members of Congress themselves fly home most every weekend, and members of the national media are frequent flyers. Upper-income Americans in general were far more likely to encounter a problem than those who earn less.”

In his weekly newspaper column, Scott looks at the enormous “gap between the American people and the Political Class. Those in politics take the self-serving view that they are uniquely qualified to solve the nation’s problems. Those in the general public have a much firmer grasp on reality.” He adds, “Americans recognize that they have more power acting as consumers than they do when acting as voters. That’s why they want choice. Politicians prefer a top-down approach where they write the rules. That’s the source of the disconnect.”

Case in point: Voters have consistently said for years that cost is their biggest health care concern, and 59% think free market competition would do more to reduce health care costs than more government regulation.

Voters remain closely divided in their opinions of President Obama’s national health care law. Nineteen percent (19%) say the health care law already has helped them, but 35% feel the law has hurt them instead. Forty-three percent (43%) say the law has had no impact on their lives. This marks a 10-point jump in the number of people hurt by the law since last July. There has been a four-point increase in the number helped by the law. Most of the law’s provisions will go into effect next year.

Only two percent (2%) believe members of Congress and their staff should be exempt from the health care law. Ninety-three percent (93%) feel those in Congress and their staff members should be required to live under all the rules they write for the rest of the nation.

Syria is another case in point. Most voters still oppose greater U.S. involvement in the political crisis there. But 59% of the Political Class think the United States should provide military assistance to the Syrian rebels if they have been attacked with chemical weapons. Just 31% of Mainstream voters agree.

Speaking of the Political Class, 68% of all voters believe members of Congress are overpaid. Americans are divided as to whether the nation would be better off if the best people took jobs in government or the private sector. Democrats tend to want the best people in government. Republicans and unaffiliated voters take the opposite view and want the best people working in the private sector. Overall, only five percent (5%) believe members of Congress and their staff represent the nation’s best and brightest.

For the first time since before the presidential election, Republicans lead Democrats on the Generic Congressional Ballot.

The president earned his lowest job approval ratings since last August this past week in the daily Presidential Tracking Poll.

For most of the three years leading up to Election 2012, Obama’s job approval rating generally hovered around 47% or 48%. His numbers improved as Election Day neared and peaked with a post-election bounce in December to 56%. That slipped to 52% by March and 50% for the full month of April. Still, his ratings remain above where they were for most of his first term in office.

Among voters who are gun owners, just 39% approve of the way the president is doing his job. Sixty percent (60%) disapprove. The numbers are reversed among voters who don’t own a gun: 65% approve, and 32% disapprove.

One potential cloud on the horizon for the president is Benghazi. Most voters believe the murder there last year of the U.S. ambassador to Libya was a terrorist act and needs to be thoroughly investigated. But just 32% give the Obama administration good or excellent marks for its explanation of the events surrounding the ambassador’s murder.

While voters are even more critical of the president’s handling of issues related to job creation, he got a slight boost from the improved unemployment figures at week’s end.

As projected by the Rasmussen Employment Index, the government’s monthly report on job creation was an improvement from a month ago. Twenty-three percent (23%) of workers now report that their employers are hiring, while 20% report layoffs. The net hiring numbers are the most positive measured since March 2008. Still, confidence in the labor market remains well below the levels measured from 2004 through the middle of 2007.

Americans express little optimism about the job market, though. Only 29% think the unemployment rate will be lower a year from now. Just 44% now think it’s possible for anyone to work their way out of poverty in the United States.

Americans still don’t think more government hiring is the answer to the country’s unemployment problems. Ten percent (10%) think the government should hire those who can’t find work after an extended period of time. Fourteen percent (14%) believe their unemployment benefits should be extended indefinitely, while 28% feel the government should pay for their retraining. Thirty-four percent (34%) think the government should do nothing at all for the long-term unemployed.

Forty-seven percent (47%) of Americans still think it will take more than three years for housing prices to fully recover from the downturn that began in 2008. But this is the second month in a row that this finding has dipped below the 50% mark and, generally speaking, reflects slightly more optimism than Americans have had since mid-2010.

However, Americans continue to express little short- or long-term confidence in the U.S. economy. Thirty-one percent (31%) believe the U.S. economy will be stronger a year from now, but 38% feel it will be weaker. Forty-one percent (41%) of American Adults think the economy will be stronger five years from today. In early March 2009, 64% expected the economy to be stronger in five years’ time.

One-in-three (33%) adult consumers believe the U.S. economy is getting better these days.  Among investors, 39% think economic conditions in the United States are improving.

In other surveys last week:

— For the second week in a row, 30% of Likely U.S. Voters say the country is heading in the right direction.

— Prior to this week’s arrests of three more individuals connected to the Boston Marathon bombings, many voters already believed the Tsarnaev brothers had help.

— Twenty-eight percent (28%) of Americans think the U.S. legal system worries too much about protecting individuals rights, while 24% say it worries too much about public safety. Twenty-nine percent (29%) believe the balance is about right.

— Fifty-nine percent (59%) believe the primary purpose for attending college is to learn the skills needed to get a better job.

Full-time college professors are generally regarded as politically liberal by most Americans, and only 25% believe most of these professors share the values of U.S. society.

Forty-nine percent (49%) of voters give the environment positive ratings, but far fewer believe it is getting better.

— Most voters continue to think parents should be able to choose between schools based on such things as uniforms, prayer and how long the school year lasts.


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