Is the U.S. nuclear arsenal still a deterrence?

WSJ graphic

The editorialists at the Las Vegas Sun are living in a mad, MAD world. You know: Mutually Assured Destruction. Never mind that some of the people with their fingers on nuclear triggers may well be suicidal seekers of the apocalypse.

But let’s dispel a factual error first. “There are nearly 7,000 warheads in the U.S. nuclear arsenal, deliverable across the globe at a moment’s notice by missile, aircraft and submarine,” today’s Sun editorial proclaims.

Well, not quite. According to the Federation of American Scientists, the U.S. has a total of about 6,600 nuclear weapons, but 2,600 are retired and awaiting dismantling. Another 2,200 are in stockpile and about 1,800 are deployed. Russia has similar numbers, they say. Enough to make the rubble bounce, as we used to say?

The Sun quotes a Time article that hysterically declares President Trump has put the Nevada National Security Site on notice to be ready to renew testing of nuclear weapons solely for the purpose of scaring potential enemies into backing down. The Sun declares that testing is totally unneeded. (The editorial did note that Gov. Brian Sandoval says he has been assured no nuke testing will take place in Nevada.)

The Sun says the mere idea of renewed nuke tests “demonstrates an astonishing lack of understanding about the nation’s military and the world’s perception of the U.S. More than anything, it proves that Trump’s feelings of inadequacy and inferiority know no bounds.”

But is our nuclear deterrence still a deterrence?

According to a recent Wall Street Journal op-ed, our ancient B-52 bombers and outdated cruise missiles are vulnerable to Russian and Chinese air defenses and we have only 20 penetrating B-2 bombers located at a few insufficiently hardened bases.

While we once had 41 ballistic-missile submarines, SSBNs, we are down to 14, the article notes, and those, too, are vulnerable.

“American ballistic-missile defense is severely underdeveloped due to ideological opposition and the misunderstanding of its purpose, which is to protect population and infrastructure as much as possible but, because many warheads will get through, primarily to shield retaliatory capacity so as to make a successful enemy first strike impossible — thus increasing stability rather than decreasing it, as its critics wrongly believe,” the writer, Mark Helprin, explains. “Starved of money and innovation, missile defense has been confined to midcourse interception, when boost-phase and terminal intercept are also needed. Merely intending this without sufficient funding is useless. As for national resilience, the U.S. long ago gave up any form of civil defense, while Russia and China have not. This reinforces their ideas of nuclear utility, weakens our deterrence, and makes the nuclear calculus that much more unstable.”

Helprin disputes the federation of scientists stats and states the Russians have 2,600 currently deployed strategic warheads compared to the U.S.’s 1,590.

Another WSJ writer points out that the U.S. has no tactical nukes, which means if confronted by another nation’s use of smaller nukes on the battlefield, the U.S.’s only ability to counter is with a full-scale nuclear exchange and a global holocaust — or to back down and lose all credibility for defense commitments.

Perhaps we should not be so fast in declaring there is no need for continued nuclear weapon development and testing. It is a mad, mad world after all.

Federation of American Scientists graphic

 

 

 

Advertisements

Lawsuit outlines compendium of allegations against Wynn

If you thought the sexual harassment allegations against Steve Wynn were horrendous, wait till you read the lawsuit filed today accusing him and his compliant board of excess pay and benefits. The Nevada Independent has posted a copy of the 42-page suit.

Most of the claims in the suit by shareholder Norfolk County Retirement System, filed in Clark County District Court, have been reported at one time or the other but the compilation is eye-opening. The suit accuses Wynn, his board and company executives of poor corporate governance and breaches of fiduciary duty at the expense of shareholders.

The suit notes, for example, that Institutional Shareholder Services, Inc. has recommended withholding votes to re-elect members of the Wynn compensation committee, citing “Wynn’s sizable pay packages compared with other CEOs and a severance agreement equating to $330 million that ‘exceeds the upper parameter of acceptable amounts,’ according to a report from ISS last year. Glass Lewis & Co, another advisory firm, also recommended that shareholders vote against the Company’s compensation package, citing ‘poor overall design’ and ‘performance disconnect.’ In fact, Glass Lewis gave the Company an ‘F’ for its pay-for-performance practices for the last two years.”

This past year ISS gave Wynn Resorts its worst ranking for governance risk.

The suit also recounts that the company leases Wynn’s personal art collection for $1 a year, but pays the cost of insurance, security and taxes.

Of course, it also relates the recent allegations of sexual harassment against Wynn, noting the board’s knowledge of and lack of action. The suit says that Wynn’s former wife Elaine Wynn’s lawsuit “accuses Mr. Wynn of using the Company ‘to fund his lavish lifestyle and personal politics’ and displaying ‘reckless risk-taking behavior’ that places the Company in jeopardy and has exposed it to legal challenges. Thus, regardless of whether Mr. Wynn initially concealed the settlement and allegations of egregious misconduct involving the Company, the Board knew of the settlement and allegations of patently egregious misconduct involving the Company by at least 2015 and failed to act and continued to support and recommend to the stockholders Mr. Wynn’s continued leadership and compensation. The Board knowingly failed to investigate the allegations of patently egregious misconduct by the Chairman and CEO and Mr. Wynn’s suitability for his fiduciary positions and regulatory compliance and his suitability as a gaming operator. Knowing failure to act by the Board on the allegations of such egregious misconduct involving the Company constituted a knowing and intentional violation of its fiduciary duties to the Company for which the Director Defendants are liable.”

Wynn’s current employment agree, the suit notes, runs till 2022 and pays him $2.5 million a year.

Then there is this chart:

 

 

Newspaper column: Why Nevada must hit the brakes on taxes

WSJ illustration

It’s called voting with your feet.

A remarkable number of well-heeled Americans are doing just that, and it should serve as a warning to Nevada voters and candidates as we enter an election year. Though Republican governors in recent years have shepherded through the Legislature record-high tax increases, Nevada still fares fairly well in comparison to other states when it comes to the tax burden borne by citizens of the Silver State.

According to the Tax Foundation’s analysis of state and local tax burdens per capita for fiscal year 2012 — which is after Gov. Kenny Guinn’s billion-dollar tax hike but before the $1.5 billion tax hike pushed by Gov. Brian Sandoval — Nevada ranked 43rd lowest in the nation, while neighboring Taxafornia ranked sixth highest.

Nevada tax collectors grabbed 8.1 percent of the state income through state and local taxes or $3,349 per capita. Meanwhile, California snatched 11 percent of state income or $5,237 per capita.

Perhaps that explains why, according to Internal Revenue Service data on taxpayer migration, from 2014 to 2015 about 10,500 Nevada taxpayers moved to California, while 17,700 California taxpayers moved to Nevada. Even more telling is the fact that the Californians fleeing to lower-taxed Nevada averaged $91,000 in gross adjusted income, while the Nevadans heading to California averaged only $47,400 in adjusted gross income.

It seems people with higher income have a tendency to find ways to keep more of it for themselves.

From 2014 to 2015 Nevada netted an increase in total adjusted gross income reported to the IRS of $1.43 billion. Of that, $1.1 billion came due to the influx of Californians changing residencies.

An analysis of a sampling of that IRS data shows the California-Nevada migration pattern is no anomaly.

In that one year, the state of New York, which has the highest state and local tax burden of any state at 12.7 percent of income and $6,993 per capita, lost $4.4 billion in income.

No. 2 highest Connecticut lost $1.3 billion in income. No. 3 highest New Jersey lost $2.46 billion. No. 5 Illinois lost $3.47 billion. No. 6 California lost $2.09 billion.

Meanwhile, state income tax-free Texas, ranked 46th lowest, added $3.61 billion, and state income tax-free Florida, though only 34th lowest, added $11.65 billion. The latter might have something to do with weather as well, since $2.62 billion of that came in from former New Yorkers, $1.49 billion from former New Jersey residents and $1.47 billion from former Illinoisans.

The New Jersey residents who moved to Florida had an average income of $121,000, while Floridians moving to New Jersey averaged $72,500.

This is hardly surprising nor a new phenomenon. In an article in The Wall Street Journal in 2009 under the headline, “Soak the Rich, Lose the Rich,” economist Arthur Laffer and WSJ economics writer Stephen Moore updated previous studies and found that from 1998 to 2007, more than 1,100 people every day of the year relocated from the nine highest income-tax states — such as California, New Jersey, New York and Ohio — mostly to the nine tax-haven states with no income tax — including Florida, Nevada, New Hampshire and Texas.

Laffer and Moore determined that over that period of time the no-income tax states created 89 percent more jobs and had 32 percent faster personal income growth than the high-tax states.

“Did the greater prosperity in low-tax states happen by chance? Is it coincidence that the two highest tax-rate states in the nation, California and New York, have the biggest fiscal holes to repair?” they asked. “No. Dozens of academic studies — old and new — have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses.”

A recent WSJ editorial noted that billions in income are still flowing out of New York, New Jersey and Connecticut and into Florida.

“As these state laboratories of Democratic governance show, dunning the rich ultimately hurts people of all incomes by repressing the growth needed to create jobs, boost wages and raise government revenues that fund public services,” the editorial concluded.

Voting with the feet is sure to increase since the recent tax reform limits federal income tax deductions for state and local taxes.

Let this be a lesson for Nevada. Chase the rich, they’ll run away.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

News coverage of net neutrality changes reveal nuances in news neutrality

FCC Chair Ajit Pai (AP pix via NYT)

Words can convey considerable nuance, suggesting approval or disapproval without coming right out and saying so. Compare the news flashes this morning from The New York Times and The Wall Street Journal about the Federal Communications Commission’s decision to vote next month to end net neutrality rules. There is a difference in tone and emphasis.

The third paragraph of The Times piece reads:

The clear winners from the move would be telecom giants like AT&T and Comcast that have lobbied for years against regulations of broadband and will now have more control over the online experiences of American consumers. The losers could be internet sites that will have to answer telecom firms to get their content in front of consumers. And consumers may see their bills increase for the best quality of internet service.

The second graph of The Journal article reads:

The changes are expected to be approved at a Federal Communications Commission meeting in mid-December. They would create a range of new opportunities for internet providers, enabling them to form alliances with media and other online firms to offer web services at higher speeds and quality. They also would help clear the way for creative pricing and bundling of services to attract more customers.

The Obama administration imposed the net neutrality rules in 2015. They prohibit internet service providers from charging more for faster connection speed. Sort of like prohibiting a trucking company from charging more for heavier shipments. (No neutrality here, of course.)

The Journal noted that critics argued the rules “stifled investment and innovation in the still-developing broadband industry. Providers also worried the rules could open the door to rate regulation and other new oversight.”

The Times did quote FCC Chairman as saying, “Under my proposal, the federal government will stop micromanaging the internet. Instead, the F.C.C. would simply require internet service providers to be transparent about their practices so that consumers can buy the service plan that’s best for them and entrepreneurs and other small businesses can have the technical information they need to innovate.”

The next graph in The Times states:

The plan to repeal the 2015 net neutrality rules also reverses a hallmark decision by the agency to declare broadband as a service as essential as phones and electricity, a move that created the legal foundation for the net neutrality rules and underscored the importance of high-speed internet service to the nation.

Hallmark. Importance.

The Journal outlined the two sides of the argument:

Many conservatives view the FTC’s case-by-case regulatory approach as more appropriate for the internet economy, to encourage more innovation.

Progressives prefer the FCC’s rule-based approach for the online environment to prevent unfair and anticompetitive practices by internet providers from ever taking root.

The Journal also noted that on Monday the Trump Justice Department filed suit to block a proposed merger of AT&T with Time Warner on antitrust grounds, saying this suggested the administration’s   support for big telecommunications combinations has limits. The Times made no mention of this.

News neutrality is difficult to achieve, too.

 

Newspaper column: Constitution stretched to the breaking point

A Utah prairie dog peeks out of an artificial burrow after arriving at a remote site in the desert, some 25 miles away from Cedar City, Utah. (AP pix via WSJ)

If words can mean anything anyone says they mean, then words are meaningless. That is what the 10th U.S. Circuit Court of Appeals has done with the Commerce Clause of the Constitution.

The appellate court overturned a federal judge who found that the Commerce Clause does not give Congress the power under the Endangered Species Act (ESA) to regulate a species that exists only within the boundaries of one state and has no commercial value whatsoever — specifically the Utah prairie dog.

Nevada has joined with Utah and 21 other states to ask the U.S. Supreme Court to strike the circuit court ruling, saying that if the ruling stands “then Congress has virtually limitless authority, and the Tenth Amendment is a dead letter,” as well as the concept of federalism. (prairiedogamicusbrief)

If Nevada is to have any control over any economic activity within its borders, which include numerous endangered and threatened species, it is vital that the high court reverse this Constitution-rendering exercise in legerdemain.

The circuit court judges stretched the meaning of the Commerce Clause — which gives Congress the power to regulate interstate commerce in order to promote commerce by preventing interstate tariffs — to include anything Congress could imagine in its wildest flights of fantasy.

“We conclude that Congress had a rational basis to believe that regulation of the take of the Utah prairie dog on nonfederal land is an essential part of the ESA’s broader regulatory scheme which, in the aggregate, substantially affects interstate commerce,” the circuit court ruled, without any hint as whether that conclusion was at all rational rather than delusional sophistry.

The judges dived further into base speculation by stating, “‘ESA’s drafters were concerned by the “incalculable” value of the genetic heritage that might be lost absent regulation,’ as well as observing that the majority of takes of species ‘result from economic activity …’” Might that incalculable value be zero? Species became extinct before mankind arrived on the scene.

The amicus brief filed by the attorneys general of 23 states paraphrased the 10th Amendment in the Bill of Rights by stating, “The Framers correctly concluded that both restraints – separation of powers and federalism – are necessary to preserve individual liberty and avoid tyranny. So powers not given to the federal government are reserved for the States and the people. But federalism serves its purposes only if the federal-state interplay remains properly balanced. That means courts must ensure that the federal government operates only within its enumerated powers so the States can function within their proper spheres.”

Adding insult to constitutional injury is the fact the state of Utah was actually doing a better job of protecting the prairie dog population than the U.S. Fish and Wildlife Service.

The Fish and Wildlife rules made it a federal crime to “take” the Utah prairie dog — which means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture or collect — without first obtaining time-consuming and expensive federal permits. Meanwhile, the burrowing prairie dogs were damaging parks, sports fields, airports and cemeteries and preventing the construction of homes and businesses. Especially hard hit is the small college town Cedar City.

During the time after the federal judge blocked the Fish and Wildlife rules the state of Utah spent a considerable amount of money to move the prairie dogs from population centers to remote and safer conservation areas, allowing the population to boom from a low of 24,000 in 1984 to an estimated 80,000 today.

The original lawsuit was brought by 200 private property owners calling themselves People for the Ethical Treatment of Property Owners. They were represented by the Pacific Legal Foundation (PLF), which litigates on behalf of personal liberty and property rights.

“For decades, the federal government’s harmful Utah prairie dog regulation has prohibited residents of Cedar City from doing things that most of us take for granted in our own communities,” PLF attorney Jonathan Wood is quoted as saying in a press release. “They have been blocked from building homes, starting small businesses, even protecting playgrounds, an airport, and the local cemetery from the disruptive, tunneling rodent.

“The Commerce Clause has long been a source of federal mischief, but the Supreme Court has never allowed it to be stretched this far,” Wood noted. “With their prairie dog regulation, federal bureaucrats have asserted control over local activities that are not interstate commerce, do not affect interstate commerce, and are not necessary to any federal regulation of interstate commerce.”

If the words of the Constitution are so malleable, it has no meaning and Congress is our dictator.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Editorial: Tax reform that could benefit Nevadans slipping away

It looks like a tax reform proposal that could have resulted in lower income tax rates for Nevadans is swirling down the drain.

The Los Angeles Times is reporting that congressional Republicans are considering jettisoning a part of President Trump’s proposal that would eliminate IRS deductions for state and local taxes. Dropping the deduction would generate $1.3 trillion in additional federal revenue, thus allowing lower rates for the 70 percent of Americans who do not itemize and take the standard deduction.

While Democrats insist tax reform should in no way benefit the wealthy, the retention of the state and local tax deduction does precisely that for the wealthy who live in Democrat-controlled high tax states, such as New York and California.

The Times conceded that Californians benefit more from the state and local tax deduction than taxpayers in any other state. In fact Californians managed to dodge $101 billion in taxes in 2014 — New York, New Jersey and Illinois were next on the list of top tax dodgers. Of the top 10 states for the deduction, Trump carried only three.

The New York Times also is reporting that some Republican spines are weakening, noting that elimination of the deduction has Republicans in high-tax states worried about backlash from voters whose tax bills might rise.

The newspaper said that Rep. Chris Collins, a New York Republican, said in an interview that party leaders had assured him “there’s not going to be full repeal” of the state and local tax deduction. The paper also quoted Gary Cohn, the director of the National Economic Council, as saying the deduction was not a “red line.”

Using 2010 statistical data from the IRS, Californians who filed for state and local income tax deductions claimed deductions of $10,700 per return. Nevadans who filed for the state and local sales tax deduction claimed only $1,430 per return. Calculated on a per capita basis, Californians claimed $2,116 in federal income tax deductions, while Nevadans claimed only $166 per person for sales tax deductions.

Nevadans — along with residents of New Hampshire, Florida, Wyoming, Texas, South Dakota and Alaska — get to deduct about 1 percent or less of their adjusted gross income, while those who live in New York, Maryland, D.C. and California deduct more than 5 percent.

“Republicans have said the deduction largely affects the wealthy and is unfair to residents in lower-tax states,” the Los Angeles newspaper reported. “Eliminating the break would help simplify the tax code and make it more equitable, White House officials said.”

In 1985 Ronald Reagan argued for eliminating the state and local tax deduction. He said in a speech: “We’re reducing tax rates by simplifying the complex system of special provisions that favor some at the expense of others. Restoring confidence in our tax system means restoring and respecting the principle of fairness for all. This means curtailing some business deductions now being written off; it means ending several personal deductions, including the state and local tax deduction, which actually provides a special subsidy for high-income individuals, especially in a few high-tax states. Two-thirds of Americans don’t even itemize, so they receive no benefit from the state and local tax deduction. But they’re being forced to subsidize the high-tax policies of a handful of states. This is truly taxation without representation.”

Reagan failed, primarily because there were too many Republican lawmakers from New York and California, just as there are today. California has 14 Republicans in the House and New York has nine.

If Congress caves in to the few who want to keep their lucrative state and local tax deductions, it is unlikely the 70 percent of Americans who currently do not itemize can be afforded a doubling of the standard deduction as is currently being contemplated.

The tax code should be fair and equitable for all and not carve out breaks for some.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Could North Korea actually defeat the U.S.?

Kim Jong Un with a reported hydrogen bomb. (Reuters pix via WSJ)

Decades ago while I was writing about the threat of a nuclear attack on the nearby Strategic Command Air Force base, my managing editor informed me who would be the unlucky ones in that eventually: Those who would look up and ask: What was that?

The threat then was the Soviet Union. Now North Korea has openly stated the possibility of attacking the U.S. with a single nuclear weapon at high altitude that could destroy much of this country’s electronic infrastructure.

The Wall Street Journal reports that North Korea’s state news agency on Sunday morning, after detonating another nuclear weapon test, specifically stated that it has “a multifunctional thermonuclear nuke with great destructive power which can be detonated even at high altitudes for super-powerful EMP attack.” EMP is an electromagnetic pulse that could cripple the power grid and destroy electronics that allow water to be pumped, food to be refrigerated, banking accounts to be accessed, fuel pumping, communications, electronics in many vehicles and so much more.

How big a threat is EMP? One report from a couple of years ago estimated as much as 90 percent of the population of the U.S. might die from starvation, disease and social tumult after such an attack.

In a 2015 newspaper column I wrote about what was being done to protect the country from such an attack. The answer: Virtually nothing. Because our “leaders” deemed global warming the biggest threat to mankind.

A year a ago I again wrote about the impact of an EMP attack.

In December I wrote about how Nevada could play a role in defense efforts. And there are a half dozen other blogs posted here about EMP.

The cost to harden the power grid against EMP has been placed at somewhere between a half a billion dollars and a couple of billion. Washington spends three times that in one minute.