Mercury Rising 鳯女

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Archive for February 13th, 2012

Taking a Rasor to military costs

Posted by Charles II on February 13, 2012

It should scandalize all of us, whether hawks or peaceniks. Defense contractors are making enormous profits because there are no effective cost controls in place. They tell the government to pay so-and-so much, and the government does–without even checking that the exp. They are endangering it by guaranteeing that there will be backlash against defense spending.

Dina Rasor has a piece out on t/o (it’s a few months old) in which she interviews Director of Defense Pricing Shay Assad on what is called “should cost pricing.”

…there are very few people left in the DoD and in the United States who really know how to do the traditional should cost studies that made US manufacturing so effective 40 years ago. The DoD has spent years making sure those types of industrial engineers were purged from the system and all traces of should cost were swept away. Assad vows to train and rebuild a professional corps who can do real should-cost studies on weapons and make it a permanent fixture on how we price weapons. He said that he was “absolutely” going to purge the historical pricing system in the DoD for good.

The Japanese still have some should-cost methodology left and they should be used as a template. The DoD should go into its archives of the work of DoD whistleblower Ernest Fitzgerald, who worked his whole career to establish should cost. His past should-cost studies on various weapons would also be an important template for future genuine should-cost studies.

•The contractors generally don’t do these types of studies anymore and thrive on keeping their records on pricing, audits and payments in chaos so they can’t be closely monitored either by the DoD or by government lawsuits.

I would not be surprised if one-third of the cost of most weapons systems isn’t waste. Ironically, the contractors only get a fraction of what is wasted. It would be less expensive if we offered them higher profit margins on honest costs.

Posted in deficit, military | 1 Comment »

The Incredible Shrinking Mortgage Settlement Screwjob

Posted by Phoenix Woman on February 13, 2012

Gag. Not only is the mortgage settlement far, far less than what is just, and not only does it give the banks the ability to forge (erm, “robosign”) signatures on documents for $2000 a signature, and not only will it be paid for out of our pension funds, but guess what? Before the thing’s even been made official, state governments are already planning how they’re going to steal the money so they can use it to paper over holes in state budgets rather than making rich people actually pay taxes:

Obviously, higher education is important, and fiscal transfers to the states should be a regular part of this recovery. But this is a fund paid by banks – the only hard payment in the settlement – ostensibly designed to aid homeowners in a variety of ways. It’s not meant to be a special kitty for whatever budget priority state leaders see fit to use it on. In Missouri, every dollar diverted to higher education means a dollar less for a mediation counselor to put banks and homeowners seeking modifications in the same room, or a dollar less for legal aid for a foreclosure victim, or a dollar less for anti-blight programs to clean up neighborhoods with vacant properties. That undermines the entire point of the settlement and deprives the victims of restitution.

And it’s not like Missouri has no other ways to fill that budget gap. For one, as Think Progress notes, they can stop handing out tax credits to corporations. You can see the settlement, if you will, as funding those tax credits.

Missouri’s governor, Jay Nixon — a Democrat, no less — wants to steal $40 million this way, rather than end the corporate tax credit loophole. That’s even worse than Scott Walker’s plan to steal $26 million from Wisconsin’s share of the settlement.


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