Archives for October 2009

Boeing lost $1.67 billion dollars in the last quarter, and clearly, organized labor is to blame… you know, just like union contracts are to blame for budget deficits in King County, the state of Washington, and thousands of other state and local governments throughout the nation. (Not to mention the declining fortunes of the newspaper industry, but don’t get me started.)

And logically, in addition to breaking its unions, the obvious path to renewed profits for Boeing would be to replace its experienced CEO with a complete and total amateur who has never even managed a staff of one, let alone an actual business. I mean, that’s what we’ve advised King County voters to do, arguing that “the county must act more like private-sector businesses,” so it only makes sense that a private-sector business like Boeing do the same, right?

How convenient for the South Park guys that when an actual dad in Colorado pulls off the most insane Randy Marsh imitation of all time, they’re right in the middle of making new episodes.

Please join us tonight for some politics under the influence at the Seattle chapter of Drinking Liberally. Festivities take place at the Montlake Ale House, 2307 24th Avenue E. beginning at 8:00 pm. Some of us show up early for dinner.

[youtube]http://www.youtube.com/watch?v=6Tndry1HvP0[/youtube]

Not in Seattle? With 340 other chapters of Drinking Liberally, there is bound to be one near you.

Again, isn’t it ironic that Darcy Burner is having a greater impact in the health care debate than Dave Reichert.

I guess somebody forgot to tell Apple there’s a recession going on.

Defying the struggling economy and crushing Wall Street’s expectations, Apple delivered its best quarter ever, setting record unit sales of both iPhones and Macs, and producing its largest profit in history: at $1.67 billion, a 46-percent increase over the year ago quarter.

Now to be honest, I’ve long been a bit of an Apple fanboy, and an admirer of CEO Steve Jobs obvious genius. While I’ve developed, published and supported software for both Mac and Windows PCs, and am quite comfortable working in a Windows environment, the Mac has been my platform of choice at home for over two decades, and when given the option, at work as well. And with Apple’s share price now hovering near an all time high, the couple hundred or so shares I own in my IRA comprise my single largest asset outside the equity in my home, and by far my best investment ever. (I bought in October of 2001. You do the math.)

But this post isn’t meant to be one of those partisan Apple vs. Microsoft things, for while I love Apple’s products, and have personally profited from its stunning revival, I fully understand that it is just another amoral corporation, whose primary responsibility is to maximize shareholder value. Rather, I thought I’d use Apple’s earnings report as a springboard for making a brief comment on the likely future of Boeing here in Washington state.

On the back of my beloved iPhone, and I suppose on every other piece of Apple hardware these days, is stamped the pronouncement: “Designed by Apple in California. Assembled in China.” Apple used to proudly tout its state of the art US manufacturing facilities, but shuttered its last major domestic plant in 2004. Nowadays it appears that all of the company’s manufacturing is contracted out to third parties, mostly in Taiwan and China. (Apple is infamously secretive to the point of paranoia, so it’s hard to say for sure.)

Apple sold 3.05 million Macs, 7.4 million iPhones and 10.2 million iPods in the last quarter, and I’m not sure they own and operate a single factory. Yet they still manage to maintain some of the highest margins in the industry.

From a shareholder’s perspective, it’s hard to argue with that kinda success.

Now apply that same sort of logic to Boeing, and you get a pretty good idea of where its local manufacturing jobs may be headed.

Of course, jetliners aren’t mass produced, so it would be wrong to make too direct a comparison, but anybody who thinks a sense of corporate citizenship is going to push Boeing executives to keep manufacturing jobs here in Washington state is smoking crack. Nor should we expect the recent meltdown in Boeing’s outsourcing strategy to dramatically alter the company’s long term manufacturing plans.

Boeing is intent on moving production to where labor is cheapest, be it South Carolina, or ultimately, China. That’s what Boeing executives believe it takes to compete in today’s global market, and that’s what they believe they need to do to maximize shareholder value. And there’s nothing we can do to stop them.

So the question is… are Boeing executives right?

Apple excels at innovation, engineering, industrial design and marketing — some of which Boeing itself hasn’t been too shabby at over recent decades — but apart from a few custom chips and case moldings, Apple’s products are largely assembled from commodity components using standard, if generally cutting edge manufacturing techniques. But when Boeing designs a new airplane, it also designs many of its basic components, sometimes right down to the individual rivet. Meanwhile building an airplane is much more labor intensive, and requires many more specialized skills than, say, assembling an iPhone.

But of course the biggest difference between Apple and Boeing is the acceptable level of quality control. When a Mac crashes, the worst case scenario is you lose a little data. But when an airplane crashes… well, I don’t need to draw you picture.

That said, the possibility of outsourcing components, and possibly even final assembly to low cost contractors, wherever they may be, must be awfully compelling to Boeing, especially considering that this option is not nearly as available to its primary competitor, Airbus.

Think about it. Airbus was conceived and subsidized primarily as a jobs program for its European partners, so with the tens of billions of taxpayer euros invested in the venture, it’s hard to imagine the political will necessary to export these high wage manufacturing jobs to China or anywhere else. Boeing on the other hand is unburdened by such demands, putting it at a distinct competitive advantage should it successfully execute its outsourcing strategy.

That it is, assuming, Boeing’s primary competitor really is Airbus.

Like I said, Apple excels at innovation, engineering, industrial design and marketing, skills its Chinese manufacturing partners have yet to master, but which are absolutely critical to successfully selling consumer products with short product life cycles in a crowded global market. Transferring the technology necessary to enable a contractor to assemble an iPod doesn’t give this manufacturer the skills and know-how necessary to create a product that can compete with the iPod and the iTunes ecosystem Apple has built around it.

But the same may not be true of the Chinese aviation industry Boeing will increasingly be forced to partner with as it pursues a business strategy contingent on substantially lowering its cost of production. Commercial Aircraft Corp. of China has already announced ambitious plans to launch a 737 competitor by 2016, and any technology Boeing transfers to mutual suppliers and partners will only make this goal more achievable. Furthermore, with much of the anticipated growth in commercial aviation expected to take place in China itself, the Chinese government backed Comac already has a captive customer in the Chinese government backed airlines that dominate the market.

So, can Boeing successfully transition itself to an outsourced manufacturing model without losing market share to its low-wage partners? Will we eventually see a Boeing airplane stamped “Designed by Boeing in Washington. Assembled in China”…? And if Boeing does manage to leverage its innovation, engineering and design prowess to retain its position as a market leader, even while jettisoning the bulk of its manufacturing infrastructure, what will this mean for Washington state?

I don’t know. But given Boeing’s apparent eagerness to move production out of state, it sure does look like we’re eventually gonna find out.

Yesterday, in admitting my decision to vote for Mike McGinn (I don’t like to do “endorsements” per se), I questioned some of his political judgement, specifically: “I still think his unwavering opposition to the tunnel loses him more votes than it wins him.”

And lo and behold, a few hours later, McGinn backtracks his previously intractable stance against the tunnel, explaining to Publicola:

“I still oppose the tunnel. I think it’s a terrible decision for the city of Seattle. My statement is a simple acknowledgment of how the Democratic process works. The mayor is obligated to follow a 9-0 vote of the council. It’s not an option for the mayor to just ignore legislation.

I’ve consistently been against the tunnel. I remain opposed. Yesterday, I acknowledged that it’s not the mayor’s job to ignore legislation passed by the council.”

Huh. Maybe there’s a political advisor job waiting for me in the McGinn administration?

Don’t get me wrong, I too opposed the tunnel, convinced that a surface/transit option was the best alternative given current financial constraints, but I’m not so opposed to it that I’d be willing to indefinitely block the Viaduct replacement until the crumbling freeway fell down on its own. Yeah, the Big Bore is overly expensive, possibly unnecessary, and as the least engineered and studied of all the proposals, by far the most financially risky option that could have been adopted, but there’s no debating that it enjoys overwhelming support within our political establishment, and, well, sometimes, you just can’t fight City Hall… even from City Hall.

I’ve never doubted McGinn’s ability to throw a hefty monkey wrench into the works, but blocking Seattle from moving on something is a helluva lot easier than pushing it to move in another direction, and I just didn’t see how McGinn was going to get us from here to there. McGinn’s admission that a 9-0 council vote (not to mention the pro-tunnel stance of the governor and the legislature) is not something a mayor is likely to overcome shows a pragmatic side that I wasn’t sure he had coming into this campaign, and should help assuage the concerns of some who feared a vote for McGinn would be a vote for gridlock, both figuratively and literally. Though considering the establishment support Joe Mallahan has garnered, it may be too late.

We’re going to build the tunnel, regardless of who’s in the mayor’s office, but with the question of cost overruns still on the table, I’m a lot more comfortable having McGinn defending the interests of Seattle taxpayers than Mallahan.

Brian Baird pens a curious guest editorial that includes how to pay for health insurance reform; Chris at Politics Is a Blood Sport calls it what it is: a Value Added Tax, and it’s regressive and unfair as hell.

If this is some kind of trial balloon, I’ll be hiding in the attic over the garage eating some snacks.

In the last SurveyUSA poll, Susan Hutchison was still receiving support from 33% of Democrats, a clear indication that many, many voters still don’t know who she is and what she stands for. I hope this ad has enough money behind it to help change that.

The Obama Administration has put down in writing their official policy on medical marijuana. They will no longer interfere with state medical marijuana laws. The most important benefit of this policy is that it opens the door for states to implement much more robust systems of production and distribution without interference from the DEA. Previously, states faced a dilemma in that the more regulation of a medical marijuana system that they created, the more paper trails there were for the DEA to take the whole thing down. That’s a big reason why California’s system ended up being such an unregulated mess. With this new policy, it will be easier for states to set it up the right way.

All of this may soon become moot because the tide is quickly turning towards allowing regulated sales to recreational users as well.

There isn’t a state-by-state breakdown, but this poll shows the same result seen in previous polls, that a majority of people on the west coast support full legalization. Of course, as we’ve learned with the public option, you need about 70-75% support for something before Democrats find the testicular fortitude to implement it.

[youtube]http://www.youtube.com/watch?v=cgj0FbPxSiY&feature=player_embedded[/youtube]

Anybody who has followed my coverage of the Seattle mayor’s race may be surprised to learn that I’m voting for Mike McGinn.

I haven’t been particularly kind to McGinn over the past six months or so, and apart from what I admit to be a surprisingly successful grassroots campaign, he hasn’t done much to change my opinion of him as a politician. But then, neither has Joe Mallahan, and given the choice between grassroots and no roots, I’m going with the former.

While it is far from a perfect test, how one runs a political campaign is somewhat of an indicator of how one might run the office being sought. It’s not supposed to be easy, and how one gets through the daily grind of fundraising and organizing and debates and interviews and all that, both says a lot about the candidate, and helps prepare him or her for the daily grind of office.

In that sense, the quarter of a million dollars or so that Mallahan has pumped into his own campaign has proven to be both a blessing and a curse. A blessing, because without it, he never would have been taken a seriously as a candidate. A curse, because his lazy reliance on his own money appears to have short-circuited his development as a politician.

There are few politicians who truly enjoy “call time” or relish the thought of knocking on thousands upon thousands of doors, but nearly all will tell you that these activities make you a better candidate, because when you spend hours a day talking to voters and/or (gasp) asking for money, you also spend hours a day listening to voters’ concerns. Read all the position papers you want, hire the best consultants to draft your talking points, but nobody can educate you better about the issues than the voters themselves.

But with his own money to backstop his campaign, Mallahan never had to do the kind of call time typical of a citywide race, and it shows. He didn’t appear well-informed about city issues back when he declared, and he doesn’t appear much better informed now. He simply hasn’t grown as a candidate, and that doesn’t bode well for a novice politician seeking the mayor’s office.

As for McGinn, well, I don’t take back anything I haven’t already taken back about what I’ve previously written, and I still sincerely question his ability to work and play well with others. But as impolitic as he’s sometimes been (I still think his unwavering opposition to the tunnel loses him more votes than it wins him), he’s also proven to be thoughtful and at times even flexible. But mostly, like I said, you’ve just got to give him credit for running such a successful, largely grassroots campaign.

That shows political skill, and an enormous amount of hard work, something Mallahan has failed to demonstrate. And while McGinn remains a risky choice, he shows a much greater degree of political upside. No, he hasn’t come anywhere close to throwing a knockout punch, but if this race were a boxing match, McGinn would clearly be winning on points.

So for what it’s worth I’m voting for Mike McGinn, which considering my level of skepticism entering the race, says as much about his opponent as it does of him.

The Transit Riders Union invited all candidates running for Seattle City Council, Mayor and King Executive offices to respond to a questionnaire regarding the concerns of transit riders. All but Susan Hutchison and Joe Mallahan responded.

While Mallahan has generally been pretty good about filling out these sort of questionnaires, Hutchison has typically failed to respond when her honest answers might hurt her with voters. Hence her refusal to comply with similar requests from NARAL, the Women’s Political Caucus, even the Downtown Seattle Association (she has repeatedly accused county government of being too Seattle-centric).

So while Hutchison vaguely denies that she opposes rail, her gushing praise for the Washington Policy Center’s anti-rail prescriptions (they call it “socialist”) and her refusal to answer basic questions from the Transit Riders Union indicates otherwise. Not to mention her tens of thousands of dollars of financial support from Kemper Freeman, who is suing to stop light rail from crossing I-90.

But then, that’s the sort of lack of transparency we’ve come to expect from Hutchison.

I gave myself the weekend to sleep on it, during which I didn’t load a Seattle Times web page once. I thought I might, with a little distance, eventually fisk the paper’s execrable editorial endorsement of Susan Hutchison, but I can’t really bring myself to read it again, let alone read it closely. And honestly… why bother?

For the core of my critique of the Times as both an opinion leader, and as a news organization doesn’t require line-by-line mockery to explicate: quite simply, they are a bunch of fucking hypocrites, a thesis that is perhaps best illustrated by contrasting their treatment of Susan Hutchison with that of Darcy Burner.

As we all know, the Times’ editors dismissed Darcy as an inexperienced lightweight, out of touch with the mainstream values of her district, who should have been advised to work her way up to a congressional challenge… a particularly galling critique considering the quality of her opponent. But perhaps the most misogynistic and mean-spirited attack was the accusation that she “lacked authenticity,” a theme picked up by their news department to devastating effect in an eleventh hour front page smear piece accusing Darcy of lying about her Harvard degree.

Compare that to the Times’ treatment of Suzie, a woman who has never held political office, never ran a business, and never even managed a staff, running for what amounts to the governorship of a small state. What political and administrative qualifications does Suzie bring to office? None. Yet in Suzie’s evolution-denying, abortion-opposing, union-busting hands, inexperience suddenly becomes a positive, enabling her to bring a “fresh” perspective to the problems facing King County government. Yay!

I mean… what the fuck?

And I haven’t even gotten to the issue of authenticity yet.

For let’s be honest, Susan Hutchison has run perhaps one of the least authentic political campaigns since George Wallace ran for governor of Alabama in 1982 on a civil rights platform. On more than one occasion I’ve had local journalists defend her, saying that she’s not as right-wing as I make her out to be, but that’s not the point: Hutchison is not nearly as moderate or as nonpartisan as she makes herself out to be, which makes her entire campaign a lie to which the Times has been complicit.

Furthermore, in recent weeks, Hutchison has repeatedly lied about incontrovertible facts. She claims she never gave money to the BIAW, when in fact she did. She claims her unreported campaign headquarters is merely the residence of her campaign manager, when it isn’t. And she claims the PDC has already dismissed 79 of the 82 allegations in the PDC complaint filed against her, which the PDC firmly denies.

And, of course, Hutchison laughably denies that she is a partisan Republican

Yet where is the front page article taking Suzie to task for her lies?

There is no editorial attacking Suzie’s lack of experience or her extremist values, nor front page article attacking her relentless lack of truthfulness, because unlike with Darcy, the Times wants Suzie to win. And, because as an institution, they are a bunch of fucking hypocrites.

Now I know there are those who will come back at me in the comment thread, accusing me of being just as ideological as the Times, and at least as hypocritical, but let me remind you that I’m just some foul-mouthed, partisan blogger who post photos of dog turds to his front page, and accuses a sitting state senator of fucking pigs, while they are our state’s paper of record.  I’m not supposed to be better than the Times. They’re supposed to be better than me.

But they’re not.

And as can clearly be seen in their hypocritical treatment of Darcy vs. Suzie, the Times’ alleged credibility is just as fictitious as Hutchison’s alleged nonpartisanship.