May 8, 2024

Off the Shelf: ‘Bleeding Talent’ Sees a Military Management Mess

In “Bleeding Talent” (Palgrave Macmillan, $30), Mr. Kane gives us a veteran’s proud, though acutely critical, perspective on the American military. He offers an illuminating view of the other “1 percent” — not the privileged upper crust, but the sliver of Americans who have accepted the burden of waging two of the longest wars in our history.

The military is perhaps as selfless an institution as our society has produced. But in its current form, Mr. Kane says, it stifles the aspirations of the best who seek to serve it and pushes them out. “In terms of attracting and training innovative leaders, the U.S. military is unparalleled,” he writes. “In terms of managing talent, the U.S. military is doing everything wrong.”

The core problem, he argues, is that while the military may be “all volunteer” on the first day, it is thoroughly coercive every day thereafter. In particular, it dictates the jobs, promotions and careers of the millions in its ranks through a centralized, top-down, one-size-fits-almost-all system that drives many talented officers to resign in frustration. They leave, he says, because they believe that “the military personnel system — every aspect of it — is nearly blind to merit.”

Mr. Kane knows whereof he speaks. An Air Force Academy graduate, he worked in military intelligence for five years before resigning, in the mid-1990s, after the Air Force declined to send him for graduate studies in economics. He is now chief economist at the Hudson Institute, a conservative research group. In the years between, he helped start a couple of small companies and picked up a taste for entrepreneurship.

He finds a natural hero in Milton Friedman, the libertarian economist and intellectual father of the all-voluntary military. And Mr. Kane suggests that today’s Pentagon is ignorant of Adam Smith, whose “Wealth of Nations” taught that society’s interests might best be served by every individual’s seeking his or her own self-interest.

In 2005, Mr. Kane made a mark with empirical studies demonstrating that the “myth of the stupid soldier” is indeed a myth. His data showed that the enlisted ranks were brighter and better educated than their civilian counterparts.

He looks at today’s military and sees suppressed entrepreneurs among officers and enlisted ranks alike. “America’s armed forces are a leadership factory,” he writes, saying that former military officers are three times as likely to become corporate C.E.O.’s as their raw numbers would suggest.

In surveying recent West Point graduates, he found that only 7 percent believed that most of the best officers remained in the military. It is not the combat, the low pay or the pull of family life that is the top reason they quit in surprising numbers, Mr. Kane writes, but rather the “frustration with military bureaucracy.” One study found that young officers left because they wanted a sense of control over their careers. In short, they wanted what the rest of us want.

The exodus of young officers means that promotion to lieutenant colonel is taken for granted in a career trajectory. Yet the step beyond colonel, to general, is subject to a rigid and stultifying screen. A thousand colonels a year are considered; only 35 or 40 make the cut, he says. The mavericks, the innovators who rock the boat, usually do not.

ACCORDING to Mr. Kane, “the root of all evil in this ecosystem” is the Defense Officer Personnel Management Act, enacted by Congress in 1980 to standardize military personnel policies. But the system has defied efforts by successive defense secretaries to bring about change.

That act binds the military into a system that honors seniority over individual merit. It judges officers, hundreds at a time, in an up-or-out promotion process that relies on evaluations that have been almost laughably eroded by grade inflation. A zero-defect mentality punishes errors severely. The system discourages specialization — you can’t expect to stay a fighter jock or a cybersecurity expert — and pushes the career-minded up a tried-and-true ladder that, not surprisingly, produces lookalikes.

In the subtitle of his book, Mr. Kane declares a radical intent: “How the U.S. Military Mismanages Great Leaders and Why It’s Time for a Revolution.” The revolution he has in mind would turn the military inside out by creating an internal labor market for job assignments and promotions.

Need an assistant commander of an airborne regiment? If an officer has the training and the credentials, why shouldn’t he or she be allowed to apply for the job? Let the commander, not the Pentagon, choose a sidekick from a stack of résumés, Mr. Kane says. Sounds a lot like civilian life, doesn’t it?

By the same token, a talented 33-year-old colonel could command a 40-year-old major, an age reversal that is commonplace in the civilian economy. The ranks would also be open to lateral entry. Why not readmit a former officer who wants to re-enlist after a stint in logistics for Walmart?

Mr. Kane is taking on an institution whose sheer size boggles the mind. There are 1.1 million men and women in the United States Army, including the National Guard and Army Reserve. The regular Army alone has some 82,000 officers, 15,000 above the rank of major (but only 300 generals). Can it rely on a military Monster.com of the kind the author is proposing to put all those people in the right jobs?

There are skeptics, even among Mr. Kane’s supporters in the military, who say his quest is quixotic, an attempt to dent a stone wall that has defied all efforts to change it. But it might not be hopeless. Our military is part of our society. It has bent before to provide greater opportunities, first for blacks, then for women, and most recently for gays and lesbians. If the demand now is for greater personal autonomy, how long can the military resist?

Article source: http://www.nytimes.com/2013/01/06/business/bleeding-talent-sees-a-military-management-mess.html?partner=rss&emc=rss

Bigger Tax Bite for Most Households Under Senate Plan

The legislation, which still must overcome resistance exhibited on Tuesday by House Republicans, would grant most Americans an instant reversal of the income tax increases that took effect with the arrival of the new year. Only about 0.7 percent of households would be subject to an income tax increase this year, according to the Tax Policy Center, a nonpartisan research group in Washington. The increases would apply almost exclusively to households making at least half a million dollars, the center estimated in an analysis published Tuesday.

But the Senate’s decision not to reverse a scheduled increase in the payroll tax that finances Social Security, while widely expected, still means that about 77 percent of households would pay a larger share of income to the federal government this year, according to the center’s analysis.

The tax this year would increase by two percentage points, to 6.2 percent from 4.2 percent, on all earned income up to $113,700.

Indeed, for most lower- and middle-income households, the payroll tax increase would most likely equal or exceed the value of the income tax savings. A household earning $50,000 in 2013, roughly the national median, would avoid paying about $1,000 more in income taxes — but pay about $1,000 more in payroll taxes.

The timing and outcome of a House vote was unclear on Tuesday evening.

Sabrina Garcia, a 35-year-old accounting assistant from Quincy, Mass., who together with her husband made about $102,000 last year, said the payroll tax increase equated to “about $200 a month for my family.”

“That’s a lot of money for us,” Ms. Garcia said. “It means we will have to cut back.” She said in an e-mail exchange that she would most likely postpone buying a new computer. “And forget about being able to save money,” she added.

The deal would impose larger tax increases on those who make the most. It would raise taxes in two ways: by restoring limits on the amount of income affluent Americans can shelter from federal taxation, and by returning to a top marginal tax rate of 39.6 percent. The current rate is 35 percent.

For married couples filing jointly, the deduction limits apply to income above $300,000, while the top tax rate kicks in above $450,000. But both numbers are somewhat misleading, because “income” in this context is a technical term, referring only to the portion of income subject to taxation after exemptions and deductions.

Few households with actual incomes of less than half a million dollars would face a tax increase. The Tax Policy Center calculated that less than 5 percent of families earning $200,000 to $500,000 would actually pay more.

The size of those increases would be much smaller than President Obama originally proposed. The net effect, according to the center’s estimates, is that the top 1 percent of households would see an average income tax increase this year of $62,000 rather than $94,000. “The high-income people really are doing very well in this compared to what the president wanted to do,” said Roberton Williams, a senior fellow at the Tax Policy Center.

The Senate deal would impose fewer limits on deductions than the White House plan. It would also tax income from dividends at a flat rate of 20 percent, rather than the same marginal rate as earned income. And there is another important point, often misunderstood: Affluent households would pay the new 39.6 percent rate only on income above $450,000. They and everyone else would still pay lower rates on income below that threshold.

Households making $500,000 to $1 million would pay an additional $6,700 in taxes on average. Those making more than $1 million would pay an additional $123,000 on average.

Article source: http://www.nytimes.com/2013/01/02/business/economy/a-bigger-tax-bite-for-most-households-under-senate-plan.html?partner=rss&emc=rss