Thomas E. Ricks's Blog, page 248

Kristof discovers U.S. military!

Sometimes New York Times columnists strike me as more provincial than Gomer Pyle. Nicholas Kristof has a once-over-easy article about how socialistic the U.S. military is. Shazam!

Here is a better piece I wrote on the same subject some 15 years ago. 

Learning from Buffett (II): Is liquidity the financial equivalent of readiness?

No, Warren
Buffett doesn't know how to assault a machine gun bunker or check out the
maintenance record on a Bradley fighting vehicle. But he does know how to
prepare for the financial equivalent of combat and take advantage of chaos and
panic. "To finish first, you must first finish," he observes (p. 22)
as he begins to discuss lessons of the financial crisis of September 2008,
when, as he notes, the American economy veered dangerously close to collapse.
Credit, he explains, "is like oxygen. When either is abundant, its presence
goes unnoticed. When either is missing, that's all that is noticed."

Liquidity strikes me
as the financial equivalent of combat readiness, the thing that has allowed
Buffett famously to boast that when others get greedy, he panics-and that when
others are panicking, that's when it is time to get greedy. "Having loads of
liquidity [in the company]. . . lets us sleep well. Moreover, during the
episodes of financial chaos that occasionally erupt in our economy, we will be
equipped both financially and emotionally to play offense while others scramble
for survival. That's what allowed us to invest $15.6 billion in 25 days of
panic following the Lehman bankruptcy in 2008."

My question: If I am
right and liquidity is the financial equivalent of combat readiness, could the
academic literature and theory of financial liquidity be used to illuminate
better our understanding and even measurement of readiness? This would be a
good project for one of youse smart military officers doing a double degree at
the Harvard Business School and the Kennedy School of Government. I think to
explore the connection, don't turn first to discussions of military readiness,
but rather to studies of the nature of sustained
combat effectiveness, and see how measures of liquidity might be applied to
that area. You might wind up being the Black-Scholes of military theory.

Pakistan busts CIA's sources on AQ

The smart money says this is an
indication of a split between the Pakistani military/ ISI
on the one hand and the Pakistani civilian officials on the other. I don't
quite follow that, but it won't be the first time I didn't understand Pakistan.