While President-Elect Obama is looking to change the way the big-spending military is run, the Pentagon is busily preparing to fight World War II all over again. Which proves the old adage that "generals and admirals always prepare for the last war."

While Mr. Obama is thinking about terrorism, the military is thinking conventional war. That's why the Pentagon wants to build more aircraft carriers for the Navy, more $140 million fighter planes for the Air Force, and more high-tech doodads for the Army.

Advanced weaponry is valuable in a conventional war fought between nations. World War I and World War II showed the overwhelming initial advantage advanced weaponry afforded Germany and Japan. One Panzer tank could knockout five of America's best Sherman tanks. Japan's Zeroes made mincemeat out of America's best fighter planes at the start of the war in the Pacific. But, lucky for us, Germany was led by a madman who violated Bismarck's dictum, "Germany must never fight a two-front war." Japan's Tojo was not much wiser, believing that the single strike at Pearl Harbor would destroy America's will to fight.

Unfortunately, aircraft carriers and F-22 fighters are so World War II-ish.

Air power was worthless in Vietnam, where the North Vietnamese troops were protected by a triple-cover jungle. Aircraft carriers are floating coffins in the new world of silent subs and surface-skimming missiles. The next conventional war will be waged among silent propulsion submarines, drone aircraft and missiles. And of course, armies – always there will be armies.

But the best high-tech, whiz-bang weapons are powerless in a war with stateless terrorist organizations who operate on a low-tech basis.

While the Pentagon budget has now reached $400 billion, the terrorist attack of 9/11 was financed for less than $500,000. And the costs are 100 times greater.

The invasion of Iraq was a conventional war, easily won by America's high-tech weaponry at very low cost in men and treasure. But the ensuing low-tech insurgency is costing over $10 billion a month and over 4,000 dead soldiers.

Apparently no one at the Pentagon is familiar with American military history. In the Spanish-American war of 1898, the U.S. Army routed the poorly equipped Philippine army in a matter of months. Fewer than 400 lives were lost. But the insuring insurgency lasted three years and cost over 4,000 American lives. All this against insurgents who were armed largely with machetes and spears. American's technically superior Springfield rifles were worthless in close-encounter jungle combat. Eventually, the invention of the famed .45-caliber automatic saved the day. (We were fortunate that industry could come up with a saving weapon during the time of combat. Today, the Pentagon finds it impossible to field a new weapon in under ten years – or over twice as long as World War II lasted.)

Before 1898, the Spanish had tried to control the Philippines for more than three centuries. They failed utterly. By the time the Americans moved in, Philippine rebels controlled the entire nation except for the city of Manila. To this day, the Philippines' largest island, Muslim Mindanao, has never been subdued.

During World War II, a Japanese general concluded that "a single Philippine rebel ties up 25 Japanese soldiers."

History indicates that fighting terrorism involves highly leveraged negative financing. The costs of fighting terrorism, whether measured in money or manpower, are highly negative.

The Islamist terror attack on Mumbai probably cost no more than $50,000. Yet it came within a whisker of setting off the world's first nuclear war. The cost of putting the "shoe bomber" on a passenger plane was minuscule compared with the cost of losing an airplane filled with passengers. Every suicide bomber in Iraq has caused damages thousands times greater than the costs of providing one person with a bomb belt.

Let's look at the negative cost situation from the perspective of facial recognition technology.

The U.S. government is investing vast sums in developing face recognition devices which can catch terrorists who might use false names and fabricated passports. Twenty individual states are developing similar face recognition technologies to prevent identity thieves and terrorists from obtaining drivers licenses.

A Brown University study indicates that women have a more greenish tint to the skin, while men have a more reddish tint. The study was published in the journal Psychological Science with findings published in mass news media.

This will set off three industries simultaneously:

1. The facial recognition developers will add color differentiating to their software for Caucasians.

2. Cosmetic makers will start selling red-tinted foundation creams for women and green-tinted sunscreens for men.

3. The terrorists in Pakistan and Egypt will start making facial color-altering cremes for terror groups planning to attack Europe, India and the U.S.A.

As you will note, the cost of developing the cremes will be mere pennies compared with the cost of developing the facial-color recognition software.

And the camouflage cremes will be on the market before the recognition products are.

Defending America from potential conventional war countries like Russia and China, while developing the strategy, tactics and products to fight terrorism is a horrendously complex task. What works for one kind of war will not work for the other.

Fortunately, President-Elect Obama has chosen his Defense Secretary well. Robert Gates is one of the few men in the country who has the strength and wisdom to help the U.S. make the right choices in an affordable defense strategy capable of dealing with both kinds of conflicts.

He has also shown that he knows how to win political battles against the Pentagon's battleship admirals and high-flying generals.

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