Pro Commerce

I’m worth $1 billion at Peets

Peets coffee is where I can be found most days of the week and on the weekends in the morning. I like Peets espresso.

I say that I am worth $1 billion to Peets.

Peets was recently sold to a German company for $1 billion.

What the German company was buying was the loyalty of millions of people like myself who are customers of Peets. Some of us are being sold at $1,000 apiece....  effectively.

While I am not personally worth $1 billion to Peets shareholders, I am a metonymic example of what the German company was buying.

Next time a company that is your loyal source is bought you can think of that purchase as a purchase of you. Your loyalty to a business is worth a great deal of money.

Such sales are relevant to marketing. Developing customer loyalty is what genuinely creates economic value for a company.

I recently learned that my book (with Salli Rasberry as coauthor) Marketing without Advertising, is one of the top three books on marketing in English in the history of publishing. My book makes it clear how loyalty can be created.

Chinatown store helps understand inflation/deflation

I don't know if there is a Chinatown near you.

If there is, you will find many stores with products that are available at incredibly low prices.

If there is a $.99 store in your area, you will find many but not all of these very same Chinese made inexpensive products on the shelves.

This is by way of explaining how inexpensive the products are that have flooded American markets and are readily available at high markups with still low retail prices at Walmart, Target and a few other stores.

A pair of pliers in Chinatown can sell for a dollar and in an Ace hardware store for eight dollars. Still cheap for a well made piece of steel.

It is because of this vast importation of Chinese goods that the United States has had a real twenty-year deflation.

We don't see the deflation because domestic products such as home building, education, and healthcare have been rising at astounding rates. Combining the Chinese imports of very low cost goods and the domestic explosion of housing, education and healthcare prices we still end up with a low inflation rate.

Going to a Chinatown is the way to understand what is creating America’s modest inflation.

We have deflation that effects most ordinary Americans who shop at Walmart and inflation that effects social climbers who buy new houses and expensive higher education.

Jews lucky to be surrounded by enemies

Jews are not unique in history in having serious internal dissension.

Such dissension is what led to the destruction of the first Temple and the dispersal of Jews throughout the Middle East. It is also what led to the writing of the Torah and several of the additional stories to explain to the Jews of the future how dissension had resulted in defeat and dispersal.  There would be no Jews today if Cyrus had not allowed them to return to Israel.

The same dissension later led to the battles of the Maccabees and the celebration of Hanukkah. And the destruction of the second Temple.

Jews did not learn the lesson over the intervening two millennia. There were many instances where Jews battled each other theologically, politically and in competing organizations. Even when they were building the State of Israel.

The survival of Jews in Israel required cooperation. The new state of Israel began with extensive dissension among the settlers. It was the hostility, now a century old, of the surrounding Arabs that has forced Jews to learn internal tolerance.

Israel survives because it is a cohesive nation, more cohesive than any other. It is cohesive because it is surrounded by obvious dangers and belligerent enemies.

Because one third of American Jews do not understand the situation in Israel, I can look forward to a long-term separation of a large part of American Jewry from the future of Israel.  Many American Jewish communities will begin to resemble overseas Chinese and Japanese communities... arcane and completely detached from the homeland.

Really boost the economy

We have been in the longest slowest economic recovery in American history (five years since the beginning of 2008).

There have been many speculative suggestions for the reasons. So far I have favored the hypothesis that the federal stimulus money diverted capital investment needed for the recovery and that the Obama administration has shown such great hostility toward commerce that it suppressed investment as well.

What I want to discuss here are the actual policies that could have stimulated the economy and still could.

The number one most important source of government led economic stimulus would be an expansion of free trade agreements and reduction of domestic tariffs and tariff barriers. Our economy would skyrocket. One such agreement is on the horizon: the Trans Pacific Partnership.

The number two source of Federal economic stimulus would be a fiat percentage reduction in EPA, OSHA and the Dept. of the Interior regulations that are hostile to business.

Number three would be a national model law for environmental evaluations of new projects, EIRs, that would limit the evaluation to two printed pages and one month for preparation.  A national law on this subject would trump local laws.

Similarly the fourth source of stimulus would be a national model building code that focused almost exclusively on fire, flood and earthquake safety. There should be national incentives to get local jurisdictions to accept the model code.  Buildings could be mass-produced as well as imported.

Those four efforts to stimulate the economy should probably result in dramatic investment success.

St. Francis Yacht club

The St. Francis Yacht Club has recently been in the local news because of a book that describes how Larry Ellison (CEO of Oracle) tried to get the club to sponsor his Americas Cup boat and to bring the America's Cup race to San Francisco.

Ellison failed in that effort and moved his efforts 100 yards to the Golden Gate Yacht club, a dinky ramshackle blue-collar drinking club. There he succeeded. The Golden Gate Yacht club, in return for some building upgrading, sponsors Ellison's yacht and the America's Cup race this summer in San Francisco.

Ellison (a Jew) would not have been a member of the St. Francis yacht club, in the first place, if it had not been for my efforts in the 1970s.

The St. Francis is on public property with a long-term lease supervised by the Park and Recreation Department.

The St. Francis was one of the very last vestiges of the hereditary upper class.  It was frequently listed in the San Francisco Blue Book.

The laws had changed by the 1970s and clubs with more than 200 members could not legally discriminate.

When the St. Francis lease was due to come up, I mounted a campaign to make their lease renewal conditional on affirmative action in membership. Their employees were already 90% minority.

It took only a few phone calls and I had the necessary political backing.

By the time of the lease renewal hearing before the Park and Recreation Commission, the St. Francis Club had capitulated and put a nondiscriminatory clause in their charter and invited a few prominent blacks to join the club.

The club remains a stuffy old farts hangout but they legally had to let Ellison become a member.

Dream currency

In roughly 1976 or '77 by the time the Briarpatch had grown to a large number of businesses, 600+, the strange thought occurred to me that we could have our own currency.  Most briars would have been happy to use a currency that promoted interaction among their fellow businesses that had common values (openness, honesty and cooperation.)

I actually commissioned a graphic arts studio to design a currency. I decided to call the currency ‘Briarpatch Dreams’. I picked this name on the assumption that any federal agency that decided to persecute us would be embarrassed to be persecuting ‘dreams’.

I also went so far as to figure out how to avoid forgery. As was consistent with the values of that era, I settled on handmade exotic paper.

I went to a remote village between Kyoto and the North Sea to have specially designed mulberry paper made. I ordered 500 sheets with gold thread through it at regular intervals. On the right is a photo of the roll of 500 sheets that I still have (the gold threads are sticking out).

My plan was to have a location where anyone could buy the Dreams in denominations from one to 50. The location would also redeem the Dreams in dollars. We would also provide a list of the Briar businesses.

I have no doubt the system would have worked and been very pleasing to the Briarpatch members.

I also have no doubt that the idea would have attracted a great deal of attention.

As I thought about actually beginning the operation, I realized I would have to be the banker and manage the banking function. The profit of the operation would come from all the currency that is never redeemed.  It could have been a large sum.

I realized, I had already been a banker and had no interest in doing it again.

Born equal: democracy and genetics

I recently made an observation that I wish to present to my beloved blog readers. This may be an original idea.

Democracy may be a biologically advantageous political system. When I'm referring to democracy I am referring specifically to the American model which is a limited government, multistate, Republic.

The biological fact of human beings, Homo sapiens, is that we are like apples.  Every child born is a reversion to the standard human being.  Plant a fancy Fuji apple seed and you get the standard crab apple. We constantly return to the norm of the population. With excessive inbreeding, our lineage dies.

If that is the biological fact, then any idea of a biologically bred upper-class, or lower-class, is bound to fail because there is no biological way to maintain the inbreeding superiority or inferiority in humans. Certainly, in the past, such inherited class categories have been created by culture. When families tried to inbreed they died out.

In the most extreme cultural case, Japan, the hierarchical social structure is maintained by selection of outstanding genetic individuals and marrying them higher in the hierarchy for their talent. This is still a cultural mechanism since the genetic material (their children) always revert to the population norm.

Over long periods of time, the question becomes what political system is most capable of accommodating a society that always reverts to the genetic norm?

I would suggest that American-style democracy creates the most favorable environment for the favorable-sporadic-random gene to become highly productive for the society. That productivity may be in any domain: culture, science, politics or most importantly commerce.  Such wonderful outliers have the greatest chance of making a social contribution in an American world.

Doesn't this strike you as an interesting thesis? That American-style democracy has a biologically favorable role.

A friend commented that American style uses a high level of chaos to produce innovation.  Yes, and that is also how biology works in the genetic world. Random variation with selection for favorable attributes.

How are in-laws like party guests?

You may have noticed that when you invite close personal friends of yours to a party they may be convivial and they may get along well, but rarely do friendships develop between your friends.

It was always my hope that my friends would become friends with each other but that rarely happened.

I gave a great deal of thought to my failure in this endeavor and came up with an explanation. It may be an explanation that makes sense to you too.

I am a somewhat complex person, like most people. My friends are attracted to me because of a variety of my personal attributes. They do not find that same attribute that attracts them to me in any of my other friends, necessarily.

That makes sense, doesn't it. I am like a starfish with each pod independent and different. My friends are attracted to different parts. They are not necessarily attracted to each other. Picture the starfish with a bunch of mussels or clams attached to each pod.  Those mussels or clams might not be interested in mussels or clams on other pods.

Now, I realize that in-laws have the same complex quality.

My children, like me, are complex and the spouse they find is attracted to some attributes of my child that I may not have appreciated myself. The spouses may have significantly different attributes from the attributes in my children that I most appreciate.

The same can be true of lovers. The magnetic attributes between me and a lover may not be in any way related to the attributes that attract friends of my lover. So my lover's friends may be of little or minor interest to me.

All of which is to say that families are inherently diverse and can be difficult. Because of their long-term nature, it is incumbent upon sensible people to accept the diversity and maintain family equanimity.

Willie’s voting scam

Willie Brown is the most brilliant political operative in the history of California. Maybe the U.S.

To his regret, he returned to San Francisco to be mayor. A job he disliked vehemently because he had to deal with a garrulous Board of Supervisors, mostly idiots. In a town of Lefty ideological voters.

Willie had a long history of running campaigns in California from his central position as Democratic Party banker.

Willie tried an experiment in his second campaign for mayor. He wanted to see if the traditional Chicago, New York political machines would work in San Francisco.

He set up several large church fried chicken dinners in black neighborhoods. He then offered, via his political friendship network, to take any black voter to the polling station by limousine and afterwards to the free chicken dinner.

Willie was prepared to transport several thousand black voters.

He only got several hundred.

Political machines with the traditional bribery form don't work in San Francisco.

The ones that work are union based. The union has sufficient power over its members to get them to act. The unions have 26,000 city employees, the highest salaries and benefits in the country,  thousands of SEIU maintenance workers and thousands of hospital workers.  Unions have a large voting influence. No bribery, just suasion.

We created the EU, Japanese pacifism

If you are noticing international problems that are arising because Japan has become a pacifist nation (Chinese and North Korean aggression) or because the Europeans are hostile to Israel and unwilling to share any burdens of global policing (Libya, Syria, Egypt, Iran...), you may have to look at the United States as the reason for this problem.

The United States has been willingly acting as a global policeman since World War II. This willingness has allowed Europeans and the Japanese to assume the position of helpless nations unwilling to fund a reasonable standing military.

That is part of the reason. The real problem comes from the fact that the United States, at the end of WWII, designed Europe and Japan to be pacifists.

The Japanese Constitution actually defines Japan as a country without a military. Over the intervening sixty years several generations have grown up with a pure pacifist mentality. I see no way that that can be changed.

The United States did everything possible to create a European Union with the intention of ending the millennia long internecine warfare in Europe.  The U.S. created a unified NATO that could confront Soviet communism. It diffused European nationalism. The net effect has been to create a pacifist Europe over two generations.  Europeans now abhor nation-states that need to defend themselves, like Israel.

We have succeeded in making sure that we have no allies to support us in global policing responsibilities and can never look forward to such allies again.

Someone might stop me and ask about the European staffed peace forces on the Lebanon border, the Golan Heights and Sinai borders and I can only respond by pointing out how quickly these peace forces evaporate in times of trouble. Pacifists pretending to be soldiers.

China and a few other countries are not part of this pacifist landscape that we have created.

We have no choice about how to deal with this as our own creation bites us in the foot.  We must remain the global policeman. Fortunately, Canada, has understood what has happened and keeps encouraging us to act responsibly.

Maintenance failure... precipitous decline

It has begun to be common to read about freeways, highways, bridges, railroads and even cruise ship disasters.  In virtually all these cases the problem is a lack of maintenance.

The Golden Gate Bridge is a shining example of good maintenance. The bridge is now 75 years old. Every year since it was built it has been scraped and painted and repainted. Nearly the entire six dollars per car that is collected goes toward maintenance of the bridge.

The same cannot be said about any other piece of public steel in America. While the Golden Gate Bridge has to deal with an ocean environment, it is not significantly more vulnerable than all the other man made steel objects in America.

Throughout my life, until the 1980s, when German and Japanese cars began to impact automobile design in the United States, American cars were notoriously unreliable.

Both the Japanese and the German engineers understand the nature of maintenance. Their cars introduced the requirement that new cars be serviced regularly at factory authorized facilities. Regular service is a synonym for maintenance.

Maintenance begins in design. If the object is not designed for easy maintenance it will not occur.

From my own personal experience I have learned what maintenance is about. I had an Aston Martin Lagonda, which was a sedan designed for high power. The only access to the spark plugs required the removal of the engine. British. I also had an MGA sports car. The electrical harness looked like spaghetti and when it began to be a problem, no one could figure out which wire went where.

I worked on a French Fuga fighter plane that had a stick of dynamite under the pilot's seat for ejection purposes. The dynamite had to be replaced every 100 hours. A major job that was an example of French maintenance and design incompetence. I had a French motorscooter with oversized rubber shock absorbers that wore out in less than five years.

The New York subway system had come to a virtual standstill by the early 1990’s when a transportation expert from Canada was brought in to fix the system. The first thing he did was install a reliable maintenance system. That made the subway system functional.

When you compare airplane safety to automobile safety in the 1950s and 60s you can understand the high level of safety of airplanes because they have a high level of scheduled maintenance that is enforced by government agencies.

In the contemporary world, where America remains pretty much a Third World country, part of our problem has to do with lack of understanding of maintenance. Without maintenance most man-made objects are destined to fail at a precipitous rate.

First Victorian paint jobs

San Francisco is noted for its Victorian houses painted in ornate styles and colors.

There are roughly 40,000 Victorian houses in the city most were built before the earthquake of 1906. They were originally painted in bright pastel colors.

Beginning at the turn of the 20th century conformity was the prevailing national style. Unusual behavior was limited to membership in the largest voluntary organization, the Odd Fellows.  So the Victorian color fest ended.

For more than a half-century all San Franciso Victorians were painted white or gray.

In the late 1960's one person, on psychedelic drugs, painted his house on the outside to resemble the psychedelic interior decor, common to hippy 'pads'. The tenant in this house was Jefferson F. Poland, well-known as a founder of the Sexual Freedom League. The photo on the right is the first house painted with modern Victorian polychrome style. The first modern Victorian paint job was done on the house on the left, 906 Steiner St.  It has since been returned to a rather boring standard look since Jeff left.  The next door neighbor has the more vibrant current Victorian style.

Don't bother looking this up in Wikipedia, they have it wrong. I knew Jeff Poland and I worked with many of the first people who got into the Victorian polychrome house painting business in the Briarpatch. They became very skilled and very much in demand.

This is just an historical note to set the record straight.

Lottery vs earnings-2

I am always puzzled by discussions about people who have too much money. My life is wonderful, I have no reason to complain about others.

The people complaining are clearly expressing envy and relying on an ancient tribal desire to have equality among all the tribal members.

The playing field of complaints about people having too much money is not a level playing field. That  makes the issue of understanding it more difficult.

While there is an endless array of complaints about senior executives being paid in the tens of millions and more extreme complaints about financial figures earning in the hundreds of millions, there is no comparable complaining about celebrities or sports figures earning comparable amounts of money.  A good basketball player can earn the same as a chief executive who runs a $10 billion company with 15,000 employees.

I begin the blog with the mention of winners of the lottery. There is a visible absence of complaints about their level of earnings.

So what is going on? I cannot understand it.

Executives frequently have managerial responsibility for thousands of employees and the level of responsibility is very heavy. The celebrity status is pretty much luck much like the lottery.  Both of which resemble inherited money.

Inherited money does generate some envy but nothing comparable to executive pay or financial figure  payments.

The president of the US and the rest of the envy crowd seem to put financial people with large earnings at the top of their hate list. In most cases these people are dealing with billions of dollars and making reasonable or lucky decisions about their investment. They are taking a tiny percentage of their success in payment.

The playing field for envy does not make sense to me at this point.

Lottery vs earnings-1

I simply want to ask the question: ' why a person who wins tens of millions of dollars in a lottery is not subject to the same kind of hostile greed-envy talk that a person being paid that same amount of money as a manager of a corporation experiences?'

I don't have the answer. It clearly has to do with the lottery winner benefiting from luck not because the person is ‘better’. Anyone can win the lottery.  Executives have to have more than just luck.

It is certainly hard, if not impossible, for the public to understand why corporate executives or successful businesspeople are able to generate a great deal of income because their behavior is good.

First we have people who are actors portraying corporate executives (like Peter Coyote) who have no understanding of the role. (Many such Hollywood actors playing corporate executives in fact come from a Marxist background.).

We also live in a society in which absolutely no arts, theater, movies or novels convey the type of work effort and competence that it takes to earn high income.  Except for sports and movie stars.

This could be a partial explanation. The next blog expands my bewilderment.

Jerry Brown

There are many articles about California Gov. Jerry Brown, these days, because he governs a large Democrat state and is acting very differently than the similar over-extended debtor states of New York and Illinois.

Jerry Brown is different. He has raised taxes and is cutting the budget, for real, in order to have some surplus revenue. This is not the way 999 out of 1000 Democrats behave.

I constantly disagree with Jerry but there are three things that permanently endear him to me.

In his first term in office, he appointed Ed Roberts to head the disability agency replacing the former deaf and blind agency. He did this on the suggestion of my friend Robert Gnaizda. Ed Roberts is the man who single-handedly created the modern global disability movement.  More important than Gandhi or M.L. King Jr.

He also did me a personal favor, we were friends at the time, by acting on an article that I wrote about the racism of the anti-whaling movement . He effectively killed the American anti-whaling movement.

In his current term as governor he has done something no Democrat to my knowledge in American history has done, he abolished an entire agency. He abolished the California Redevelopment Agency which had 412 offices and thousands of employees.

Jerry Brown is very unusual. At age 75 he does daily exercise in a room off of his office. He controls a completely Democratic legislature and yet he's not letting them become the spend and spend insane Democrats that one usually expects in elective office.

He is quiet, curious and honest.  Three characteristics that are as rare as you can imagine in politics.

Two biggest events in American history

Two of the three biggest popular uprisings in American history, since the nation was founded, have occurred in the past three years.

I am in debt to one of my favorite blogger, Bookwormroom, for pointing out that the current IRS scandal is the biggest scandal in American history. It is.

The Left has been inundated with the absurd meme that this scandal is not very important. These same media pundits are the ones who completely ignored the largest uprising in American history, the Tea Party of 2009.  These blind Democratic Party ideologues had no idea that the Congress of 2011, and for a long time into the future, will be controlled by the popular uprising of the Tea Party. The election for Congress and for the governor's offices in 2010 was the greatest political sweep in American history.

Since I know American history, and since we have already had one political upheaval of enormous magnitude, I do not hesitate to say that the reaction to the IRS scandal will be even greater than the reaction to the Democratic Party forcing an unpopular healthcare mandate on Americans with unacceptable parliamentary fraud.

The IRS scandal is far worse than the cause of the Tea Party uprising in 2009. A trusted an important government agency used its awful police powers to punish Jews and patriots.

The coming uprising against the IRS will be far greater than just the revolution by the previous Tea Party.

This is the second time in our history that the Democratic Party has caused a deep fissure in American society. The first time was the Civil War.

It is worth asking the question: What is it about the Democratic Party that is so un-American?

To create an earthquake in American society requires that a political party be (1) blindly ideological and (2) arrogant in its self-righteousness. Those are the two qualities that brought about the American Civil War and they are the same two qualities that are creating the current popular uprising. The Democratic Party ideological position of the 1850s was the importance of the 'peculiar Southern institution' of slavery and the right of Southerners to take that institution into the new Western states.

The current blind ideology is a belief in the importance of government control of the commercial world and individual behavior in the interest of the common good. A century of failure by communist and socialist countries has had no impact on the Democratic Party. Just as the abolition of slavery in most of the world before 1850 had no impact on the Democratic Party.

I personally do not often comment on current political issues. This one has made me feel so strongly that I am announcing the following:

I will not file my 2013 income tax form unless many IRS top managers are sent to prison.

This is an important issue at an important juncture in American history.

Swimming, sugar, salt and egg yolk

I could make this a quiz. 'What do swimming, sugar, salt and egg yolks have in common?' But that would be too difficult.

These are all related to false wives tales.

* Until 1960, when the Army published its own findings, it was widely believed (and strictly enforced by my mother) that we could not swim for an hour after eating lunch. The Army found it easy to test this thesis.  When I was in the Army we were marching immediately after lunch everyday.  There was no connection between eating and getting a cramp from prompt exercise.

* Throughout the entire 60s and 70s, and it is still widely believed,  that sugar is the reason for children misbehaving after eating ice cream.

Since this was easily measured by sugar levels in the blood, it should have been rejected early on. Sugar, in any form, including ice cream does not create blood sugar any quicker than cheese or avocado.

* Salt has always been identified as a source of potential harm to the heart. It is correct to say that salt, sodium chloride, does cause humans to retain water and slightly increase blood pressure. But careful studies have shown that salt in reduced concentrations in the diet has no direct benefit for heart attacks, stroke or heart disease. Just another old wives tale.

* I personally avoided egg yolks for 25 years because the nutritionist unions supported the old wives tale that egg yolks raise your cholesterol level. While egg yolks themselves are very high in cholesterol, they do not turn into cholesterol inside a human being. We create our own cholesterol independent of how much egg yolk we eat.

I notice that McDonald's is selling an egg white breakfast sandwich.  How long before they get the word that customers aren’t asking for it? How long before customers get 'the word'?

Street lanes in Japan

When I first began going to Japan, in 1971 and then returning every year thenceforth, one of the most striking features of street life was that there were no lines in the streets to divide the lanes of traffic. There was a line in the middle to divide traffic flowing opposite directions but there was no concept of lanes.  This was changed in the early 1980’s because Japan wanted to be seen as a ‘Western’ nation.

To  put it another way, automobile, bus, truck and bicycle traffic was treated just the way pedestrian traffic is. No lines to tell you to walk in a straight line.

In fact, like most pedestrian traffic, the street traffic flowed smoothly without the lines. Like people on a dance floor.

I mention this so that you can think about the perplexing question of why we Americans create traffic lines.

Is it for Puritan reasons? That we don't want automobiles to act like dancers prancing down the highway.  Is it because we are so legalistic that everyone has to have legal boundaries to our behavior. Or is it because we want a very orderly society and we think lines will help?

Buttercup Bakery and Suze Orman

I recently read a book that was attacking the investment planning industry. The author was generally correct in her criticisms but she is an ignoramus who has no idea what the underlying problem is nor what might constitute sensible investment planning advice. (See my Simple Living Investment Advice for Old Age.)

One of the chapters was devoted to attacking Suze Orman. The author is a mean-spirited person and after mentioning that Suze got her business start working for Buttercup Bakery in Berkeley, the author found someone to say that Buttercup was not particularly good.

Wrong.  

Buttercup was great and beloved. Buttercup was the first modern retail eatery in America. It was the source of Chez Panisse and the Berkeley gourmet extravaganza. And the whole explosion of interesting hippie generated food that follwed.

Buttercup served elegant and imaginative homemade breads, pastries and served all its dishes with a wide variety of fresh ingredients and imaginative spices.  Buttercup was a member of the Briarpatch and I visited it several times during its early years. It was widely loved in the neighborhood.

More than a decade later the two owners invited me back for an urgent consultation.

The owners, in an effort to expand their kitchen and ovens, had borrowed money with onerous terms.

My visit was in February. The loan came due at the end of May and required an instant repayment with no renewal if specific revenue targets had not been met. The revenue in the previous months had been more than 10% below the target.

It was my job to figure out how to dramatically increase revenues in the coming three months without additional investment.

I did... and the two owners followed my advice. First I had them offer free coffee to the drivers of all the buses that stopped in front of the bakery. The goal was to make the bus passengers aware of the widespread love of the bakery and smell the baking aromas.

The second thing I had them do was create and distribute a flyer to all the residences within a half a mile radius. One side of the flyer offered two jobs in the bakery. It was a period of economic slow down in Berkeley.    

The other side explained the wonderful smells wafting over the neighborhood that were due to the new ovens. There was an explanation of the wood fired ovens.

The purpose of the flyer was simply to remind people of the bakery that they all loved.

Revenues immediately grew by more than 15%.  The loan was extended.

At this point, one of the most common things about small business, occurred. The owners sold the business and went to Mexico.

Irish banking strike

An Irish friend of mine was always very reluctant to tell me her age.

One day while discussing her history she mentioned that an Irish bank she had been working for went on strike for several months. This was when she was 19, after finishing high school school. Because I knew that the strike she was referring to must have been the one in the summer of 1976, I had no trouble knowing her age.

Strikes of this nature have always been of interest to me. It was a strike of the Grayline tour bus company in 1972 that allowed me to start the modern diverse thriving tour business in San Francisco.

There were several Irish banking strikes in the decade before 1976. The Irish had learned to do without bank accounts.

Initially people wrote checks to each other. But they quickly learned that the checks couldn’t be cashed.  So the checks were passed around with each person signing on the back for a few weeks. Soon people recognized that adding signatures was irrelevant.

Most people checked the names of the Issuer and the first signer to determine if the check was good. If both parties were known to be trustworthy the check was treated as cash.

The whole point to me was that people very quickly find ways to create a currency system. Of course the underlying nature of that currency system is trust.

It was about this time that I went to Japan to create and buy a large batch of special mulberry paper.   I had already commissioned a design firm to create a currency for use in the Briarpatch. After talking to business people and validating the potential success of the currency I decided not to do it. It was going to consume too much of my time being a banker.

Latin declensions

I had one year of Latin in high school. I remember it well.  It was difficult and challenging unlike any other school experience.. It has always had a positive effect on me and my ability to learn.

I was joking with a friend the other day about the plural of Prius.

Since Prius has a Latin ending, I was speculating on the plural, many such Toyota hybrid vehicles.  In English it would be Priuses.

I ended up looking it up in Wikipedia and found that Latin declensions were far more complicated than anything I learned in my brief one-year exposure.

I will save you the trouble of looking up the article in Wikipedia. The plural of Prius is Prium.

So when you are driving down the highway and (especially in California) you pass two or more such vehicles you can point out that you have passed a Prium.

I don't expect that to make much sense to anybody who is riding with you, but it is cute.

LSD and the Left

We are now in an era when a large proportion of the Lefty voters in America have experienced LSD or other psychedelic in their lifetime. What is the consequence?

I cannot accurately determine the percentage of people who voted for Barack Obama in the last two elections who had used LSD during their life. My guess would be roughly 20%.

I observed such people in the 1970’s who had used LSD and other psychedelics during the hippie era. I also tried it myself several times.

Psychedelics simply disconnect incoming sensory inputs from the traditional mental structure. The consequence is that the person on the drugs has a complete sense of disorientation. In a short time there is usually a reorientation but it connects to an incoherent world of senses. Like Alice in Wonderland.

The psychedelics wear off in a few hours, usually within eight hours.

Observing former psychedelic users I noticed two surprising post drug mental patterns.

In one case, such users become ‘Jesus freaks’. Jesus freaks decide that a strong belief in the Christian deity-prophet, Jesus,  will provide the emotional and intellectual stability that they need in their lives.  I don’t think these people end up being voters.

In the other cases I saw, there was a high level of paranoia and Lefty allegiance. The paranoia was accompanied by a sense that dark unexplained forces were at work in our world.  This coincided with the belief that the Democratic Party was the bulwark against chaos and dangerous threats. The Democratic Party, in the eyes of these former users, represented social welfare programs and general social protection. Not police. They saw the Democratic Party as a benign social government deity to protect them.

I think it is time to examine the modern political population with these issues in mind.

Dairy to Texas

A few decades ago, a group of 14 Wisconsin dairy farmers moved their dairies to the Central Valley of California. They wanted to use emerging high tech dairy techniques.

Each of the 14 farms had 600 milking cow and automated milking machines. The cows were milked four times a day. They used spray water to keep the cows cool in the very hot California weather. Milk was picked up daily by truck and brought to a central cheese processing plant in Turlock that the same 14 farmers had created. The cheese plant produced and still produces roughly 1/3 of all the cheese sold in America and had over 1,000 employees.

The cows ate corn raised on the farms. California does not permit irrigated water to be used for raising corn so these Wisconsin dairy farmers had selected a location where well water was sufficient for their corn crops.

What is interesting is that these very successful, environmentally conscious and prosperous dairy farmers have been slowly moving their operation to the Panhandle of Texas.

The reason they told me for their move to Texas is that the California’s environmental and safety regulations are onerous.

An example one farmer gave me concerned backup generators.  These farmers must not have their milking machines out of service for even two hours,  because cows become ill if they aren’t milked (600 of them). Therefore the farms have three backup generators for electric emergencies. California inspectors require full emission control on each generator (expensive equipment) even though the second and third generators may not ever be used even once in a century.

This was given to me as an example of the insanity of California bureaucracy.

When I told this story to a Lefty friend, he was incapable of understanding the reality that these farmers face in California.  Even more significantly, most Lefties are unable to understand the terrible damage this out migration of business does to the California economy.

My Tokyo partner

This blog is about language translation.

For more than 20 years I was a partner in a Japanese social science think tank. I won't describe it here, that will be a separate blog, because we don't have any comparable think tanks in the United States.

What I wish to comment on is how my partner, Seiji Takekawa, and I communicated. This is highly relevant to machine translation.

If you know any languages or regularly see translations from other languages on Google or other computer programs, you will note that some languages translate fairly well and some languages do not translate at all.

Japanese to English is a complete failure. Machine language translation for many languages is a farce.  I do not see any possible improvement on the horizon.

That is why I am describing how Takekawa san and I communicated for two decades.

Early on Takekawa san brought in a translator. His English was poor and my Japanese is equally poor.

After talking with each other for about 5 minutes the translator would be dismissed. We could communicate perfectly.

The way we did it was for him to make a statement or describe a business project in broken English and for me, in poor quality Japanese,  to repeat back what I heard or understood.

Sometimes he would talk in Japanese and I would repeat back in English.

Invariably we understood each other and carried on conversations for hours. We carried on conversations that dealt with complex social science issues.

It was very rare for one of us to repeat what we had said in a modified form to make sure we were understood. Most of the time our interpersonal communications were perfect.

To give you an example of a particular subject matter and the level of complexity we dealt with.  One of our clients was a religious movement that was interested in selling a new design of household ‘memorial cabinets’. In Japan most households have a cabinet with photographs, incense and fruit dedicated to the memory of deceased family members.  Our business challenge was to understand this new religious movement and translate the issues into design criteria for the memorial cabinets and invent new sales channels that could be used. Not a simple subject. Not a simple language issue.  But we did it.  Our clients were very happy.

We had no trouble understanding each other. I had to describe burial and mortuary procedures in the United States.  Not easy for someone, like Takekawa san, who had rarely been to the U.S. to understand.

What this tells me is that complex language translations are quite natural for human beings but not susceptible to computer brute force or the prominent fantasies of computer artificial intelligence.

New abortion scene

I'm sure that most of my readers are aware that a doctor named Gosnell was convicted of murder in Philadelphia for his work at an abortion clinic. He was convicted of murdering three post abortion babies that attending nurses claimed were alive.

The prevailing argument about this case is that this will have some affect on the pro-and anti-abortion politics. I don't know about that because people have pretty much made up their minds.  The country is divided. Nearly 2/3rds of the country say they would not have an abortion personally nor recommended abortion to anyone in their family.  Simultaneously, half the population believe legal abortion should be available.

I only wish to point out that any doctor in the US who is conducting abortion procedures will now give a second thought to any abortion after the first trimester. Most fetuses are not viable even in the middle of the second trimester.  Post Gosnell, I can't imagine a doctor putting his/her life at risk now that a jury, made up mostly of pro-abortion citizens, would return a verdict of murder.

I think that will change the reality of work in abortion procedures.

Deep Eddy Austin pool

I was telling a friend about a freshwater swimming pool that I used in the early 1960’s when I worked at the corner of Van Ness and Market in San Francisco. The pool was inside downstairs near the corner of Oak Street and Van Ness.

My friend told me about a pool in Austin Texas that is fed by a freshwater stream. I was delighted to hear about it.  I asked how Austin handled the sanitation issues. My friend said that the water changed on such a regular basis that Austin bureacrats seemed happy with the quality.

The fact is my friend didn't know.

My 1960’s pool was wonderful to swim in. It was in a basement and was freshwater fed from the Hayes Valley River that was, and still is, underground. It is one of several underground rivers in San Francisco.

My pool facilities were not heavily used and were not very well maintained. By that I mean that there was a constant smell of fungus in the dressing room and dark splotches visible on ceilings.

By 1964, the city had closed my wonderful freshwater, chlorine-free, pool. The city claimed that the water must be chlorinated. Chlorination was obviously necessary to satisfy some bureaucrat. Also obviously, the pool no longer had the revenue to bribe the local bureaucrats.

The bureaucrats continued to maintain their preposterous chlorination policy until 2010.

I know that because the gigantic pool at the University of San Francisco, I swim in, was designed in the 1970’s to have an ultraviolet-light purification system. The bureaucrats would not let the ultraviolet system be used and required chlorination.  The ultraviolet was finally permitted in 2010.

Miscellaneous information for more readers.

Dressing up

There are several cities known for dressing up in costumes.

San Franciscans put on parties all year long with dress-up themes and costume.  That includes the Symphony, Opera and Ballet.  They all put on dress-up and costume parties regularly.

Hippies had regular costume parades and parties all over the city all the time for decades.

The biggest events in the past few decades have been the costume parties of the Exotic Erotic Balls and the Gay Halloween event. Because it grew so big, the Gay Halloween event has been suppressed to some extent. San Francisco has an event called the Bay to Breakers Race which is a costume event with 70-90,000 participants.

I asked myself why San Francisco is so in love with costumes and dressing up.

I have two answers.

Number one: San Francisco is where people come to find out who they are. The use of a costume to cover up the real person as he searches for his or her identity, makes sense. Once people have found who they are, they leave San Francisco and go where their character is most appreciated.  

Children raised in San Francisco tend to know who they are and move away after high school. Almost no one I went to school with in San Francisco lives in the city today. That is true for the few other people I’ve met who grew up in San Francisco.

People are in the City to find out who they are and costumes are like a chrysalis to hide the developing product.

The number two reason: San Francisco is a city of façades. The most common architectural style is Victorian. Victorian homes and buildings permeate the city. Victoriana is rococo, pure façade.

Many of the Victorians and architecturally related houses have a fake roof line on the top. Like buildings in old Western movies.

This fake roofline is a sham.   It is very visible and common in the city.

In my opinion this environment of façade and fake rooflines is consistent with the idea of costumes and dress-up.

Golden Gate Bridge music

To me, the power of art is its ability to shape our perceptions. Great art has a major impact on our perceptions in many dimensions; auditory, visual, intellectual, taste etc. Lesser art has a lesser effect or no effect.

 

In 1975, I set out in a van to record the sounds of many public objects in San Francisco. The possibility for recording objects came to my attention thanks to a member of the Briarpatch with whom I consulted, Arnie Lazarus who had developed an audio pickup call the FRAP, flat response audio pickup. It was used by every rock and roll muscian of the time.

Arnie was on the trip, along with Bess Bair the great tap dancer known as Rosie Radiator, Doug McKechnie a musician and composer and lastly Don Sach a photographer.

We played and recorded half a dozen statues, sculptures, stairwells and banisters around the city. Our last object was the Golden Gate Bridge. A few nights earlier Arnie, Doug and myself had gone to test the Golden Gate Bridge for its acoustic possibilities. We were chased off the bridge at the time.

The idea of playing the cables on the bridge, like harp strings, came from in magazine cover done by David Wills. We played the bridge strings. Doug used several heavy mallets and hammers.

David's visual imagery had become an audio and photographic image. Doug made a short musical piece which was played widely on am radio up and down the West Coast.

Since then, countless bridges have been played and the New York Philharmonic has performed a  piece using local bridge sounds.

I consider that Golden Gate Bridge creation a good work of art because it has had repercussions in the visual and audio world.

T

he part that I remember most vividly is that we found one cable that had a standing wave.  A standing wave is an extraordinary object. It is a wave that is in perfect harmony with the object in which it travels and the distance it travels. It moves back and forth to perpetuity. You can check it out in Wikipedia.

 

We found a standing wave in one cable, and because of its potential danger to the bridge, I reported it to the bridge engineer a few days later.

You can find Doug's music online in several places.

Bing and Yahoo

Yahoo, with its new Mayer led CEO, is trying to get out of a 10 year agreement with Microsoft to use Bing (a natural language search engine).  Yahoo would make more profit from advertising if it used Google.

Microsoft made a mistake when it bought a natural language search startup that became Bing.

I could have told them at the time but I'm sure they would not have listened to me.  Too smart by a half.

Google is a service monopoly. In a book called Gods of Commerce that I published in the early 1990s I explained what a service monopoly is.

If you offer any service where there is a network advantage, that can be a Yellow Pages, a network like Craigslist, a currency, anything where the greater number of users the greater the usefulness. That is a service monopoly. Google is a service monopoly.

The monopoly status will be maintained as long as customers do not find a single significant activity that is missing from a service monopoly. If such a single significant activity is missing a new service monopoly can rapidly grow to replace the former.

Google isn't anywhere near having a single significant missing activity. Google moves very rapidly to fill any holes in its service.

Bing is one of many search engines that will have no future. Too bad for Yahoo and Microsoft.

The exception to my rule about service monopolies, of course, will be in some tyrannical country that has a unique language like China.

Visa trade secrets

This blog is a business confession.

I was describing the nature of trade secrets to a friend. I had explained that under California law a corporation cannot keep an employee from going to work for a competitor. This is one of the few good things about doing business in California.

However an employee going to a competitor cannot give that competitor trade secrets from the former employer.

That is what led to my discussion of trade secrets.

I had been the newly hired marketing researcher who studied the four year old BankAmericard, the first travel and entertainment card issued by a bank. It was intended to be a general purpose card. I knew everything about the BankAmericard.

When I left the Bank of America a few years later to join the Bank of California and start a marketing planning department, I set out one morning to visit my peers in banking.

All four of them were sitting together in a Wells Fargo office when I arrived. A fortuitous surprise for me. They were discussing a proposal from a man named Salverson. Salverson suggested that he create a credit card to be a service to the banks. The four bankers had laughed at Salverson's suggestion.   They told him ‘the only credit card we need is green paper’... meaning cash (that was a bankers' joke.).

It was at this point that I used a secret from the Bank of America. I said that BankAmericard was extremely profitable and had generated $13 million in its fourth year of operation; net net. They wanted to know how that was possible and what internal interest rate was being charged. I knew another inside secret. The Bank of America was charging BankAmericard a 14% internal interest on its money.  BankAmericard was really profitable already.

My four friends were stunned by this revelation. They promptly asked how we could start our own credit card and I explained how it could be done under existing banking law. (The same law that made a check clearing house possible.)

Out of this, in less than six months grew MasterCard. By the time MasterCard was started, it had hundreds of banks joining it.  BankAmericard had to change its name to Visa and asked other banks to join.

I confess, I used trade secrets to help create MasterCard.