Pro Commerce

Ann Landers and Israel

Longtime readers know my view of my own Judaism.  We Jews are the chosen people. Chosen to help humankind be ‘better.’  Jews are hated because they have been able to read, write, and do math for 3,000 years and virtually nobody else can or could.  They have also been good at commerce, globally. And yes, those skills have included most Jewish women.

Israel’s role today is to continue the roles Jews have played in society for millennia.  To improve medicine, technology, food and day to day life. Israel is the moral leader in its military behavior and in countless social issues.  Menachim Begin was the true founder of the country, a moral giant.  Bibi Netanyahu is one of the greatest men in human history, an incomparable leader for all time.

So what does this have to do with Ann Landers?  Ann’s real name was Esther Lederer and her sister (Dear Abby) was Esther Phillips.  Both Jews which is the point of this blog.

I started reading Ann’s column when she started in the Chicago Sun Times and I started at the University of Chicago in Fall 1955. 

The total readership of Ann and Abby reached two thirds of the adult population of America for several decades.  The advice they gave concerned all aspects of daily moral life. To put it simply, America’s moral life for an important part of the 20th century came from two Jewish women.  That, to me, is the work of the ‘chosen people.’

Another Jewish moral advisor was Ruth Westheimer, Dr. Ruth. She was a powerful moral teacher to Americans for two decades, reaching audiences nearly as large as Dear Ann and Dear Abby at times. Her focus had more sexuality in it.

The demand of ‘the chosen people’ is to be moral leaders for all time.  Not an enviable burden.

I Was There

I was there at the beginning of the Beatnik movement, the hippie movement, and the Whole Earth Catalog.

The Beats were mostly in New York and San Francisco.  I went to the U. of Chicago, in the geographic middle, in August of 1955 and was in the male dormitories in 1957 for six months. For reasons I still don’t understand, I was a widely known radical organizer with a sweatshirt, blue jeans, disheveled hair and a full beard. The Beats were visible in the youth population of the time.  As they traveled from Coast to Coast they stopped in Chicago at the University where I got them dorm rooms to stay in.  I knew about a dozen of the Beats at the time.  An article in Time magazine in 1959 said I was one of the Beats.

When I returned to San Francisco in 1960 to go to grad school at U.C. Berkeley in economics, my wife, Helen, and I lived in San Francisco on Broadway a few blocks from North Beach. The Beat scene was centered around City Lights bookstore owned by Lawrence Ferlinghetti. There were five other Beat businesses.  The most important was a small restaurant at approximately 575 Pacific Ave. that had a monk’s bowl of rice and meat and some veggies. Across the street at the Columbus Tower was a street level window with a few seats that had a chrome Italian espresso machine, the first I ever had in the U.S. In the next block North on Columbus was a second-hand bookstore, a bar on what is now Jack Kerouac Alley and City Lights. In the next block of Grant across Broadway was The Saloon where heavy beatnik drinkers hung out.

In 1963 Salli Rasberry arrived with her boyfriend. They went immediately to North Beach where the Beats had created a jazz and comedy scene. Raz, whom I didn’t meet for seven years,  moved to Masonic Boulevard in the Haight-Ashbury. Jazz was the overlap of the two youth cultures. Both smoked pot. The Beats had speed which was sold to students and truckers.  Raz and her bunch, later called hippies, soon got LSD from the gang around Stanford that got it from psych researchers.

The Beats were a little older than Raz and her bunch; most were in their mid to late 20’s.  The Beats wore d ark clothes and had long hair.  Their view of the world was summarized perfectly in Ginsberg’s poem, Howl. Grim, rejectionist and hopeless.

Raz and her crowd were also rejectionist about the stultifying society around us, but they were ecstatic, joyful, optimistic, and full of color and vitality. Their clothes were rainbow-exciting, their music loud and wild. They intended to change everything.  Starting with food, sex, and living arrangements.

North Beach was the primary overlap of Beats and hippies.  On a personal basis they met at a house off Kings Mountain on the road over the top, from Palo Alto to Pescadero.  It was a fairly large primitive house just a mile west of SkyLonda coffee shop. That was where Hippies, the Rainbow Bus, Kesey, the Beats, and the outlaw gang of Hell's Angels bikers hung out.  I went there twice with Portola Institute (the core of the Whole Earth Catalog) friends to hang out.

I was well known in the hippie crowd as the banker at Bank of America from 1964 to 1966 and later as VP of the Bank of California who invited all the hippie movers and shakers to a Japanese lunch on Fridays from 1967 to 1970. When the first Trips festival was organized by the Beats and Stewart Brand in January 1966 at the Longshoreman's Hall, Stewart asked me to handle the ticket sales and money collection at the door.

I collected the money for an hour, but the whole scene was too exciting and too many of my friends were there, so I asked the one person I trusted, Bill Graham, to take over the door for me.

I finally met Rasberry officially in Spring 1971 at the Demise Party of the Whole Earth Catalog. We had met many times but that night we sat on a bale of hay talking from 3 am till sunrise at 7am and became lifelong friends.

This is a good place to point out to the historians of the future that the political Left never was connected to the hippie movement.  Hippies joined all the parades of the anti-Vietnam era for the dancing and music.  I know because I knew the Lefty organizers.  I started the Graduate Student Union at U.C. Berkeley and Mario Savio was my Treasurer in 1963. He became famous in 1964.  

Tom Hayden used my living room in San Francisco to try and organize the East Coast media to cover a hippie be-in in Golden Gate Park.  I was opposed to any official publicity and stopped it.

Abbie Hoffman was a colleague who helped me put on a fundraiser for some forgotten cause but he pulled out when stoned and paranoid. I handled the gate myself and returned the money to anyone who wanted it.

 

Where the Ultra Rich Came From

The ultra-rich, our billionaires, are in for a great deal of antagonism.  However, only a few hundred people know where they came from and no one seems to have written about it.

I see two sources, and a combination of the two.  

A). One came from the genius of Harold Geneen, who became President of International Telephone and Telegraph Company in 1959. He proceeded to create and run the first genuine ‘conglomerate.’  Within a decade he had bought 350 companies in 80 countries.  He had experience as a runner at the NY Stock Exchange and as an accountant.  Geneen created the corporation market. Corporations are now bought and sold like cars and shoes.

After Geneen showed it could be done, corporations became marketable objects.  Geneen managed his acquisition by standardized financial statements and careful top- level supervision.

After Geneen showed it could be done, corporations became market objects just like any other good on the market. Buying and selling corporations and making improvements in the operations became a source of riches for anyone who was good at it. 

Three lines of development extended from Geneen’s invention.

1.  First, corporate takeovers. The best known name in this field is Carl Icahn. Icahn began in the early 1980’s. In a corporate takeover, a shareholder buys enough stock and gets enough votes to take over a company and change top management.  With improved share value the company is sold by the takeover shareholder.
2.  The consulting firm, Bain, founded in 1971, found many other corporations that could be improved but refused to make the profitable changes Bain suggested. Bain then had Mitt Romney and Orit Gadiesh form a company in 1991, Bain Capital, for the purpose of buying corporations and making managerial improvements and then selling the corporations.
3. The third line of development was the creation of special purpose funds to imitate Bain Capital and raise funds in the stock market. The largest three, called private equity, are BlackRock, Apollo, and KKR. With combined assets worth $2 trillion.

As can be seen in the examples above, the stock market has been an important source of capital to realize the net gains in corporate value as the corporations improve operating performance.

B.) The stock market has been a more direct source of gain for the dozen or so entrepreneurs who created giant companies de novo. The unique source of stock market wealth has been the special stock holding status of founders.  

The lawyers in Silicon Valley who created the corporate structure of many of the extraordinarily successful high-tech companies, made sure the founders and the early investors got an extraordinary proportion of the wealth generated by the stock in these companies.  This modality is the source of many of the extraordinary fortunes of the top founding entrepreneurs.

The Democrat Party is Gone

The Democrat Party was gone, officially, in 2020 when it could not field a single viable candidate.  

Of course people still vote the way their parents did.  It can go on for a few years as it did with the Whigs.

There were three Democrat Party pseudo candidates: Kamala Harris, Joe Biden and Bernie Sanders.  Harris got less than 5% in national polls.  Five percent is the minimum that can be measured with survey research.  Biden had run for president several times before and the party leaders had kicked him out as a known idiot, exposed plagiarist, and crook. Sanders was not and had never been a Democrat. He said, every day of his life, he was a Socialist.

Faced with this choice the party leaders chose Biden as their candidate and Harris as their VP. They then used the dying party machines in Michigan and Pennsylvania and the political naivete of Trump in Georgia to win for Biden-Harris.

The Democrats, under Biden, then proceeded to finish off the Democrat Party for good. 

The Democrat Party proceeded, for the first time in American history, to bring half a dozen legal cases against the opposing party with a real and popular candidate. 

The Democrats elected no candidate in the 2024 primaries.

Over the nine years that Trump was on the political scene, the national media changed.  From 75% of the major media trusted by Democrat Party voters to less than 55%. From 35% trusted by Republicans to 15%.  A whole new media and audience grew up among voters in America.

The many outrages against Trump and the Republicans were only necessary because the Democrats had nothing else to offer, no viable issues or candidates. 

I won’t list the dozen outrages initiated by the Democrat Party because a Democrat reading the list wouldn't believe that the list represents the first time such an array of nonsense has ever been used in American politics. It happened because the Democrat Party is finished.  Historically finished.

Sometime in the next four years, a new party will replace the Democrats.

Better Economics

I earned a PhD in economics at UC Berkeley but never got the degree because: I lacked the two languages required at the time, the entire department was in love with Fidel Castro while I was on the campaign staff of Richard Nixon and I had my doubts about many parts of the economics teachings.  

I left Berkeley and over the next six months I wrote my doctoral thesis on why economic theory was wrong about ‘capital.’  I wrote a 60 page thesis that ‘capital is really just plain knowledge applied to a specific instance.  I used Robinson Crusoe as the model.  I submitted my paper to the leading journal, the American Economic Review, where it was accepted for publication.  The editor wanted the paper reduced to 40 pages.  Being arrogant, I never did the editing.  My view of ‘capital’ has become the norm in the succeeding 60 years.

Now I’m ready to correct what else is wrong with economics.

First, the core terminology of economics is wrong. Communism, Socialism, and Capitalism are meaningless empty words. The world operates on commerce. There are three forms of commerce: Trade, Industry and Clientry. 

Most of the tribal world is involved in trade.  Each trading unit aims to make a single sale with enough margin in the sale price over the original object purchase price to cover the trader’s operating costs until the next object purchase and sale can occur. Sometimes there is credit involved and sometimes there is a three-way exchange.  The largest companies in the world, such as Mitsubishi and Sumitomo Trading use three-way trades and credit.

Industry is a complex hierarchical structure of workers whose goal is to maximize output and minimize costs. Minimizing costs is usually done by operating at scales that economize the operational expenses. Entire nations and societies can be organized to allow as many businesses as possible to operate at efficient scales.  Transportation, information, and communication can be optimized for an industrial society.

Lastly, there is clientry.  An interstitial form of commerce where businesses are organized to satisfy a small number of customers with highly personalized services for long periods of time.  These include lawyers, designers, dentists, and banks.

Capital, as I explained in my 1964 paper on the subject, is highly specific knowledge often embedded in some material form.  Small boats coming into the San Francisco Bay have fathometers to measure the water depth along with maps and tide tables.  All of those are capital that has replaced strings and sounding.  But capital still remains in the form of pilot boats and human bay pilots for large ships where navigation still requires complex and changing human knowledge.

Since John D. Rockefeller created a business in the 1880’s turning crude oil into gasoline, and gasoline and its derivatives have been the prime medium that underlies modern commerce.  Since OPEC and the oil producing members throttled the oil production of its members in 1973 the price of oil is demonstrably the foundation of inflation.  Standard economic teaching associates U.S. excess of government spending over tax revenue as the source of inflation.  This may be true in some cases as post WWI in Germany and in many South American banana republics, and in the 1800's due to gold discoveries but oil price is the modern source of inflation.

Interest rates may be the long term cost of capital in individual investment cases but the interest rate set by national banks can’t be.  Many countries in the 1990s and 2000s have had zero or minus national interest rates and Japan had a decade-long deflation. Neither resulted in infinite or massive investment.  Interest rate, for investment purposes, seems to be set by banks and investors in an international market place.

There is no capitalism, there is only commerce.

Capital is knowledge in some physical form.

Oil is the basis of modern society and the rise in the price of oil is inflation.

National interest rate is not the time value of long term investments.

Biden Almost Killed Me

In the Fall of 1991, I was riding in a taxi down K Street in Washington, D.C. on a Saturday when the Senate hearings on Judge Thomas were underway.  I was going to a board meeting of a group I was associated with for seven years. A global third world funding project called Appropriate Technology International.

The driver was an Arab speaker with the radio tuned to the Senate hearings.  Anita Hill was testifying about the day she was with Thomas who had a can of Coke in his hand and he joked that there was a pubic hair on the can. The driver asked me what “pubic” was? I said it was hair from her pussy. He drove the cab into the center divide and just missed killing us on a tree before pulling back into the right lane.

How was Joe Biden responsible for this?  He was on the Senate committee and had met the previous weekend with Thomas to tell him the whole hearing would be a “breeze.”  Biden knew all along that Hill was a sneak witness against Thomas.

Japanese Think Tank

I’ve worked for several think tanks around the world.  American, French, Dutch, and Swedish but the most unique and interesting was the one in Japan where I was a partner.  It was called Dynax and there were only two of us principals.  

For the first few years, in the early 1990’s, we had a translator since neither Takakawa san nor I spoke the other’s language well. After three years we found we understood each other, he speaking English poorly and me speaking Japanese equally poorly, but slowly we understood each other, perfectly.

The three most interesting jobs we worked on were for a giant department store chain and a coalition of three giant companies including the Sumitomo Group.

The chain wanted research on the tastes of 14-16 year-old girls.  We started with in person research at youth concerts but quickly gave that up.  What we settled on was ‘Aunt Suki’ a sign-up program for high school girls in the Tokyo area.  A subject sheet was mailed to the girls each week for them to call in on Monday and Wednesday to share their opinions with Aunt Suki on some specific subject, such as lipstick, bras, shoes or hairdos. Then on Tuesday and Thursday they would call in to get a summary of Aunt Suki’s opinions on the previous day’s calls.  The client got a monthly summary.

The second research, in the mid-1990s, predicted what was going to happen when computers and communication got so good that most workers could do most of their work at home. We did a few test runs in Yokohama with a few giant company departments.  We had our own version of Zoom.  We saw that all the low-level workers were fairly comfortable for three to four days at home.  Most mid-level workers worked a few days at home, a few days in a satellite office and one day at headquarters.  Management needed to be at the head office most of the time.

The third project was the most interesting, for the same group of giant company clients. 

There was concern among management that many experts and outsiders were used throughout their companies but management felt their expertise was not fully utilized.

We developed a methodology for deeper understanding of classroom talks. 

Each student had a handful of 3x5 cards.  As they listened to the talk the students made simple notes.  At the end, with the guest speaker gone, the class walked to the board at the front and put their notes on a large branching tree of the speaker's subject. They were summarizing the talk with their notes, showing the history of what they heard on the board.

Greater attention, accuracy and understanding were the outcome.  Over months and with different groups practicing the technique, the process got better and better.

Jewish Community Organizations Fail

San Francisco State University is in a financial crisis.  The number of students applying and entering has dropped significantly in this century but the school has been unable to demand more money from the State or to cut expenses sufficiently.

I blame the Jews. I’m being facetious.  Not Jews but the Jewish community organizations.

In the mid 1990s I got many reports that anti-Jewish activity on the SFSU campus was rampant.  I went out to take a look. Jew hate was everywhere. Murals, posters and notice boards.  I was told by my friends on the faculty that all Jews on the faculty were leaving because the general environment was so anti-Jew.

One of my trips out to the campus was to help a faculty member who was trying to get Chiune Sugihara, a Japanese diplomat, recognized for his efforts to save Jews in WWII by getting them to Japan. No interest on this campus.

I reported this campus Jew hate widely and broadly to the Jewish community organizations and the Jewish press.  

None paid attention because the major Jewish organizations were left-wing. The anti-Jew sentiment was all coming from black and Arab lefty organizations.

Now Jew hate has exploded on college campuses and once again the lefty Jewish Community organizations are dragging their collective feet because the Jew hate comes from the Left.San Francisco State University has had a particularly precipitous decline in enrollment for two decades.  Jews, as individuals, don’t go there as students or as faculty.

I am ashamed to admit it but my worthless BA degree is from a year spent at SFSU 60+ years ago.

Power vs God, the Wokie View

About fifty years ago I did a small survey and found that there were four categories of primary universal action as viewed by Americans. About 50% of adults viewed some (1) sort of god as the prime mover, 20% saw (2) power as the prime mover, 25% saw (3) money as the prime mover and 5% had other categories.  

Under God I found many people who viewed science as the prime mover, what historically was called the clockmaker version of prime mover or math as the scientific universal structure.

Now 50 years later the ratio has gone to 45% some sort of god, while 25% now see power as the prime mover.  Many of these people are ‘wokies’ and have some ‘colonialism’ as the model of primary universal action. The philosophic model for this group, even if they don’t know it, is Michel Foucault. Marxism is the meta model of money as prime mover.

These categories seem to remain fairly stable over long periods of time. The (4) ‘other’ category is not growing.

In the other category are many Asian and traditional versions of multiple prime movers. The Greek and Roman pantheon are multiple movers. So is the Indian universe. The Chinese Dao and Confucious are multiple prime movers as are the Japanese Buddhism and Shinto.  

In the modern world anthropology sees different cultures as having many different societal multiple prime movers.

I personally see humans as driven by a wide variety of ideas, metaphors, stories and images as prime movers of our species.

I don’t see much change in the future.  These categories appear stable over long periods of time.  The ‘wokies’ will be with us indefinitely. The wokies who see colonization as a prime force may add the Chinese in Tibet and Xinjiang (Uyghurs); and Moslems in much of Africa to their current hate list (Columbus, America and Israel.)

Spontaneous Commerce

When Airbnb was first started in San Francisco, I had three friends who immediately got into the business.

Does that mean anything to you?

One was a game developer, no surprise.  He bought three condos and rented them out. 

The second was a salaryman who bought five houses in New Orleans with the intention of moving there to rent them out. 

The third was a psychotherapist who rented out her city apartment for $5,000 a month and stayed at her country farmhouse.

The interesting thing about this event was that two of these emerging entrepreneurs were not the kind of person one expects to start a business.  It says to me that America is a land of millions of potential entrepreneurs who will start a business if they are given the slightest genuine opportunity. This is truly America. Commerce is deeply American.

The first and third were almost immediately put out of business by the rules San Francisco put in place to make Airbnb unworkable. The first friend soon moved to Los Angeles.  The second was soon put out of business by the city government of New Orleans that made Airbnb unworkable.

The CEO of Airbnb is Brian Chesky.  He and his founding partner were both graduates of the Rhode Island School of Design. Neither one had any idea of how politics works. Both immediately conceded to the laws and regulations that the San Francisco government put in place.  Terrible laws that destroyed two-thirds of all the operating BnB rentals in operation.  The anti-business regulations were copied everywhere Airbnb went. The same horrible regulations nearly destroyed similar vacation rental businesses that had been operating for decades, worldwide.

Three lessons from this: 

1. Americans are deeply disposed to starting businesses; no matter who they are. Its American.
2. Government with trivial and irrelevant regulations is the greatest destroyer of business on the planet.

Travis Kalanick, the founder and CEO of Uber, didn’t start his business until he got a Statewide license to run a limousine business which served as a short-term protection against the politically connected and ferocious taxi cab bastards.

    3. Political skills are vital to innovation in business.  Otherwise governments will destroy you.