Pro Commerce

Unified hegemon

Byline: Tokyo

From the people I’ve talked to here, who watched the Democratic Convention, there seems to be a consensus: America is one unified country --- patriotic, militant and determined.

A Japanese friend asked me how Americans feel about international hostility toward America. I suggested that “The Japanese should understand if I call the hostility America bashing.” When Japan was the hot growth country in the world in the 1980s the American and European media were constantly attacking Japan for some form of protectionism. The Japanese remember those thirteen years of attack, well. Japan bashing only went away when Japan entered a long recession.

My comment seems to help my Japanese friends understand that America bashing isn’t going away. We Americans, somehow know, that the leader is always going to be attacked by the underlings. There is no choice; America can’t be a smaller, weaker or poorer country.”

The word hegemon originally meant leader in Greek. I suspect the meaning will return in the coming decade.

Poisson, Flags

Byline: Tokyo

Last year in Tokyo I was surprised at the number of American flags I was seeing on clothing and accessories. So I counted the number I saw. In ten days I counted 14 clearly identifiable unambiguous flags including several on children’s clothing.

To me, that was an astounding number and showed overflowing popular Japanese support for America just after the American success in defeating Saddam Hussein’s Iraqi army. This was true because the Japanese would never expose children to any form of potential shame or ridicule.

This year I again counted American flags on clothing (I never count brand name flags, like Ralph Loren) and accessories. In ten days I counted two.

I’m a statistician so what do these two numbers tell me?

Let me suggest the statistics first. My sample size in ten days is “several tens of thousands of people.” I counted 1,500 people passing in front of me one hour while drinking coffee in a narrow alley near a street corner. So a number like several tens of thousands of people seen in ten days is reasonable. The distribution is therefore a Poisson named after Simeon-Denise Poisson (1781-1840).

It appears that the base number of spontaneous American flag anyone would see in ten days in Tokyo is 0,1,2. That means that the 14 that I saw last year was, just what I thought it was, an astounding outpouring of support for the American armed forces that defeated Saddam Hussein’s Iraqi Army.

How much the Japanese knew about the victory I don’t know. My favorite, and the greatest military historian alive, John Keegan, has called the U.S. military victory in Iraq one of the two greatest military successes in history.

The victory was a special tribute the most important architect behind it, Donald Rumsfeld.

If there were a God, that God would punish all the public officials who called for Rummy to step down this year.

Cute quirk. I used the term "astounding" to refer to an event that had a near zero likelihood of occuring by chance. Near zero is one divided by an astoundingly large number. My hero Charles Sanders Peirce used one divided by an astoundingly large number to describe the chances that the signature on a will of a celebrity heiress was real not a forgery.

Peirce refered to the number 10 to 127 power as more than the number of grains of sand. It turns out that the number is greater than the number of atoms in the universe.

Its time for Peirce-like forensic statistics to be used on the CSI programs. Teach statistics as well as biology.

Pragmatism and Charles Sanders Peirce

Byline: Tokyo

I’ve commented earlier on Louis Menand’s Metaphysical Club. He’s a great writer and the book is a brilliant structure for examining the major American ideas of the late 1800s.

Menand does a superb job on Pragmatism. He gives its various perspectives and does the best job I know of in connecting the ideas of Charles Sanders Peirce, William James and John Dewey.

Menand did one wonderful thing for me and failed in two others.

I have long been a devoted of Peirce, having read his work when I was 16 years old. To me, Peirce is one of the few great American minds. I have always been baffled by the rejection of Peirce, the person, by his entire generation and the academic world of his day. Menand explains it.

Peirce’s problem was that he loved woman, was brilliant enough to be arrogant and was careless with money. Since he was living with his glamorous second wife before divorcing his first wife, he was fired from Johns Hopkins. Since he squandered money and kept poor records, traveling on business, he was fired from his government job. Since he was arrogant, the three way combination made him unsuitable for academic work. At the time there was no other venue for intellectuals.

(His first wife had strong feminist opinions: housewives should be paid salaries by their husbands and adultery should be punished by the death penalty.)

Where Menand failed is to appreciate that Peirce’s pragmatism is THE pragmatism of America. American pragmatism is not the watered down versions of James or Dewey. In Peirce’s pragmatism, all ideas and forms are constructs of our social context. Ideas and forms survive, historically, because of their viability and functionality. What was unique to Peirce was the notion that ideas have an ultimate truth. That truth emerges in the future as the way ideas are used and the human condition, converge. This latter point is only conjecture, untestable, but it reflects a deeper understanding of the whole concept of pragmatism.

Menand is a revisionist in looking at the anti-ideology of the three thinkers. That is current 21st century language projected backwards. Pragmatism is inherently anti-ideology, but it took Hitler, Stalin and a few others to convince most of us of the horrors of ideology. It took fifty years of good anti-left thinkers to come to that understanding.

I have little affection for John Dewey (prominent Lefty pacificist by WWII) but his understanding of democracy and dialogue are very important. Menand does an inadequate job on that subject.

Must read

Byline: Tokyo

I can’t praise too highly an article by Bruce Bawer in the spring Hudson Review. It is very long and rather brilliant on anti-Americanism. He doesn’t touch on any of my views about anti-Commercialism and latent anti-Semitism but he does a masterful and comprehensive job.

Here is a brief description of Bawer’s position: “Living in Europe, I gradually came to appreciate American virtues I’d always taken for granted, or even disdained—among them a lack of self-seriousness, a grasp of irony and self-deprecating humor, a friendly informality with strangers, an unashamed curiosity, an openness to new experience, an innate optimism, a willingness to think for oneself and speak one’s mind and question the accepted way of doing things. (One reason why Europeans view Americans as ignorant is that when we don’t know something, we’re more likely to admit it freely and ask questions.) While Americans, I saw, cherished liberty, Europeans tended to take it for granted or dismiss it as a naive or cynical, and somehow vaguely embarrassing, American fiction. I found myself toting up words that begin with i: individuality, imagination, initiative, inventiveness, independence of mind. Americans, it seemed to me, were more likely to think for themselves and trust their own judgments, and less easily cowed by authorities or bossed around by “experts”; they believed in their own ability to make things better. No wonder so many smart, ambitious young Europeans look for inspiration to the United States, which has a dynamism their own countries lack, and which communicates the idea that life can be an adventure and that there’s important, exciting work to be done. Reagan-style “morning in America” clichés may make some of us wince, but they reflect something genuine and valuable in the American air. Europeans may or may not have more of a “sense of history” than Americans do (in fact, in a recent study comparing students’ historical knowledge, the results were pretty much a draw), but America has something else that matters—a belief in the future.”

Professor, Slob and Bureaucrat

Byline: Tokyo

One of my favorite cheap Tokyo dishes has been the chipped beef on rice bowl. Yoshinoya has stopped serving it. Now they have substituted pork or chicken for beef and the other beef bowl restaurants in Tokyo have followed suit. Why?

This is because of the professor, the slob and the bureaucrat. The professor is Stanley Prusiner who demonstrated the existence of prions in the early 1980s. Prions are pieces of protein, folded in a way that allows them to be duplicated and yet makes them lethal because they fill in spaces and block processes that require functional proteins. Prusiner showed that his prions were the proximate cause of Kuru, a brain wasting disease transmitted by eating human brain, and Jacob-Creutzfeld, another brain-wasting disease of older people.

About the same time a butcher in a small town in England (his name and the name of his town are unknown to me) was doing his butchering in a traditional, but non-standard way. He was chopping cow brains and spinal nerves on the same chopping block that he used for all his beef. Unknown to the butcher, the cows he was butchering had been fed sheep brains that were infected with a brain-wasting disease. The prevailing scientific wisdom was that diseases like that don’t cross species lines.

In the early 1990s, 23 young men died from Jacob-Creutzfeld disease. Young people were not common candidates for this disease and 23 deaths was unheard of. When all 23 came from the same town and the same neighborhood, the butcher’s operation was singled out.

Since Prusiner had already discovered prions and prions had been connected to brain-wasting disease in cattle, the world quickly learned about Mad Cow Disease.

When the Japanese found madcow in Japanese cattle, a few years ago, they began a 100% inspection system. When madcow was found in the U.S., we immediately did nothing. After six months, an unknown bureaucrat in the U.S. Department of Agriculture decided to test a sample of 1 per thousand at-risk cattle. The bureaucrat also made it illegal for any rancher to test his/her own cattle and sell the beef on the basis of 100% testing. The logic was that 100% testing by a few ranchers would imply that all other beef was too risky.

The consequence is that Japan can’t import American beef. The owner of Yoshinoya made the public claim that his chipped beef bowl only tasted right with American beef. Other beef bowl restaurants of lesser culinary stature were forced to follow suit.

So, I don’t get chipped beef over rice this year due to the professor, the sloppy butcher, the USDA bureaucrat and, of course, the gourmet CEO of Yoshinoya.

Media Medea

Byline: Tokyo

Is there an interaction between media and public behavior? The answer is “sure.”

We have a great new example here in Tokyo. Nearly everyone seems to have a 3G camera phone. 3G is the high bandwidth communications standard; it allows phones to send data in megabytes per second. The 3G camera sends streaming video. This means that every crowd is loaded with portable mini-video cams broadcasting to the world.

I’ve seen two dramatic street scenes. One was on a crowded narrow street in Shimokitazawa, a college area, where a loud, rowdy, raucous gang of about twelve people were marching with wild costumes and a noisy chaotic band of the type used to promote circuses a century ago. The group was promoting the opening of a theatrical performance. The parade was broadcast to thousands, maybe tens of thousands, via all the camera phones held by gawkers along the route. Great contemporary publicity and promotion.

I saw the same thing in Shinjuku. Two guys with red hair and clown clothes on unicycles riding through the crowd promoting something in Japanese I couldn’t read. They were covered by the hundred camera eyes in the crowd.

The new medium: public video cameras on phones broadcasting via websites. The new medium has created a new public promotional behavior. Street theatre is back, in Tokyo, in a big way.

Sacred Place I (found)

Byline: Tokyo

I’ve changed my mind. (Changed from an earlier blog.) There are sacred places of commerce in Tokyo. The first of several places is in the photo on the right.

The photo is shot from a pedestrian overpass in Shinjuku. The main buildings in the center are the Takashimaya Department Store which is connected by a pedestrian bridge at the seventh floor to the Kinokuniya Bookstore. In the background is the faux Empire State Building occupied by NTT. This is unrelated to the sacred buildings.

Japan is ahead of the rest of the world in many aspects of commerce. Commerce moves in only one direction: toward more for the consumer. Japan has more types of market items than any society on the planet. Inside the Takashimaya Department Store is Tokyu Hands. Tokyu Hands is eight floors with more items of hobbies, hardware and miscellany than any human who hasn’t been there can imagine. Takashimaya itself is fourteen floors of more market items than can be found in any shopping mall in America. There are two floors of restaurants on the top with more than a dozen different cuisines. There are two floors of food in the basement.

Kinokuniya is seven floors of books and magazines. In the book business we don’t talk about market items, we talk about titles. Kinokuniya has more titles than any commercial location on the planet.

These buildings are a sacred space in the world of commerce. Someday, when more people appreciate commerce, the importance of this location will be appropriately recognized.

The photo has a very commercial quality to it. There is construction going on in the foreground. Commerce never stops changing -- construction is the lifeblood of commerce.

Deceptive product

Byline: Tokyo

It might be possible to complain about this product and it might be possible to laugh. The buttocks bra with a registered trademark symbol.

I picked up a brochure about this product today in a department store. The brochure doesn't have a URL. The image on the left is from a patent filed in the U.S. in 2002 and the image on the right is a product for sale to men in Toronto.

The Japanese product for women comes in seven sizes from hips of 82 to 102cm. Priced at $40.

Sacred site

Byline: Tokyo
Genghis Khan made sure his body was hidden so it couldn’t be found and desecrated. He probably left orders to kill the team that buried him. George Pullman had ten feet of concrete poured over his casket for the same reason. Many a potential martyr has found his or her ashes scattered by their executors so future pilgrims could not find a place to worship the deceased.

I would like to worship at the sacred alter of Commerce. The two founding centers of modern commerce were Amsterdam and Scotland. Amsterdam invented bonds and the way to raise taxes to support bonds. Scotland, in both Glasgow and Edinburgh, created the industrial mind that generated future industrial leaders to cover the planet.

The capitals of modern commerce would certainly have to be the United States and Japan. There is no specific place in the U.S. to treat as a sacred commercial center. Manhattan may have once qualified for that honor, but today the entire society is a sacred center of modern commerce. (I don’t even make an exception for Berkeley or Santa Monica -- these cities make significant contributions to modern commerce in spite of a few local anti-commercial radicals.)

Japan is another story. Tokyo is much larger than New York City and much more important to the total management of global Japanese commerce. Therefore I consider the city of Tokyo a major sacred center of modern commerce.

Where to go in Tokyo to worship the goddess of modern commerce? Tokyo is large, but scattered. The center is distributed over an area the size of Manhattan, referred to locally as the Yamanote Circle. The Yamanote is a train line that circles the dense part of downtown in about an hour. (There are trains every 3-5 minutes going both directions around the circle.).

I’ve considered making the Tokyo international airport the sacred center. I’ve considered the major telecom satellite dishes as a potential sacred center; similarly one could choose the place where undersea fiber optic lines converge in Tokyo. I could choose the tallest building or tower that has a 360 degree view of the city. I could choose a station on the Yamanote line.

I have come to realize the sacred goddess of commerce can not be worshipped in one geographic spot, nor can she be desecreated.

In the end, I bow to the four points of the compass every morning in front of our Tokyo home and appreciate the inherent decentralized nature of my beloved goddess.

Confessions 2

Byline: Tokyo

(Confession 1 is immediately below this.) I investigated investments while I was in Israel and haven’t reported my findings yet. Part of withholding the investment information was because I wanted to report something positive and it took over a month to fully check it out.

The negative part was investment in an ordinary apartment. Real estate looked good initially. I looked at half a dozen apartments. A lovely two bedroom apartment on the third floor of a concrete building, one block from the beach, with elevator, parking and a nice, tree-lined street was $250,000. A great deal by American standards. The Israeli recession is over and land prices are slowly beginning to rise.

The trouble is that you get title to the apartment on a stand-alone basis. It's not a condominium, a tenants-in-common, nor a cooperative. Each apartment in the building is owned separately, with no provision for the common building. The management is handled by a volunteer committee in every apartment building. I asked around and found people saying things like “Don’t worry, the common expenses are around $70 a month including utilities and taxes.” That response made me worry even more, because maintenance should be five times $70. Everywhere I looked, apartment buildings were in disrepair -- almost certainly because of this unfortunate condition of real estate common ownership.

Additionally, I found that there was no title insurance. Most of Israel was bought from Ottoman Turks and local Arabs over the past 150 years. I know the history of land claims in California where the original owners bought Mexican rancheros. Rights to court cases were sold for the next fifty years. Israel needs title insurance.

The good investment I found is the Tel Aviv stock exchange.

What I wanted was a mutual fund of Israeli companies traded internationally as well as on the Tel Aviv stock exchange. ( There are hundreds of internationally traded Israeli stocks.) Even better than a mutual fund would be an exchange-traded index of such stocks. There isn’t one. (There needs to be one. There needs to be such funds made up of international and domestic Indian and Chinese stocks, too. Ethnic funds, I call them. )

Turns out it is possible for an American to buy Tel Aviv stock exchange stock. I wanted an index fund and found two. The market cap of the Tel Aviv exchange is about $100 billion, made up of about 70% in less than five companies. One index fund is a selection of the top 25 stocks and another is the top 100. I also found several good mutual funds. In my interviews with the fund managers I was looking for managers whose prime interest was corporate management. Israelis are great at technology and starting businesses, but less than great at managing growing companies. I found one fund manager whose views matched mine.

In order to buy an Israeli stock, you need to open a bank account. I choose the Bank Hapoalim. The account is in shekels and is visible online. I wiretransferred dollars to the account and it showed up in shekels online. Then I sent a fax and told the bank what shares to buy. The trade was executed by the bank trust department, where the securities are held. My new portfolio is visible to me online.

I expect rapid growth of Israel equities. In the next ten years I would not be surprised at growth rates of the GNP over 6% per annum and equities of more than 8% per annum.

Tel Aviv shopping

Byline: Tokyo

I told a good friend here that there were several items I didn’t report from my Israel trip two months ago. He convinced me to write this first confession.

My partner, who was an Orange County housewife while I was a free-love hippy, had discouraged me from using blatant sex in my blogs. That policy has now changed until I see significant opposition from my readers, including a big drop in readership.

I was asked by a friend from my free-love days to investigate porn in Israel. I went to several porn shops and found nothing unusual. I emailed back a few photos of tattoos where pubic hair used to be, one was humorous (a bird’s nest) and the other was a devil face with his tongue appropriately hanging out.

I walked into another porn shop with two young male staffers and decided to ask them my direct question. “Is there any uniquely Israeli porn?” The guys seemed to relish the question and got into the act, so to speak. One walked over to some boxes of edible bras and opened a red one. Holding it up he said “this one shoots one bullet from each nipple.” The three of us laughed. The other guy went to another box and took it out of the glass case. It was a small rectangular dildo. He said: “You have your girl friend put this in her panties. You can activate it by cell phone when you’re on you’re way to her house.”

Hair and price

Byline: Tokyo

The first observable Tokyo style development is the long hair on women. Below the shoulder is common, maybe one third of the women walking past a coffee shop in our neighborhood had hair below the shoulder. Women of all ages had hair below the shoulder.

There is a new coffee-bakery at our train station (Yoyogi Uehara on the Chiyoda line). It’s called Choco Cro which seems to relate to their iconic product, a chocolate croissant.

What is fascinating about Choco Cro is the marketing of price. No, not cheap, they are just below the mean in price ---- they price every product, including coffee, in a weird number. One roll is 167 yen, next to it is a 183 slice of pizza and a plain cup of coffee is 133 yen
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This is a marketing gimmick unique to Japan where all prices are 150, 155 or 160 with sales tax included. The Japanese round retail price numbers (except in taxis and grocery stores) and they include the sales tax in the final price. There is no tipping anywhere.

Choco Cro is fooling around. It is a cute gimmick in this society where consumers have created an adult pricing market.

I’m not being rude by suggesting that Japanese are adult in their pricing and Americans are childish.

For my few readers who haven’t noticed before: retail prices in the U.S. are based on the presumption that lower income buyers are stupid, gullible children and that slave/servants are still operating in modern America. Observe it yourself.

Auto prices on used cars are $5,999.95 for a used Chevy, but $27,100.00 for a one year old Lexus. Stupid gullible children are presumed to buy Chevies; sophisticated elites are presumed to buy Lexus. These same pricing practices are found in consignment car lots where ordinary people set the sale price of their own vehicle.

Slave/servants never pumped gasoline, so gasoline costs what the pump meter says. Slave/servants never repaired cars, did electrical work or plumbing so there are is no tipping for those jobs. The invoice is the price you pay. Taxi drivers, porters and waiters were formerly slaves and servants in America; they get tips to this day.

I invite you to look around at pricing and tipping as the vestiges of our elitist distain for the “lower classes” (they presumably think $1.99 is cheaper than $1.80) and see that tipping is a remnant of slave/servant labor practices.

That is why Choco Cro can joke around about pricing and we Americans can’t.

Reading in comfort

Byline: Tokyo

I read the beginning of the Metaphysical Club by Louis Menand on the nine hour flight to Tokyo. (Business Class has good reading lights and plenty of room to read.)

This is a book ostensibly about the development of modern ideas in America. Three elements jumped out at me.

First the book deals with the period 1850-1890 when industrial commerce made its most stunning super nova explosion. Only a tiny part of this commercial explosion is dealt with by the brilliant Menand. I hope that will be remedied later in my life, by good writers who have felt some influence from my work.

The influential thinkers that Menand deals with Charles Sanders Peirce, William James and John Dewey all connect ideas to the real world. The real world was rapidly becoming commerce as these men were shaping American thought. The connection can’t be missed.

The book is fun, nevertheless. The biography of O.W. Holmes dwelt on the change in Bostonian attitudes towards slavery from 1850 to 1865. The most impressive points of the recital were the constant efforts of the South to force the North to accept the Southern view. The aggressive demands started with the insistence of the expansion of slavery to the territories, it expanded to the enforcement of runaway slave laws and finally generated the firing on Ft. Sumter.

Northerners were backed into the position of the Emancipation Proclamation against their will.

The comparison I see today, on a modest scale, is the position of the Anti-Iraq-War people. The AIW group is so aggressive in projecting their position with anger, venom, exaggeration and allusions to Armageddon that I suspect they will push the Pro-Regime-Change majority into a more substantial, well defined and rigid position.

Lastly, a lefty friend asked me what I thought about scientists signing public statements attacking the current administration. The Menand book reminded me how often science has been used to support political positions. The most egregious concerned the biological superiority of Caucasian people and the inheritability of intelligence. These sober scientific positions were promoted 150 years ago and still defended by scientists in my lifetime. Scientists simply have no historic credibility in commenting on anything outside their narrow specific research purview. In the fields I know, the statistics of global warming and the morality of human genetic engineering, the general category of “scientist” is an absurdity and the plaintiff advice given by “scientists” is more absurd.

Next byline is Tokyo -- Metaphor

I spend summers in Tokyo. Commerce, modernity, the world’s greatest city and sybaritic comfort – Tokyo is magnificent, exciting, clean, safe and quiet.

The photo on the right is Shibuya corner many years ago. We live within a easy walking distance of Shibuya corner and go there regularly.

My thinking for now is about the right metaphor for the significance of commerce. The problem is to find a metaphor that conveys the size of commerce in the world relative to everything else, the dynamic explosion of commerce over the past 150 years and the engulfing quality of commerce.

There are three metaphors that each partially work -- a great mountain, a great river and the Hawaiian Islands. The mountain works because we Americans and Japanese are on the top with other industrial nations on the side. All other institutions, academia, government, religion are small hillocks around the bottom. But a mountain is not dynamic and engulfing.

A great river has the power and engulfing qualities. A great river puts all other institutions in the picture as small backwater eddies. The explosive quality of commerce only comes in if we think of spring floods and rain storms. Nothing about a river metaphor conveys the newness of commerce.

The Hawaiian Islands are new mountains, with active volcanoes and they rise miles above the sea floor. But the whole image requires too much knowledge of geology.

What is a good metaphor for the role of commerce in the world?
(You can click on any photo for an enlargement)

Mistake in my life

I made a big mistake in my life.

In the early and mid 1980s I had over 50 large corporate clients. Once during that time I gave a talk to a private gathering of the CEOs of the top 50 U.S. corporations. They loved me.

My mistake was not maintaining my social contacts with all these important people in the commercial world. I wrongly believed my interests were elsewhere in the realm of social change.

It is not too late to remedy my error. Social relations with business people are clean, clear and friendly. I can do that and I should have been doing it with my former contacts for the past twenty years.

I failed. Failed to see the elephant in the room. Industrial commerce is the elephant in our homes, in our lives, and I ignored its gargantuan importance.

Do you acknowledge that industrial commerce, in the past 150 years, has become the single overriding institution on the planet?

Restaurant-Bar Conversation

Picture four people at a dinner table on stage. Now add loud speakers with very loud pop music directed at you, the audience. The actors at the dinner table have to shout at each other to be heard.

What is this play about?

This play is about everyday out-on-the-town life in 2004 San Francisco and probably every other large city in America.

My question is: Why do people, today, try to carry on conversation when the background noise forces them to yell?

My answer is a commerce answer. Most of us spend our daily lives in a work environment that promotes diversity and meritocracy by suppressing dramatic personal identity. You can't expect a group of people to work together if they incense each other.

Yelling over loud noise is a way to do three things at once. Gives everyone the chance to receive intense attention (listeners must make a deliberate effort to hear). Gives everyone a chance to ignore statements and opinions they don’t like (“I didn’t hear him say that.”) Most importantly it provides a good cover for trite and superficial conversation.

I repeat. The restaurant/bar environment with loud noise provides an ingenious technical extension of the socially neutral work environment.

New Adjective

The Wall Street Journal brought us a new adjective this morning in its review of robot vacuum cleaners: Paris Hilton.

"Karcher RC 3000 (Price: $1,495) Comment: The Paris Hilton of robot vacs -- it can't clean well, it wanders aimlessly and it's pricey. But it sure is pretty".

The word could also include the meaning of sexy since she was in an unauthorized porn video. Paris Hilton is a wonderful relief in a world of boring melodrama. You can click on the Paris photo.

Bum rap for Heinz

A recent email bemoans the fact that Maria Teresa Thiersten Simoes-Ferreira Heinz Kerry gave $4 million to the Tides Foundation. The email then goes on to list some of the radical left ludicrous projects that Tides gives money to.

It’s a bum rap. I have brought non-profit projects to Tides. Tides is a conduit for non-profit donations. Mrs Kerry got a charitable 501c3 tax deduction for her donation to Tides because Tides Foundation is a 501c3. Mrs Kerry no doubt specified the charity in the Tides portfolio she wanted to fund. We don’t know what that was.

Tides accepts money to pass along to non-profits that don’t yet have 501c3 exemptions or whose exemptions are not three years old, qualifying them for unquestioned IRS contributions.

The real problem here is that Tides is a financially sloppy operation. I pointed out to the president, Drummond Pike, the irresponsible financial policies of Tides and he ignored me. No one has ever told me that they cleaned up their act.

Farewell Malvina’s

Caffe Malvina, Stockton & Union in North Beach, was the coffee shop I went to most weekdays for seventeen years. Malvina’s is where I met my current partner.

Malvina’s was opened by Franco Bruno, Norma (I forget her last name) and a silent partner. Franco had owned a cafe by the same name on Union prior to the Stockton location. He bought out Norma and the third partner about five years after opening. Franco died of lung cancer in the mid 1990s and passed the cafe on to his son Roberto who by then had married Jackie. They had two sons, Ishmael and Amadeus, who were always part of the cafe.

Much as I loved the Bruno family and loved Malvina’s, the business part of me has always kept its mouth shut. The Brunos loved their business, but were not masters of the difficult art of retail food. It was friendliness, a great staff, persistence, a very good lunch and the beauty of the location that kept Malvina’s alive.

The photo on the left is shot through the window of Malvina’s. It was my business card for years. The people at the morning table were my friends. I kicked many of them out a week after September 11th 2001, when emotions were high and I felt they failed to appreciate the horror of the event and sounded like Susan Sontag, blaming America, the victim.

Malvina’s closed this week. Farewell Caffe Malvina, a wonderful source of beauty, camaraderie and fellowship.

Deep Irony

A wonderful woman died last week. Sylvia Powell was the aunt of my former wife Catherine. The obituary summarizes her extraordinary life.

Sylvia and her husband, John, came back from Shanghai, in 1953 where they had been publishing the China Monthly Review since 1947. They were charged with treason. The trial dragged on; they were not found guilty after nearly ten years of legal maneuvers.

Because of the charges and the era, neither Sylvia nor John could get a job so they started remodeling houses in San Francisco for a living. They ultimately remodeled 14 houses. The last was their home, on Church St., that had their own antique store on the first floor.

The irony is that two people who believed in the Mao revolution, survived in their home country as bootstrap capitalists. I don’t think I ever heard either of them comment on this irony in their lives. I don’t think either ever wavered from their teenage political values.

Out of work in San Francisco

Several of my friends have been out of work for a long time. They have software and internet backgrounds. What's going on?

I haven't seen San Francisco hit so hard by business leaving in my lifetime.

I think the reason is that San Francisco is a business and culture generator. When the businesses succeed and grow, the consolidation that comes to the mature industry means the consolidated business moves to a more traditional environment. Consolidated businesses move to places where labor and management are more conservative and established than in San Francisco.

Wells Fargo and Bank of America are good examples. They were founded in San Francisco, gobbled up most of the banks in California and then were consolidated. The consolidated banks moved to Minneapolis and North Carolina respectively.

The firms that are still in the S. F. Bay Area are the ones that started here. Schwab, H-P, Intel and Apple started here in a variety of recent new business boom periods.

Other native firms that aren't long for this local world are Gap and Genentech. Gap will be bought out fairly soon.

Genentech is part of a current ferment of recent biotech firms that are flourishing now but will someday be consolidated and move out.

Biotech is the current growth sector and will probably be one of the few areas of job growth for the near future. Biotech is an example of San Francisco being the generator of new businesses. San Francisco Area has been the center of new biotech for twenty-five years due to the talent, the academic milieu and entrepreneurial imagination of the area.

My software and internet friends saw their jobs spread like seeds around the countryside and some jobs went overseas. They may not fit into the biotech lab.

Is meritocracy moral?

I argue that meritocracy is a non-moral system. The argument appears on an adjacent interactive blog relating to my recent book Commerce.
(click to enlarge photo for a surprise)

Americans work longer

We are getting richer, fast. We started out rich. Americans now work roughly 1,800 hours per year. That number has leaped from 1,500 hours in 1970. We now work the same number of hours as the Japanese do. I will give an explanation for both patterns of long work hours.

Europeans work considerably less than Americans. French and German workers put in 1550 hours per year. Their six-week long vacations contribute to this lower number of annual hours.

The numbers I give here were numbers reported in the Wall Street Journal July 8th on page 2. The data were published by the OECD in Paris. Americans were found to have 71% of working age people at work compared to 65% in Europe. In America, more people are working more hours -- creating a strong economic engine.

My explanation for the increase in hours of work is that America from 1970 to 2000 moved away from a class structure toward a meritocracy. In a meritocracy, people are more likely to do work they are good at, do work they are appreciated for and rewarded for. Under these conditions Americans are more willing to work longer hours, work harder and work better. Work in a meritocracy can be a reward in itself.

The number of hours European work keeps falling because Europe is still a class ridden society.

Japan is another story. Japanese seem to enjoy their corporate work because they still have plenty of long-term employment stability in their job, which does not come from unions. The Japanese work environment gives them clear goals and clear paths to success for accomplishment. Most importantly Japanese workers are rotated to a variety of jobs so workers are constantly learning new jobs and moving around in the organization. Workers are usually parts of a team where they get respect from peers for good work.

If my analysis is correct, America is on a path to steady and rapid economic growth. Our access to immigrants, that few other countries enjoy, adds to our unique economic potential.

Homeland Defense rated

Summary: two pluses and a minus.

The first plus was in yesterday’s S.F. Examiner “Joseph Michel, also known as JoJo Koulibaly, was arrested in Aachen, Germany, for the 1997 murder of Robbie Small of Marin City, who was gunned down Jan. 9, 1997, at a birthday party in Marin City.”

In case you don’t know about police work, two years ago JoJo could have been arrested in Reno for bank robbery and the police would never have connected him to the 1997 homicide. The prompt international cooperation is 100% due to good work at Homeland Defense.

The second plus would have been more obvious if I weren’t so lazy and had posted this blog when I wrote it yesterday. I reported that 200 lbs of explosives had been stolen from a police/CHP/sherriff’s depot on Tuesday. I said that a perfect measure of Homeland Defense would be how quickly the explosives were recovered. They were recovered two days after they were stolen. A definite plus. FBI, ATF and local police obviously cooperated.

The minus comes from a report by John Perry Barlow that he was arrested in January at the San Francisco Airport for a checked bag that had three joints in it. He was held overnight and released after refusing to accept a misdemeanor charge of possession.

I definitely oppose using Homeland Defense in the Drug War. Drugs will always come into the U.S. and putting drug smugglers and drug users into a hostile category with terrorists will make life much easier for terrorists. It is a foolish and shortsighted policy.

Chances are, we will have to decriminalize drugs when we get serious about terrorism. Hopefully it won’t be too late.

Stunning Success

In January of this year, the Greenlining Institute and I negotiated an agreement with Pacific Gas & Electric to create an annual report that shows the entire scope of PG&E's executive compensation. Everything is included on two pages: all current and proposed future executive income.

PG&E signed the agreement for one reason – they were in a hurry to get out of bankruptcy. The biggest thing that could have held up their exit from bankruptcy was for the California Public Utilities Commission to delay its findings on a new $5 billion ten-year package of electricity rate increases. The action that could have delayed the Commission announcing its findings would have been my filing before the CPUC that said PG&E had just paid seventeen executives an unexpected $84 million as bonuses for running a successful business during bankruptcy. I had testified in June 2003 that PG&E and other utilities had hidden executive compensation. PG&E didn’t want the issue revisited, especially since I was right.

The agreement between me, Greenlining and PG&E in January 2004 required PG&E to file a report conducted by an audit firm that was independent of PG&E’s primary auditor. This report is a modified example of it.

The agreement also required PG&E to support having other regulated utilities provide comparable open disclosure of executive compensation.

This is a significant step forward for transparency in executive compensation. I post this blog on the same day that Ken Lay was indicted.

I have never believed there was a simple, reasonable and rational way to set executive compensation. The only solution I see is for the financial public to be as completely aware of the amount being paid as inside board members know. Now we have that for PG&E. Lets get it for every other major public company.

The website I posted the material on has four pages. The first is the independent audit report. The two key paragraphs are: The reason for these pages is “to assist the management of PG&E Corporation (PG&E) and Greenlining Institute (parties) in evaluating the full disclosure of the elements of the accompanying PG&E Corporation's 2003 Executive Compensation” and “The elements of the accompanying 2003 Executive Compensation Supplement are fully disclosed and clearly described; and are consistent with the books and records of PG&E, authorization of PG&E's Nominating, Compensating and Governance Committee, and the documents filed with the Securities Exchange Commission and other sources available on the internet.”

This sentence says two very important things. (1) The two page audit report includes everything the Board of PG&E knows about current and future executive compensation. (2) All sub-documents are available on the internet.

The audit cover letter is followed by exerpts of the two pages listing all thirty executive's compensation. The first page is current and future the second page is current and is published in full in the PG&E annual report. The third page is footnotes.

The documents I have posted show the type of information provided in a full disclosure. While the complete document, with numbers in it, is available by phoning or going to the CPUC, neither PG&E nor the CPUC has decided to put the full documents on the internet. Of course they should.

Hippy Part 1

My friend Alice, who is young, wants me to write about the positive effects that the hippies have had on our society.

I was in a great place to be part of the hippie world. I was business manager of Glide Memorial Church, the emotional, spiritual, charitable and political center of the hippies. I was on the Portola Institute Board and the Point Foundation board, the parents of the Whole Earth Catalog and New Games. I founded the Briarpatch Network, the locus of the hippy business world. I co-wrote The Seven Laws of Money, the hippy money bible. I am also a long time close friend of Salli Razberry the mother of hippy and my co-author on many books.

This hippy blog has four parts. This first part is on responsibility. One part each is on: food, health and presentism. The hippies changed America and much of the world -- for the better, I will argue.

The hippies rejected the world around them as hypocritical. The world drank booze in large quantities pretended to be nice to each other and tried to keep a lid on anything that resembled chaotic fun. Hippy was rebellion. Rebellion with the sole intention of creating a better world for the hippies -- a happy world. The hippy world had no ideology, no rancor and no self-righteousness.

The key to hippiness was hanging out with friends in the present. Unrestrained fun, happiness and pleasure. Everyone was welcome. Leave all baggage behind, we only live in the moment. “What is your astrological sign?” was a tool to make everyone entering hippydom an equal.

Technically speaking, the economic liberation that hippies enjoyed was possible because America is so rich that 20 people can live on the wages of one person working part time. That is still true today but 20 people can’t emotionally live comfortably together any more.

Hippies took total responsibility for themselves as a group. In communal houses and apartments, hippies pooled their money and bought food wholesale -- sometimes directly from farmers. The shopping mechanism was affectionately called a food conspiracy. The hippies promptly set up their own health clinics (the Haight-Ashbury Free clinic is still going) their own used clothing depositories and countless small food, auto repair and room mate referral services. Schools, rural communes and urban communes sprang up at the same time as hundreds of thousands of the leading edge of the baby boomers dropped out of standard life to join hippydom.

The abundant hippy free time was used to hang out, share music, sing songs, smoke pot, drink cheap wine, lie in the park and test every drug that anyone could find.

The group responsibility had the goal of mutual pleasure.

Research I like

The Wall Street Journal reported on Friday (7/2 page C3) that Criterion Research Group in NY examined 3,500 non-financial companies over a 40 year period and found that the companies with the most aggressive accounting for accrued receipts faced four times as many class action (shareholder) lawsuits as the ones who had the least aggressive accounting practices.

What the study is referring to is how you would treat a wholesaler’s accounting for the sale of magazines to newsstands when the wholesaler accepts returns of unsold magazines. Aggressive accrual would mean you show income on say $100,000 of magazines the day they were shipped and show a negative income three months later when $40,000 worth are returned. A non-aggressive accounting might show only $50,000 in income when the magazines are shipped and add $10,000 more when the returns count arrives. Lawsuits happen more often to companies who do the first.

I love the outcome.

However I admit I have never heard of this research outfit, the data are not published, the criteria are not discussed in the article and in general, alternative explanations are not examined.

If this were known to be to be reliable research I would be exuberant. As it stands, the research just confirms my prejudice in favor of corporate accounting transparency.

Bariatric truism

My daughter and I revisited the obesity statistics. The research is totally inadequate. The existing published research continues to offer no information except that every demographic category is increasing in weight and that bariatric cases are dying rapidly and at an earlier age.

I have stated that obesity is a problem of personal control, like credit, because the only people not gaining weight are yuppies (not a demographic category). My daughter added an additional important point. She points out that it is nearly impossible to lose weight so the problem becomes one of not gaining weight. That is a personal control issue. You have to not gain weight.

The recent Dr. Phil tv series had a dozen people who were carefully chosen to lose weight under strict supervision. The project was duplicated at most local stations too. Everyone involved did their exercise and all were under horrific social pressure to eat right. This project was structured to produce guaranteed results. Result:

Two out of twelve lost significant weight. What Dr. Phil had was a colossal failure. Those two who lost weight might not even keep the weight off for a year.

My daughter is right, you can’t put on weight in the first place.

Seeking work

If you are a lawyer putting together a class action case against Sprint, Fandango or Reservation Rewards for consumer fraud, I am your perfect expert witness. If you are googling about Sprint fraud, or Fandango fraud, contact me. I am a member of your class and happy to testify against your corporate evil doer. Reservation Rewards committed consumer fraud with an ad they placed on the Fandango website that forces you to select their absurd product -- but they refunded all my money.

There is nothing interesting about any of these three frauds that my readers should waste their time reading about. It is standard fraud in the $100-$200 range. The only two cautions I would offer is stay away from Sprint and Fandango and check your credit card bills closely. I reconcile my Visa charges against my books and enter an expense code. That is how I found that I had a $9.00 per month automatic recurring charge with Reservation Rewards, a firm I had never heard of.

If you are curious, Reservation Rewards offers discounts that will get you a half price extra cup of coffee at 35,000 restaurants. Reservation Rewards will contact your credit card company so that the credit card company will pay for charges on a lost or stolen card, which the card companies will do if you contacted them directly yourself. Reservation Rewards will also contact an airline about your lost luggage to get a $250 payment, which the airline would give you if you contacted them directly.