Pro Commerce

Diversity and meritocracy

A strong argument for diversity in the workforce, particularly the professional workforce, was made in today's Wall Street Journal in an article about the way Philip Morris has succeeded in reducing lung cancer lawsuits and the amount of damages awarded in lawsuits.

The lead counsel for Philip Morris, a few years back, was about to address a group of 100 of his litigation lawyers when he realized that they were all white males.  I know, the article doesn't mention it, they were from the early 20^th century “upper crust” which Philip Morris originally thought would be politically helpful in local venues.  Boy, was Philip Morris wrong and they got to stew in their bigoted class idiocy with tens of billions in legal penalties.

New lawyers were hired and put in charge of major cases.  Just one of the new lawyers changed the whole direction of lung cancer lawsuits against Philip Morris. First she invented a new series of questions to measure prejudice against cigarette companies and got judges to use the questions to disqualify jurors.  Second she convinced judges to hold court from 8:30am to 1pm so working people could be on juries.  Working people are much less antagonistic to corporations than the unemployed and retired who sit on most juries.

Voila ... diversity and meritocracy, two of the four tent poles of commerce, are victorious in the real world.

GM and Ford

Both GM and Ford, the two remaining auto companies in the U.S have had their bond ratings reduced to “junk” status.  What does that mean and why did it happen?

The junk bond status means that the two main companies that rate bonds do not believe that the bonds issued by GM and Ford are secure investments for pension funds or other conservatively managed portfolios.  The chances that all the remaining coupons for the outstanding bonds of these two companies will be paid and the full face value of the bonds will remain for the life of the bond is below 100% ... significantly below 100%.

Both of these auto companies are selling over $100 billion worth of vehicles and parts, but their liabilities exceed their assets.  In the normal course of business, both companies would be bought by experts at dismantling companies and the salable parts of the business would be sold off, some money would be paid out to the dismantling experts and the rest of the company would be thrown into bankruptcy to resolve the net debt issues.  A bankruptcy court would pay off some of the creditors, revise union contracts and salvage what is left of the core auto business to be sold to Toyota and Honda.

There are political problems with this scenario so the people who rush in to do the salvage work have good reason to be leery.

The preeminent financial problem in both cases are large future debts for pensions and high current union labor contracts. 

The real problem at the root of the current situation is the reason these two companies got into their current straits.  These are two behemoths that are so large and unmanageable that they are incapable of making change.  You can readily note that neither company has ever been able to construct a small car to compete with imported small cars.  Both companies have seen the market for small cars since 1966 and yet they have never been able to build a small car.  Both companies have seen the market for high mileage cars since 1973 and neither has been able to build a high mileage car.  Now that both companies are able to see the market for hybrid gas/electric engines, still, neither is capable of manufacturing such an engine.

The lesson in this is that Americans don't have the managerial skills to cope with a global company this large that faces market competition.  AT&T and Sears faced the same fate and died as have many other behemoth global companies ranging from advertising giants, sewing, steel, mining and consumer product giants.  IBM and GE are exceptions.  Only time will tell about the two global retail giants, WalMart and MacDonald's.

I don't mean to imply that people other than Americans can run giant global corporations.  There is no strong evidence for that proposition.  There are several giant companies in Japan that continue strong but there isn't enough time to evaluate them.  (The four zaibatsu have nothing to commend them.)

Olden days

There are a few set ways of analyzing in the population.  About 60% of all people start with the premise that nearly everything was better in the old days, especially education. Everything follows from that, usually that the world is getting worse. The next 35% of the population is neo-Marxist.  Everything can be explained by people, social classes or corporations acting in their self interest, usually for money.  The final 5% of the population has a variety of ways to analyze the world ranging from what people eat is what matters, everything in the world is connected, to the CIA and the Jews run everything.

The Wall Street Journal yesterday had a review of a book by Steven Johnson Everything Bad is Good for You.  The reviewer tells how Johnson looks at contemporary culture and finds that many TV shows and video games develop useful social and business skills. 

The reviewer, John Leo, is in the majority school of analysis; things used to be better.

I only want to point out two obvious points: young people can operate VCRs, computers, instant messaging, cell phones and they try to teach older folks how to do it.  Second, I spent a month in the summer during high school to learn how to type, because I needed it for college.  Nobody takes classes in how to type these days, everyone learns on their own.

Mapping the party line

Imagine a map of the United States with a distribution showing people who say they “have no religious affiliation."

The map would look very much like a map from 1953 of people who believed that Julius and Ethel Rosenberg were innocent of spying. (Ethel possibly was innocent but was willing to die with her husband.) Most of those people still believed that communism was a reasonable ideology and that the charges against Stalin were exaggerated.  They also believed that charges of Soviet spying were fictitious. (Over 200 people in high ranking government jobs were actually spies, but the evidence was from deciphered codes that couldn't be used in court ... most of the 200 were confronted and pressured to resign.)

My point is that communism (with a small C) was a lefty value system that had several million Americans hewing to a “party line.” The party line replaced theism. Today the heirs to this system of thought still hew to a party line.  I get the party line in every gathering of San Franciscans.  Some people get the party line from Doonesbury, others from friends who read Doonesbury.  The rest just figured out that being opposed to everything George W. Bush proposes is the simple way to follow the party line.

Of course there are exceptions to the “no religious affiliation” such as liberation theology Catholics and a few National Council of Churches Protestants.

Quicken productivity

I'm impressed with the large number of people who can and do use Quicken. Far more Americans in the last two decades have learned about rudimentary bookkeeping and far more can read financial statements than at any time before.

This is a significant increase in America's level of productivity that we should appreciate in a commercial society.

By the way, thanks to Marilyn Vos Savant for pointing out that one word in the first paragraph has three pairs of letters in a row, the only word in English.

A great university

According to Daniel Pipes, in a recent article, our government has an extensive campaign to support moderate Islam around the world to counter the growing influence of radical Islam. 

My son has a first rate idea: create a great Islamic university in downtown Manhattan. Make the Islamic University of New York into the preeminent home of the important Islamic scholars from around the world.  It wouldn't take many years before New York had a positive place in the Muslim view of the world.

New Yorkers unite! Demand a new university in downtown Manhattan!

I vote for gay

I'm reading Ron Chernow's biography of Alexander Hamilton and the issue of Hamilton's homosexual relations comes up.  The same issue has come up regarding Abe Lincoln recently. Both men wrote letters to other men that appear to be love letters.

When did American men stop sleeping together?  I don't know the date.  I know that women visitors to our house in San Francisco and our guests in Tokyo still sleep together regardless of their age.  Men don't, almost regardless of their age. It is current social custom that lets women sleep together but not men.

Men in the past have nearly always slept together, there were few exceptions.

I know why we have the present male/female sleeping together distinction.  Because men get erections all the time and from a very early age, men masturbate and men ejaculate in their sleep.

I'm a 1 or a 2 on the Kinsey 7 point scale (zero: pure hetero, seven: pure homo.) Speaking for all men, I can say that if I slept with men from age nine to age sixteen, other than my brothers, I would definitely have had sex with men.

So I vote for gay as being the norm for men before social custom made men sleep separately.  I assume that nearly all men in previous centuries had plenty of gay sexual relations and enjoyed it, even though it was illegal (... consequently dangerous) and taboo.

Hot off the presses

The London Daily Telegraph published a story by Robert Mathews that says leading climate researchers who have dissenting evidence on global warming are being rejected by Science and Nature, the same magazines for which the researchers do peer reviewing.  One unpublished study found that in the top 1,000 articles on climate change, only ten had an author firmly state a connection to human activity.

I cancelled my subscription to Science in 1992 because it was so politically biased in the fields that I knew well  that I couldn't stomach it anymore.

Two poor arguments

There were two poor arguments that came up last week.  One was in the S.F. Chronicle by Richard N. Zare who argued that science wasn't getting enough respect in our society.  He argued that science has brought us countless medical and technical miracles as the reason we should accord a high status to science and he argued that science was not incompatible with religion. 

Sorry Dr. Zare, but astrology, religion, native medicine and alchemy have also provided useful tools and produced miracles.  What science provides is falsifiable theories that improve with time and with continued empirical research.  We appreciate science because it appeals to our Reason.  That doesn't make it incompatible with religion, just completely different.

The second argument was made on our public radio station, KQED, by the head of the Interdisciplinary department at San Francisco State University (one of the mediocre high school-level institutions in San Francisco). The Interdisciplinary department is being radically cut back during these times of State budget crunch.  This gentleman argued that the reason we need to have an interdisciplinary department is because it produces comprehensive thinkers and renaissance citizens. 

Sorry again.  The reason that interdisciplinary departments have proliferated at colleges and universities throughout the world is that discipline is not a stable concept.  In the 19th century higher education included the disciplines of phrenology, morality, metaphysics, belles & letters and poetics. Those disciplines came and went.

Entire disciplines have become outmoded in the 20^th century.  Cultural anthropology became questionable with the work of Clifford Geertz who encouraged researchers to stop counting and instead to write “thick descriptions.”  Sociology is in disfavor because “class” is no longer a useful tool. Science has trouble distinguishing biology, chemistry and physics.  My daughter has a PhD in biophysical-chemistry.

If you want comprehensive and renaissance thinkers you should follow the University of Chicago Great Books model. (My alma mater.) The University of Chicago has probably had more impact on contemporary America than any other university ... followed closely by Stanford.

Americans and politics

Can we say anything about American attitudes about politics except to say that any left-right dichotomy is wrong?

Yes, we can make some strong and interesting statements about Americans' views on politics and about government, of which politics is a necessary subset.

Americans are proud of our country, our life and are satisfied with our government.  Most people take as their personal political motto a phrase embedded in the Declaration of Independence: “We hold these truths to be self evident ... all men are... endowed .. with inalienable rights... among these.. the pursuit of happiness.”

Most people only vote when they feel the government is incompetent and needs a change, as in the case of California and reform minded Governor Schwarzenegger. The rest of the time they prefer to vote for the moderate candidate.

Citizens will come out to vote against a candidate if a candidate holds odious positions: ex. McGovern for president. They will also vote strongly for a candidate if the candidate represents a desired change in government direction: ex. Reagan for president. Generally Americans don't vote, or when questioned about their voting patterns they disavow any connection to “conservative” or “liberal.”

Before 1982 many Americans were uncomfortable with cash-money-corruption in the political process at all levels of government.  The creation of transparent PACs, political action committees, changed that perception.  Now, nearly all Americans consider our government not to be corrupt.  The change was  abrupt, which goes to the next point.

Americans are solution oriented.  When problems arise in our lives and the solution relates to government, Americans want practical solutions and we want the solutions to be sophisticated,  tailored to the needs of the constituency and outside the government if possible.

Practical solutions: After being successfully eliminated in Wisconsin, welfare-without-work was ended nationally in 1996. Trial first, then extension for successful programs.  Nearly every state and local government agency implements improvements which they learn from the successes of other comparable government agencies.

Tailored solutions: Driver's licenses come with a wide variety of restrictions related to age, driving experience and skill.

Non-government solutions where possible: School systems are moving to non-government managed schools to keep up with the student population that migrated out of public schools decades ago and continues to migrate.

Summary: The vast majority of Americans are pursuing happiness in their lives content with the modern commercial society and glad to be self reliant.  Some pay attention to government issues when elections roll around, but remain moderate in their involvement and their electoral choices.  A small part of the population follows the politics of government more intently than the rest, but are only influential in making changes when their values coincide with those of the vast majority.

(Credit for this blog goes to my friend Alex and several survey research studies.)