Pro Commerce

Proportionality equation

I try not to get riled up in my blog about Israel attacking Gaza because it is not a subject on which I have any credibility at all.  I call myself an Israeli-American, an heir to the group once called Jews.

I do want to raise a moral question, since moral questions are one of my fortes.  Most of the anti-Semites in the world, which are 96% of the leaders of UN member nations, politely demand that the Israeli military defense be 'proportional'. What is proportional?

In my moral crayon box the proportionality equation is something like this: 

1a = 867b

killing one peace-loving-innocent citizen of a peace-loving nation =

killing in retribution 867 enemy soldiers who hide among civilians; the 867 includes any number of close-in civilians who teach their children to live a life of murder in a country dedicated to genocide.

What does your moral equation look like?

Your children won't tell you

If you have a boy in an urban public school chances are he will get beaten up between grades 3 and 9 by black or Latino boys. Most likely several times. And you the parent will never know about it.  The same is true for a girl if the black or Latino minority exceeds 10% of the school.

No kid in his right mind will tell his parent that he got beaten up.  Reason: the clumsy, self righteous parent will go to the school and demand action against the minority kids involved.  At the worst, the school will try to do something and the perpetrators and their friends will have a new and better reason for beating up your kid.

I remember this happening to me more than 60 years ago - Mexican kids.

You may hear about it when your kid is grown up.  If you ask in a genuine listening mode.

That's the way the world works.  Its too easy to forget as you get older.

Tunnels

I spent time in Laos where I got to see the Lao people being trained in bombi removal (by U.S. troops from Ft. Lewis).  Bombi's are the baseball size bomblets that were dropped inside cluster bombs in the late 1960's war in Vietnam.  Just before hitting the ground the cluster bombs opened and about 2/3rds of the bombis exploded, the rest landed and remained dangerous like landmines.

Just as the Israelis have often designed specific weapons for unique problems (like destroying airfields in Egypt during the 1967 war, delivered by very light trainer jets) the brilliant Israeli's have done it again.  Tunnels have become a problem because the Egyptian Arabs won't stop the Gazan Arabs from burrowing out of Gaza into Egypt.

What the Israeli Airforce has done is designed a unique cluster bomb to penetrate the tunnel with GPS based accuracy then wait a half hour to discharge the hundreds of bombis into the surrounding sand and soil.  The bombis are now landmines buried deeply and invisibly under all the land used for tunnel building.

No more tunnels for the Gaza Arab murderers.  They will be killed trying to dig. Killed by the hundreds no matter what technology they try to apply.

Impossible phone responders

It is rare, but not rare enough, to get a person on the other end of a business call who's English pronunciation is impossible to understand.  I always blame it on the employer never on the employee.

Why is it the fault of the employer? 

Because it is really inexpensive to send an employee to a class to learn how to speak national dialect English. TV English. In most areas of the country a one week course costs as little as $600 and the employee comes out speaking clearly in our national dialect, understandable to everyone. 

$600 you miserable cheapskate company that won't train your employees.

Training employees to use our national dialect is cheap because it is easy.  It involves listing the 10 main sentences used in phone conversations and the 500 common words used in specific business conversation.  Repetition with audio playback is all that the employee needs to get the dialect right.

Reached the bottom?

Have we reached the bottom of the financial, housing or commercial downturn?

I believe we have reached the bottom of the financial downturn.  I find it fairly easy to get bank credit.  I think that the Dow Jones at $8,000 is very close to the book value of most of the companies that are listed and going lower will mean that companies start buying back their stock.

There are now many parts of the country where the prices of homes are so low that investors are buying more houses now than they did two years ago.  However this pattern is spotty and the downturn in home prices could continue in many parts of the country.  Near me in San Francisco there has been very little reduction in home prices and may not be any. Spotty bottom is the word.

The overall commercial world has not reached the bottom; not anywhere near it.  I think we'll know more by mid-January.  I'm looking for several segments of the commercial world to stabilize to let me know when the bottom will be reached. In November price searches on the Internet surged and WalMart continues to abide.  Those are the beginnings of data evincing some stability.

Post Christmas shopping

The place I consider ideal for measuring American attitudes and behavior is the great Colorado plateau that has Denver on the southern end and Longmont on the north.  This is a post industrial American representative location. This area has the urban development style of Los Angeles (sprawl without a center) without the Port or industrial factories of LA.

The most important shopping location for the Colorado Plateau is the Flatiron Crossings Mall.

I was there on the day after Christmas, yesterday. 95% of the parking spaces were full and at 1PM the lines in the food service area were impossibly long.

Was there a hint of a recession at this most typical of American retail locations? No!

Bush is like Lincoln

Obama reads Lincoln and wants to be like him. Big shoes to fill.

Bush already is like Lincoln.  Here is a recent comment by President G.W. Bush.

......(we're) "going to have to rely upon the military a lot. There's four basic constituencies for a President during war; one is the American people. And this has been a difficult assignment, to convince the people that what happens in Iraq matters to our own security at home, that what happens in Afghanistan matters to the security, and that -- the first task was to remove the regimes that threatened peace and threatened our security. And the next task is to not replace one strongman with another, but encourage a democracy to grow because we're in an ideological struggle. And it's the ideology of liberty that defeats the ideology of hate every time.

"A second constituency was the enemy. And they got to know we're going to go after them all times, all places -- unrelenting pressure on them. 

 "Third, in the case of Iraq, with the Iraqi people, they wanted to know whether or not America was going to keep its word, because if not, they're going to find a local militia that could keep their families safe.

"And the fourth is the military. And the military must know that the mission is just, the goals are clear, and the President will not be making decisions with their lives based upon an opinion poll.

......"I've been reading a lot about Abraham Lincoln recently. I just finished James McPherson's book, and, once again, he talks about how Lincoln would visit with the enlisted folks as well as the generals, visit with the widows as well as the moms, visit with the wounded. And it's going to be very important for the country as we head down the future to recognize that this all-volunteer forces needs to be sustained by commitment as well as -- by monetary commitment as well as psychological commitment. We got to be with these kids."

Post Christmas reading

James Lewis argues that the Bush Derangement Syndrome is really the classic 'Kill the King, praise the Messiah' story.  I don't agree but it is worth reading.

I don't agree because the Bush Derangement Syndrome so easily slid into the Palin Derangement Syndrome.  I think the syndrome is based on four elements: 1) the rise of a genuine alternative position to the Lefty religious ideology over the past 20 years, 2) The easily recognizable decline of the vast Lefty media-academic tyranny 3) the mounting 20th Century evidence that the Left is wrong, genocidally wrong and 4) Lefties are basically unhappy people looking for a place to vent their anger.

The Diagnostic and Statistical Manual of Mental Disorders IV  currently being revised should have the Bush Derangement Syndrome as a major category...but it won't.  The field of psychology attracts unhappy lost souls..by definition: Lefties.

Fascinating focus (quite long) on the way the 'scientific community' abnegated the Medieval Warming Period.  The earth was much warmer than today in the period from 950 to 1250CE.  Charts included.

I knew this because I read all the known Nordic Sagas. The story is in the Saga of Eric The Red who settled Greenland and was the first discoverer of America to leave a record. Eric's fellow settlers raised rye and barley on vast lands that are today covered by ice.

I suspect that the North Pole was an open ocean at the time and that Eric the Red and the Portuguese fishermen who plied those waters put the idea of the Northwest Passage into the European geographic lexicon. You heard that thesis here, first, by the way.

MINT

There is a fascinating website called MINT that helps you analyze your accounting information online and on your Iphone. It was started in San Francisco and has more than half a million users, including me.

I must admit I love the name. In 1975 Annie Styron (now Leonard) and I started a hippy organization in San Francisco with the acronym MINT which stood for Money Is Not Terrific.

We put out a press release with my phone number and some enticing descriptions of our organization (Annie had been a PR woman with the Guggenheim Museum).  We were in newspapers around the world and I was interviewed for months on the radio.

Our MINT was based on the principles of simple living.  When phoned I listed them: use it up, borrow it, get one from a flea market, or live without it.  Those simple living principles still work in the current downturn.

Don't believe it

The monster economic decline is not real.

Todays retail sales report in the Wall Street Journal (subscribers only) show a November decline of 2.5% and a December decline of 4%.  Considering that this data comes from credit card sales and is a dollar volume, this is a minor blip in the economy.  Minor blip.

The prices in retail stores have been cut by so much (by fear of recession talk) that a growth of sales in number of transactions would show as a decline in revenue.  Nearly all the decline has been in the luxury categories, such as Neiman Marcus, jewelry and electronics. This is part Bernie Madoff, part portfolio horror and partly the complete absence of interesting new gadgets.

Luxury goods should be off with a financial decline of 45% in the stock market from its peak.  I guess all the home construction workers out of work, auto workers worried about their jobs and former Lehman Brothers employees are still taking care of themselves. Or the rest of us are making up for them.  Or the scare is not real.

Religion in America

On this Christmas day it is worth asking why America is blessed with such important theologians. We have had Paul Tillich, Reinhold Niebuhr, Abraham Heschel and Martin Marty in recent years.

I believe in Social Thought, the recognition that worldviews are built on a few tent pole ideas, images and metaphors. America was built on four main populations that left England.  The Puritans and Quakers to seek a new home to practice their extreme Protestant visions of Christianity.  The Roman Catholics to escape the persecution of their religion in England and still remain English.  Lastly, the male victims of primogenitor who only brought the old anti-papist Episcopalian Church with them.

For all the people who came to America, except the last (Virginians), leading a suitable religious life was central to their lives.  Such a description of a nation doesn't describe any other group of humans except for Israel.

It is no surprise to me that important minds in America are still struggling with these religious and spiritual issues, still contributing to the pottage of religious thought and Americans are still debating the role of religion in our national life.

Thank you President elect Obama for inviting Rick Warren to your inauguration.

(Cognoscenti will recognize the image of Martin Buber.)

Are newspapers failing?

I really get annoyed to hear about the failing newspaper industry.

As the Zell company that owns the Chicago Tribune and the LA Times goes into bankruptcy the press gets more absurd and hysterical.

There is a daily newspaper that is growing and thriving: the San Francisco Examiner and the Washington DC Examiner.  Both are owned by Philip Anschutz, both are free dailies, both are tabloid size, both are heavy on local news and both have a growing ad base.

I don't know how profitable either paper is, but as I see the network expand to LA, Boston and Chicago I will know for certain it is profitable.

I also see the Wall Street Journal growing and USA Today remaining strong and healthy.

People in the press, so called journalists, are obviously self centered boobs when they report on the decline of their industry. Blind to the real forces at work, blind to the archaic management of their old city-rooms. Just plain blind.

Iwo Jima photo?

Was the famous photo of the soldiers raising the flag at Iwo Jima really a spontaneous original?

I think many classically successful images, words and phrases are rehashing of well established but forgotten earlier images, words and phrases.

I use Iwo Jima as an example.

Here are two classic American images.  One below left is raising the tree of liberty in Boston and the other, lower right, is raising the pole of liberty in Manhattan.

Both images are from the greatest American historian's (David Hackett Fischer) book Liberty and Freedom.

I don't go for Carl Jung's or any one elses archetypes of the mind but I do know that we are attracted to tent pole structures of our own social heritage.

 

Apparent success

Roughly three years ago I changed the name of this blog from Gods of Commerce to Pro Commerce with the intention of changing the way English speakers view the world.

At the time I Googled the term and found only three or four references to the term the way I was using it.  There were many more references to the term meaning an abbreviation of 'professional' commerce.

Now I'm finding more usage of the term the way I use it, especially under Google Scholar. An example is:

"Exposed to balanced information, people with pro-commerce values tend to see the benefits of nanotechnology as outweighing any risks. However, people with egalitarian or communitarian values who are predisposed to blame commerce and industry for social inequities and environmental harm tend to see nanotechnology risks as outweighing benefits."

That is the way I use the term.  It is a functional replacement for the outmoded terms capitalist or free-market.  Neither of the older terms actually have a meaningful core.  All commerce uses capital regardless of the form of government and there are no free markets without contract enforcement, fraud penalties or public roads...usually supplied by government.

I might be having the effect I intended to have on the world.

PS: I have not taken a stand on nanotechnology.

Blame the gay political community

I've gotten a number of emails from political candidates' exploratory committees.  Since the gay community has started its shameful war against donors to California Prop. 8, I no longer respond to political email and will only give money in the name of Mickey Mouse. 

I certainly will never again give a penny to a gay political cause.

I favor openness in the political world but the Anti-Prop 8 gay community has removed that as an option.

Congress is now justified in removing political donor names and affiliations from public view.

Until then, I am campaign donor: Mickey Mouse.

Bailout

Most people don't seem to appreciate the first part of the financial bailout.  I don't approve the auto bailout part, but there were inherently good reasons for the financial bailout: TARP.

Banks are required to have capital worth 5% of their assets (assets in banking are loans). That is Federal law and when a bank falls below 5% it is illiquid and must be seized by the government.

Most of that 5% is equity on the stock market, the banks public stock.  So when the stock market drops 20% a bank who's equity might have been 6% of assets is now only 4.5%.  The bank has to be seize by the Feds.  By August the market was down 35% so most banks had to be seized.  Or the Federal government had to buy their stock.  Those are the only alternatives. Which is what TARP is all about.

That is what happened.  The Federal government was faced with either putting the major banks of America out of business or buy their stock. Bailout. A reasonable action by the Feds was to create TARP.

Just so you know my view of what must be done to correct this problem in the future.  We need two regular commercial banks owned by the U.S. Treasury that guarantees deposits of any size and can only recall a loan or line of credit when the assets backing the loan are insufficient. 

Business needs safe banks just as much as it needs stable currency.

Plane crash in Denver

I have only one reason to pay attention to this plane crash.  My Southwest flight arrived at Denver at 6:12 on Saturday evening and the Continental flight to Texas that crashed on an aborted takeoff started moving at 6:16. It ran off the runway a few minutes later probably going 80 mph.

Our flight arrived under clear skies, about 19 degrees Fahrenheit, no ice on the runways, into the wind on runway 26.  Runway 26 would be pointing West at 260 degrees.  The 737 Continental was taking off on runway 34.  We landed into the wind so the Continental must have had a cross-wind but it didn't plow off the runway away from the wind...it went into the wind.

I have no inside information on the crash. Why the pilot aborted is any one's guess. My guess is that after the decision was made to abort, the brakes were the problem.  If the take-off had been into the wind on runway 25, the left side of the runway would not have been so catastrophic.  The same is true for runway 35 which was being used for landings at the time.

We left the airport as ambulances were streaming in.

I hate impossible phone responders

It is rare but not rare enough to get a person on the other end of a business call who's pronunciation is impossible to understand.  I always blame it on the employer never on the employee.

Why is it the fault of the employer? 

Because it is really inexpensive to send an employee to a class to learn how to speak national dialect English. TV English. In most areas of the country a one week course costs as little as $600 and the employee comes out speaking clearly in our national dialect, understandable to everyone. 

$600 you miserable cheapskate company that won't train your employees.

Training employees to use our national dialect is cheap because it is easy.  It involves listing the 10 main sentences used in phone conversations and the 500 common words used in specific business conversation.  Repetition with audio playback is all that the employee needs to get the dialect right.

Perfect storm

Schadenfreud is the pleasure you get when someone else suffers.  Thousands of Lefties are suffering miserably but I will only admit to a tiny pleasure. I prefer that social change occur because people are drawn to a positive magnet, such as Pro Commerce, not punished by their antiquated socialist religion.

I am one of the few people who know how much the Left is suffering.  They faced a perfect storm in the past six weeks.

First, they got their Messiah elected president of the United States entirely because of a global financial catastrophe, not because of anything about his politics.  Then he appointed a cabinet that will implement nearly all of George Bush's international policies. The Left lives with an insane hatred of President G.W. Bush (and Sarah Palin)

Finally, Bernie Madoff, wiped out the JEHT foundation.  Madoff himself was a Lefty who funded the Democratic Party heavily. The JEHT was giving away over a billion dollars to hundreds of pure Lefty causes.  The list of organizations that got JEHT money over the past few years will gladden the heart of any pro commerce or conservative reader and evoke misery among Lefties.

My contribution to helping readers understand the perfect storm nature of this last event is to point out what has happened to hundreds of Lefty do-gooder organizations.  Each one got grants worth 10-20% of their annual revenues for a two year period or more.

These are non-profits.  Non-profits are run 98% of the time by incompetent managers because they were never employed by a good manager.  So a non-profit getting a big boost in its funding will hire more people, build infra-structure, raise pay and will brag and make commitments to their clientele.

Now with a significant part of their budget gone, with no managerial skill they will have no idea of what to do, other than reek havoc in the non-profit donor world and complain so loudly that everyone around them will suffer. They will just wallow in misery for a year or more.

Perfect storm...with all the meanings and nuances of that recently created phrase.

Norma died

The S.F.Chronicle reported on the death, at age 57, of Norma Hotaling. My relationship to Norma is worth remembering.

I played a major role in creating COYOTE, Margo St. James' organization to decriminalize prostitution.  I also played a role in many other sexual liberation vehicles. Margo got COYOTE started in 1974. 

Norma Hotaling got her start around the late 1980s opposing COYOTE and working hard to make sure prostitution was viewed as horrible oppression of women. Norma created several projects to get prostitutes off the street. Her most notable, notorious to me, accomplishment was inventing the practice of arresting Johns, fining them $1,000 the first time, and forcing the arrested Johns to attend a Norma all day class to berate them for 8 hours.  Norma and her staff got great pay for this belittling effort. See the article to see that Norma became a great hero to the press, Oprah and local Puritans.

Norma asked for my help with her non-profits in the mid 1990s.  I went to help her.  My business consulting oath is much like the Hippocratic oath...I have a unique gift for helping businesses, so I help everyone regardless of my view of them.

The main thing to report about Norma is that she was a kind, warm, well intentioned woman.  She had no managerial skills (like 49 out of 50 non-profit managers) and no ability to make or read a financial statement.  I told her the truth: she needed to hire an operating manager whom she completely trusted and do the politics (which Norma was great at) herself.  She needed to hire a bookkeeper who was intimate with her....I mean it.

She did both and flourished.  The real reason Norma flourished was because she was riding the crest of a Puritan anti-sex wave which is still moving at Tsunami speeds.

San Francisco for visitors Part 2

If you are in San Francisco for a short time and have followed my advice in the last blog, to sign up for any one of the walking tours, I would recommend the following additional sites.

If you are at a convention, ride on the wonderfully restored merry-go-round on the roof of the convention center. This and the ice skating rink are the only remnants of my failed project to create a Tivoli Garden in the center of San Francisco.  I loved Tivoli in Copenhagen and tried to bring it to San Francisco.  I got an ally on the planning commission, later the Board of Supervisors...Sue Bierman, but she was never able to get a real Tivoli Garden.  Fear of danger, local unvoiced dislike of kids and risk of lawsuits completely destroyed the project.

Don't miss the Ferry Building on the Bay including coffee at Peets and the elegant markets on Thursday and Saturday. San Francisco, by the early 1980s became the gourmet capital of America (more subscribers to Gourmet magazine per capita than any place else) and the Saturday market remains a focal point of the foodie crowd.

See Fort Mason, the first transfer of military land to public use (I played an important role in that) with over 80 interesting non-profit occupants and Greens restaurant, the first and foremost top end vegetarian restaurant in America. 

Take a walk in the Presidio, another military base that was transformed into a public masterpiece based on the success of Ft. Mason.  I played a minor role in the magnificent Crissy field promenade that no visitor should miss.

San Francisco for visitors Part 1

One of my loyal readers reported being in San Francisco for a few days and having a wonderful time.  Great, but I feel some responsibility to play the host role.

Back in the early 1970s I made a major difference in the way the world perceived San Francisco.  I told the story in an earlier blog how I used my position as business manager of a church to overturn the bus tour monopoly. At the time the only tour business in San Francisco was on strike. I was able to explode the local tour business forever more.

I now recommend one of the most interesting off-shoots of my tour creation, the walking tours of San Francisco. I trained more than a dozen young people and several dozen tour bus guides in the key parts of San Francisco and several spun-off into the walking guide business within a year. Sign-up for one of the dozens of walking tours, any one, they are all great.

San Francisco is best understood at the walking levels.  I have never stopped walking the City and I know many people who come here for weeks and walk every day.  I walk in every City I go to, nearly every day.

This walking option is one of the great attributes of most cities, but not all.

Footnote on painted ladies (houses): the hippies created the first painted ladies and I was the first to promote a photo of them with the promotional postcard used for the Glide Tours.

Israelis learned slowly

 

Today most Israelis are realistic about the Arabs and Palestinians and the Israeli economy.  Americans live in a fantasy world about foreign affairs and the economy.

I would like to suggest that the Israelis moved from ideological dupes, Lefty lemmings, in 1966 to their current state of open-eyed realism because of three wars.  Americans might be in for the same eye-opening movement in the next few decades.

The first force for change in Israel was the 1967 Six Day war that taught Israelis that only a strong military with preemptive strikes could save them from the savage nations that surround them. 

The 1973 War reinforced that understanding and created an understanding of the need for a far reaching powerful, untethered and active intelligence service. The pseudo-peace treaty with Egypt that followed has been a long lesson in learning that Arabs are lying savages only kept in abeyance out of fear of retaliation. The cold peace with Egypt is a sorry lesson in Arab perfidiousness.

The final lesson for the remaining Lefty peaceniks in Israel was Intifada II.  The lesson there...the Palestinians are savages, implacable enemies, like all the other Arab nations and can never be trusted under any circumstances. Waste ten years negotiating peace when their only goal was war.

The September 2001 Arab attack on New York and Washington may be the equivalent of the Israeli Six Day War.  The first painful lesson in dealing with Arabs. We have a long way to go and a great deal more tragedy before we can reach the level of realism that Israelis have today.

Eureka

When Archimedes yelled 'eureka!' after discovering that his body displaced a mass of water in the bath equal to his own mass, he was pretty certain he had made a significant discovery.

Me too.

What has never been known nor understood to any one's satisfaction is the source of anti-Semitism.  Why would any large group of people be filled with hatred toward a tiny hard working, generous, peaceful minority?

I've got the answer: Every large group that is anti-Semitic is fed and driven by their own upper social class.  The greater the spread between the upper class and the rest of the society, the greater the anti-Semitism.  There is a linear relationship.

The reason for this connection has long been understood.  The upper class is diverting the attention of the lower class from their role of class privilege by creating a scape-goat. 

The societies with the greatest social class differences have been the most anti-Semitic, conversely, the ones with the least class difference are the least anti-Semitic. Linear.

This connection has been most visible to me in Scandinavia.  The countries with the least visible upper class are Denmark, Sweden and Finland.  The Scandinavian country I've seen with the most visible upper class is Norway.

Norway is also the home of a great deal of anti-Semitism.  Check this article from the Jerusalem Post. Norway has a serious case of anti-Semitism, the other three are almost free of it.

Denmark, Sweden and Finland also have a lower gini (measured income inequality) than Norway.

All the Arab countries are wildly anti-Semitic and their upper classes are very over-the-top. The same is true of nearly all Latin American countries where part of the blame for anti-Semitism can be the Catholic Church but much more importantly, Latin America has the most class differentiated societies on the planet, and very anti-Semitic.

In Europe the countries that saved Jews were Holland and Denmark, both the most egalitarian countries. Today England has one of the worst cases of anti-Semitism and remains very upper class segregated.

On the other end of the scale, Japan has had a Jewish population for over a century but no anti-Semitism.  Japan is hierarchical but has no distinct upper class.  Interestingly, the best country to prove my point is our own: the United States.

Anti-Semitism in America was high from 1900 to 1955 but then went into a numeric nose dive after 1960.  I've always attributed this rapid decline to the changes in the Vatican II theology but a much better explanation is the genuine disappearance of America's upper class in 1960 with the publication of the last New York Blue Book.

Summary: In highly divided societies where the upper class needs to divert attention from itself, we will find anti-Semitism...as a scapegoat.  A visible and distinct upper class will protect itself by feeding a strong anti-Semitism. The degree of class difference and the level of anti-Semitism is a linear relationship.

Incredibly free

The previous blog that describes how the Republican legislators of California can sit back and let the Democrats crash their car into a concrete wall is an unforeseen consequence of extreme gerrymandering.

The state legislative districts have been so severely gerrymandered that every elected Republican is in a 'safe' Republican district that can only elect Republicans. The consequence is that the elected Republicans are ideologically pure and can remain that way.  They are free men and women, free to vote any way they want. And they refuse to raise taxes.  Possibly a model for the rest of the Republican Party.

The election that just happened last month replaced Republican legislators forced to retire with new Republican legislators who are equally ideological.  As a consequence the Democrats get to swim in their own doodoo, the impossible budget mess that the Democrats made for themselves.

For the good of the society, of course, the electorate has just corrected this serious gerrymandering error by passing the Phillips' Initiative which comes into effect in 2012.

(The image in the upper right is a manure pile.)

I'm proud

You will be surprised to read what inaction I am proud of but you won't be surprised at my reason.

The California Legislature has been in a deadlock since July over the current 08-09 budget.  The Senate has 40 members and needs 27 votes to pass a budget, the 15 Republicans can stop passage of the budget and they have. The Assembly has 80 member and needs 54 votes to pass a budget.  There are 29 Republicans in the Assembly who can stop a budget bill; and they have.

The budget consists of $126 billion in expenses and $100 billion in revenue.

The Republicans in both houses have been unified in refusing to pass any budget that requires a tax increase. The Republicans are being viciously criticized for not proposing a specific alternative solution.  I am very proud of the Republican legislators.  If they remain unified the State will come to a dead stand still in March, possibly sooner.

I was a legislative analyst early in my career, working in Sacramento.  We had a non-partisan legislature at the time.  Soon afterward the legislature became part of a statewide Democratic Party machine created by Jesse Unruh. It has remained part of the Democratic Party machine ever since 1964.

The entire budget debacle has been created by the Democrats in conjunction with the California unions.  More than 55% of the budget is paid to education union members. Why should the Republicans antagonize anyone by proposing areas to cut the budget...they didn't bring the pigs to the trough in the first place.

In the 1950's California always ranked #1 in education from K to 12 and at the University level (I didn't personally like it then when I was in it).  Today, K-12 in California ranks somewhere between Louisiana and Mississippi.  Today California Colleges and Universities teach one common curriculum: Lefty socialism.

Since the Democrats created the teats on the hog of the state budget it is obviously their job to cut off the milk supply.  They will have no choice in a few months. California has one of the highest unemployment rates in the U.S. and has been especially hard hit by sub-prime mortgages.

How could the recession start a year ago?

The official referee of recessions is the NBER, National Bureau of Economic Research, in Cambridge.  So how do they get away with calling this recession 11 months after they claim it started?

I was a graduate student in economics in the field of business cycles.  The founder of the field was Wesley Mitchell who also founded the NBER in the 1930s.  I carefully studied business cycles and the NBER methodology.

What has happened is that the business cycle changed twice in the past 50 years.  First, by 1958 the NBER had seen enough patterns in the previous half century to create their leading, coincident and lagging indicators that were pretty accurate.  The leading indicators showed that the forces that first stop growing in the economy did so 6-18 months before the overall economy started to slow down.  The coincident indicators became the actual measures of economic activity and included unemployment.  The lagging indicators were used to show that some economic effects continued to retreat even when new growth was strongly underway.

I left the field of economics when I realized that the business cycle was a meaningless concept because it was based on data but no underlying theory or viable model. (The one vague theory of Solomon Fabricant's inventory movements was very poorly demonstrated).

That all changed about 15 years ago with the second major economic change and the NBER was left with nothing.  None of the indicators worked any more. One writer suggested that the NBER was taken over by Lefties who wanted two recessions to fall into George Bush's time in office.

I don't think so.  I think the economy changed 15 years ago and the NBER is trying to adjust its model to fit reality.  There no longer are any real leading indicators and only employment remains as a coincident indicator.  We once had the GNP move in cycles related to the coincident indicators so the two quarters of negative growth definition was viable and became public, but it hasn't done so for 15 years.

I have said it before and repeat, there are no more business cycles because the economy is so huge and so diversified that the great variation in separate sectors don't converge on the overall economy.

What we are experiencing right now is a completely new phenomenon.  A global financial collapse.

The businesses and investors of the world saw a disaster coming in the Middle East with Iran building nuclear weapons and threatening the Straits of Hormuz.  The stock markets began to fall and fell steadily for a year while, for the same reason, the price of oil climbed for that same year.  Both were realistic reactions to a horrific nuclear Iran reality.

Both the magnitude of the stock market fall and the magnitude of the oil price rise pushed all the resources of the economy past their functional boundaries.  That kind of boundary breaking occurs when investment portfolios decline 25% in a short time and a key resource, like oil, increases in price 300%.

Then the businesses of the world have to slow down, contract and reorganize.  That is what is happening.

The NBER is, sadly, irrelevant.

Nuclear rain from Iran

The U.S. is currently working on a nuclear umbrella for Saudi Arabia. I see this as an interesting twist on European history. Saudia Arabia really needs nuclear protection now.

The Europeans spent more than five centuries spewing Jew hate while actually pursuing wars between Catholic and Protestant countries.  Could there be an Islamic parallel?

I mean, Shia Iran is spewing Jew hate while the real target of their nuclear bombs may be a nearby Sunni target: Saudi Arabia?  The parallel is based on the distracting focus of Iranian hate-speech directed at Israel, a very difficult target, while Iran only needs a few bombs ( probably available by March based on most published data) and a few fighter planes headed for Riyadh.

The image on the upper right is Riyadh sometime early next year.

Publish great stuff

The previous blog described an experiment by Stewart Brand in the late 1980s to publish an open unedited column for his regular Whole Earth Review magazine.  It was a brilliant idea to see what hidden material was in the vast human mind that was not making it into the public domain.

In my recollection there was nothing particularly interesting in the published material.  I don't have a copy to check on but it should be of some historic value.  The inherent problem is two fold. 

First, ideas, reports and views that are important but truly outside the domain of public consideration, simply can't be recognized and appreciated because they are outside.  Example: a number of European Jews reported on the Holocaust starting in 1941 to the NYTimes, Manchester Guardian and Washington Post and never got more than a few inches of press.

Second, many ideas, reports and views that are important are too slow moving for the public to appreciate their importance.  That applies often to technology such as the Xerox process, the DNA double helix research reports, FM radio and gene splicing.  It also applies to social change such as the impact of political conventions covered on TV that lead to open primary voting and the introduction of the VW auto that lead to the fall of the American auto industry.

Great news time

We haven't started the new Democratic administration, in fact the election was only a month ago and so far we have: (1) Charlie Rangel, the Democratic chair of the committee that sets taxes and determines the U.S. budget who doesn't know which tax laws apply to him, (2) a Democratic Illinois governor who  sold a Senate seat to Jessie Jackson Jr for $1 million before the story leaked out, (3) the SEIU a major union backbone in Democratic politics with its finger in the Illinois senate seat scandal and a fraudulent non-profit in Los Angeles and (4) a major Democratic Party donor, Bernie Madoff, who stole the largest amount of money in human history, greater than everyone else combined in the past century.

Frankly, I don't see how the size of the Madoff theft was possible.  All investment funds must be audited and so are all licensed brokers.

This is a great time for news and it is just beginning.  The Democratic Party is historically the party of corruption, which you would know if you know history.  And the history we know is all before the Internet and blogs got fully underway. Four weeks and so far we are covered in corruption slime. How can we make it to the Inaugural Ball?

This is not to mention the global financial meltdown and the bailouts which are competing for news coverage.

The good news about corruption is that for the first time since the state was founded, the Louisianans refused to elect an indicted politician. (Rep. 'Freezer' Jefferson defeated).

Write freely

Back in the late 1980s Stewart Brand had a great idea.  He offered all his regular writers for the Whole Earth Review (circulation 30,000, nearly all hippies) the publication of an uncensored unedited column to say whatever we wanted.  Great opportunity for me.

I chose to write about the two hysterias that were raging around me at the time: recovered memory of childhood abuse and child denunciation of satanic ritual abuse by adults.  I knew no one else would publish anything on the subject since the hysteria had gained control over 99.99% of all Americans.

That made me the first human being to publicly write about these two hysterias.  I knew about both of them because my friend Catherine C. was a lawyer who had a lawyer friend who defended plaintiffs in these types of cases...all of which were the modern day version of the Salem witch trials, maybe even worse.

The strangest thing was that I never met a person, not one person from any walk of life who was outside the hysteria.  Everyone...no exceptions, believed in the recovered memory and ritual child abuse stories unless they were specifically the people falsely accused, their immediate family or their lawyers.