Pro Commerce

The Internet and the Armada

The Internet changes business and all institutions.

Sometimes it seems our political leaders are idiots. We see the facts on youtube and the political leaders are making blithering unrelated statements.

A few hours after the Israelis intercepted the Mari Marmara they put the video online, showing the murderous, out for blood, thugs attacking them on the the Turkish ship of hate.

At the same time European leaders were condemning Israel for the violence and demanding proportional responses.  The U.S. President condemned all violence and asked for an investigation.

Those idiots.  We all saw the video.  The IDF was fighting for their lives against the standard lying Arab monsters. Jews are entitled to self-defense.

Blame it on the Internet.  We competent Internet users get to see what really happened with our own eyes.  Two groups got screwed and look stupid.

One group are political leaders who get all their news from their 'intelligence bureaucrats' in briefings which are based on incompetent outmoded underlings who have no up-to-date information and talk only to each other.  Just turn on the Internet, you administrators at the top of the pyramid.  Look for yourselves.

The other group are the ideologues in the public (most of the Jew hating Europeans and the American Left) who get their news filtered by anti-Israel TV networks or other blind-hatred-Lefty news outlets. The filters keep a useless ideology in place. Just look at the Internet videos and stop looking so hopelessly out of touch and foolish.

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After I wrote this blog I read what Michael Oren (Israeli ambassador to the U.S.) said in a private conversation: “Even our close friends came out against us. … Only after some time, when video from the ship arrived and was aired by the American media, did public opinion begin to shift in Israel’s favor.”

More on the Civil War

The U.S. Supreme Court decisions yesterday had three implications of note.

1. The extension of the 14th Amendment to include laws that states make regarding gun possession is a long time in coming.  This related to my points in many blogs that the Civil War will not be over until we celebrate the 150th or 200th anniversary of the Emancipation Declaration. 

The 14th Amendment was passed shortly after the Emancipation Declaration went into effect in 1864 and clearly extends the Bill of Rights to cover all state laws.  But the Supreme Court has ignored that application to the 2nd Amendment for 55 years after it was first applied to school integration in Brown v. Board of Education. Now it applies to all the Bill of Rights.  The core idea of the 2nd Amendment is very clear, in English, and is finally the law of the land.

Hopefully the right to self defense, which is what the 2nd Amendment is about, will sometime be applied all over the world to Jews (and Israel). It should start with the tens of millions of Jew-hating Europeans and the current American president.

2. The Court takes up the question of 'patents on business processes'. The Court effectively eliminates business process patents unless they apply to the use of a machine or similar object. 

This is an incidental matter. The Court has not and can not fix the patent laws which need to be fixed by Congress.

3. The Court ruled on an element of the Sarbanes-Oxley Act that nearly every big business claims is onerous. 

This Court decision has no effect on the Act, it merely diddles with a technical issue of Presidential power in the control of an accounting board that administers 'Sarbox' as it is not affectionately called by accountants.

You might want these

I am going to comment on two books.  I loved them both but I wouldn't recommend you buy either of them.  I'll explain.

The first is A Patriot's History of the United States by Schweikart and Allen.  The book is intended as an alternative to the neo-Marxist books that dominate this field and dominate history teaching in academia: Charles Beard, Howard Zinn and Arthur Schlesinger.  The authors do a masterful job.  Everywhere that the New Left in the 1970s has perverted American history with a fictional Marxist version, the authors of A Patriot's History do a superb job of presenting the arguments and evidence on this.  For example, how many people were in the America's when Columbus arrived.  A gigantic number, 100 million people,  is used to show how White people destroyed a great civilization.  A smaller number, 4 million, is used to show that these natives spent a lot of time killing each other.

The authors go a little bonkers on the subject of America's founding fathers creating a Christian Constitution. They didn't.  Most of the founders were Masons, strong and important Masons. The Masonic Order was strongly against organized religion.  We have a Masonic Constitution, if anything.

The value of the book is to open up hundreds of ideas and subjects to new thought for the reader and to stimulate excitement in studying our history.

The second book is The Last Well Person by Nortin Hadler.  This book takes me back to a discussion of the Alpha Heresy.  "William Koestler wrote about the Alpha heresy in the communist world.  It was common among intellectuals to explain why they didn't write: 'If I came to understand something by myself, then only the others who have done the same will understand me and they don't need to hear it from me.'"

Hadler uses the same criterion for medicine that I use for life: Karl Popper.  Popper showed that science progresses by testing falsifiable hypothesis.  All science is the accumulation of refutable hypotheses that, so far, haven't been refuted by testing.

When applied to medicine and medical procedures, almost nothing works better than doing nothing. Aspirin, Ibuprofen, some antibiotics work so does tamoxafin for estrogen positive breast cancer. Hip replacement also works.  Most of the rest doesn't.  The same applies to alternative medicine.

Thus the Alpha Heresy: Unless you've come to the same conclusion yourself, you won't like the book... or it is irrelevant to you.

The new financial regulations

 I could have written this blog before the financial regulations were finalized and published in the Wall Street Journal.  Now is a good time.

There is nothing, absolutely nothing that will change America's or the worlds exposure to financial risk with the enactment of this law. Nothing.  This law will cost $20 billion to implement and a few billion a year to administer.  It will do nothing... nothing positive.

The law is based on two fallacies. The first is that some kind of government agency has the ability to evaluate and avert serious financial risk.  Since we have never seen such an imaginary action there is no reason to expect it to happen in the future.  Countless financial people saw the dangers of FreddieMac and FannieMae and it meant nothing.  The Fed has vast powers and never uses them.

The new regs create four federal bodies to operate with oversight.  The debates within those oversight bodies will be heated, some people will be right, but more often these bodies will be seen to be ineffective or punitive long after the next financial fiasco.

Second, the new regs will put derivatives into a visible market.  That is good, but it ignores the fact that financiers will invent new and more obscure financial instruments that will be larger, more volatile and far outside the realm of regulation... in a very short time.  Just read what an interest rate swap is in wikipedia and you'll know that government will never keep up with the ingenuity of the financial market. 

I myself used to invent financial instruments (I invented and introduced the consumer certificate of deposit) and smart people will always be around to outsmart government regulators.

The same reasoning applies to all the new regulations in the consumer area.  New fees will spring up to replace regulated ones faster than grass after a Spring rain.

This whole government band-aid is a farce.  The only productive steps for the future will be to separate financial speculation from the solid, steady conservative commercial system.  Guarantee a large category of secure bank loans and lines of credit to business. The only intelligent action is to segregate finance from productive commerce.

Boring?

I often hear the protest that something offensive is 'boring'.  I instantly pay attention.

One of my favorite bloggers and her acolytes considers this Lady Gaga video 'boring'. The two most critical and sophisticated put downs they use are 'boring' and 'the work of an art school student'. 

The two things that incorrectly describe this video are 'boring' and 'art school'.  Lady Gaga music is in the ABBA tradition; very melodic and sweet with easily understood words.  The graphics are among the most complex in the business, fast paced, original and dramatic.  The sexuality is there and is of some sexual interest but not much.  Lady Gaga wears a bra and panties.  It is just a music video... a good one.

What does 'boring' mean in this context?  It means 'I see something sexual that offends me but I want to discourage others from looking.... boring is my cover-up for hot and dirty'.

Look at the word dirty.  It is in the same category as boring.  It is designed to associate the object of the description as a negative, an uninteresting negative: plain old dirt.

Why do we do this?  Look at something titillating and then behave in a way that is intended to discourage others?  Because that is the core of Puritanism. Puritanism is the outrage that is felt when someone else is enjoying themselves. 

When everyone is having fun, it is the Puritan who asks: 'Are we having fun yet?'

 The Puritan response to puritan violations is 'boring'. Boring is to try and discourage others from knowing about the secret pleasure.

In research done in the human sexuality field at Stanford, on mature married couples (not the classically useless research on students) there were three groups who filled out sexual attitude and behavior questionnaires before and after the test. Group one saw six weeks of explicit sexual films.  Group two saw travelogues in the same building on the same nights.  Group three were the control group who did nothing.

More sexual activity was evident in the control group, just from the stimulus of the questionnaire.  Much more sexual activity was found among the group that saw the sex films and their attitudes toward the sexuality of others was toward more tolerance and appreciation (homosexuality and other sexual behaviors were consider more acceptable after the film series). 

The group that saw the travelogues had less sex and were much more intolerant of other's sexual behavior.  When questioned, the researchers found that they knew that another group of people in their building were getting to see hot sex films.

Puritanism: objection to someone else having pleasure.

If the Lady Gaga video were not interesting, if it was repetitive, dull and unimaginative...those are the words that would be used to describe it.  Boring is a clue that it is really good but offensive to Puritans.

For the record.  Because someone is a Puritan doesn't mean they are bad at sex.  The American Puritans strongly encouraged, even demanded aggressive sex, among married couples, under the sheets as does the Torah.

Morals of Rolling Stone

A U.S. General was brought down by a pop rock magazine (McCrystal/Rolling Stone).  I'll leave to others to explain why this magazine matters to this president. 

No one doubts that the reporter, Michael Hastings, reported on conversations that were 'off the record' and that the fact checkers at Rolling Stone set a deliberate trap for McCrystal's staff. 

The real problem is Rolling Stone.  The owner/publisher is the most immoral man I have ever personally met. I wrote about Jann Wenner who held a grudge against me for years because I considered him immoral and wouldn't help him get a bank loan.  He held a grudge against Max Palevsky for fifty years; Max wanted a small personal loan repaid.  A major Lefty magazine, Salon, called him the worst slime in publishing, eleven years ago. Jann is a big Democratic contributor.

There is evil in our society and you can find it in the person of every human who works for or kisses-up to Jann Wenner.

Invert the pyramid

In world history from 1,000 years ago till today, from Japan to China to Europe to San Francisco we have lived with a social pyramid that has business people (traders) just one rung up from the bottom.  Business people have for 1,000 years of recorded history and on a global scale been just one social class above the untouchables.

Jews were consigned to this low cast by the Catholic Church as a punishment for not converting to Christianity 1,000 years ago.

Last week, the members of Congress and the Harvard Law president poured opprobrium on business executives as they have been doing for the past 18 months.

While the suppression and disdain is not universal and not total in the United States and the business class has moved up in much of the world it is only 'moving up' from a very low position.

The business class has created the modern world, our great health and long lives, our excitement, our vitality and most importantly our options for a full and meaningful existence.

The business class should be our top class.  (Not the vapid MBA's*).  Successful entrepreneurs should be more popular than rock stars, more trusted than academics and more powerful than Congressional Committee chairmen and ambitious District Attorneys.

Time to invert the social pyramid.

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*(I only respect an MBA when it teaches people how to read an appreciate financial statements.)

The real credit card history

In the book I reviewed in the last blog, Matt Ridley does what many other people have done, completely screw up the history of the credit card.  Wikipedia is screwed up too.

Ridley gives due credit to Joe Williams at the Bank of America who made the first major contribution.  Until Joe got the Bank of America to issue the first BankAmericard in Fresno in 1958 the main plastic credit cards were issued for travel and entertainment, mostly for business travelers. There were Diners Club, American Express and a few others.  Credit cards were in use at the time by gasoline retailers and department stores, each having their own card. 

Joe Williams' understanding and innovation was that using a bank, especially the biggest bank in California, as the source of the credit card could expand the usage to ordinary middleclass customers and unify the many credit cards and plates into one card.  Joe made a few mistakes.  First, the imprinter was expensive and didn't work.  Second, plenty of people with bad credit got the cards in the mail.

When I got to Bank of America in 1962, I quickly started work on improving the credit screening.  The card was already profitable after the immediate bad credit actors were removed because the idea of a bank issued card and bank supported merchants was a good idea.

Working with an economist (who's name I forget) we together developed the first credit scoring system... still in use, worldwide, today.

I left Bank of America in 1966 to start a marketing research department at Bank of California.  Within the first week I set out to pay a courtesy visit to my peers in the other banks (all friends).  I started next door at Wells Fargo.  In one room were all my peers in marketing.  They were bitching about the stupidity of BankAmericard and credit cards in general.  The were together because an outsider had approached each one of them to fund a new credit card.  They knew that was nonsense. 

I explained the profitability of the BankAmericard and explained how we could have our own card open to all banks under a law that created the interbank check clearing house. 

I scheduled our next meeting at our lawyer's office and at that meeting we formed Western States Bank Corporation which became today's MasterCard.  We decided to put our executive VPs on the board to make sure that the new card happened.  We hired a New Jersey firm to do the operations and stole  away Robert Footman who was the BankAmericard ad executive. 

Jointly with Footman, at his agency (Foote Cone and Belding) we developed the idea of a real universal card aimed at women.  The white background with two overlapping circles (orange-red and gold) was chosen and tested because it appealed to women. The women didn't recognize the vagina symbolism that we consciously used.

We tested both names: Mastercharge and Mastercard. The former worked best but the latter came into use a decade later.

Before we got our card to market three things happened:  (1) BankAmericard saw what we were doing and copied us.  They changed their card name immediately to Visa and opened the card to membership by all the U.S. banks in their banking network (2) Hundreds of banks, nationwide, begged to join us and we let them and (3) A group of banks in Chicago copied our model and issued cards on two months notice... they failed in one month.

I did one thing that helped but wasn't important.  I discovered the way to get consumers to accept a card from Bank of California sent in the mail.  I wrote a letter in advance telling them they could reject the card, before they got it, or when they got it.  All the banks in MasterCard copied my approach, and usage started out higher than ever before in the credit card industry.

What really happened?  First, we did succeed with MasterCard and its imitation in Visa in making the card universal in its retail applications.  Second we created a vast and credible base because we were banks, the motherlode of credit in our society.

That is what counts in the credit card market and in credit card history.

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* A fellow named Dee Hock has been taking credit for his role in credit cards for decades.  He deserves very little.  He was hired by the rapidly growing Visa after it got the new name, after it opened membership to other banks and was already a success.

A book for your bookshelf

I want to particularly recommend a new book by Matt Ridley, The Rational Optimist.  The title comes from the fact that Ridley looks at the 50,000 year history of our species and sees clearly that commerce has put humans on a track to prosperity, excitement and unimaginable benefits.

The bad first and the three goods.

The bad is that Matt Ridley is just as poor a writer as I am.  If Ridley were a great writer or even a good writer this book would be recommended by every right thinking economist, historian and original thinker. If it were exciting to turn the page, few intelligent people could live without this book.  A good writer knows that pushing too hard doesn't work, that rhetoric is the structure by which people change their minds and too much sugar with no lemon is hard to take.

The three goods:  (a) Ridley agrees with nearly everything I have covered in this blog for ten years.  (b) Ridley has several new and important ideas  (c) Ridley has done a masterful job of consolidating numbers and evidence to support the upward trajectory of commercial history.

(a) Ridley is in love with commerce, as I am, and he weaves together a history which properly appreciates that nearly everything positive about human life today is the result of commerce. He appreciates cities, density, diversity and technology. He makes the same arguments I do about the vitality of commercial innovation, the power of specialization that arises from trade and the revolution in happiness, health and fulfillment of life that commerce generates.

I love his denigration of science.  As I say often, technology is the handmaiden of our better lives, science sweeps up the crumbs technology generates and tries to put them together. 

We both see commerce as a Darwinian process of adaptation, pragmatic solutions and incremental decentralized evolution. The size of the trading market matters; bigger is better. 

 (b) Ridley suggests that it was the early adoption of trade (your sea shells for my salt) that started the positive human trajectory.  He supports this thesis with vast anthropological, DNA and archaeological evidence and the footnotes that go with it.  Without a large enough trade area, humans revert to the most primitive level of habitat. Tasmania is his example.

He shows how commerce created agriculture and not the other way around.  He, like me, appreciates the global explosion of knowledge, skill and technology that the Phoenicians brought to the world.

 I love his way of talking about the collective brain.  He points out that we are all so specialized that it takes hundreds of different skills just to make a pencil and none of us could possibly do it from scratch.  We are, via commerce, a collective brain.

Government power and over-reach usually kills whatever it touches, it doesn't generate innovation except by accident. There are many problems with patent and copyright law that need to be corrected.

(c) I would guess that Ridley has 50 metric examples of improvements from commerce. A kilowatt-hour of electricity cost an hour of work in 1900 and five minutes today.  Rockefeller with his innovations in petroleum products saved the whales of the world.  Vanderbilt reduced rail costs from $1.00 per unit per mile to $.10 between 1870 and 1900 and reduced rail costs increased food supplies worldwide multi-fold.  The murder rate has dropped from 35 per 100,000 in Christopher Columbus's Spain to 20 per 100,000 in Shakespeare's London to 4 per 100,000 in the U.S. today.

In summary, this is the book to have to complement what you read on this blog.  Every chapter makes us challenge his ideas and with reflection to rethink our own views in a fresh mode.

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*Ridley got a sentence on credit cards wrong.  But he used several sources that are wrong.  I'll explain it in the next blog.

Supreme Courts?

A rule of law is vital for business.  Not necessarily a rule of law as it exists in the U.S.  But how does the rule of law really work?

It is pretty much of a historic miracle that the U.S. Supreme Court has any importance at all.  Most other similar courts in the world are not very important.

I see four reasons for the importance of our Supreme Court:

* First, under the founding Jay Court, no effort was made to issue strong or controversial rulings. It allowed time to accept the courts existence.

* Second, after ten quiet years, the Marshal Court ruled, in a case that was clear and straightforward, that the function of the Supreme Court was to make sure that all legislation was consistent with the U.S. Constitution.

* Third, Americans consider the Constitution and the Bill of Rights to have the binding historic force that Torah does for Jews.  That gives the Supreme Court enduring authority.

* Fourth and last, the Court has avoided encroaching on the power of the Congress to legislate.

I make this point because we have two immediate cases that are relevant.  The Federal District Court has told the State of California to spend billions of dollars on healthcare in California prisons.  The State of California has completely ignored the Court and has established the precedent that Federal
District Court is a toothless old hag, that will be used to settle questions only when the State asks it to. It is not treated as part of the Supreme Court.

The other case is the Israeli Supreme Court that has issued something like 28 rulings directing the Israeli government where to build a high school, where to build or not build the anti-terrorist protective wall and other legislative functions.  The Israeli government ignores the Court.

Have I explained the matter.  A Supreme Court is only functional in making rulings on the Constitutionality of legislation in a society that values the Constitution.

The International Court, which lacks everything, is meaningless and always will be.

Almost nobody understands this and the failure to understand is most common among lawyers.

Monopoly and Microsoft on the Internet

There is a popular belief that a very big company (or a very rich person) has some monopolistic advantage in the world.  That believe is wrong wrong wrong.

I will keep throwing data and empirical evidence at the popular belief and hope to convince one person at a time.

The dominant company in computer software has been Microsoft.  It has had +80% of the global software market for 25 years. Microsoft has $37 billion cash on hand and generates $22 billion a year (twice what Apple or Google generate).

Yet, since the Internet became the dominant computer relationship in our lives, Microsoft has tried desperately to gain a foothold in the Internet.  It has tried with Internet Explorer, WebTV, MSNBC, Hotmail, Bing and a few other campaigns that I've forgotten. Not only has Microsoft failed, it has spent and lost $10 billion trying.

So much for the monopoly power of a company with virtually unlimited cash and 9,300 employees.

More data for ideologues to ignore.

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PS: Henry Blodget even thinks Microsoft may be at the end of the road, with its survival 100% based on Windows.

The great American divide

My daughter reminded me of a core divide in America that has existed all my life and has never changed.

There is the East Coast Elite and there are the rest of us.

 I got a scholarship to the University of Chicago in the early 1950s because I'm from the West Coast.  There was conscious geographic affirmative action in those days.  But it never worked; at least 55 years later it still hasn't.

I've often walked around Harvard and other sacred elite spots and been highly aware that we outsiders don't fit into the East Coast elite.  They really don't know we exist.  When a major conference is put on, a few non-East Coasters are invited as an after thought... even if the subject is China, Daoism, Japan or East Timor.

The East Coast elite is still about footnotes, policy, International Relations, academia, clubs, proper behavior, 'good' schools.

This remains true despite the end of the hereditary upper class, the death of the elite's beloved Europe and its replacement with high tech Japan and globe busting China, the birth and explosion of the computer and Internet giants on the West Coast. 

The continuing seriousness of this divide is evident in the elite hatred of Fox TV (Los Angeles) and Sarah Palin (Alaska); the most outside of outsiders.

San Francisco left

We had a five hour debate before the San Francisco Board of Supervisors this week over a proposal by the Supervisors to condemn Israel for blocking the Armada of Hate.

One video and one photo should tell you what evil people I have to live with here in San Francisco.  The Left lives with you too.

This is a three minute video by the most authoritative person possible saying in public that the Israeli Army is the most protective of civilians in military history (video from February of this year).  Everyone who is not a Leftie knows this.

The photo below purports to be a wedding of 450 Hamas men to pre-pubescent girls a year ago.  While Hamas denies that this photo was accurate and no other photos have ever been produced to contradict this, you have to decide why anyone would believe Hamas.   

Hamas is the ruling political body in Gaza that has refused to accept the aid that was sent on the Armada of Hate.  What does that tell you?

Thanks to Susan, Sumik.

Will the anger last?

Not if it is anger. 

What is that question in the title and what the dickens is that answer in the first line?

The NYTimes and its lapdogs have persistently written about the Tea Party 'anger'. 

Those of us who do not have lefty ideological blinders on know that the angry political groups are in the peace movement, in the hate Bush cocktail circuit, among the hate Palin feminists and in the hate-Jews-pro-Palestinian movement.  The Tea Party is not a political group or ideology it is an immanent American uprising that is calm, determined, grass roots and deliberative.

The point of this blog is that popular anger in politics is fleeting.  Americans were angry about the Christmas Detroit bomber and the White House's ridiculous response; for three weeks.  The American public was angry at the poor response to the Haitian earthquake; for three weeks.  The American public was angry about Tiger Woods treatment of his wife: for three weeks.

Anger in the public mood doesn't have staying power.  Which is why the NYTimes and its lapdogs would love to believe that the Tea Party is really just a bunch of angry people in a fleeting political mood.

Fortunately for all of us, the Tea Party is not a bunch of angry people in a mood.  It is a deeply American force that elected Richard Nixon, Ronald Reagan, George W. Bush and threw up a dingbat (Perot) against two bad choices in the 1992 election and has completely ignored the NYTimes and lapdogs for over forty years.

The real test will be November 2 of this year.  The Tea Party will be nearly 18 months old in its current incarnation.  It appears to have learned from 1992, when it was registered in 50 states, and now rejects self-chosen leaders.  We will see a major rejection of the Obama, Reid, Pelosi train to oblivion.

Anger in the public mood never lasts.  The Tea Party is not about an angry political mood.

Blame it on John D.

I haven't paid any attention to the details of the U.S. vs BP battle.  As a lover of commerce and as a person who knows that the future of politics is very different from the current worn-out model (the future is a random legislature) there is not much drama for me.  The treatment of BP executives by the President and the Congressional committees is a low grade farce, mostly poop and fart humor, not worthy of my time.

There are a number of useful comments I can make, because I have a pretty good idea how a company the size of BP works. 

I'm reminded of the time when I was a banker (VP of Marketing) developing what later became the modern corporate cash management systems, universally used.  I had interviewed at least 30 of the treasurers of top U.S. corporations. I came back from a trip and asked a Senior VP of my bank whether I should mention to anyone that I could save General Motors $40 million with better banking and no disruption of any department.  He said wisely: 'Michael, $40 million will never be of interest to anyone in top management... they only look at figures in the billions.)

On that subject, BP has revenue of a quarter of a trillion dollars a year and employs 80,000 people.  You can compare that to the GDP of Norway or Denmark, countries with millions of citizens. You can compare it to the sales to the world by Mexico, Spain or Saudi Arabia.

 I doubt that anyone in top management could pay attention to a  decision with a figure under $5 billion. A top manager couldn't find someone to talk with him or her (several women in top management) about something so small. Creating a fund of $20 billion could be approved by any one member of top management.  It is a trivial number looked at over several years.  Oil companies work with horizons of 10-20 years.

Three things to know about oil companies. Henry Mintzberg has shown, in his early work, that oil company top management only gets gross information such as: 'how stable is Iran?', 'what is the future of natural gas in the world?', and 'what are BP's relations with China?'. 

No single person runs a large oil company (there have been one or two exceptions).  All decisions take 3 to 5 top managers to agree, if the issue is a top management issue in the first place.

The decisions about a single oil well in the Gulf of Mexico have been split up and delegated far down a chain of command. Andy Inglis is chief executive of exploration and production. He is an engineer, a member of the Royal Academy of Engineering and was preceded in his current job by Tony Hayward the current CEO (and political flack catcher). 

Inglis has several people under him who deal with either exploration or production.  The Deepwater Horizon well in the Gulf is probably in both areas of responsibility. Under these top managers are regional managers and whole chains of command in both engineering, finance, safety and operations.  The same is true at the local level in the Gulf.  Within the Gulf there are probably sectional management chains of command for every one of these components plus personnel.  There are probably 5 managers on the drilling rig, each with a chain of command above and below.  This is a very hierarchical company, decisions under $50 million are very local never getting to a regional manager.

Top management of BP is poorly paid. The highest paid manager is Byron Grote the chief financial officer at $4 million per year plus stock.  This is less than the earnings of the top five managers at every American utility company; tiny companies by comp0arison with revenues and risks that are 5% the size of BP.

BP is the creation of John D. Rockefeller.  John D.s company was split up by 1911, a decade after he retired. He designed one hell of a brilliant and efficient company. One of the split off companies, Standard Oil of Ohio kept growing and buying other less productive oil companies until, a century later, it became the current BP.  Oil companies have to be big so they can stand up to nations, most of which are run by tyrants, including the current temporary occupant of the White House.

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PS: For a correction on the relationship of BP to Standard Oil see the comment below.

New family model

The crime rate in America began to rise rapidly as Blacks moved into Northern cities in the 1940s and climbed for the next thirty years, with Blacks causing three to four times the number of crimes per capita of any ethnic group. The Black migration ended by 1970 and began to reverse by the late 1980s.

At the same time as Blacks were moving North their families were falling apart and we had a national single mothers disaster in the works. From the mid-1950s when there were few single Black mothers (under 15% of Black families) to the peak in 1990, single mothers became roughly 60% of Black families. The proportion is much worse when considering only families with children under 10 years of age.

It is time to welcome an interesting new (since the early 1980s) phenomenon in the Black community: the family reunion.  You've seen these.  They take over a whole hotel with the "Williams Family Reunion". The definition of family is vague, but it is a positive step.  It resembles the tribal connections of family in most of Africa.

What does 'junk' mean

Major bond rating services now all agree that Greek government issued bonds are 'junk'.

Bonds are rated from AAA to AA, down to Ba to Bb.  That describes the probability of the bonds reaching maturity, paying dividends the entire time and being worth 100% when it is time to redeem them. AAA means 100% probability and the current Greek rating of Ba means less than 50% probability of getting your expected money back.

I've bet on Ba bonds in the past and made a lot of money when they paid off.  Michael Milken was the genius who created a vast market for low rated bonds that had a greater likelihood of paying-off than the bond rating houses estimated.

But Greece is a socialist mess.  The 'junk' rating is accurate. (The final blow to the straw house of the Lefty ideology; socialism doesn't work.)

No one I know believes the Greek government can work themselves out of the excessive government controls and subsidies of everything and the rampant employment of friends and family ('corruption') to do nothing. 

Most people I know think Greece and a few other socialist countries will have to leave the EU on their own accord so they can slap their citizens with a wild inflation. Greeks will apparently prefer the hidden punishment of inflation to openly visible increases in taxes and decreases in income.

***PS Take a look at Alex's comment below.  China is buying Greece.  There may be another way commerce will solve this problem.

We do it

We are now complaining in International business circles that China is restricting government purchases to objects that were invented or developed in China if there is a choice.

How can we complain? 

We have a thousand laws restricting government at every level from buying anything foreign if their is anything comparable made in the U.S. even if the price is a third higher. 

Have we no shame?  The answer is 'No'.

Its time

I think its time to remember the Armenian genocide.  The U.S. Congress should pass a bill that remembers the horror and slaughter that the Turks brought to over a million innocent Armenians during and after World War I.

The Turks have a blockade wall against Armenia.

I think its time to remember the perpetual and on-going military slaughter of Kurds who live in the Kurdish parts of Turkey.  The Kurds are fighting for an independent Kurdistan and the Turks are using their military might and ceaseless brutality to suppress the rightful aspirations of the Kurds. 

The Turks regularly ignore the internationally recognized boundary of Kurdish Iraq for barbarous intrusions.

I think it is time to remember that while Arabs and a few other peoples are noted for the barbarity of their torture, no peoples on earth are as monstrous in their torture skills as the Turks.

It is time for the U.N. to take a stand against Turkey on all of these issues.

Summary of my recent blogs

I will offer a blog summary like this every month on the 1st and 15th.

There are three blogs that enter new territory of human thought. 

* The first I wrote last summer but it is the subject of many emails and discussions.  I now call the subject Predatory Food.  There is one and only one reason for the dramatic increase in obesity nearly everywhere: food has been evolving to find market niches where the particular food becomes irresistible.  The number of food products on store shelves has gone from roughly 30,000 thirty years ago to over 80,000 today.  These new foods are aimed at flavor and taste that gets to a small niche of people and is irresistible. It has nothing to do with corn syrup, which is not used in many countries.

* The second concerns the nature of self defense. I have realized (thanks to the Turkish Armada of Hate) that the right to self defense is the core human right that ranks above all other rights including life, liberty, the pursuit of happiness and property. If you can't defend your life what are the other rights? Think of women and slaves.

* I put that together in the case of Jews and Israel. Jews have never had the right to self defense and in the minds of Europeans, the American Left and much of the Muslim world they still don't.  That habit of mind is worn deeply into the brain and needs to become a public issue.

I answer the question: "must Europe fail?" There are two opposing examples to look at.

Does talk radio shape the American political agenda? Yes.  It has shaped opinion on immigration and Obamacare.

I commented on the final blow to the Left which is now visibly dying with the financial disaster that is Greece. The detailed form of Lefty death is not obvious.

Lastly, I use "diversity" in my blog title and I want to point out that diversity is not tolerance.  Tolerance is really holding your nose.  Diversity is living and working together regardless of feelings.

Post presidency concerns

I am already thinking about the issue of all the young and healthy ex-presidents walking around.  I am particularly concerned about Barack Obama when he is no longer president.  I think he doesn't like the U.S., Jews, ordinary working Americans or intellectuals who oppose his ideological views.  Because he is so arrogant, self-centered, lacking in compassion or demeanor and thin skinned he could be a walking time bomb after he is run out of office (most likely in two years). We already have one walking post-presidential disaster (Jimmy-boy Carter). 

The mitigating circumstances are that President Obama has no global friends or allies.  He has alienated everyone who deals with him (Merkel, Brown, Netanyahu, Sarkozy, Singh and Japan).  He will still be able to do plenty of damage because he will still garner attention for 2-3 years after leaving office.

We've already had one U.S. president who was a traitor after leaving office.  John Tyler became a member of the Confederate Congress.

My suggestion is that the 2012 Congress, which could be Republican, begin hearings on Jimmy-boy Carter for treason.  Just hold a few Congressional committee hearings on the subject.  Jimmy-boy went to foreign countries and spoke against President Bush and the Congressional mandates to invade Iraq.  That has to be an appropriate stimulus for considering Jimmy-boy treasonous.

The purpose of the hearings would not be to try Jimmy-boy but to scare the current sitting President.

What do you think?

Authentic vs poor

Calling attention to hypocrisy is a waste of time.  Most people don't care if they are inconsistent, they just move their firm defense to another subject.

But it is fun and personally rewarding to see hypocrisy in others.

My new favorite is the 'authentic' debate and the hypocrisy it engenders.  Most Lefties and many others believe that there is something called authenticity.  As a consequence a man can't really understand and write from a woman's point of view, a white from a Black's point of view or fiction writer in India of a Holocaust survivors point of view.

This ignores most of the history of literature, spy work and cross cultural work environments.

Being wrong about the nature of authenticity is one thing.  But it is always accompanied with a Left wing hypocrisy.  I have been in the top floor apartments of Upper Westside New Yorkers, in the dining rooms of Hollywood mansions and on the deck of luxury yachts and had to listen to Lefties tell me how poor people think and what they need from the government.

Can't these people who lecture on the poor, vote for politicians who claim concern for the poor, realize that they have no idea what the life of a poor person is about?  Unmitigated hypocrisy, which most of us hear every day.

"The poor need this; the poor want that; the poor suffer from this..." 

How do you rich people know so much about poor people? 

I built a park for street winos and spent years talking and working with them; I've been in third world projects in India for untouchables and talked to them.  Nothing I've ever heard from a rich Lefty about 'the poor' connects with reality.  I see the hypocrisy of their belief in authenticity and the conflict with their willingness to be experts on the poor.

Not all Spaniards

Not all Spaniards and not all Spanish gays are filled with Jew-hate.  Spain today has changed very little since Ferdinand and Isabella... stuck in half a millennium of hate.

Here is an exception. Pilar Rahola speaks truth to the insanity that is modern Spain.

Diversity versus tolerance

The subject of diversity seems to be in the air these days.  Part of the issue deals with the lingering debate about the college level ethnic and gender studies departments.  Part from the various insipid diversity training programs that permeate the bureaucratic world.

I have no concern for ethnic and gender studies departments.  Any fool will notice that there are no Japanese or Taiwanese or Orthoxox Jews in these departments. The departments stand for a treadworn ideology not an academic reality.  If some job applicant knows about Mary Wollstonecraft or Antonie Lopez de Santa Anna but not Andrew Jackson they won't get a job.  Most people in our society, especially those in college who want to live in society after graduation, treat these departments as a farce (or as an historic fart).

The diversity training programs on the other hand are probably harmful.  They treat diversity as a political issue and make some kinds of ethnic diversity (Black, Latino, American Indian, women and a few others) as 'precious', fragile, delicate subjects who must be 'respected' (like gang members who demand 'respect').  Most of these people would rather be ignored and allowed to fit in quietly, rather than singled out as 'precious' and fragile.  They are Americans, trying to be Americans and automatically worthy of respect. 

If you doubt me on either of these two points, go to a citizenship swearing in ceremony and see the ardor that immigrants express in their love of America, as they get citizenship. Also see the inherent core diversity of our wonderful country in attendance.

Back to the main subject.  I don't like tolerance, but I don't have an alternative word.  Tolerance is very stand-offish, sour... the tolerant person is 'put upon'.

The diversity that I mention in my blog headline as a core value of commerce is the variety of human conditions which interact in trade.  Diversity certainly isn't primarily ethnic. Real diversity is more often religious, national, linguistic, social class and cultural. Commerce only requires enough accommodation between diverse people to trade, exchange, collaborate and occasionally live safely nearby each other.  That is all.  Like New Yorkers who live in the same building and never speak to each other.... there is a great deal of accommodation that requires minimal interaction.

Get with diversity and forget tolerance.

A view from the hills

My 'Old friend Charlie' lives in the hills and comes into Sacramento to work.  He has written a stunningly beautiful description of his life in response to my comments and emails about the global Jew Hate, particularly what I've documented about the mild Jew-lynching Swedes.

"Michael,

"It's a sorry situation, I'm sure of that.

"But I just don't hear anything up here or even much down in Sac about it -- I mean about the Gaza problem and all that. To me, it's a TV news thing. So I hear about it some by way of the internet or from NPR news, but there's sure no people around here demanding a boycott of Israel. I can't even imagine it.

"There's a local guy here we call "Swede" because he's from Sweden. He's a truck driver who was in the Swedish merchant marine before he met and married a girl who is from around here (Amador County). 'Swede' doesn't like life in Sweden, he likes the U.S. a lot better. Anyway, I don't see Swede all that often, but I'm pretty sure that he isn't worried about any issues with Israel and bears no ill will toward Jews.

"Down in Sac, people there maybe talk about ethnic stuff, I guess. Where we are in business -- South Sac -- it's a real melting pot. We have everybody coming in. We have people from India (Sikh and Punjabi), from Iran, from Japan, from Argentina, from Ireland -- but mostly they are always a mix, like father from Iran and mother from Philippines. There's a guy with a yarmulke too, except I think he moved to Colorado. He was a big help in the early days of the collective. People come and go and talk all manner of subjects, including talking trash. It doesn't matter that much about Hispanic or black, it's mostly by neighborhood and gang affiliation. The biggest war of all is the war of the sexes. As far as the business goes, and I think most people that we meet, everybody figures it this way: if you can't do business with Jews, who can you do business with?

"In Sacramento, it's all democratic party, and I think Obama's popularity is holding up. I'm not in Sac that much, but when I am there in connection with business, it seems to be mostly Chinese people that I talk to -- the lady that runs the little coffee shop (talk about the weather), the guy that runs the laundromat (talk about Bruce Lee and Jackie Chan). On our block, there's a storefront church of people who are mostly Guatemalan, I think, but I don't talk to them much -- they call themselves "Al Shaddai" whatever that means. Then there's a black barbershop complete with pool table. But if I get a haircut I go to the new Super Walmart, where I know a sweetheart young lady, very black and all positive, who works at the Style place and does everything, you know, shades and braids and waves and what have you. (Of course, her talents are wasted on me!)

"If you want to know what the politics is in South Sac, just read the Sacramento News and Review (free weekly tabloid), pretty good reporting and I think you can see it online.

"The only thing that's not too great about Sacramento, especially South Sac, is there's occasional drive-by shootings and sometimes innocent little kids get killed -- I mean kids like three or five years old. Most people are packing, you know. We had a holdup already (at gun point) and more than one attempted burglary. Also, don't forget to lock your car! I forgot to lock it last time I was there running errands and my new (used) iBook is gone (about $300 to me).

"But I'm mostly up here in Amador. People don't usually pack up here, but they damn sure are armored up. I think what people here are concerned about and talk about, especially with politics, is:

• Global warming NOT (we just had an unusually cold winter up here, or so everyone says, followed by a late spring and rain in June!)
• Tea Party -- anti-abortion and anti-regulation
• Sarah Palin -- women like her and the guys do too, but for different reasons!
• The economy is still down, work is hard to find, but maybe getting a little better
• North Korea -- we should nuke them
• Everything is made in China
• And, of course, everything's going to hell in a hand basket -- that's a given

"I hope you  won't let all the negativity get to you."

New on my blog

I am going to post a summary of the past two weeks on my blog.

Posting will be on the 1st and 15th of the month.

Check next Tuesday to see what this all about.

Let me explain

It is hard for a rational person to understand two conditions that effect Jews.  One is logical inference and the other is universal humanism.

On the first, logical inference: we assume, from experience, in most cases, if someone is angry at another person, if one person attacks another, that the second party, the recipient of the aggression, had some culpability.  Rape victims know this which is why they often hide the crime.  We have a cliche: where there is smoke there is fire.

However every Jew knows that this logical inference can be wrong when applied to Jews.  The 'Blood Libel' that Jews kill children for their blood to be used in Jewish rituals, is a 1,000 years old and has been used incessantly (still common today) in Europe and the Middle East.  We know that not a word of it is true. The Blood Libel never happened yet the accusation has been made many millions of time. Tens of millions of times. Logical inference is wrong when it comes to Jews.

On the second, universal humanism, we confront the assumption and experience that most humans are very much alike, and should be given the same rights. 

However, Jews for more than 1,000 years have never had the right to self defense.  That long history has eroded a footpath in the minds of Europeans and their co-evals, that Jews don't have the right to self defense today.  Israel is condemned daily for acts of self defense. The tread worn path in the mental history of most people is that Jews don't have the right to self defense.  For Jews, universal humanism does not include the right to self defense.

My two points: if you are a Jew, people can lie about you with absolutely no rational or factual basis and you as a Jew have no historic right to self defense. 

One thousand years of experience says I'm right.

Don't miss this one

Glenn Reynolds (aka Instapundit) has written an article on the bubble in higher education.

He is right on.  The value of work after college, in general, will no longer justify the astronomic costs of college time.  It hasn't for nearly two decades.  The same goes for prep-schools and many post graduate departments.

There are several points that Reynolds, as an academic, misses:

* Paying off the associated student loans is debilitating and destroys the working life and working opportunities for many people. If you have to pay off a student loan at $700 per month, you usually can't take a job where you will learn important lessons about the business world, or start your own business if you have the skills.  You also must look forward to a very grim loan paying future with no likely reward in sight.  Depression. You postpone a family at the time when you are most capable of raising children.  Overall, for most people college loans are a disaster.

* Colleges are a business disaster.  The administrative costs of college are far out of proportion to their contribution to the final product.  I've consulted with several colleges and walked away stunned by the administrative overhead, not to mention the incredibly high salaries to faculty which is wasted in 98.3% of the positions.

* Many Universities just lost a bundle in their endowments.  Maybe donors will be more cautious in the future.

* Most importantly, commercial colleges are stealing the sophisticated non-bubble students who are able to calculate the cost of education, match the specific appropriate academic field or training, and benefit from an efficiently delivered education. 

*Plus, commercial colleges put a lot of resources into making sure their graduates get jobs.

I knew it

Now I consider it a fact: the U.S. State Department is anti-Israel and always has been. An honest man has brought history up to date.

We know that the State Department fiercely opposed the creation of the State of Israel until Harry Truman shoved it down their Skull and Bones Yalie throats.

As Michael Oren points out (in his Power-Faith-Fantasy), the U.S. State Department was pro-Arab for 200 years, exactly like the British Foreign Office and the French Quai d 'Orsay.

Here is an honest man, with a lifetime in the State Department, the top of U.S. government and a lifetime in the foreign service: Elliott Abrams "In the American government, it is never the State Department bureaucracy that wishes to brave the endless assaults [on Israel] at the UN. Normally the resistance comes not from the various regional bureaus or from the International Organizations bureau, where Israel is so often viewed as a giant pain, but from the White House and sometimes (example: George Shultz) the Secretary of State."

This is what I have always seen.  The State Department over-rode the great George Bush in his final year by commandeering his close friend, Condi Rice, and turning her (the highest ranking real black woman [up from slavery] in world history) into an anti-Israel puppet.

Basic American mythology

We have a deep core mythology for which no real character, god or idol has been created.  Our core mythological creature is one who is constantly strengthened by the attacks on him.

Think of Audie Murphy or Sylvester Stallone.  When fighting they get stronger the more aggressive and mean spirited their opponent.  The meanness and hostility feeds the strength of the the hero.

Such a strength gained from the power of the attackers is also evident in the Ghostbusters, a movie where the gelatinous monster that swallows up New York feeds on the evil of New York City.

I expect someday we will have our truly American children's story with a character that fits this description: a the character who gains strength from the attacks on it.

In the meantime the reality of America is that three presidents have benefited from this unvocalized mythical creature who gains strength from the attacks on him: Richard Nixon, Ronald Reagan and George Bush. 

Now we have a new addition to the mythology: Sarah Palin.  At the rate attacks on her are going, she will carry every state in the electoral college when she is elected president.

And Israel will become the most beloved of nations, based on popular opinion.

I have written my version of the myth which I call the Magic Dragon.  Give me a good ending.

Our 'peculiar institution'

This is a phrase you had better know if you are an American over 16 years of age.  Our 'peculiar institution' is the euphemism that was used for seventy years by Southerners to refer to slavery.  It was the Southerner's way to avoid directly dealing with the moral power and emotional accuracy of the word 'slavery.'

I bring up this euphemism for two reasons: first we have a president who is using several euphemisms to avoid using the real words that carry impact.  The real words are Islamic terrorism.  The Arab and Persian worlds of Islam are hysterical in their hatred of Jews and America.  This is a moral outrage not the slightest bit different from the moral outrage of slavery.  Yet, our American President prefers euphemisms like ' human caused disasters' and 'military contingent operations'.  These euphemisms sounds awfully close to 'peculiar institutions'.

The second reason I bring it up is because we have a president who pretends to be black and pretended to be black for 35 years.  A real black would know the euphemism 'peculiar institution' and would be repulsed by the use of euphemisms in the face of true moral outrages.  But our president, Barack Obama, has absolutely no connection to black American history. Euphemisms don't bother him. Islamic terrorism doesn't bother him.

His mother was a white anthropologist and the maternal grandmother who raised him was white.  His father was a Harvard educated Kenyan.  For those who know nothing about slave history here is a startling fact: No slaves came to the Americas from the Kenyan Luo tribe (Obama's father's tribe). All slaves came from the Ivory and Gold Coasts.  A few slaves came to the coast via internal slavery but they never traveled more than a few hundred miles. From the Gold Coast to Kenya is 2,500 miles; with not a single road anywhere.

Nothing in Obama's history has any connection to American slave history.  The man is a 100% phony black. And euphemisms that distort reality, like 'peculiar institution' mean nothing to him.