Pro Commerce

80-20 rule

 You know the rule, nearly all revenue (80%) comes from a fifth (20%) of your customers.  That is also true for Federal and State tax revenues.  It is only a rule of thumb .... but almost a law of business.

David Boxenhorn pointed out that the rule applies to two more levels of arithmetic: roughly  60% of business comes from 5% of  customers, and 50% comes from 1% of customers.

This latter figure is interesting, because in the old music business, book publishing, the current film business and in venture capital, it is just one investment, one work of art that comprises nearly the entire business.

Can you apologize to a city?

Jerusalem, O Jerusalem.... please accept my apologies.

 Jerusalem may be the oldest continuous, most renowned and important city in history.
When I first arrived there in 1959 it was barren, no trees, just like a standard Arab city.  The entire Old City, with the Wailing Wall, was closed to anyone on the Israeli side (Arabs only pretend to be hospitable). There were a few hotels, fewer businesses, other than an occasional suk, few people out on the street and endless white stone buildings.  It was desolate, boring.

I returned again in 1990, 2003 and 2005 and it was the same spiritual, religious, non-commercial city.  Boring, really boring to a man of commerce.  

The Old City was now open to the Jews that put the city on the map of history, except for the Arab Conquest desert-gold-plated-stone in the very middle called the Dome of the Rock on the Temple Mount.  But nearly all the stalls in the Old City were ugly tourist traps run by Arabs who design their stores to look like mini-iron prisons.

 Big change in 2010. A major mall,  Mamilla Mall has been build over 4-5 blocks long from the city center to the Old City, Jaffa gate.  The Mall is beautiful, open, brilliantly designed, with open restaurants and coffee shops, great windows, good parking and international stores in abundance.

It sort of makes the sacred Old City a Disney destination.  Wonderful.  Commerce has come to Jerusalem and it is not spiritual, not religious.... it is life.

There is also a lovely new shopping,walking,  restaurant street near the German Colony called Emek Refaim which is also alive.

Jerusalem, please accept my apologies.  You had potential all along.  I just never saw it.

Fifth pro commerce value

Reader David Boxenhorn has pointed out to me that the fifth value promoted by commerce is different from the other four.  

 The list of values that promote commerce are: diversity, meritocracy, openness, love of technology and favoring the market.

David points out that the first four are propensities, often cultural.  The Dutch, Danes and Japanese are very open and honest; Indians, Arabs and Latins are not. The same is true for meritocracy and love of technology. To some extent any overly hierarchical culture must make special provisions for meritocracy as the Japanese do with adulthood adoption. Highly qualified people are adopted or married into high ranking families.  Diversity is less of a propensity and more of a begrudging acceptance.  Nearly anyone can live comfortably in Amsterdam and nobody but a tribal Arab can be comfortable in Riyadh.

 The exception is ‘favoring the market’ which is learned.  Until 1960 most Americans preferred monopoly, like Bell Telephone, but with the advent of overseas goods getting around the high tariff barriers, Volksvagen and Cost Plus, Americans began to see the benefits of the competitive market.

The same has slowly been revealed to people in Europe and Israel with telephone long distance costs and airlines.

People are learning that the market can reduce prices and costs and promote innovation.  Such learning is a key nail in the coffin of socialism which always promoted monopoly.

Learning to appreciate the market is a value that promotes commerce. It is a non-cultural propensity.

Is this a Civil War?

There are several elements of the Great American Civil War that are present today and worth examining.
 We have in both cases an open political division of the country over the moral role of America in the world.  The two main parties (the same as in the Great Civil War),  the Republican Party with its radical Tea Party wing, believes that the purpose of America has been denied and rejected by the Democrats in power. The Democrats believe they have the mantle of righteousness on their side.

The sides are slightly changed over 150 years.  In the Great Civil War the party that came to power was the Republicans and it was the Republican party that began making major changes toward the Republican moral position (anti-slavery)... today it is the Democrats who are making changes to dismantle the American moral role in the world.  In the Great Civil War the underlying issue was slavery and the public issue was expansion of slavery to new states.

Today, as before, the underlying issue is the moral leadership of the United States in the world.  Today, the Republicans again believe that America must be a moral leader.  It is no longer an issue of domestic slavery, it is now an issue of defending the American vision of Democracy, religious freedom and Commerce in the world.

As with the Great Civil War the Democrats use euphemism  (the ‘peculiar institution’) to describe their anti-moral position.  Today, the Democrat euphemism for the moral war against Islamic militants is ‘overseas contingency operations’.
 The emerging issues then as now were overlays to the underlying moral leadership role of the United States.  The Republicans want the Mexican border closed so anti-Democracy aliens can’t sneak into the country, want a strong military presence in Iraq and Afghanistan, want North Korea and Iran to be disarmed of nuclear weapons, want the only democracy in the middle-east (Israel) to be supported fully, want the domestic economy to be a fiscally balanced as possible for a global leader, without new draining government entitlements, and with little or no effort by the government to run the economy with stimulus or direct control of corporations.  The Republicans are proud of the concept of American exceptionalism.  The Democrats are on the other side of each issue and believe America has often been wrong globally, created antagonism unnecessarliy and needs to emulate a more modest European social and international model.

The country, today, even has a state by state division, Red and Blue, but the state divisions cover the more significant local divisions which are cities versus suburbs and exurbs.  

No open warfare can grow from the current Civil War but the parallels are disturbing.

Mystic chords

 "The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearthstone all over this broad land, will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature."

I hate to take issue with Abe Lincoln in his first inaugural address, but I think that the ‘mystic chords of memory’ are more like genuine out-in-the-open public memory.  While such memory is not visible in the flow of pop cultural or daily news media, the body politic is a genuine entity that remembers and digests historic events.

The body politic is evident in the mental structure that we find in our language; it is evident as the reason we get smarter when we talk with smart people and most importantly it is visible when the body politic erupts to change the political direction of the nation/state/or local government.  We see such out-in-the-open memory in the reaction to building a Ground Zero mosque nine years after the New York Twin Towers attack.

'Mystic chords' no. Memory in the greater body politic, yes.

Repos

Pronounced  ‘ree pose’ are a financial instrument that I occasionally see under attack by ignorant politicians.  Really ignorant.

When I was a banker, repos were first coming into common use.  Since it consisted of one person in the bank on the phone, there was not much need for me (head of marketing research) to get involved.

What that one person was doing was buying and selling the volatile money the bank had over short periods; one day, two days, a long weekend.

In a bank with tens of $billions in deposits the daily fluctuation could be in the hundreds of $millions. Only a specific 20% had to be kept on deposit with the Fed, calculated every Wednesday, so the balance was borrowed or sold to adjust for the daily fluctuation.

Got what a repo is?  A bank loan good for one or two days that pays interest.  Large corporations, investment institutions and financial businesses slowly got into the repo business, over the years.

You can’t do any harm with a one or two day loan. 

Everyone on the trading desk for repos (the one guy at my bank on the phone) knows everyone else in the business.  No con men get into that tight circle.  For that matter, the same is true of government bond trading desks. Simple, honest and straight-forward, trading $billions a minute.

* (Photo from a Hotel named Repos in Croatia)

Era of analysis

I apologize for writing my response to President Obama’s statement that the reason nearly all Israeli’s distrust him is because of his middle name.  I said he is deranged.

I have a responsibility as an intellectual and as the author of this blog (which is read by many of the smartest people in the English speaking world) to do a better job of analyzing the nature of the president’s derangement.

The first man to take on this intellectual responsibility has been Dinesh D’Souza.  The first article of intellectual analysis is appropriately in Forbes.  The prime question to be answered: ‘Is why Obama hates business so much and so deeply?’

D’Souza has a great advantage in this venture. He recognized that his older peers in India held the same worldview that Obama’s father held.  They were anti-British anti-colonialists.

Obama titled his first book Dreams FROM My Father.  The ‘from’ is significant as D’Souza points out. Obama worshiped his father who was an anti-colonial socialist with the standard 1950’s Kenyan black zero-sum worldview that the West was only richer and more successful because it exploited the poor in the third world.  Obama jr. clearly still believes that and acts on it as the first American president who is anti-American.  (His father was also a drunk and a murderer.)

Remember the first act of Obama as president was to send the statue of Winston Churchill back to England. Outrageous, infantile and inexplicable at the time.

I like D’Souza’s argument.  It is the beginning of a genuine and much needed intellectual analysis of a weird man. A weird man who became president, first by manipulating a non-democratic (he only used caucuses, not election primaries) procedure to win the Democratic Party nomination, then moved from far behind his Republican opponent to win after the mid-summer 2008 stock market crash that wiped out 40% of the savings of nearly all Americans.

Subway

I watched a Subway franchise open in the diamond district of Ramat Gan in Israel (part of Greater Tel Aviv).  This is how commerce really works.

The franchise of one location cost less than $10,000, the classes for training were in New England.  The buyer of the franchise (one of 33 allotted to Tel Aviv) is English and used his own savings because no loans are available anywhere.  He was at the site sawing, hammering, cutting and lifting before the opening.

The fitting out of the site cost over $200,000.  The specialized Subway equipment comes from a warehouse in East Europe, it is made everywhere in the world, especially China.

The rent for a tiny space in a ‘lunch-traffic-only site, surrounded by juice, coffee and fallafel shops, in a typically scuzzy Israeli walkway, is $20 a square foot, plus expensive utilities.  The same rent as San Francisco or New York.

The store is Kosher, no cheese or dairy products.  The food was fine, high Subway standards but the cookies were a little soft....prossibly because of the ‘no-dairy’ rule of a kosher operation.

Opening day the customers were 25 deep, and being Israeli, not willing to form a line.  When the Internet and fax connections are finally set up (government land lines<see comment below by Susan>) someday, the front counter will operate more smoothly.  It was a successful opening and the great guy who created this deserves his success.

This one store will create 12 jobs directly and an equal number indirectly (prep work, delivery and support).  

Why do so few people understand business? The miracle of jobs, food, pleasure, accomplishment and conviviality. 

The kind of people who don’t understand the miracle of commerce go to work for the government and universities.

Everyone seems to know

I just saw a video of Jimmy Carter being interviewed by Jon Stewart.  Both mentioned Obama's connection to a Kenyan tribe, which is an insider's reference to Dinesh D'Souza's article about Obama adopting the values of his father (a drunken murderer) who was a ferocious anti-colonialist. 

It appears that this article is widely circulated.  I linked to it earlier this month.

This is just to let my global readers know what is circulating in elite media circles these days. 

Of course the Left hates the D'Souza analysis so it must be powerful.  There is no other explanation of why the President, newly in office, returned the statue of Churchill to England along with great deliberate offense.

I think D'Souza is right, tragically.

Gidi's solution

Are you overwhelmed by too many voice messages and too many short phone calls you have to make? Messages that pile up during meetings; conversations that you need to have during periods of dedicated work?

I am.

One of my Israeli friends, a terribly busy international executive, has found a solution that I like.  His voice mail says: ‘ don’t leave a message, send me a text.’

The benefit of a text is that it is a polite way to avoid our required social formalities.  A polite and efficient way to live in the world.  Of course, you had better be a nice person to start with, otherwise you will have overlooked the main reason for social formalities: interpersonal lubrication.

Obama peace talks

Few people take the Obama PA-Israel peace talks seriously.  No one in Israel or the West Bank. It appears to be just a puppet show for a Muslim oriented, arrogant, ideological, U.S. president, who still views the world through the eyes of his socialist-anti-colonist 1950’s style father.

One photo, just one photo can explain the situation to anyone who is:

- self honest
- not blinded by Jew hate
- not closed-minded since age 23
- not a sociopath who lives in a world of hate
- not a lefty Jew trained by 2,000 years of cowardice
- or anyone who prides themselves on their ignorance

The photo shows the standard road sign to be found everywhere in Israel.  The sign is in Hebrew, Arabic and English.

What does the sign show?  It shows that Arabs live in Israel (over one million) as full citizens and full participants in the country since it was founded more than 60 years ago.

This is in contrast to the Palestinian terror-tories where Israeli-Jews are murdered it they go there unprotected.  The Palestinians publicly announce that they will never let Israeli-Jews live in any land that the Palestinians control.

The Obama peace talks are supposed to be between one side that fully accommodates its own native Arab population and the Arab side that hates Israeli-Jews and kills those who enter peacefully.

Intelligence success

I’m not known for my appreciation of intelligence agencies, especially the ones that are deliberately awful like the U.S. agencies.  Israel and Russia appear to do a good job.

I want to call to your attention three visible intelligence operations that were stunningly successful.

1. An entire 20 year old global political movement, Human Caused Global Warming, was brought down with the release of East Anglia University email files by the Russian intelligence service using a university server in Tomsk, Siberia.

2. The intelligence service of Dubai was publicly ridiculed as incompetent Arabs, along with exposing the Jew-hate of the Irish, French, British  and a few other governments, that condemned Israel with no evidence.  

The Dubai government announced a Jew-hating Arab terrorist was murdered in his hotel room by a team of 23 Israeli operatives (why not 35?).  Photos were published but no real person was ever identified.  Good intelligence cover-up by the agency that actually did the assasination.

3. Julian Assange apparently thought , after ten years of success, that he could publish secret intelligence information with wikileaks.org ... impervious to all secret agency reactions.  So some intelligence agency got several women in Sweden to accuse Assange of rape and got prosecutors to press charges. No new posts to wikileaks since then.

Three cheers for good intelligence work.

Uncertainty in commerce and international relations

I hope my readers will not question the fact that the past two years of the current Democratic administration has created a very high level of uncertainty for large businesses and nations.  It is a fact.

The economic level of uncertainty created by over 5,000 pages of new health care and finance laws  along with more than a $trillion of political pork (‘stimulus’) spending are significant.

 The level of uncertainty in the international relations is even greater.  We have terrified our allies. Japan has opened full and intense partnership relations with China. East Europe is looking for anyway to get out from under the Putin claw, the Russians are sending combat subs to American waters and as J.E. Dyer points out, Israel has closed a new defense alliance with Russia and is doing the same with China and India.

This may be stupid

This may be a really stupid blog.  I have found no way to relate several observations to commerce. These subjects are off the wall.

* The first piece of irrelevance comes from my regular travels to Japan and Israel.  In both countries a woman can walk the streets on a dark night and feel safe.  The murder rates are very low in both countries which is usually a reliable measure of basic crime since murder nearly always gets reported.  

San Francisco had an annual murder rate as high as 112 murders at the peak in 1991, today it is back where it was in the early 1960’s around 65.  If San Francisco had the Israeli murder rate only 18 people would die.  If it had the Japanese rate only 9 people would be murdered. 

Is crime culturally related?  Absolutely.

* I consider Woody Allen to be the poster boy for Jew-hate.  I have argued that Jew-hate among Europeans arises from 1,500 years of Jews living without self-defense.  Woody Allen is the personification of the Jewish coward of that 1,500 years of tyranny.  The German-Yiddish word for hopeless, pathetic, coward is ‘schlemiel’.  Woody is a schlemiel of the first order.  The Left loves him and the Left generally hates Jews.  I rest my case.

Actually I don’t rest my case.  The question now is how could a Woody schlemiel have emerged with such visibility in the modern world.  This interview with him in the NYTimes explains it. 

The man is a fool, with no introspective skills, no self-honesty and no reasoning ability.  He thinks New Age fortune telling (think Mia Farrow) is identical to serious religious practices.  He thinks aging has no benefits for anyone in terms of reflection, perception or moderation. He is obviously looking at himself.  The cost of making movies in New York is not too high, he just doesn’t have the money (I’m serious... he said that).  Based on outrageous French press reporting about a film he made, he wonders out loud if the major mainstream media may sometimes miss reporting serious matters.

He is the perfect Jew for the celebrity world.  Old World cowardice, New Age stupidity.

(Photo: my favorite Tel Aviv beach swim site)

Larry Ellison

“Larry Ellison, ... was born to a single, 19-year-old Jewish mother and raised by her aunt and uncle in Chicago."  He wasn’t from a complaining black culture, the only burden he didn’t start with.

“I have had all of the disadvantages required for success,” Ellison has been quoted as saying. “The most important aspect of my personality, as far as determining my success goes, has been my questioning conventional wisdom, doubting the experts and questioning authority. While that can be very painful in relationships with your parents and teachers, it’s enormously useful in life.”

When Ellison visited Israel for the first time in 2007, he told a business conference that he had launched Oracle, now the world’s largest business software company, in 1977 with just $1,400 of his own money because no one had believed in his vision. “Businessmen are successful when they question the norms that conventional wisdom espouses,” he said. “That is where innovation comes from – finding errors in conventional wisdom. That is what my company is built upon and that is why I think Israel will continue to be innovative. People here are always questioning what they are told!”

“When you innovate, you’ve got to be prepared for everyone telling you you’re nuts,” Ellison once said.”

Nearly every thing Ellison says sounds wise to me.  You're probably reading my blog because I think and live far outside the conventional world.  You too?

Work and jobs

The idea of work or the idea of a job must be in serious flux these days.  On the way to oblivion.

I regularly talk to people who respond to the question “What kind of work do you do?” with the very uncomfortable reply “I do xxx, but I love doing it.” Meaning it isn’t work to them.

Based on survey data, there are roughly 45% of working age adults who are not counted in the labor force, by choice; they say they ‘don’t work’. Many of these raise children (very difficult but not work or a job ... its an historic role), maintain a home or write poetry.

There are another 5% who are truly self employed doing things they want to do.  Among the remaining people in the labor force, mostly in corporations, 15% say they love what they do (mostly in management, the professions and running a small business).

Total that up, and two out of three Americans can not be called ‘workers’ or people who go to traditional ‘jobs’. Or put the other way, less than one out of three people can reasonably claim to have a job, go to work or look for work.  

That doesn’t sound like a society where the terms labor force, work or jobs makes much sense.  

We need some new terminology, especially for the tens of millions of people who earn money doing what they love doing.  The earning/contributing part of their time is just living.

The meaning of pro commerce

The brouhaha over the Oval Office carpet is quickly forgotten. 

But the diluted quote from M.L. King Jr.  and Theodore Parker ‘The arc of the moral universe is long, but it bends toward justice.’ is inappropriate in the context of the current Oval Office.  There is little evidence to support anything the Democratic Party, unions and Obama have done to support the the true source of justice.  

In the long arc of history, the moral improvements from the Civil War were small compared to the global atrocities of WWII, Communism and the rise of commerce-hate by Arabs, the Luddite vision of the Greens and the wildly out of control Jew-hate of the current European Left.

The only bending of the arc of history toward justice has been the global expansion of commerce.  Commerce ended the human political slaughter inherent in Soviet, Chinese, Cambodian and Vietnamese communism (still ongoing in commerce hating Cuba, North Korea and Venezuela) and ended global starvation the human norm for several hundred thousand years.   Commerce ended the abbreviated  global lifespan of 40 years (an average based on death in infancy and death in childbirth) by bringing hygiene to the world. Those two commercial contributions have been the only true bending of the arc of moral history toward justice.

The whole point of pro commerce is that commerce thrives on the moral values of diversity, meritocracy, openness (honesty), love of technology and open markets.  No other human institution effectively promotes these positive human values...not religion, not the UN, not the military, not law and not even democracy without commerce (examples are Greece and Mexico).

I summarize: the only bending of the moral arc of history toward justice is the rise of commerce. That is the point of this blog and you will only find a few other living people arguing the same obvious fact.

Unions and the middle class

President Obama regularly conflated labor unions with the middle class in his Labor Day rant.  Wrong.  Way wrong.

Labor unions are a legacy of 16th Century crafts guilds. Unions and guilds have been the four wheel brake on commerce throughout history. 

Today, they are the most destructive force acting on large manufacturing businesses and government bureaucracies. 

* Think of GM and the UAW that required a $30 billion taxpayer bailout.

*Think of the UAW that destroyed the NUMMI auto plant in California and put 15,000 plant and associated people out of work rather than take a pay cut.

So our president thinks labor unions have created the middle class, created shorter work weeks (which have actually been getting longer every year since 1982) and ended child labor. 

That means that while he was at Occidental, Columbia and Harvard, Obama never noticed that Japan has the biggest middleclass on the planet and virtually no real labor unions.  India has a rapidly growing middleclass without any benefit of labor unions... the same is true for Singapore, Hong Kong and Taiwan. 

In each of these examples we have a gigantic middleclass with no active labor unions.

Debate in commerce

My friend Suzuki san in Japan has long believed that one secret of American creative commercial success is debate.

Debate is both a skill and a cultural propensity.  The skill is learned many ways.  

I was a judge in a Japanese debate contest, where the subject was 'Pepsi is better than Coke', and the Japanese participants failed since they were culturally unable to say anything negative or make negative comparisons to the opposition.

The two winnng entrepreneurial societies on the planet, the U.S. and Israel are the two where open debate and confrontation are common in business.

Picture any serious business discussion, if you have ever been in one, and you’ll find multiple parties arguing strongly for their own position.  

‘My approach has these three benefits and bonuses.... yours could even have adverse fallout...’

Open, aggressive debate is our commercial in-house style.  It is still cordial and made in a system where workers remain capable of working toward a compromise.  Those are very American and Israeli qualities.

Probably an important part of the openness and meritocracy that help commerce thrive.  The debate mode may not be essential but it is clearly positive for commerce.

Disappearing English

I’ve spent nearly forty years visiting Japan annually, and have gone to Israel off and on for much longer.

 What I saw in Japan, over that time, was a decline in the use of English on signs, menus, listings, local postings and the declining use of American models in advertising.  The exceptions to my observations have been tourist locations where signage has steadily gotten better.

I saw a nearly similar phenomenon in Israel.

The Japanese pattern of decline began in the mid-1980s as the American Congress held an annual “Japan bashing festival” every January to April.  The decline in public English usage has continued to this day.

The same seems to have happened in Israel except that the use of English grew until the mid-2006.  It has been in decline since then (the beginning of the Condi Rice peace process) and probably much more so with the rise of Jew attacks by the Obama White House.

I have tried to be careful in my sampling in both countries.

Two things to note in this phenomenon.  First, I am referring to autonomous citizen based forces.  In neither Japan or Israel is there a change in government policy.  Second, this is contrary to the explosive use of English in the world, especially in business... where we now have English as the lingua anglais.

This probably occurs because of the change in attitudes toward America by ordinary people.

Islamophobia or learning

If you are as sick of the entire mainstream media calling Americans Islamophobes as I am, then a good antidote is a quick read of Bookwormroom's simple summary of what real American's have learned in the last nine years and the Left blindly ignores.

Eggs

There are two places I know I can get real eggs at the supermarket: Japan and Israel.

Upon my recent return from Tokyo I decided to find some good tasting eggs, the kind I enjoy in Tokyo.  I spent three months in San Francisco tasting more than a dozen different premium eggs.

The supermarket eggs in Japan and Israel are 9-10 on a 1-10 scale.  The American supermarket egg is a 1.  

I tried eggs from organic chickens, Omega 3 chickens, free range chickens with high colonics and aroma therapy nests.  I never found an egg in America than gets a rating higher than a 2 on a 1-10 scale.    

I ended up finding New Zealand eggs at a Japanese grocery in San Francisco that are 10s.  The eggs cost me $1 each but they are worth it.  I also love the distance: 7,000 miles.

I try to have all meals with an average source distance for the food of 1,000+ miles.  One New Zealand egg raises the average of every meal.  

As you can guess I think the locavore food nuts are racist, Luddite, arrogant people who hate commerce, hate poor people and hate everyone who doesn’t live in California, Israel or Japan. (Wait... probably half of them hate Israel and know nothing of the fresh food diet there.)

Cute note from the S.F. to New Zealand data: yelling to a friend between the two places, (Luddites will probably try this) the sound would travel for 9 hours each way. Listen closely, then wait 18 hours for the reply.

Torture? (Humor)

Can I compare waterboarding to sitting in a middle seat on an ordinary coach class flight of four hours?

If you don’t know what waterboarding is like buy a New Age Netipot and use it.  You put your head below your shoulders and with this pot of water you pour the water in one nostril and blow it out the other.  It feels terrible until your peer group of New Agers explains the miracle of clear sinuses.

You probably know what the airplane experience is.  Confined to a tiny space smaller than a coffin with plenty of air and virtually no movement unless you use social credits to ask a seatmate to let you stand up and move for a few minutes.  

 The first form of torture, waterboarding is usually done to you and you have no control.  The second is either because you are too poor (our version of a social outcast) or the airline is mismanaged and overbooked.  Both states are only partially in your control.  Some things like a fat or smelly seatmate or bad hair in front of you are out of your control.

The whole issue is clouded when we remember that many people are into sado-masochism.  Control is supposedly absent, but a code word to stop the sado part does exist.

Put the three together and you have my confused reaction to the airline scenario which I experienced recently, inadvertently, for the second time in five years.  I hate it. Fours of waterboarding might be worse... but only a little bit.

Blot on idealism

I knew Lou Kelso, the inventor of the ESOP (employee share ownership plan) that is the modern tax based version of employee owned coops.
 Lou was a San Francisco lawyer who wore a Harvard 1940’s style bow tie (not actually from Harvard) all the time.  The ESOP was originally an idealistic model like your neighborhood food coop, that became part of tax law in the early 1970s and Lou formed a company to help corporations give their stock to employees as a temporary loan and then borrow the money for them so the employees could pay back the loan and own the stock.

The plan was so successful that the Kelso firm is one of the top modern equity finance firms.

Only trouble is that it is worthless to employees who never get any meaningful say in corporate management, (as if employees were really capable of managing a modern company or wanted to), and often lose part of their retirement funds as the ESOP tanks.

Worst of all, the ESOP has become a favorite way to inflate the value of a failing company so it can be sold for much more than it is worth.  

So much for idealism.  Many losers have idealism and Lou Kelso to thank. (check stories about Sam Zell and ESOPs)

In my experience this is a common relationship between idealism and the real world.

Kindly, for your information

A few comments back you’ll notice in the comment section that I have been invited to write for a new and striking website: the Rightnetwork. 

The site has high production values and the kind of positive values I champion. It is my view that what holds the non-Lefty realm of politics together is our upbeat optimism, think Sarah Palin (the Left is mostly style and anger).

I will write for them and I am pleased to call their opening today to your attention.  I  like video, so this might tempt me to do some video. 

Divine justice?

I doubt that my readers believe in Divine Justice but I was almost converted to the idea when I arrived for my international flight and had left my wallet with money and credit cards at home.

I still flew with just my passport and my partner’s money and credit cards. The wallet arrived by express a week later. I saw the irony immediately. 

I had had a credit card since 1958, when they were barely useful and had the first truly useful one that I created in 1968. Forty-three years without leaving my wonderful invention at home. 

That was something close to divine justice.   My feeling at the moment I realized I was without my credit cards will not be forgotten.  I felt naked.  My ability to buy nearly anything I wanted,  even trivial whims, without anyone else’s approval... was a magic wand I had lost.

The card was not my identity, it was my hammer, knife and screw driver.... metaphoric tools.  Without it, I was walking in the modern world with only access to a key ring size Swiss army knife.

Researchers on the right

I.F. Stone (Izzy) was a hero of the Left from the 1940s till the early 1980s.  My father subscribed to the I. F. Stone Weekly from its beginning in 1953.  I read every issue until I left for the University.  I thought, and still think, Stone was an honest man.  Honest publicly and self-honest.

What distinguished Stone above all others, Left, Right and Other was that he used original sources.  With gigantic glasses and poor eyesight, Stone read deep into the D.C. rooms full of public documents to find authentic documents and accurate news.

Stone was also a simple liver.  He picked up the press runs of his boxes of Weeklies, hand carried them to be addressed, and carried them to the post office.  Until he was too successful to carry so many boxes. (70,000 subscribers in the mid-1960s.)

Today the I.F.Stone tradition is carried out by the investigative Right.  I read daily reports of investigators online scouring every document, journal, press release and speech that they can get their hands on.  Izzy Stone is alive on the right and the news we get from these sources is honest and reliable.

In the meantime the Left fulminates and bloviates mercilessly, filled with hate (except for their divine Obama) with no facts, no data, just augmenting their conspiracy theories and updating their mid-19th Century theology about commerce.

Tasmania

Can I make a match? I mean between major disruption and economic decline.

 My hero, Matt Ridley, author of The Rational Optimist, writes about the natives who lived in Tasmania.

These were the same natives who arrived in Australia as paleolithic hunters 50,000 years ago. At the time there appears to have been a land connection between Australia and Tasmania. Some hunters went to Tasmania.

The connection to Australia was cut off about 10,000 years ago. From that point on the Tasmanian natives lost nearly all the paleolithic arts, from flint spears, a 21 herb pharmacopeia, the art of making fishing hooks and nets... they lost everything.

Ridley explains it in terms of lost specialization from diminishing population. Specialization (even passed from father to son) is the source of civilizational knowledge.

 I accept that a society can regress when it shrinks or when its specialization is disrupted, as Tasmania experienced.

My question is whether: the disruption of the overland silk road by the Islamic conquests and Islamic domination completed by the 11th Century that lasted until the Mongol reconquest in the 13th Century was a source of dramatic global decline in commerce, knowledge and food supplies?

Did WWI and WWII have similar disruptive effects on commerce?

Dubai

 Dubai is an architecturally beautiful city. There is no future; it will someday be the correct image of Blade Runner. 'Blade Runner” refers to an iconic 1982 fantasy film that describes a dystopian version of future Los Angeles.

Dubai will be a deserted disintegrating city, lacking maintenance and people. Nothing much will be going on there in a few decades. An abandoned commercial desert.

Dubai is a planned city intended to be the Singapore of the Middle East. Built with astronomic amounts of money and a population of 1 million imported non-citizens.

Five news items should help you understand my disaster forecast.

The first was a report that an Arab Emirate company was buying a large port near New York. The whole project was stopped promptly and in the process we saw the Arab stock exchanges deliberately crashed by New York and London dealers. The reason: the Arab world had joined the WTO but ignored all the rules and had nothing to export that could be punished under WTO rules. Thus, the Arab stock markets were deliberately crashed. 'Don't buy our critical industries.'

Two, we learned in the ensuing stories that Dubai still embargoes Israeli goods and didn't intent to stop the illegal behavior under WTO. They do what they want; international agreements mean nothing.

 Three, with the U.S. mortgage meltdown, the Arabs got stuck with plenty of bad paper and were directly bailed out by the Emirates. ( Not helped or supported, but 100% bailed out).

Four, the farce of accusing Israel of sending 27 agents to kill one Arab terrorist. The local police showed dozens of unidentifiable photos. Gross incompetence and anti-Israel stupidity.

Five, banning Blackberry emails.

What is significant about the Blackberry email action? Inside nearly every global corporation the Blackberry emails are the main source of communication. No Blackberry emails... no job. To be sent to Dubai without Blackberry email would be the same as being fired.

The problem with Dubai. It violates nearly every premise of pro commerce governance. Diversity: only tribal Arabs can be citizens. Meritocracy: the top mucky muck selects only his family to run the city-state. Love of technology: no native Arabs love technology or innovation. Honesty: Islamic finance (no interest rate) is gross insanity, and Arabs always lie if necessary to save face.

Global dis-voting

Following on to the last blog, we are in a period where democratic government is in deep trouble.

The German Reichstadt can barely form a majority government, the Dutch haven't been able to do so as of today, the Australians have failed, the Brits and the Canadians are governing based on tiny pluralities and the Japanese aren't even close.

Modern democratic government does not have the support of the governed.

Unfortunately the one correct answer is to have true representation (random selection of legislators). The public doesn't know enough about the solution to enact it.

We are in for a long period of political misery until the solution is implemented.

Random in politics

I know that among the many many contributions to human thought for which I will get credit long after I die, the use of random selection for political bodies will be one for which I will get credit.

What is interesting is how I first generated the idea of using random selection in political life.

I was doing a difficult study in a State Assembly district in San Francisco where the Democratic candidate was black in 1964. The district was about 70% Democrat. I wanted to determine if the anti-black racism was sufficient to defeat a black Democrat.

My solution was to do an exhaustive survey with detailed notes. I took 100 precincts and divided them among three other marketing research friends. We pursued each of our 25 names in our samples for two weeks, with up to six knocks on the front door.

We then sat at a table with each other and went over each questionnaire to give a final conclusive answer: would this person vote and would they vote against a black Democrat. Our conclusion was that no amount of money could sway these voters because there was no perceptible anti-black political sentiment. The black candidate was Willie Brown and he won handily.

What I learned from my long personal interviews in the homes of real people, was that a cross section of my fellow Americans are intelligent, thoughtful and have well thought-out coherent views on the world. I still believe that, even though I rant against the political ideology of Lefties.

About 11 years later, driving with one of my many brilliant girl-friends, we were discussing why our local Board of Supervisors were so out of touch with reality, my girl friend asked what I would do to fix the Board. At that point I came up with random selection because I had so much faith in ordinary people.

Ordinary people must be the basis for representative government. Random selection is the way to do that.  Institutions must also be represented but not necessarily by random sampling.