Pro Commerce

Solving a major question: meta blog

I have solved two major human questions and my method of solution is the reason for this blog.

The two issues that I have solved by thinking extensively have been the issue of obesity and the issue of Jew hate.

My methodology has been to look at all of the data cross culturally and within cultures.

Most people look at one part of the data and rely on that as the primary need for explanation. For example, most Americans are becoming obese or already are.

To me that is not the way to approach the problem. First, one must notice that some children are obese, but most are not. Second many adults who are yuppies and  social climbers are not obese. Third many populations in other cultures have little or no obesity; such as the Japanese. And lastly, the obesity epidemic began sometime in the late 1970s in the United States.

Looking at these significantly different data points requires a more complex explanation than the simple ‘too much corn syrup’.

I concluded that the increase in number of grocery store products competing to find addictive qualities is acting like Darwinian evolution in bringing us new products that are irresistible to many parts of the society. That inturn causes obesity among American populations.

My explanation for the problem applies to all data points. For me that is a requirement of solid thinking and good solutions.

Why is it empty?

I often notice that buildings and retail shops are empty and have been empty for a long time. Why?

I asked myself that question often.

From my decades long business experience I can offer several explanations.

The most common reason I have encountered over many decades is that an inheritance is in dispute.

Typically multiple members of a family who have inherited the property or the tenant's lease are in a fight over share of the property or use of the property. Such family feuds have no time limit and are often perpetuated because "the other person is hurt more than me".

Commonly we are dealing with the relationship between property taxes and capital gains. For many properties, the property tax may be low while the property is being depreciated and unused.  The owner intends to sell the property after depreciation has gone on for years and take the entire resulting sales price as capital gains. This happens where the alternative tax might be income tax.

Such tax related cases often involve improving the property and still not using it.

In areas where there is rent control or complex tenant eviction problems, it is common for property to remain unused to avoid the costs of dealing with tenant evictions. The taxes may be easily offset by depreciation and capital gains.

Finally, when multiple properties for investments are part of the portfolio there is the additional possibility that other high yielding asset income is being offset by the tax deductions involved in the property that is being left unused.

There are other unique reasons property is left unused but they are highly particular and I cannot summarize the reasons into a major category.  If you have examples, please let me know.

GMO

GMO refers to genetically modified organisms.

There is an initiative on the California ballot to label GMOs.  The actual labeling is chaotic but quite irrelevant to the absurdity of the proposed legislation.

In the early ‘90s I organized a group called the Project to Label Genetically Engineered Foods. I worked with all of the other groups concerned with this issue and helped start several other important groups related to genetic engineering and ethics. My concern at the time was that genetically engineered foods might have harmful consequences in humans. I was particularly alarmed that advocates for genetic engineering kept arguing that it was just like existing hybridization and plant selection processes.

It is not. No farmer ever got a pig to have sex with a banana. Yet genetic engineering can put pig genes in bananas and they do.

That was my reason for wanting genetically engineered foods to be labeled.

We found the solution in the Department of Agriculture's plans to label organic food. The food people agreed to exclude all genetically engineered products from the organic label. All of us joined together and pushed for this government solution. We won. Overwhelmingly.

The term organic in the United States means there is no genetically engineered component in the organic product.

My concern about detecting long-term harmful human consequences was satisfied.  People who buy and eat organic wouldn’t have GMO related health consequences.

Now along came this initiative to label everything with GMO.  It is nearly 20 years later and no genetically engineered product has been found to be harmful to humans.

Such labeling today is indefensible. If someone doesn't want GMOs they can buy organic. Everyone else now will have to pay for the cost of labeling in California.

This is sheer stupidity. But more importantly it shows that the environmental and the natural food lobbies are made up of dishonest, mentally incompetent people.

Lilly Ledbetter

The Democratic party and their president, Obama, have made a fetish of a law passed the first month they gained total control of Congress in 2009. The Lilly Ledbetter fair pay act.

To me this is grossly offensive.

I brought the first and most important employment diversity class action lawsuit against the Bank of California in 1971 with Robert Gnaizda as my lawyer and Public Advocates as my firm. This was the most powerful diversity lawsuit ever brought before or since. We got a consent order from a Federal Court which was then offered to every major bank, savings and loan and insurance company. Most big firms signed on to avoid suit against them.

It is because of this suit that the world of finance has, to this day, the most diverse employment population of any business category.

The Lilly Ledbetter law is a modification of the 1964 civil rights act that creates the right to sue a business based on discriminatory wage practices. In the original law the plaintiff had three months to sue after finding evidence of discrimination. With the Ledbetter amendment to the law, the three months begins after the last paycheck. The last paycheck can be decades after the discriminatory payment occurred.

The biggest problem with this issue is that there are virtually no discrimination cases brought solely on the basis of wage differentials for the past three decades. That was the nature of the early cases, particularly the one I brought. I had massive computer evidence with hundreds of examples.

The defense against such a discrimination case years or decades later is that personnel are no longer available for defense testimony. The company may have been sold one or more times in the interim. The company may have gone into bankruptcy and be unable to defend itself.

In general, the Ledbetter law is irrelevant and deeply flawed and is not directed at women, as the president falsely claimed.  

It offends me to see a piece of trivia used as an argument for Obama and the Democratic parties support of women in the workplace.

Elliott Abrams on Kings

I read an interesting article by Elliott Abrams on the Middle East.

I don't necessarily agree but he makes the point that monarchs seem to survive much better in the Arab world than do dictators.

He argues that some of the monarchs, such as King Hussein in Jordan and the Royal Saudis (and a few others) have long historical roots in their societies. Some claim to go back to Mohammed.

His point is that monarchs have legitimacy derived from the divine right of kings. Whereas dictators lack legitimacy. Even when the dictator was originally elected, his inability to have new elections voids his legitimate connection to the society.

I can think of a few counter examples. However Abrams point is that any government needs legitimacy in order to survive.

That is why the Bush doctrine, and the military success in Iraq have long-term positive objectives. By establishing the validity of democratic elections as a source of governing legitimacy, the United States has introduced, to the Middle East,  the core idea that supports democracy.

More on the new civil war

In an earlier blog I announced that we are now in the middle of a civil war in America. Expect people to occasionally shoot each other over politics.

The Democrats, as they were in the major Civil War, are on the side of paternalism, like slavery and the South. The Republicans are on the side of pro-commerce, open markets and government restraint.

As in the major Civil War both sides took a moral position. However, the provocative South attacked the moral fabric of the North by pushing the Dred Scott decision that forced Northerners to return slaves to the South. An odious proposition. Similarly the South pushed the great compromise in which half of new states were to be slave.

The current Democratic incitement of moral indignation by the Republicans is threefold. First the press has become more aggressive and partisan in the past decade. The media has gone so far as to call Republicans liars in every newspaper and nearly every TV newscast.  This is a moral challenge because the Democrats are the worst  liars as exemplified by the outrageous Harry Reid, as the Majority leader of the Senate who fabricated a 10 year tax holiday for the Republican presidential candidate.

Second, the Democrats have screamed racism 10 times a day when no circumstances supported it. Again a moral issue in which Republicans are innocent and the Democrats are historically guilty (think race warriors like Al Sharpton).

Third, the Democratic president has aggressively attacked the idea that America is a fair society with great opportunity for everyone to succeed on their own merits. This attack is a moral attack on fundamental Republican views of America.

The civil war today is fully underway and the moral attack from the Democrats will assure that this civil war will last many decades.

Naked men

San Francisco has been facing a Puritan voting battle for more than a year and a half.

A small group of less than a dozen naked men began appearing on warm days in the gay Castro district.

The initial legal solution was to require them to sit on towels and stay out of restaurants and coffee shops.

That legislation did not work. The citizenry rose up against them. Now the naked men face total illegality except during parades or street fairs.

I bring this up not because naked people bother me in any way shape or form or time but because I know that even in the most tolerant liberal environments Puritanism is the dominant moral value.

What is interesting to me is that I do not think this issue will go away because of legislation. I expect naked men to continue to appear simply because it is the arbitrary frontline of a political battle. Just as, gay marriage is the frontline of a political battle and consequently appealing to people who want to fight.

Democratic guilt

It is common for Democrats to accuse everyone else of racism. There is a reason for this bad behavior.

The Democrats were completely out of the game during the civil rights movement. You may not know that the Republican Party pushed for civil rights at a time when they were the minority in both houses of Congress. The Republican Party pushed for civil rights in 1957 to support the school desegregation laws. President Eisenhower pushed Congress for a civil rights voting bill.  With complete Republican support but Democratic control of both houses, Eisenhower got a watered down useless bill.

When voting rights came up again in 1964 and 1965, the Democratic majority could not pass a bill without strong support from the Republican party. The same was true for equal pay for women in 1963, a decades old Republican Party platform.

It is the complete absence from the civil rights movement of Democrats that is the reason for their guilt and their perpetual screams of racism.

The major Democratic newspapers in the United States have played on this racist Democratic guilt for a quarter of a century. In 1987 a black woman made completely false rape accusations against six white men, including policemen. The New York Times and Washington Post and all the media carried the Tawana Brawley story for a year. The false accusations were never retracted by the media after the case was dismissed.

The same pattern occurred year after year as the Democrats tried to turn racism into a permanent American issue. The same false charges recurred again in 2006 against the Duke lacrosse team. This helped Obama defeat Hillary Clinton.

This endless Democratic pattern of false racism charges became an issue in 2012 as the president joined in attacking a half white male in Florida in the case known as Treyvon Martin.  

The black community has persistently voted Democrat since the early 1960s. Northern blacks always previously voted Republican.  The reason for the change is straightforward.  Blacks had always voted Democrat in the South since that was the only party. When 6 million blacks migrated North in mid-century they kept their Democratic voting behavior and overwhelmed the Republican blacks in big cities. Blacks remained Democrats because they had moved to cities with only Democratic party opportunities, just like the Jim Crow South. The few Republican blacks moved to the suburbs.

Rosenberg-Smith

More on the history of mergers and acquisitions. This, I believe, was a first.

In 1992 when Richard Rosenberg, a friend of mine, was CEO of the Bank of America he bought Security Pacific Bank, headquartered in Los Angeles. Security Pacific's CEO was Bob Smith.

As with all corporations,  Security Pacific was a warren of internal political fighting groups. It was the genius of Richard Rosenberg to offer Bob Smith a termination agreement of several million dollars in return for Smith telling him the intricacies of the internal political fighting at Security Pacific. Rosenberg was particularly interested in who were the outstanding officers and who were the deadwood.

After the merger, two young officers were promoted to the Bank of America board of directors. Several other officers were left behind to seek new job.

As far as I can tell, word spread in the merger and acquisition field and this final-tell-all given in return for a termination agreement became a standard feature of M & A.

Corporate cash management

This blog is a continuation of the material on Bain Capital and corporate consulting.

When I was a vice president at Bank of California in the late 1960s, I became interested in developing a tool for corporate cash management. Making arrangements through our corporate banking department, I was able to visit nearly 30 of the top American corporations and study their corporate cash management techniques.

By observing carefully the cash management approaches of 30 different corporate treasurer offices I got a very clear idea of the best practices in the field. There was great diversity from extreme competence at Ford Motor company with one treasurer and one secretary, to incompetence at GM with one treasurer and 80 employees.(Note: GM needed the 2008 bailout, Ford didn't.)

By consolidating the best practices into a short training course that the Bank of California promptly offered its corporate customers, the new methodology that I had developed for corporate cash management became the American standard in the field.

I was acting just like a standard corporate consultant. I was observing practices in the corporate world and consolidating them into the best practices. The consolidated best practices then became the kind of advice that consultants give to their clients.

Bain Capital

From the previous blog you will get a sense of the dramatic change that was underway in the corporate world after corporations became market items for sale.

Into this milieu came a group of business consultants from the Boston consulting group Bain. After a few years of trying to act as hands-off investors in corporations, the new group, called Bain Capital, decided to use the accumulated consulting experience among the founders and staff by purchasing businesses and applying their consulting knowledge to benefit the corporation and their own investment.

The idea was successful.

What made the idea successful was that many people in consulting to corporations accumulated a highly pragmatic set of skills and tools that are beneficial in the corporate environment. However, many corporations have such complex internal political problems that they cannot make use of the consulting advice.

It is into this world that the consultants moved. When they owned a company they could apply the consulting pragmatic tools that they had available, without others getting in their way.

What we ended up with was a market of fungible corporations that could be easily bought and sold. In between they could be improved using corporate consulting experience.

There is nothing magical about corporate consulting. After a consultant has seen the same problem in many corporate environments and occasionally watched successful changes occur in those environments, the consultant has pragmatic material to make future recommendations that will work.

M & A

M & A refers to the legal and financial category Mergers and Acquisitions.

Unfortunately for my beloved readers I have not found a competent history of mergers and acquisitions. I have been involved in several myself and I have helped prepare businesses to be sold.

What happened in the late 1950s was that several corporations began to form conglomerates. The conglomerate was a core entity that bought other corporations that were well run financially. The core entity ran the acquired companies by controlling the finances. Using capital and financial statements the conglomerate was able to manage the associated companies.

In the process, more and more companies achieved corporate management standards that created a market for the buying and selling of businesses. The businesses on the market began to resemble a supply and demand environment. Businesses, over the next 40 years found it easier than ever to buy and sell other companies.

People in the M & A field developed an expertise for the buying and selling of corporations that made the market quite liquid. This was a major change in the nature of global business.

I know of no one who has reliably written about this high level, highly productive change in corporate management.

Defib vision

I have encountered many descriptions of death and perceptions by people who were temporarily dead and fortuitously recovered. These descriptions tend to the imagery of a warm glowing welcoming light.

That did not happen me.

When I was in the catheter lab having a stent implanted after a heart attack, the passage of the catheter across my heart via the artery resulted in my heart going into afibrilation. It stopped pumping blood.

In the time it took for the doctors to put a defibrillator pad on my chest there was no blood to my brain. That is what happens prior to death.

I did not have a warm glowing welcoming light. It's possible that the 120 volt defibrillator was applied rapidly.

What I saw in my dream world was a typical overseas American Embassy. A place surrounded by barbed wire fences, thick concrete and steel walls and big steel drums to keep truck bombs out.

That vision of a complete military fortress with me inside was my only encounter with death.

Just so you know.

Redistribution occurs naturally

The current American president has made redistribution of income a new issue for the Democrat party. It has always been a loser in the past. We have been reducing redistribution practices for 40 years.

The current president is taking advantage of his limited ideological intelligence and the Democratic Party’s racial guilt.  Remember the Democratic Party has always been the anti-black, pro slavery party and did little to end Jim Crow. The Democrat party has great racial guilt.

I merely want to point out based on my many years consulting individuals and families on finance, that there is a natural form of redistribution.

Wealth is passed on to children.  Most of the time the children do not have the business skills of the creator of the fortune so the money is piddled away.

I have frequently seen the female children in wealthy families marry incompetent men who squandered the family fortune. More often I have seen the men go after Las Vegas showgirls who also squandered the family fortune.

In still other cases, maybe the majority, the wealthy children of inherited estates are swindled out of their money by highly competent and smart con operators.

Lastly, there are many incompetent investment counselors who do their part to redistribute inherited wealth.

All in all, I call these various commonplace mechanisms the natural redistribution of wealth institution.

Jews, class and merit

Many people over many centuries have tried to understand the root causes of Jew hate.

I have succeed. I have found the two elements that, when joined together, explain cross cultural differences and within culture differences.

The issue is merit.

Wherever Jews are in the active commercial world, they provide a major social challenge because they promote merit. The society must find a way to deal with this meritocratic-demanding population.

As I have pointed out in the past, societies that have strong inherited social class structures are particularly subject to Jew hate. I have also pointed out that Jew hate is a class of paranoia and significantly disables the people and societies that have this brain disease.

I have finally realized that these two observations fit together. Societies that have strong hereditary social class structures are threatened by meritocracy.These societies promote paranoia as a way to describe the disruptive presence of Jews, with their merit.  Promoting Jew hate paranoia is the mechanism that hereditary class societies use to support their upper class survival.

There are several societies where this is not the case. In the United States (and to a lesser extent in Canada) hereditary social classes disappeared in 1960 at the same time Jew hate diminished rapidly.

In Japan, China, and Hindi India, Jew hate has always been minimal. In Holland, Denmark and Finland Jew hate has been minimal for a long time because these are non-hereditary social class societies. In Sweden, where an effort has been made to diminish social class, Jew hate is limited. In Norway, where Jew hate is strong, hereditary social class is also.

Japan, China and Hindi India have 2000 year old social class structures that have mechanisms for accommodating merit. Therefore, Jew hate is not necessary.

Jew hate is dominant in the rest of the world: Latin America, the remaining parts of Europe and nearly all of Arabia and South East Asia. In Southeast Asia, the Overseas Chinese are the Jews.

In Malaysia we have a nearly perfect case. There are virtually no Jews in Malaysia or in adjacent Singapore. In Malaysia, which only joined the commercial world after World War II, the government and the ruling class have deliberately created Jew hate. In Singapore, Jew hate is absent because the population is primarily Overseas Chinese.

The largest landmass with little or no Jew hate is sub-Saharan Africa (excluding South Africa). The reason is straightforward: modern commerce has not developed. Meritocracy in a non-commercial world doesn't exist and is therefore not a challenge requiring Jew hate.

Final evidence: the far left in the United States and Canada has a case of Jew hate. The reason is that these people support an anti-merit ideology that worships government jobs and unions. These are two environments in which merit is irrelevant. Only seniority matters. Consequently the far left love of government and union jobs is reason for Jew hate. Jew hate is hatred of meritocracy.

Your comments are welcome on this centuries old issue.

Executive pay battle

The Wall Street Journal had an article about the way corporations are explaining their executive pay in obtuse and obscure numbers in many annual reports.  Trying to make the pay look smaller.

This is understandable but is a direct offense to me. It is understandable because executives are trying to steal corporate wealth by hiding their actual pay from the shareholders who are increasingly called upon to approve their compensation.

It is a personal offense to me because I developed the current SEC required statement of executive compensation.

I developed these tables for PG&E to use at a time when PG&E was getting out of bankruptcy and they were exceptionally vulnerable to my activism. PG&E adopted my table of executive compensation reporting.  

One and a half years later, with a little encouragement from me, the SEC adopted my table. Prior to that time, there were three main ways of reporting executive compensation. One was by Fortune magazine, another by labor unions and a third by the Wall Street Journal. Now there is one.

It is time to make the SEC require its own definition of executive compensation be used in all annual reports.

It is even more important that there be clear-cut executive compensation options. Maybe three maybe five packages from which any Corporation is required to select the nature of its package. And the Corporation must stick with that package for at least five years. I have written about this package model earlier.

Risk taking and business

It is common these days during the political campaign to talk about successful business people as risk takers.

I have said it before and I will say it again. In the thousand entrepreneurs and small business people I have worked with, risk was not on their agenda.

Successful businesspeople do everything possible to reduce risk in their business.

They will always favor reducing costs over increasing market share. They will always favor multiple supplier sources and a variety of advisors over low-cost monopoly.

For every new venture or direction of a business every effort will be made to reduce risk. That includes narrowing the market focus, that includes having backup plans, that includes finding alternative forms of support and most importantly the option of reducing cost is always the main backup plan.

It is nice to talk about business people and risk takers as brave but it is incorrect. Business founders are usually exceptional people but not because of risk taking.

Hebrew Scriptures and America

I read a fascinating book by Yoram Hazony, the Philosophy of Hebrew Scripture. I am neither a scriptural nor a Hebrew scholar. I enjoyed the book. I do know most of the Torah.

Hazony makes several interesting arguments. First that Torah should be taken as philosophy not revelation. He points out, accurately, that Greek writing of the time also invoked God's talking to humans. Second, he argues that the distinction between revelation and reason came 600 years after Torah was redacted because of Christianity.

Third and most importantly he argues that Torah was  redacted by Jeremiah and his followers after their exile from Jerusalem.

The ten tribes of Samaria were scattered earlier by the Assyrians and totally assimilated, as was Assyrian practice. When the remaining two tribes in Jerusalem were attacked and defeated they ended up in parts of Egypt and Babylon.  Jeremiah, was trying to create their history.  He intended to keep the remaining two tribes coherent and functional. (He suceeded.)

Jeremiah is credited with using the Biblical story to explain the reason for the fall of Israel. His contention is that the government first created by Saul, became too lavish with too big a military and extreme local injustices. The high taxes and the luxuriant royalty were an offense to the citizens and resulted in disunity.

Hazony argues that the Torah favors shepherds over farmers. Therefore a shepherd society should have a weak government.

I am aware that many of the founding fathers Madison, Hamilton, Adams and others could read Hebrew and read Torah in the original language.

It seems to me that Torah is pretty explicit about the need for weak non-ostentatious government and that this may have influenced the founding fathers.

Hazony makes an interesting additional point that Greek philosophy may have been influenced by the close contact between Jews and Greeks in Egypt during the Jeremiah period.

First Hollywood star

I have made my position clear on several occasions. The film world has never had an impact on the real world. It is a fantasy environment and is taken by the real world as fantasy even in the case of documentary films.

The political pronoucements of Hollywood celebrities are even less important in the real world than films themselves. Comic books, movie stars, blockbuster movies and theatrical people are in the same irrelevant category. Entertainment.

I must now make an exception.

One person has climbed out of that fantasy culture and had an impact on the real world.

That one person is Clint Eastwood. Eastwood who is a director, producer and actor did an improv piece at the Republican convention this year, with the empty Obama chair, that introduced an image and a language into political rhetoric. It fit so perectly that it stuck.

That is truly a significant contribution to the real world.

I will have to be more restrained in the future in denigrating the importance of Hollywood.

Customer churn and marketing

Most businesses have a steady stream of new customers replacing customers who left. That replacement is called churn.

In some instances that churn is nearly 100% as is the case with much retail and restaurant business. In other instances there is very little churn as is the case with telephone contracts, utilities and accounting firms.

Businesses such as banks, department stores, shopping centers and coffee shops are in the middle with churn as a definable reality of business.

In my first post-college job, starting the marketing research department for the Bank of America, I noticed that churn for this largest California statewide bank was very high. Nearly 1/3 of customers  opened and closed accounts every year.

I pointed out to management that simply reducing the number of customers leaving or finding a way to get them to return to the bank would be a major source of customer growth. Management had no interest because most of the churn was in retail customers and only corporate customers were considered important.

For most of my clients, over the past 40 years, retaining customers became the most important source of growth.  That is why my book Marketing without Advertising puts so much emphasis on helping customers explain their problems to the business management before they leave and giving them vast recourse opportunities if anything goes wrong. Don’t let them leave because of dissatisfaction, if possible.

Think about how fast your business could grow if the number of customers leaving were cut in half. In this era of Internet business it should be even easier to reduce churn.

First great businessman

Have I expressed sufficient disdain about president Obama?

As the tide has turned in this election I began thinking about a Romney administration.

We have never had a great businessman as president. In fact we have never had a businessman as president.

I want to deal with both the words great and businessman.

There is a stunning difference between the milieu of business and politics. I have written several books on business and have been a consultant to nearly 2000 businesses of every size on many continents.  I have also been heavily involved in politics as president of the Young Republicans, legislative analyst, campaign manager on half a dozen campaigns, advance man on others and an unregistered lobbyist in D.C  

Business is focused on reducing costs, expanding markets, finding technological solutions and most importantly solving problems. There are three key elements in successful business. One is honesty. The second is meritocracy, always using the most competent people one can find. Three is using the market and competition to solve problems.

Politics is almost exactly the opposite. In politics one gains power by increasing the number of employees and departments. Politics has one single goal: to reconcile conflicting power centers if possible. To reconcile them for as long as possible. Honesty among brokers is valuable but not necessary. Meritocracy never trumps party loyalty. Political conflicts are solved only by compromise.

On the face of it Gov. Romney does not have the tools to make the transition between business and government.

Except, first and most importantly he has already proven to be capable of making the transition as governor and a good governor, of Massachusetts.

Second, he was not a traditional businessman.  He was an insider in the consulting business as I will explain in a coming blog and in building his Bain Capital. He used inside consulting experts to make businesses more successful. That is a type of business experience more suitable for transfer to government than a traditional leader on top of a bureaucracy in an old established business.

Most importantly, he was clearly a brilliant man, capable of harnessing other brilliant business people and he was at the leading edge of a new industry.

He will be uniquely, one of the finest presidents since Lincoln.

Google is the first universal

It was awhile ago that I realized I had created the world's first universal currency. I developed the MasterCard financial vehicle that was the first credit card to be open to all banks.  That allowed it to become globally universal.

I just recently realized that Google is the first universal human commonality.

Anthropologists have spent many decades trying to find universal commonalities among the diverse people on the planet. Other than a few biological functions, like eating, there are none.

Google is the first universal human commonality. Everywhere on the planet human beings use Google to find information.

The only credit I can take for Google is its initial success. Google's front page, from the beginning, has always been blank... without advertising.  Google has always subdued the visual impact of the paid marketing on its information pages. Since I am the most prominent person to have promoted and published a book on marketing without advertising, I will sneak in a little credit for myself.

There is not much more to say about this except as a disclaimer. I have held Google stock for many years and will continue holding it.

Angry versus bottled-up

I have used therapists and psychotherapist at several points in my life but I have no great respect for the pseudo-intellectual model that they customarily use.

Not too many days ago, when I was furious at some supplier over the phone, I was told by a friend overhearing me that anger was a possible source of my early heart attack. Age 74 is not really so early.

Nevertheless it is a prevailing theory among many people who follow the psychotherapeutic world that anger is a source of stress on the heart. Personally I find it frequently useful in dealing with intransigent problems that it provides great satisfaction. I also do not remain angry 2 minutes after I express myself.

The intellectual problem with this issue is that psychotherapy holds the exact opposite theory with equal certainty.

When anger is bottled up it is harmful to the heart and the psyche. Anger that is bottled up is presumed to leak out in unexpected and disturbing ways.

I have explained to many American friends that I have only once seen an expression of anger in Japan. I am almost always informed by Americans that this is a form of social repression and must explode in some other behavioral channel.

I think both of these models of anger expression and anger repression are fanciful.  Having a model with two equally valid opposites is evidence of the pseudo-intellectual nature of psychotherapy.

Marketing sodas and coffee

There are two retail stores that I want to call to your attention.

The first is in San Francisco and is an ice cream soda shop called The Ice Cream Bar

As is true all over San Francisco, there is a wide variety of unusual ice creams at this store. What makes this retail outlets so unique is the bar at the back which is stocked with an arsenal of tinctures and syrups. The mixologist does what ice cream bars in old fashion drugstores used to do.

Before refrigeration was cheap and ubiquitous, the way a cold drink was made was to drop acid phosphate into soda water to create a bubbling, refreshing drink. All sorts of tinctures such as oil of lemon are put into the phosphate drink. Coca-Cola was originally a phosphate drink. Ask at The Ice Cream Bar and have one made for you.... make it a float too.

This is a wonderful store that lets you understand why drugstores were the home of soda fountains and ice cream.

It is a brilliant business, the kind that San Francisco is so prolific in creating.  San Francisco had already created the modern world of mixed drinks as a response to the perverted alcohol laws that treated the Japanese shochu as a wine (described in an earlier blog).

There is a new retail outlet in Venice Beach California that is equally innovative and representative of the kind of businesses generated on the Westside of Los Angeles.

It is called Deus ex Machina.  I will not say what that Latin phrase means to my sophisticated readers. The shop is a motorcycle coffee bar that also sells motorcycle accessories and has a motorcycle repair shop in the rear. The espresso is good.

Deus ex Machina is a slow development that took many years to come to fruition as an idea. Espresso entered our American daily lives 20 years ago with Starbucks. Starbucks entered the market at the top of the status ladder by carrying the New York Times and jazz. Deus ex Machina is here to show us that real style is at the bottom of the status ladder among motorcycle fans.

Of course this is America, where status has always been treated as a joke and this retail outlet is the perfect ironic joke. It is beautiful and well designed, just like a motorcycle.

Being on the wrong side of history

I am trying to think of how it must feel to be a Lefty today.

History has passed you by.

The idea that the government or a centralized state of any sort can change or perfect human beings, including the poor and incompetent, is an idea that was generated in the French revolution and was demonstrated as a complete failure by the end of the 20th century.

Every single nation that was a socialist paradise became mired in tyrannical murder and always wallowed in poverty. All but two of these nations were redeemed and able to feed their populations by joining the world of commerce (Cuba and North Korea are still suffering ideological blindness.).

History has passed you by if you are a Lefty.

Both of my parents were Lefties. They both saw the direction of the world and were saddened to see their dreams disappearing.

One of my closest friends completely denied the disappearance of her dreams. I pointed out to her that  the Rosenbergs, the most famous spy trial in America, had been proven guilty with the release of the Soviet documents after the fall of the USSR. She simply denied it. The Rosenbergs are symptomatic of the entire life of Lefties, there were many more similar examples, where the Left championed complete lies for half a century or more.

So there are three Leftie coping mechanisms I see.

One is to be sentimental and acknowledge the decline of the Left with sadness.

The second is to associate only with other Lefties, so one can live in a world of denial comfortably.

The third is to simply deny the world and select some sub-segment to focus on such as environmentalism and ignore the rest. Unfortunately environmentalism is a dead end subset of the Left.

A really free man

This blog has always been about my ideas. I try to avoid talking about myself except as I record experiences in my life that may be relevant to readers in the distant future.

However, there is a subject that is highly relevant to pro-commerce that I have not covered and is somewhat personal.

I have already mentioned that the pro-commerce world created the modern surgical tool, a catheter lab, that kept me alive and vital after an heart attack.

What I haven't mentioned is that the pro-commerce world gave me an adult life that was never before available in history.

I have supported myself since my first year in college at age 16. Around my late 30’s I received an inheritance of $20,000 which went into savings and has never been touched.

From 16 on, I have done precisely what I want to do next. Every day. Exactly as I wanted to do it. That is a level of freedom that is incomprehensible in history for an individual who did not have a job, a steady source of income for inherited money. I have traveled the world and spent 40 years visiting Japan annually. Never for one moment did I give a second thought to changing my behavior in order to earn money.

There are two reasons I have been able to do this.

The first is simple living. I have written a book on the subject and I have been a fanatic practitioner. There has never been a time when I denied myself any object or activity that I desired. I always saw the options in the world as having the choice of reducing my living costs, renting, borrowing or re-using.

Simple living has included such behaviors as trading houses in Japan with a good friend. This also meant several years where I was house sitting for friends while renting out my own house. The house I own, I bought when it was a ‘disaster’ in a beautiful location with a periodic river running under it. I did the remodeling work myself and built a "mother-in-law" unit downstairs that has been a source of rental income except during the time when my father and mother lived there.

The second reason is an  historic anomaly because I bought a house in California in the early 1970s. The house has been a miracle of low-cost living in San Francisco because Prop. 13, passed in 1978, has kept my property taxes growing at the infinitesimal 2% a year.

My extraordinary life of complete freedom has come because I live in a commercial society. Simple living and the incredible abundance around me have combined to allow me a wide choice of behaviors, many of which have generated income.

In addition, my behavior in using this extraordinary blessing of freedom, generated some of the revenue itself. The books I have written which generated royalties were based on my experiences. The same is true for lectures and my current role as an expert witness.

I have never recommended simple living, because it may not work for many people. I don't recommend leading your life with the abandon I have enjoyed. Some people, probably not many, will be able to do it successfully. Thank modern commerce.

People who don’t vote

I was puzzled for many years by the question of why half of all Americans don't vote.

I pondered this question as I tried to develop questionnaires and a methodology to measure this phenomenon. It is very hard find out from survey research why people don’t do something.

Not surprisingly, when I finally figured out the right series of questions and the right methodology I was able to figure out the answer. Sometimes when you know the correct question and the correct methodology you know what the answer is.

What I developed was a series of self addressed postcards sent to me by a split sample in which my address showed me as part of a variety of organizations and the postcard had a variety of reasons the respondents explained why they were planning to vote.

The answer was that people who don't vote: do not consider the political system surrounding their life to be inadequate. When it becomes intrusive or troublesome they will turn out to vote. Most of the time they are not dissatisfied.

I myself decided to go along, for many years,  without voting in order to think about ways to harness this non-voting population into a voting block. If even a small percentage of non-voters in any election could be mobilized they would determine the outcome of the election.

I never conceived a way to harness this population.

Hysteria is

I don't know what hysteria is. I sense that like stereotyping it is part of our mental structure. It may even have positive attributes as stereotyping does.

I first became aware of hysteria because I saw some numbers in the early 1980s that completely contradicted the prevailing public view. In the early 1980s it was universally believed in America that kidnappings of children were occurring at levels that exceeded 100,000 children per year.  That's when parents stopped letting kids walk to school.

A German study of the United States, using FBI data, found that the actual number of children kidnapped by a stranger was roughly 100 per year.

As I mentioned this to many people, I found I was completely ignored or treated as an idiot. This I came to understand was hysteria.

The second hysteria I became aware of was, a few years later, from a lawyer who was involved in defending teachers in Fresno accused of ritual child abuse. Children were interviewed and testified that adult teachers had been carrying out satanic sexual rituals on them.

Again, everyone I described this false legal horror to, completely ignored me or told me I was wrong.  “Children don’t lie.”  Teachers were still in prison 20 years later due to this hysteria.

The third instance, that arose from my experience with the ritual child abuse, was a very widespread idea of recovered memory. Again this was an hysterical idea. People may not remember trauma easily, but they do remember it.  It is not remembered accurately when driven by an agenda prompted by psychotherapists. This hysteria lasted 15 years.

Today we live with two obvious hysterias one is human caused global warming and the other is the Messiah nature of Barack Obama.

In both of these cases, there is a very large population that rejects the hysteria while an even larger population lives in the hysterical bubble and denies all facts, all data and all evidence that contradicts the hysteria.

I go back to the beginning. I really do not understand hysteria.

Why pro commerce is not conservatism

Sometimes it takes me awhile to understand what I have done.

It was many decades after I developed the modern credit card, by sharing among multiple banks, that I realized I had also invented the first international currency. You can use a modern credit card anywhere on the planet regardless of currency.

I am beginning to think about the reason I am in a category of my own called pro-commerce. I hope to be able to write a complete article on the subject at some future point.

I have written a book on what I consider to be commerce. It is radically different than the conventional view. You can see some of my thinking in the heading of this blog. Most people do not think of commerce as the source of human diversity. But it is.

Nor do people think of commerce as the only creation resulting from meritocracy or of commerce being based primarily on the value: openness. But it is.

One of the reasons I want to be clear that pro-commerce is not the same as any conventional views is because I am occasionally treated as a conservative or a member of the right wing.

It is hard to conceive of me being a conservative. I am as conservative as a person who believes in Darwinian – punctuated evolution.  Commerce is an evolutionary system based on survival.  

I accept the real world as it is. That is why I love commerce.

That distinguishes me from Lefties, Liberals and others who have an ideological dream of future human beings and how they can be shaped by government.

Commerce is the most radical source of social upheaval that the human mind can imagine. Everything changes every day. It is not like Chairman Mao's slaughter of human beings in the Great March Backward. Commerce is a constant world of reducing costs and improving life using voluntary human interaction and technology.

Commerce is totally disruptive and could never be a source of comfort for a person who is comfortable with the status quo. You won’t find me defending some local sentimental business against a new superstore.

Commerce is always based on values. Those values are completely incompatible with conventional political ideas of the contemporary political world. The political world is made up of humans trying to find accommodation to power based conflicts.

Commerce resolves all problems by seeking new markets and new technologies.

The New Civil War

One of the bloggers I read has suggested that the current division in America is more severe and more extreme than the divide that led to the Civil War.

We live physically too close together to be able to  kill each other.  I am clearly on one side and very upset at the moral position and future disaster that the other side is creating for America.  As in the Civil War, I would have to fight my close friends, brothers and daughters.

The divide is parallel to the Civil War divide which was between the Democrats and the newly established Republicans. The Democrats supported slave states and formed the Confederacy to protect their plantation lifestyle by leaving the Union. To the Democrats it was a moral issue... states rights.  To the newly formed Republicans, the country had to remain united for its survival and slavery was an antiquated immoral institution.  Moral certainty on both sides.


Today, the Democratic party has clearly chosen a path of plantation economics. There is absolutely no concern in California or in the U.S. Senate or the presidency with a rapidly expanding deficit, a completely moribund economy for four years with the economy in the worst condition in my lifetime, and perennial expansion of government expenditure and regulation. To me the government is cancer. Absolutely no concern whatsoever on the Democrats part.  The moral issues are racism, abortion, unions and gay marriage.

The Republican party, recently vitalized by the democracy-based Tea Party, has chosen the opposite tack. The Republican policy is that commerce is the only way to a prosperous, stable society. To me the evidence is supported entirely by every rapidly growing country of the world -- from Singapore, to Taipei, to South Korea, to Israel and much of East Europe.  We can now look at Southern Europe to see the unstable fate of the Democrat policies. The cancer of government deficit expansion and regulation is a direct restraint on commerce.

In addition, the president of the United States, supported in part by the Democratic Party and Democratic voters, has acted like Neville Chamberlain in the face of Hitler and done little to avoid the impending, announced Iranian Jew-killing Holocaust.

Civility is gone. The press has chosen overwhelmingly to join the Democrat-Confederacy side of the issue.  The country has already entered a civil war.

The election next month can only inflame the circumstances.  

The Civil War lasted more than 100 years after the fighting ended.  Are we in for the same thing again?

How did we come to this juncture?

Science is like art theory

As most of my regular readers know, I don't think very highly of the category of knowledge called science. I consider science to be a religious, metaphorical overlay to technology.

After having a discussion with a friend of mine on this subject I finally came up with the analogy that: science is to technology as art theory is to art.

Art theory of course is a farce. I have helped artist clients of mine write foundation and museum descriptions of their own work.... to do so we had to create an imaginary world of words that have only incidental connection to the actual art.

That is indeed what science is to technology.

Niels Bohr was my science teacher at the University of Chicago. He taught physics by showing us that all of physics was a series of constants. He started with Galileo's measurement of acceleration due to gravity and continued into modern quantum theory. All of these constants were derived from brilliant technological achievements.

What has always been my experience is that entire new fields are developed outside of science theory. A perfect example is the higher temperature discoveries regarding superconductivity, even though the theory did not allow for that. Similarly the discovery of cosmic background radiation came from persistent technological efforts to silence the circuits in a Bell laboratory antenna.

I repeat, science is to technology as art theory is to art.