Pro Commerce

Investment advice

I have a moral problem with investment advice.  My own moral problem.

I have run several multi-million dollar portfolios and always did an exceptionally good job.  Well ahead of the market indexes.  I have several techniques that work.  One is to bet on companies that deliver goods and services that I personally know well and recommend.   The other is to see incipient businesses that have a high probability of growing significantly.  That means I made money on Google, Amazon and Netflix.  Lots.

Much more importantly I know when to get out of particular companies.  Usually before the trouble hits.  When I see the CEO of Amazon attack Donald Trump I see trouble ahead.

I am poor on getting in and out of markets when related to business cycles.  And fortunately I know it.

My problem has to do with giving others investment advice.  I refuse to give investment advice to anyone including my own family, my kids, my spouses and paramours.  The reason is simple: they may buy on my advice but I am not running their portfolio so I can’t tell them when to sell.  

Even worse, if they lose money, I feel guilty and want to reimburse them.  I’m serious, I take my own advice seriously.  If my business advice is wrong I’ll do everything possible to help the business correct the error, free.  In 50 years my business advice has never been wrong.

Thus I will not give investment advice.

It is a different story when it comes to personal money advice.  I wrote a book called Simple Living Investments for Old Age.  I always recommend reducing costs as a way to deal with money.  Owning a home if your are good at household repairs. Developing work skills that will be useful in old age.  Those work.

Bad sign

Both Apple and Microsoft are trying to get into new markets by buying existing companies.

Microsoft tried to get into the cell phone business by buying Nokia’s phone business and adding its own operating system.  That failed even after Microsoft started offering the phone with Android.

Microsoft is now trying to find a way to connect its dominance inside the corporate world with the world of cellphones.  

The problem is that Microsoft is a gigantic bureaucracy and there is no way to protect and guide an innovative start-up.

The best exception to this rule has been the Google purchase of YouTube.  Google got YouTube at an early stage and had the right degree of innovative spirit at top management for YouTube to survive and currently to thrive.

Apple sees rapidly growing fields and wants to buy its way in.  It is looking at Time Warner and other media companies so it can have a backlog of shows.  It is also interested in Netflix in order to go directly into the new market of new media directly to the home.

Apple and Microsoft both have serious problems that will keep them from entering the dynamic new markets.

Apple believes in ‘proprietary’.  It wants to own everything that connects to its product.  An absolutely losing strategy as I have explained a dozen times.  Apple is so blindly following this strategy that it has no idea why the iPhone was such a success.  iPhone used an open app market which made it great.  People use their phones for apps not just as old fashioned phones.  The app market was everyone else… not Apple proprietary.

Microsoft had a brilliant strategy.  Sell to businesses that are technically bound by their employees and whistle-blowers to pay user fees.  Give the rest away free or cheap.  They also tried to bundle their own little programs into their big programs.  Microsoft is never an innovator, it always copies everyone else.  So the bundle and copy approach works ‘alright’.

The trouble is, the market exploded outside their domain.  The smartphone world grew outside the corporation and people brought their phones to work and self integrated them.  Now the smartphone is the small portable computer for everyone, running on Android, and Microsoft is out in the cold.

Apple hasn’t a real chance in the new media world.  Few companies do.  One can sell old inventory for many years, which gave book publishers some market value.

The media world now has two channels.  Channel one is the modern genius exemplified by ‘Breaking Bad’.  Breaking Bad set a new standard which everyone else tries to achieve but rarely can.  Like literature, a Lolita or a Harry Potter are hard to find.  Visual media is equally hard.  The bar is high and the chance of getting over it is low.

The second channel is international multi-country appeal.  The American racism that insists on putting blacks in everything American means the global market is rapidly disappearing. Many cultures dislike black, especially Chinese.

Both Apple and Microsoft are giant bureaucracies.  I don’t expect success unless it is pure luck like the App store for Apple.  Google still seems to have a way around its gigantic size.  Netflix and Amazon are still in growing and expanding markets.

Other tech giants have problems.  IBM, HP are dying like Motorola, Nokia and Xerox.

Shrimp boy

This is really about a rotten 1970’s lawyer.

San Francisco had a jury trial with many associated indictments over a two year period that was dramatic and a great story.

It started for the citizens with an indictment of a well known local Democrat San Francisco Senator, Leland Yee.  Yee was well known to all of us as a School Board President, as a City Supervisor and as a ranking Assemblyman.  Yee had to step down as a senator and we got a new election.  Yee and a fellow politician, he also know from his school board days, were charged and pleaded out, finally sentenced to five years of Federal time.  

The great part of the Yee story is that he was an anti-gun fanatic as an elective official.  One of the guilty charges was for buying guns from Philippine Islamists, including shoulder launched missiles and trying to sell them to the undercover FBI agent.  Five years in Federal prison. That's all.

The part of the story that made local headlines was Yee’s contact in Chinatown.  The gang leader was Raymond Chow.  Chow’s nickname was ‘Shrimp boy’.

After serving more than ten years in prison for racketeering, ‘Shrimp boy’ returned to Chinatown, and killed Allen Leung who was head of the fraternal order of the Ghee Kung association.  'Shrimp boy' brought in his allies and turned the association into a money laundering criminal gang.

My part of the story relates to ‘Shrimp boy’s’ lawyer, Tony Serra.  Tony was a stoned out hippie lawyer who won many cases in the 70’s and 80’s for radicals and terrorists.  He won cases for Hells Angels, SLA members and many prominent radicals.  He was always a hippie, smoked a great deal of dope, missed many court appointments but gave great closing arguments in trial.

He served some Federal time for failure to pay taxes.  On the good side, Tony is the brother of one of America’s greatest sculptors, Richard Serra.

Tony Serra always had one closing argument: ‘my client is a hard working, dedicated member of the proletariat and is the victim of ‘the man’ who is always  trying to exploit him/her and punish his innocent soul for being at the bottom of the social hierarchy. The testimony against him are all from snitches and government stoolies.’  Since there are always a few hippies and Marxists on any San Francisco Jury it almost always worked.

But this is 2016 and except for Bernie Sanders who wasn’t important at the time, no one on the jury bought the antiquated argument.  ‘Shrimp boy’ is more than 50 years old, the FBI had myriad tapes of the conversations with ‘Shrimp boy’s’ gang members while he bragged, and several of those gang members turned state’s witness.

Tony lost.  He had a press conference announcing that the Judge (brother of Supreme Court Justice Breyer) was biased and the whole proceeding was unfair.

Cybercrime

Cybercrime and cyber warfare are regular headlines.  But they seldom carry meaning.

I don’t think I am a useful commentator on cyber anything, but I’m happy to discuss the subject.

I was working with computers in the early 1960’s when a computer got its input from punch cards and programming was focused on wiring boards.  I used the IBM 360 heavily and regularly for statistical and marketing problems.

When computers began getting their input from tapes and keyboards I was an early user.  Stanford had a networked computer called SPIRES and I put my first book (The Seven Laws of Money) on SPIRES so people could read, comment and carry-on a discussion.  Nobody did.  

A few years later, I had a portable typewriter size teletype (from Texas Instruments) that I used to connect to a computer by dial-up modem in New Jersey, NJIT, from Kyoto.  I sent messages to my secretary in San Francisco, circa 1976. The following year I was using a Radio Shack Tandy TRS-80 portable.

By 1982 I tried to create a network of new age intellectuals on the WELL computer and network.  It never got anywhere.  By then I was using an IBM PC in my office.

My second book (Honest Business) was written on a Compaq portable.  With only line editing available and floppy discs.

The Briarpatch, which I founded in 1974, included the Homebrew Computer Club of which Steve J and Steve Wozniak are the most famous members.  I was already a good friend of John (Captain Crunch) Draper, who was the first cyber master I met.  

John used the AT&T long distance computer network and could do anything as indicated in this Esquire article.  John had 200 fellow hackers he had recruited.

John introduced me to ‘social engineering’ in 1976.  His term for calling up a computer terminal operator late at night and getting help with his ‘password’.  I used the same technique as recently as 2010.

What I know about hacking is that:

 * hackers are networked so that many simple hacks are virtually public. 

* that passwords are an irrelevant issue because people create them with limited knowledge and imagination.

* that nearly all important programs have a backdoor and with sufficient time a hacker will find it.  

* that governments have trouble hiring and keeping the kind of outlaws who make good hackers.  

That is enough to start with.

City of potholes

Every time I go over a serious pothole, one that is truly disturbing, I say ‘goddamn the Democrats who run San Francisco’.  The potholes are so bad that they weekly get together and form a sinkhole. Am I being unfair?

Put simply.  The holes in the streets are directly caused by the high wages and retirement benefits paid to the City employees who are unionized.

The city budget is $9 billion dollars.  One quarter billion is allocated to street repair and maintenance.  The $9 billion and the quarter billion are separate. That street repair comes entirely out of a bond issue from three years ago.  Imagine street repair, which is rarely done, comes out of money from a bond issue, not from the operating budget. It's like your living space and auto repairs are done on borrowed money.

So where does all that tax money, $9 billion go?  Half goes to the salaries and benefits of the city employees.  In five years we have gone from 26,000 city employees to 30,000.  They are paid an average of $120,000 per year with added costs of health and pensions of $35,000 per employee,  That accounts for half of the $9 billion budget, $4.5 billion.  

Another $1 billion goes to paying interest on the bonds, a few of which are used to pay for street repair. Borrowed money used for maintenance.

The most significant $1 billion additional goes to cover the pensions of the 27,000 former city employees, many of whom are getting over $100,000 in retirement payments per year.  The $1 billion is the amount over the payout of $3 billion from the pension fund  that is promised to retired pensioners.  The existing pension fund is roughly $70 billion and yielding about 4.5% income.

My list of wages, benefits and retirements plus bond interest totals only $6.5 billion of the $9 billion budget.  The rest are operating costs paid to contract workers, paid for supplies and capital items like trucks, cars and building repairs.

Those numbers are horrifying.  They spell disaster when a recession hits the City and when the deficit caused by more hiring, rising wages and the low yield on the pension fund collide.

Put simply.  The holes in the streets are directly caused by the high wages and retirement benefits paid to the City employees who are unionized.

Where can you find these numbers to verify it all for yourself?  You can’t.  I got the numbers from small squibs in two dozen sources plus a little addition, subtraction and multiplication… as I always do.

The highest symbol

I’ve always read historians who point out that Cathedrals were the tallest peaks in older cities because the Churches were the most important institutions.  Certainly that still remains true in many places with the mosques and their minarets.

Tall buildings filled with legal and financial offices replaced Cathedral towers in much of the world, in the early 20th Century.

I worked in a Methodist church, called Glide, after the original donor, Lizzie Glide who used her late husbands money to build the church and put a rotating neon cross on the peak.  She put the church in the most dissolute location in the most dissolute City to attract the reprobates.  She understood the meaning of the tallest symbol.

Now I wish to point out the photo on the right where a neighborhood church tower is not as high as the neighborhood cellphone tower.

Telecom is now more important than churches.  They both involve pure communication.  But the cell tower is democratic and the communication is on diverse subjects and is multi-directional.  That is a general trend in our society.

Rents

Someone intelligent picked a Google math and map geek to be the artist in residence at the San Francisco Exploratorium.  Thank you both.

The fellow, Eric Fischer, used his residency to put together the rental data on San Francisco going back 68 years.

What he found was a simple equation: F(rent)= a (.066) -(Vacancy) +(employment total) +(wage level).

So, if you want rents to go down, build more rental units, stop the growth of business and get rid of high paying jobs.

Easy.  

And San Francisco is only doing the middle one, stopping the growth of business.  Most of the business that is coming to San Francisco these days have high paying jobs such as in the pharmacology world or Internet.  So, all the City can do to lower rent is driving business out of town, which it has been good at for 30 years of Democrat-Union tyranny.

Thank you Eric.  Now the City needs a credible person to explain that to the citizenry.

Museum of modern commerce

There are a number of museums of science and industry in the U.S. and in the world.

I know there is no museum of commerce. Why not?

In 200 years, modern commerce has had a greater impact on the world than anything in the past including Genghis Khan.  It has raised the global earnings from $3 a day where it was for three thousand years to $33 a day now.  Americans earn $130 a day.

Modern commerce has increased lifespan and reduced the many pains of everyday life.

What would be in a museum of modern commerce?  One wall would include the 100 most effective commercial giants, with a brief video of their accomplishments. (Rockefeller, Vail, Penney, Krupp, Weil, Gates, etc)  It could be updated yearly as new giants of modern commerce emerge around the world.

There could be another wall of an additional 100 such people, with a mechanism to allow museum attendees to argue for their inclusion in the top 100.

It would have a room of major battles between commercial giants that have occurred like Rockefeller taking over the oil industry.  Like the battle of AC and DC electricity.  There could be a dozen battles, from various telephone companies, to the audio tape formats,  to the videotape battles of VHS and Betamax.

I would have a room of battles between modern commerce and governments.  The break-up of Standard Oil and its reassembly 75 years later.  The break-up of railroads companies and trust companies. The battles between states in the 1840’s to provide forms for the modern corporation.

There could be many, many rooms in my imagination.  Most rooms could display the evolution of products including airplanes from the various biplanes to the current Boeing-Airbus world.

The most important room in my mind would be a room of the invisible infrastructure of modern commerce.  The undersea cables, the radio spectrum, the oil and gas pipelines of the world and the use of English in aviation and science journals.

Time for a museum of modern commerce.

Wedge issue

The definition of ‘wedge issue’ you will find on Google refers to issues raised by candidates or parties to divide the opposition or unify the supporters.

Trouble is, it’s the President, Obama, who regularly uses wedge issues.

His latest is dramatic, forcing public schools to admit transgenders into bathrooms and locker rooms of their choice.  He used the same issue in integrating the military with transgender soldiers.  Nobody noticed.

Before this he has used guns.  He tried to use guns as a wedge issue in the San Bernardino slaughter, but the guns were in the hands of Muslim Fundamentalists. So it didn't work.

He used gay marriage effectively. He has tried to use a Supreme Court replacement of Judge Scalia as a wedge issue.  He is getting nowhere.

Obama has effectively created wedge issues of income inequality, Wall Street failing to pay its fair share of taxes and rich private jet owners.  He used it to create the Occupy Wall Street movement which was used by Democrat mayors all over the country.

He also has used Trayvon Martin, Ferguson and Baltimore to create a wedge between whites and blacks.  He got the Black Lives Matter movement out of it and invited the leaders to the White House.

The reason for today’s blog is that the transgender issue doesn’t seem to be much of a wedge.

I suspect that the majority of Americans have never met a transgender person.  Many who have didn’t know it.  It’s hard to make a wedge issue out of something like that. 

Latin food

My friends seldom take me out for Mexican or other Latin food.  They know it rarely gets me excited.

I love Japanese cuisine, Italian, French, Indian, Chinese and a few others.  

So I ask myself ‘What is it about Latin food that I find unexciting?”

The more general question is what makes a cuisine more interesting?  I identify three qualities:

• Absorption by the dominant culture of the former indigenous foods.
• Absorption of immigrant foods
• Use of a wide range of seasoning.

The uniquely boring foods of the world are English, Irish, Russian and German.  They are all in Viking dominated cultures.  The indigenous populations in these countries date back several millennia and were dominant at a time when the food supply was limited in variety.  Military life was also dominant and required a small, portable, durable, safe palate.

The same seems to be true of Latin food.  It rarely absorbed the brilliant new foods of the native people of the Aztec and MesoAmerican societies. The Latin natives gave the world tomatoes, potatoes, yams, grapefruit, vanilla, pineapple, raspberry, papaya and guava.

How often do you find those in a taco, refried beans, rice and guacamole with meat. Foods that seem stuck in a 1700 lifestyle.

The Chinese have always had a great variety of indigenous tribal foods to draw on. China is still not a homogeneous society.

The United States only seems to have improved our food when the hippies brought all the immigrant food into our diet.  

The Japanese have always imported other nations foods starting with a Chinese base;   the French, Italian and Indian have actively absorbed immigrant foods.

Lastly, the Chinese, Indian and especially the Japanese are noted for the wide variety of  seasonings in their repertoire.  An estimated 5,000 different plants compared to less than 2,000 in American and English foods.

Taste is of course a matter of taste.  Most of my friends are fanatic lovers of Latin food.  I have eaten in the best restaurants in Mexico City and other parts of Latin America and am still unexcited.

I notice that pork is a much greater part of the Latin diet than is found in any other population.  Which always leads me to wonder if this is a carry over of some antagonism and persecution of Jews and Muslims in pre-1500 Spain.

Old friend Charlie

My regular readers will have noticed one frequent commentator on this blog, ‘Old Friend Charlie’. Sometimes his comments are long.

Charlie is indeed an old friend from my college days at the University of Chicago.  He was a roommate in the off campus apartment we shared on Kimbark near 53rd..

We stayed friends after we were both in the Army, he in intelligence in Europe.  He was living in Venice Beach and coming to San Francisco for the drug scene when we first reconnected.

Charlie was around the afternoon when I first dictated the 14 page Seven Laws of Money to Salli Rasberry.  It was he who explained the Chinese concept of 7 Laws to me and for which I am forever grateful.  Both Salli and I felt he should be part of the book when it finally reached that stage.  

So Charlie was Jug ’n’ Candle, the author of all the poetry in The Seven Laws of Money.  For many years I kept in touch in order to send him his royalties.  He also made a point of visiting me in San Francisco.

These days he lives in Oregon and continues to be a simple liver.  He lives with his son and has always had a loyal dog and community around him.

Read the Bill of Rights

I was thinking about how important the Bill of Rights is in the context of my blog on evil.

In a society that puts the utmost significance in the individual and the nuclear family, the nature of evil becomes defined based on threats to the individual.  As opposed to tribal and national moral systems one based on individuals would deal with restraining unbridled government power and all forms of brutality that are exercised at the expense of the weak.

That is the Bill of Rights.  

In looking at its history it appears to be a combination of English history where the Lords needed legal protection from the ruler and for similar experiences of the new American states vis a vis Britain.

In reading the Bill of Rights I was struck by the extreme departure from this ideal that contemporary America has strayed.  I know that the denigration of these rights is first influenced by later amendments that gave more power to the Federal government and to the slow attrition that has occurred as case law presents difficult conflicts.  But the abandonment of these values is still horrific. And blatant.

Start with the first right. The prohibition on the ‘establishment of religion’.  The environmental global warming Armageddon is purely religious and has become established by the federal government in a hundred ways. Outrageous.

The second right which is the absolute fundamental right of individuals to survive ‘shall not be infringed’.  I bought a rifle and bullets at Sears in 1975 over the counter and took it home with no papers to sign.  Today there is an entire federal bureaucracy and many hours of my time to satisfy the stringent requirements to buy a rifle.  It takes many weeks and convoluted behaviors to buy a rifle and ammunition today. Forget the second amendment right.

The fourth right (privacy) is a farce in light of the government intrusion in electronic media and the usual demolition of a citizen’s property when a search warrant is actually issued.

A fundamental right to property is essential to the existence of individuals.  Taking away property is supposed to be protected by the Bill of Rights.  Property seizure in civil forfeiture cases violates the entire concept of 'due process'.  Due process is the core of most of the remaining rights.

Two hundred years has taken us far away from the Bill of Rights that so brilliantly protected us from ‘evil’.

Three justices seem to have recognized this tragic change: Scalia, Thomas and Alito. Bless them.  Lets hope for more such justices.

Peter on women

Peter was Peter Sherrill who died nearly twenty years ago.  He was a close friend.  During his declining last three years I went to his house nearly every Sunday to visit.

Peter was my closest intellectual companion and the only one aside from a close friend in Jerusalem (David).  You can imagine that must be true.  The number of visits to his home, at the top of a mountain overlooking the San Francisco Bay, was well over hundred times for several hours at a time.

Peter sharpened many of my observations and I learned much from his.  We became friends after being rivals in a marketing research contest, a 1985 style bake-off,  It is described here.

Peter and I had similar taste in women and great interest in them.  He dated three women who had been my lovers and I dated two of his.  Discretely.

Peter only wrote a few academic papers.  I was a prolific writer.  Eleven books during his lifetime and countless articles.

I have blogged about several important ideas that I got from Peter.  One on Puritanism and one on mass transportation.

One of the most baffling subjects in our discussions, which came up several times, was Peter’s admonition to me: “never write about women.”  He never said why.  He was adamant.  My only suspicion is that it would uniquely damage my reputation well into the next millennium.

I haven’t written about women as a result.  

The most interesting parallel I have seen on the subject is a statement Donald Trump made in one of his books:

“I began to realize that women are far stronger than men. Their sex drive makes us look like babies. Some women try to portray themselves as being of the weaker sex, but don’t believe it for a minute.”

“Women have one of the great acts of all time. The smart ones act very feminine and needy, but inside they are real killers. The person who came up with the expression ‘the weaker sex’ was either very naive or had to be kidding. I have seen women manipulate men with just a twitch of their eye — or perhaps another body part.” (“Trump: The Art of the Comeback”)

This simple observation has created endless trouble for Donald.  That is another warning to me.

More on the Hamilton effect

What I have named the ‘Hamilton effect’ is the wide swath of influences that an unusual individual has on the world around him and is not appreciated by historians.  The swath of influence is only evident centuries later in the multiple events the person was involved in.  I now see Hamilton’s hand in the winning of the American Revolutionary War, in the constitution and in the successful creation of a commercial nation.

I see it in my own history.  Sometimes trivial acts had great long range consequences and will never be traced back to me.   As head of a volunteer educational group, I put on a fair on the subject of innovation in education.  The author of a book on the Whole Earth Catalogue shows the global impact of my small action, but doesn’t make the direct connection.

As manager of the Glide Methodist Church in San Francisco, which had an important publishing arm, I was asked to help put on a West Coast book fair.  I did it with the help of several friends.  It was at the Golden Gate Park Hall of Flowers.  I gave the event, in 1973. the name: ‘Friends of Books and Comics’ and I organized the tables so that everything was next to a dissimilar table.  The whole array was around a bookseller I thought was truly weird.  Every book of his was a one of a kind, one off.  I don’t know the impact of the Fair.  Comic books are still centered in San Francisco and art books are still flourishing here.

One spontaneous act did have some visible consequences. I wrote about it here.  Using Carol Rae’s idea to burn a dried-up-Christmas tree at the beach, I rented a truck to get more trees, my step mother Lucile Phillips and my son Scott helped pick up the trees around the City.  We started a tradition of burning trees on the beach.  One of my good friends from the Suicide Club, John Law, took the tree burning to China Beach where they could build a bigger fire and light up a wooden man with John’s neon lights on him.  That moved to the Black Rock desert in Nevada and now has 70,000 attendees.  It came out of my head.

I  also made a paper mache bulls head for the front of my car and organized a run with the bulls event in downtown San Francisco.  Art cars and runners.

These are not listed as major events in my resume, because they weren’t.  They were peripheral.  It is hard to know their repercussions on the larger society.  

You see why I recognized the ‘Hamilton Effect’ and why it’s important to me.

Education?

I got a very good formal education.  The full Great Books education and liberal arts at the University of Chicago undergraduate school.  Ever since then I have paid attention to what I wasn't taught.

The first, and for me the most obvious omission, was that I didn’t know anything about the history of the Middle East, India or the vast reaches of Asia including China and Japan.  When I had traveled through Europe at age 19, I found myself in Naples, wondering where to go next, the only geography in my mind was Israel. Which is where I went.  I only knew about Persia from Greek and biblical history.

Since then, the biggest hole in my education, I’ve found, is art.  I knew nothing about art east of Israel and what I knew of before the Renaissance was Greek sculpture, architecture and Egyptian hieroglyphics.

The first big shock to my educational hole was in a visit to a restoration artist’s lab in Tokyo.  There I saw two oil paintings about 8”x8” portraits from the 2nd Century BCE that had been created in Egypt.  The dimensionality, shading and colors could have been done by Gilbert Stuart.  I found it incredible.

Just this week I learned about the tempera paintings on the wall of a synagogue in 2nd Century Syria near the Euphrates in a trading city called Dura Europos.  The synagogue was filled with sand during an invasion and is perfectly preserved.  On the top right is the room in perspective.  The Torah obviously was in the alcove with a column on each side.

On the left is one of the paintings.  It is the vision of Ezekiel about armageddon when the bones of fallen soldiers will be put together and have the breath of life re-installed.

The vitality and power of this art is astonishing  It must have been in the DNA of Marc Chagall.

This art is now in a Damascus Museum.  I hope it survives.  

To bad we can’t get all the art out of Muslim countries.  The current wave of classic Islam is hellbent on destroying art that was never meant for those idiots in the first place.

 

Me on Wikipedia

There is nothing about me on Wikipedia.  That is just as well.  I wouldn’t like what they would put up anyway.  I have my own auto-bio on my website and it is far too humble to suit my taste.

There are two problems with a notation about me on Wikipedia, when there finally is one.

• Many of my contributions won’t be recognizable for decades after I die, like this Pro Commerce blog and my creation of Random Selection of legislators. So, no ordinary editor would allow comments related to future innovations, no matter how important.
• I will not be given the appropriate credit for much of what I have done because the prevailing views of how change in our society works are terribly wrong.  For example, I created the modern global credit system, yet virtually no one will understand that in 1967 I was thinking about how to use the laws permitting bank check clearing houses for credit cards.  Not only did I convene the fellows who jointly created MasterCard with me, I used my unique thinking in creating the legal structure of the card which had long term global implications for credit card success.

I made many contributions to our society, but I had one operating principle that makes sure both history and Wikipedia will have a great deal of trouble understanding my contribution. My rule has always been: ‘don’t take personal credit, share it with many others’.

I adopted that principle because I could see, at a very early stage, that my ability to organize other people to help me in my projects required not being known as vainglorious.  I needed, and got, a reputation for not taking credit and always giving it to others.  For example, although I was the main person small businesses in the Briarpatch Network wanted as their business adviser, I always took 2-4 other people with me on consultations so they could learn what I was doing.

That’s life.  I made a choice and it had many rewards, many.  There are now a few drawbacks.  One drawback is looking at Wikipedia in my old age (when I no longer need to be humble) and seeing a small and irrelevant entry.

All choices have their consequences.

Heating water for coffee

I’ve looked at many ‘around the house’ environmental issues over many years.  I’ve checked on paper vs cloth diapers, various forms of refrigeration and freezing, TV and computer micro currents, turning appliances and computers off at night, and dozens more.  Natural gas autos and total electric car chargers.   Plastic bags versus paper bags is a biggie for controversy.

It is seldom possible to honestly evaluate environmental choices because the infrastructure cost is nearly impossible to calculate.  Getting pipes and lines to residences is costly, but sometimes it was depreciated long ago.  Highways, trucks and city streets are even more of a problem, including bird deaths from a wide range of activities.

In the end, nearly all these comparisons are meaningless because the back end is so truly complex that no honest calculation is feasible.   In my opinion as a careful researcher and honest statistician, nearly all the environmental choices offered to citizens to help them become do-gooders are meaningless, false, hype…. In short:’crap’.

Since I drink a cup of coffee when doing these blogs in the morning I often make a cup of coffee at home.  I couldn’t help comparing my way of heating water in the microwave and my wife’s stovetop kettle.  

After careful analysis I calculated an annual difference in the single digit dollar range.  The cost of one cup of coffee at Peet’s coffee.  

I kick myself for wasting my time again.   

It happened to Schumpeter

My readers know who Joseph Schumpeter is.  He is the man most well known for noting that commerce is based on ‘creative destruction’.

His most famous book is Capitalism, Socialism and Democracy.  I haven’t read it in a long time but the most important thing I remember about it was written after ten years of FD Roosevelt's New Deal and America’s entry into WWII.  Schumpeter was very pessimistic about the survival modern commerce.

Schumpeter understood the vital role of entrepreneurs in commerce, hence the ‘creative destruction’ billboard.  He worried that entrepreneurs would be circumscribed by two forces.  The rise of bureaucracy inside of corporations, which he called corporatism, as I recall.  This has clearly happened in nearly every large corporation.  He was right.

However he could not see that the incredible vitality and vigor of commerce would create an economy that went from 100 giant corporations in the U.S. in 1960 to 500 by 1990. Corporations do indeed become static bureaucracies but they get bought out by newly established corporations.  Nearly every top corporation today didn’t exist in 1960.  A few have the same name as the older corporation but were long ago taken over by a young upstart.

What Schumpeter saw and I see happening today.  He saw that democracy would destroy modern commerce as more voters choose socialism and the easy life of welfare.  

We are there today as environmentalist have chosen to stop modern commerce with environmental taboos and regulations.  Lefties have place every imaginable control on businesses in the name of their own do-good ideologies of social justice.

I personally struggle with the question of whether we are at the end of modern commerce. As I struggle I can’t help remembering that the genius of Joseph Schumpeter looking over my shoulder, finally succumbed to the grim reaper view of the end of commerce.

Was Schumpeter right; should I be as worried as I am?

San Francisco was tolerant

I am not the only one who has commented on the change in the population of San Francisco.

I have lived here nearly all my life.  My father came from San Francisco, as did my grandfather and my own children were born and grew up here.

I hear the same observation from other long time City dwellers.  The obvious change is that the City was run by the hereditary wealthy elite until the mid-1960’s when the Democrat Party and unions took over.

San Francisco had two unique qualities for the previous 100 years.

 * it was always a quirky hotbed of radicals.  

 * it was calderon where people came to find out who they were.

This was home to: leading anarchists, the capital of single taxers, the center of the American Wobblies, the 1880’s baby boomers, the first citywide strike, the communist run longshoreman’s union, the founding of the gay and lesbian movements, the home of  sexual freedom and the global home of the hippies. I haven’t forgotten the Urban Guerrillas and  Burning Man.  The city was always radical and comfortable with radicalism.  

Today it is the Internet tech and the Pharmacology geek center of the planet.   There are no  radicals anymore; just boring Lefty Luddite copycats who control the city government and parrot the national Lefty tunes of the Democrat Union Party.

San Francisco was where people came to find out who they were.  Everyone I went to public school with moved somewhere else when they graduated from high school. They were ordinary people who knew what they wanted to be.   They didn't wonder who they were.

The writers who came to the San Francisco calderon to find themselves and leave were Mark Twain, Jack London, Emma Goldman, Gertrude Stein (born in S.F.) Dashiell Hammett, Gary Snyder, John Muir, John Steinbeck, Robert Frost, Robert Louis Stevenson, Anne Rice and William Saroyan.

An equal number of artists came to the calderon: Janis Joplin, Ansel Adams, Richard Serra, Isadora Duncan, Francis Coppola, Clint Eastwood, George Lucas, Bruce Lee, The Grateful Dead, the Jefferson Airplane, Johnny Mathis,

Journalists: Ambrose Bierce, William Randolph Hearst and Lincoln Steffens.  

And Clifford Geertz, Rev. Jim Jones, Julia Morgan, Dorothea Lange, Robin Williams.

Today the city is not ‘tolerant’.  It is Lefty intolerant.  The only voices heard anywhere are politically correct Lefty Luddites.  Everything else is suppressed.

The fundamentals of the city are not attended to by the incompetent city government.  Tourists are nearly universal in commenting on how dirty the City is and how extreme the homeless problem is. Local old time residents are shocked at the poor quality of the transit system, the ubiquitous potholes in the street that often cluster together to form sinkholes.  The worst government problem is that the largest budget item is government pensions; in the $billions every year.

Just to add fuel to the fire of devastation, very major corporation founded here has left.  Starting with Bank of America, Wells Fargo, Bechtel, Charles Schwab, Pacific Gas and Electric, Pacific Telephone, Cisco Systems, Hearst Corporation, Cost Plus, Crown Zellerbach,  Del Monte, Dole, Espirit, Six Apart, Sharper Image, Transamerica and Firemen's Fund.

What a sad state for a once great city.

Meritocratic failure

Where are the adults?  It is distressing to me to see so many successful entrepreneurs who are donating large amounts to the Democrat Party.

I explained the multiple reasons the self made rich act in such a self defeating manner.  In a manner that will stifle their own family future and the future of entrepreneurial behavior.  Their financial contributions never equal or come close to the power and influence of union money in the Democrat Party.  Unions are the very symbol of their enemy.  Anti-meritocracy. Pro-bureaucracy.

But the single most distressing reason for their behavior is that they are the beneficiaries of a meritocratic society.  In the crudest possible language: we have trailer trash rising to billionaire status on their own merits who then work to destroy meritocracy.  They are burning the very ladder they themselves climbed.

There are plenty from George Soros and Michael Bloomberg to Tom Steyer, Steve Ballmer and Sean Parker.  The most well known are Warren Buffett, John Doerr and Charles Munger.

Meritocracy has its downside.  The hardboiled-egg-brain of Lefty ideology is stuck in  many who succeed in our society and who then turn around and want to destroy meritocracy.

This is the tragedy of meritocracy.  It has changed the face of our society, for the worse.

 

Wages are structured

If you have worked for any institution that has 100 or more employees you know how wages are structured.

Every job fits in a wage classification.  Say a manager of 15 or more people might be in range 7 from $70k to $110k per year.  Within that classification there are steps determined by length of experience in the job, from 1 to 10 years and within the steps there will be levels of proficiency from 1 to 5.  

In a national or international company there will be adjustments for location of the employee.  From a high in New York or Tokyo to a low in Boise or Guam.

When companies are acquired, invariably the employees of the smaller company are fit into the wage structure of the larger company.

I have looked at academic research on wage structures in terms of influence from wages at the top and wages at the bottom.  I haven’t found any good ones for the bottom..

As regards wages at the bottom, research is difficult because most of the minimum wage changes occur in industries where a structured wage plan doesn’t exist. In the retail and fast food world where large corporations do exist, the forces of rising minimum wages are only beginning to have an effect that can be measured.

At the top, a rise in wages (not performance bonuses) cascades all the way down the organization. The wage structure moves up when the CEO wages move up. Plenty of studies on that subject.

Bottom up, were just starting to learn.  Top down, a well defined cascade of wages.

Ghosting

There is a term in San Francisco and maybe elsewhere among hetero sexual couples: ‘ghosting’.

It means that when one person in a dating couple breaks off the dating they do it by ceasing all communication.

One recent article by a woman who is active in the local dating scene was complaining about how badly she feels when a man she likes ‘ghosts’ her.  She pleaded for an end to this way of ending relationships.

Sorry dear.  You need to hear my story.

When I was dating many women, one with very appealing pale skin, made me promise to tell her when the relationship was over.  She said that men just ‘seem to jump off the Golden Gate Bridge when they break off the relationship’.  I naively said ‘Sure’.

After about four dates, I was getting bored.  We were at a small restaurant on California near Polk (believe me, I remember).  I fell asleep while eating.  I awoke and said ‘This is a good time to say that this relationship is over.’  What happened next?

I got a torrent of words about how selfish, egocentric, insensitive, unappreciative and generally awful I was.

Do you think I ever told another woman when our relationship was over? No. That is why ghosting is so prevalent. I learned my lesson and I've told other men.

Evil

The nature of evil has changed in the past several hundred years and I haven’t seen any acknowledgement of this change.

In the traditional tribal world that prevailed before modernity, 'evil' was all that counteracted the forces that held the tribe together.  Very often it was the antagonistic behavior of ‘other’ tribes.

You can come to the same conclusion by thinking about evil in the context of what is good for holding the tribe together and respecting the authority and hierarchy of the tribe.  ‘A good boy follows the rules’.  Outsiders behavior is invariably seen as part of evil behavior. ‘They eat dogs and burn widows’.

America, since its inception and modern commerce, have introduced a new model.  The issue now has become the survival and thriving of the individual and the nuclear family.  Individuals are the subject of ‘life, liberty and the pursuit of happiness’.  Not the tribal French:’liberty, equality, fraternity’.  Those are tribal values in a nationalistic setting.

Try to think of ‘evil’ behavior.  I think of mistreating animals, torturing other people especially children and women.  Think of innocent people convicted of a crime, an abusive parent giving debilitating drugs to a young child.  Killing a public figure, destroying a public work of art. A person of one religion killing or harming a person because they are of another religion. Maybe worst of all, law enforcement maliciously harming an innocent individual.

Evil now is any and all situations where a powerful person or group uses that power against a weaker person or persons.  That is because the individual has become the highest value unit in the American world.  And increasingly in the modern commercial world.  We hire people for their unique skills and talents, not their family connection or hereditary position.  We value the individual.

Evil has dramatically changed its focus over the past two centuries, largely due to the nature of America and individualism and the values of modern commerce.  Concern for the individual creates the moral structure of evil as opposed to concern for the tribe.

In line with this unique American meaning of evil, the Bill of rights, is really a force against evil in favor of protecting the individual.  That is particularly true of the right to self defense.

The Bill of Rights is uniquely American and the source and product of our conception of ‘evil’.  

The commerce contribution to Trump

I’ve been arguing for several months now that Trump’s popular uprising has been based solely on a broad public distaste for lies by Barack Obama and the Democrat Party.  In addition, there is the shameless dishonesty implicit in the last 30 years of PC, political correctness. ('People of color' is OK but 'colored people' is racist.)

I don’t want to interrupt your reading flow with a list of the horrific and unique lies of the past 7 years.  That abbreviated list is at the end of this blog.

I see the rise of the Trump movement, and that is what it is, as a growing public conflict between the values of commerce and the political world.

The political world is very ancient.  When an Arab tribal leader sits in his tent listening to petitioners asking for special favors and judgement in disputes he is using time honored politics.  He must weigh multiple forces acting upon him from within his tribe and outside the tribe.  He must then find an accommodation that will be the most stable outcome he can produce.

I was in active politics for many decades and I do appreciate the skill and talents that make a good politician.  There are a few good politicians. Very few.  Politics does require honesty within the closed circle of the participants and an honest broker is truly valuable.  But dealing with the public requires the skill to make a statement that doesn’t destabilize the political accommodation without outright dishonesty.  Obama was never a competent politician, much less a barely functional one.  He could never negotiate with the opposition; a core skill of a politician.

Most of the public doesn’t like compromise and accommodation.  Politics is not appreciated or valued.  Over time as the civic clubs (Lions, Rotary, Odd Fellows, Masons) have declined so has organizational experience with politics disappeared from American society.

At the same time, slowly, more Americans have become part of the commercial world.  The commercial world values honesty, openness and cooperation at the highest level of those values.  If you ask most Americans working in the commercial world they would be unable to verbalize this reality because the false overlying ideology is so strong.  But anyone who lies to fellow employees will be fired, any consultant supplier or adviser who lies will be terminated.  Everyone cooperates in the commercial environment.  Suppliers must be helpful and cooperative to maintain their relationships, so must managers with staff and departments with other departments.  Politics exists within businesses but it is secondary to openness, honesty and cooperation.  Imagine a business where coworkers, accountants, suppliers and outside consultants lied.  The business would fail quickly.  

It is my contention, that slowly over the past century, as more people live in the commercial world and absorb those values, they reject politics more and more.  They reject open dishonesty.

That is why a businessman, who is notorious for blatant candor, and is outsider to the political world is the head of an anti-politics uprising.  

Donald Trump is riding a slowly rising tide of Americans who spend their lives in the commercial world and have become intolerant of the political world and the blatant lies of Obama and the Democrats.

Here is my brief list of Obama’s worst lies:

• You won’t have to change your doctors under Obamacare.
• There is no political corruption in the IRS.
• The Islamic State has nothing to do with Islam.
• The Fast and Furious campaign of guns to Mexican cartels was started in the Bush years. (No.)
• The murder of our Libyan Ambassador in Benghazi was caused by an Internet video.
• The Republicans in Congress are the reason my many budgets and policies have not been enacted. (Obama would never negotiate.)
• The Citizens United court case gives foreigners the power to significantly interfere in the American political process. (Completely untrue.)
• I have supported programs to increase oil and gas production in the U.S.
• The greatest global threat to the United States is man made global warming.
• Trayvon Martin could have been my son. (No. The Obama’s were always middleclass, educated and politically connected).

Those are all open and deliberate lies.  Americans strongly dislike that kind of deception.

 The Trump movement is the confluence of pro commerce and anti-politics.

Billionaires

The world of Lefties has got angry bees stuck in their anal sphincter muscles about income inequality and how much of the world’s income goes to a few billionaires.

I put together the Forbes global data on billionaires by country and the number of people in the work force in each country.   Here are the tables. Page one is my data and statistical analysis. Page two my friend Josh’s reworking of the data.  Results are similar.

I can now make the statement to those who want greater income equality and fewer billionaires: “For each billionaire you want to get rid of, fire half a million workers in highly productive countries like the U.S., Singapore, Australia, Germany, Israel, Taiwan and Sweden.  Go even further, you’ll get rid of two billionaires for every million workers you fire.”

In less productive countries like Russia, France, Italy, Britain, Turkey and Spain. You have to fire two million workers to get rid of one billionaire.

In the least productive countries like China, India and Mexico you have to fire 4-5 million workers to get rid of one billionaire.

Increased productivity per worker generates more billionaires.  So stifle productivity if you can with unions, bureaucracy, environmental restrictions and government regulations.

Well, all you Lefty do gooders, go out there and start firing workers by the tens of millions and we’ll get rid of those pesky billionaires who seem to you to make life so miserable for everyone else.

Violence can be like a butterfly

This is an article by Scott Phillips, a truly world renowned martial artist, who went to a training by another martial artist.  The man whose class he attended actually uses martial arts to hurt and disable bad people.  The fellow recovers kidnap victims.

Phillips’ was reminded in the class that we are heavily trained to resist our own violent capabilities.  Everyday from childhood our ability to carry out violence is restrained, subverted and thwarted by social convention.

As a consequence for ordinary people to do violence or protect themselves against violence, ferocious energy is needed to overcome our own superego training.  It is an enormous mental force that restrains us from using the power that is inherent in our bodies.

This, plus the cocktail of hormones that comes into play when we encounter violence, turns an ordinary person from being a powerful biological force into a pile of useless muscles and bones.

Once a person has learned to do violence and overcome the strong violence suppression mechanism, the startling fact is: a person who is not restrained can do horrific damage to another person EASILY.  

Meaning, a 75 year old who has committed violence for many years, would find it easy to break the legs of any other man with a kick to the calf.

Those stories of black thugs hitting people on the street in the face for fun and doing significant damage, is understandable.  These are guys are enjoying their access to violence and the vast physical powers it gives them.  They can hurt others without repercussions.

Read Phillips’ article.  Violence is a realm all its own; most of us can’t access it.  But those who can have super predator powers.

LEED buildings

We have a new environmentally perfect building in San Francisco.  It is a LEED (Leadership in Energy and Environmental Design) gold star perfect model.  The ratepayers of San Francisco paid for it.  Me, included.

Only three or four minor problems.

• It cost three times what an ordinary office building of the same footage would have cost.
• The wind generators on the outside of the building don’t work and had to be shut down. The company that built them went bankrupt.
• The waste water recycling system smelled so bad it had to be virtually undone.
• A new cooling system had to be installed because the original failed along with bankruptcy for the company that installed it.  It was never needed in San Francisco a city with rare hot days and always a gentle breeze.
• The office spaces had inadequate air circulation and made most people sick.  A lesson that should have been learned from the first ‘environmentally perfect building’ in Sacramento 40 years earlier.

God, please save us from the do gooder environmentalist.

E-cigarettes

Last week I saw a study widely published that e-cigarettes are recommended for smoking cessation by the main British Medical societies.

First, this material will be ignored by every relevant researcher and legislator in America as they merrily outlaw e-cigarettes on the basis, they say, of ‘science’.  America is a strongly Puritan society and strongly opposed to anyone finding enjoyment outside of marriage.

Second, the campaign against e-cigarettes will be unabated.  With laws and pressure against it unremitting.

I personally have been collecting e-cigarette systems since 2009 when I first found an e-cigarette system in Japan that was made in China.  It was a battery and charger in a cigarette box with a single cigarette that fit in the charger with  filter like attachments having nicotine embedded in the filters.

The most recent system I bought was assembled at the local ‘vape’ store. Photo on the right.  It charges from any USB outlet and uses a nicotine juice sold widely.

I want my readers to know about a system sold in Japan by Altria called IQos which has a Marlboro brand name on the small stick of plugs.

I couldn’t read the Japanese instructions so it took me half an hour to figure it out.  I never figured out the cleaning system.   There is a cigarette like case that is the charger, you carry with you.  There is the smoker that fits inside to get the charge and that holds the small plugs which are made of a filter and a small segment of tobacco. You can puff for 6 minutes or 14 puffs.  A small heater actually warms the tobacco to 350F.

It feels like a real cigarette.  

You are now up-to-date on the subject.

Increased racism under Obama

I don’t have any reliable data on the extent to which Barack Obama has personally increased the black-white division in the United States.  There has been an horrific and dramatic increase in division.  I have my own personal experience to report.

I did a study in the early 1970’s that is reported in yesterday’s blog.  It applies to the current issue.  All males evaluate all males unconsciously as potential physical threats.

I see hundreds of people a week, mostly at my Peet’s coffee shop, but also on the street, at my gym and shopping.

Over the seven years of Obama I have noticed only one change.  The way I look at blacks.  

Every day I see a great variety of people with every imaginable visual attribute.  Chinese (American), Japanese (American), Korean, Filipino, Latin, Thai, Indian, etc.  Men and women and transsexuals of all ages and clothing styles.  My observations and threat assessments have not changed for these seven years.

Except for blacks.  My observations have changed dramatically.

I now look at black men, of all shades, as increased potential threats.  That immediately is modified by a careful review of their visual clues.  They are not a threat if they are older, over 35.  Under 12, wearing a suit or nice informal clothes or a uniform.  

If they are wearing a hoodie, gang clothes, if they seem self righteous, arrogant, have tattoos, or I see several young black males together, they get a second or third threat assessment. That is a big change, due to the racial sensitivity that Obama and his minions have created.  

If they are women, I check their posture and the look on their face.  If they look angry, deranged or ungrateful (like Michelle Obama) I avoid them, and certainly won’t talk to them.

I now notice blacks on TV and in commercials and am conscious when they are more than one out of ten.  Or are assigned a role unlikely to be played by a black in the real world.

This a big change that I have noticed over the past seven years.  Call it ‘racist’ whatever Democrat-Lefty slur you like.  I worked in a black church for eleven years.  Thanks to Obama I have a new, and not desirable, racial cautiousness.

Threat assessment

I searched my earlier blogs to see if I ever wrote a blog about my living room test of ‘stranger interaction’.  Apparently I only included it as part of a longer blog.  

My study occurred in the very early 1970’s when I wanted to use some of my marketing research technologies on general human questions.  I worked with my close friend Peter Sherrill, a genius on research design and analysis.

I invited 16 friends of mine, half men and half women, to my house for research and snacks.  None of them knew each other. Only I knew them all.  Hippie days; people would go to a party for any reason.

As they came in I gave them a letter to pin on their chest and asked them not to talk to each other.  They all did as I asked.  Then I had each one answer a dozen spatial dimension questions on a questionnaire. Which two people are more alike A,B,C ...A,B,D'  etc.

The test was designed to use spatial measurement to find out how people made judgments of strangers when they first meet and then how they changed those judgments after hearing the people talk for ten minutes.  

It turns out when people first meet strangers, the first judgment they make appears to be masculine/feminine.  It was sometimes easy for subjects to discern, but in a few cases not so easy.  Both men and women subjects used this same criteria.  

After I collected the questionnaires, I changed the letters on each person to numbers (I had the list that showed which letters became which numbers.)

Then I had each person in the room introduce themselves and say a few words about what they did and who they were.

How do I know this questionnaire reflected the actual criteria these people used in their minds to evaluate strangers?  Because I asked unrelated questions on the second questionnaire that could be matched to the spatial dimensions on the first questionnaire.  The second questionnaire was after they heard each other talk about themselves.

Results of strangers meeting each other.  First they all decided who was a male and who was a female.  There was a little ambiguity about one person for a moment or two.

Second, crude and animalistic as it might sound, I found that men were looking for physical threats as they met strangers and women were looking for female competitors. Very Darwinian. Very much like most wild animals.

The whole point of the research was to have empirical data and empirical tests to corroborate whatever I found.  The analysis was done by inverting the matrix of 16 people and applying MDScal, the multi-dimensional scaling test used in those days in physics.

I know, I know.  You want to know more.  The third dimension in the perception of strangers was their sexual attractiveness,  Usually heterosexual and partially explained by the age of the group: all under 35.

Social Thought

I can recommend an interesting Gizmodo article to you.  It tells about a large data study of the changes to Wikipedia and to the Wikipedia handbook since its founding fifteen years ago.

What the article says is that the original people established the core values of the organization and they remain core values.  It claims the study finds that over time Wikipedia is not getting new editors and that the top elite are firmly entrenched and are combative with each other.

I read the original article.  It doesn’t really say anymore than the core values remain in the organization and that some of the conflicts in the meaning of the core values have resulted in conflict and segmentation among the editors.

First, my nine years of public radio interviews are about how institutions work.  That is what ‘social thought’ is.  The notion of a founder's long term influence on an institution is 1st grade material.  Long term bureaucratic infighting is about as new as the horse and chariot.

I was chagrined to read the core article.  It is a set of trivial ideas, ascribed to nobodies, with complex statistics overlayed on top of it.  I am a statistician so I know that the statistic don’t add any meaning or gravity to the work.  Where did this field of social science crap come from?

The Gizmodo summary is still interesting. The photo is Mary Douglas, founder of the field of social thought.