Monday, August 15, 2016

Multiplexity: Difficult Questions in a Complex World


People in general don’t ask the right questions or don’t bother with data that contradicts their presumptions.  The globalized world is so complex and specialized, the only sane starting point is that you know nothing unless you have information from an honest expert. Unfortunately, most of us get information from TV, which relies on titillation or outliers to gain eyeballs (but not brains).  Once we consider how few companies control the news; how much the military and government spend on advertising (the amount is so large, the Congressional Research Service once remarked, “It is unclear how much the executive branch, let alone the federal government as a whole, spends on communications each year.”); and how government agencies funnel information only to outlets that agree with their political positions or support them, we can see the TV is the last place to look for objective data.

In an ideal world, TV would have lots of documentaries and experts discussing the intricacies of their work.  For example, why has crime spiked in x city? Instead of listening to the same pundit try his or her best to fill up the demands of a 24-hour news cycle, the media should showcase the local police chief and sheriff.  Not only would this create more direct accountability, it would force the media to focus on refuting the claims made by local law enforcement official or to assist him/her in improving conditions.  In other words, under such a system, the media would be useful as a check and balance against lies by public officials or as a supporter of potential solutions.

I don’t watch much TV, but when I see police officials on TV, they’re often not responding to any specific issue or providing input about a specific problem they’re seeing within their area of personal knowledge.  Instead, they’re often talking about issues outside of their area of expertise, such as family values.  It’s true if I see ten families with single parents who are experiencing problems requiring police intervention, I may believe family values are the primary issue. Yet, because I do not see single parents from more affluent households, I may not be receiving enough data to form an accurate opinion. Even if I did see enough single parents, I may not be able to determine, without extensive interviews, whether the problems I see arise from poverty or some other stressor, such as temporary job loss or inadequate savings.  Problems often have multiple causes, and other than a few persons like Warren Buffett, no single individual possesses enough patience, time, and access to honest experts to identify the source of a complex problem, much less resolve it.  To prevent useless pontificating, the first question to ask any public official ought to be, “What keeps you up at night?” or “What issues did you not anticipate when you first took this job?” or “What issues have gotten worse since you took this job?”

You’ll see two important factors in my analysis above: honesty (truth) and cooperation (absent unique traits possessed by only a few individuals).  A successful society should maximize honesty and cooperation. To do this, we must study what systems and incentives promote such values.  Without such values, nothing else matters if a sustainable and mentally healthy society is the goal.  I’ve been focusing on economic systems and transactions my whole life, believing that the proper incentives within a well-designed economic system will promote honesty and cooperation. I now see that my singular focus on economics stems mainly from my own lack of access to money and financial stability when I was younger.  Even as I add psychological factors to my list of topics to explore, I firmly believe stability and sustainability rely upon providing people with meaningful work (including the option of raising one’s own children) and low inflation in essential items, such as housing and nutritious food. (As a side note, Dan Ariely’s Predictably Irrational is an excellent starting point for anyone interested in the intersection of psychology and economics.) Let’s explore some questions and topics to give us an idea of how we ought to approach our complex world.

1. One reason the Vietnam War ended—with a loss for the Americans—is because of the visibility of the increasing number of Americans who died in the war.  Today, with drones and other weapons, it is easy to kill the enemy (as well as civilians) without incurring dramatic losses, as long as war is restricted to countries that lack access to advanced weaponry. Even with technological superiority, the U.S. has lost every war since Vietnam, except for skirmishes in Granada and Panama.  (The first Iraq war doesn’t count as a victory when it required America to re-invade a few years later, culminating in the creation of ISIS.)

You are thinking of joining the U.S. military.  You live in a rural area where job opportunities are not plentiful, and you don’t want to go in debt to attend the nearest university, which requires you to move to a different city.  You’ve heard of the Chilcot Inquiry.  You know its findings include that the 2003 Iraq war was unnecessary and relied on false intelligence, causing over a hundred thousand civilians to be murdered.  (Note: the U.S. military has a history of killing civilians going back to the Vietnam War, when General Curtis LeMay advocated an ill-advised strategy of using air power and bombs against North Vietnam to end the war “by taking out factories, harbors, and bridges.” Such bombings instead convinced northern Vietnamese residents to join the opposing army in large numbers.)

You may not know that prior to the 2003 Iraq invasion, Admiral Sir Michael Boyce, chief of the British defense staff, advised then-PM Tony Blair that civilian casualties would likely be in the “low hundreds,” but you have a sense that civilian political leadership is focused on domestic economic issues and has lost the stomach to question military leadership. You know that joining the U.S. military might give you opportunities that you would otherwise lack, such as traveling to different countries, and you’re smart enough to know that plenty of civilian positions exist, such as maintaining planes and equipment, or even being a cook on a ship.  You don’t see much value in working 9-6 in a local job, because it doesn’t give you the opportunity to serve a higher purpose or to create lasting bonds.  Yet, you also know if you join the military, you will be subject to greater restrictions on your behavior as well as the possibility in helping your country murder civilians abroad. You know that the two current presidential contenders are incompetent or voted for the unnecessary Iraq War.  What is the correct moral choice?  What is the correct practical choice?  Why might they be different?

2.  The current economic system relies on ever-increasing inflation, primed by central banks. In the past, each dollar was linked to a finite resource, gold.  Each citizen could trade dollars for a certain amount of gold, thereby providing a check against excessive government spending.  After 1971, the U.S. used its credibility and superpower status to gain the ability to print money.  In doing so, it helped the U.S. increase its military expenditures, which in turn helped end the Cold War, giving the U.S. sole superpower status.

Today, central banks worldwide have issued debt between 30 and 40 trillion U.S. dollars.  From 2007 to 2010, due to the banking crisis, the Federal Reserve alone issued about 16 trillion dollars.  Much of the new debt post-2001, however, has been used for military or intelligence agencies, including, for example, the Iraq war and creating new agencies such as the TSA.  The U.S. has 17 different intelligence agencies.  The direct benefits to American residents as a result of recent military adventurism and intelligence-gathering operations are unclear.  Whereas much of the debt issued to banks from 2007 to 2010 were in the form of loans, requiring them to be paid back, the money spent on the ill-fated war in Iraq and other military activities is often secret and off-budget (through abuse of a Congressional option known as appropriations, designed to allow Congress to fund short-term, necessary, and limited operations without needing to go through the normal budget process but which is now used by the military to gain unlimited funding).

Some Americans argue that central bank printing has corrupted the country and we should either abolish the Fed Reserve or go back to the gold standard.

If we return to the gold standard, what happens to the 30+ trillion owed by central banks? Should countries worldwide agree to waive a portion of the outstanding debt to each other and create a “reset”?  Would doing so help future generations in all countries, who are positioned to pay off the debt?  Or would it not matter, given that the debt can be held infinitely because countries technically have no end date and are assumed to last forever? (And why are we still talking about gold as if it’s the default physical store of value in an age where rhodium, platinum, oil, and silver also have industrial uses? Are there other physical stores of value that would be rare/finite, useful, and universal?)

Part of the reason inflation is considered to be beneficial is because it devalues the debt owed.  For example, if you borrow 1 dollar today, it should be easier to pay off in a year because the value of your wages or assets (like your house) should be worth more.  If your wages or assets are not worth more, a central bank can lower interest rates, which should make it easier for businesses and consumers to spend money and/or borrow to expand economic activity, or it can increase interest rates, making it easier for you to save money at a higher rate than when you took out the loan.  Until 2008, the previous assumptions held mostly true.  Today, such assumptions have been proven false.

Corporations have not been spending money because the economic outlook is uncertain.  (I just saw a Bloomberg article titled, “China, Inc. Has $1 Trillion in Cash That It’s Too Scared to Spend.”) Meanwhile, central banks in export-oriented countries have actively pursued currency devaluation, an artificial way of increasing their balance sheets without adding anything of value.  The situation is so dire that even countries that want to devalue their currency, such as Japan, are unable to do so because their citizens and consumers save substantial portions of their income or do not spend at expected rates, regardless of interest rate changes.  Some banks have even played with negative interest rates and calibrated the exact percentage (about negative 1.5%) after which consumers would presumably withdraw their savings and put them under the mattress or buy tangible assets.  In short, the current American and European economic system depends on consumers buying things they don’t necessarily need even as the prices for essential items, such as housing and education, increase.  In Asia and South America, the situation is somewhat reversed. Consumer goods such as Nike shoes are very expensive relative to income, but housing is affordable outside of certain areas.  Because public or private transportation (jeepneys, buses, etc.) is relatively cheap, buying a home or condo in a smaller or less densely populated area does not cut you off from jobs or your community, though it does cost you substantial travel time.  As a result, life outside of America and Europe may require more patience, but people seem happier despite being poorer in terms of wages and legal rights.  

Supporters of central banks, such as Mohamed El-Erian, claim central bank activities saved the worldwide economy as political institutions proved unwilling or unable to act.  This argument is similar to the CIA or military claiming that the only thing that matters in the end is getting things done, and sometimes, actions have to be taken in secret because of political gridlock or lack of public sophistication. Such an argument relies on the assumption that the entity acting has more information and better judgment than everyone else, which may or may not be true, but which is certainly convenient to believe. (Human beings, especially men, are more apt to overestimate than underestimate their competence.)

Like most complex issues, the answer is at least two-sided.  Yes, it is true that central banks saved the day between 2008 and 2010, but it is also true that in doing so, they prevented structural reforms that would have benefited Americans long-term.  When analyzing any claim or proposed solution, always ask: is the goal short-term or long-term success?  Will the problem recur 5, 10, or 20 years from now if we try to fix it this way? If we are asking the public to make sacrifices in the short-term that will create long-term benefits, how do we effectively communicate the strategy?  How do we promote cooperation in an age where politicians have lost credibility, even as cooperation is necessary to improve conditions in the long-term due to the interlinked nature of worldwide economies?  (Note: it is supremely ironic that the U.K. fired the first shot against globalization and cooperation through Brexit, even though it was the former British PM Gordon Brown in Beyond the Crash (2010) who most effectively and presciently stated that worldwide cooperation was necessary to resolve global trade imbalances and to resolve loopholes such as corporate forum-shopping for the lowest tax rates.)

3.  As some countries gain greater material wealth, many of their residents no longer have to consider financial incentives as primary motivators.  In an age where the pact between employer and employee is laden with mistrust and factors beyond corporate control (such as China’s willingness to spend x money to maintain its assumed growth rate, which impacts the worldwide economy), how do we create an environment where workers have meaningful lives?  How do we also create incentives where workers are connected to their communities even as work itself becomes disconnected from location?

The above questions are crucial to answer because the American economy—which drives worldwide consumer demand—assumes people will work and willingly go in debt to buy a home (and other goods or services). What we are seeing, however, is that some people are opting out and choosing to rely on inheritances, Airbnb or Uber, or the “sharing” economy, leaving a smaller number of people contributing taxes in the way economic models expect.  (Hence, the battle between Airbnb/Uber and governments, which will probably be resolved after some level of taxation is implemented.)

The key is to ensure that agreed-upon level of taxation does not constantly increase, thereby reducing incentives to join the “alternative economy.”  Once you realize that governments and banks did not anticipate so many young people being able to opt out of the traditional economy, which reduces their taxes and loan generations, which in turn makes it harder to comply with ironclad legal agreements such as negotiated automatic COLA increases, you can see that how the battle between the new and old economic players is resolved and moderated will determine whether people truly have economic freedom.

4.  A huge problem is that the things we call x no longer mean x—in practice, they lead to completely different outcomes.  Education no longer guarantees accurate knowledge, skills, or jobs.  The law doesn’t lead to justice.  Religion doesn’t necessarily lead to long-term outlooks, even though God is presumed to be infinite.  Rather than resolve legal problems such as removing incompetent workers, government agencies resort to spending taxpayer dollars to create “community relations” programs such as life-sized dolls of police officers designed to attract (brainwash?) children.

For example, in some American cities, police are stopping passengers to give them free ice cream and in doing so, are using the incidents (and unwilling participants) as free PR. One need only to look at the faces of the terrified African-American passengers stumbling over themselves to say “Sir” before one realizes several disheartening conclusions: 1) police departments are so disconnected from their communities, they actually thought stopping random minorities was a good idea; 2) police departments are so deluded, they don’t realize that the people involved probably won’t deny consent to the incident being videotaped and broadcasted to the world because they feel coerced; 3) communities are somehow not outraged over this use of police time and services, which means they either lack an easy way to be heard; think they won’t be heard even if they complain; think they might be targeted if their complaints are heard; are apathetic; or are so disconnected from minority communities they cannot empathize with their obvious fear.  In any case, all roads lead to procedure trumping substance, indicating that PR has become preferable to substantive change.

When marketing trumps actual reform, it is time to be concerned.  When marketing is considered more worthy of implementation than actual reform in a country with easy access to guns, it is time to pay attention. When marketing overrules common sense in a country where over half the population is essentially living paycheck to paycheck, it is time to evaluate the character of its people.  If all three occur at the same time…well, perhaps it is time to leave or opt out.

Even though governments are considered to have infinite lifespans and corporations can declare bankruptcy or go out of business much more quickly, in the current political climate, it appears corporations are more incentivized to think long-term because Coca-Cola wants you to drink its beverages 1,000 years from now, whereas politicians just need you to vote for them every 2, 4, or 6 years.

As a result of our strange new world, where everything seems flipped, different groups have used democratic legal systems to give themselves protection from market whims, but without any additional benefit to the public.  What is the benefit in keeping an excessively violent officer on the force? Assuming repeated and excessively violent conduct, any benefit to police officer morale is eliminated by the overall resentment and mistrust that occurs when the public realizes it is forced to pay ever-increasing taxes to maintain a culture of unaccountability.  Yet, in states where police are allowed to unionize, their self-interest continues to outweigh the public interest.  Such a scenario is shocking when you consider all the assumptions inherent in a democratic society.  The non-police public, after all, vastly outnumber the police, and the police are generally not allowed to go on strike because they are considered to provide essential services.

How did unaccountability come to rule the day?  It is partly money, but not in the way you think.  If we assume that government agencies are able to get automatic funding every year, regardless of results—and indeed, many states have passed laws that mandate a certain percentage of tax revenue go to certain departments, regardless of overall economic circumstances—then they can plan long term and can become important purchasers.  The power to divert their automatic tax revenue to specific people and companies means everyone from individuals to small businesses to large corporations needs to conform to the specific policies of the government or risk losing a bid.  (Can you now see why giving any government entity a blank check in the form of central bank printing is a problem?)

In practice, employees may favor specific companies or entities and voice dissatisfaction if a competitor is chosen for a bid, rankling the leadership, which is more concerned with morale and the status quo than improvement.  Why?  Because if the funding each year is automatic and not based on any specific metrics, the leadership is incentivized not to improve each year, but to maintain the status quo and to avoid a loss at any cost (a loss including both tangible and intangible items, such as embarrassment, etc.).  Once we realize that government entities are incentivized in a particular way, then we can easily see that censorship will be favored over transparency and accountability, especially if the avoidance of loss, such as public embarrassment, is the goal.  It’s not a difficult step to understand if censorship is more favorable to receiving automatic funding every year, with a possible increase, that government entities will lobby for special protections if transparency is pursued by the public (unique privacy rights, legal standards of discretion that are more subjective than objective, etc.) and/or will use fear to help increase tax dollars above the guaranteed minimum. It also follows that it’s easier for government entities to engage in superficial activities like “community relations” to create positive PR rather than fixing structural problems, such as removing excessively violent police officers or incompetent government workers under a unionized system where the government agencies help elect government officials both with political funding and so-called “volunteer” hours in campaign support.  What’s easier in the modern era?  Sending a few cops to your local school and paying them OT for a few hours to smile and look good, or actually trying to remove the 10% or so of the bad apples that have shown a repeated lack of good judgment?

With no real consequences for misbehavior or a lack of improvement, hubris rules the day, removing humility and creating antagonism between the government and the public it is supposed to serve.  Welcome to America, post-9/11.

(Side note: I once had a low-level American TSA worker confidently tell me his detailed scientific opinion about the safety of the new scattershot x-ray machines when they were first introduced.  I’ve traveled to at least 20 major airports in South America, the Middle East, and Southeast Asia—except for one airport, none of them use the new body scan machines.  It’s almost as if most countries are waiting to see whether the technology is worth spending taxpayer money or if there are any long-term health effects. You couldn’t convince the low level TSA agent about his lack of scientific knowledge, though—he had read something (perhaps given to him by the agency?) and appeared to be parroting it, word for word, in the most arrogant tone of voice.)

5.  Let’s follow up on the increasing intersection between government spending—much of it without any consequences for employee bad behavior or the need to improve or even deliver services or results in order to receive taxpayer funding—and its impact on free speech and dissent.

I was working in a fashion retailer HQ’s in San Francisco, California.  One day, in the publicly accessible area of the ground floor, open to everyone, the company held a security fair.  Among other participants, the FBI and SFPD showed up with freebies and brochures.  I shook the hand of the uniformed SFPD officer at his table, but the two FBI representatives weren’t as hospitable.  When I reminded them that their agency spied on MLK and missed 9/11, one of the representatives demanded to know my name—even though I was wearing an ID card on a lanyard that had my full name and picture on it.  Given the FBI’s history of spying on political dissidents, I became upset and demonstrated my displeasure by stepping backwards (to prevent any claim of physical intimidation) and flipped off the table.  Mind you, this discussion revolved around repeated failures by the FBI—a substantive political issue—and ended with the FBI representative demanding to know my name in an angry voice.  I went upstairs to get back to work, but I decided my political dissent wasn’t yet complete.  I went downstairs and stood a healthy distance from the FBI table, within sight of the SFPD table, and continued to flip off the FBI table.

Shortly afterwards, a security employee at the fashion company took me into his office and escorted me out of the building, even after I explained to him that my conduct was in response to the FBI demanding to know my name after a political discussion in a publicly accessible area.  I was almost immediately locked out of my company-provided laptop and told I could not return to the building to return the laptop, but needed to mail it in. (I returned the laptop in person anyway without further incident.)  When I contacted one of the legal counsels at the company I’d worked with—someone who ought to understand the importance of political dissent and the history of the FBI in suppressing it—he also toed the company line, showing no support for my non-violent speech, even after I explained what happened.  This might be a good time to mention the company’s advertising has recently involved rebels with tattoos and non-conformists.

Let’s recap: a company relying on non-conformist branding sided with the government rather than a minority after the government agency—known for illegal and unnecessary surveillance on American citizens even before 9/11—angrily demanded to know the minority’s name after a short political discussion.  (By the way, the security employee was African-American. I’m sure he thinks he would have supported Muhammad Ali when he was in trouble and controversial, but I think if he were white, he probably would have sided with the government. Our modern era institutions are so good at marketing, the brain can firmly believe one supports non-conformity even when one acts automatically against it.)

Again, welcome to America, post-9/11.  Such is the corrosive effect of giving security agencies in America a blank check—the amount of money involved, not to mention the possible need for security connections to get information that might not be publicly accessible due to a lack of transparency, turns most Americans into willing agents of the government without a need for direct employment or funding.  Now consider that according to The Atlantic, “Nearly half of Americans would have trouble finding $400 to pay for an emergency…[and] 55 percent of households didn’t have enough money to replace a month’s worth of lost income.” (May 2016, Neil Gabler) We can see that with so many cash-strapped Americans relying on the potential for government spending for jobs or direct employment just to survive, the democratic tilt is in favor of a repressive police state even as people believe themselves to be nonconformists.

6.  With magazines and the TV using heavy makeup and photoshop to dramatically alter one’s own appearance, it’s no surprise that ordinary people worldwide love apps that change reality. The danger is that it has become so easy to change reality virtually and artificially that our brains are fooled or diverted from wanting to actually change reality in a structurally positive way.  Even Brave New World didn’t imagine a future where people would actively alter reality to present themselves falsely to friends and strangers and then base one’s self-image on imaginary clicks or views of support.  At least soma was a tangible thing and subject to manufacturing costs that caused a direct physical reaction, not something free that relied on imagination and false pretense.  Lacking physical barriers or limitations, the latter can spread worldwide like an uncontrollable virus.

7.  The merging of corporate and governmental power has been called fascism, but such a label does not tell the whole story in the modern age.  Consider potash sales, which can improve crop productivity.  Worldwide, agriculture continues to represent an outsized economic sector.  (By the way, one way to see different jobs in different countries is by joining Kiva.org. In Lebanon, women often ask for loans to open beauty salons, which tells you no matter where you are in the world, dermatology and hair products will always sell.  Here’s one of my Kiva pages, in case you’re interested: https://www.kiva.org/invitedby/lawyer)

With most products, sellers negotiate a price directly with each buyer, but with potash, China has decided that it will protect its agricultural workers by acting as a de facto wholesaler. (In reality, the move protects the existing government because many Chinese citizens work in the agricultural sector, and China is wisely pre-empting internal strife by taking care of its rural citizens and keeping an eye on food inflation, an issue India and Thailand have not yet mastered.) As such, China requires foreign potash sellers to negotiate a single price for the entire country in order to do business, which provides its farmers with a substantial discount and also sets the benchmark for price negotiations with other entities, including large private companies and other countries like India.  In contrast, American farmers and companies presumably have to buy potash through distributors (aka middlemen), which obviously creates an additional markup on top of the higher price paid due to the lack of a nationwide discount based on volume.  In short, American farmers are at a disadvantage because their federal government does not negotiate directly with potash sellers and instead allows the “free market” to set the prices, which is misleading, because the free market is now being influenced by another government’s actions.  Funny thing about “free markets”—they’re easily influenced by major players who don’t have incentives to stay within the same system as everyone else.

Even if you’re the most ardent free market capitalist, you can see that the American government standing still disadvantages American farmers, who then resort to domestic lobbying to get benefits such as ethanol subsidies at American taxpayer (and nutritious) expense.  The federal government might retaliate by restricting Chinese agricultural exports, but such legal wrangling on the international level is of limited value because a) China can sell its food products to another country, which can easily remove or ignore origin labels and re-sell it to U.S. consumers (at a markup, of course); and b) major countries sell so many products to each other that protecting one sector could lead to equivalent retaliation, which, if not contained, could harm everyone.  (P.S. Globalized trade is also why economic sanctions don’t work, unless you’re trying to deny medical supplies to kids in Iraq, which is basically what the U.S. ended up doing during Saddam Hussein’s reign, bolstering arguments that the U.S. is immoral.)

So what do we do when globalization and the “intangible” services economy have upended established economic theories, leading to voter backlash against academic elites?  Most people don’t know that government spending as a percentage of GDP is not much different in America than in so-called socialist countries like Sweden.  In America, government spending in 2013 was about 40% of GDP; in Holland, it was about 46%; and in Sweden, it was about 52%.  Setting aside obvious differences in population size, poverty, and diversity, Swedes receive fully or almost fully subsidized education, including college, and healthcare, whereas Americans are often in personal debt to receive such services.  Of course the Swedes pay more in personal taxes, but in general, after taking a 401(k) and/or a mortgage deduction, most Americans making less than 125,000 USD annually will not pay more than 25% a year in income taxes.  In short, an 11% differential in tax rates cannot explain the vast differences in government services.

Thus, the key is to focus on how tax revenue is distributed rather than tax rates themselves; then whether it is used efficiently; and finally, whether it is accomplishing its stated purpose.  No single voter or government official or even several of them acting together can do that—cooperation is required across local, state, government, small business, and multinational players.  In other words, in an era where more cooperation is necessary to make America great again, America has never been more fractured in spirit.  Throw in the fact that Americans today are more than willing to antagonize others for no reason other than because they can, and we have guaranteed American decline in a world where other countries’ governments are acting carefully and in ways that maximize their advantages in concrete, practical, and tangible ways.

(Note: cooperation does not and should not mean sacrificing one's independence.  Local entities and their residents should be wary of cooperation that looks more like partnering or a merger than knowledge transfer or sharing expertise.)

8. What “coming of age” rituals can Americans (and other countries) agree upon, or should such rituals be restricted solely to the private sphere?  On this topic, I have very little to add.  I personally credit high school wrestling with my own coming of age, but I also know each person’s experience with sports is different.  Yet, I am troubled by the contrast I see between Americans and Thais, Brazilians, and Filipinos.

Thais, Brazilians, and Filipinos are some of the most diverse people you’ll ever meet.  A Thai could have brown or light skin, or be of Indian descent; Filipinos are mixed with Chinese, Spanish, and Malay; and the best second passport is a Brazilian one because Brazil has Anglos, Lebanese, Chinese, Japanese, Portuguese, and everything in between, so there’s no “Brazilian” look that will attract attention at airports (unlike a Chinese traveler with a Russian passport, for example).  Somehow, everyone I’ve met from these countries is united and proud to be associated with their country (though not necessarily their government) to the point where most get offended if you ask them if they’re actually Thai or Brazilian.  They always make a point to vehemently reiterate that they’re from the country even though their grandparent was full Chinese. How did three countries more diverse than America (outside of a few of America’s major cities like NYC) end up becoming much more inwardly and quietly patriotic, with overt displays of patriotism such as flying the national flag less common? (I’ve noticed that in countries where citizens fly their national flag more often, there is more division and less unity.) I don’t know the answer to this question.  Someone should study it.   It’s not just the three countries I mentioned, by the way.  Colombians, for example, will give anyone a run for their money when it comes to national pride.

9.  Any modern root cause analysis of problems contains “multiplexity,” or multiple reasons and causes creating complex outcomes (my term, as far as I know).  For example, I met a Filipina in the Philippines and asked about her son.  She had met an Aussie miner several years ago, during the mining boom caused by China’s infrastructure spending, and she fell in love. Unfortunately, the Aussie miner disclaimed her child until after she took a DNA test, fracturing the relationship.  I asked her what future she hoped for her young son.  She said she hoped he would become a football player.  I asked whether she read to her child regularly.  She said she had heard it was a good idea, but she relied on the television to teach him English.

I take two main points from my conversation with her.  First, TV and social media’s pervasiveness have made outrageously unlikely outcomes—such as becoming a professional football player—seem normal.  Second, the child exists because of Chinese infrastructure spending and some central bank somewhere changing interest rates in ways that made gold more expensive, which put more money in the Australian mining community.  Yet, you’d never look at the kid and think he exists because of a bank's decisions or foreign government spending—even though he does.  Multiplexity is real, even though it is often invisible.

10.  One of life’s ironies is that liberals tend to create well-meaning programs without thinking of the way they can be “gamed” and made financially unsustainable by a small percentage of bad actors; as such, programs would often be best implemented by conservatives.  Such a potential merging of different skill sets to create an ideal match is probably why political differences have survived in people.  Take Warren Buffett and Charlie Munger, for example.  Buffett is liberal, Munger is conservative.  Would either of them be anywhere close to their success today without each other?

11.  It seems like everyone these days is interested in psychology.  Yet, so many of psychology’s conclusions rely on incomplete data.  For example, let’s say I do an experiment with Lindt chocolate, which is generally much more expensive than Hershey’s chocolate.  Such an experiment would probably involve fewer than 3 dollars a transaction or perhaps as little as 25 cents.  A psychologist may arrive at interesting data after comparing demand between the two chocolates side by side at different prices, but the experiment won’t account for substantial differences in the buyers’ emotional states.

If just 10% of the buyers are active investors in the stock market, and the market went up 5% that day, they may be more inclined to buy the more expensive chocolate, and the reverse if the market went down 5%.  Moreover, it’s possible the amounts in question are too small to be meaningful.  For instance, if someone is trying to scam me out of a dollar, I may just give him the dollar to maintain the peace.  How would any psychologist determine whether I am being gullible by pretending not to know I’m being scammed, or making a cost-benefit analysis? In most experiments of this nature, there is no way to accurately separate all the factors in a person’s head and isolate the primary one. (Another result of multiplexity.) As such, most psychology after general conclusions is often worthless.  Indeed, if psychology’s generally accepted conclusions interfere with one’s ability to analyze or address individual problems on a micro-level, they may actually create more negative than positive outcomes, despite being true in the abstract.

Personally, I’m interested in the following issue: it’s clear that the best way to get most people (non-con-artists) to provide unbiased information is to pretend to be dumb. (I always rely on women if I want unbiased information, because they all understand this tactic, even if they don’t use it.)  In doing so, however, one sacrifices credibility and the opportunity to lead the person or his friends, at least in the short-term. What is the best way to reconcile these two competing factors?

12.  I have some general ideas that may help improve some of our problems:

a.  Have economic incentives, not profits, dictate corporate performance.  We tend to say, “Do what you love, and the money will come,” but somehow ignore this advice when it comes to encouraging corporate employees and the level of discretion given to them.

b.  Stop blindly implementing backward-looking policies.  It’s not just pension funds that refuse to budge from 8% assumed annual investment returns—the problem is often much less political, but passive acceptance of nonsensical policies tends to creep into other areas of thinking.

When I travel, I often buy one-way airline tickets because I’m not sure how long I want to stay in a new country. The current travel system is set up to force airline check-in employees to input a destination after the landing or deny check-in because of the small chance that the destination airport will deny entry to the traveler.  The discretion to reject a traveler without an ongoing destination is because the traveler may overstay his or her visa and work illegally and also because criminals have been known to use one way tickets.  Yet, there is no way an airport employee with half a brain will be able to look at my well-used passport and my bank account (accessible on my phone) and believe I would be a burden, financial or otherwise, to any destination country.  I’ve gotten into arguments with airport staff because I know procedural loopholes they don’t, but my real frustration comes from people not realizing our quality of life will diminish considerably if customer-facing employees and their supervisors do not know the reasons behind the rules and are given the discretion to modify them when needed.  In an age where rules can be accessed on anyone’s phone, why don’t more companies and governments make it easier to find rules and their exceptions and empower their supervisors to interpret them?  (Richard Branson's companies have been successful precisely because of a flexible management style.)  Do we really want to have a society where any non-standard response must be vetted by lawyers and risk managers, who are often based in locations far away from the day-to-day action?

c.  Stop using outliers as the basis of any policy.  One terrorist tries to detonate a bomb in his shoes, and everyone traveling needs to remove his or her shoes (as if criminals aren’t capable of changing tactics).  One criminal uses one-way tickets to minimize detection, and governments implement rules to discourage one-way tickets (even though any idiot wanting to bypass this rule could buy a multi-leg, roundtrip ticket and leave at an earlier stop).

It’s easy to see that entities relying on the perception of maintaining safety would be incentivized to over-regulate rather than give employees discretion, especially when disparate treatment often results from unconscious bias.  Yet, as lower level functions become automated, the main values human employees can add to any organization are common sense and the ability to use discretion wisely.  To encourage such value, companies need to demonstrate more loyalty to their employees and give them more opportunities to be visible to upper management.  One Japanese owner may have the right idea—he tells his employees they won’t ever be terminated because they lack talent, but in exchange, they must work hard.

Conclusion: as private and public entities with more power over our lives become larger, they tend to use top-down rather than bottom-up management.  People are frustrated because they are not seen as individuals.  The advent of social media and the influence of television have made everyone’s lives more difficult by increasing the level of biased information and of broad (and therefore useless) data, while decreasing the time dedicated to contextually complete and nuanced information.  Everyone is convinced they are correct and honest even if they see only one area of a picture; yet, in an era of multiplexity, it is more likely that people are wrong than right. Whether people begin to realize their perspective is limited, despite the vast amounts of information available to them, will determine whether the human race prospers.

Lawrence Ferlinghetti once said, “It seems that mankind is too stupid and greedy to save himself.” He was referring to ecological annihilation, but his statement sadly applies to many more areas. Perhaps humankind isn’t too closeminded to save itself from people who insist on using fear and complex legal maneuvers to drive their version of progress. Time will tell whether we can reverse our current path. We’ll have one indication of our direction in the November 2016 elections, and another indication when or whether Congress reverses its long-standing reliance on appropriations to fund military adventurism and expansion.  Will the world be driven by countries needing to buy hundreds of billions of dollars of advanced weapons each year, or will people finally demand that politicians work together to advance cooperation on both micro and macro levels? Multiplexity demands either increased worldwide cooperation, increased segregation, or decreased size.  Only one of those options encourages a world with reduced conflict and fewer misunderstandings.

May the odds be ever in your favor.  

Saturday, July 16, 2016

Adventures in Travel

America is in decline, and everything will be okay.  Let me explain.  Donald Trump and Hillary Clinton as presidential candidates look terrible, but not when you understand why they’ve become the nominees. 

Trump’s rise is easy to explain—he's the personification of anti-political correctness and doesn't talk down to non-coastal Americans despite being from New York City.  Uneven federal government spending and concentrated corporate technological and VC investment has helped shift affluence, influence, and higher-paying jobs to coasts and larger cities instead of smaller or non-coastal ones, and no one likes feeling unappreciated in today's winner-take-all economic battles.  Moreover, Trump voters aren’t all racists or xenophobes and resent being seen as such.  A typical Trump supporter may be anti-immigration but may base his or her opinion on valid prima facie data, namely, the increase in prisoners from various groups that are immigrants or recent descendants of immigrants. 

My conversations with GOP voters revolve around immigrants changing the character of their communities and the federal government doing little to help.  A primary perception is that illegal immigrants receive welfare or “free stuff”; and secondly, that newcomers cost more than native-born Americans, whether by diverting school resources to ESL programs not used by their children or their neighbor’s children, or by requiring more work to be done by existing police and jail employees but without additional tax revenue.  Globalization is also an issue in cities that have lost manufacturing jobs, but it’s really the feeling that China is getting the better end of trade deals that riles up the conservative base.  To summarize, Trump is winning because the Establishment and younger Americans have either ignored valid complaints from conservative voters or unfairly decided that such complaints are the result of bigotry or ignorance.  See, for example, the book titled, What’s the Matter with Kansas? (Which causes me to think, “Nothing.  Who wouldn’t want to live in Lawrence?”) “You may not listen to me,” a Trump voter might say, “but you cannot ignore Trump.”

Now, it is true that cities with immigrants, both legal and illegal, have experienced more economic growth than cities without them, and it is the illegal immigrants’ American-born children who receive welfare, not the illegal immigrants themselves.  The positive impact of immigration on economic growth is not restricted to American cities like San Antonio, New York, or San Jose—some studies cite Toronto’s working population as 51% immigrant.  What some liberals fail to consider is whether the average Midwesterner or Southerner wants to pay 650,000 USD for a townhome in a so-so K-12 district, wants to live around neighbors who don’t share his religious values, wants to see his son working as a lawyer rather than a machinist, or wants to see his daughter delaying motherhood until her 40s because two incomes are necessary to buy a home.  (Even coastal voters are starting to acknowledge the problem of constant inflation in essential goods and ever-increasing productivity—witness comedian Ali Wong joking, “I don’t want to ‘lean in,’ okay?  I want to lie down.”).  At the end of the day, when you ignore or mischaracterize complaints, there will be backlash.  Hence, the rise of Trump. 

What of Hillary Clinton, then?  Her rise to power is a logical extension of the Democratic platform--safe positions that provide the perception of diversity and social progress. When you’re winning eight years straight, and your opponent is throwing Hail Marys, there’s no need to rewrite the playbook.  Even the so-called Affordable Care Act required so much compromise, it ended up being a boon to the most powerful lobbyists in D.C.—the insurance companies. Younger voters, of course, will get the shaft—they’ve been getting shafted in almost every democratic country in the world, as high schools and colleges fail to teach economics and basic finance properly and as populations age and senior citizens vote consistently, causing tax revenue to shift to government-provided medical care and retirement programs. 

Meanwhile, what’s a top concern for voters in their 30s and 40s in industrialized nations?  Subsidized childcare.  You’d think such a request would be easy enough to implement--after all, how hard can it be to pass several individual and childcare provider tax credits?--but you’d be wrong.  As young couples marry later and have fewer children, they don’t have a strong enough voting bloc to be given substantial attention at the political table.  Call it the “Curse of Reasonableness,” but studied, incremental reforms require nuanced perspectives and knowledge of the law of unintended consequences, which don't get much play in the age of Kardashians, the six-second Vine, and the Pokemon Go app.  If you’re a Democratic politician, are you going to attract attention by promising childcare tax credits or free college tuition? 

That word, “free”—did you see it?  “Free stuff.”  It’s tantalizing, isn’t it?  A conservative voter will argue that nothing is free. You have to divert tax revenue from existing services if you add new ones; reduce morale by asking government employees to work more for the same pay (in California, during particularly difficult budget negotiations, some government union employees openly bragged about slowing down non-essential work); and/or raise taxes, almost all of which eventually come out of middle class voters’ pockets, because the rich have lawyers and bankers whose jobs revolve around finding loopholes to protect their clients.

If you’re a liberal voter, you’ll probably respond with arguments about income inequality, actual rather than posted corporate tax rates, the 1%, etc.  Even if you’re right, it doesn’t matter, and it won’t change the fact that about half the country doesn’t care as much about effective corporate tax rates as they do about attracting more corporate jobs while making sure they can pay the same taxes on their house today as they did when they bought it ten years ago and preventing haphazard social development that changes their community’s character.  As I like to tell Californians who don’t own Teslas, “You may look down on Southern conservative voters, but where do you think your car was assembled, and by whom?”

Underneath the Democratic Party’s lofty words and promises is a need for tax revenue and job growth.  First, those pensions promised to teachers and government union workers?  They have an assumed interest rate (or rate of growth) established by politicians, usually around 7.5%. Look up where you can increase your assets 7.5% a year, and the correct answers will take you to the stock market and hedge funds, both of which lead you straight to Wall Street.

Second, no political party can escape the reality of politics, which is that if the economy is doing well, the incumbent wins. How are jobs created in the 21st century?  Through debt, which has come from central bank printing. That’s why Hillary Clinton is in bed with the big banks and multi-national corporations, and that’s why Bernie Sanders never stood a chance.  If you live in a mid-sized city where you’re happy with your local mid-sized bank or credit union that keeps its own mortgages; content to see your daughter married at the age of 26 (maybe even with grandchildren already); and realize one reason Walmart invested in your community and created jobs, including well-paying managerial positions, is because of fewer regulations and lower corporate taxes (one Indiana resident with whom I spoke called the new Walmart the "new downtown"), then why would you vote for Hillary Clinton? If you think fewer regulations necessarily lead to a race to the bottom, consider that Walmart executives may have better reputations than Congressional members. (Stated another way, do you trust Apple's Steve Jobs to make the right decision, or Iowa Rep. Steve King?) What about abortion?  If you want one, you can now get that job at Walmart and fly to California or New York to get it. As for freedom, it’s not just about the 2nd Amendment for conservatives—as economist Nassim Taleb writes in Antifragility, “[W]e have never been more in debt ([and] for the ancients, someone in debt was not free, he was in bondage.”) 

In short, both Clinton and Trump are extensions of legitimate political positions and strategies on both sides.  Side A is tired of not being heard, while Side B chooses to hear nothing but bigotry.  I started this essay by saying America was in decline, and I hold that position.  What has changed is that it no longer depresses me.  Cities will stay segregated as voters focus more on observable racism than poverty and segregation as root causes of violence.  Tax revenues will fluctuate and continue to be uneven nationwide.  Central banks will continue papering over structural problems.  Lawyers will continue to find loopholes, both legal and illegal, for their clients. Yet, there is value in realizing both presidential candidates, though far from ideal, are extensions of the current political climate, because it means America has not gone crazy—it’s just lowered its expectations.  Expectations can be modified, even if it takes another 50 to 100 years.  As optimists such as Warren Buffett have written,

“Indeed, most of today’s children are doing well. All families in my upper middle-class neighborhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth. His unparalleled fortune couldn't buy what we now take for granted, whether the field is, to name just a few, transportation, entertainment, communication or medical services. Rockefeller certainly had power and fame; he could not, however, live as well as my neighbors now do. Though the pie to be shared by the next generation will be far larger than today’s, how it will be divided will remain fiercely contentious. [Italics mine.]  Just as is now the case, there will be struggles for the increased output of goods and services between those people in their productive years and retirees, between the healthy and the infirm, between the inheritors and the Horatio Algers, between investors and workers and, in particular, between those with talents that are valued highly by the marketplace and the equally decent hard-working Americans who lack the skills the market prizes. Clashes of that sort have forever been with us and will forever continue. Congress will be the battlefield; money and votes will be the weapons. Lobbying will remain a growth industry.” [2015 Berkshire Hathaway Shareholder Letter]

One can recognize the absence of psychological well-being (apart from material comfort, anyway) in Buffett’s equation and still appreciate his realism. What does this mean for me, a U.S. citizen and American immigrant who recently told someone, “I hate America,” shortly after the Philando Castile shooting?  It means that I no longer expect as much from America, but just because America has become older and less sturdy, it does not make her less beautiful.  If Tokyo can be the most prosperous city I’ve seen in my travels, despite Japan’s debt-to-GDP ratio of 220%+, perhaps government debt, on its own, won’t cause a country to collapse.  Maybe we’ll adapt, even if it means more segregation, less immigration, more cross-border violence, more divorce, more student loans, more single parents, more incompetent or unaccountable government employees, and more unaffordable housing.  Maybe on the way down, we’ll re-evaluate what it means to have honor as an American. 

Maybe a commonly agreed upon definition of American honor will be related to the ancient Mediterranean ethic, Factum tacendo, crimen facias acrius (He who does not stop a crime is an accomplice—from Taleb’s book, Antifragility.)

Perhaps we’ll adopt a more modern version of honor similar to George Meyer’s, as related by Adam Grant: “(1) Show up. (2) Work hard. (3) Be kind. (4) Take the high road.”

Or maybe cowardice rather than honor will be enhanced by technology, as “society is fragilized by spineless politicians, draft dodgers afraid of polls, and journalists building narratives, who create explosive deficits and compound agency problems because they want to look good in the short term.” (Taleb) 

But maybe things will work out, even as living spaces become smaller, consumerism and materialism continue to rule the day, and countries erect more barriers against foreign workers but not foreign capital. 

As for me, I’m going to keep traveling.  I’ve been to 10 cities in the past four months, increasing my lifetime “countries visited” count to about 30. 

I’ve decided the world is based on academic assumptions that no longer apply, but which have prevailed in large part because central bank spending has maintained the status quo.  For example, most economic theories and approaches are from times when tangible products ruled the day rather than services, which are more difficult to track, more easily manipulated, and more subject to cross-border competition. Adam Grant points out, “In the 1980s, the service sector made up about half of the world’s gross domestic product. By 1995, the service sector was responsible for nearly two thirds of world GDP.  Today, more than 80% of Americans work in service jobs.” (Of course, fraud and manipulation still happened in the “analog” world.  One banker was fooled into guaranteeing a loan to a business by inspecting only the top of a vegetable oil tanker—the rest was water.) Still, there’s an upside to our changing world: even if you didn’t go to college or didn’t pay attention in high school, it may not matter in the long run—the information being taught might be outdated and therefore inapplicable to your life. 

My most interesting conversations have been with women. Educated women worldwide are quietly rebelling against traditional expectations.  (If I faced the prospect of coming home to a man who was content with drinking beer while watching a baseball game, perhaps I’d go shopping more and stay single, too.)  It’s easy to see the future will belong to societies that achieve higher female participation in politics and business through merit-based factors and that manage to encourage career-oriented women to have children.  Whether this means more subsidized childcare, a greater appreciation for introverts, tax credits for each child, and/or social pressure on men to do more housework, I don’t know.  I do know, however, that current and future economic forecasts are based on women continuing to have an average of two consumers—er, children—and those children receiving adequate educations and stable living environments that discourage violent behavior.  Ideally, those two children would not be latchkey kids and would attend college and not graduate with crushing debt and non-existent practical skills, but from what I’ve seen, many educated women are not going to comply with all of the above assumptions.  If uneducated women in poorer countries have more children over the next 100 years than educated women in richer countries, and public education systems are not reformed to increase practical and critical thinking skills, we could be looking at a world where we have a few Japans selling products to the rest of the world, or we could be looking at land and water needs and disputes controlling international relations. There are many in-between scenarios, but none likely without more segregation and walls. 

Let’s hope we figure out how to appreciate ambitious, career-oriented women and not end the human race in the process.  As the folk wisdom goes, “If momma ain’t happy, ain’t nobody happy,” but what happens when there’s no mommas left, or they’re mostly in some countries but not others?

I’m single, 38 years old, debt-free, and childless.  I’ve decided that my new criterion for a relationship is whether a woman believes in character and whether she has it herself.  In the modern world, where everything is negotiable and where outcomes are unpredictable, only character will remain the true constant.  I’ll be visiting Canada and Australia at some point in my travels.  As Paul Coelho wrote in The Alchemist, “[W]hen you want something, all the universe conspires in helping you to achieve it.”

I’m going to find out if he’s right. 

Monday, April 18, 2016

Tower of Babel

As I get older, I look back on my life and wonder what's next.  I've learned a few things I'd like to share.

1.  Morality is always key. It doesn't have to come from any particular source, but it should always be the primary consideration in any transaction, whether governmental, commercial, or personal.

The trouble with morality is that it cannot be absolute; otherwise, it wouldn't account for humanity's inherent imperfection.  Thus, the real question is when one must act, on what information, and on what percentage of accuracy.  The only answer I've found so far is that diversity, integrity, and confidentiality are paramount.

Regarding confidentiality, it's the easiest of the three to explain.  Without some measure of privacy, we may be a safer country, but at such a massive cost of reduced innovation and happiness, we would lose our soul.  Henry Ward Beecher was on point when he wrote, "Liberty is the soul's right to breathe and when it cannot take a long breath, laws are girded too tight. Without liberty, man is a syncope."

Integrity, in contrast, is much more difficult to promote because everyone believes they have it, but almost no one actually does.  The best result in an age of advanced, mobile weaponry and technology so innovative it can be both invisible and imaginary is to have fierce, adversarial competition between all players--unions, corporations, small businesses, and even between government agencies, state, federal and local.  One never knows where one will find morality and integrity, so one cannot eliminate any group entirely.  The one exception might be government unions, such as police and teachers' unions.  There must be some way to reward and appreciate good teachers without being forced to hold onto the bad or lazy ones.  The solution, for now, is competition, namely, charter schools, and a greater reliance on the Socratic method.  (Of course this does not mean charter schools are given a pass if they, too, become corrupt or inefficient.)  Also, let me be clear--the best friend you will ever be lucky to know is a good, honest cop.

2.  We need intelligent diversity, not diversity for the sake of diversity.  Right now, we are in the unfortunate position of promoting visible leaders on the basis of race or some other overt trait while leaving behind the vast majority of people in the organization.  Such an approach is the worst of all possible worlds--it fails to promote based on merit, which disserves the public while antagonizing good employees who favor merit, causing them to leave or become demoralized.  There must be a better way.  I personally admire IBM's Ginni Rometty and Santa Clara County Sheriff Laurie Smith and look forward to learning about their thoughts on this subject in print.

I don't believe it is effective for women to speak about diversity--as one of the smartest women in my life once told me, "Don't talk about yourself--if you're good, others will talk for you."  This same woman--who was older than me and who guided me professionally--called herself an "idiot savant."  She was anything but.  Smart people must realize that the reason they have doubts and depressive episodes is because they are smart and their self-doubt is due precisely to their different level of abilities.  In a sense, they are mutants, and how they interact with others will determine whether they go to Magneto or Xavier.  To take a personal example, one heartbreak I had in college caused me to miss dating a wonderful woman many years later.  She would have been perfect for me if I had the courage to overcome my own bias, but I was too young.

3.  A young man should date older women.  The Prophet Muhammad was nothing but an illiterate peasant when he met Khadija bint Khuwaylid, fifteen years older than him.  With her support and guidance, he became one of the greatest men in the history of civilization.  He outlawed slavery long after Christ was born.  While Muhammad (PBUH) freed Bilal the slave, earning him the enmity of the Arab establishment, Christ had nothing to say on the topic specifically, at least not in print.  Meanwhile, Christ, a bachelor, meandered around, direction-less, eventually felled by his own people, who could not stand a man smarter than they who had no formal training.

Christ's example was in his willingness to speak out against inconsistencies and hypocrisy regardless of the source.  He was able to rise up because he had more information than everyone else--he went to the dark, unvarnished corners because that's where the most honest and dishonest people in his time were.  In a better time, Christ would have lived.  There's a lesson there for all of us--how do we build a society that would not only not have killed Christ, but would have allowed him to prosper.

4.  Local police partnering with the federal government is one of the worst developments in modern times.  Think about what I said above about diversity of information and confidentiality.  Then think about which government branches and workers need to be the most protected if they are honest.

If you don't get it yet, let me explain.  The federal government will always have more money and technology than local entities.  If local entities partner with the federal government, they will become de facto arms of one agency.  If that large agency is led by a dishonest or incompetent person, it will resemble Sauron.  Such an approach forces the good and competent people to invest in becoming larger as well, creating a limited approach that eliminates diversity and guarantees destruction.  By "limited approach," I mean duality.  With just two large players, one will eventually gain an advantage and eliminate the other, resulting in a singularity.  When people refer to the Judeo-Christian philosophy, I see only a limited duality.  I see a world that currently needs clearer rules and strong people to enforce those rules.  Consequently, I see a world of Shia Islam fused with Rumi's Sufism--compassion, playfulness, and an unequivocal hatred of all kinds of slavery.  Of course I do not say this is the only way to achieve a just world, or that such an approach will be the best one 400 years from now.  I continue to see only two absolute truths: integrity and humility.

4.  Like morality, humility is key.  When I say humility is an absolute truth, I hope you see the contradiction. Being humble means that one can never know whether he or she has discovered the absolute truth.  You just have to keep trying.  Never give up.  Please, if you know you are different, if you know you are smarter than the rest of them, never, ever give up.

5.  "Give me a child until the age of 7, and I will show you the man or woman." (See what I did there?)

6.  I dedicate this post and my life thus far to two people:

Nicanor Amper IV of Westmont High School.  From San Jose Mercury News: "There are five generations of Nicanors in the Amper family, many who served in the military and many who are devout Christians. Nicanor's name comes from the New Testament, as one of the seven 'honest men' in the Acts of the Apostles."  I do not get as easily emotional on any topic except when I think of Nic.  May he rest in peace.  I know if heaven exists, he will be the one to welcome me there.

Kevin McKenney, Judge, Santa Clara County Superior Court.  A true iconoclast.  If I am blessed enough to have children, and if one of them happens to be a boy, I hope my wife will agree to name him "Kavon."

And so it goes.

Friday, June 22, 2012

Google 2012 Annual Meeting, Facestuffing Edition



Welcome!  Above is a pic of the dessert served at Google's 2012 annual shareholder meeting.  (Thank you, Larry, Sergey, and Eric!)  I've attended many Bay Area shareholder meetings (see right hand side of blog, about a third of the way down), and I used to blog in detail about Google's annual shareholder meetings.  The company now uploads them on YouTube, so a blog post seems redundant; however, if you're interested in some older reviews, here is one from 2009 and another review from 2010.  I miss the more informal earlier meetings, when it was just Sergey Brin and Larry Page on two stool chairs answering questions.  Of course, back then, fewer shareholders attended.  

One tidbit you may not pick up from the video--almost everyone who attended is a senior citizen or retired.  (The meeting usually starts around 2:00PM, which means almost no one can attend except for retirees.)  This year, the meeting was fairly uneventful.  Neither Larry Page nor Sergey Brin attended.  We had one shareholder who liked the fact that Google stood up to China, said he used to be in the Air Force, and ended his spiel saying how he would deal with China: "Bomb them."  He didn't look like he was joking.  I asked the executives to better fine-tune the captioning features on YouTube videos.  I've noticed that except for a few Khan Academy videos, the captioning feature is almost worthless.  Most of the words are not consistently transcribed, and over the past two years, the captioning feature hasn't improved much.  I asked Mr. Schmidt to imagine a world where he had a grandchild who was deaf, and the grandchild would one day come to him and say, (paraphrase) "I love the internet, but I can't fully engage with it.  Was there something you could have done back in 2011, 2012, and 2013 to fix this?" I said I hoped he would be able to give his grandchild a satisfactory answer.   

Anyway, if you're interested in more shareholder reviews, scroll about a third of the way down the right hand side of this blog.  You will see plenty of firsthand accounts of various shareholder meetings, including Berkshire HathawayDisneyElectronic Arts, Apple, Starbucks, and more.  The rest of the blog discusses diverse topics, including economics, politics, law, Indialittle-known filmsand even Mark Twain.  

Saturday, November 5, 2011

Justice Ginsburg


California Lawyer (November 2011) has an excellent interview with Justice Ruth Ginsburg.  Below is my favorite part: 

Q. I'd like you to talk a little bit about the cases that I've spent my life studying, the key gender cases that began in the 1970s, which you litigated and wrote amici briefs for. The 14th Amendment, which guarantees equal protection under the law, had been settled interpretation for, I think, 104 years. What made you think that you could get the courts to overrule more than a century of precedent?

A: The times. The Court is a reactive institution. It's never in the forefront of social change. When you think of Brown v. Board of Education, it was not only that Thurgood Marshall was a brilliant lawyer. It was the tenor of the times. We had just fought a war against an odious form of racism, and yet our troops through most of World War II were separated by race. Apartheid in America really had to go. Similarly, by 1970 the women's movement was revived, not just in the United States but all over the world. As a great legal scholar once said, the Court should never react to the weather of the day, but inevitably it will react to the climate of the era, and the climate was right for that change.

Perhaps, at least in a peaceful society, all good things come to those who wait?  I've sometimes wondered whether the Supreme Court's decision upholding Muhammad Ali's conscientious objector status would be the same if the case had arrived at the Court a few years earlier. In one article I read--it was from Men's Journal (Nov 2011)--the author wrote that the Supreme Court was set against Ali until a law clerk gave them a copy of Haley's Autobiography of Malcolm X. After reading the book, the Court allegedly had a change of heart. True or not, the anecdote demonstrates that the law, so long as it relies on interpretation by men and women, necessarily intersects with their bias.

In any case, regarding the efficacy of the Constitution against government tyranny--whether slavery, Jim Crow, Japanese internment camps, Abu Ghraib, etc.--I'll leave you with this Lysander Spooner quote: "But whether the Constitution really be one thing, or another, this much is certain--that it has either authorized such a government as we have had, or has been powerless to prevent it." [Updated on 3/25/12]

Bonus: see also "When Mass Murder and Theft of All Human Rights Were 'Legal': The Nazi Judiciary and Judges," by Hon. Richard D. Fybel, California Litigation, Vol. 25, No. 2, 2012, page 15-21.  He discusses Nazi Germany and the judicial branch's politically-convenient prostration before Hitler.

Update on 6/7/14: The Trials of Muhammad Ali (2013) includes an interview with a Supreme Court law clerk who worked on Ali's conscientious objector case. The Supreme Court almost dismissed the case but sent it back for review because a new wiretap issue arose (the government admitted to spying on conversations between MLK and Ali). Then, when the case returned to the Supreme Court after three and a half years, the preliminary vote was against Ali 5 to 3 until Thomas G. Krattenmaker, Justice Harlan's law clerk, argued--many times to Harlan--that the Nation of Islam should be treated the same as Jehovah's Witnesses who believed that only God may compel the followers to war and no one else. After reading the Autobiography of Malcolm X (1965) and Message to the Blackman in America (1965), he convinced Justice Harlan, who switched his vote, making it 4 to 4.  However, a deadlocked 4-4 vote would have put Ali in jail for 5 years and generated no substantive written opinion explaining the Court's rationale.  Then Justice Potter found precedent to rule in a narrow way that applied only to Ali based on denial of due process, which permitted the government to continue with its draft while allowing only Ali to file for C.O. status (rather than every single Nation of Islam member or prospective member). The revised opinion resulted in a unanimous 8 to 0 decision (Justice Thurgood Marshall recused himself because the NAACP Legal Fund was involved). The Court ruled Ali was denied due process because the government argued that he was insincere in his religious beliefs at the Draft Board yet later told the Supreme Court it believed Ali was sincere. And just like that, history was made. Without Krattenmaker, Harlan, and Potter, Ali goes to jail, never reclaims the title, and never raises the torch at the '96 Olympics.

BonusInterview with California Supreme Court Justice Stanley Mosk (1998):

LaBerge: [H]ow do you think both you and just the court in general can influence social policy, or vice versa, does social policy influence the decisions?

Mosk: Well, theoretically, we should be governed solely by the law and not by individual concepts of rights and duties.  But inevitably, individual rights do enter into opinions that may be written.  Whether that's good or bad, effective or ineffective, is always debatable.  [pp. 84]

Mosk: I have a certain sympathy for individuals in our society.  Our society has grown so large and impersonal that I think we sometimes have the tendency to overlook an individual's rights and obligations. [pp. 85]  

Saturday, October 22, 2011

Movie Quotes

Adam's Rib (1949): "Lawyers should never marry other lawyers. This is called inbreeding, from which comes idiot children and more lawyers."

"What is marriage? Tell me that. It's a contract. It's the law. Are you going to outsmart that, the way you've outsmarted other laws?" (Spencer Tracy to Katherine Hepburn)

"Assault lies dormant within us all. It requires only circumstance to set it in violent motion." (Hepburn's closing argument)

The Art of the Steal (2009): "One man's conspiracy is another man's political consensus."

Cape Fear (1962): "You can't arrest a man for what he might do. And thank heaven for that."

[Bonus: "There is no such crime as a crime of thought; there are only crimes of action." -- Clarence Darrow]

Citizen Kane: (1941): Woman: "I don't know many people." Kane: "I know too many people. I guess we're both lonely."

Dial M for Murder (1954): "[P]eople don't commit murder on credit."

Eat Man Drink Woman (1994): "Eat, drink, man, woman. Basic human desires. Can't avoid them. All my life, every day, that's all I've ever done. It pisses me off. Is that all there is to life?"

Equinox Flower (1958) (not a good movie, but I liked these lines): "Then everyone's inconsistent. Everyone but God. Life is absurd. We're not all perfect. As a scholar said, 'The sum total of inconsistencies is life.'"

The Field (1990):
McCabe: "There's a law stronger than the common law."
Priest: "What's that?"
McCabe: "The law of the land."

Gilmore Girls (2001): Luke, on marriage: "It's a bureaucratic civil ceremony and a pretty pointless one...It's not biologically natural for people to mate for life. Animals don't mate for life. Well, ducks do, but who the hell cares what ducks do? I mean, people grow and evolve their whole lives. The chances that you'll grow and evolve at the same rate as someone else are too slim to take. The minute you say, 'I do,' you're sticking yourself in a tiny little box for the rest of your life. But hey, at least you had a party first, right?" (Season 2, "Red Light on Wedding Night")

Gloomy Sunday (1999):
Schnefke: "But we must be careful not to stray too far outside the law."
Hans: "Of course.  But the beauty and vibrancy of the law lies in its flexible boundaries."
[Two Nazis in Hungary around 1939 discussing their future, indirectly demonstrating that the law, regardless of its substance or intent, usually favors those in power.]

The Jane Austen Book Club (2007): "He looks at me like he's the spoon, and I'm the dish of ice cream."

Juno (2007), from the protagonist, a pregnant high school student: "Oh, I'm a legend. The tale of the cautionary whale, you know?"

Kind Hearts and Coronets (1949) (a very fun dark comedy): "I must admit, he exhibits the most extraordinary capacity I've ever encountered for middle age in a young man of 24."

The Last Kiss (2006) (overall, not a great movie, except for these lines): "Stop talking about love. Every a**hole in the world says he loves somebody. It means nothing. What you feel only matters to you. It's what you do to the people you say you love--that's what matters. [Indeed] It's the only thing that counts."

Lilies of the Field (1963): "To me, it [the chapel] is insurance. To me, life is here on this Earth. I cannot see further, so I cannot believe further. But if they are right about the hereafter, I have my insurance, seƱor."

The Lion in Winter (1968) (a must-see film): "He came from the North to Paris with a mind like Aristotle's and a form like mortal sin. We shattered the Commandments on the spot."

A Man for All Seasons (1966):
Roper: So, now you give the Devil the benefit of law!
Thomas More: Yes! What would you do? Cut a great road through the law to get after the Devil?
Roper: Yes, I'd cut down every law in England to do that!
Thomas More: Oh? And when the last law was down, and the Devil turned 'round on you, where would you hide, Roper, the laws all being flat? This country is planted thick with laws, from coast to coast, Man's laws, not God's! And if you cut them down, and you're just the man to do it, do you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil benefit of law, for my own safety's sake!

Mario's Story (2007): "[E]ventually good triumphs, but before it triumphs, a lot of people have to suffer."

Miller's Crossing (1990): "All in all, not a bad guy...if looks, brains, and personality don't count."

My Favorite Year (1982): ‎"Comedy? You can't write comedy in California. It's not depressing enough!"

Nashville (1975): "Congress is run by lawyers. A lawyer is trained for two things, and two things only: to clarify and to confuse. He does whichever is to his client's advantage."

Night of the Hunter (1955): "Open the door, you spawn of the devil's own strumpet!"

One Day (2011): "She lit up with you...She made you decent. And then in return, you made her so happy."

Public Enemy (1931): "You're a spoiled boy, Tommy.  You want things, and you're not content until you get them.  Well, maybe I'm spoiled, too."

Quai des Orfevres (1947): "Maurice is my flame. He may not burn bright, but he lights my way."

Revolutionary Road (2008): "No one forgets the truth, Frank. They just get better at lying."

Sabrina (1954):
Linus Larrabee: What’s money got to do with it? If making money were all there were to business, it'd hardly be worthwhile going to the office. Money is a by-product.
David: What’s the main objective? Power?
Linus: Agh! That’s become a dirty word.
Davis: Well then, what’s the urge? You’re going into plastics now. What will that prove?
Linus: Prove? Nothing much. A new product has been found, something of use to the world. So, a new industry moves into an undeveloped area. Factories go up, machines are brought in, a harbor is dug and you’re in business. It’s purely coincidental of course that people who've never seen a dime before suddenly have a dollar. And barefooted kids wear shoes and have their teeth fixed and their faces washed. What’s wrong with a kind of an urge that gives people libraries, hospitals, baseball diamonds and movies on a Saturday night?

The Shop Around the Corner (1940):
Pirovitch: I'm sure she'll be beautiful.
Alfred Kralik: Well, not too beautiful.  What chance does a fellow like me--
Pirovitch: What do you want?  A homely girl?
Alfred Kralik: No, no.  You knock on wood for me.  Just a lovely, average girl.  That's--that's all I want.

Slumdog Millionaire (2008): "Money and women: the reasons to make most mistakes in life."

Starting Out in the Evening (2007): "I find very few men of my age interesting. They're like chewing gum--ten minutes of flavor followed by bland repetition."

10,000 Black Men Named George (2002): "Nobody got anything in this country unless they took it.  Hell, I admire the white man.  He wanted Manhattan Island, gave the Indians a bottle of whiskey, and he took it.  White folks died, suffered, sacrificed.  Took a country and built it up.  Yeah, they brought us here in chains, we know that.  We're still in chains--they're a tad lighter, but they're still chains. And the only way those chains are gonna get broke is if we break 'em.  Ain't nobody else gonna do it for us...We're the same, you and me...I just like money and p*ssy more than you do." -- Milton P. Webster, black Republican (1887-1965), to union organizer and Democratic civil rights leader A. Philip Randolph

To Catch a Thief (1955):
Francie: Money handles most people.
John: Do you honestly believe that?
Francie: I've proved it.
John: You're a singular girl.
Francie: Is that good or bad?
John: Oh, it's good, it's quite good. You know what you want. You go out after it and nothing stops you from getting it.
Francie: You make it sound corny.
John:
Oh no, you're a jackpot of admirable character traits.
Francie: I already knew that.
John: Yes, I will say you do things with dispatch. No wasted preliminaries. Not only did I enjoy that kiss last night, I was awed by the efficiency behind it.
Francie: Well, I'm a great believer of getting down to essentials.


Venus (2006):
"For most men, a woman's body is the most beautiful thing they will ever see."
"What about for women?"
"Her first child."

Wall Street (2010): "Most people, they lose, they whine and quit. Don't run when you lose, don't whine when it hurts. It's like the first grade...Nobody likes a crybaby."

X-Men 2 (2003): 
Storm: Sometimes anger can help you survive.
Nightcrawler: So can faith.

You Can't Take It With You (1938): Lincoln said, "With malice towards none; with charity to all." Nowadays they say, "Think the way I do, or I'll bomb the daylights out of you."