Tuesday, September 18, 2007
Nemesis: The Last Days of the American Republic, by Chalmers Johnson
Friday, August 31, 2007
Capitalism and Freedom, by Milton Friedman
"Freedom to advocate unpopular causes does not require that such advocacy be without cost. On the contrary, no society could be stable if advocacy of radical change were costless, much less subsidized...Indeed, it is important to preserve freedom only to people who are willing to practice self-denial, for otherwise freedom degenerates into license and irresponsibility... Freedom is a tenable objective only for responsible individuals."
Friedman's main motif is that freedom requires self-evaluation and self-policing, which is preferable to government interference. The alternative, state-sanctioned coercion, necessarily leads to less freedom--a theme Friedman patiently hammers into the reader.
If there is a flaw in Friedman's analysis, it is the missing link of how to prevent citizens with less self-control or citizens who are more susceptible to temptation from interfering with other, more reasonable citizens. Friedman may answer that this is where government is useful. He writes, "The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the 'rules of the game' and as an umpire to interpret and enforce the rules decided on."
Although government is a necessity, Mr. Friedman wants readers to ask, "How much government is necessary," and "What form should government take"?:
"Political freedom means the absence of coercion of a man by his fellow men. The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, an oligarchy, or a momentary majority. The preservation of freedom requires the elimination of such concentration of power to the fullest possible extent and the dispersal and distribution of whatever power cannot be eliminated--a system of checks and balances."
Thus, Friedman escapes any contradiction by making the point that while government is necessary, it is necessary only in the most minimalist form possible. Friedman also promulgates several broad principles to support his philosophical framework, namely,
1. The scope of government must be limited.
2. Government power must be dispersed.
3. "The power to do good is also the power to harm; those who control the power today may not tomorrow; and, more important, what one man regards as good, another may regard as harm."
The last principle is stunning in its beautiful, simple logic, and there are gems like this on almost every page.
Friedman's other point is that the "great advances of civilization...have never come from centralized government. " FDR's New Deal is one counterargument, but Friedman indirectly addresses this potential hole by stating that the Depression was a unique instance in history that could have and should have been avoided: "The Great Depression in the United States, far from being a sign of the inherent instability of the private enterprise system[,] is a testament to how much harm can be done by mistakes on the part of a few men [i.e., the Federal Reserve] when they wield vast power over the monetary system of a country." Friedman says that had the Fed provided money to the banking system through its discount window, the Great Depression might have been avoided. (It is interesting to note that Bernanke, in the face of widespread economic fear, recently opened the discount window to banks, which is an interesting development, because he is known in academic circles as favoring inflation targeting.)
Perhaps Friedman's most salient point is that we forget the short history of mankind's relative affluence. He states, "Because we live in a largely free society, we tend to forget how limited is the span of time and the part of the globe for which there has ever been anything like political freedom: the typical state of mankind is tyranny, servitude, and misery." In other words, there is no such thing as a free lunch, and freedom is a goal worth striving for.
I will leave you with an interesting passage that is relevant to the recent subprime mortgage mess in the markets and the lack of financial liquidity:
"The result [of the banks lending money and keeping only 15 to 20 cents of each dollar deposit] is that for every dollar of cash owned by banks, they owe several dollars of deposits. [Thus,] any widespread attempt on the part of depositors to 'get their money' must therefore mean a decline in the total amount of money unless there is some way in which additional cash can be created and some way for banks to get it. Otherwise, one bank, in trying to satisfy its depositors, will put pressure on other banks by calling loans or selling investments or withdrawing its deposits and these other banks in turn will put pressure on still others. This vicious cycle, if allowed to proceed, grows on itself as the attempt of banks to get cash forces down the prices of securities, renders banks insolvent that would otherwise been entirely sound, shakes the confidence of depositors, and starts the cycle over again."
It looks like Bernanke made the right decision, at least in the short term, by opening the discount window. If, however, he lowers interest rates in September, his reputation as an inflation targeter may not be deserved.
In any case, read Capitalism and Freedom. It's an incredible education to be had, and in just 202 pages. I recommend the 40th Anniversary edition, with the year 2002 introduction by Friedman.
Note: the picture above is of Mr. Friedman's son and myself at Santa Clara Law School.
Tuesday, August 7, 2007
Book Review: Niall Ferguson's The Cash Nexus
Earlier in the book, he referred to a Freedom House survey that "suggests that countries without a predominant ethnic majority are less successful in establishing open and democratic societies than ethnically homogeneous countries (defined as countries in which over two-thirds of the population belong to a single ethnic group). Of the 114 countries in the world which possess a dominant ethnic group, 66--more than half--are free. By contrast, among multi-ethnic countries only 22 of 77 are free--less than a third." [pages 375-376]
Personally, I think the EU's current instability owes more to the lack of a single dominant language and differing corruption and tax enforcement levels (e.g., efficient Germany vs. corrupt Greece) than any ethnic differences. Also, Ferguson is highlighting a survey with a 57.8% to 28.6% numerical difference--which is perhaps not statistically significant unless one examines the survey's definition of "ethnic" and the time periods involved (which could be either too limited or too broad). In any case, Ferguson does not elaborate much on the survey's methods or underlying data.
5. For the gold bugs: most gold is used for jewelry, and India consumes 700 tons of gold annually (at least per 2001 data). Ferguson also includes this interesting note: "It should be emphasized that, contrary to popular belief, gold has been a poor hedge against inflation in Britain and the United States. The purchasing power of gold has actually increased more in periods of deflation like the 1880s and 1930s; whereas during war-induced inflations it has lost ground relative to industrial commodities needed for military purposes. The real attraction of gold is that it is accessible and exchangeable even when established monetary institutions fail." [page 325]
Ferguson relies on The Changing Relationship Between Gold and the Money Supply, by Michael D. Bordo and Anna J. Schwartz, and Gold as a Store of Value by Stephen Harmston.
According to the United States Census Bureau, in 2010, state and local governments had 16.6 million full time employees. (See here.) The federal government had about 3 million total employees, with 2.583 million having full time jobs. These federal numbers apparently do not include the 185,295 employees within the Department of Homeland Security. (See here.) Taken together, the aforementioned numbers indicate that we had about 19,368,295 full time government employees in 2010. In 2010, the U.S. Census Bureau indicated that the resident population of the United States on April 1, 2010 was 308,745,538. These figures indicate that in 2010, total government personnel in the United States was about 6.27% of the total resident population.
Monday, August 6, 2007
West by West: My Charmed, Tormented Life
Jerry West's autobiography showcases a man of pure class and professionalism. I've summarized parts of the book I found most interesting below.
West grew up poor in West Virginia, the fifth of six children. He had a distant mother plagued by her husband's infidelity and a father who was abusive towards West and his siblings. West writes that his dislike of authority figures probably comes from his father. At the same time, West has a non-confrontational personality due to his shyness.
Jack Nicholson describes West as "fierce, frank, but very fragile."
West suffers from depression and atrial fibrillation. He takes Coumadin and Xanax for the atrial fibrillation and Prozac for the depression.
Two interesting quotes: "The coal industry and its lobbyists have run West Virginia for years, and it depresses me that education is not the first priority." (page 28)
"I have a coal -mining, company-store mentality, born out of the state we both grew up in: that if you are doing well, the company will reward you. But there's no point in asking because it would be un-Southern and ungracious, and besides, they have all the power anyway."
West voted for Obama. West dislikes Jesse Jackson. His hero is James Brown, who also wore #44.
Cooke, the Lakers' owner before Buss, was apparently a pompous arse. One example: he called John Wooden to his home to ask him to coach the Lakers, even though Wooden had insisted beforehand he would not leave UCLA. Nevertheless, Cooke wrote a number on a piece of paper and slid it over to Wooden. Wooden looked at it and said, "No coach is worth this amount of money." Cooke immediately told Wooden to get out of his house.
West pulled a "Barry Bonds"--he surprised his second wife with a prenup shortly before the wedding day, primarily because his first marriage (he married too young) had ended badly and expensively. He is still married to his second wife, Karen.
West on Kobe Bryant, the player he recruited, with the help of Arn Tellum: "Kobe was young and immature. He had a showboat style and a bottomless reservoir of drive that fueled him; he wasn't content just to beat people, he had to embarrass them, even players on his own team."
Although West views himself as a father figure to Kobe, Kobe chose not to participate in the book, unlike Kareem, Pat Riley, etc.
West thinks that Kobe was "set up" by the woman in Colorado who accused him of rape. When the incident occurred, Kobe sought out West for advice, even though West was working for Memphis at the time.
Phil Jackson told Jerry to get the eff out of the locker room after a game. No one had ever told Jerry to get out of the Lakers locker room before, and that incident strained an already tense relationship. When Phil first joined the Lakers, West felt that Phil deliberately ignored him. Jackson apparently wouldn't even say hello as he walked by West's office.
Basically, Phil had already won six championships when he joined the Lakers, had just come from a situation in Chicago where he and the GM had clashed, and had no need for West's advice or input. As Mitch Kupchak says, "Phil didn't need Jerry's advice and wouldn't have wanted it anyway."
At the end of the day, West didn't leave the Lakers solely because of Phil--there were many reasons, including Buss's increasing separation from the team once they moved to Staples Center, as well as Glen Rice's back-handed salary negotiations.
West praises Kurt Rambis both in personal and professional terms. He also says that Kurt was responsible for the Showtime Lakers' success because of the quick way he would collect the ball, get out of bounds with one leg, and pass the ball to Magic to start the fast break. Magic agrees.
West participated in a strike where the players were demanding a pension plan. They succeeded.
West believes that the expansion of the NBA roster from 10 (the limit during his time) to 15 players allows non-NBA-caliber players to join the league. These days, West says the additional three to five players basically serve as practice players, i.e., players who are primarily utilized to challenge teammates during practice. He seems to say that we should either reduce the roster size or the number of teams. He believes the higher number of teams harms the ability of small market teams to compete against larger market teams. Ironically, West indicates that Pat Riley--whose work ethic was exceptional--may have been in the category of a practice player. Given Riley's success as a coach, one wonders whether a modern-day version of a Pat Riley would still be able to get his start in the NBA today, especially if it had smaller rosters or fewer teams.
Some final notes: 1) Jerry's brother, David, died in the Korean War when Jerry was a boy. David was apparently the family's favorite. David's death probably gave Jerry a kind of survivor's guilt, which, coupled with his abusive father, led to his depression; 2) despite being asked to contribute some thoughts to the book, Kobe did not do so, which "shocked" West; 3) West continues to be plagued by the six times the Celtics beat his Lakers in the Finals, even though West won the championship in 1972; his Lakers team continues to hold the longest active winning streak in professional sports (33 games); and he won a gold medal in 1960, his most prized possession); 4) West claims he didn't give away Pau Gasol to the Lakers out of favoritism but because the owner of the Grizzlies wanted to save money; 5) one of the pictures in the book is of Riley with a mustache--it's hilarious; and 6) at the end of the book, West included a touching comment to his wife of "33 years (and counting)": "It has not always been smooth, I know that, but I am grateful that you stayed in the game."
Mr. West, on behalf of NBA fans everywhere, thank you for "staying in the game."
Sunday, August 5, 2007
Book Review: The Persia Cafe, by Melany Neilson
If Faulkner were a woman who could cook and wanted to write Mississippi Burning, The Persia Cafe might have been the result. Food is the motif that emanates throughout the book, placing its protagonist, a cafe owner, Fanny Leary, right on the DMZ of the racial divide. Of course, the notion of food separating people rather than bringing them together shows the reader the type of town that is Persia, Mississippi. Some passages are absolutely golden:
"You have to say this about the cafe: Smells curtained the place. Odors from one room climbed to another. Cinnamon. Frying bacon. Blackberry cobbler, serene as ink. There was a smell in our sheets like bread dough. There were nights when moonlight spilling along the river and through the window gave the wallpaper dimension."
Right away, we learn that Fannie Leary isn't your typical Southerner:
"I for one had often thanked the Lord that I did not have to listen to Brother Works's sermons as long as there was a pot of coffee and a pillowed bed, a newspaper, the loose-sheeted freedom of a Sunday morning. "
However, in the middle of the novel, some Southern soap opera makes its appearance, bogging down the novel. The beginning of The Persia Cafe is interesting, as we are getting to know the characters; the ending, absolutely enthralling, as the plot slowly unfolds; but the middle seems like one story too much as it focuses on Fanny's alcoholic husband, a Southern stereotype diluting the novel's interesting prose and plot. Still, some passages are too good not to share:
"So this too was Will. Pacing there, I had what I thought was a refreshing perspective and saw that the boy I had married had not been true and fine but just a boy. I saw that he had not been mine but merely near, and though he had taken me in his arms he had not fallen for me, but had merely felt that mysterious jolt in the pulse."
Still, as soap operas go, that's not a bad piece. And again, I take you back to food to show you that the author never loses her touch for too long:
"I hung up. It rang again. I picked up and hollered, 'What the hell you want?' A listening silence, then click, the dial tone, a long hollow blowsy tunnel, spit and crackle, like frying eggs."
The following passage also integrates food with cats, a neat feat: "their nostrils sniffing the meaty air...soft paws scurried, tiny white fangs tore at bones, backs arched and tails batoned and fur rose and brushed my ankles, making electric shocks."
But the real sadness of the South is that one never truly knows one's neighbor because of the secrets and lies buried with the strange fruit Billie Holiday sang about. Laws and social mores that constrict human interaction prevent possibilities, and this is where the novel enters a more sophisticated realm:
"And I was still mad at her for being black and being my friend, two things that together she was never supposed to have been."
"Well I had not known. I had not known; how could I in this town where it seemed you could never really know another person? I was alone in the world, in a way that made me feel the dryness in my mouth and the deep ache in my breathing, and the darkness rising through the room, like smoke."
There are two sides to this loneliness. From one perspective, loneliness is good, at least where injustice is concerned--better to be alone than complicit in the company of apathy. Thus, the reader will empathize with Fanny, but also wonder why the situation arose in the first place. Looking around, especially in California, Mississippi just forty five(!) years ago seems like another planet. Southern novels seem strange to many readers because they chronicle a bygone era. The key is to remember that this tension did actually exist once upon a time. Without suspending modern day notions, Southern novels make no sense, and we should be glad that reality has to be pushed aside to let Southern literature into our lives.
Still, no Southern novel would be complete without some reference to the thick swampy climate, and I will leave you with that weight:
"I didn't find much to say to that. So I continued to sit there for quite a while, holding Mattie's hand, which she seemed to want, and looking out into the night, which coiled dampsweet and thick toward the river, in the direction of the cafe."
Tuesday, July 24, 2007
Plus ça change, plus c'est la même chose, Part II: Theodore Roosevelt's New Nationalism
http://www.theodore-roosevelt.com/trwhiteraces.html
http://www.theodore-roosevelt.com/trnationalismspeech.html
(general link) http://usinfo.state.gov/usa/infousa/facts/speeches.htm
"Now, this means that our government, national and State, must be freed from the sinister influence or control of special interests. Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and corrupt the men and methods of government for their own profit. We must drive the special interests out of politics. That is one of our tasks to-day. Every special interest is entitled to justice - full, fair, and complete - and, now, mind you, if there were any attempt by mob-violence to plunder and work harm to the special interest, whatever it may be, and I most dislike and the wealthy man, whomsoever he may be, for whom I have the greatest contempt, I would fight for him, and you would if you were worth your salt. He should have justice. For every special interest is entitled to justice, but not one is entitled to a vote in Congress, to a voice on the bench, or to representation in any public office. The Constitution guarantees protections to property, and we must make that promise good But it does not give the right of suffrage to any corporation. The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man's making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being.
There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done. We must have complete and effective publicity of corporate affairs, so that people may know beyond peradventure whether the corporations obey the law and whether their management entitles them to the confidence of the public. It is necessary that laws should be passed to prohibit the use of corporate funds directly or indirectly for political purposes; it is still more necessary that such laws should be thoroughly enforced. Corporate expenditures for political purposes, and especially such expenditures by public-service corporations, have supplied one of the principal sources of corruption in our political affairs...
Those who oppose all reform will do well to remember that ruin in its worst form is inevitable if our national life brings us nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism.
If our political institutions were perfect, they would absolutely prevent the political domination of money in any part of our affairs. We need to make our political representatives more quickly and sensitively responsive to the people whose servants they are. More direct action by the people in their own affairs under proper safeguards is vitally necessary...
So it is in our civil life. No matter how honest and decent we are in our private lives, if we do not have the right kind of law and the right kind of administration of the law, we cannot go forward as a nation. That is imperative; but it must be an addition to, and not a substitution for, the qualities that make us good citizens...You must have that, and, then, in addition, you must have the kind of law and the kind of administration of the law which will give to those qualities in the private citizen the best possible chance for development. The prime problem of our nation is to get the right type of good citizenship, and, to get it, we must have progress, and our public men must be genuinely progressive."
Wednesday, July 11, 2007
Angels, Demons, and Lawyers
The 20th century killed the romantic. Capitalism vanquished socialism and then proceeded to elevate the twin values of starvation and survival. It didn't matter if it was real starvation, the kind that took place in Africa, what Robert Kennedy saw in the South--or high-class starvation, the kind that newly laid-off fathers with families understood. Choosing survival, the men in the modern world, tempted by luxuries of beauty and bare bellybuttons, reached back into Biblical times and remembered the fable of the apple. Women, not happy with being demonized, decided to either cut down the tree or plant their own gardens, further confusing Adam’s progeny.
Meanwhile, modern men branched out into three realms: one, the creature that refused to conform, saw political correctness as an affront to his being, spawned The Man Show and the Coors Twins; two, the blessed kind, that saw equality and self-control as either entitlements to Beemers or, perhaps more appropriately, to responsibility; and three, the other, the nerd in the corner, never popular in high school, now older, taller, appealing, but the holder of the modern apple of fear–scared of commitment, of falling behind, of starving and of losing the motivator of starvation. It was the last camp that Rustem Mahdy fell in, and his stomach rumbled as he took the elevator to the sixth floor of the law firm, where he played an attorney, propping up partners with wizened faces and dusty knowledge. He had contemplated stopping on the second floor to flirt with the office manager of a process service firm but decided against it. It was too early, and besides, work had to be done.
Women, of course, defied any easy description, but branched generally into several camps: the kind with strong, loving fathers (who of course had strong, loving mothers) and either chose to emulate their fathers professionally, or, having been given faith in man, gained the knowledge of how to identify men who would not let them down. Flannery O'Connor aside, it would be one of the surprising features of the modern world that the women who could identify a good man, even if lacking all other skills, would somehow be better off in terms of love. In the third camp were women who knew they were not as smart as the men they wanted, or as attractive as the women men wanted, and decided to gain security through the unifying force God had given all women. It was an interesting trade-off, and those women--once married--did seem to be quite happy. There was another camp, slowly dwindling in numbers, of women who had spent their lives raising children, ironing and cleaning, only to see Proctor and Gamble and the microwave culture passing them too quickly to give thanks (or even their condolences).
But Michelle Mosi, Esq. wasn't wondering what camp she was in. Born and raised in the Midwest, she was too practical for those kinds of questions and was more intent on getting opposing counsel to submit to her very reasonable demand of scheduling an independent medical exam in September rather than October. "It's all so simple," she thought to herself--"just get Plaintiff to the the exam, and I'll make my billables and keep the client happy. " Love-wise, Michelle was married with a reasonably-sized diamond ring--it wasn't a Tacori, but at least it was from Borsheim's. Michelle stopped looking at her ring and re-focused her attention on work. "Left Message for Client re: IME, 0.2."
This was the new world that God had to play with, and He wondered how to manage marriage and love in a culture suspicious of sacrifice and unused to thinking in terms of centuries rather than seconds. The Devil cackled, egging on his right-hand man, Materialism, and informed him of the pullback. The news from the front came soon enough: Cupid had been shot and was D.O.A.
God, never one to appreciate losing a round, sent one of his most trusted angels, Bryan Gabriel, back to America to assess the damage and to help restore faith. Gabriel, after surveying how he could be most effective, decided to apply for a law firm emphasizing employment law. If it didn’t work out, Gabriel thought, he could always become an investment banker and hear what this Soros character had to say. Gabriel decided to set up an office on the second floor of a tall commercial building in downtown San Jose. There was work to be done, and not a second to lose.
[In later chapters, Milton Black aka the Devil, will send down a man named Mark Lusy, who will apply for and be accepted at a law firm called Nicholson, Lytler, and Reese.]
Tuesday, July 10, 2007
Music Lyrics 1
Someone should call Bob Dylan, because we need better lyrics in today's music scene. Without the rock n' rollers, modern music no longer seems to fill in the role of counter-culture. The younger generation used to function as a counterweight to war, and in doing so, promoted idealism. Today, with many of the largest media outlets in the hands of shareholders, whose job is to maximize profits, and much of the younger generation in debt, it will be interesting to see where new societal counterweights come from.
The Logical Song, by Supertramp
When I was young, it seemed that life was so wonderful,
A miracle, oh it was beautiful, magical
And all the birds in the trees, well they’d be singing so happily,
Joyfully, playfully watching me.
But then they sent me away to teach me how to be sensible,
Logical, responsible, practical.
And they showed me a world where I could be so dependable,
Clinical, intellectual, cynical.
There are times when all the world’s asleep,
The questions run too deep
For such a simple man.
Won’t you please, please tell me what we’ve learned
I know it sounds absurd
But please tell me who I am.
Now watch what you say or they’ll be calling you a radical,
Liberal, fanatical, criminal.
Won’t you sign up your name, we’d like to feel you’re
Acceptable, respectable, presentable, a vegetable.
At night, when all the world’s asleep,
The questions run so deep
For such a simple man.
Won’t you please, please tell me what we’ve learned
I know it sounds absurd
But please tell me who I am.
Wednesday, July 4, 2007
Plus ça change, plus c'est la même chose
http://www.fordham.edu/halsall/mod/1955sukarno-bandong.html
This twentieth century has been a period of terrific dynamism. Perhaps the last fifty years have seen more developments and more material progress than the previous five hundred years. Man has learned to control many of the scourges which once threatened him. He has learned to consume distance. He has learned to project his voice and his picture across oceans and continents. lie has probed deep into the secrets of nature and learned how to make the desert bloom and the plants of the earth increase their bounty. He has learned how to release the immense forces locked in the smallest particles of matter.
But has man's political skill marched hand-in-hand with his technical and scientific skill? Man can chain lightning to his command-can be control the society in which be lives? The answer is No! The political skill of man has been far outstripped by technical skill, and what lie has made he cannot be sure of controlling.
The result of this is fear. And man gasps for safety and morality.
Perhaps now more than at any other moment in the history of the world, society, government and statesmanship need to be based upon the highest code of morality and ethics. And in political terms, what is the highest code of morality? It is the subordination of everything to the well-being of mankind. But today we are faced with a situation where the well-being of mankind is not always the primary consideration. Many who are in places of high power think, rather, of controlling the world.
Yes, we are living in a world of fear. The life of man today is corroded and made bitter by fear. Fear of the future, fear of the hydrogen bomb, fear of ideologies. Perhaps this fear is a greater danger than the danger itself, because it is fear which drives men to act foolishly, to act thoughtlessly, to act dangerously. . . .
All of us, I am certain, are united by more important things than those which superficially divide us. We are united, for instance, by a common detestation of colonialism in whatever form it appears. We are united by a common detestation of racialism. And we are united by a common determination to preserve and stabilise peace in the world. . . .
We are often told "Colonialism is dead." Let us not be deceived or even soothed by that. 1 say to you, colonialism is not yet dead. How can we say it is dead, so long as vast areas of Asia and Africa are unfree.
And, I beg of you do not think of colonialism only in the classic form which we of Indonesia, and our brothers in different parts of Asia and Africa, knew. Colonialism has also its modern dress, in the form of economic control, intellectual control, actual physical control by a small but alien community within a nation. It is a skillful and determined enemy, and it appears in many guises. It does not give up its loot easily. Wherever, whenever and however it appears, colonialism is an evil thing, and one which must be eradicated from the earth. . . .
Not so very long ago we argued that peace was necessary for us because an outbreak of fighting in our part of the world would imperil our precious independence, so recently won at such great cost.
Today, the picture is more black. War would riot only mean a threat to our independence, it may mean the end of civilisation and even of human life. There is a force loose in the world whose potentiality for evil no man truly knows. Even in practice and rehearsal for war the effects may well be building up into something of unknown horror.
Not so long ago it was possible to take some little comfort from the idea that the clash, if it came, could perhaps be settled by what were called "conventional weapons "-bombs, tanks, cannon and men. Today that little grain of comfort is denied us for it has been made clear that the weapons of ultimate horror will certainly be used, and the military planning of nations is on that basis. The unconventional has become the conventional, and who knows what other examples of misguided and diabolical scientific skill have been discovered as a plague on humanity.
And do not think that the oceans and the seas will protect us. The food that we cat, the water that we drink, yes, even the very air that we breathe can be contaminated by poisons originating from thousands of miles away. And it could be that, even if we ourselves escaped lightly, the unborn generations of our children would bear on their distorted bodies the marks of our failure to control the forces which have been released on the world.
No task is more urgent than that of preserving peace. Without peace our independence means little. The rehabilitation and upbuilding of our countries will have little meaning. Our revolutions will not be allowed to run their course. . . .
What can we do? We can do much! We can inject the voice of reason into world affairs. We can mobilise all the spiritual, all the moral, all the political strength of Asia and Africa on the side of peace. Yes, we! We, the peoples of Asia and Africa, 1,400,000,000 strong, far more than half the human population of the world, we can mobilise what I have called the Moral Violence of Nations in favour of peace. We can demonstrate to the minority of the world which lives on the other continents that we, the majority are for peace, not for war, and that whatever strength we have will always be thrown on to the side of peace.
In this struggle, some success has already been scored. I think it is generally recognised that the activity of the Prime Ministers of the Sponsoring Countries which invited you here had a not unimportant role to play in ending the fighting in Indo-China.
Look, the peoples of Asia raised their voices, and the world listened. It was no small victory and no negligible precedent! The five Prime Ministers did not make threats. They issued no ultimatum, they mobilised no troops. Instead they consulted together, discussed the issues, pooled their ideas, added together their individual political skills and came forward with sound and reasoned suggestions which formed the basis for a settlement of the long struggle in Indo-China.
I have often since then asked myself why these five were successful when others, with long records of diplomacy, were unsuccessful, and, in fact, had allowed a bad situation to get worse, so that there was a danger of the conflict spreading. . . . I think that the answer really lies in the fact that those five Prime Ministers brought a fresh approach to bear on the problem. They were not seeking advantage for their own countries. They had no axe of power-politics to grind. They had but one interest-how to end the fighting in such a way that the chances of continuing peace and stability were enhanced. . . .
So, let this Asian-African Conference be a great success! Make the "Live and let live" principle and the "Unity in Diversity" motto the unifying force which brings us all together-to seek in friendly, uninhibited discussion, ways and means by which each of us can live his own life, and let others live their own lives, in their own way, in harmony, and in peace.
If we succeed in doing so, the effect of it for the freedom, independence and the welfare of man will be great on the world at large. The Light of Understanding has again been lit, the Pillar of Cooperation again erected. The likelihood of success of this Conference is proved already by the very presence of you all here today. It is for us to give it strength, to give it the power of inspiration-to spread its message all over the World.
Friday, June 29, 2007
Seattle Desegregation?
When reading the majority opinion, I was struck by how much enmity Justice Roberts has created between the justices despite his pledge to unite the Court and create more civility. After writing for the majority, Roberts then blazed through Justice Breyer's dissent and dissected it like a law clerk attacking another lawyer's brief--or, to be more colorful, Sherman going through Atlanta. In contrast, Justice Kennedy, as the fifth vote necessary to have a majority, appeared to distance himself from Roberts in various sections in a separate concurrence. Justice Thomas also seemed to go out of his way to be respectful to Justice Breyer, saying that while he has no doubt Breyer's intentions are good, the law must remain as immutable as possible rather than being contingent on a particular judge applying the law.
In short, Roberts stated that there had to be a compelling reason to use race. For law students, this is Con Law 101, i.e. the strict scrutiny test. Kennedy appeared to try to compromise by saying that diversity was a compelling goal, and other methods could be used to create diversity, such as locating new schools in neighborhoods that would naturally draw upon different races (although one wonders how this would be accomplished if some neighborhoods are already segregated--I predict a future opinion echoing O'Connor's disdain for gerrymandering, where she famously called some of the Congressional districts similar to a Rorschach test or a "bug splattered on a windshield.") Breyer essentially stated that the Court is betraying precedent and twisting the intent and spirit of Brown v. Board of Education.
The opinion is most intelligent when differentiating between de jure segregation and de facto segregation. The conservatives seem to say that de facto segregation is permissible. The paragraph that seems to lay the best rationale for the decision is directly below:
"The Court’s emphasis on‘benign racial classifications’ suggests confidence in its ability to distinguish good from harmful governmental uses of racial criteria. History should teach greater humility. . . . ‘[B]enign’ carries with it no independent meaning, but reflects only acceptance of the current generation’s conclusion that a politically acceptable burden, imposed on particular citizens on the basis of race, is reasonable.” Metro Broadcasting, 497 U. S., at 609–610 (O’Connor, J., dissenting). See also Adarand, supra, at 226 (“‘[I]t may not always be clear that a so-called preference is in fact benign’” (quoting Bakke, supra, at 298 (opinion of Powell, J.))). Accepting JUSTICE BREYER’s approach would “do no more than move us from ‘separate but equal’ to ‘unequal but benign.’” Metro Broadcasting, supra, at 638 (KENNEDY, J., dissenting)."
One interesting point made in the dissent is that the school plans in question here are voluntarily attempting to desegregate. Breyer indicates that voluntary plans to achieve desegregation should be viewed with a different lens than laws involuntarily ordering segregation, as was the issue in Brown v. Board.
(Ironically, this same month, the U.S. Mint produced one of the most beautiful coins ever made. It is a silver coin depicting the Little Rock Central High School Desegregation. See here.)
My take on the situation is that the conservative justices have no patience for dividing Americans by race. In their minds, they are attempting to prevent America from becoming Yugoslavia 100 years from now. One of Justice Alito's quotes from a different case could summarize the majority's feelings: "It is a sordid business, this divvying us up by race.” The majority opinion forcefully points out that under the Seattle program, if a school was 30% Asian, 30% Hispanic, 10% African-American, and 30% Caucasian, this breakdown would not be sufficiently diverse. Justice Roberts' example implies that this is a different world than 1975.
The liberal justices, on the other hand, believe that in much of America, we are still segregated by race. A cursory glance at any BLS or Census statistics will show lower rates of net worth and home ownership in the African-American community than in any other community. Although not stated in the opinion, the liberal justices seem to imply that the only reason for such modern disparity is the legacy of slavery and unequal access to education. It is not mentioned in the opinion that most of the conservative justices worked or are from large cities that are more integrated than smaller cities in the South. In much of America, it is indeed true that not much has changed since 1975. On the other hand, Justice Thomas's opinion seems to carry more weight because he actually integrated schools, sometimes against the wishes of classmates and parents of other students. An unsung hero, Rev. John Brooks, was instrumental in Thomas's education, and an interview given to BusinessWeek provides the most insight I have seen about Thomas and his background. See here (3/12/07, interview & Rev. John E. Brooks).
While it may seem counterintuitive that Justice Thomas would side with Justice Roberts here, Thomas may believe that his personal experience actually supports the majority's arguments because there was no de jure segregation at the time, and as a result he was able to attend majority-white schools and receive a top-notch education. Thus, Thomas may view Seattle through the prism that he is not dealing with any law forcing segregation, and any rule classifying anyone based on race could very easily turn against him or another race in the future. Jim Crow, after all, was not that long ago.
Perhaps an economic analysis would be helpful in understanding the majority opinion. Schools receive much of their funding from local property taxes. Housing values closely correlate with local school quality, as parents are willing to spend more money to buy into a better school district. See The New Economics of the Middle Class: Why Making Ends Meet Has Gotten Harder, by Elizabeth Warren and Leo Gottlieb:
Failing public schools have an impact on the children trapped in them, but they also impose a terrible burden on the families struggling to escape them. Failing public schools translate directly into higher housing costs for middle class families as they try to escape those schools. Home prices have grown across the board (particularly in larger urban areas), but the brunt of the price increases has fallen on families with children. The home value for the average childless couple increased by 58 percent between 1984 and 2004—an impressive rise in less just twenty years. (Again, these and all other figures are adjusted for inflation.) For married couples with children, however, housing prices shot up 145 percent during this period—nearly three times faster.
The Seattle parents were paying lots of money in mortgage payments and local taxes and were being told that some of their kids would have to go to an inferior quality school as part of a greater good. The students benefiting from the Seattle program would be students who, but for the program, would have to go to poorly funded schools. The students from poorer school districts would probably come from families that did not pay as much money in taxes or who lived in apartments (thereby not paying property taxes). Thus, the Seattle program indirectly charged parents who paid more in taxes more money for an inferior product while gifting parents who paid fewer taxes with a better product. In California, we had a lawsuit that argued that property taxes should go to the state rather than the county and then distributed among school districts in amounts to prevent inequality. I am unclear how Washington or Kentucky, the other state affected by the opinion, distributes its property taxes. The opinion did not discuss anything about vouchers, either. It remains to be seen what impact the opinion will have on voucher advocacy movements.
For now, in a time in America when we have ample resources and the economic "pie" is large, the Seattle decision will not create massive problems in the near term. The question is how we will view the decision if a sustained recession occurs, bringing to light the economic inequality in America that oftentimes can be categorized by race. A middle ground post-Seattle might be to balance schools by income, thereby avoiding any legal review or analysis. Federal courts do not usually get involved in a state's local affairs absent some illegal activity or protected class, and rich/poor is a category that is not illegal nor protected. America spends 400 billion dollars a year on schools, according to Revolutionary Wealth by Alvin Toffler. With that much money, perhaps the "pie" is still big enough to focus on economic rather than judicial solutions to improve school quality.
Thursday, June 28, 2007
Gandhi, Revisited
I also learned that the Sikh philosophy contains much of the Hindu philosophy, but with the difference that the Sikhs believe in one God, not several. Another interesting tidbit is that the Sikhs are also known as brave warriors who fought valiantly in several wars, including in WWII.
Wednesday, June 27, 2007
Hamiltonian Capitalism
Hamilton fought for a national banking system against Jefferson's agrarian vision, was born in the West Indies to an unmarried mother, received only some books as an inheritance, and worked as an accountant as a teenager and as a lawyer afterwards. Understanding the U.S. as Hamilton's country opens our eyes to exactly why modern America works. One, Hamilton wasn't part of "the club." In fact, without George Washington's interventions on his behalf, he may have never been of any consequence. Because Hamilton had to work for a living, he created a system where anyone--even the bastard immigrant child of a single mother such as himself--could live in stability.
Hamilton, as a teenager, saw slaves being treated very poorly in the West Indies. As a result, the quasi-documentary insinuates that while Jefferson seemed comfortable owning slaves, the lesson Hamilton learned from slavery is that mankind's passions had to be corralled. Thus, one goal of Hamiltonian capitalism is to reduce and control men's passions through a system that includes protection of property; rewards for delayed self-gratification; strict enforcement of contracts; and when all else fails, imprisonment. Such a system, by encouraging materialism and hard work, forces people to think locally and have a vested stake in local rather than non-profitable or international events. In fact, some might say capitalism works precisely because it causes an investment in local matters. The average person's day is spent on bosses to placate, work to be done, debt to pay off, television to watch, kids to feed, and bills to be paid. There is no time, or it is not profitable, to think of solving larger issues that one cannot affect. The upside of capitalism's gimlet eye is that it forces us to live in the here and now; the downside is that it works too well--apparently, only 10 to 21% of Americans own passports. I am a huge fan of Jefferson--no one can match his passionate defense of the individual--but seeing this PBS special made me think more about Jefferson's vision versus Hamilton's vision for America, with the conclusion being that Hamilton's vision created modern-day America, while Jefferson's vision would have created an economy similar to modern-day China.
An interesting link:
http://www.pbs.org/nights/blog/2007/05/
american_experience_alexander.html
Tuesday, June 26, 2007
Africa
While Bono, Clooney, and others have attempted to interest the world in Africa's plight, the only nation that really seems to want to be serious about engaging with Africa on a long term basis is China. The China-Africa partnership is not an exercise in altruism: China needs natural resources; Africa has them; and you don't need to be Sherlock to see that China is acting in its self-interest. Other countries also contribute aid, but the magazine points out that America spends only 0.17% of our budget on aid (the U.N. goal is 0.7%). For those of us who argue that money will make no difference in a corrupt Africa, Mr. Sachs argues that the money given has not been enough. He contends that we could solve the problem with 20 billion dollars and that the aid given thus far has worked but is not sufficient to create any sustained change. He compares detractors' arguments against aid to fighting a wildfire with a hose, and when the water runs out from the hose, claiming that water does not cure fires because the fire still rages.
There are several issues with attempting to solve world poverty. On the surface, it appears that we could, acting in concert, feed all the world's hungry. We certainly make enough food and can transport it anywhere. For example, I am drinking water imported from Iceland that I bought with a coupon from Walgreen's for one dollar. If I, an average Californian resident, can get Icelandic water for one dollar (admittedly, the cost is half of what at least a billion people earn every day), it seems that affluent nations should be able to eliminate diseases that come from contaminated water. However, affluent nations have mostly capitalistic systems, with the exception of possibly Scandinavian countries. As a result, transferring large amounts of tax revenue from one country to another without receiving something in return is generally not feasible. Many Americans would probably chafe if 1% of our GDP is spent on international aid during a time of internal crisis, such as Katrina.
Having said all that, one quote caught my eye: a person interviewed said that Africans must become self-reliant to avoid a situation where Africa becomes the "white man's burden." It is a stunning reminder that just a few of the world's nations control most of the world's wealth. Although millionaires are newly minted in India and China on a weekly basis, most of the world's money is probably still in Dubai, New York, the U.K., Switzerland, Hong Kong, Tokyo, and Singapore. As a result, one possible reason for inertia is the mere fact that most citizens from these "monied" nations lack a firm connection with poor nations such as Africa or Bangladesh. Still, pointing to an absence of shared race appears to be a simplistic answer, especially in an age where we are mixing together culturally and biologically.
One of the prevalent themes in the magazine was the appeal to shared humanity. Minister Tutu went so far as to say that a person who is completely self-sufficient is sub-human. Maya Angelou more eloquently stated that she takes an interest in all human beings because she is a human being and therefore no human being can be alien to her. The point being made is as follows: "Let him who expects one class of society to prosper in the highest degree, while the other is in distress, try whether one side of the face can smile while the other is pinched." But one of the surprising elements of the 21st century is how easily affluent people can wall themselves off from the impoverished without consequence. (For those who point to 9/11 as one counterargument, the attackers were actually affluent and educated.)
Indeed, the world is becoming more stratified, not less, as money flows more rapidly. The rich can, if they choose, congregate only in particular neighborhoods; go to private schools; and get plush jobs through connections. Part of this de facto segregation is because wealth is becoming more earned than inherited, and people who make lots of money tend to work with affluent, educated people. Another part of it might be inertia: if you are raised with golf and tennis lessons, you may be perfectly happy spending your free time doing those activities at the local country club during your free time.
In any case, it is becoming obvious that people can become rich and stay comfortably rich without ever assisting or coming into contact with the poor. The inequality is even apparent in the retail sector: Neiman Marcus and Tiffany's are doing better than ever, while companies attempting to cater to the middle class, like JC Penny, Mervyn's, and Sears, are having trouble. So the 21st century is the age of inequality and yet also an incredible time to be alive if one lives in a first-world country.
Given our modern acceptance of financial stratification, moral arguments about equality and all of us being human may not be effective in an era where capitalism requires most of us to focus on local and profitable events; where most wealth is earned, making it difficult to argue that wealth should be shared because it is a matter of luck; and where religion is waning as a source of persuasion. So the 20 billion dollar question remains: how do we connect up the poor with the resources necessary to allow them to prosper?
One solution could be that Africa could organize its own OPEC. It certainly has enough natural resources to do this, and if it does not, it may be beholden to China for the next century rather than becoming self-sufficient. (Though this may not be a bad thing: http://www.csmonitor.com/2007/0627/p01s05-woaf.html)
A second solution could be to adopt the Saudi Arabian model: the Americans helped the Saudis find and remove oil, but after a certain period of time, the companies reverted to local control. Thereafter, the Saudis exchanged resources for technology and infrastructure and now are investing in non-traditional vehicles such as hedge funds. Today, there are few poor Saudi citizens.
Beyond those suggestions, I have no solutions about how to bring Africa--20% of the world population--out of poverty. Africa has great human capital--many Africans speak several languages, which will assist them in an increasingly global economy. Major cities, like Nairobi, are relatively affluent--my friend tells me everyone there has cell phones--while smaller cities lack basic water and food supplies. In the end, perhaps Bono is doing the most anyone can do: raise money and awareness, and let the Africans develop their own pace of progress. In the meantime, I will keep contributing to www.kiva.org
Saturday, June 23, 2007
Gandhi, played by Kingsley
1. Gandhi always approached an end indirectly. For example, to get women involved in the movement and excise radicals, "Gandhi exhorted Indian men and women, rich or poor, to spend time each day spinning khadi in support of the independence movement. This was a strategy to inculcate discipline and dedication to weed out the unwilling and ambitious, and to include women in the movement at a time when many thought that such activities were not respectable activities for women."
2. Gandhi would fast when violence broke out. He seemed to realize humanity's passions had to be redirected into other sources of energy and perhaps there is something in human nature that causes us to become calm when presented with someone willing to be strong and absorb our bad energy. For the first time, I understand the presence of energy in New Age doctrines. One of his best lines, in response to a comment that passive resistance would not work, was that he had never advocated anything passive--he had always encouraged active noncooperation.
3. Still, I see some potential problems with Gandhi's philosophy.
One, had Gandhi been lesser known and not a public figure, his strategies may not have worked. The media needs to be sympathetic to his cause for it to succeed. In this case, if there is no one around to hear a tree fall in the forest, it really makes no sound. So what choices do average, non-famous people have when they are attacked? This is a difficult question, especially because we know that one of the reasons India is now able to move forward and perhaps resume its status as an empire is in no small part to Gandhi's vision. Yet, if the media portrays a subjugated people or a minority as violent, individual peacemakers could become ineffective. Thus, non-cooperation and non-violence seem to require a media that is both fair as well as sympathetic to peaceful non-cooperation, but any attempt to control the media and make it "fair" usually leads to oppressive dictatorships.
Two, Gandhi was presented with good numbers. 150,000 British ruling over millions of Indians. Without scores of people to continue to sacrifice themselves, nonviolence would be too short-lived to impact an oppressor's conscience. So what does a smaller minority do, such as the Jews in Germany during the 1940's or the Muslim Bosnians against Serbia in the 1990's? (Note: another thought-provoking film is No Man's Land (2001), about Bosnians and Serbs.)
Three, the British were clearly behaving improperly, at one point massacring thousands of unarmed protesters. Evil has evolved. Very few modern oppressors would openly behave like Southern governments in 1950's America and allow the media to have a field day. Also, there is no need for high pressure fire-hoses today. A government can simply fire a missile and wipe out an entire group, perhaps thousands of non-cooperating citizens. There would be no face-to-face contact that would engender an awakening of conscience. As Stalin said, "One death is a tragedy; thousands of deaths, a statistic." Today, for example, if 100 Tweedledees decide to close off an area, prevent reporters from entering, shoot missiles and kill 100 protesting Tweedledums in the process, and then clean up the area before allowing re-entry, non-cooperation would result in non-existence. Therefore, it appears that with technology wedging distance amongst peoples--whether by a selective media or by allowing video-game violence--non-cooperation may result in an oppressor being able to eliminate any attempt to shame him. Thus, non-cooperation requires a strong media and a citizenry with enough free time to see what is happening to feel ashamed and to do something. In an increasingly busy world, where people are shielded even from local acts of violence, or work twelve hour days to make mortgage payments, a strong middle class or, counter-intuitively, a majority of poor or persecuted people, seems required for Gandhi's ideas to work.
Spike Lee's portrayal of Mookie and whether he did the right thing in provoking violence ended with two quotes from Malcolm X and Martin Luther King. I will end with one of my favorite quotes by Gandhi:
"When I despair, I remember that all through history the way of truth and love has always won. There have been tyrants and murderers and for a time they seem invincible, but in the end, they always fall — think of it, always."
Monday, June 11, 2007
Khufu's Wisdom, by Mahfouz
My primary issue with the novel is its disjointed style. Even so, I can see why the author eventually won the Nobel Prize--check out this beautiful passage:
Sennefer yawned again, then closed his eyes. Djedef stared at him in the feeble lamplight with eyes clouded by misery. When he was sure that Sennefer had surrendered to sleep, he moaned to himself in torment. Shunning his bed and feeling an intense unrest, he grew weary, and tiptoed out of the room. The air was moist, with a chilling breeze, and the night black as pitch. In the darkness, the date palms looked like slumbering ghosts, or souls whose tortures stretched through eternity.
In many other places, however, the writing seems perfect for a Frank Miller movie: "May the Divine Ra, Shaper of the Universe and Creator of life, bless you...[but] the Fates are making mock as is their wont and have conjured a male child." And, "Are you truly the majestic princess? Be a simple peasant girl--for a peasant girl lost is nearer to the heart than a princess found."
I have not read any of Mahfouz's other books, but I would recommend reading something else. Khufu's Wisdom was Mahfouz's first step on the path of greatness, but shows him in his unpolished glory.
Sunday, June 10, 2007
Warren Buffett and Berkshire Hathaway's Meeting
My last two posts were about shareholder meetings and heroes. They provide the perfect segue into my hero, Warren Buffet, and my experience at the Berkshire Hathaway meeting in Omaha, Nebraska in 2007. I chose to attend the meeting for several reasons, primarily because I was not sure whether my future schedule would allow me to take several days off, and to a lesser extent, whether Mr. Buffett would still be around in the next few years. Also, I have never been to the Midwest, except for Chicago, so I was looking forward to this trip.
First, if you plan to go to the meeting, plan early. All the hotels were booked almost seven months in advance, and I was lucky to get a great deal on priceline.com for the Comfort Inn at the Zoo. The location is far from some of the events, such as Gorat's and Borsheim's, but I did not rent a car and relied on the kindness of strangers, including a chance meeting with a Reuters reporter, to get me to various places. (He was very friendly, an ex-lawyer, and seemed to lament the fact that Bloomberg had sent several more reporters with more resources.) As almost everyone there was friendly, I had no problem getting around, but I do suggest renting a car if you go. Omaha, NE is spread out because they have such a low population density and lots of open space. As a result of this land affluence, the city planners could afford to build with disregard to future growth, creating sprawl. Taxis are extremely expensive because of limited competition and also the numerous highways they have to enter to get from one place to another. So even though Point A and Point B are literally one mile away from each other, sometimes you have to take two highways to get there. For a city slicker like myself, used to being able to walk anywhere or take public transportation in Singapore, Boston, San Jose, and D.C., it was a shock to see so much land and so much sprawl.
Other than renting a car, my second tip is to bring a raincoat. Spontaneous thunderstorms are not uncommon in Omaha, and its location smack in the middle of the country creates interesting weather. One day, lightning was so bad, closing the blinds at night made no difference in terms of ambiance. (Apparently, you can tell how close a storm is by counting seconds between thunder and lightning, and had I known that at the time, it would have added to the "Friday the 13th" weather atmosphere.) I (mistakenly) brought plenty of warm clothing, but Omaha is humid in May. So bring a light raincoat and some jeans, and you will be all set.
The first day I arrived at Omaha's main airport, I was happy to be there. Numerous people were there from all over the world, and I chatted up people from South Africa to San Francisco. One tip is to take the Hilton Omaha shuttle from the airport because you will be much closer to the city center and your hotel. The Hilton Omaha employees were so nice, they allowed me to take the shuttle from their hotel to my hotel at the Comfort Inn. (The Midwestern kindness is no lie.) If you have a decent-sized budget, the newer Hilton Omaha is the best hotel. It is right next to the Convention Center where the meeting is held, and its shuttles will also take you to various Berkshire events, such as sale day at the Furniture Mart (which is massive and sells much more than just furniture, including cameras, laptops, etc.). Another Hilton is a few blocks away and has a great restaurant that serves wonderful steak. This brings me to the best tip about Omaha. Have steak, more steak, and when you're done, top it off with a porterhouse steak. Gorat's Steakhouse is the most famous restaurant in Omaha due to Mr. Buffett's frequent visits, but the Hilton restaurants serve some mighty fine steak also. The only other place I had better steak was Michael Jordan's Steakhouse at NY's Grand Central station, but that's another story. (Just imagine two college students looking at the menu and trying to decide how to eat and not take out a small loan--and the bathroom had an attendant, which I had never seen before. It was all worth it, by the way.) So again, order the steak.
When I landed in Omaha, NE, I realized that I did not have my pass. Each shareholder is entitled to four passes/tickets. For most shareholder meetings, simply bringing the proxy is sufficient. Not so for this event. Here, you have to send back a small document asking for a pass when you get the proxy in the mail. If you do not do this, you can go the Convention Center the Friday before the meeting and get a pass. (I found this out after almost suffering a heart attack on Thursday, the night before I was to board the plane and saw an unusually colored paper sticking out of the annual report.) Everything worked out, and the staff was very friendly. The key point is that if you are a shareholder, you can bring three guests (at least in 2007).
I am still giddy about the visit, and there is much more to tell, but I will save the stories for another day. I shook Warren Buffett's hand, which was my last goal on my list of things to do before I turned 30. Yup, I am still giddy.
Wednesday, June 6, 2007
Jamba Juice, Shareholder Meeting
Jamba Juice's annual meeting--its very first one--also took place in Oakland, at the Marriott City Center near Chinatown. The Chairman was impressive to listen to, but the other speakers seemed more focused on marketing than the nuts and bolts of running a business. In an industry where location is everything, Peet's and Starbucks are snapping up almost all the great locations. For example, Peet's just opened new stores in Morgan Hill and downtown San Jose. Those could have been Jamba store locations. Unless Jamba intends on selling its product over the Internet or solely in stores, it needs to focus on locations and favorable lease terms to increase revenue. I was disappointed that the company does not purchase any futures contracts, but a corporate officer explained that the primary product they use was strawberries, and no futures market exists for that ingredient. He also explained to me that Jamba Juice tends to favor suburban locations rather than business-centric, downtown locations because suburbia offers seven-day-a-week foot traffic, whereas business districts are typically ghost towns on weekends.
Some other interesting notes: Jamba is focusing on opening kiosks in airports and perhaps also having drive-thrus. They seem to be shying away from a heavy physical presence, perhaps because of high rents--especially closer to the more residential areas in Washington and California, where strip mall rents are much higher than average. But why go public if the money raised will not be used to increase a physical presence? A private company can just as easily enter into partnerships and devise marketing plans.
The Chairman stated that he has received many offers to open stores internationally but he was being cautious about opening abroad because he wanted to carefully control the brand's image. Another speaker dropped an interesting tidbit about Jamba partnering with another major player to sell beverages in stores. If Jamba partners with Coca-Cola, which has been increasing its non-soda portfolio of assets, most recently with Caribou Coffee, then perhaps the stock will experience a short term boost.
Most disappointing was that Jamba did not offer any of their products at the meeting. For a first time meeting, however, perhaps Jamba did better than most would have.
Julian Bond, American Hero
His commencement speech at Loyola University in New Orleans in 2007 was beautiful. I especially liked these lines:
"Don’t let the din of the dollar deafen you to the quiet desperation of the dispossessed. Don’t let the glare of greed blind you to the many in need. You must place interest in principle above interest on principal."
In our increasingly material world, Bond and other civil rights leaders remind us what is important. I first heard him speak at an ACLU dinner in San Jose. When I left, I was a changed man. I've heard Mike Wallace, Warren Buffett, Wesley Clark, Desmond Tutu, Steve Jobs, and even Dave Barry speak, but none of them had the impact that Bond had on me. His ability to be inspirational while calmly forceful creates a powerful impact on any listener. I have tried to imitate his style as much as possible, but I cannot replicate the hold he has over an audience. It's not just charisma--Steve Jobs and Warren Buffett have that in spades; it's not a particular kind of voice--Wesley Clark has a great voice; Bond just has something that makes you feel proud to be a human being.
Tuesday, June 5, 2007
The Innocent Man, by Grisham
Grisham begins by with a plot that could have come straight out of _Moneyball_--i.e., a talented kid from the Midwest with a powerful arm gets discovered by the A's and negotiates with prudent management for a decent signing bonus. When the bonus is sufficiently raised, Ron Williamson, brimming with confidence, chooses money/salary over a college education and a scholarship, but when he is injured, his entire life is then spent fighting for a spot in the minors. When the various stints in the minors fail, Ron goes into a destructive spiral and overzealous law enforcement connects him and his friend to a gruesome murder.
I've heard lawyers say that the criminal justice system favors the prosecution because everyone assumes the D.A. only brings cases where it is sure to convict. As a result, it is terribly easy to buy into the paradigm of Eliot Ness cops arresting violent miscreants, and more difficult to imagine a perfect storm of egotistical D.A.s and the forensic specialists who could be biased because they are on the same county or public payroll and work closely with law enforcement.
What was especially stunning to me was how much the prosecution used inherently unreliable hair samples. Even as an attorney, I did not know how unreliable some so-called scientific data was, and this book was a good education for me and exposed bias I did not even know I had. Overall, an excellent book, and one that is sure to make you question the criminal justice system without the typical pointing to race as a factor.
Monday, June 4, 2007
The Winner-Take-All Society, by R. Frank
Disgrace, by Coetzee
The Prize, by Yergin
A major historical omission Yergin makes is that he fails to note Kermit Roosevelt's possible role in Operation Ajax, which is discussed in Perkins' _Confessions of an Economic Hit Man_. Still, the scope of this book is incredible. We learn that oil was around one dollar a barrel in the 1940's (meaning our addiction to "black gold" is fairly new); that BP is the successor to the nationalized Anglo-Persian Oil Company; that U.S. and British policy wished to prevent Anglo-Persian's oil from falling into Communist hands, making the new millennium's current events especially interesting; that one possible reason we, rather than the British, have a special relationship with Saudi Arabia may involve FDR's superior knowledge of Middle Eastern culture, as well as FDR's polio; that at one point, Venezuela supplied 55% of the U.S.'s oil (In 2007, Canada, Mexico, and Venezuela supply most of the U.S.'s oil); that Leavittown gave rise to suburbs (fun quote from its founder: "No man who owns his own house and lot can be a Communist. He has too much to do."); and much more. This book should be required reading in every history classroom in America. It enlivens history with its detailed depictions of characters who changed the course of world history. It is around 800 pages in paperback, and is, without question, worth the time investment.
Gilead by M. Robinson
Some nuggets from this book are too good not to be shared: "A little too much anger, too often or at the wrong time, can destroy more than you would ever imagine. Above all, mind what you say. 'Behold how much wood is kindled by how small a fire, and the tongue is a fire.'"
Aside from advice, Robinson's language will soothe any reader: "The graveyard was about the loneliest place you could imagine. If I were to say it was going back to nature, you might get the idea there was some vitality about the place. But it was parched and sun-stricken. It was hard to imagine the grass had ever been green. Everywhere you stepped, little grasshoppers would fly up by the score, making that snap they do, like striking a match."
Rev. Ames' ability to be self-aware and also transfer his knowledge to us makes him a special character--few characters are written as self-aware, intelligent, and articulate. Knowing his son will spend most of his life fatherless, he writes, "You are drawing those terrible little pictures that you will bring me to admire, and which I will admire because I have not the heart to say one word that you might remember against me." In an age of attention-seeking, Rev. Ames reminds us that humility and quiet compassion still have much to teach this generation. The mere act of reading Robinson's novel will transport you into a slower, more gentle world.