Friday, July 31, 2015

An updated review of Chromecast

In months past, I've had some kind and not so kind words for Chromecast. But that was before I had a OnePlus phone with the latest operating system update that I got a few months ago. Oddly, the OnePlus works better than the Nexus 4 I had before.

For the readers who are not familiar with Chromecast, let me give you a quick summary. Chromecast is an HDMI dongle that you connect to your TV. It looks like just another jump drive, but bigger. And it doesn't fit in any USB drive. It fits in any HDMI video port on your TV. It literally turns any TV into a very smart TV. It is, now that I think about it, a smart TV killer.

There is a lot to like about Chromecast when it works. It's portable, but it does need a power supply to work. It comes with a USB cable that you can plug it into the TV for power, but then it only has power when you turn the TV on. I like to plug it into a nearby wall socket for power to ensure that it's always on. I found that it works better with wall power as it seems to have more power to work with for network access.

There is a huge ecosystem for Chromecast and the applications are there to prove it. With the right application, you can cast just about anything to your TV. From pictures you took with your phone, to YouTube to Netflix. Most content applications nowadays will cast to your Chromecast.

If you're not in the mood for video or pictures, you can cast audio to your Chromecast, too. Google Play, TuneIn, Pandora, Spotify and even SoundCloud will cast to your Chromecast and put the sound to your TV. It is amazing what can be done with Chromecast and it's still early days.

But the best part is this. When I travel, I can take the Chromecast with me. Then instead of watching the hotel cable system, I can watch Netflix or YouTube on the TV there. I can play the music I want to play there. All over the wifi system provided by the hotel.

When I'm visiting family and friends and want to catch up on pictures, I can plug the Chromecast into the TV in the living room. Then I can play videos or show pictures without a slide projector. Oh, wait. I'm showing my years. Does anyone even know what a slide projector is, anymore? Of course, Chromecast only works if there is wifi router in the house.

Back at home, I still use the Chromecast. My wife plays Netflix and YouTube on the TV for the kids by casting straight from a computer to the TV. I like to use my phone to cast the same content to the TV. Sometimes I show pictures to friends and family when visiting.

Things are so much better now with the Chromecast. In the past, I had to constantly fiddle with everything just to get it going. I'd reboot the router, reboot my phone, reboot the Chromecast. Back then it might take 15-20 minutes just to get the Chromecast going. By then, everyone else has moved on. I did notice that streaming from the computer worked better than streaming from my phone, so it must have been the phone that was causing all the problems with the Chromecast.

I'm pretty sure there was an update on my phone that did the trick. I'm not exactly sure when it happened, but it was probably when I got the update to CyanogenMod 12. Perhaps there was an update on the Chromecast, too. All I know is that now it works and it works great.

Chromecast has totally changed my perspective on content whether it be audio, video or pictures. Chromecast has mobilized my content so that I can take it with me, anywhere. It might just be a paradigm shift for content, since Apple is trying to do the same thing. I'm just glad I'm around to enjoy it with my family and friends.

Thursday, July 30, 2015

The case for worldwide matriarchy

What you see below is a screenshot of a mortifying statistic: better than 92% of all homicides worldwide are committed by men.

The reason that statistic is so mortifying is not just that men commit the most homicides and murders worldwide, it's that men rule the world. Now I'm a man and I'm making this post about the case for a matriarchy, worldwide. Do I have an interest in doing this? Absolutely. As a man dedicated to erring on the side of peace, I believe that matriarchy is worth a try, I'm even willing to submit to permanent matriarchy if that is what it takes to ensure the survival of our species for another 100,000 years.

The reason that men commit the vast majority of crimes including homicide should be reason enough alone to ban men from the highest offices of government. But there is another reason: Testosterone.

Scientists at Duke University compared skulls from 80,000, 38,000 and modern skulls of today and found evidence that around 50,000 years ago, the level of testosterone in humans suffered a serious decline. Maybe that's because the most aggressive males had killed each other off, leaving the less aggressive males to procreate a kinder, gentler progeny.

This change in human physiology correlates well with a blossoming of culture and technology around the same time. From the article at Science Daily:
"The modern human behaviors of technological innovation, making art and rapid cultural exchange probably came at the same time that we developed a more cooperative temperament," said lead author Robert Cieri, a biology graduate student at the University of Utah who began this work as a senior at Duke University.
Cooperative temperament? That is what we will need going forward as we've grown from the tiny villages of prehistory to 7 billion people living in a modern world. Cooperation is how technology and culture are made. Humans do not create great things in a vacuum. They work together and cooperate to get to their goals.

Technology is something that men seem obsessed with. I'm reminded of a great meme I saw not too long ago:
Behind every great man is a woman rolling her eyes.
No doubt there are many great men who walk this earth in peace, erring on the side of peace as they walk. They often do great things, but before they got to that great thing, there was a woman behind him, rolling her eyes.

Though we men may aspire to greatness, we have testosterone. Higher levels of testosterone lends a tendency towards aggression. That tendency in a crowded world is a disability. Wars are started by men. They are ended by men, too, usually after enough of the most aggressive men have been killed off.

I have had the opportunity to read about and observe the behavior of women. A woman who is pregnant is gifted with a strong predisposition to cooperate, to find peace. A woman with small children finds that the gift grows and that she will need that gift when dealing with unreasonable breadwinners, aggressive males who see her children as a threat, and in working with her small children. A strong woman knows how to find safety for her children through cooperation.

Remember, small children are only thinking about getting their needs met. They will do whatever it takes to get their needs met. A mother who understands this makes better decisions about what to teach her children when her thinking is not clouded by testosterone.

This post is not to say that men should not participate in politics at all, but there needs to be a balance. Considering that men have heaped so much abuse upon women for all of history, perhaps the men in this world need to take a back seat to power and let the women drive. I'm thinking that women should have exclusive access to the highest offices of power worldwide for something like the next 50 years, maybe 100, just to set us on the right course to worldwide peace.

To solve the great problems of the day, from global warming to terrorism (something that men played a big part in), we're going to need to cooperate. Women are masters at cooperation. Why not let them rule the world to see if we can finally advance to the next phase of our development? Perhaps women as leaders can teach the world that cooperation is the greatest survival skill of all.

Tuesday, July 28, 2015

The Super Delegate problem and Bernie Sanders

I've been busy with Twitter lately and I've noticed quite a bit of support for Bernie Sanders on Twitter. I've added many Bernie supporters to my Twitter following list - that is, I'm following them for the news about Bernie.

I got a tip from one of my friends on Twitter about a website called Bull Moose Nation. This Bull Moose Nation models itself upon the original Bull Moose Party of 1912. That party was the party of Teddy Roosevelt, a populist who had the same goal in this country then as Bernie Sanders does now:
“To dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day”
— Bull Moose Party Platform, 1912
This is what I know of Teddy Roosevelt, a man dedicated to preserving our natural resources, cutting the ties of private control from government and serving the public interest. The irony is that he was a Republican then.

Let me give you an idea of how much things have changed. While Roosevelt would have fought to preserve the national parks, the Republican clowns in Congress have passed a bill to make it easier for energy companies that burn coal to dump coal ash directly into water sources. They want to return the regulation of the coal energy companies back to the states, as if that would make things better. Somehow, I have my doubts.

Bull Moose Nation has brought to light a very interesting and compelling problem: getting the Super Delegates in the Democrat Party to support Bernie Sanders (I would use the term "Democratic Party", but Super Delegates are anything but democratic). Much like the Electoral College, the Democrat Party has Super Delegates that can vote for whomever they please rather than who the people want. This is all explained very nicely in this Bull Moose Nation video and in their website at this location

The summary is this:
In the 2016 primary 747 of the 5,083 total delegates are superdelegates.  What this means is that in a worst case scenario where Bernie Sanders cannot get any of the superdelegate votes he will need almost 59% of primary voters to vote for him.
And they explain the problem with an observation from the past election with Hilary Clinton in the fray:
The irony is that no one knows about this problem better than Hillary Clinton.  When she ran against President Obama in 2008 she won the popular vote counting the ballots in Michigan - it was the superdelegates who ended up making the decision. She was unable, however, to secure the needed superdelegate votes and lost the nomination as a result. The Bernie Sanders campaign is vulnerable to falling into a similar trap since the majority of Democratic Party leaders having been falling in behind Hillary Clinton. If we as a public truly believe that Bernie Sanders is the man who will best represent us, the first step that we need to take is making sure that he gets the nomination.
The solution? Double Down for Bernie! Bull Moose Nation estimates that we will need at least 8 million additional primary voters nationwide to ensure that Bernie is nominated. If we're going to elect Bernie, we will need to gather our forces and bring them to bear against an enormous establishment opposed to such a possibility. That means getting people registered to vote and getting them to the polls for the primaries. Bernie needs to win in the primaries to get a shot at the nomination at the Democrat Convention next year.

I know, it seems daunting, but somehow, this country managed to elect a black man with a Muslim sounding name, apparently against the odds. 

We need to also remember that the right of nomination has already been stolen from us by the 1%. The 1% believe they are exercising the right of nomination with Hilary. Through a grass roots effort, we can call up the votes we need to restore the right of nomination back to us, the people. This is just (a big) part of what we need to do to get Bernie elected as President. Together, we can make it happen.

Monday, July 27, 2015

Punishment, reward and addiction

I'm still thinking about what I've learned from Dr. Ross Greene, Ph.D at Lives in the Balance. Dr. Greene has made some very interesting observations about kids that I've applied to my own life. I can tell you that in the short time that I've watched videos and read the tour there, my attitude has changed completely and I've developed new habits as a result. To summarize, I'm making a shift from punishment and reward for my kids to helping them solve problems.

I had this experience last night with my daughter Emily, who is two years old. She takes a bath every night and with that bath she has discovered the magic of a cup. She can fill the cup with water by submerging it and then pouring it out. In the past few nights, she has found a problem she wanted to solve: Can she empty the bath tub with the cup by filling it with water and pouring it out into the bigger tub surrounding the little tub she was in over and over until the tub is empty?

In the past, I would have interrupted her with the excuse that her quest would take too much time and we really need to get her to bed to sleep. I've done that and have had drama instead. Last night, however, I let her run her course. I let her see that when the water gets too low, it's harder to fill up the cup and at that point she lost interest, handed me the cup, stepped outside the little tub and dumped the water out. Problem solved.

Better yet, she had the satisfaction of learning the solution to the problem that she wanted to solve and can more easily move on to something else. I suspect she will want to try it one or two more times again before she gets bored and finally moves on. But I found that letting her have that experience demonstrates something very important: she can find her own motivation from the inside. I don't have to do anything to motivate her.

I only need to present a quiet, safe and nurturing environment for her to learn from it. She is already motivated and she only engages in drama when the environment presents demands that are beyond her ability to adapt to. This is not a question of motivation, it is a question of skills. As parents, our job is to teach kids the skills to adapt to the environment, not to punish them for failing to adapt.

In my move away from punishment and reward I have realized profound and lasting benefits from that experience, one being an almost complete absence of drama with my daughter.

There is another aspect of the punishment/reward philosophy that has become apparent to me in the past few days: punishment/reward leads to addiction. The punishment/reward philosophy leads to a dependence on external stimulus for motivation. In other words, if I engage in punishment and reward with my kids, I'm saying that they will find their motivation from me, not from inside their own heads and hearts.

A person raised on punishment and reward will spend the rest of their life going from stimulus to stimulus to find that reward instead of finding his own motivation to act from the inside. This also includes the motivation to manage and control impulses. Addicts cannot control their own impulses. Healthy people can.

Addicts can be addicted to many different stimuli for the reward, sex, drugs, money and people, to name a few. Here's the rub: we have no control over people, places and things. It is far easier to find peace and contentment from inside through our own motivation to do so than to depend on anything else outside. You know, like making a choice to be happy with what we have now rather than to be constantly seeking a hit from people, places and things.

Making a decision to be happy is a sign of maturity. Being grateful for what we have now is actually a skill. It's something we learn from our parents, mentors, friends, family, spouse and if we're lucky, our children. No matter what our disposition, it is still up to us to make a decision to be happy.

I know this because I've seen very wealthy people flit from thing to thing seeking that hit and just making a miserable time of their lives. I've also seen people of very meager means find happiness. Finding happiness is not just a decision, its a skill that we must learn in life so that we're not so dependent on people, places and things for it.

As a member of this culture, the one we call America, I see that so much of our culture promotes dependence on people places and things for our happiness. Buy this and be happy. Drink this and be happy. Wear this and be happy. Watch this and be happy. Send brave young men and women to war and be happy. Send those other people to prison and make them change so we can be happy. See where I'm going with this?

Our culture is all about addiction to people, places and things, and the only way we're going to get our next fix is by keeping all that stuff ready for our next hit. But if we learn the skill of finding happiness we can wean ourselves off the dependence of those people, places and things.

It seems to me that every form of therapy, from 12-Steps to Jung, is designed to teach us the skill to find happiness without dependence on other people, places and things to change or stay the same. Every addict requires someone else to change or stay the same. Every addict requires something to change or stay the same. Every addict requires some place to change or stay the same.

In the broader context, when I read about people doing really nasty stuff to other people, including war, I see that event in the context that one group of people want anther group of people to change. I also see war never ends because you can't change people.

People decide to change on their own without any help from anyone else - change is automatic. People change when they learn a new skill, like how to be happy. The diversion of our country's great resources from teaching and learning skills to war is evident in the shape of our economy.

That diversion is the great tragedy of our country. We went to war when we could have rebuilt our crumbling bridges and highways. We could have built more schools and hired more teachers. We could have built more hospitals and trained more nurses and doctors. We could have built a pervasive fiber network sea to sea, an internet for everyone here. We could pay tuition for everyone who wants to go to college. All for the cost of two wars.

As a people, a nation and a culture, we must learn to find happiness from the inside or we shall surely perish. Finding that happiness is a skill that we must learn and teach our kids. When we can move away from punishment and reward and focus on the skill of finding our own happiness, then and only then shall we know everlasting peace. That is the problem we must all solve. Together.

Saturday, July 25, 2015

States' rights vs the DARK Act

How interesting. In Utah, we have 4 representatives in the House and all except one voted yes on The Safe and Accurate Food Labeling Act, aka, The DARK Act, an act that would preclude state and local governments from requiring food with genetically modified organisms to be labeled. All of them are staunch supporters of "states' rights", yet 3 of them voted yes on a bill to consolidate the power to require such labeling into the hands of bureaucrats in the far away land of Washington, D.C.

They are likely to be joined soon by Senator Mike Lee and Orrin Hatch of Utah, two Senators who claim to be staunch supporters of states' rights. But when it comes to this vote, states' rights go out the window. And it's not just with Utah, without question, a Red State. The vast majority of Republicans in the House voted yes on HR 1599. Here is a screenshot I found floating around the social media networks to show the final tally:

Of 246 Republicans, only 12 voted no and 4 didn't vote. The Republican rhetoric and voting behavior is about supporting states' rights and how the federal government should let the states alone. Not with this vote.

It is sad to see so many Democrats vote in favor of this bill. Maybe they have been swayed by campaign contributions from the people who deign to write public policy in spite of everyone else, the 0.1%. If you want to know how your representative voted, you can get the full list of of the vote here, at

This vote shows in very clear relief the hypocrisy of the states' rights advocates in the House because HR 1599 would reserve the right to require labeling of GMO foods to the Food and Drug Administration (FDA), an agency of the federal government. Compare this vote to their animosity pointed at the FCC when it comes to broadband. When it comes to broadband, their attitude is states' rights or bust.

What is the motivation for this kind of public policy? GMOs are patented and the royalties accruing from those patents are the result of an enormous government intervention in the market. This is not the free market at work. This is the government essentially handing over our money to companies like Monsanto, DuPont and Bayer. Those companies make money from crops that are modified to withstand their pest and weed controlling chemicals. They also tell us that those foods are safe, but when asked about food safety, they point to the FDA for answers.

Patents are offered as an incentive to inventors to share their inventions so that others may license the patent and propagate the benefits of the patented invention. In most cases, inventions are proudly labeled as patented by their inventors. They are righteously defended when copycats fail to pay their royalties on the use of a patent without license.

Yet, the people who modify genes in seeds for profit strenuously object to and vigorously fight any effort to require labeling. Why? They fear that people won't buy their food if they are labeled as "GMO". States and municipalities that wanted GMO labeling passed their own laws to get what they couldn't get from the federal government. The intent of this bill is to preempt state and local laws that require GMO labeling, concentrating that power into the hands of a few well placed former employees working at the FDA.

Groups like The Non-GMO Project and Just-Label-It oppose HR 1599 for the reason that the bill was written for the food manufacturing industry, not for the consumers. To get an idea of the advocates for the bill, here is a letter from the Coalition for Safe and Affordable Food (PDF), urging Congress to pass HR 1599. Read the letter then check out who signed it - nothing but corporations and associations of food manufacturers who see nothing but money in this bill.

Now who is this Coalition for Safe and Affordable Food? Those same business organizations, none of which are grassroots organizations of consumers that want strict labeling of GMOs.

So for Congressional conservatives, states' rights are only important if business interests are served. As far as they're concerned, consumers can take a hike. Why? It's OK to deceive consumers by withholding information about the food on the shelf as long as there's a check in the mail.

Friday, July 24, 2015

If you want GMOs labeled, now is the time to act

I am an advocate of GMO labeling. "GMO" stands for "Genetically Modified Organism". A genetically modified organism is an animal or plant with genes that have been altered in some way other than breeding. Breeding is what man has been doing for thousands of years to encourage desirable traits in plants and animals for agriculture. Genetic modification is a direct change of the genes in a plant or animal through some other means.

GMOs have been around since the late 80s. I read a book about them in high school and was fascinated that these molecules could do work without anyone telling them what to do. Molecules such as DNA and proteins give us life. DNA codes for proteins, and the proteins do the rest of the work. The entire process of life has one central, overarching purpose: to keep reproducing DNA. That's it. We are a product of that process.

Even though I read about GMOs in high school, I didn't really form an opinion about them in food until a few years ago. GMO food has been around since the early 90s. GMO corn and soy were quietly introduced into our food supply without consent from the majority of the world's population. No labels were provided.

In the last decade, particularly within the last few years, there has been a fast growing awareness of GMOs and their impact on our environment and our health. It is becoming very apparent that we cannot assess the positive impact of GMOs with any particular accuracy. On the other hand, we do know for sure that glyphosphate resistant crops have encouraged farmers to use much more glyphosphate to kill weeds in their crops. Glyphosphate is now pretty much everywhere, and that is just one example of how GMOs are used.

Glyphosphate is the active ingredient in the Monsanto product known as Round-Up. We generally refer to glyphosphate resistant crops as "Round-Up Ready", a phrase coined by Monsanto. Here is the irony. Monsanto is happy to label their GMO seeds for farmers to use. But they don't want food to be labeled at the grocery store as GMO. Happy to have the patents and all the royalties that accrue, but they really don't want consumers to know what they're eating.

As awareness has grown about the harmful effects of GMO agriculture, various counties, cities and states have passed laws restricting GMO use and cultivation. This of course has upset executives at companies like Monsanto, Bayer, and DuPont.

The biggest names in GMO seeds don't want us to know what we're eating. They claim that any attempt to label the food as "GMO" will disadvantage their position in the market. People will unfairly discriminate against their products even though, as food manufacturers claim, "it's safe". When the Food and Drug Administration is stacked with former employees of Monsanto, it's hard to trust GMO food as safe. There is so much money at stake that judgment in the eyes of the regulator becomes clouded.

The debate over GMOs has now reached Congress and the House has passed a bill forbidding state and local laws requiring the labeling of GMO food. It's called the "Safe and Accurate Food Labeling Act" but critics call it the "Deny Americans the Right to Know (DARK) Act" for the very simple reason that the bill is designed to preclude our right to know what is in our food:

  • The bill allows the developer of GMOs to determine the safety of said food rather than requiring the FDA to make that determination. That is a conflict of interest.
  • The bill pre-empts all state and local authority for labeling requirements.
  • A food can be labeled as non-GMO even if it is produced with a GMO processing aid or enzyme or derived from animals fed GMO feed or given GMO drugs.

It is interesting to see how strenuously seed and food producers are resisting any requirements to label their food as GMO when it contains GMO products. The message we're getting from them is this: We want protection from the government in the market and we want to reserve the right to deceive our customers with impunity.

We can do something about it and we must do it today because the DARK Act has been passed by the House and is now heading to the Senate. Tell your Senator to vote no on the DARK Act if you want to retain the right to know what is in your food. Follow The Non-GMO Project on Facebook, and Twitter, and Just-Label-It on Facebook and Twitter for the latest news.

Thursday, July 23, 2015

The facade of a free market in fossil fuels

In school, we are led to believe that America has a free market where people can apply their talents and skills to earn a good living, perhaps even become independently wealthy as a result. While it is true that people can prosper from their efforts, it would seem that the subsidies provided by government aren't really discussed.

For example, despite the taxes we pay in order to inhibit the use of fossil fuels, the fossil industry received an estimated $4.9 trillion subsidy worldwide in 2013, according to a recent IMF report. Subsidies for fossil fuels are projected to grow to $5.3 trillion in 2015. This very large sum is expected to exceed the total cost of health care, worldwide.

To put it differently, for the cost of all of the fossil fuel subsidies alone, we could provide universal free health care for everyone on the planet. But we don't do that because that would be "socialism".

What is also unstated is that these subsidies contribute to enormous profits captured by the fossil fuel industries. Those profits can be used in turn to influence public policy in a way that neutralizes the influence of all others when it comes to the regulation and taxation of fossil fuels.

This is not a free market in action, as any economist will tell you. Worse, the subsidies flow to those at the top of the chain, not the bottom. The subsidies support inflated compensation for fossil fuel executives and do not trickle down.

The environmental and health damage from fossil fuels is almost beyond comprehension. Spills from oil and coal ash, and damage to the water supply from fracking impose enormous costs on ordinary citizens, yet the fossil fuel industry is rarely held to full account. At most, they get a slap on the wrist. No one goes to jail (unless except for China - then execution might be in the wings).

So when conservative American politicians work tirelessly to gut Medicare, or to repeal Obamacare, while at the same time, writing a blank check for fossil fuels, I'm not amused. I see the hypocrisy of our so-called leaders when they encounter a conflict of interest. It's time to use full cost accounting when calculating the costs of the fuels we choose to help run our daily lives.

For a market to be free, there must be transparency and accountability. The current political environment provides very little transparency or accountability when it comes to fossil fuels. Full cost accounting is just a start, but at least then we can start to bring all of the costs of our energy choices into view in any debate on the subject.

Perhaps then, we will see that investments in solar, wind and nuclear power are far less expensive and taxing on the environment compared to fossil fuels. Perhaps then, we can see what it will take to avert total decimation of the world's resources and leave a habitable planet for the next generation.

Wednesday, July 22, 2015

Let Trump feed the GOP these words, "money is speech"

Donald Trump is an icon that represents money, money, money. He's a billionaire that inherited money from his family and used that money to make more money. Of course, few of us are aware that he's also declared corporate bankruptcy 4 times - corporations are people too, right? Few of us know this because Trump can use money to control the message from the press.

Since Trump has made incendiary and insult remarks about certain Mexican immigrants and calling a a sitting Senator and Vietnam POW a loser, it would seem that many Republicans are upset with Trump as a GOP presidential candidate. Some are worried that Trump is killing the GOP. Some are calling for him to quit the race.

But Trump says otherwise. He says that he is leading in the polls and that he finds ample support in many states for his candidacy. Trump swears he's not running as a Democrat plant.

There is no stopping Trump. Why not? He has money and he's going to use it to push his message. If the GOP truly believes that money is speech, then Trump is going to force feed those words to the GOP, although I'm not sure that's what he had in mind.

With his money, Trump can buy all the airtime he wants. With 90% of media ownership concentrated in the hands of 6 parent corporations, most of which are sympathetic to neoliberalism, Trump will also get plenty of free air time, too.

When the decision of Citizens United was handed down, the leaders of the GOP rubbed their hands together with glee. Will they still feel the same if Trump wins the GOP nomination?

On the other hand, we have Bernie Sanders. Bernie is not a billionaire and probably not a millionaire. He's not using much of his own money to finance his campaign and he's campaigning on the promise of refusing corporate contributions to his campaign. He's received his campaign contributions from hundreds of thousands of supporters in small denominations. $20 here, $45 there, and it all adds up.

Bernie doesn't have to pay people to show up and cheer for himbecause he's packing stadiums and auditoriums. Best of all, Bernie understands that this election is not just about getting him elected, that this election is bigger than that. It's about a social movement to end inequality fomented by public policy, to end The Conservative Nanny State.

Trump is all about inequality. His name, his casinos and his words underline his cause. He could be the best thing that ever happened to the Democratic Party if Democrats are willing to take advantage of it. All they have to do is nominate and support Bernie Sanders for president.

Tuesday, July 21, 2015

Bait and switch with the Fed

Readers familiar with me know me to be a progressive. I wasn't always that way. I grew up in a conservative Republican family. I loved Reagan, but felt he wasn't enough to really change the system. By chance I went to an event sponsored by the Libertarian party as a young adult.

It was there that I was introduced to the "Patriot Movement", the entrance to a long lost weekend that I will never forget. I learned more about how government functions during that time than I ever did in school. Not because of the Libertarian Party or the Patriot Movement. It was because I took the time to write more than 300 requests for documents pursuant to freedom of information acts at state and federal levels (see FOIA).

As a member of the Patriot Movement in good standing, I learned about the history of the Federal Reserve. I read The Secrets of the Federal Reserve, by Eustace Mullins. I found websites parroting the same lines about how Congress passed the Federal Reserve Act in 1913, two days before Christmas while no one noticed. I believed the line that the Fed is a private bank and that the money making power was given to private hands that year. I also believed that the Fed loaned money to our government at interest.

What I didn't know at the time, that is, what I know now, is that the Fed actually pays more than $80 billion a year to the US Treasury in interest each year. The Fed is making money for the US government. And while it is true that the money making power has been given to the Fed, that money making power has been delegated to private banks.

Banks in the United States and around the world have the privilege of creating money with every loan that they make. They are allowed to engage in fractional reserve banking. Investopedia's definition of fractional reserve banking is as follows:
A banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties. Most countries operate under this type of system.
When we hear in the news that the Fed is raising the reserve requirements for banks, they are trying to ensure that the banks don't fail when the loans go bad. The financial crisis we saw in 2008 was a result of many more loans going bad than going well. Investors who put up the capital to make those loans possible were at risk of losing their money. The banks were still on the hook for investor money, but they could pass the buck to the person who took out the loan in the first place. Fortunately for the biggest investors, the government bailed them out.

Here's the kicker: most of the loans that failed in 2008 were created using fractional reserve banking. In general, banks only need to maintain about 10% reserves to outstanding loans. Thus, banks are collecting interest on money they didn't really have - they just created it.

This is why I rolled my eyes when Congress passed yet another law that made it nearly impossible to discharge a student loan in bankruptcy. The bank enjoys numerous protections for those loans. The loans are guaranteed by the government, so even if students default, they're still backed by the government's guarantee.

Second, the bank is loaning money it created out nothing. Once that money goes into circulation, there's not getting it back. It becomes real and goes from the school that received the funds to the employees who work for the school and then back out into the general economy.

When conservatives complain about inflation, they usually point to the Fed and to the Federal government. They complain that the Fed is creating too much money and that creates inflation. What I find interesting is that the finger is being pointed at the wrong banks. The Fed doesn't create all that much money compared to the private banks. Every home loan, every car loan, every student loan, even commercial loans - they are all created by private banks using their own reserves as a basis.

That is what I mean by bait and switch. While most of us are looking at the Fed, we're missing most of the action with the private banks. The private banks get to decide if the economy should grow or not with their lending power. The private banks are not accountable to voters. They are corporations and act as if they are people, with political contributions that promote self-dealing rather than the public interest.

This is why I'm a proponent of public banking. Public banking is where the bank is owned by the government. The bank makes loans to citizens for the public interest, not the private interest. Public banks are boring. They invest in things like infrastructure, education and farms. We have one in the United States that has been around for more than 90 years: The Bank of North Dakota (BND).

The Bank of North Dakota was created for the purpose of insulating local farmers from predatory lending practices outside of the state, particularly, New York. The BND receives money from the state as deposits for the reserves. The deposits are from taxes and fees collected by the state that are in turn used to finance the operations of the state. The BND pays the interest earned back to the the treasury.

During the financial crisis, the state of North Dakota was the only state reporting a budget surplus. The BND did not contribute to inflation despite its work. In fact, the BND kept the local economy humming along despite misery in the rest of the country.

Now contrast this with the ridiculous fees earned by investment banks for CALPERS for terrible performance. Public retirement funds go to the private banks for investment guidance so that their funds can keep up with or surpass inflation. What they get is poor performance relative to a public bank.

Public banks are risk averse where private banks are not. Public banks are accountable to the public where private banks are not. Private banks serve private interests. Public banks serve the public interest. All of these characteristics are well documented at the Public Banking Institute.

If you've ever wondered why we're thrust through a boom and bust cycle every generation, ask your private bank. If you would like to see and end to the boom and bust cycle, consider agitating for a public bank. You might just get one.

Monday, July 20, 2015

Prison reform in the context of Maslow's Hierarchy of Needs

I'm still thinking about Maslow's Hierarchy of Needs, but this time, I'd like to explore how that concept can be applied to prisons, or what are formally known as "correctional facilities". As I've mentioned in a past post, the US has the highest incarceration rate in the world and one of the highest recidivism rates in the world at 60% or better.

As more prisons are privatized, the prison system in the United States has become a cash cow for the companies and unions that run them. Our correctional facilities have a revolving door for everyone that is on good behavior and a closed door for those who are not. It's sort of a Hotel California, only not so nice. Privatizing prisons into profit centers has a corrupting influence on public policy and seems to lead to an interesting bias. When prisons become profit centers, the bias is on getting people into prisons, not keeping them out.

I see also that President Obama is the first sitting president to visit a federal prison and he's talking about prison reform. It's good that he's taking a good long hard look at the problem, because we have a problem that's been growing for 20 years and counting. Even former President Clinton admits he made a mistake by signing into law stricter and heavier sentencing guidelines for judges with very little latitude to work with.

It would seem that since then, the idea was to make prisons a hell hole and make it much harder to avoid - but if you have money - hey, you're cool. You get probation. You get the country club prison. You're isolated from the violent criminals doing hard time.

So let's review Maslow's Hierarchy of Needs again. Here's the same graphic I showed a few days ago:

Of the accounts I've read about prisons, prisoners can pretty much forget about anything above the first two levels of needs. Even safety is in question if a prisoner is stuck in a cell with a really big guy named "Bubba". There is no privacy in American prison cells. Well, unless you're in isolated confinement. Then you're perfectly safe until you've gone for a few weeks without seeing sunshine or a human face. Privacy is a basic human need that is mostly denied in prison.

American prisons are not interested in Maslow's Hierarchy of Needs. They are interested in denying prisoners their needs except for the basic physiological needs. They treat prisoners like animals and seem uniquely designed for that purpose. Humans rose above animals because they developed the capacity to love and be loved. But in prison, love is denied. Fellowship is denied. And forget about real job training so that you can make a living when you get out. Prisons seem to be designed for job security at a buck a day.

Contrast that environment to Norway. In Norway, their recidivism rate is about 20%. Prisoners are taught skills to take care of themselves. They are given space to live in private. They can cook their own food, and are provided with their own private bathroom. They are treated as humans and are expected to act like one when they get out. They have skills to get a job when they get out. Prisoners in Norway are treated like adults, not adolescents.

Adolescence is often when people who go to prison first get a taste of what that is like. Adolescents can be the most challenging people we encounter. But they are also instructive in why we send them to prison when they commit crimes. Most crimes in America are committed during adolescence or during young adulthood, so if we're going to fix the prison problem I think we should start there.

I believe that it's time to change the way we think about challenging kids. Rather than assume they are challenging because they want to be, perhaps we might be better off understanding that when we're confronted with a challenge from a young person, we're dealing with someone who lacks the skills to adapt to the situation. They have a need but cannot articulate the need, so they offer up a challenge instead.

A few days ago, I happened upon a website called "Lives in the Balance". I've been watching the videos and reading the materials and as a parent, I'm fascinated with this approach to raising kids, even challenging kids.

The organization is headed by Dr. Ross Greene, PhD, a man with more than 20 years of experience working with kids. His organization's web site is a treasure trove of information on how kids behave and how to respond to challenging behavior. The overarching theme is that whether or not kids behave well is not a question of motivation. It is a question of ability. Kids do well if they can. If they can't, then there is a lag in their ability to be flexible and adapt to the situation. They offer up a challenge when they lack the skills needed to adapt to the situation.

Adult criminals do the same thing. People turn to crime not because they want to, they do it because they think they have to. In our culture it's easy to turn to "original sin" and think that people are just born bad. I disagree. People are born innocent. Almost everything we know about ourselves we learn from someone else. 

I know this after watching the birth and subsequent growth of my two daughters. They are watching me and what I do when I'm around. They are watching their mother and how she interacts with me and them. They are learning how to live from me and their mother.

As a father, my job is to create an environment where their physical and safety needs are met. Then I work on love and belonging. I let them know every day that I love them in some way. I start my day with the intention to err on the side of peace and kindness with them. When the house is quiet and drama free, they can relax, absorb the environment and learn while they interact.

But when they present a challenge, it is my job to remember that the challenge means they are not able to respond to the demands of the of their environment. I will admit that what I learned from Dr. Greene is not new to me. For a long time, I've known about this way of life, but have not been able to articulate it until now. 

As a country, if we really want to reform our prisons, we need to stop making the assumption that people aren't motivated to do better. I believe that people are always motivated to do better, they just don't know how. Instead, we can assume that when people are not capable of doing better, that the desire to do better has always been there, but the skills to do better are not. Better to assume ignorance before malice. 

When our needs are met, we can learn and not before then. Getting our needs met is a skill that we must teach our children to keep them out of prison.

This is true of adults inside and outside of prison. Norway has proven that if you help the prisoner meet their needs by giving them the skills they need to get their needs met, they are less likely to return to prison. Dr. Greene proves that if you teach kids the skills they need to cope with the challenges they face, they will be far less likely to see the walls of a prison.

The question of prison reform is not a question of skills. It's a question of motivation. We can choose between money and compassion. If we choose money, then we will get more of the last 20 years. If we choose compassion, we can help to end the suffering of millions of incarcerated Americans and prevent the suffering of countless more.

Saturday, July 18, 2015

Terrorism isn't just for Muslims, but that doesn't fit the mainstream narrative

Black churches are burning in the Deep South of America, but Muslim fundraising has stepped in to help rebuild those churches. Big news right? Not judging by this search of Google for news articles relating to the same trends:

I would expect to see big names like ABC, NBC, CBS or even MSNBC covering this story. Sure, we got one hit from CNN towards the bottom (not shown). Isn't it interesting how Al-Jazeera is at the top?

Could it be that when Muslims fundraise to help rebuild black churches, there's something wrong with the narrative we've been given? If there is a liberal media bias as conservatives often complain of, I'm not seeing it here.

This story is not in the major news because it doesn't fit the mainstream narrative that all Muslims want to kill Christians. I can hardly see why there should be any tension at all between the two since both religions are what are known as Abrahamic religions. Christianity, Judaism and Islam all derive from a single patriarch, Abraham.

I suspect there is a very interesting reason why this news trend doesn't fit the narrative. If Muslims had been found to be burning black churches you can bet that would be news. Then whoever claimed responsibility would be called "terrorists'. But these church burnings are being done by white supremacists and so far, no one is call them terrorists.

The narrative that we are supposed to believe then, is that only Muslims are terrorists. So even if white supremacists are motivated by their Christian beliefs to burn churches, it's just a hate crime, not terrorism. Yet Muslims involved in terrorism are often alleged to be motivated by their Islamic faith.

It is good to see Muslims motivated by their faith to help Christians rebuild their burned down Christians. Peace is possible no matter what the religion. It is simply a matter of desire and effort.

Friday, July 17, 2015

One picture says it all: The people of Iran want peace

There is an amazing photo floating around social media, starting with Twitter:

Check out that t-shirt and the pride of the man wearing it. Considering all the hubris from conservatives in Congress about Iran and nuclear weapons, that's not exactly a model terrorist in the picture. This image is an incredible contrast to the students shouting death to the US that I saw in 1979.

It would seem to me that the people of Iran, at least the young people, are very happy with the nuclear arms agreement that President Obama signed with their country. Proponents say that the agreement will avert a new war in the region. Opponents say that it will only give Iran more room to build a few bombs they can toss at Israel. Well then, if that's the case, Israel might want to shape up, and I sincerely doubt Iran wants a war with anyone right now, if ever.

Still, there's more to the deal with Iran than just weapons. I think some people are really upset that sanctions might be lifted. Some are concerned that trade relations might normalize, that free trade might lift many young Iranians out of poverty by growing their economy. As you can see from this Twitter feed, there is widespread celebration in Iran of the conclusion of this agreement. Cooler heads may prevail with the young people of Iran.

Iran is sitting on 158 billion barrels of oil and has something north of 30 million barrels sitting in tankers offshore. They want to sell oil, no doubt. But the infrastructure is in decline and significant investments are needed to get production back to pre-2008 levels. So don't expect much of a drop in prices at the pump just yet. The implications of this deal have already been baked into gas prices. Frackers are not going to be happy.

I think that the most significant aspect of this deal is the release of so much tension about a possible war with Iran. This agreement could still fall through as conservatives in Congress seem aching to nix it in whatever way they can. Their unstated reason for killing the deal? Because it's another achievement for Obama. That might be bad news in the polls come November of next year. I guess conservatives in Congress have to decide if they want to be seen as doves or hawks. Hopefully, the decision to approve the agreement with Iran is not entirely up to them.

We could have peace. But all of us must share the desire for it.

Thursday, July 16, 2015

If a single payer system is so bad, why all the mergers?

Here is some interesting news regarding Obamacare. It seems that the insurance industry is participating in the current wave of mergers and acquisitions going on worldwide. The fuel for this M/A activity is profits from Obamacare. All of this consolidation is leading to higher premiums for everyone, but for those who can afford it, it won't matter because they own the stock of the companies that are merging.

Moyers and Company have posted an article by Robert Reich noting that while stock values and executive compensation increase, employee wages have remained stagnant in order to support the extra padding for executives. As the mergers are approved by their respective regulators, you know, the people just panting for a job at one of the companies they regulate, we will eventually see layoffs by the thousands. Layoffs are the usual result of mergers and are required in order to get the "efficiencies" that are so necessary to support executive compensation and stock dividends.

All of this would suggest that we will eventually wind up with a few "too big to fail" health insurance companies using whatever market power they have to drive up numbers while sacrificing service and support. We will in effect have a privately monopoly on health insurance with one really big government competitor: Medicare.

It is interesting to note the entire Obamacare debate was of concern that government would take over health care and that rates would rise in response. That is exactly what is happening now, but with private insurers at the wheel. But you wouldn't know that by reading the news. Why not?

Members of the boards of directors in our biggest insurance companies are also members of the boards of directors for media companies. I found that from a rather old article that describes the "interlocking directorates" between health insurers and the media and it is rather startling. Given the current wave of consolidation in nearly every industry, it would not surprise me if the practice of interlocking directorates remains as popular now as it was in 2009.

I first learned about interlocking directorates from AdBusters, home of "Buy Nothing Day", long before the internet became the norm in our lives. I actually subscribed to their magazine - I know, I'm showing my years. Back then, they crafted a very interesting chart of the interlocking directorates of major corporations between disparate industries. I was fascinated that a member of one board of directors could sit on another. It's a great way to coordinate activities between companies - oh, wait a minute. Isn't that "collusion"? Well, not if you ask the US Attorney General.

For many years insurance companies have been using their ties to the media to clamp down on any news that most Americans might have a favorable view of a single payer plan,  you know, that thing that conservatives have been fighting to avoid since President Clinton was in office?

It may well be that private insurers don't mind a single payer plan just so long as it's private, invisible and profitable.

Wednesday, July 15, 2015

A basic guaranteed income in the context of Maslow's Hierarchy of Needs

There has been some discussion lately of a guaranteed basic income. Instead of welfare, everyone, regardless of age or wealth will receive a check from the government as basic income for a year.

A guaranteed basic income is mainly a liberal idea and has actually been around a long, long time. It is surprising to see even some conservatives giving serious consideration to the idea. But given how low skill jobs are slowly disappearing at the hidden hand of automation, as a culture, we need to remember that not everyone is an expert. It just isn't humane to let people starve because they missed the boat, or were not gifted investors with friends in the right places.

Despite the conservative rhetoric that a basic income guaranteed (BIG) would create further dependence on the welfare state, there is significant evidence to the contrary. Radio host and humanitarian Thom Hartmann has taken note of the benefits of a BIG:
A paper published in 2013 looked at two groups in Uganda: one group that received a no-strings attached grant equal to their annual income - about 380 dollars per person - and a control group that received no grant. And what did the unemployed youth do when they were “paid not to work”?
The group that received the grant worked on average an extra 17 hours in comparison to the control group. And they showed a 41% increase in earnings four years after receiving the grant. They invested in skills and businesses. Individuals were 65% more likely to practice a skilled trade two years after receiving the grants. 
Interesting, isn't it? That looks to me like once the basic needs were met, people were free to starting thinking about and acting on what they really, really wanted to do. Consider this chart of Abraham Maslow's Hierarchy of Needs:

This is a concept I learned about long ago. Back then I wanted to be a therapist, but then I learned about the abysmal pay of social workers, so I got into IT instead. Anyway, the chart shows where we start with meeting our needs. Throughout our lives, we are primarily focused on meeting the bottom two, physiological and safety needs.

As we create a stable environment for ourselves for physical and emotional safety, we start looking for love and fellowship. That builds esteem and as we build esteem, we begin to think of who we really want to be and how we can contribute to our culture and society.

When people are faced with the choice to work a dead end job just to keep things going or starve, they will invariably find work, even if they don't like the work. But that way of life is a life of constant fear and self-loathing. "Hey, the money's good, but I really hate my job." Without that guaranteed income, it's hard to take a break, step back and get a job to love rather than hate.

Knowing that BIG is there means being able to invest time and effort into new skills. It also means being able to choose a job to love rather than just taking what comes next. When we're doing what we love, that builds esteem to the point where we are self-actualized. What, exactly does that mean?

There are some slightly differing opinions about what self-actualization is, but it is described in the opening paragraph of the Wikipedia article on the subject as follows:
"Expressing one's creativity, quest for spiritual enlightenment, pursuit of knowledge, and the desire to give to society are examples of self-actualization." (emphasis mine)
Think for a moment about what this means. If our basic needs are met, then we are more able pursue work we enjoy. I once had a video production teacher who said, "Love what you do for work and never work a day in your life". People who love what they do work to give, not to receive. Look at every great actor, songwriter or artist. All of them do it because there is a drive, a force, that compels them to do it. It's just not that easy to make a living as an artist unless you're one of the best.

That's why for many centuries, artistic works were commissioned by the wealthiest alive throughout history. Anyone who has ever seen the J. Paul Getty Museum will know what I'm talking about.

A guaranteed basic income would create a culture where more people are doing jobs they love rather than have to do for survival. They're thinking about the work, not the money. That leads to more productive people, happier people, lower turnover. That would also make employers more accountable, maybe even more polite, for fear of turnover. Turnover is expensive.

The current capitalist system reduces life to a fight over a sandwich. An eye for an eye and everyone is blind. But Darwin said that the fittest shall survive, not the strongest. A country filled with men and women who are doing what they love will outperform any another country filled with men and women who have been foreclosed of every opportunity for advancement (where we've been headed for 35 years).

A basic guaranteed income means we can let go of the basics and work on self-actualization. We can work to give rather than work to receive. We can think BIG.

Tuesday, July 14, 2015

Which country has the lowest homicide rate in the world?

The UN has released a very interesting study of worldwide homicide rates and has found that Japan has the lowest rate of homicide of *any* country in the world. I view this with considerable irony as they were the country that was the recipient of two atom bombs in World War II. Here is a rather long nugget from the report:
With no notable fluctuations, the homicide rate in Japan has decreased steadily since 1955 to reach one of the lowest levels in the world. The country’s homicide rate is associated with a stable and prosperous society with low inequality and high levels of development. Young Japanese males now commit only a tenth of the homicides committed by their predecessors in 1955, and the age and sex distribution of victims tend to be uniform across age groups. This has been attributed by some researchers to, amongst other factors, extremely low levels of gun ownership (1 in 175 households), a greater chance of detection (according to police data, 98 per cent of homicide cases are solved), the rejection of violence after the Second World War, the growth of affluence without the accompanying concentrations of poverty common in many highly developed countries, and the stigma of arrest for any crime in Japanese society. (emphasis mine)
I see several key factors namely, low inequality and very low levels of ownership due to very strict gun control laws. Those two factors alone contribute to this startling contrast in statistics:
The U.S. saw more than 12,000 firearm-related homicides in 2008, while Japan had only 11.
So when I see Republicans fighting every measure aimed at inequality and gun control, I see them fighting against peace and happiness. I see them fighting against a shared prosperity for everyone. I see them fighting against a right to life. If they're looking for a good guy with a gun to prevent gun violence, they're going to have a mighty tough time trying to find one.

Maybe that's because the stress of inequality leaves people predisposed to violence. Just ask the people living in Ferguson and Baltimore. They know.

Sunday, July 12, 2015

Self-imposed Confederate flag amnesia

It is interesting to note the angst, suspicion and antipathy to the Confederate flag. I don't like the Confederate flag for what it was intended to represent: supremacy of the white man over all others of color. Therefore, I agree that it should not be flown by any government, at any level. Taking that flag down is a reasonable, thoughtful and compassionate thing to do. It is how I want my government to act.

If a private person wants to wave that flag in front of his own home, he's legally permitted to do so. The flag can be used as an expression of speech protected by the 1st Amendment. I once had a neighbor that dangled that flag in front of his home. I moved to a better neighborhood because that flag also represents rebellion, a sort of middle finger for the authorities, which didn't seem to bode well for that house or the neighborhood. So I felt justified in moving.

There is even discussion of taking the flag down in museums and removing it from culture in general. This is where I draw the line. The Confederate flag has played an important role in our history and should remain in our museums and our culture as a reminder of the wrong paths our country has taken. It should be displayed in museums with the only other Confederate flag that ever really mattered, the white flag. The Confederate flag should serve as a reminder that we must work every day to defeat everything that the Confederate flag represents.

There is an interesting fairy tale from the Brothers Grimm that emphasizes the point I want to make here: Sleeping Beauty. Sleeping Beauty is a story about a king and his lovely new daughter. At the daughter's first birthday party her guests included family and friends of the king along with several important fairies. But one fairy was not invited probably by oversight, and in her wrath, cast a spell upon the princess. The spell foretold the future, a day where the young princess on her 15th birthday, would prick her finger on a spindle and fall dead. The spell was countered somewhat by a good fairy's spell to limit the damage to 100 years of sleep rather than death.

To save the princess from such a fate, the king removed every spindle from the kingdom, and every cultural reference to the same. In the following years, everyone forgot about the spindle and the princess never saw one until that fateful 15th birthday. (SPOILER ALERT!) On that day, she ventured around the castle to find the same still angry fairy, spinning yarn in a lonely, dusty, forgotten room of the castle. The fairy offered the princess a try at the spindle to learn how to spin yarn, only to prick her finger on the spindle as foretold by the fairy's spell. I guess that's why they call that story "a fairy tale".

Forgetting our history is the problem we want to avoid, for if we forget it, we are doomed to repeat it. It is one thing to ask the government not to fly the Confederate flag. Doing so means that the government acknowledges our wish not to promote what the Confederate flag represents. That flag should remain in our culture, museums and text books to remind us and our children that if institutionalized slavery and discrimination happened once, it can happen again. We need to keep the Confederate flag in our culture not to promote what it represents, but to remind us that we can choose a different path than the one we took so painfully before.

The 1st Amendment reminds us that the right of expression of speech is protected for the people. Not the government.

Saturday, July 11, 2015

Mergers and Acquisitions!! The hobby most favored by billionaire "job creators"

Since the Occupy Wall Street movement started, Wall Street has been on the defensive, trying to justify their wealth by painting themselves as job creators. The bankers in Wall Street seem to think that what they do actually creates jobs. So what have they been up to lately?

There is a boom in mergers and acquisitions this year and the Financial Times in the UK has provided some interesting analysis on the trend. This boom is bigger than any of the previous waves of M/A activity (I'd use an ampersand, but Blogger messes that up). Average price per share in acquisitions and mergers are also much higher than before. But does all this activity create jobs?

Naked Capitalism has reported on the trend and offers a case study: Microsoft and their acquisition of Nokia. Here are the results in a nutshell:
"Beyond the insufferable corporate speak? The “standalone” business Microsoft bought for $7.2 billion a year and a half ago would essentially be shut down. The costs are ballooning. The tab for the Nokia acquisition and some other moves, with both waves combined, now lists 25,800 jobs axed and $10 billion down the drain."
This activity was picked up by Yves Smith, someone who has extensive experience in M/A and can attest to the surreal world of high finance. She happened to notice the original Microsoft story on Wolf Richter's website, Wolfstreet. So when you go to the case study link above, you'll see that there is some commentary by Yves followed by the article reprinted from Wolf Street. Wolf Richter and the story are described as follows:
"By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street."
The nugget in all of this is right here from Mr. Richter:
"Share repurchases, M&A, layoffs, and cost-cutting are easier to make happen for a CEO than inventing things and boosting sales organically, which is really hard."
I know that my post here meanders a bit, but I want to focus on that last point about the contrast between buying companies (that usually means buying the competition) and building and creating things to sell that add value to the lives of customers. You know, the people that are the source of revenue for the company.

When there is real competition, M/A goes out the window and really smart people work hard to create stuff that we can all use and want to buy or support (in the case of free products like Gmail and Blogger). When there is no competition or when money is easy, it's better to pad the compensation package with mergers and acquisitions. Is this the decision that the "job creators" are faced with?

We're currently in the early thrall of a worldwide wave of M/A activity. Microsoft, in their acquisition of Nokia lost $10 billion and cut 25,000 jobs. That's just *one* acquisition out of a sea of acquisitions. Steve Ballmer made a nice chunk of change from this activity. He made enough money that when he left Microsoft, he bought a basketball team for $2 billion. Did he create any jobs? Not many that I can see. I doubt he created enough jobs buying the LA Clippers to wash the 25,000 he lost at Microsoft.

What was the tax rate on the capital gains he made from his "job creating activity"? 15%. Sweet.

This is what we're facing when we go to work for a large corporation that is more focused on M/A than on creating products that customers want. This also begs the question we should be asking when we vote: Do we want to reward capital or labor?

As I've noted in previous blogs, capital hates labor. There seems to be some serious antipathy between capital and labor and it's not really necessary. There is currently a cooperative movement afoot in the US. You might not have heard about it because it seems small now. But the M/A boom we see now, with associated job losses will only increase the chance that the cooperative movement will become a sea change.

Most cooperatives go unnoticed. There are a few of them that are well known. Southwest Airlines is employee owned and is pretty close to a cooperative. Few of us know that South Airlines didn't layoff anyone after 9/11. They found work for their employees to do because they knew the work would pick up again. There is also WinCo Foods. Some of their long-time employees have $1 million saved in retirement due to their compensation planning that works for the employee, rather than just the CEO. You can find a list of employee owned companies here.

The current system is unsustainable and change is inevitable. Unfortunately, most of the changes that need to take place are in public policy. So when you look at the slate of candidates you get to choose from between now and next November, remember that some of them like labor and some like capital.

The lesson from Microsoft is that CEO's and financial engineers don't always know how to create jobs. A vote for capital is a vote for a repeat of that lesson.

Friday, July 10, 2015

Everyone deserves a second chance

Long ago, I was a customer of ATT's cellular service. I seemed to be getting a better rate than before and better service than with Sprint. That was before the ATT we know now with some of the worst customer service around. At that time, ATT was having a bit of a struggle migrating numbers from one carrier to their service and they were pilloried in the press for that bit of trouble.

I held out thinking that ATT was going to learn from that mistake and they did. They did much better shortly after that fiasco and they prospered for working through it. I gave them a second chance.

I'm a parent and I see the value in giving kids a second chance. God knows we give babies a second chance. We try to put food in their mouth and they spit it out. We put it back in until they understand that food is something we swallow. We sit them up and they fall down. We sit them up again and again until they learn to sit on their own. They try to walk and they fall down. We let them hold our hand until they learn how to walk. This process goes on and on until adulthood. Kids will always ask for help until they think they don't need our help, then promptly ignore us to solve their problems on their own. They come back when they find they still need help.

When our kids make a mistake, we can either punish them or give them a second chance. Most of us learned from B.F. Skinner whether we know it or not and punish the kid instead of giving a second chance. We think that somehow, punishment is going to make it better, but it only gets worse. Why talk it out when you can punish first and never ask questions? Besides, we can reward them later when they get something right, right?

That game, rewards and punishment, is not about fostering a better relationship, it's about control. As adults, we play that game, not only with our kids, but with our peers. Kids who didn't learn how to control their own actions can grow into adults who become criminals or just really difficult people.

It is only recently that some have noticed that people behave the way they do not because they want to, but because they don't know a better way. This isn't to say that we should not incarcerate a murderer or a banker that cheated millions out of billions. This is to say that we need only look into the mirror when surveying the pain and suffering around us.

I've grown up in the reward and punishment game in school and in family life. My goal is to stop that cycle and learn how to talk to kids, adults, whoever, to figure out what problem it is they are trying to solve and to help them solve the problem rather than punish them for a problem they don't know how to solve. They might not even have the capacity to solve the problems before them.

This attitude keeps people accountable. It keeps people honest since fear is the reason people lie, cheat and steal, if they do. Most importantly, it allows everyone to engage in the one skill that is going to save mankind: problem solving.

I'm a liberal because I believe in second chances. I believe that when people are not in fear, they are better able to handle the problems they need to solve for themselves. When I look at conservative politics, I just see an eye for an eye and everyone is blind. I see that they punish first and try to forget about the person they put away, rather than look at ways to prevent the problem from occurring in the first place. I see that their philosophy is to cut social spending because that is the only way people are going to learn, without ever wondering if the people they're punishing lack the capacity to learn the lesson in the first place.

So when I see conservative zeal to cut Social Security, Medicare, education, infrastructure and the like, I see a group of people who are unwilling to give others a second chance. Unless, of course, they are "family".

Let me give you an example. Jeb Bush played a significant part in the Savings and Loan scandal back in the 1980s. In fact, the father and 3 brothers were all complicit in the S&L scandal in the 1980s. They cheated people out of millions, yet none of them have gone to prison, two of them have been elected president based on their failed economic policies and one hopes to someday be president, "like his daddy". They all got a second chance.

Ironically, the public policies they promote do not include a second chance for everyone else. Cutting Social Security is all about eliminating that second chance for most people who are not expert investors with friends in the right places. Cutting Medicare is eliminating the second chance for all of those people who did not managed to keep up with the rapidly advancing costs of health care by making more money. Cutting education funding is about removing the ladder they got to use to climb to the next level.

This is why I'm voting for Bernie Sanders. Bernie Sanders is all about second chances. He's all about sharing prosperity when people work hard to create that prosperity. He's all about sharing the risks we take as a country, fairly and squarely. If we build a ladder, we climb it and leave it behind so that the next person can use it. If we want to go up the ladder to the next level, we build another ladder, climb it and leave it for the next person to use. Conservatives want to take that ladder away and use it for private gain. Liberals like Bernie want to share the ladder.

Share the ladder? What a concept. That is how humanity has worked for thousands of years. Some of us know that process as scientific progress. Some of us know is as civilization. Perhaps someday, we'll come to know it as fellowship. In a fellowship, we give our brother or sister a second chance when they make a mistake. That fellowship is the mark of a country I want to build. Together, we can build it.

Thursday, July 09, 2015

The city that legacy incumbent ISPs don't want you to see

Community Broadband Networks brings us yet another success story from Sandy, Oregon (not to be confused with Sandy, Utah). Sandy's municipally owned broadband network now delivers a gig for $60 a month (that's 1 gigabit per second of up and down speed - 100x the typical 10mb/s most Americans are lucky enough to get). The town of Sandy has about 10,000 residents and 60% of the town is either connected or on a waiting list to get connected.

Like so many other towns that wanted better speed, reliability and price, Sandy was met with indifference from the legacy incumbent ISPs like ATT, Verizon, Comcast, Time-Warner and Centurylink. The only way they were going to get better service was by rolling their own network. Fortunately for the residents of Sandy, their legislature is not completely owned by legacy incumbent ISPs.

Here in Utah, the legislature passed a bill into law that prohibits cities from owning their own broadband network unless and until they pass a stringent and expensive set of tests. That bill was passed first in 2001, making Utah the first to do so. The Municipal Telecommunications Private Industry Safeguards Act is model legislation written by the members of the American Legislative Exchange Council (ALEC) and was eventually passed in more than 20 states since 2001.

The goal of ALEC in Utah was to head off projects like Utopia, a consortium of 13 cities that could not get better speeds, service or price for internet access from Comcast or Centurylink. So they worked together to do it. But before they could get the project off the ground, ALEC was there with the legacy incumbent ISPs to do whatever it takes to prevent residents of Utah from getting better internet access.

Some might say that Sandy, Oregon has an advantage, it's a small town, so the costs of building the network are small. Then have a look at Chattanooga, Tennessee with a population of 173,000. They're a much bigger city and they have a very popular and successful municipally owned broadband service working for them right now. Residents in Chattanooga can get a gig for $70 a month. Who is offering that service? The Electric Power Board, a cooperative better known as EPB. The legacy incumbent ISPs and ALEC tried to stop them too, but it was too late.

Millions of people across the United States are being denied better service for internet access not because they don't want it. They don't get the service they want because public policy is not written by the people. It's written by the big money monopolies, including our legacy incumbent ISPs. I say "legacy incumbent ISPs" for a few very important reasons. First is that they're still running copper for the last mile. Second is that some like ATT and Verizon are abandoning their copper infrastructure so that they can escape the burdens of common carrier regulation and the costs of keeping all that copper running. Third is that they make promises they won't keep just to keep the monopoly business going. And lastly, they're utterly dependent upon a monopoly business model that is stamped with government approval - that's the local franchise deals between the ISP and the cities they service.

Sandy, Oregon has something we could all have. That fair city has also proven beyond a doubt that municipally owned broadband networks easily outperform the legacy incumbent ISPs on price, performance and service. The only thing stopping us is a legislature that would rather cater to commercial interests than to the people.

If you're looking for changes in your town and want community broadband, look no further than the Community Connectivity Toolkit, created by the good folks at Community Broadband Networks. There you will find many very useful tools and tips to help bring about a community owned internet service that listens to the people of your town rather than a bean counter in New York.

We can have the ISP of our dreams, but we must get involved and let our representatives at every level of government know that we want it.