VOR’s Turn: Fortunately, the U.S. Is Not Just About Money. Sometimes, It Is About Unsurpassed Excellence.

Paul Erdman has long been one of my favorite authors. Sadly, he died in 2007. He wrote financial thrillers with great wit and clarity. He could make complex financial instruments and maneuvering seem almost comprehensible.

Just as well he had a sense of humor. The Swiss put him in jail after the bank he ran in Basel, Switzerland, collapsed after speculating in cocoa futures (something I know a little about from a previous life).  He was released on bail, fled, and was convicted in absentia.

While imprisoned he wrote his first novel THE BILLION DOLLAR SURE THING. His second novel, THE SILVER BEARS, was made into a 1978 movie starring Michael Caine.

Erdman made a memorable observation about America.

"The entire essence of America is the hope to first make money--then make money with money--then make lots of money with lots of money." -Paul Erdman

The thought that life here is just about money – though it contains a great deal of truth - is depressing. Fortunately, this extraordinary country redeems itself in surprising ways. Last night I watched a Nova documentary which illustrated one of them. It was about the World Trade Center Memorial and was absolutely riveting.

People at their best are extraordinary.

VOR’s Turn: A Salute To OccupyWallStreet

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We all like to think that we are rational, clear-thinking individuals who are eminently capable of filtering out the hype from the substance where any type of mass communication is concerned. (We do concede that inter-personal communication is trickier to assess.)

For the life of me, I don’t know why we think this way, because the evidence is sharply tilted to the contrary.

Propaganda, whether it be political or commercial, WORKS!

It works on you, and it works on me. The degree may vary, but the fact that propaganda works has been established beyond the point of debate. Advertising – just so we are clear – is propaganda. And advertising works on all of us to some degree even if it only communicates name recognition. Here is the tricky point: Name recognition – even when it is negative - conveys familiarity and credibility virtually regardless of the subject at hand. We are programmed to be suspicious of people, ideas,  cultures, places and products we don’t know. Propaganda drops our guard. In fact, if Stalin – albeit guilty of some of the greatest crimes against humanity in history - was alive and retired here today, he would probably be addressing the Tea Party as a motivational speaker.

How so? Well, his extreme views apart, he has (or should have) name recognition; and this is a celebrity culture. Sadly, given the state of our educational system right now, it seemed appropriate to add the qualifier

Propaganda is particularly effective when people are, so to speak, conditioned to being conditioned. What do I mean by that? I’m referring, in particular, to the combination of educational and media influences which prepare Americans for adult life. They embed fundamental assumptions which are not necessarily true. Indeed, some are outright lies. Many are distortions. Some are admirable. However, on balance such assumptions are worrying. They distort our ability to think clearly to a truly alarming extent. In short, they foment ignorance.

“There is a cult of ignorance in the United States, and there always has been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that “my ignorance is just as good as your knowledge.”

- Isaac Asimov, column in Newsweek (21 January 1980).

In terms of specifics – instances where propaganda has been outstandingly successful – I would like to draw your attention to the following:

• Government is the problem: This is pernicious nonsense, because the simple fact is that we need government because there is a great deal we cannot do by ourselves no matter how rugged and individualistic we are. Also, there are services we need and want, which government is best equipped to provide. Social Security and Medicare are two. The list is long. Clearly, there can be good government and bad government – and there is vast room for improvement in ours - but the same applies to any institution or activity, government or private, created by humans. We are a flawed species. Nonetheless, the Right Wing has succeeded in establishing a fundamental mistrust of government – a different thing entirely from keeping a prudent eye on things - as a consequence of four decades of propaganda. That has led to a massive destruction of confidence in government, and the current state of gridlock whereby commonsense action to help the economy – and there are numerous excellent ideas available - cannot be implemented. In effect, they have seriously damaged our social capital – trust and willingness to cooperate – to a point where the National Interest is being harmed. A country without social capital is in trouble.
• The U.S. is overtaxed: Currently, the U.S. is one of the most lightly taxed countries in the developed world. What is wrong is that those who either have, or earn the most, are proportionately paying the least. That is palpably unfair and inefficient. and to have a 71,000 page tax code is ridiculous. 
• A rising tide raises all boats: This is code for saying that if you favor the rich, the rest of the population will benefit too. The track record is otherwise. Since about 1974, the bulk of the American population has seen no increase in real earnings while the top few percent have prospered. Meanwhile, the populations in numerous other countries have thrived. Quite why almost no one either spotted, or made an issue of this extraordinary situation, is answered by the belief of so many Americans is such clichés as: “We have the greatest economy in the world.” We do have the largest; but, as it happens, we also have one of the un-fairest – and have had for decades. It is noteworthy that after a long period during which both the rich and corporations have prospered, the earning power of most American households is in decline. After nearly four decades of frozen earnings, that is bitter gall indeed.

It is in the context of the truth, that propaganda has an excessive role in American life, that I would like to express my admiration for all those involved in OccupyWallStreet. They have cut through the propaganda – a rare thing in the U.S. – and they are drawing attention to the core fact that if we don’t change the status quo, the consequences will be extremely unpleasant at best; and they could be catastrophic.

The protesters are widely accused of having no message (propaganda yet again). In fact, they are focused on the fundamental one.

 

 

 

 

 

 

VOR’s Turn: H. G. Well’s Very Active Love Life

H.G. Wells (Image via RottenTomatoes.com)

There is a marvelous piece on David Lodge’s book about H.G. Well’s love life in the October 2011 Atlantic Magazine.

It was written by Christina Schwarz and elegantly illustrates the point that less can sometimes be more.

Never heard of the lady before, but will look out for her writing in the future.

I should add that The Atlantic is an exceptional publication.

The title of the book is MAN OF PARTS. It would seem Wells lived up to it – as well as being a rather agreeable fellow.

Let me quote a short extract form Ms. Schwarz’s entertaining piece:

“Ultimately, this novel’s sensitive and lively examination of its protagonist’s relationships with women (including, most famously, Rebecca West)—his appreciation of their charms, his responses to their needs and personalities, the social and emotional difficulties in which his love for them embroils him—is what really fleshes out (so to speak) his attractive character.”

 

Christina Schwarz’s novels include Drowning Ruth and All Is Vanity.

 

 

 

VOR’s Turn: Greed And Inaction Have Consequences. And More And More Americans Are Not Just Frightened: They Are Angry.

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For a considerable length of time – decades rather than years – I have been of the belief that U.S. style capitalism must be reformed. Such views tend to be dismissed as socialist or communist; or worse.

In truth, I’m not an ideolog. Politically, I’m a pragmatist. I like prosperous countries which look after their people and the assets of the nation. Infrastructure is useful stuff. A poisoned environment is unhelpful. Switzerland and Singapore come to mind, but there are numerous other examples.

Where we are concerned, I merely looked around this extraordinary country of ours and thought: We can do better than this. We must do better than this. If we don’t, we are going to be living in a world of hurt.

Many, who have traveled, or have studied other economic systems, have come to exactly the same conclusion. In the U.S., the Middle Class and the poor are being treated badly; and the competition is eating our lunch. And the less said about our infrastructure and the environment the better. We are poor stewards. Current U.S. style capitalism – apart from being grossly unfair – isn’t working too well. It is greedy, oriented towards the short term, and can be exceedingly cruel. It is dumb capitalism. Capitalism, as such, does not have to be this way. There are other varieties, and most – as far as the average citizen is concerned – work better than ours.

History demonstrates again and again that any society where the rich get richer, and the poor get poorer (and are treated as an underclass) is inherently unstable. And given that such a situation inevitably means that there are relatively few rich, and vast numbers of less well-off, the probability is that a combination of the less well off (the Middle Class) and the poor will eventually rise up and take action. Sometimes that action is confined to civil disobedience. Since governments have a consistent tendency to over-react, often it escalates into violence. From there it can spiral into something much worse which can last for decades. (The IRA’s last campaign spanned nearly 30 years). The fabric of a socially unjust society is innately fragile. 

The fig-leaf of democracy, in a country where the rich own the very system which is supposed to represent ALL Americans – but doesn’t - can be maintained for just so long.

Remarkably similar conditions set in motion the original American Revolution. Today, one can make a good case that they are worse. Today, the poison of near-unchecked corporate power has entered the equation. And it seems to be backed up by a Supreme Court which allows it free rein.

This raises the obvious question: If betrayed by the political system and the legal system, what is the average American to do? The whole history and culture of this Great Nation screams: “Rebel!” And that is as it should be. The Founding Fathers held just such a view.

Quite why those in power – and here I include President Obama – don’t understand this, escapes me. It is scarcely news that “All power corrupts, and absolute power corrupts absolutely (to quote Lord Action) but is it blind and stupid as well?”

The evidence would indicate the affirmative.

For the record, let me note that some of my ancestors were French aristocrats and incurred the wrath of an enraged citizenry. They, my ancestors, were guillotined. Up to 40,000 of their peers were executed in such a fashion during the French revolution. Think them as the bankers, over-paid corporate CEOs, and corrupted politicians of their time; or the 1%.

Fortunately, one escaped to Ireland in 1792; or I would not be writing this. His full name was Benjamin Lentaigne de Logivieres. He studied medicine and became Dr. Benjamin Lentaigne M.D. F.R.C.P. 5th Dragoon Guards. He tended Irish patriot, Wolfe Tone, before he was hanged. You can Google him if so inclined. The family did rather well. His son was knighted.

The lessons of the French Revolution (and there were others, not to mention two World Wars) are well understood by Europeans (and more than a few other thriving economies), which is one of the reasons why they have put such effort into modifying the excesses of (American-style) unfettered capitalism. They are painfully aware of the consequences of sustained social injustice. The results, particularly in Northern Europe – debt crisis notwithstanding - have been a dramatic success.

No one, apart from extremists, wants yet another American Revolution, but an ever increasing number of U.S. citizens is of the view that the current U.S. economic system needs drastic reform. They are right. And they are right to be enraged.

So far, my sense is that relatively few understand the full extent of the greed and corruption that currently hold this country in its grip. Such vicious forces pervade virtually every aspect of the American way of life from the Food Chain to our National Security, from employment to our life spans. Quite what will happen when more Americans wake up is a chilling to contemplate.

One would hope that the guillotine will not make an appearance in the U.S. But, if it does, it is depressing to note that it will probably be made in China.

VOR’s Turn: We’re Quarreling On The Beach While The Tsunami Roars In

Image by Urban Mixer via Flickr

Author Michael Lewis is one of those authors who tends to spot trends and developments ahead of mere mortals, and who then comes out with a book which is both prescient and fascinating; as well as being thoroughly entertaining.

I’ve been reading him for years. He is an acute observer, has a nice dry sense of humor, and is extremely well informed. He is also the author of the current hit movie, MONEYBALL which stars Brad Pitt. He has a nose for the quirky.

His latest book is called BOOMERANG and makes the case that both the U.S. and Europe are in a great deal more trouble than we think; and that things are going to get worse before they get better.

I haven’t yet read the book, but courtesy of Barry Ritholtz’s outstandingly good blog, THE BIG PICTURE, watched a video interview with Lewis. He delivered his grim news with a great charm and a smile. He’s an engaging man.

He used phrases like “A fraying of a sense of common purpose,” and “moral breakdown” when referring to our current situation.

I happen to think he is right, and am amazed that there isn’t more of a sense of a sense of crisis and urgency, and national self-analysis. Instead we’re quarreling on the beach while the tsunami roars in. And make no mistake about it, it is coming.

I’m reluctant to use phrases like “moral breakdown” because I think they sound preachy, but there is something very wrong with our core values right now; and the problem is pervasive. The banks almost certainly represent the worst of such behavior, but it’s hard to find another sector in the U.S. where greed and egregious consumerism haven’t got out of hand. Essentially, we’ve evolved into an “anything is justified in pursuit of profit” society, which is rapidly becoming bereft of moral standards and decency. Cheating at school is widespread, and behavior just gets worse from there on. And our current corporate culture is socially irresponsible, deeply corrupt and not infrequently criminal. And the major corporations own Congress; and are scarcely subtle about the fact.

There are exceptions, of course – and hopefully many - but the trend seems to be a progression from the nasty to the nastier with the Financial Sector (which soaks up 30-40 percent of corporate profits) setting the tone. But Wall Street has plenty of company in the race to the bottom.

It’s sad because this country has enormous strengths and is inhabited, in many cases, by thoroughly  agreeable people. But something is deeply wrong; and the most alarming thing is that so few are admitting to it, or are doing anything about it. And many are complicit. Why not! They/We are only doing what everyone else seems to be doing. Lying, cheating and stealing is becoming the cultural norm; and if you stand up and object, you are likely to lose your job.

My sense is that economic insecurity and fear are making a major contribution to our moral collapse. People are not at their best when frightened. And people definitely are frightened, and with very good reason, because the way of life we thought we had, with its built-in economic securities, re-assuring professionals, and bright future is proving to be – in many ways – a fraud.

Your job is no longer safe; your bank savings earn virtually no interest; your 401K has been trashed; health costs have got out of hand; a defined pension is near impossible to get; and your social safety net – if anything does go wrong – is the worst in the developed world. And, unless you are rich, forget sending your kids to college without life-crushing debt.

How could this be happening to the richest county in the world? In truth, if you allow greed to get out of hand, it’s inevitable; especially when social cohesion – trust - is replaced by ignorance and selfishness.

Author Michael Lewis put it another way. He said that “our lizard brains” seem to be taking over.

America should be – desperately needs to be – better than this.

 

 

 

VOR’s Turn: Steve Job’s Achievements Are Even More Remarkable If We Consider The Power & Bone-headedness of Who & What He Was Up Against.

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My grandmother never learned to drive. When she had a farm for a while in Brittas Bay, County Wicklow, Ireland – primarily for her grandchildren’s benefit -  the fields were plowed with the aid of two magnificent shire horses. One was white and one was black, and Nolan, the head man. spent a great deal of time cleaning their brasses. Whether or not that contributed to the farm’s profitability is a point open to debate.

She had a Roll’s Royce, but gave it to the local parish priest.

My mother was one of the worst drivers I have yet experienced. One advanced jerkily and at high risk. At one stage she obliterated a bus queue in Donnybook, Ireland, followed by a store front. And all of this within mere yards of the local police station.

Quite why she was ever allowed to drive again after that massacre, I don’t know, but she was charismatic, well connected, and could be extremely charming. And Ireland – especially in those days – was possessed of a tolerant culture. It helped if one owned a Big House and had a brother-in law who was a senior policeman. Uncle Michael, as it happened, was a Chief Superintendent and had two counties, Waterford and Kilkenny, under his control.  And I have reason to believe he rather fancied my mother, who was a widow at the time. And young, attractive and sexual.

I grew up without a TV in two very large houses – sequentially, you will be relieved to read. The first was largely unheated. The second was equipped with a highly efficient system of storage heaters which my mother had removed because she thought they looked like like coffins. To her, the aesthetics of an object were more important than its functionality. She was a writer, painter and socialite who essentially lived off inherited wealth. She hated technology and lived in a way that rendered it largely irrelevant. We had a radio, but it was kept in the kitchen “for the servants.”

She did possess a typewriter, but mostly wrote by hand in large, clear, rather childish hand-writing. We did possess a washing-machine but that was kept in a dank room in the basement, and only used by the servants. It was just as well we had it because my mother had twelve children (I  was the eldest). We did not have a dryer but we had land and clothes lines, and doing laundry kept the servants out of mischief. They tended to get pregnant if not kept busy. In truth, they tended to get pregnant anyway. Condoms were illegal in Ireland in those days.

I mention all this to make the point that I grew up in a technology deprived environment in what was, at the time, a technology deprived country (Ireland) so computers came as something of a shock.

In the Seventies, I founded and operated a company, Addmaster UK, that sold adding machines and calculators using direct marketing techniques. It was entirely data driven and ended up with 134,000 customers by the time I left, but was operated using manually operated systems which I devised from first principals; and which were surprisingly effective. However, that was largely thanks to my extraordinarily talented General Manager, Collin White, so it was about that time that I started thinking about computers.

What I found was that they were primarily accounts driven, were remarkably expensive to modify, and were operated by people who seemed to live in a world of their own.

It was frustrating, because I could see the potential of computers, but couldn’t get computer types to share my vision. They tended to act like High Priests and were more concerned with dogma than flexibility. Software was proprietary and expensive. In short, if you didn’t agree with the way they did things, you were wrong. In fact, at a different time, I had the feeling that the Inquisition would have picked me up and burned me at the stake.

The rigidity and  arrogance of the computer industry in those days is hard to overstate. Its members knew that they made and marketed astonishingly powerful devices, but they were determined that their customers would operate their way – and pay through the nose for the privilege. IBM was worst in this respect, but even upstarts like DEC were not much better. They were both corporate and cultist in just about equal measure.

Against such a background, Steve Job’s achievements are all the more impressive. He was pushing against extraordinarily powerful opposition and, essentially was preaching heresy. It is remarkable that he wasn’t swatted away. He was truly a David up against a whole bunch of Goliaths.

What attracted me to Apple was that it’s approach matched my mental model of what a computer should do. I was looking for ease of use, multi-tasking, massive power, WHISYWIG and ease of printing from the beginning. It seemed to me ridiculous to operate any other way. I also thought that the operating system could be kept separate from the data, and that the all important data should be removable. I was unaware of the internet in those early days. Nonetheless, my thinking was way ahead of the current culture. Indeed, it was visionary.

To have a vision isn’t enough. You have got to be able to execute. This is where Steve Jobs moved into a league of his own. And he did this across a whole range of products and technologies; and made the world a better place into the bargain.

Steve Jobs had many strengths but one of his greatest was the combination of vision, pursuit of excellence, and technological awareness combined with his refusal to compromise.

Obduracy based upon ignorance, which seems to be the guiding mantra of the Republican Party right now, is another matter entirely.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

VOR’S Turn: Change Is Not Accomplished By The Reasonable

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By all accounts, Steve Jobs was a difficult and demanding man. Just as well; or he would never have accomplished a fraction of what he achieved in his far too short life.

Change is not accomplished by the reasonable.

People are way too established in their comfort zones, too short term in their thinking, too selfish, too greedy, and too fearful of the new. And bureaucracies, in particular, whether corporate, government, or academic, seem to have a remarkable ability to detect the iconoclast – the pioneer - and crush him or or her. Visionaries, while alive, are rarely popular and have a tendency to end up as economic road kill. To be a visionary is to embrace a high risk occupation. People rarely understand, and they fear change. And they lash out at what they fear until the vision becomes the new normal..

Jobs, himself, despite his extraordinary abilities, was a victim of such a fate when he was fired from the very company he had founded. What happened to him was outrageous. He went on to found Next and Pixar, and to vindication; but his dismissal from Apple must have been devastating.

Jobs is widely and justifiably described as a visionary and a genius. What strikes me with some vigor is how rare such qualities are in relation to dealing with our day-to-day problems – particularly here in the U.S.. Here, I am primarily referring to our political structures, and our seeming inability to deal adequately with such such basics as hunger, poverty, education, employment, health, and how we govern ourselves. And yet we are the richest and most powerful country in the world. There is something very wrong here. The blatant corruption of our political system by the Rich and Corporate Interests is certainly part of it, as is the ignorance and inertia of much of the electorate, but there are other issues at work here.

Above all, we seem to be astonishingly lacking in imagination when it comes to the great issues of governance and the wider issues of how we live. Whether it comes to energy policy, moving to a more sustainable lifestyle, or re-building after Katrina, we seem to be bereft of ideas and instead enmeshed in more of the same: crony capitalism; political indifference; and a truly alarming lack of innovative thinking. Running a pipeline from Canada’s tar sands to Texas isn’t innovation. It’s business as usual.

In contrast, while we have been luxuriating in complacency for the last forty years, much of the rest of the world has been showing what vision, combined with passion and commitment, can achieve.

China has proved that central planning – combined with capitalism - actually does work; Taiwan has implemented an extraordinarily effective healthcare system from scratch; the Scandinavian countries have managed to combine the best of government with the best of capitalism. Singapore has reinvented itself completely. Brazil is booming. Arab nations are being re-vitalized by the Arab Spring. The list goes on and on. In contrast, we’ve been losing ground in practically every sector; and we are continuing to do so.

Why is this so? Are American children somehow innately less creative than their peers elsewhere so grow up into docile citizens? I doubt the genetic element. However, I do think we have evolved a corporatized consumerist culture which stunts creativity, stresses conformity, and penalizes those who deviate from the social norm. And it includes strong elements of insecurity and fear because if you lose your job in today’s America – which is a constant threat given the pervasive lack of social concern of the corporate world – you lose income, credit, health, and quite possibly your car and your home. This is social control worthy of Big Brother, and it is backed up by a legal system that imprisons a higher proportion of its population than any other country in the world. And then there is the fact that much U.S. media, which the Founding Fathers thought would keep us informed, is more concerned with manipulation and distraction (entertainment) than with information.

All of that might be tolerated (though one would hope not) if such a system was delivering reasonable prosperity for the vast bulk of the American people. But it isn’t; and hasn’t for decades.

What Steve Jobs accomplished was prodigious, and he will be sorely missed, but what we need next – rather desperately – is a similar vision, passion and commitment to change applied to the American Way of Life.

We need a political visionary of integrity with the same qualities as Steve Jobs but applied to the great issues that concern us. Better yet, we need a number of them. Best of all, we need a movement committed to reform.

Once, many thought Obama was a visionary, but if he has a vision for America, it is – so far - a well kept secret. Further, his unwillingness to get to grips with Wall Street is disturbing. And the Republican vision seems to consist solely of catering to the Rich and Special Interests.

So who comes to mind next (pun intended)? Best remaining bet: Elizabeth Warren. I don’t think she has articulated it in full as yet, but she clearly has a vision of the kind of country we should be.

“"There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you.

"But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers that the rest of us paid to educate...Part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."

Elizabeth Warren