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It's Comcastic!

When basketball season ended, we cancelled cable TV, saving about $60 a month. And life continued.

Turns out there is plenty of entertainment for our "television" screen out there for free. Instead of cable TV, we are watching OTA television, Hulu, Netflix on-demand, and ESPN3.

Comcast was nice enough to leave the free over-the-air (OTA) channels on the cable itself so we dont have to mess with an antenna. Using Sage TV software on a Windows 7 PC, we are able to record and watch PBS and the major networks just like we would with cable. Even better actually since these channels are in HD and unscrambled so we can record them with our home theater PC DVR.

ESPN was nice for sports but most of the ESPN content is also available on their online site ESPN3. Some shows are only available during the broadcast but most are available on demand for a week after the actual event.

Netflix on-demand is fantastic. I find that Claire and I spend most of our time with this service.

Hulu is also great but mostly for broadcast shows during the season and for anime that does not have the same restrictive licenses as the major network shows.

Life with high speed Internet but without Comcast is worth living after all.

HTPC update

This change also made me realize that I may have build my last Windows PC.

Our HTPC was pretty long in the tooth. A single processor that was 4+ years old. It has been a solid performer for years but it just could not keep up with the demands of Adobe's CPU hog known as FLASH. Apple is right to criticize the performance of FLASH, which is a dog. Trying to watch the jerky, low-rez version of the World Cup on ESPN3 was the final straw.

For about $300, I bought a new entry-level AMD CPU, motherboard, memory and a nicer case to rebuild our HTPC. Then I spent a half-day putting it together.

• For $100, the Lian Li case is half the size of our old PC. It does not look like a "stereo" but it is small and distinct enough to look decent and still give us flexibility.
• We kept our Hauppage PCI TV capture card for recording HD TV shows with cable or an antenna, and the SageTV software for running a PVR. (Although about the only TV we watch this way now is the news.)
• The CPU is a dual-core and the motherboard has on-board video from ATI. I was worried it would not keep up but it does just fine with HDTV so we got rid of the separate $60 video card I had.
• The most exciting addition was a remote touchpad/keyboard that fits in my hand for about $40. This was my main point of frustration with the HTPC system that I was never able to solve. Who wants a huge keyboard on the coach or wants to get up to use the keyboard across the room?

The new system is half the size, quiet, and performs like a champ.

FLASH video from Hulu and ESPN3 looks great at the highest quality level. No complaints now. (Netflix always looked great because it uses Silverlight not FLASH.)

I considered moving to an Apple system for the HTPC but ruled it out for cost. We would need to spend money on a TV capture method that I already owned and the Apple TV does not provide full browser support for Hulu and ESPN3. So I stuck with Windows.

Is this the last Windows PC I build?

the end of Windows PCs?

The HTPC and my gaming PC both run Windows 7, but the rest of our computers and devices are all from Apple. Two iMacs, two iPhones, and iPad and a few iPods.

My gaming PC is almost 2 years old and still going strong. For about 10 years, I have been building my own Windows PC's to game with. Every year or so, I replace something in the system. Our basement is a testament to those investments: a pile of worthless PC parts in their original boxes. While we have been re-selling our old Mac's on Craiglist for about 50% of what we paid for them, most PC's are worth next to nothing after 2+ years.

But is building PC's fun? Lately I think not. My hobby is playing games not building PC's (or worse, troubleshooting malfunctioning ones). Now that I spend more time playing console games, I really question the value of time spent building PC's to play games.

My next Mac upgrade will likely be more powerful than my game PC, with a better video card and CPU, which also calls into question why I have a separate game PC. Valve now has Steam for the Mac so I can get a number of games on my Mac natively...

So the end may well be in sight. With a 27", 4-core iMac, I will move to Bootcamp - one Mac that runs MacOS or Windows 7, as needed. That will remove a PC box and a monitor from my office and give us back some space while providing an even better experience. Sometimes it is nice to use my Mac to look stuff up while playing a game, but I can probably live without that.

The world keeps changing but the good news (for computers at least) is that the experience for users continues to get better.

A few years ago when I was in graduate school, a classmate asked me for feedback on a presentation they did. Since this was not a person I knew well, I was curious why they asked for my feedback.

"I want your feedback because I know you will tell the truth."

That answer really stuck with me. I have received the opposite feedback over the years that I am too abrupt or brutally honest so I became rather sensitive about volunteering my thoughts but here was a person that actively wanted to hear my truth. 'I know you are brutally honest so if you say I did good, I can believe it..."

Recently I had an epiphany (and I am a bit embarrassed to admit it took me this long to realize) about what a precious thing honesty is. I realized that I know hardly any people who could be honest and objective with me and that got me thinking about what a valuable and rare thing honesty is.

personal honesty

There are lot of reasons why honesty is rare.

Most people dont want to hurt your feelings. They will omit things or white-wash them or act like they are ok. Social harmony is a valuable thing to most people.

Not only are honest answers hard to give for many people, they are even harder to receive. People often ask for "honest" feedback but really just want to hear positive feedback. One has to be honest about wanting to hear honest feedback; they have to be open to hearing it.

Honesty is a tricky thing even on just a personal level. Whether it is that new haircut you love which makes you look like a fool or you are cheating on your spouse or stealing from your employer, most people will not give you an honest answer about how they feel. They will tell you what you want to hear.

While totally slamming someone with harsh feedback can feel powerful (and there is a ton of that kind of thing on the internet), unless it is anonymous, giving feedback actually makes you more vulnerable. Exposing what you really think makes you vulnerable to other people, it is like showing your cards so to speak. Even if you are not concerned about hurting someone's feelings, you may be concerned about revealing too much about yourself.

To take an extreme example, let's say you are a fascist, Nazi or a white-supremecist. Announcing your beliefs might make you some new friends or it could make you a pariah. Being open and honest about your thoughts is risky so most people play it safe and keep it to themselves. There are even proverbs about not being honest, such as "the nail that sticks up gets the hammer".

In the end, honesty is restricted to relationships in which both parties trust each other enough to handle it maturely.

workplace honesty

If honesty in your personal life is hard, its even worse in the workplace.

Let's say that someone was just fired or you got moved to a new org or you just heard details about the new product... Being honest and up front about how your really feel could help improve the situation or it could get you marginalized and removed. The savvy thing is often to keep quiet and let others decide which way to go. This is "decision by committee" and it stems from protecting yourself by hiding your true feelings.

Then there are people like myself who pursued scientific, engineering or mathematical careers. We often have a strong belief in "truth". These people are often more honest and blunt because its the truth, what else can you say?

Sadly philosophers have debated the very existence of a single or true truth for millennium. After all human beings filter reality through their own perceptions and brain so its easy to argue for truth but hard to prove it. When you are young, the TRUTH! always seems so obvious and unassailable but the older (and wiser) one gets, the more nuance appears and it gets harder to tell the truth from the could-be-truth. That may be your truth but its not mine...

So we focus on math or data or the code to tell the truth. All the other stuff (email, presentations, talk) are open to interpretation and mistakes. Unfortunately very few decisions can be reduced to math and even fewer company cultures really try.

political honesty

And then you have company politics.

In another life, I worked at a Silicon Valley startup during the dot-com craze. It was crazy on many levels.

At the time, lots of us read a website called fuckedCompany for candid, anonymous reports of the "truth". 'yes, we keep telling people that our company is about to take off but here is the truth of how fucked up our startup is...' It was entertaining, informative, and at times one really felt they were hearing the truth about how things were.

I have been thinking about this topic of honesty for several weeks but today I had a fuckedCompany moment while reading Mini-Microsoft.

Microsoft is a massive public corporation and like any large organization, it is very hard to get an honest answer about much of anything. It is hard to find out what happened (or is happening) and it is near impossible to find out why it happened.

Reading the anonymous posts on Mini, it just struck me that some of the posts (and only some) had the tone and content of real truth. The kind of truth that is never stated publicly by anyone at a company. The kind of truth one only gets from knowing the right person and being in their circle-of-trust. The kind of truth one finds within the vast quantities of chaff found in anonymous comments.

Were there layoffs? The company is not saying but you might find out on Mini. Who got fired and who really deserved to get fired? How is product/group X really doing? Again, the company isnt saying but you might find some honest answers on Mini. Mini has become Microsoft's very own FC.

All companies talk about honesty and often pride themselves on their corporate values but in practice it rarely happens. Just as for individuals, being honest is too risky. Someone might lose their job. Someone might get sued. Most serious issues are kept within a circle of trust (or a circle of delusion/cool-aid) and those on the outside are left to wonder and gossip.

In a work context, what most of us want to know is who is to blame, who made the decision. Unfortunately that kind of truth is often surprisingly difficult to determine even from people involved and when people are not trying to obfuscate what happened. Which is why other hierarchical institutions dont even try. The captain goes down with the ship because ultimately it doesnt matter who was to blame only that the ship was sinking and someone had to be responsible. Then again that kind of model might well be a fantasy; it certainly is not very common in corporations.

historical truth

What about history? If there is one place we can count on the truth, surely it is the historical record... Not so much. Even though we teach history as the truth, almost by definition none of us were there to experience it so we dont know. History has proven to be so false there is a saying: "history is written by the conquerers." At best history is an attempt to capture the truth of things that happened. At worst, it is an attempt to protect the guilty and cover up the truth about things that happened.

Possibly the only place one can find the honest truth is a TV mystery - because it is made up.

Yes, this started off as a simple post but when it comes to the topic of honesty and truth, there are a lot of things to consider. In the end, if you have some supportive, honest relationships in your life - cherish them. They are as rare as they are valuable.

There have been a number of articles recently about Microsoft and Apple. While both companies are well known brands, most comparisons miss the fact that they are completely different businesses.

This history of IBM, Microsoft, and Apple also tells the tale of the "personal" computer.

Once upon a time computers were room-size mainframes, all computers were used for business and THE business computer company was IBM. IBM was serious business.

In the 1980s tiny startups appeared trying to create “personal” computers, maybe even put a computer on every desk. This was heresy to Big Blue but IBM was powerless to stop it and eventually even they got in the act with the IBM PC. The world of computing profoundly changed.

Fast forward 30 years and everything has changed again.

IBM still makes mainframes computers but their visibility has been greatly diminished as business focus has moved from the back-office to the desktop. IBM eventually gave up on desktop computers altogether and re-invented itself as a "services" or consulting business.

Microsoft has changed too. It has replaced IBM as THE business computer company. Business computing has shifted from mainframes to desktops and Microsoft makes the OS and the productivity software that runs business globally. Once the champion of "personal computers", Microsoft’s focus has changed from the personal computer to “enterprise software”.

And then there is Apple. Apple was the David to IBM's Goliath in the 1980's, pushing hard for personal computers. For decades it quietly made desktop computers that felt more personal, the PC for the rest of us so to speak. In the 1990's, Apple tried to get into serious business and floundered badly. The company almost went out of business but its loyal following kept it alive churning out desktop computers. Then CEO Steve Jobs returned to the company and things started to change. A lot.

It wasn't obvious at the time but it is now. Apple has reinvented the idea of a "personal" computer by taking the idea to the next level. It is not about a computer in every desktop anymore; We have that.

The next stage of personal computing is a computer in every pocket or backpack. Apple has emerged as the company pushing this vision harder and more successfully than anyone else.

It is pretty amazing how much Apple has changed in the last 5-10 years. As proof, look at their income statements and you will see a desktop computer company that has reinvented itself as a portable computer company. Apple built a solid, extendable foundation with MacOS X on the desktop and then they expanded: first laptops, then iPods, then the iPhone and now the iPad.

Apple still makes a tidy profit with desktop computers and they sell more Macs then ever before but after less than 3 years, 40% of their revenue (40%!!) comes from the iPhone alone. Add in iPods and iPads and one can see the future. Apple is now a mobile computing company. With iPhones selling in Wal-Mart? You can expect that trend to continue.

This transformation is also why Apple’s stock price has taken off and Microsoft’s has cratered. Enterprise software is for business and every business has a copy (legal or otherwise) of some version of Office and Windows. Enterprise software is a mature business which is driven by upgrades not new customers.

Almost everyone that can afford a desktop computer already has one but how many people have a pocket computer? If every person buys a smartphone and every other person buys a tablet, Apple stands to make a lot of sales to brand new customers. These are growth businesses not mature businesses and Apple products have emerged as "affordable luxury" items in these markets. Apple's devices are aspirational in segments that represent enormous future sales opportunity. The stock prices reflect that.

While Apple, Microsoft and IBM are often compared and have a shared history, they are different creatures today. IBM was mainframes and became services. Microsoft was personal desktop PC's and became enterprise software on the desktop. Apple continues its journey as the "personal computer for the rest of us" as an emerging mobile computing company.

And the story continues. How will things look in another twenty years?

How many things would you purchase for $5?

It turns out that $5 is a magic price point for me and video games. Every week I check Steam for sales and if I am curious about the game, I can rationalize an impulse purchase. "$5? That is 2 cups of coffee. Sure..." (Of course I still buy the coffee so this is just an unnecessary personal expense but let me live the delusion.)

Apple has put tons of price pressure on software with their app store but Steam has recognized that weekend sale prices create all kind of demand from people that otherwise would not purchase the product.

Would I have paid $20 for an old game like Elder Scrolls 3: Morrowind? Heck no. But for $5, I am willing to get it just on the chance I might have the free time to try it. Even though that scenario is highly unlikely, I made the purchase.

Have I mentioned how much I love Steam?

Video games are like perishable foods. They make over 50% of their sales as pre-orders before release and then another 30% within the first month of release. After that they are "old", past their expiration date, moved off the mental shelf for the next pre-order/new release.

Sales on Steam is a great way to produce new sales revenue from old products whose development cost are already sunk costs. It is like DVD sales versus theater showings. With digital distribution, that means marginal revenue with almost no marginal cost. And I doubt that I am the only person that pays for a game he never even downloads which means there is zero marginal cost.

Steam sales - another smart business move that benefits gamers and game developers.

All software has bugs. If you think you are going to write a complicated program without any bugs, you are fooling yourself (or maybe you are lying to yourself). Space ships, medical devices, car accelerators, office applications. Some programs are worse than others but all software has bugs.

After a few releases, there are things that never worked right, things that broke recently and things that just dont make sense anymore. By the time you get to version five or six of your product, you only have one decision to make: Do you aim for perfection or stick with what you know? Given that you already have a list of known problems, do you try to do things the right way now or do you leave things well enough alone?

If you leave it alone, it will stay broken but at least you understand how it is broken and you have already lived with it that way.

If you try to do it the right way, you do so knowing it still wont be perfect (all software has bugs). If you forge ahead with changes, you dont know what those future problems will be so you are taking a risk but at least you tried to make things better. If you are going to have bugs anyway, why not at least try to do the right thing?

How you answer this question says a lot about you as a developer. How your team answers this question says a lot about your company culture.

One set of people want to manage risk. For them, the devil we know is clearly the safer decision because the other path is unknown. What if there are bugs? What if something goes wrong? How bad will it be? Much better to stick with what we know. Someday we can come back and do it right, but not now.

The other set of people want to pursue their vision. For them it is better to die trying than to live with the mediocrity they know. These people are motivated by a vision and the risks always seem small in comparison.

Most companies have both types of people and they are always at odds with each other because of how they feel about risks. Both types of people are intelligent and rational and both paths make sense. Part of the tension is that there is no right answer and once you choose one path you never know what could have happened if you had chosen the other path.

The only constant in this debate is that when it is all said and done, all software has bugs.

You remember those Visa commercials? The ones with the punchline "Priceless"?

Those commercials were designed to make you feel better about an industry that has been reviled as far back as the Bible (and rightly so), but they did have a good message.

Want to know what I think is priceless about living in the USA? The rule of law.

I regularly hear people, generally conservative folks, whine and complain about paying taxes and it just gets me mad. How ignorant! How selfish! Some people have no idea how good we have it here. I know it is natural to take something for granted until you lose it but still.

How can folks be so ungrateful for the quality of life we have here at a time when we pay all this attention on Iraq and Afghanistan? What do people think we are trying to do over there? We are trying to create the rule of law. Look how hard that is and then think about how much we take for granted here and shouldnt.

We have the big stuff here.

• I am 40 years old and I have never been in fear of my life from my government or my police.
• No one I know of has ever been visited in the middle of the night and "disappeared" by a policeman or government official.
• I dont see military grade weapons on the street or soldiers in the neighborhood and neither do my children.
• The only time military jets fly overhead is for Fleet Week and air shows and they never drop bombs.
• Bombings are almost unheard of.
• I have never had to shoot at anyone or known anyone that has been shot.
• I can walk around my neighborhood day or night without fear of being murdered or kidnapped.
• When I go to the office, I do not have to worry that my wife and daughter will be alive when I get home.

Those are the big things and they are priceless. They are also things that happen because of the rule of law.

In this country, we solve our disputes with lawyers. Life is not perfect but we do not solve our problems with an AK47 or explosives nor do we have to resort to bribes and kidnapping to make a living.

And we also have the little stuff.

• All homes have sanitation and most have sewers, running water, heat and 24/7 electricity.
• The roads are all passable and most have curbs and sidewalks.
• The streets arent littered with dead animals or trash.
• And if you have a problem, you can pick up the phone and get help.

Because we have the basic rule of law here, we can use our tax money to provide these other niceties of life which are also priceless.

The irony is that we get to sit around and complain about paying taxes simply because we have it so damn good. We are rich because there is almost no fear in our lives. We live with a level of luxury and peace that billions of people want for themselves. And we barely appreciate it.

Yesterday morning I woke up to the news that 4 police had been murdered.

Today I woke up to the news that the suspected shooter had been found and shot dead.

First off, I hoped that they got the right person.

Second, I asked myself why. Why would that guy have murdered these 4 policemen he did not even know?

And that seems to be the theme of recent news. Why? Why did he/they do it?

Israel wants to prosecute some 900 year old guy from Ohio for alleged crimes in a Nazi concentration camp during WW2. Why did we murder so many families in those camps?

Cambodia is prosecuting some guy there for similar war crimes by the Khymer Rouge. Why did Cambodians turn on each other and murder half their countrymen?

A while back, a 16 year old girl in Richmond, CA was brutally raped by a group of men outside her high school - and no one called the police or stopped it. This morning there was a radio story on Richmond, CA as a former resident asked how this had happened in his hometown. I actually lived and worked in Richmond for a time and when I first heard the story all I could think about is why this happened and what those men were thinking.

Why are human beings so inhuman to each other?

From acts of individual violence to systemic violence and genocide, why do we do it? I dont have any answers. I just find myself shaking my head and asking why.

This weekend tragedy hit the Seattle area. A person walked into a coffee shop early in the morning, took out a gun, and murdered 4 policemen.

As the local TV stations ran updates on the story all day long, I kept waiting for the usual response from the NRA and gun lovers. You know, the one where they assure us that guns save lives. The one where they say this tragedy would have been stopped if the victims had been armed with guns.

Well these victims were police and they were armed with guns. They even had bullet-proof vests on! It sounds like the shooter was wounded but that did not stop him from killing his intended victims.

No, we dont need more guns we need less. Guns increase killings they dont discourage them. Look at Iraq, Sudan, Afghanistan, Mexico and the USA.

This tragedy would not have happened if we were more concerned with safety and less concerned with making money by selling weapons. Maybe we cannot stop the movies and video games that glorify killing people with guns or the delusional folks that need a gun to feel important but we can stop the guns by making them illegal. There are no gun killings without gun factories.

If you want to keep single-shot hunting rifles and bird-shot shotgun ammunition, fine. Every other handgun, high-powered rifle, automatic weapon and ammunition should be banned and the factories strictly controlled. It is time to make our country and the rest of the world a safer place by ending the weapon industry. It is time to grow up and say that making money is less important than saving lives.

This year Ive been working on an idea, a big idea that I have been having trouble expressing. But here goes...

Animals have a life-cycle. Can a system like capitalism have a life-cycle too? Can it be young and naive in one nation but old and past its prime in another?

Think about MTV. I remember when it came out it. It was pretty rough. They played that horrible Buggle's video 24/7. Over time the music video matured and got more sophisticated. Then MTV realized that music videos just didnt keep one's attention so they completely changed their format to the present one, 24/7 reality shows.
MTV today is barely recognizable from its start in the 1980's which is true for just about any topic since WW2.
Think about a product or process. It starts off simple, gets increasingly sophisticated, often it changes so much it is unrecognizable today from 50 years ago or it is completely gone.

We call this progress and the guiding force behind this progress are the basic rules of capitalism. Make more money.

Cars, car manufacturing, steel, mining, banking, computers as well as systems like trade or banking. The Cold War with the Russians came and went in the last 50 years as did entire thought systems, the big ideas of communism and socialism.

The nature of human beings may not change much over the centuries but a human being does. We start out very simple, grow stronger, come into our prime and then start a long decline. What does an 80 year old think when looking back to when they were 30? Can you recognize an 80 year old from their photo at 10, 20 or 30? Are the changes welcome? Are they desirable?

The idea I have been struggling with is that our system of capitlaism is reaching 80 (in the USA) and the affects are not pleasant now and getting worse. Capitalism itself may not be sustainable in a way that is agreeable for Americans.

Put another way, for the past 50 years our system has been giving the business to other countries and we have been living better and better. Our system now is no longer naive and simple but rather sophisticated and mature. It is looking like the next 50 years will have the rest of the world giving us the business, particularly China. China is our child in this way. 50 years younger than us, looking to us for guidance but indepenent and ready to forge a new way whether or not we like it. (Ungrateful kids!)

For the past 20 years, our natural progression has been away from the manufacturing industries that built our wealth and onto the next step, banking. Banking and investing have been our only source of economic growth since the Clinton administration -- and it just blew up.

Can we rebuild and maintain our finance empire? Can this financial empire stage actually support us? All of us? Sure Buffett and Madoff made a lot of money but most people havent seen a raise in years and now unemployment (and underemployment) are at the highest levels since the great depression.

The capitalist system we have created and fostered (much like children) doesnt owe us anything and we dont control it. With the globalism we pushed to make ourselves wealthier, it is now a force by itself well beyond our control or even the control of national governments. Everone everywhere recognized the desire to make a buck and financial systems are changing much faster than government systems.

So now what?

The stock market is ballooning again less than a year after our "crash" but why? I think the stock market (the industry of money) is greatly separated from the realm of jobs and families, ie real people.

I question whether the jobs will ever come back to the USA. It is more likely that there will never be as many jobs as before. In part that is because of technology which lets fewer people do more with less. (For a perfect example, look at farmers.) There are too many people, and not enough jobs that need to be done. (There are also jobs that lack trained people.)

We will continue to have the highly paid high-tech and banking jobs but all other jobs will go away or not pay enough to support a family.

Think about your experiences at retail and fast food and support on the telephone. Are you getting knowledgable, helpful, happy people because I am sure not. I get indifferent, often miserable folks - they dont love their job, they know they dont make enough now and they know that they never will in that job. The hope of a brighter future is missing and sometimes so is the English as even these jobs have been moved out of our country.

Not quite the Road but not a very cheerful outlook for my daughter.

I dont see any curbs on capitalism and as a result I see a very different future for our country. When I was a kid in Michigan, the morons who dropped out of high school could get a job making cars for Detroit and make enough money to afford a summer house with a boat on the Great Lakes. Not anymore.

Im expecting more people, fewer jobs, and less prosperity overall in the US. The retirement of the baby boomers is going to be painful. Crushingly painful as they find out what it means to not have saved for retirement (but to still have a mortgage for a McMansion).

All that whether or not we have significant climate change.

This morning I heard a thought-provoking review of the new movie, Welcome.

We dont talk about it but the truth is that there is a war going on. A war against the poor.

On one side you have us, people with something. On the other side, you have the poor, people with nothing except the drive to fight for something.

In the USA, the poor are Latin's from Mexico and Central America. In Europe, the poor are Africans largely from Morocco. Almost every country has an ethnic minority living in poverty, doing the crappy jobs, and being vilified by the populace.

Walls, laws, dogs, police, brutality, propaganda. It's not a shooting war yet but it is a war which is made all the worse because we dont acknowledge it. We tell ourselves we are just following the law.

But are the laws just? Should I get an all-you-can-eat meal at Olive Garden while the people that built the restaurant and work in the restaurant illegally are told to go hungry? While their family back home is told to starve?

Maybe it seems like a stretch now but the naked truth is going to get more and more obvious. At some point we will have a shooting war. There are too many peopel competing for the save basic resources: food and water and comfort.

All the while, we in the US piddle around about abortion. Abortion, abortion, its so terrible!! Clearly what America needs is more poor children with bad or no parents! Give me a break. This is not an easy question. This is a tough decision between two evils.

We live in a tiny bubble of prosperity surrounded by a sea of poverty and despair. A few hundred million people in Western prosperity surrounded by a sea of billions of the unwashed, unfed, uneducated. If you care so much about the un-born, please adopt someone who is born, one of the millions of orphans living in poverty right now. How much of your money, of your comfort, are you ready to give to the un-born?

Some argue that we need more babies to maintain our standard of living but what they mean is that we need more tax-paying babies with good jobs. The sad irony is that technology allows us to do more with less. We may need more tax payers but we have fewer jobs and the jobs we have require more and more technical education. The un-born, unwanted are not going to help this problem; they are going to add to the problem.

There will always be a need for some manual, unskilled workers but we need fewer every year and the standard of living they can earn shrinks every year. Work hard, for peanuts - something that only sounds appealing to most ambitious of the very poor. The very people we are trying to keep out.

I hate to be an annoying moralist here but the sad truth is that we, you and I, have a hand in this. Just like global warming, you can think that this is someone else's problem but our comfort comes at a cost to other human beings. People we either ignore or think of as less than human. It is not a new pattern but it has never been such a global one.

As a kid, my parents told me that life is not fair. I never accepted that lesson.

I often think about Aesop’s fables such as the ‘Ant and the Grasshopper’. What that fable tells me is that humans have struggled with the idea of people getting what they deserve for as long as there have been humans.

Sure, nature isn’t fair. Storms and earthquakes are something we have to accept and endure. But, if “life” is not fair, that simply means that people are not fair. We decide whether life is fair and just or not.

So it is my childish and unwavering sense of fairness and justice that has me so freaking mad about the last 8 years and especially about the economic crisis we find ourselves in.

Two things: punishment and acceptance

We ought to punish those that can clearly be assigned blame, and possibly a few on the border.

Heavy, overbearing punishment was a favorite theme of the Bush administration. I see no reason to end it now. In fact, I might even be fine with 24-style Jack Baer torture as long as it confines itself to the right wealthy, Caucasian victims…

The people that created this crisis directly should be punished.

As we take over banks and investment companies, the first thing we should do is fire the top immediately. The executives, the board of directors, and any managers that were clearly involved. Escort them to the door and let them know criminal charges are pending. Appoint a board of trustees to hire new management and throw the bums we know out. Keeping them on is like hiring the town arsonist to run the fire department.

People accused of massive financial fraud should be treated the same way we treat inner city kids for drug possession and gang crimes. Hint: hold their ass in jail and not “house arrest” in their own mansions. If being accused caries the presumption of guilt for the poor, I see no reason why it should not extend to the members of the 38% tax bracket.

If I saw clear evidence that the guilty were getting punished, that they were suffering, it would make it easier for the second part of all this, acceptance.

The truth is, we are all in it together. What burns the hottest is that people who consciously stayed out of trouble have to suffer along with those that actively courted trouble. That is true for global warming, war, or economic problems.

At some level, we do need to accept that people are not fair and move on. If we don’t, we will end up like Israel and Palestine, in a perpetual cycle of blame and grief.

But I am not there yet. I am not ready to accept the people who brought this mess upon us as our saviors. And I don’t think I am alone.

I have been looking at evidence of crisis building and thinking about the things we are doing about it. What I see is a lot of half-steps and half-measures.

Which pretty much jibes with my own experiences. What does it take for someone to make a decisive action?

Nowhere in Africa
A few years ago I saw a movie that really stuck with me. It was a bout a Jewish family in Germany during the 1930's.

The Nazi party was gaining popularity and war was in the air. Things looks grim but people kept saying it would blow over. Hitler would get voted out of office. Honest people wouldn't let him get too powerful.

One guy was convinced that things would get much worse. His friends and family told him he was crazy, he was worrying too much.

But he took his wife and daughter to Africa. To the middle of freaking no where. He took a crazy risk. He made a decisive change. And he saved their lives by doing so.

Dotcom crash
Fast forward to the dotcom crash and 2001. I was living alone in a 2 bedroom condo in San Francisco. I had a huge mortgage and no job.

Decisive action would have been (a) get a roommate, (b) move into a cheap apartment and rent out my condo, (c) move out of SF.

But I did not do any of those things. I did a half-measure. I did nothing. I charged up credit cards to pay my bills and I just hoped the whole thing would blow over.

It took me a year to find a job and the job forced me to move out of SF anyway. I eventually did a decisive act but only because someone else forced me and only after I had a huge amount of debt. As I spent the next few years, paying off that debt, I kept wishing I had been stronger when it would have counted.

I often think about these two experiences. They apply not just to my own life to but those around me.

A bad marriage but not willing to divorce. An expensive home but not willing to downsize or live in an apartment. A bad job but not willing to quit. Out of work but not willing to move.

Our lives are filled with decisions, with opportunities to be decisive or to take a half-step.

Decisive moves are hard. They usually go against what we want, against what our friends tell us to do, and they usually have unpredictable results. They require personal strength and a leap of faith.

Which surely explains why so few of us make them. We stick to the half-steps and half-measures. We stick with what we know even if its bad for us or makes us unhappy.

And it is not just individuals. When I look at our national financial crises or the many company bankruptcies, I see the same patterns. Take a leap with a decisive action or waste time with a half-step. Japan is now famous for a decade of half-steps. Maybe we will be next.

I have tremendous respect for people that are willing to take decisive actions in their own lives. I wish I was crazy enough to do it more often. Fortune rewards the bold.

Now its real.

Signs of economic deterioration have been with us for a while. First housing prices started to drop. Then we had a "subprime" crisis for banks, followed by the collapse of the investment banks and the emergency TARP bill. For Thanksgiving the topic du jour was the retail sector and then we started to marvel at the amazingly high unemployment numbers.

By January 2009, the daily paper was a list of articles on companies with shrinking revenue, rising losses and layoffs. The news has been impossible to ignore but as things often are here in Seattle, they seemed far off.

Until yesterday.

On Thursday January 22, 2009, Microsoft did its first every "mass" layoffs. The rumors had been going strong since December but now it is official.

For people living elsewhere, you probably think, "what's the big deal? Companies do layoffs all the time." But not here.

As a transplant, whenever I complained about the unsustainably high price of housing in this area, I was told time and again that prices were high because Microsoft jobs pay so well and they never do layoffs.

So much for that twisted logic. Yesterday Seattle rejoined the nation. Following the bankruptcy of WAMU, the Microsoft announcement makes the sinking economy undeniable even here in the forest.

Even though I was expecting the announcement (since last week), yesterday was a hard day. I did not lose my job but it was very emotional for me nonetheless. I've been laid off before and I guess I still have a lot of strong feelings about the experience, which was probably the lowest point in my life.

Its one thing to read about layoffs, another thing to work at a company doing layoffs and another level altogether to get laid off yourself.

Although I did not lose my job, people I know and like did. Their absence will have a very real affect on my job moving forward. They will be missed and the rest of us will be changed.

I hear that Microsoft was originally going to cut much more than the 5% it actually did but 5% is bad enough. The emotional impact is going to be much larger than the actual numbers.

The word "never" is gone for good and Balmer clearly said that layoffs would continue for 18 months so now even the survivors know they arent safe. The company also froze raises for the year so the topic is sure to linger for months. Ugh.

It is pretty clear that the global economy is going to struggle for the foreseeable future too. Job problems and money fears are going to grow and linger for everyone. 2009 is going to be a hard year. For a lot of people, it may be their first hard year ever.

This may be the the first people of job losses for some people, but job losses arent the only story. While the news will continue to focus on the losses (and the occasional plane crash), companies will continue to hire some people. That will give some people hope even as it will strange for others.

On the day we got email about the job losses we also got an email from a college grad showing up for his first week of work. Wha? Microsoft is firing people out one door and hiring new ones through another. There is a logical argument for this but the emotional experience is a difficult one.

But difficult or not, that is just the way it is going to be. We are adults and we have to face realities. Businesses exist to make money. They are influenced by politics and circumstance. Our task is to make our way as best we can in that system.

My heart goes out to all those people facing hard times, especially those that did not bring it on themselves with poor decisions. Let's all pray for better days.

I suspect most people look at their world and see things that bother them. They see problems. They see things they want to change.

And they feel that things never change.

The idea that things never change however is an illusion. Our environment is changing constantly. Think back to your childhood and start making a list of things that are different. Then take that list and multiply it by an order of magnitude if not more because we really dont notice most of the changes going on.

You could also argue that things change but not for the good. Things change but they dont improve. Schools get worse every year, roads and bridges do too, etc.

Changing things for the good takes a lot of effort. Nature degrades things over time and it takes a lot of energy, creation-energy, to build new things, fix old things, and generally improve stuff. ("Good" is also subjective.)

To change things for the good on a national level, it takes a catalyst. Something big.

9/11 changed things in a big way as did the Bush administration's efforts to undermine government regulation and oversight. In less than 8 years, they have made a tremendous amount of change in our country and the world. Cheney seems proud of their accomplishments.

Im getting the sense that we may be entering a historic period of constructive change. It may not happen but everywhere I look I see problems that are reaching the point where something must be done.

Case in point: water.

One of the reasons we moved to Seattle and not San Diego five years ago was my concern about water. I didnt want to commit to a 30-year mortgage in a place that might be uninhabitable in 10 years.

In just the past 24 hours, Ive heard two people talking about water problems in California this year.

Yesterday I heard a food policy expert talking about how scarce water is and how our national farming policy completely wastes it in order to continue our fast-food economy. We grow dairy cows in the desert and put tons of water towards growing alfalfa to feed cows. We waste water as if it is unlimited.

For years I have heard that our farming industry is not sustainable because of water. It took millions of years to create the massive aquifer under most of the West but modern farming practices will have drained it within a century. The Colorado river is not a trickle and Mexico gets hardly any water from us anymore. It is not a new issue but it has been ignored by the public, until...

Now California is in a multi-year drought and cities are planning to ration again. A WSJ article on Wednesday raised the issue and the idea that the state has to act this year. Less rain, less snow, more fires, not enough water for food and people.

Something will have to change. Rationing, higher prices, policy changes. Its a big deal unless the Earth goes back to bountiful water in Cali soon. (Dont hold your breath.)

Changing water policy (and food policy) is the right way to go but its huge. Someone will lose money and that creates a lot of resistance in state and national capitols.

But when events like 9/11 happen, things change dramatically and people accept it. Let's hope we are entering a period of dramatic, positive change. Lets hope our leaders can create lasting change that we can all be proud of.

When I agreed to have kids, I knew my life would change in unpredictable ways. I knew I would learn things. And I was correct.

First off, I didnt expect to get so much pleasure from being a parent. I am not one of this "kid guys" who cant think of anything more fun than a room full of 5-year olds. In fact, I dont even like children very much but just thinking about my daughter makes me smile, makes me feel good. I certainly dont love every minute of it but it is a source of satisfaction that I never had before and did not know existed. It is both simple and powerful in the way biological things usually are.

I always thought I would have a kid, there was just never a time I thought it would be now. And then it happened and I found I had a lot of feelings I wasnt expecting. It turns out that thinking about being a parent, thinking about having a child is totally different from actually having one. I thought it would be cool to be a father but I didnt realize it would feel great to be a father.

It is this aspect of parenthood that does not translate to couples who are deciding whether to have kids. It is an idiom. Before you do it, you just dont know and you cant understand. After you do it, it just makes sense in ways you cannot explain or argue. It opens a part of you that you didnt know you had.

Which isn't to say that everyone should have children. The people with the most kids are often the ones least qualified to be good parental units. But Idiocracy was correct in pointing out that the best and brightest often rationalize not having children because the theoretical sacrifice of children seems greater than the reward. A mistake of over-thinking and under-experiencing.

The second thing I didnt expect was understanding my own parents more. Being a parent is just different from being a child. I might even argue that you never stop being a child until you have one. Completing the circle has given me a lot more compassion and understanding of my own parents. I expect that to only strengthen as time goes on and my own children turn into uncontrollable monsters that hate me for being unfair.

I cant wait.

The news, video games, TV, movies, sci-fi -- I feel besieged by images of impending doom. At every turn, our collective unconscious seems convinced that the world we know is ending soon and in a bad way.

Science fiction has always predicted a grim future but the amount of gloom has really started to bother me. I say the hell with that.

I reject the doom and gloom and am now consciously looking for ways to make the future better than that.

Now that I am a parent, I think about the future in a different way. My child is the most important thing in my life and I want her to have a nice future. I dont want her wandering the Capitol Wasteland. Maybe she will never eat tuna sushi but I want more for her than post-apocolyptia.

For years, Gene Roddenbery of Star Trek was a voice of hope. He was one of the few futurists predicting that humans could overcome and build a better not a worse future. We need more of that. We need any of that.

I am still not a fan of Obama but every once in a while I think about him and about the idea of significant change.

Forget Bush and the military-oil-industrial complex of the past. Let's invest in fiber optics, clean energy, education in a BIG way. Let's quick bickering over $100 for education while we spend $1 Billion dollars on stealth bombers.

Yes, every once in a while I think about what we could build if we really tried. It is an odd, exciting, heart-moving feeling of hope. We could do amazing things if we wanted to.

Sadly, I am unconvinced that "we" do want to. The human mob, ie the voting public, doesn't seem to have grown any wiser since the days of Caesar. We want entertainment, diversion, and promises of money for nothing. And the subprime fiasco has proven than our educated leaders aren't any better.

It takes much more energy to build something than it takes to criticize it or to break it. As a parent, Im trying to keep hope alive but as a citizen I am still doubtful America will lead the way. We might act in a big way but probably not until things are much, much worse.

As a species, we tend to cling to the past, to our auto worker jobs or our small towns. Its only the mavericks and outliers and weirdos that leave the safety of what we know away for an unpredictable future. Now that the World is flat, its hard to physically move somewhere to start over. The world is large but the capital system of strip malls and franchises has permiated most of the planet.

Lets be honest. Changing the path the world is on will be a huge amount of work. We facing massive challenges.

Our patterns of consumption and our system of pursuing individual wealth are not sustainable. Money is infinite because it is just made up but there are very real limits on raw materials, clean water and food. And there are a LOT of people in the world with more every day, most of which live in abject poverty with no hope of that changing.

Global warming is a reality and the consequence will be massive and probably brutal. Even minor changes in rainfall and weather could have titanic changes on food production.

In terms of economics, we have sent our manufacturing base to China and built a global system where baby milk or vitamins in Ohio comes from a factory half way around the world. It looks like entire countries in Africa are built from old plastic bottles and refuse from the West. If anythign happens to cheap transportation or trade, we are in trouble. We made money in the transition and followed the rules of capitalism but we are now more dependent and less self-sufficient than a generation ago.

These are huge issues, much bigger than anything Obama has talked about. Working within our system, he will be lucky just to create modest health care reform. Radical health care reform, like giving every citizen access to health care, seems impossible.

But we have to try.

2008 was a bellwether year for American capitalism. The biggest setback in a century and the aftermath of our greed and stupidity is still unfolding. After talking about the amazing number of new billionaires created by the boom we are now talking about the number of millionaires that have lost it all.

Maybe the crash will be enough for us to change our ways. To save more, to invest in the future, to think about our legacy.

I am still doubtful but I sincerely hope so. For our children's sake. I just wish I had a better idea of what normal people like us should be doing.

Every few years, we get snow in Seattle. Generally speaking, snow in Seattle is a disaster.

We get snow so rarely that there is no infrastructure for it. No snow plows or salt/sand trucks. People are bad drivers in the rain so you can imagine what they are like in snow and ice. Worse, this areas is extremely hilly and wooded so adding ice makes many areas inaccesible.

This kind of weather makes me want to hunker down and hide in our home bunker until clear skies reappear. Now that we have a child, I worry more so today I left the safety of home and braved the streets to get supplies.

First I planned my route mentally so that I avoided as many hills as possible. Then I set out, drove around, got things done, and came home. There was a little sliding but I made it just fine.

The problem is that I was terrified the whole time. White knuckled, rigid muscles, heart in the throat terrified. So much so that I had to laugh at myself and I got to thinking.

the special forces mindset

Years ago I knew a guy who had been in the Special Forces. I was kind of surprised when I heard that because he didnt seem all that special or bright but he was memorable.

He wanted to learn to snow board. Instead of taking a lesson like a normal person would do, he rented a board and climbed on the ski lift. He literally knocked himself unconscious coming down the mountain but he taught himself how to board.

As I got to know him, it struck me that he just didnt worry about physical harm. If he wanted to do something, he did it. He was indifferent to getting hurt and he had no doubts that he could achieve his goals.

spelunking builds confidence

When I lived in Kentucky, my office took a trip to Mammoth Caves. But we didnt go on the tourist, wheelchair accessible tour most people take. A friend of mine signed us up for a "private" cave tour. Wearing old clothes, a hard hat and a miners head lamp, we crawled through increasingly smaller caves for an entire day.

But the memorable part came for me towards the end of the day. I was really tired and we came to an impasse. We asked our guide, "Where do we go now?" and he pointed to an impossibly small hole in the wall that no one had noticed. (Did I mention how small it was?)

Well I was too tired to complain so I got down and crawled through the hole into a huge tunnel. (Turns out there was an another way through for people that freaked out or were too large to fit.) Like worms we crawled out of nowhere into the path of the normal tour and that is when it hit me.

You can be trained to do the impossible. You can be trained to ignore the voice in your head that is screaming "no fooking way you can do that!" and just do it. After you do the impossible enough times, you probably dont even think about that voice anymore. You see life in a different way. "Charge up that heavily fortified hill and kill those Japanese soldiers with my bare hands? No problem. Have lunch ready when we get back."

That cave trip was my Special Forces moment. The one time in my life where I did the impossible without a second thought and it wasnt until later that I realized what I had actually done. It was a brief moment but I never forgot it or the lesson about achievement.

bad weather, big deal

The truth is, I have driven in a LOT of bad weather. I grew up in Michigan and we never thought twice about the roads or snow or ice. In college, I drove around in a 2WD pickup truck with a few bags of sand in the back for traction.

I drove my grandmother 300 miles through a blizzard one Christmas. I drove with my mom from Texas to Michigan through a terrible ice storm. I drove a moving truck through the Great Plains in a terrible storm that closed the freeways and left dozens of big rigs stranded, covered in ice -- and I wasnt just in a moving truck, I was towing by old pickup! In my current 2WD Toyota I have driven through mountain roads and crossed a police barricade that was turning away any vehicles that werent 4WD.

I have driven through a LOT of bad weather and yet I have never had an accident nor have I ever been stuck. Admittedly I had two close calls in my truck on ice but no history of serious problems. Even so, it still terrifies me to drive in bad weather.

I bring this up because it helps me recognize how much I think about what could go wrong and how little I credit the fact that nothing ever has. Admittedly there is a line between confident and foolish. It is also clear to me that you get more careful as you get older, probably because you see more of what could go wrong and your realize what you have to lose. I guess another word for that is wisdom.

But I want my children to be Yoda-esque "can do!" special forces types who are aware of the risks but get things done nonetheless. People who get out of the house and do things when others are stuck at home worrying about what could go wrong. I am confident one can learn this mindset, Im just not sure how to teach it.

I like to think that I have grown wise as I have grown older. I definitely know a lot more stuff than I did twenty years ago.

But every once in a while, I have a moment of clarity and I realize that I basically behave the exact same way I did in high school or even earlier. So I have gained knowledge but I react with the same patterns and habits that I formed as a kid.

It is a sobering and not altogether pleasant realization. (Good thing I tend to forget about it for months at a time :) And maybe knowing more stuff is an illusion too. I found some of my notebooks from college and was astonished that I once understood any of them.

We all probably have friends that refuse to change. Their bad behaviors are obvious to us and they often persist for years and years. Often they are aware of their issues, maybe they even complain about them, but even when things are pointed out to them, they dont change.

Seeing this stuff in others makes for good gossip. Seeing it in oneself, not so much.

Makes me think about how important it is to get things right as a child. It seems that once we learn a behavior, it is very, very hard for us to change it. More often, we learn not to see it at all.

That puts even more pressure on parents and I suspect we learn a lot of behavior REALLY early, long before parents think about it.

Being able to reprogram oneself, to truly learn and adapt, seems so hard I wonder how many people really can do it.

As I was catching up on the newspapers this weekend, I had my first smile in a long time. After years of watching the Bush administration ruin our country, I got my first glimmer that positive changes are happening and more might be possible.

the final days of Bush

Before the smiles though, there are a few frowns. News of Bush's actions in his final days continues to roll out. In the past week he is slipping in more changes to let companies ruin the environment for their own profits and it came out that his administration halted investigations on environmental crimes like the BP oil spill in Alaska.

Historians will take years to tabulate all the damage Bush has done to our nation and our planet. Its too bad half the country continues to pretend that they didnt cause this by voting for him - twice.

climate change going mainstream

The economy is bad but the biggest problem facing humanity is climate change. Bush actively courted those that want to disbelieve. Global warming is a myth. Global warming is natural. Global warming will create beach resorts in Canada...

Well I hear that the Today Show is now showing the very visible signs of global warming around the world. No snow on Mt Kilimanjaro? A massive drought in Australia that is wiping out livestock? It isnt just about polar bears or penguins. I fully expect global climate change to kill billions of people within 20 years but if it is on the Today Show, that means the topic is going mainstream. Which means we might actually do something if we get leadership.

come back when you are serious, Detroit

The other bright spot is watching the auto industry get rebuffed. It is hard to watch banks, who created the current financial crisis, get bailed out with tax payer dollars but I definitely didn't want to see Detroit do the same. For decades American car companies have resisted change, continued to build gas-guzzlers that damage the environment and even fight any efforts to mandate better fuel efficiency or cleaner air. And the Democrats have supported them time and again because Democrat = labor unions.

Last week, Congress did not approve a bailout for the Big 3. Instead they complained that CEO's flew there in a private jet, acting like they were too big to fail and deserved a handout. Congress actually demanded that Detroit eat a little crow and come back with a real plan for change. I dont expect Detroit to change but I was shocked to see Congress have some semblance of a spine.

Even better, Rep John Dingell got fired. The auto industry and Ron Dingell have been instrumental in keeping our country from facing global warming. Hybrid cars and cleaner air may be good for the planet but they are bad for profits so these two have fought them.

In the same week, the CEO's got rejected and Dingell was replaced by Rep Henry Waxman - an unprecedented move in Congress. This is no guarantee of anything but it is a very visible sign that the Democrats are making changes. Maybe the next 4 years wont get bogged down in the same-old-same-old Democratic nonsense.

less Byrd

Update #1

I almost forgot that Mr Earmark himself, Sen Byrd, also left his comfy roost in the Senate. The 90-year old stepped down to be replaced by 84-year old Sen Inouye from Hawaii. Unlike Ted Steven, who finally left after losing an election and being convicted for being an old, greedy dumbass, Byrd's move was "voluntary" and perhaps a sign that Democrats are cleaning their own house a bit.

So it is encouraging to see the "youth" movement making changes and replacing people who were born during the great depression with folks born after.

the Obama Hangover

On a less practical but more personal note, I also got a smile from watching Obama do 180's on his campaign rhetoric.

Hillary Clinton was the one who argued that it takes experience to accomplish change in government. The Clintons learned in 1992 that ideas and youth were not enough but a new generation didnt want to hear that. The progressive movement that backed Obama wanted nothing to do with the Clinton's and Hillary lost the primary.

First Obama nominated Biden as a running mate - hardly a symbol of youth or change. And now he has appointed a cadre of Clinton administration folks AND Hillary Clinton to his cabinet. Ouch.

I dont think I ever wrote about it but several months ago I predicted an Obama Hangover. The Hangover will come when he fails to be the candidate he promised to be in the primaries. Just like Bill Clinton did.

The reality of ruling is much harder than making campaign promises. More importantly you can tell everyone what they want to hear but in the end, you can only deliver one path. Someone is going to be disappointed.

Which is all fine with me as long as I am not the one disappointed and I am most encouraged to see Obama appoint experienced people. His cabinet appears to be an all-star team of folks and that is just what we need after 8 years of complete incompetence. I will enjoy hearing the progressives complain about a bait & switch but I am also more hopeful than ever that good things may happen at a time when we really need a few good things to happen.

justice (not just convictions) served

update #2

I forgot about another sign of goodness that made me smile. The WSJ had a cover story about Craig Watkins, the DA in Dallas, TX.

It seems Mr Watkins had few political ties yet still won his office in 2006, after the Latino community discovered that the Dallas police had planted drug evidence on dozens of Mexican immigrants. Oops. It seems that police corruption is alive and well and not just found in movies about the past.

Not only was Watkins not hand-picked by the establishment, he went on to use DNA evidence to re-examine 400 previous convictions. Guess what happened? They started to find men in prison for crimes they did not do, including a guy on death row for 27 years. 27 years!

I have long been a supporter of the Innocence Project, so I was thrilled to see a DA work with them to make certain that the people we throw in jail are actually guilty. The death penalty is murder not justice if it is applied on an innocent man.

Similarly, I was shocked and pleased to hear that 400 detainees in Guantanamo, the biggest single blemish on the American justice system, have been freed. Pleased that they were freed but shocked that there were so many people there in the first place. Now that everyone who matters agrees that we need to close the prison, the discussion to can move on to what we do to/for those people that were imprisoned (and possibly tortured) unjustly.

I have been thinking about a number of things recently but haven't had the time to write. 2008 has turned into a historic year on many levels.

Needs and Wants

One topic that has been on my mind again is the difference between needs and wants.

This issue is almost a constant in our household. Based on the economic news, I am thinking it will be a big topic for others too.

The number of things you can spend your money on is almost infinite. Even when you pick an object, like a watch, the amount you can spend varies greatly. You could buy a $5 digital watch, or a $50 running watch or perhaps the very simple-looking $5,000 Swiss watch I picked out last week - before I knew the price.

Our culture is obsessed with stuff and being a product of our culture, I regularly struggle with decisions about stuff. What do I want? What can I afford? These two questions invariably lead to the real question: What do I need?

A new era of frugality

My sense is that for years, many fellow citizens have started with the first question and skipped the other two. We have been consuming far beyond our ability to pay and we have filled our lives with things we really dont need anyway.

Now that period may actually be coming to an end. For a long time if not forever.

Of course I have been banging this drum for years but current events indicate that on a national scale, we may finally be facing the fact that borrowed money cannot take us any further. Eventually the capacity to afford things impacts our purchase decisions and we focus on what we truly need.

I dont think many Americans have suddenly bought Quicken and done an actual analysis of their spending but companies are doing it for them. Credit is drying up. Banks are failing. Everyone, consumers and businesses alike, are looking at their spending and their "wealth" and feeling poorer. It looks like the macro economy is forcing us to face the prospect of a painful financial diet.

we already have what we need

I was surprised to realize that both of my personal computers are now two years old. As a gamer and a professional computer user, that is the longest period I have ever gone without an upgrade.

My desire to upgrade was dormant but kicked into high gear recently. So I have been shopping and researching. Turns out a LOT of stuff has changed in the past 2 years and there are an abundance of neat new computer toys available.

But every time I put items in my shopping cart and look at our budget, I reluctantly face reality: my 2 year old computers are still just fine. They do just about everything I need them to do even if they arent as flashy as a new PC would be. In other words, my needs are already met even if my wants are falling short. So I click cancel instead of purchase and try to think about other things.

Resisting a purchase is good for our household finances even if it is bad for the national economy. I suspect there are a lot of folks out there like me who are going to forgo an upgrade because they really dont need it.

I have already written that the power of computers has surpassed the needs of consumers. Now I am looking at Apple, and Dell and Intel and wondering if we are going to see that have any impact in this new economic environment. There are billions of people that do not have a computer but the ones that do have one are the most likely to upgrade to a new one. Unfortunately, they are also the most likely to already have what they need.

The exact same situation exists for cars. I bought my car in 1996. It is not flashy or luxurious but it is totally reliable and will probably drive just fine for another 100k miles. Anyone that bought a car in the past 5 years is in the same boat. Detroit is in bad shape but we just dont need those new cars very much.

I suspect the same thing can be said for just about any consumer good. We have been buying new stuff and throwing out our perfectly good stuff for some time. We have been buying for fashion and style not for needs.

2009

I think the stock market is down about 40% from its peak, today the Federal government announced another bank intervention with Citigroup and Christmas is just around the corner. I am not expecting a big rally for corporate profits because our needs dont justify it and our wants cant afford it.

Finally, the election is over.

Run for the hills Bush, they’re commin’ for you. And don’t think you can hide in a cave, cause they’re gonna’ smoke you out.

Speaking of smoke, if you see any on the horizon it is bound to be Cheney in his undisclosed location burning any documents of the last 8 years he can find.

All joking aside, the Bush/Cheney reign of terror is almost over. On the one hand, I am relieved. On the other, I am disappointed that it took this long. Doubly disappointed that the country wanted to impeach Clinton for lying about sex but didn’t touch Bush for starting 2 wars, lying to us about WMD’s, Katrina, $11T in debt, etc.

Speeches

I was impressed and touched by McCain’s speech. He is not perfect but I always like the Good McCain even as I disliked the Evil McCain that appeared after he lost in 2000. His choice of words was archaic which caught my attention. He was extremely gracious about Obama and talked a lot about supporting him because it was good for the country. He praised Obama’s achievement of being the first black President. He gave thanks for being allowed to run and for the blessings of his life. Im not sure I’ve heard any politician be so thankful for his life, especially one that just lost an election. Commentators said it was the old McCain talking. He seemed very presidential.

In contrast, Obama’s speech was a letdown. While McCain seemed almost happy to have lost, Obama seemed somber and flat. He had the rockstar crowd there but his actual speech didn’t do much for me and I have been trying to figure out why.

Much of the speech seemed to be paraphrased Martin Luther King and that bothered me. I was never and Obama fan but I voted for him because voting for the Republican party after the past 8 years would be criminal. I think Obama’s speech troubled me because it had too many messages. He tried to blend the racial achievement and the “fix the mess that Bush wrought” agenda and the combination didn’t do much for me.

Did he win because he is black? Many people assured me that Obama wasn’t where he is because he is black; Jeraldine Ferraro lost her job for saying he was. The crowd photos last night and the media rhetoric that has followed were clearly about him being black. The first black President. On the one hand that is a great accomplishment and I can understand why African Americans are proud and emotional about it. But Im not black and the First Black President feels like a private achievement for the black community.

I didn’t vote for him because of his race. I don’t want to talk about race because race is not our most pressing problem. I don’t want to see too many racial victory laps because it implies that is why people voted for him. In a way, it also seems too personal; a private matter for one of our nation’s many minorities. Obama himself tried hard to avoid talking about race during the election and he was never a civil rights leader. Obama is an ideal person to talk about race but it brings up too many messy issues so they avoided it in the campaign just as I have avoided writing about it.

I think it is very sad that so many people in our country still hate their fellow citizens because of their race. I think it is shameful that people could listen to Colin Powell’s speech and discount it with the excuse that he only voted for Obama because he is black. Americans are way too hung up on issues of race (and sex) but I am fearful that issues of race will only complicate the next 4 years and take time away from larger problems that don’t reflect our skin color.

I voted for Obama because I am eager to see someone in our government get back to responsible stewardship of our country. I hope we move on to that quickly.

49/51

Obama won but it continues to trouble me that the nation is still so divided.

This was the election of “anybody but Bush”. Democrats AND Republicans ran on that same platform.

McCain was a maverick for decades before he tried to ingratiate himself with the new Republican base for the past 8 years. He was also so weak he barely made to the nomination. But as the country disintegrated, even the Republican party recognized they needed someone who wasn’t Bush and McCain’s stock rose. But McCain was always a weak candidate. As a Maverick he was never the heart of the party; always an outsider. He was never strong enough to take his party by the neck and shake it into something new. But even limping to the finish line, he might have won if the economy hadn’t melted down just before the election. Even as a twisted form of his former maverick self, he got half the public vote.

Political pundits are praising the accomplishment of Obama that he got 50% of the popular vote. To me that only means that more than half the country didn’t vote for him. It’s hard for me to see that as a mandate.

It astonishes me that the Republican party still exists after the last 8 years but they are still getting almost half the vote. The wars, the unwinding of government agencies, the financial meltdown, the $11T debt – Republicans don’t see themselves as having done anything wrong. Last week Newt Gingrinch said “We don’t have a free market if its only free market on the way up and socialism on the way down. What did these executives get millions of dollars in pay for it their companies need a tax-payer bailout?” and yet half the country is still voting Republican.

The election is finally over but we still seem very divided. A lot of people voted for "change" but it was never clear to me what exactly that change was. I feel fairly confident that we all wanted a different type of change and those differences will soon come to the fore.

If we want to see real change, Obama has to pull the Democratic party together behind a single vision and he has to get the Republican party to join in. The election is over and I find myself wondering if we will make any lasting progress if people still think of themselves first and half the country sees medicine as poison. To his credit, Obama did talk about the challenges ahead and how we need to pull together. I wonder how many of the people that need to listen will.

I've been thinking about the mood of the country. With the election next week and the financial meltdown, its hard not to. The consumer confidence index is at its lowest rate in my lifetime but Im not talking about economics.

These days I see two strong and disturbing meme's in our mass entertainment.

The first meme is apocalypse.

I first started to think about this issue while watching Battlestar Galactica (BSG) a few years ago.

In sci-fi there are basically two schools. The Gene Rodenberry/Isaac Asimov school is optimistic. Mankind will learn from the past and make a brighter future. The other school is Phillip K Dick and Robert Heinlein. People dont change but technology will so the future will be filled with the dark and terrible deeds of men.

BSG is the dark and terrible variety of sci-fi and that is pretty much the only sci-fi we are getting on TV these days.

BSG is basically a show about the Iraq war. Life is good and pleasant until we are unexpectedly attacked by cylons (ie terrorists). We dont know why. We dont know who they are or what they look like. Woe is us.

From that premise, the story starts to focus on survival of the human race. When I was a kid, we lived in fear of nuclear war and the end of humanity was expected to come (soon) from Soviet Union missiles. BSG captures the same fear only robots of our own making are the cause.

Then the show takes another twist and looks at the things men do to save themselves. At cowardice and betrayal and torture. Is the human race worth saving if we torture people? In fighting the enemy do we become as bad as the enemy? Again, these themes were all coming from real life and the Bush Administration.

The darkest and possibly most interesting current show is the new Terminator TV series on Fox, Terminator: The Sarah Conner Chronicles. The world is destroyed by nuclear weapons and only one man, John Conner, can save us. John also happens to be a teenager and he has to live long enough to save us. This show is very dark and since there are so few characters, it really dives deep on how people react to living under that kind of strain and surrounded by that much violence.

At its heart this is an action show with fighting robots but the end of humanity is always lurking near the surface, ready to pull you down if you start feeling too positive. Every episode exudes a sense of loss and sadness.

I recently started watching Heroes which is now in its third season. Although the show is basically a rehash of the Xmen (I keep expecting to see Cable or the Sentinals or Senator Kelly), I was surprised to find that the plot of this show also hinges on the end of the world.

And it isn't just TV. The Road was a very popular book last year and it is the most bleak and disturbing book I have ever read. I couldn't even finish it and yet I cant forget it. Trying to protect your child in the face of the end of society, of cannibalism and insanity. Soon to be a major motion picture for all to enjoy.

So we see this theme in TV, movies, books and video games.

Last year we got STALKER, a post-apocolyptic vision of the future from Eastern Bloc developers. STALKER placed its game in the shadow of Chernobyl and mixed in guns and gruesome mutants. This month Fallout 3 was released. Fallout started as a parody of the 1950's fear of nuclear destruction. F3 promised to take that theme and add high def visuals. Mad Max survivalists and horrible mutants galore all in the twisted ruins of Washington D.C. I want to play the game but I am also concerned that it will depress me. It did not make me feel better to hear the game designers touting how you can really be evil in this game. Nice.

The second meme is helplessness and violence.

Movies like Saw and Hostel represent the other meme. An innocent person is captured by an unknown force and then gruesomely tortured for no reason. Of course we film the torture and dismemberment and sell tickets for entertainment. Over and over again.

I find these movies totally repellant but I am more disturbed by the number of people that enjoy watching them. shadenfreude is one thing but there is something wrong with the graphic violence and details of these movies. Terrible things happen to people in real life but creating entertainment based on watching terrible things happen to people for no reason is disturbed.

However these themes and the graphic details are now invading our PG-13 TV realm.

Take the two JJ Abrams shows: Lost and Fringe.

What happens in Lost? People are trapped on an island and beset by unseen forces, killed, captured and tortured for no apparent reason. But Lost is more main stream than Fringe in a lot of ways.

Fringe = X-Files + Threshold + Saw

Fringe is the most graphic and gruesome TV show I have ever watched. Every episode makes me squirm. The shows construct is a simple good guys (FBI) trying to stop bad guys but do you really need to show so much? Every episode involves someone exploding or being experimented on or being tortured. And the bad guy is not inscrutable aliens or robots; the bad guys are normal people working for technology companies.

The bad guys are business men willing to do anything for profit and the immoral scientists that give them super powers. Dick Cheney meets Josef Mengele. Technology and business, the two most significant forces shaping our culture today.

geez, think positive once in a while

We have come a long way from the Brady Bunch and Leave It to Beaver. Despite the incredible comfort, stability and wealth we enjoy, Americans today see the future as a nightmare. We live in fear of being abducted and tortured for no reason. And all of this is happening by forces that we are unable to comprehend let alone stop. Our world is under attack from the greed of immoral business people and the relentless advance of science.

I dont know about you but I am ready for more of the optimism from the original Star Trek and Doctor Who creators. I agree with Rodenberry. We need to reject the idea that evil is inevitable and work hard to make our children's world a better place. It will be hard but hopefully we wont have to saw our own arm off to get there.

Last year it seemed like DRM for music was on the way out. Sony created a huge mess when Sony music CD's installed rootkit on people's machines without telling people. Steve Jobs wrote is famous DRM letter and Amazon started to sell DRM-free music.

While DRM has been losing power in music it has been gaining power in game software.

There are a ton of great new games coming out this quarter but Ive been more focused on a different issue: DRM. The industry has a bee in its bonnet about software piracy and they are punishing customers with dangerous DRM software.

I was surprised but happy to see users on Amazon give EA's Spore a 1-star rating for choosing offensive DRM software. The same thing is happening now with Bethesda's Fallout3. Both are games I would love to play but refuse to buy because of their DRM schemes. (I am particularly disappointed with Bethesda because I loved Oblivion and it did not use SecuROM. It only made me keep the DVD installed.)

To make matters worse, companies and game reviews (hello 1Up), are saying that anyone like myself who dislikes the current DRM schemes is a pirate. I just dont understand companies that insult their customers and this line of insult is getting more and more blatant.

A pirate? Well screw you EA. Any company that insults its customers doesnt understand the first thing about customer satisfaction -- and should not be supported by consumers. If you continue to follow the RIAA path, you will only find that the more you abuse customers, the more motivated they will become TO steal your software.

I am not a pirate and I am more than a little pissed off about being called one. PC's are hard enough to keep running. The last thing I want is to have a game hork my PC... Again.

It happened to me a few years ago when DRM software decided my CD/R drive and software was for piracy and it stopped various things from working. To fix my PC, I had to reinstall my OS. After a few trips to websites around the world to figure out what had happened in the first place.

I dont mind DRM.

I do mind invisible software you cannot see or uninstall.

I do mind software that is not supported by the company that made me install it.
I do mind software that conflicts with unrelated programs and can even ruin your PC.

DRM per se is not the problem. The problem is DRM schemes like secuROM and StarForce.

As I have said before, companies should use a system like Steam and iTunes. Force users to register their software online to use it. Online systems dont hork your PC nor do they affect other programs on your PC.

Quit calling users pirates and move to a DRM system that works without compromising your customer's computers.

Last week Alan Greenspan was back in D.C. testifying before Congress. I was most pleased to hear that the tone of the testimony had changed. The cowards who sucked up to him in the past were a little less friendly this time.

models versus reality

David Brooks had an interesting analysis on Friday (paraphrasing):

• Greenspan was a numbers guy. He took historical data and used his big brain to build a complex mathematical model of reality. And he had faith in the model to predict the future.
• Greenspan’s critics were students of human behavior. Instead of math, they looked at how people actually behave and they predicted problems long ago.

I think there is a lot to Brook's summary. A lot of people on Wall Street were math wizes. Enron-type geniuses that build mathematical models that could literally create wealth. Hmmm.

I would put it a simpler way: There are a lot of really smart (often arrogant) people who have no common sense.

Common sense tells us:

• There is a point at which the difference between home prices and incomes is so great, people cannot afford homes.
• Lending money to people who cannot pay it back is not a good idea even if you can sell the loan to a greater fool.
• Putting trillions of dollars into derivatives that are completely unmeasured will lead to problems.
• You cannot borrow forever.

Obvious signs were there for years. It doesn’t take a spreadsheet to realize there was trouble ahead. Making money is not a sign that everything is fine. Ignoring the signs because you are making money is simply a sign of greed.

The discussion of predicting the future from data brings up an interesting cultural issue.

Imagine a graph with three dots. Each dot goes higher as you move left to right.

An American looks at the graph and says the 4th dot will be higher and to the right. We predict linear trends that continue forever. Sort of like saying "Home prices never go down".

A Chinese looks at the graph and says 3 good years means a bad year soon. They predict cyclical trends that more closely resemble nature.

So common sense and nature agree -- good things dont last forever. Who knew this would be so shocking to Wall Street.

Greenspan: I was partially right!

Greenspan went on to say that there are always people who warn of danger and that these markets are just too complex to predict. Apparently after the dot-com crash, he also told Congress that these markets were just too complex to predict.

I call bullshit on that in two ways.

One, if markets are too complex to predict and there is nothing you could do to protect us from disaster… well then why did we PAY you? If the Federal Reserve bank and the SEC are powerless, why didn’t you shut them down and save the government some money?

Two, all it took was a little common sense to see this coming. When there was a push to regulate derivatives, you should have at least required companies to register them. If credit default swaps were registered we could at least have seen the storm brewing BEFORE it got up to $56T! That is hardly overbearing government regulation; it is just a little common sense.

Instead we paid the fox to build the henhouse. We gave the fox the key and then we kept replacing the missing hens with new ones. The “fundamentals were good” – until we were shocked to find that the hens were all gone.

There were a lot of people involved in this creating this crisis but Greenspan was one of the most powerful and definitely the most public. He deserves a HEAP of blame yet he still is not contrite.

Did he make a mistake? Greenspan says: “I was partially wrong”. The keyword is partially.

With all the obvious damage and more to come, I haven’t seen anyone in public that a) looks sorry, b) admits wrong, c) acts repentant. There aren’t any suicides. There doesn’t seem to be any guilt. There is a whole lot of “it wasn’t my fault” and “you just cannot understand how complex it all is”.

American values

I dont know if it is a cause or symptom, but there is another angle to this crisis that revolves around values and principles.

In the past 8 years there have been a lot of people in power who just have different values from the rest of us. I am not sure they are unethical or immoral so much as they just have different beliefs than average people about right and wrong.

The neocons thought we could free Iraq literally for free. Oops.

The Bush administration have made a concerted effort to combine Church and state. They have cut funding to programs on religious grounds and changed hiring in the justice department to put religious beliefs ahead of legal competence.

We created a private prison system outside of US jurisdiction -- a clear attack on the Constitution and the idea of inalienable human rights.

We have pursued "fiscal responsibility" by cutting taxes while greatly increasing spending to create huge deficits. Worse, instead of asking people to pitch in and share the burden of a needed war, we urged them to go out and shop! Support the war by buying yourself a plasma TV...

And we have pursued a so-called "free market" ideology that coddled some industries like defense and finance and encouraged government regulators to stop enforcing existing laws.

The list goes on and on as Im sure the number of books in the years to come will as we slowly learn about all the things that happened which we dont know about yet. There is no question that what we know is only scratching the surface.

But Bush was re-elected not impeached. There is a larger picture here about changes to our fundamental American values. There is probably also a story about how we make decisions that contradict our professed beliefs. These are messed up times.

For now the CEO's and leaders continue to testify as if they did nothing wrong. They clearly see the world in a different way from the rest of us and unless that changes, I fear for our future.

There are a lot of white male senior citizens out there who are powerful, arrogant and corrupt. I think we will be seeing more and more of them do the walk of shame to jail or disgrace.

First we had Ken Lay.

Then Randall Cunningham in San Diego.

Last week we got to see Alan Greenspan admit that he was "partially wrong".

And then we got to see Alaska Senator Ted Stevens.

Alaskan's seem to love "Uncle Ted" but the rest of us know him as the clueless 80 year old who described the Internet as a "series of tubes" and was one of the most powerful men in the Senate.

More than once I asked why the Senator from Alaska was so powerful? I can only assume the answer is seniority because it is not population or economy. After all Steven's first became a senator sometime after the Pony Express and before the telegraph. But power through seniority smacks of union rules or corruption - neither of which I want to see in Congress.

What I find most interesting about Steven's case is something I see in these other leaders (except for Cunningham who showed genuine remorse). They are true believers in their own cause. While others see them as a fraud, a phoney or a crook, they see themselves as victims. They arent sorry or full of regret or honest. They arent wracked with guilt or losing sleep. They are so far gone they cannot even see where they started from.

Steven's was a true believer. He asked for an early trial so he could run for election. He took the stand himself. He testified in a court of law how he didnt receive illegal gifts because he didnt' ask for the gifts and because he didnt want the gifts. The fact that he took the gifts and used the gifts doesnt seem odd to his internal logic. He clearly sees himself as innocent. He even accused the Bush justice department (the most feeble and corrupt justice department in decades) of injustice. Its so messed up you just have to laugh.

Except its not a laughing matter. These leaders of government and industry have done so much damage to our country and yet they see themselves as innocent victims who should be helped or even compensated.

The banks need a bailout. Wall Street needs a bailout. GM needs a bailout. Everyone needs a fucking bailout from taxpayers and yet we cannot find a dime of tax dollars to pay for teacher salaries or national healthcare. The irony is so thick you need hip waders and people are still out there running commercials about cutting taxes and tax-and-spend democrats or socialists. If bailing out wall street or GM isnt socialism I dont know what is. If it isnt a transfer of wealth from the poor to the rich, I dont know what is.

Im not a supporter of the blanket idea that we "throw the bums out" and change; there is a need for experience in government. But the past few months have me deeply suspicious of anyone who has been in Congress for more than 10 years. Stevens and McCain arent much different from Dodd and Franks from this perspective. As a simple tax payer, I dont know who to trust anymore.

Reality seems to be on hold these days and true believers abound. Over the next year I expect to see a steady stream of rich white old men going to court or testifying before congress or heading off to jail. I guess I always knew there were innocent men in prison.

For the past month or two I have been riveted by the stock market. Then I got to thinking about what a big change that is.

In the 1920, hardly anyone invested in the stock market. Retirement meant savings, family or poverty. There was so much poverty we created the social security administration.

Over the years it has gotten easier and easier to invest in the stock and bond markets. Since 1990, it seems like EVERYONE has a broker and a portfolio and an IRA account. For decades, most people got a pension from their employer and a little extra for social security. Now it seems that everyone is on their own and "investing in the market" is something everyone is expected to do.

Take a moment and think about what a huge change that is over a generation.

With every asset class falling at the same time around the world, take a moment to think about whether it is a good idea for everyone's retirement to depend on the stock market.

I thought I had a good grasp of investing before this crash but I have learned a ton in the past month. I cant imagine what the average person knows or thinks about the stock market. Very few people I talk with have any idea what they are doing.

By pushing millions of people into the market, we have created a huge supply of "greater fools". Is it realistic to think that the "market" can sustain the retirement needs of everyone?

By expecting people to take care of their own retirement by investing in the market, we may well be recreating the crisis of senior poverty that social security tried to eliminate nearly a century ago.

Today I read in the WSJ that since Bush took office in 2000, the auto industry has lost almost 500,000 jobs. That kind of dramatic and steady job loss is indicative of manufacturing in America. The number of jobs that you can get without a college degree is shrinking. The amount of money paid by labor jobs is shrinking. Despite the empty promises of politicians, the middle class is vanishing because the jobs that created the middle class are vanishing.

economic transition number two

The post-WW2 American way of life that we are used to is going away because of two trends:

• technology allows fewer people to do more work
• fewer people have the skills for technology jobs

In the great depression, the US was largely an agricultural economy. By WW2, our economy gradually moved to a manufacturing one. The jobs lost in farming were replaced with jobs in factories and the machines that factories built allowed fewer farmers to grow more food than before. Farm labor went down even as yields went up such that today farming is about 2% of the workforce.

Not for the first time, I find myself asking if the Information Economy can support our country. Are we are seeing that same painful transition all over again except this time the labor force is not able to make the transition? Are we doing more work with less people and we dont need the people?

In the last transition, unskilled farm laborers could find jobs in factories. There was unskilled labor to do in factories and people could learn the new skills on the job. But that is not true today.

A 40 year old factory worker from a Chrysler factory is not able to step into a job producing biotech drugs or designing a new microchip. Many of them cannot even operate the new robotics that are used to make cars in the very factories they used to work in.

We dont need those cars from Detroit but those people do need jobs to feed themselves and their families. I fear that the advance of technology is creating structural unemployment on a massive scale and we as a country are not facing the issue.

raising the minimum bar

Recently I was thinking about a similar but different aspect of this issue. A young man came to our door selling magazines. He was in a program to turn his life around. He was 19, had a 2 year old daughter, and no skills or education. I immediately liked him. He asked me what I did to get where I am today so that he could learn from me...

Well I studied hard in high school and got a scholarship to a top private school. Then I got into a top university. Then I picked a very hard degree of study which I knew would pay well and have some job security. Then I got jobs that payed well, I worked hard, and I moved with changes in the industry. Then I got a masters degree from another top university. All of which before I took on the challenges of parenting.

What could I tell that young man? Did he have any hope in hell of following my path given that he was already 19 and a parent? I found this personal experience to be both profoundly moving and sad.

The bar today is so high and getting higher.

My grandparents immigrated to this country in the 1950s with no education, no money and two children. Through physical labor and two jobs each, they were able to make a life for themselves. Significantly, they were also able to get their children a good education in public schools. Neither of my grandparents finished high school themselves but they knew that education is what set people apart. They had enormous respect for education and there was never any doubt that their children (or grandchildren) would get good degrees as a way to secure their financial future.

Today you pretty much need a college degree from a top university and in an applied degree of study. Most leaders I work with have masters degrees or phd's.

But everyone isnt able to get a law degree. Everyone isnt suited to configure email servers or work in a clean room. Someone still has to cook the food, mow the lawn and build the cars. What do we do with all those people? What kind of life will they have in America?

moving fast with no directions

The pace of change in the information economy is amazing. Computers barely existed 30 years ago and today Microsoft employs 90,000 people and is one of the most profitable companies in history. If you got in early, you probably feel like a king, like you and your stock option money are smarter than everyone else.

But how does the rest of America feel? My guess is that there are a lot of people who feel lost, confused, abandoned and afraid. They see the changes of technology but they dont understand it. Maybe they can operate an iPod but they have no idea how to make one. the changes threaten their jobs and they see people half their age making twice the money and then eliminating their job altogether.

When people are afraid, they react in two ways: a) they admit they are afraid and ask for help; b) they deny they are afraid and spurn help.

It strikes me that there are millions of (b) people out there and they may be the reason why our country feels so divided and irrational. I see this fierce idea that "Im as good as everyone else no matter how I talk or where Im from" in the 2000 election of Bush and the current nomination of Palin. Part of the 2000 election was that Bush was a "regular guy" not an educated guy. He talked like a moron, chopped wood, you can trust him. Why were Americans so drawn to the idea of Bubba running the country? Governor Palin's story is almost identical. Soccer Mom from the Boonies gets tapped by Washington to run the country. Brings tears to your eyes. It could happen to you!

There is a twisted logic at work here that creates a movement of the left-behind (and the literal Left Behind books) that seem to gravitate to the new Republican party. It is an emotional and irrational movement that Abe Lincoln would barely recognize. Listening to what Colin Powell says and comparing it to what other Republicans say, its hard to believe they are in the same universe let alone the same party.

the same coin

"Dont worry about me, I will be rich some day. Go ahead and cut those taxes. Its my money and I dont need no stinking socialism handout from the government." etc.

For years now, I have found the twisted logic of the Republican party to be baffling. I have friends that voice these opinions and when I talk to them, it is clear that they dont see the circular logic they espouse. It doesnt take long before they react harshly: I'm an elitist, Im attacking them, etc.

Why would the poorest people fight so hard for policies that hurt them and made the richest people richer? Why do we spend so much energy on the issue of abortion when our bridges are crumbling, are government is broke, and we are all worried about our jobs?

After struggling with trying to understand people, I now think we are just seeing two reactions to the same fear. Republicans reject the changes and want to restore the past through tax cuts and military spending. The Democrats have an equal pipe dream of restoring the middle class through government intervention.

Both reactions are two sides of the same coin. Both sides are reacting to the same fears about the future they are just doing so in opposite ways.

forecast calls for more of the same

Sadly, I dont think the transition we are experiencing is fixable.

As technology becomes more complex, it will take more and more training to contribute. The people that fall off the learning path or were never on it to start with will never find technology jobs. They will be left competing for minimum wage work or unemployed.

The best we can do is discuss the situation honestly and decide how we want to treat people. We could improve education. We could give more people a chance but it will cost money. Or we could continue down the path of every man for himself, but that too will cost money, largely in crime and quality of life. Money that we have less of every day as we lose jobs and make it up with debt.

Whatever happens, I think we are at an inflection point in history. This period may last a lifetime but life moving forward will be forever changed from life before. First we will face economic changes; soon we will face environmental ones.

I just cant take it anymore. If I have to hear McCain or Rossi or any other Republican whine about taxes, Im going to shoot myself. For decades I have had to endure this idea that taxes are evil and everything would be better if no one paid taxes.

Well what happened to "country first"? What happened to personal responsibility? What the fuck to do people think taxes are?

Do you like roads? Do you like running water in your house or trash collection? Do you like electricity? Do you feel safer with 911 calls or should we fire the police and firemen?

Why dont any politicians get in front of this issue and reframe the argument? Everyone wants more money but would you rather have $100 or all those services? Do you even know how much you actually PAY on taxes?

For that matter, what pays the salaries and health care for Republican politicians? fairy dust? No. Tax dollars pay for their benefits and I dont see our "tax cut" politicians lining up to work for free.

Taxes pay for everything that makes our a pleasant country to live in. Taxes are another way American's put country first. Taxes are an example of how American's are in this together. Paying taxes should be a badge of honor instead we have tacitly agreed that taxes are always to be avoided. We have created a culture of personal greed. Me before We.

These tired Republican arguments that taxes are evil, wink wink, prevent any real dialog or discussion about what we do spend our money on. That is what we should be talking about.

You want a penny to give a crippled person health care or feed a child in school? Well you have to fight a bloody jihad to get money for fellow citizens in need.

You want $100 to give to Wall Street or to buy a useless stealth bomber or give a rich farmer a rebate on corn? No problem, here take $200.

I am sorely disappointed in how our leadership handles this issue of taxes but I hope that things will get bad enough that we start to discuss our real priorities again. I am still waiting for my peace dividend from the end of the Cold War. I'd rather make butter not guns because that is putting country first.

The other aspect of taxes and "country first" is deficit spending. I think there has been 1 single year in the past 25 where the federal government did not spend more than it earned. Every year our nation has dinner and then runs out on the check. We charged up the credit card and then transfered it to our children to pay back.

What kind of traditional family value is that? What kind of fiscal conservative urges you to stop paying taxes and just borrow the money?

Our behavior is outrageous. It is criminal. And it never seems to end!

No we cant cut taxes because we have to pay our fucking bills! Look at this Federal bill we got in the mail -- 30 years of borrowing, mostly for military spending. If you dont like paying taxes, then you should have asked why we were spending so much money all those years.

We have already borrowed $10T and the next administration is going to borrow wheelbarrows more. The only source of income the government has to pay back that spending is taxes.

So wake your brain up and let's start having an adult conversation about taxes and where we should spend money. Its high time we really put "country first."

Falling home prices, foreclosures, financial company failures, 9-11. Current events have me thinking about the idea of punishment.

In our culture we tend to go for the fire and brimstone stuff. That guy who stole VCR tapes from a 7-11 and got life in prison for it because of the 3 strikes law. Or the many people that smoke pot and end up doing serious prison time because of our drug laws.

When it comes to punishment, we often think more of vengeance. It is a simple reaction and it goes along with a lot of assumptions that maintain a black & white view. We tend to assume only the guilty get arrested (or put in Guantanamo). We tend to assume the worst of people of color.

This line of thought is pretty shallow and inconsistent. We focus on the vengeance aspect but ignore the total costs to us and the system as a whole. We forget about the tax dollars we spend on prison. We dont ask what we should do with people when they get out of prison or what they should be doing while they are there.

Like many of our problems we just want them to go away. Throw them in jail and we are done. Case closed.

But what about the guys who run their company into bankruptcy and ruin the retirement saving of thousands of employees? How do we punish those guys? The ones that are on the cover of business week one month as heroes and on the cover the next month as their company implodes due to fraud and corruption? What about the people we idolize until we find out what slime bags they really were?

Beyond the people that commit fraud, how do we punish the people that are just doing risky things? Driving a car without a seatbelt, taking drugs, or making purchases they cannot afford? There are a handful of Enron's but there are millions of people making risky decisions every day.

The idea of punishment is closely tied to the idea of responsibility. How should we punish adults who are irresponsible? How do we teach children to be responsible? If people are all telling us to do something that turns out to be risky, how do we treat those that go with the flow and those that choose a different path?

I wish I had an answer but I only have questions. It is not an easy thing although it is a very topical one. The problems that face us (financial and environmental) are problems of our own making. We have only each other to blame but I have yet to see any wisdom of crowds or any leadership with a significant following. Instead we tend to ignore the problem until there is a panic and then the mob rules.

Global warming is the biggest issue but the housing bubble and its painful deflation is the immediate one. There were so many people that helped create that problem that there is no single party to scapegoat. Instead it is going to divide us as different groups try to blame each other and protect themselves.

At the end of the day I am left wondering what happened to the ideas of personal responsibility and I wonder who if anyone will get punished and how.

I have not heard much talk about this topic but I believe that we are in the middle of a tremendous financial change in our country that has taken place over the past two generations. While this has been a fairly slow transition, its implications for our society and our nation are hard to over state.

cash to credit

The WW2 generation lived on a cash economy. Their habits were forged in the Great Depression and World Wars. Borrowing money was expensive and debt was socially unacceptable. People who could get a mortgage to buy a house, paid it off. Often as soon as they could. There were no credit cards and people were good for their word and a handshake.

Those times and those standards are gone and their children, the boomers, started that change. Rejecting their parents conservatism, they helped create the stock market booms, bank reforms and credit card economy. A cash economy is hard to grow and lending was good business and good for business. Making money and borrowing money became more socially acceptable. People got bigger homes, fancier cars, more stuff.

GenX and GenY are almost completely different from their grandparents. People today buy almost everything on credit, either a credit card or a loan. Things have changed so much that few people ever pay anything off. Leasing has has become the norm. Christmas presents go on credit cards, savings has all but disappeared, and much of people's income goes to services that did not even exist 30 years ago.

There are several forces causing this change and several symptoms of it.

education and money taboo

One of the main causes of problems is that American's are uncomfortable talking about money and few households know the first thing about finance or economics.

Even though we live in a capitalist nation, money is still a taboo for most people. Schools do very little to teach citizens about how to handle money. We just dont talk about money or investing or fiscal responsibility. It's not "polite." Money is a secret or a competition, even more so within families.

Instead we talk about what we can buy, what we did buy and what we want to buy. The only time most people talk about money is when they are arguing about it. Money problems are one of the main causes for divorce. I would even argue that money is one of the main things that divides people in our country although we usually blame race and culture instead.

Few people can explain simple concepts like the difference between an asset and an expense. Is your car an asset? Is buying a luxury car a better investment than buying an economy car?

The lack of financial education has many important and mostly negative effects. It also allows a small set of professionals to "manage" our economy in ways that help the riches of the rich while the rest of the nation pays the bills.

the rental economy

One of the largest symptoms of this transition is the creation of a rental society. American's just don't buy things anymore; they rent them.

Even when people think they are buying something, they are usually just renting it from a lender like a bank. The bank owns your house until you pay it off. It is their money and their asset. People that buy a house, refinance every 5 years or purchase a larger house dont think much about the fact that their mortgage never goes away. These home "owners" are really renters -- renting from the bank.

The other big ticket item in people's lives are cars. Many luxury cars today cost as much as a home did a few decades ago. Most cars today are not purchased, they are leased. Cars have always been an expense not an investment but leases have changed cars from a purchase into a service.

buying your budget

Another aspect of these changes is that most people today have no idea what money they have or how to manage it. Instead, they buy their paycheck. If they have money in the bank, the feel ok spending it. If they have credit available, they spend it.

This weekend I saw a commercial for a credit card company. their new feature is that you can text them for an immediate reply of how much available credit is on your card. The mentality that thinks this is a beneficial feature is the problem.

Digital cash also means that many people have lost touch with what they are spending. Unless they spent time with personal finance software are often shocked with what they find. Even if you barely noticed them, all those Starbuck's latte's add up quickly.

the service economy

The cash economy bought things and owned them until they wore out. The service economy pays for use and never stops paying, ever. Think about all the monthly bills for services you have that your parents did not.

Car lease, cell phone, cable tv, internet access, video games, HBO, even coffee... These fees never end and they now represent a large portion of one's monthly income.

asset price inflation

When there is more money around, things cost more money. One consequence of easy and cheap borrowing is the inflation of costs. If it was hard to get a loan, houses would cost less. With easy lending, housing and cars cost more. (Cars today can cost more than a house did 25 years ago.)

This is especially obvious when looking at housing prices over the past 5 years and comparing them to prices over the previous 50 years. Easy money has create asset inflation all around us.

At the same time costs for big assets have gone up, our focus has changed towards attainable stuff we think of as assets. Replacing your $400 TV with a $2,000 HDTV is a normal occurrence now. Our culture seems obsessed with stuff and we increasingly spend our financial reserves on small items that provide status but dont last long; new sneakers, TVs, stereos, iPods, cell phones, etc.

debt

We have become so accustomed to debt that people hardly notice it anymore. Debt is big business and we are actively trying to export it.

A few years ago I hear a story that brought this point home for me. A Korean man committed suicide because of the shame of the credit card debt his family had accumulated. When you contemplate the thought that someone would rather die than face the shame of debt, you start to realize how much things have changed for us.

In bygone days, people took out a mortgage for a house and paid it off. These days people just took out larger mortgages to keep up their spending.

Credit cards hardly existed a few decades ago and now personal credit card debt has exploded. Many people finance their lives on revolving credit. They ALWAYS have a debt with credit cards.

Today's announcement by Wachovia is telling of the change in attitude towards debt. It would seem that banks are "shocked" that borrowers who could afford to pay their bills are walking away from their mortgages rather than suck it up. Choosing foreclosure is a clear sign of this transition. Our relationship to money, debt and bankruptcy continues to change.

One could say that individuals are starting to look at debt the same way businesses have for a long time. There is no shame for a business to try hard and then give up in bankruptcy; why should the same not be true for families? Even though credit card companies have tried hard to outlaw personal bankruptcy, this kind of attitude change is happening and it has huge impacts on lending and our financial systems. We are going to see this more and over the next few years.

closing

These financial change represents a fundamental shift in household economics and the way families handle money. What are the ramifications for retirement, social security and health care? What are the ramifications for our national economy and the fiscal health of our nation?

A cash economy wasnt perfect but people need some personal responsibility and fiscal education. Somewhere along the way we may have thrown the baby out with the bathwater.

Have you heard the recent news stories about drug-resistant bacteria?

Or the number of people that are dying from infections they got while at the hospital? how ironic is that.

Two friends of mine have been treated for cancer this year.

This week my household was sick with the flu, each of us, one at a time. Not much you can do about it. Your loved one gets sick, then you do too. It just happens.

It's funny. One's health is one of those things we completely take for granted; until it is gone.

For a while there was a lot of talk about the next pandemic. The bird flu. Something else.

I wonder if we will experience another Mask of the Red Death?

Our TV shows and movies portray this sense that we have control over everything but it is not true. We dont really have much control over nature. People get sick and sometimes they never get better, no matter how we might try or what we might wish.

Life is both resiliant and fragile.

That is probably a lesson we should all contemplate and appreciate more often.

2007 - the year of music

At the start of 2007, I predicted it would be the year of audio. Things are taking longer to progress than I expected but I still think we will have seen big changes by the end of 2007.

At the start of this year, Apple's iTunes service completely dominated digital music with no competition in sight. Apple had the major label content but their system uses a proprietary DRM model.

As the year progressed, the sale of physical CD's continued to fall and Apple stayed on top despite the competition.

First came Zune. Then came the start of something of actual consequence: DRM-free content.

First EMI then Universal announced they would offer digital music DRM-free. DRM-free content is a watershed moment in the music industry. The music industry is under attack from digital alternatives and they need to change or die.

Apple and EMI offered DRM-free songs for a premium price. Amazon.com has also announced it would offer such a service this year and Wal-Mart quietly released their own digital music service - for their four Net-Zero dial-up customers that will use it.

As one of the largest physical CD stores and one of the most popular websites, Amazon may be the first to give Apple competition. Amazon will also be the first big name to push DRM-free content in a big way. DRM-free is a big win for customers; 3 to 6 months from now, we shall see whether or not customers agree.

2008 - the year of video

At the start of the year there was a ton of buzz about YouTube and I thought we would see big changes in video by the end of the year. Now i think it will be 2008. Music may have been the first industry to feel the wrath of the Internet, but TV and Cable will be the next.

Consumers want choice; they want individual programming. I live in Seattle but I want to watch Michigan basketball games. Immigrants live in the US but they want to watch World Cup or TV shows in other countries. Just because cable TV offers 100+ channels, it doesnt mean they offer what you want to watch nor does it mean you want to pay their toll.

The Internet could offer those options but the traditional broadcast industries stand in the way. Broadcast content is consumed very differently from music but it too will have to change or die.

This year we saw an expansion of downloadable video content, from movies on iTunes to free TV show episodes on ABC.com. Internet television products continue to inch forward, waiting for that big hit or that big license deal that will cause the mainstream to take notice.

I wish it would hurry up and happen.

Wow, every single day brings a new front-page news article about mortgage financing. For the past few years, they were articles about rising home values and sales. Now the articles are about the rapidly dissolving mortgage market and hedge funds and the totally erratic prices of stocks. The tone and the topics have come full-circle.

increasing complexity of markets makes them more volatile

It is often hard to know what to make of these articles but one of the main take-aways is that the mortgage market is now very complex. The structure of the market has changed a lot since your parents bought their house decades ago and there is a lot of money changing hands along the way. All that capital sloshes from home buyers to banks to wall street to investors in other countries and back again.

the long-lost risk premium

Last weeks big news was that the market had suddenly re-discovered the idea of a risk premium. Banks were raising rates, asking for more information on potential borrowers, and the general money supply for loans started to get "tight".

the Fed's hot-beef injection

And instead of an orderly walk to the exits, someone screamed "Fire!" and it became a stampeed. On Thursday and Friday Federal Banks around the world "injected liquidity" into the markets. (Dont you wish people would say what they actually did instead of using jargon?)

It is hard to find an explanation for "injecting liquidity". I have heard two explanations. One: it means that government banks bought mortgages from commercial banks, thus giving the banks cash and removing some of their liabilities. (Isn't that a tax-payer funded bailout?) Two: it means that the Fed wanted to keep short-term interest rates at 5% so it was willing to loan money at that rate to anyone who asked. (Doesn't that defeat the purpose of charging a risk-premium for lending if you give riskier borrowers the same rate?)

Whatever the definition, an interesting fact was that the US injected about $50B but European banks injected about $200B. Isn't that the opposite of what you would expect since the cause of all this was supposedly home loans in the USA?

Moving forward we can hope that banks will go back to making loans the right way - expecting borrowers to actually show some evidence they can pay the money back. We can also hope that the hedge funds and "smartest guys in the room" will lose their shirts if not jobs, as they should, for creating this mess.

home(less) alone 4

We can also expect pressure on home prices as the cost of money (ie bank loans) increases and the supply of buyers shrinks.

What will happen when home prices flatten, even if they dont fall? How many people will find that they borrowed more money for a home than they can comfortably afford? There is a lot of talk about sub-prime borrowers but how many prime borrowers used ARM's and no-money-down loans to refinance their own house or to purchase investment property "risk free"? We may find out over the next two years.

Estimates are now roughly 2 million homes will go through foreclosure even though banks are already making extraordinary measures to help borrowers refinance (and continue to pay something). The "subprime" assumption is that these homes are all in the ghetto but how many of those mortgage defaults will be for wealthy neighborhoods?

I predict that poor minority "subprime" families wont be the only ones in trouble. There will be a lot of pain for wealthier families that took risks they did not understand because the "you cant loose!" media hype was so strong. (And the financial training in our education system is so weak.)

Expect a repeat of the dot-com and the Enron-pension stories.

mumbo-jumbo loans get more jumbo

One thing for those of us on the Left Coast to watch is jumbo loans. Fannie Mae and Freddie Mac buy about 1/2 of all mortgages from banks (which allows banks to make more loans). But they are restricted by law from buying any loans above $417k. Any loan above that amount is a jumbo loan and it is handled by private institutions.

Given that the median home price in Seattle is now about $420k, this is potentially a big deal. Just this past week Fannie/Freddie asked to be allowed to buy jumbo loans -- Congress said no. And the rates lenders are charging for jumbo loans went up more than the rates for regular loans. (As it probably should.)

So expect higher rates for loans over $400k, which again, will put more pressure on those $800k, $900k home prices that I see for very average-looking properties all over our area. Expect the drop to start in the SF Bay area, then LA, then San Diego and finally Seattle. (Which is also the order homes appreciated in.)

unwinding the unmeasurable

Another thing to watch for is being called the "great unwinding". Along with the mortgage boom there has been an options/derivatives boom. Warren Buffett has been warning about this boom, saying that it makes the risk of the great 1920's start market crash look mild in comparison. One of the problems with options is that they are almost impossible to measure but a recent WSJ article stated the total value of traded options at over $390 TRILLION.

The "unwinding" refers to all the hedge funds and other investors that bet heavily on options and what happens if those options fail to work as designed or companies bet wrong. We have already seen two funds from Bear Stearns that went belly-up for betting wrong. There are now articles from "quants", the big-giant-heads who write the statistical models that allow computerized option trading, that are saying the markets are behaving in ways the models do not predict -- ie they are losing money. (Ooops - garbage in-garbage out.)

up-down-down-up-up-down-

So expect more volatility. Expect more doom & gloom on home prices and mortgages. Expect more hedge fund loses, especially from banks and pension funds. And expect the politicians to stick their noses in and muddle everything up (or worse, expect them to bail out the big fish and let the little fish "learn a lesson").

As that Chinese proverb says: We live in exciting times.

This morning I listened to Meet the Press again. One of the guests was Tony Snow and one of the topics was Iran's supply of advanced IED's to Iraqi terrorists.

The discussion reminded me of a survey I heard last year. The survey looked at religion in different countries around the world.

Do you believe in God? The USA scored very high in belief in God but so did a lot of other countries.

Do you believe in the Devil? What made the USA unique was our belief in a Devil. As I recall, it was as high or even higher than belief in God and it was far higher than any other country.

In other words, we believe in the Devil more than any other culture. What does that say about us?

Revolutions of the past involved angry mobs of people running amok. Revolutions of today tend to be quiet affairs spurred on by technology changes. In fact, revolutions today tend to be so quiet, they go on without notice or understanding by most people.

The Internet revolution is one such quiet storm. We saw the first wave in the late 1990's with a lot of hype about "new economies" and jokes about how Bill Gates "missed the Internet." Here in 2007, we are at the start of a second wave which is much larger and more tangible.

There is a growing digital media revolution which will have a tremendous impact on the system and many of the companies that we have grown up with for decades. Despite its significance, few people seem to notice or stop to think about the changes as they gradually appear. This post is an attempt to outline that system and the forces of change.

Character has been a regular theme in the news since the late 1990's. One of the main issues in the 2000 Presidential campaign was this idea of character. At the time, candidate Bush spoke constantly about the virtues of his own character while Republicans in general spoke about the deficiencies of Bill Clinton's character, and by extension Al Gore's. John Kerry and John McCain also had to fend off attacks about their character.

With so much self-promotion in the media today, it almost comes as a shock to read about people with real character - people who risked their lives and the lives of their families to help strangers. People who took unimaginable risks simply because of the strength of their principles. Even more shocking today is that people did such things and then refused to talk about them, refused to take credit, even feared that they had not really done enough.

Such is the tale of Ernst Leitz, patriarch of the Leica camera company during WW2. Tails of recrimination and anger about WW2 are much more common than tales of personal heroism but this article is one of the latter. And worth your time.

As I read the article, I wondered about that word: character. What really IS character? Is it one of those Platonic ideals where people who have it dont mention it while people who dont have it talk about it constantly? Has the definition of character changed? Can strict values ever be character if they are based on hate and not on help or love of others? Is true character just too hard to maintain today or is it, as always, quietly going on around us too modest to call attention to itself?

As I have mentioned before, I am old. When I was a kid, I thought 20 was like really old and now I am quickly approaching 2 x 20. Not only that but I am married, have a child, and have no problem with driving a minivan.

But I have always believed that age is in your head. People act their age and it often has little to do with their chronological years.

What I have been noticing recently though is cultural age. And that cultural age has two groups, old and young, and those groups are moving further apart rather than closer together. At times it seems that we are on two different planets altogether.

This week we saw a big cultural-age phenomenon - the "mysterious package" debacle in Boston.

After taking a few years off of writing code, I am pleased to see how much the Internet culture has changed software development for the better. (At least for my better :). Software development is getting really cool again and empowering small teams to make slick products.

As one example of how things have changed, let's look at my experience from engineering school back in the day. (The day before the WWW or browsers.)

I have always had a love for video games and computer graphics so I took a few classes on the subject in college. Our textbook was thicker than a phonebook and our semester project was to build the most basic drawing program you ever saw. We worked alone and wrote in C and X-Windows.

The skills we learned focused on the algorithms for drawing lines, simple curves and basic shapes like a circle. I took this class twice and one time we did the 2D drawing program. The second time we did a simple wire-frame 3D viewer was a final project (think about Battlezone).

Contrast my experience with someone taking a graphics class today. Thanks to OOP and common APIs like OpenGL (probably written by programmers that took classes with me :), today's graphics students dont write simple algorithms; they write entire games for their class projects.

The lessons here?

Students today get to do code that is a lot more fun because they get a lot more done with each line of code. Compare my 3D wireframe viewer to the full fledged games by these students.

The reason for this is largely based on the power of object-oriented programming and common APIs - both of which are the result of building on the work of programmers before them. Now software development has always built on the work of others before them (I certainly did not write in assembler nor did I have to write a windowing system like X11) but the industry today has matured to a point where we are really seeing results.

Who the heck really is Arnold "The Governator" Schwarzenegger?

When Gray Davis was recalled, Arnold was The Terminator. He represented conservative Republican values and fun. He blew up cars and his goal was to Terminate taxes.

But he didnt get anywhere in the California State government using Bush's "unilateral" playbook. Undaunted, he took the fight "to the people" with a huge ballot initiate. And the people spoke - they terminated him. All of his initiatives failed and it was clear that the public was not behind his Republican agenda.

This morning I hear a national news report of a totally different Arnold. Now he is for green power and global warming reforms. He supports healthcare for all state citizens and a higher minimum wage. Suddenly Arnold is a center-left Democrat and his Republican party is moaning about him.

Has Arnold pulled the biggest flip-flop in history? Or was this his plan all along? Push the Republican agenda until the people clearly vote against it so that he could say he tried. Then join hands with the Democratic state congress and move ahead with the issues citizens really cared about? Hmm.

Which all has me thinking about Kalifornia and what a huge place it is.

Maligned as the "land of fruits and nuts", there are many California's.

The way north is rural and mountains and parks and massive marijuana production. The east is agricultural with mountain views. The north is the technology capital of the world and the shining city known everywhere as San Francisco. Southern california is the land of dreams and quintessential car-culture known as Los Angeles. Southern cal is also the gateway to China with the nations largest shipping port as well as San Diego, the largest military and navy presence on the west coast and a doorway to Mexico.

California has everything. The diversity of geographic features is stunning: huge snowy mountains, majestic national parks, timeless redwood trees, sweeping ocean views and beaches, and burning deserts.

The citizens are as diverse as the geography as people from all over the US and the world have flocked there. With the huge number of cultures and foods, there is also a huge diversity of people who struggle to agree on things political. The state is very split between the north and south and agricultural areas as well as between whites and blacks and asians and latinos, between long-time residents and recent immigrants. More than almost any state, California is the American "melting pot."

If it was its own nation, California would have the 6th largest economy in the world. Californians produce or service just about everything. They also lead the nation in political changes like cleaner air and now global warming.

California is an amazing place. I dont always miss it but I am glad to have lived there.

When you were kid, did your parents tell you that "life isn't fair"? What makes us dwell so much on the idea of fairness?

Last night I got home late and all the parking spaces in our apartment were taken. No biggie. Despite what the apartment managers say this is a normal occurrence because there are not enough spaces.

As with any problem, people adjust. For the past three years we routinely see people park in the fire lanes and the handicap spots without mishap. I always felt bad about doing that but that is the way it worked. I rationalized that it was caused less harm to park in the handicap spots since people never use them, there are several available, they dont block fire hydrants nor do they create blind spots which could cause an accident. So that is where I parked.

At 4:42am this morning, !BAM! we got a massive $250 ticket for parking in a handicap spot while the people who parked in the fire lines got nothing. Not only is that damn expensive, it is a sudden and unexpected change, and seemingly unfair.

After being pissed off about it, I got to thinking about the idea of fairness.

I studied software development in college and then spent a number of years building software products in different industries. I generally worked as a developer or project manager and my jobs have caused me to interact with people from just about every department in a normal company, including marketing, management, executives, HR, accounting, UI and QA.

Over the years, I have thought about the process of building better products and why there are so many failures and so few successes. My feeling is that the number one problem with software is not bugs; it is ease of use. Bugs can be quantified and fixed but products that are hard to use are not broken, they are built that way to begin with.

The root cause of this problem is threefold: the nature of design, the process and the people at most development companies.

Lately I have been getting a lot of "undeliverable email" in addiition to the regular spam. 100 junk emails per day get me thinking about how much the email system needs to be redesigned.

I have had to take a few lumps for being honest, but I personally despise hypocrisy. When the Foley case broke last week, I was pleased to see someone get what they had coming. But as the news trickled out, my feelings have really changed.

In the past three weeks, there has been a raft of articles on changes in the housing market. There doesnt seem to be any question now of whether there will be a correction. The questions now are about what shape it will take. Will it be a soft landing? Will it be a hard landing? Will it happen here? Or there?

For a long time it was unfashionable, possibly even rude, to suggest hat housing prices were rising too quickly and would have to come back down to match fundamentals like population and personal income. Counter-arguments often took the tact of quoting history. "Prices in Seattle have never dropped before", therefore, they wont drop now.

What I have noticed however is that these "historians" never quote the past when prices are going up. They don't say, "prices have never risen 10%, 15%, 20% year after year, therefore they wont rise that much this year." Historical price changes are cherry-picked and only brought out to argue that prices wont drop back down. There is an emotional appeal to this strategy but it certainly isnt logical.

If historical prices didnt predict the meteoric rise, what makes them evidence that there wont be an equally historic fall?

History is a guide but it is not a rule. The only rule of history is that things change and all investments move in cycles. Investments involve math, and complex legal systems, and money but most of all they involve humans and human emotion. And humans are fickle creatures indeed.

Tech-culture places a lot of emphasis on being smart, on "intelligence". Is it enough to be smart, to be a critical thinker?

Or do you make better products if you have industry experience? And what about passion?

Are you old enough to remember when people memorized stuff? When people could quote, as in recite from memory, poems, verses from novels, the Constitution, or sections of the Bible? It seems like a another world. (Go watch the movie Quiz Show and think about the Van Doren's for a view of that other world.)

Does anyone memorize anything anymore? Or has memorization become like spell checking - "I dont need to learn that; the computer does it for me!" Have we lost something in the process?

I've been listening to the recent debate on "fair trade", the minimum wage and illegal workers.

As an investor, you look at a company and you demand revenue growth and profit growth - every year if not every quarter. As a company, you can grow in two ways:

• you can get more customers or
• you can get existing customers to consume more.

If you raise the minimum wage, you will raise costs which will raise prices. People who argue against raising the minimum wage or against a "living wage" point out that increasing prices will decrease consumption and hurt everyone.

So be it.

Economists look at how pieces of the economy are connected to (and influence) each other, such as the idea of supply and demand. If the demand for labor goes up and the supply goes down, then wages for labor will increase. If wages increase then the cost of goods increase (to cover the wages) which means higher prices. Higher prices is another term for inflation.

The general rule is that if an economy is growing too quickly, we get inflation. The cure for inflation is to slow the economy down which the government tries to do by raising interest rates. By making money more expense (by increasing the cost of borrowing money), businesses slow down and the economy slows down and prices fall again.

At least that is the theory. Rules of thumb like this example build up over time. Economists study the great depression and the stock market crash of the 1920's for decades and eventually rules of thumb about how the economic system works appear. Economies are so complex, you cannot really see all the interactions and understand it so you need rules of thumb that explain things well enough but are simple enough to use.

I just wonder if the game is changing so fast and much that our rules of thumb based on the past century of national economies are no longer appropriate.

the new rules

This morning, I heard a news story about inflation which is what got me thinking about all this. The truth is, I am rather puzzled by inflation. The person being interviewed pointed out that the national inflation rate has stayed around 2% for years, but I dont get it.

How is it that prices for goods never seem to go up much? We pay $3 for a gallon of gas (diesel actually) in Seattle. Our heating bill went up by 4x this winter and housing prices have gone through the roof everywhere. The cost of gold and platinum is at an all time high. In fact, everywhere I look (except for computers), prices are way up so how is the national inflation index only 2%...?

Thinking about inflation, I got to thinking about closed-systems. Economies used to be largely closed systems. Raw materials would be brought into the system from other countries, but the bulk of the value was manufactured in our country. Thus the Fed and businesses only had to worry about the factors within the nation. All those supply and demand rules about wages and inflation were refined in the past century, so they are based on the idea of a closed national system.

But we dont have a closed national system anymore.

the global economy

The economy today has expanded beyond national into a global system which turns rules of thumb, like supply and demand, on their heads. Wages in our nation arent as important to inflation anymore because the jobs can just move to a cheaper country. If manufacturing costs get too high in our nation, prices dont go up but rather those jobs move to China.

Another rule of thumb economists use to judge the economy is the unemployment rate. If too many people are employed (a low unemployment rate), there will be competition for jobs and wages will rise, ie overheating the economy. This is why investors (inexplicably to many workers) like to see a healthy (ie high) unemployment rate but this rule of thumb is being changed by the massive influx of cheap labor coming into this country (like 10 million illegal workers). This supply of cheap labor prevents prices (and incomes) from rising because there is always someone willing to work for less money. And since they are illegal, you can forget about Unions or other groups pressuring for a living wage.

Of course, economists do take these inflows into account in their models but I have begun to wonder if the magnitude these inflows are now so large that they change the rules of the game. Not only has inflation stayed low because of importing cheap labor and exporting jobs but we have been importing amazing amounts of foreign capital. China, Japan and Korea continue to buy huge amounts of our Treasury Bonds, which keeps the US Dollar and our government out of bankruptcy despite the fact that we borrow more money every year (the national debt is now over $8 trillion dollars!).

So why has the inflation rate in our nation stayed so low? The answer is that globalization has changed the rules of the game and for the moment, the rules are in our favor. We continue to talk about inflation in the old terms, using our old rules of thumb, but globalism has made the picture a lot more complex.

I imagine this is clear to economists but I suspect it is completely UN-clear to citizens. We continue to make decisions on a personal level about household spending and on a macro level about education and infrastructure as if we are the only game in town. People still seem to see things as a closed-national system and that is a dangerous thing for the welfare of our children.

I am in graduate business school and taking my first ever class on ethics. I have really enjoyed learning the formal structure behind ethical thinking (which I didnt know existed) but another interesting side effect class has been learning about the beliefs of my fellow students, which are not always what I expected.

In our last class we talked about the recent Netflix "throttling" issue. I am a Netflix member and I checked their website myself. Their "how it works" page clearly states that one gets "unlimited" movies for $17.99/mo with no limitations or extra fees.

And yet, our discussion immediately focused on the customer, or more precisely, blaming the customer. "What does he want all these movies for? It is probably to pirate them." "It's not healthy to watch that many movies [so he shouldnt get them]." Why did people blame the consumer? Very peculiar, especially in such an otherwise "touchy feely" area.

We had a very similar discussion about the recent Mohammed-is-a-suicide-bomber-haha! cartoon riots. Again quick reaction was to blame the Muslims. "Being offended is no excuse for breaking things." This despite the WTO riots in Seattle, no less, and numerous student riots due to sporting events. It would seem that when we break shit, it's no problem but when ragheads burn American flags or embassies, they must be raving lunatics.

Someone suggested that Americans just dont care about anything enough to understand the way Muslims feel. That is an interesting point but I think it is something else. One, we already see Muslims as freaks and would react very differently if these were Nazi or anti-Christian cartoons. Two, its not really about cartoons.

Although I am sympathetic to Muslims and the offensiveness of these cartoons, I actually agree that the cartoons themselves are not a reasonable explanation for all the violence. But instead of blaming muslims for being too emotional or touchy, my first reaction is to ask what does explain the violence?

Is this violence an expression of other emotions?

Is it the result of living in countries without free expression, something we take for granted but does not exist in China or many other countries?

Is Denmark and France fomenting Muslim-hatred they way Europe fomented Jewish hatred in the 1930's?

Could it be that the Muslims community has long felt under attack by the US, Israel and the West and after Iraq, the cartoons are the proverbial "last straw"?

There are probably a whole list of other possible motivations. My question is why more people dont look for them instead of being so quick to assign blame. "Oh, its not our fault; Arabs are just violent."

I dont have the answer here but it strikes me that despite the spread of American culture around the world, we seem quite clueless when it comes to actually understanding other peoples.

There are educated, intelligent people who do not think global warming is real or that humans are the cause. I look at the trend-lines of greenhouse gas emissions and feel comfortable saying that after a century of burning everything we could find, mankind is changing the global environment. Moreover it is easy for me to believe that those changes will ultimately prove catastrophic.

What really irks me though is that we will look back on today and know that not only did we see it coming, we chose to do nothing. One aspect of this "do nothing" approach is cars.

Our society is built around personal transportation. I get that. I am a part of that. I own a car which i use for transportation. When i lived in a large city, I used a motorcycle not a bus to get around. I have tried to use a bus (Seattle doesn't have a rail option) but I preferred a personal vehicle.

We can argue about whether personal transportation is the right thing and the effect PT has had on city design. On one hand, we prefer the perceived convenience of personal transportation, even as we spend hours a day in traffic. On another hand there is a cultural stigma that equates poverty with mass transit. We can also see our that our collective spending reflects this bias against mass transit as we have no trouble subsidizing roads and bridges for cars but expect mass transit to pay for itself. And a few argue that mass transit overall still pollutes as much as personal vehicles because the "energy has to come from somewhere".

These are old debates and I am willing to let them go. We are hooked on individual transportation but the thing that bothers me is the way we have chosen to implement individual transport.

Individual transportation could be completely different and still achieve the same functional results. We could all be driving zero-emission golf carts powered by low-emission or emission-free power plants. We could be driving motorcycles which get 40+MPG or super-high MPG gasoline cars or even biodeisel.

But we arent.

Instead we are driving larger and larger trucks and SUV's with lower and lower gas mileage. As the evidence for human-caused global warming gets more clear, we have increased not decreased our consumption of gasoline for individual transportation. When I drive on the freeway, 9 out of 10 people are alone in their vehicle yet vehicles continue to get larger with selling points like, "Room for 8 and 0 to 60 in 6.5 seconds." I spend much of my time on the roads in traffic going less than 30 MPH but even the new hybrid vehicles tout that they offer "V8 power with V6 MPG." Even these high-tech vehicles choose power over fuel efficiency as their selling point.

Like many other products, functional improvements no longer generate car sales. Cars are no longer about function so much as fashion. The question is not whether you can get from A to B but whether you can do so in style. And style is optional, ie a choice.

If we were willing to make due with less, our roads could be very different. And so could our impact on the environment. Time will tell how bad things will get. I just wish more people would choose to live with less today so that there will be more for tomorrow.

I often question myself about what i should say here in the blogosphere. How much of one's personal life is it safe to reveal to people in print? How personal is still "professional"?

This morning I listened to an interview with Rosanne Cash. She talked about her parents and their deaths. Wow, it was so raw with emotional.

The interview was an epiphany for me. I never really saw what has been right in front of my eyes (and ears) for years. While most people hide themselves as much as they can, some people are out there, sharing their pain and their past with everyone. Those people are writers of all stripes, songs and books and movies.

There is so much pain in the world. So many terrible things that happen to us as children, as adults, things that we do others. Trauma's both mundane and horrific occur and their effect are often passed down, unthinkingly, through generations. To break the cycle, someone needs to recognize their feelings and speak out about them to begin the healing.

I am still unsure what I will say in this forum, but I wanted to thank the people who are strong enough to share their pain with us, the people who are out there leading the way and helping the rest of us face our own feelings.

Link

Rosanne Cash: 'Black Cadillac'

Weekend Edition

Saturday, January 28, 2006

Rosanne Cash is the daughter of country legend Johnny Cash, but has been a singer-songwriter in her own right for more than 25 years. Her family history couldn't help but play a role in her own career; but on her latest album, Black Cadillac, it takes on a different tone.

Within the two-year period preceding the album, Cash’s mother, father and stepmother all died. Their names are listed in dedication on the CD's liner notes, and the album is suffused with issues of mortality and mourning. Family plays another kind of role on the album as well: Cash's husband, John Leventhal, is a co-producer.

Cash talks with Scott Simon about family, music, and the new movie about her father, Walk the Line.

It is Sunday and I listened to Meet the Press guests, (Carville, Begala and Maralin), discuss the Democratic party and the 2004 election.

President Bush won re-election because he had a very simple message that resonated emotionally with voters: "Vote for me or a terrorist will kill you", put another way way, "We are at war and you dont change commanders in the middle of a war". Simple, emotional, effective.

In contrast, Kerry's message was "muddled". He tried to explain the nuances and complexity of the problems we face, including terrorism and Iraq.

As political tacticians, I understand their criticism. They think in terms of marketing and simple&emotional always sells better than complex&realistic. As people study the lessons of the 2004 election, I expect the Democrats to come back with equally simple and emotional campaigns over the next few years.

And that worries me. I would argue that President Bush's years in office show that when you dumb things down too much you just act dumb. President Bush succeeded in his elections but his policies are a total failure. His administration has created one mess after another that the next President(s) will have to face and fix.

The war in Iraq is hardly a "mission accomplished" and is likely to end up costing us over $1 trillion dollars! Our trade deficits continue to rise and our national debt is through the roof. They bungled hurricane Katrina and New Orleans continues to suffer. The medicare drug plan is a mess and every month there is another high-level Republican indicted or under serious investigation. I can go on and on but suffice it to say that unless you are in that top 2% of the income bracket, Rome is burning.

It is dangerous to think that dumb & dumber is the right course to follow because it will win the election. The world IS complex and nuanced and I for one want the smartest, best educated and most capable people running my country and my military.

It may take years for people to acknowledge the damage caused by this administration, (and some people will always blame someone else), but I think it is worth the wait to do it right. If we want to be respected abroad, we need to start with respectable leaders at home.

First they had hired "civilians" beat him with clubs and rubber hose until his ribs broke. Then they put a sleeping bag over his head, tied it with wire, put him on a board and sat on his chest (remember those broken ribs?). Then they covered his mouth so he couldn't speak until he suffocated.

It sounds horrific but dont worry, those were only "stress positions", all approved by President Cheney.

Even though it turns my stomach and I believe that government torture is antithetical to our Constitution and the rule of law not to mention the Bill of Rights, the President says that the ends justify the means. These terrorists are nasty so we need to be nasty too. So we tried secret abductions, imprisonment without charges or trials, and torture as well as spying without a warrant. From the Spanish Inquisition to Nazi Germany, that kind of government power is terrifying, no question.

If we "need" to do this kind of stuff, i ask you if it is working? We have become a despicable abductor and torturer but are we winning the war because of it? Is this stuff getting us crucial intelligence that is stopping a "bomb from destroying a US city"? As far as i can see, the answer is n-fucking-o. We have tossed out human rights, we are even spying on our own people without a warrant and we are still NOT WINNING THE WAR.

President Cheney dismissed the insurgents as rag-tag holdouts (although i believe he has only been to Iraq twice) just as Rumsfeld joked about the looters stealing the same vase over and over again for the cameras. Since that time the Iraqi terrorists (who we call insurgents for some reason) have gotten stronger, bolder and more lethal every month. On New Years day alone, they carried out 12 bombings. This month they also put on uniforms and blew up a high-security police station. We keep losing helicopters and bringing home wounded soldiers for a life-time of disability benefits. We have been sending troops over there for TWO years and what do we have to show for it? If we pulled out now Iraq would implode and people dont even think, let alone talk, about Afghanistan anymore. Whether or not it was right to invade Iraq, we did invade and we have done a terrible job of it.

To be honest, i just cannot understand why Republicans have such a strong reputation for defense!?? At least John Kerry actually went to Vietnam - none of our leaders in the White House have any military experience except maybe in video games. Not Cheney, not Rumsfeld, not Wolfowitz, not Bush, not Rice, not Rove. Zippo (except for Powell who couldn't seem to wait to get out of there.) Instead we have Duke Cunningham admitting that he took millions of dollars in bribes to keep the defense contracts rolling and you have total failure in Iraq and Afghanistan.

Republicans are tough on defense? These guys SUCK at keeping us safe. The only thing they seem to be good at is spending MONEY on defense, and doing so without even the most rudimentary return on investment or accountability measures.

This week we have a kidnapped journalist, threats from the Taliban (the Taliban? We didnt accomplish that mission either?) and another video/threat from Osama Bin Laden. Oh sure, Republican President's captured Grenada, imprisoned Noriega and we got Saddam but the guy who ACTUALLY ATTACKED us on 9/11 still walks free as a bird. Instead of getting him, our defense heroes go after "environmental terrorists" who burned some shit in Vail, CO. Are you kidding me? Vail?

For almost 5 years now, we have tried to be meaner than they are and it is not working. (Which should be no surprise since it hasnt worked for Israel for the past 30 years.) For such a religious country, I shouldnt have to tell people that you cannot kill your way into Heaven any more than you can torture and kill your way to peace.

For God's sake people, the world is watching us and it is time to change strategy and try something else.

If you voted for Bush in 2004, you share the praise and blame for this administration. Are you happy with the results? Are you pleased with the Federal government trumping State governments to control our personal lives? Do you believe in fiscal responsibility and oppose deficit spending? Are you proud of one Republican indictment and corruption scandal after another? Do you really think Jesus would approve of imprisoning innocent people and torture? If you arent happy, write the President and tell him how you feel. As we saw by the demonstrations against invading Iraq, this administration only listens to donors and their voting block so speak to them.

Things are going very wrong in our country. How bad does it have to get before the people of all political parties do something about it? Im sorry for the rant but there are few issues that are more serious - this is life and death for thousands of human beings not to mention a debt burden that may cripple our economy.

I have always been a big game player and love to think and talk about games and how to make them better (for me). Games, however, don’t get much respect in polite company so I have been something of a closet-gamer for some time. My close friends know about my addiction but I doubt most strangers would have any idea of my passion.

Most people that i have met, including my wife and mother, think games are silly, anti-social, and the province of weirdo’s. While there is a lot of truth to this belief (which I may elaborate on later), I think it is time for more mature gamers to speak out and by doing so, raise the stature of the genre. I recently started reading a really great book on games, and it motivated me to write more about my game-perspective.

The industry

The game industry is only a few decades old and as such rather immature on many levels. Despite its rather second-class reputation, the game industry has been booming. In the past few years, the game market has made a bid for respect by repeatedly stating that games now make as much money as movies, as if making money is some universal sign warranting respect.

While making money is a good thing, I would prefer games to garner respect by making respectable products. Some of that is happening but I fear that more often games are mimicking the negative aspects of movies: derivative, sexual and violent content designed for adolescent boys. Blech! Also like the movie industry, the game biz generates a few hits, a few great games, and a TON of crappy products that no one has heard of or wants to.

One of the interesting/frustrating things about games is that people’s tastes vary so much. Take two self-described “gamers” and ask them what they like and don’t like. Odds are good that they will like totally different games and their reasons will be totally different. This problem makes game design a real challenge and that is before you add the corporate pressure for “hits” into the mix.

Me, myself, and games

I thought I would start this thread of game posts with a bit about myself and the games that I have enjoyed. For non-gamers this wont make any sense but it will give some context to game players.

For starters, I am in my late 30’s and have spent my whole life playing video and computer games. I largely credit video games for my desire to program computers and to get an engineering degree. As a kid, I blew through many rolls of quarters, but these days I only play PC games, meaning games on a personal computer not a console system.

As I have aged, so has my taste in books, movies and games. Games that cater to teens generally don’t appeal to me although they seem to make tons of money and generate media buzz. For instance, I have yet to like a game from Blizzard, (not Warcraft, not Diablo, and not WoW) and I was rather bored with Grand Theft Auto.

As a general rule, I like immersive games with an original story, realism and that require some thought. I much prefer something novel to “same as last year with better graphics” (which seems to dominate the industry). I play different types of games when I am in different moods and there are some genres that I never play at all, such as sports, driving and puzzle games (and I have never wanted to play a game on my cell phone.) For the past few years, I have spent the majority of my time playing online games which has changed my outlook so much that many single-player games now depress me. (More on that later)

Since there is so much variation in “games”, the best way to learn about someone is to look at the games they have really liked, and over the years there have been a number of games that I would recommend. Here is my list of influential and favorite games, loosely broken down into genre’s.

Ending poverty starts with one thing: education. Getting that education requires two things:

1) People need to value their education and work for it. (As immigrant families consistently do.)

2) The public school system needs to be there to provide an education for all citizens, not just the families that can afford private schools anyway.

Our beleaguered public school system is suffering on both accounts but the second one is easier to fix. The most irritating thing to me is that the system we have created is fatally flawed and will never provide the same level of education to all citizens because of money.

Public education is a national good yet it is paid for by local property taxes. Basing school budgets on property taxes means that wealthy and more advantaged children will always get more money (and better schools) than poor neighborhoods. The education system we have created maintains the disadvantages of the poor when it should be leveling the playing field.

On Martin Luther King's birthday, it is simply astounding to see how race relations have improved since the 1960's. On the other hand, it breaks my heart to see how little we have done to make certain that all of our nation's children get the same quality of education and how little leadership there is to improve the status quo.

This week, I have been listening to people justify torture and these fake "news" stories we have been planting in Iraqi papers. By describing our current situation as a "war", people seem able to justify any kind of behavior. "We have to do this or we could lose the war!! Do you want to lose the war!?!"

The whole thing made me think about when the White House described Iraq as a battle for hearts and minds.

Most people will never have a chance to go to the United States or a chance to befriend an American.

What they will see are photos of Abu Ghraib. What they will hear is Dick Cheney's defense of torture. What they will hear is that we are willing to hold people in prisons without charges or trial or contact with the outside world, not even releasing their names to the public or their families. What they will hear is that we are planting fake news stories in foreign newspapers. What they will see is that we are happy to do things in other countries that are illegal in our own country while making speeches about wonders of democracy and freedom.

Tell me, are these attractive traits? Are these behaviors likely to win any hearts or minds? Would they win yours? If you heard these things about some other country, would you think positively about them? Would you be sympathetic? Would you be inclined to believe the best or the worst about them?

We will never defeat terrorism by being more ruthless than they are. We will never defeat terrorists by killing all of them. When people are willing to kill themselves in order to hurt us, we will never be able to scare them out of attacking.

Every person we kill provides the motivation for someone else to take revenge. Every person we wrongly abuse, imprison or insult will anger them, their friends and their family. Every person we torture provides justification for attacking an American. Every time we do something that contradicts what we say we stand for, we provide support for the arguments of our detractors.

This is not a "war" that we can win with stealth bombers or armies. We need intelligence, and police, and the rule of law. We need transparency and to behave in an unassailably ethical way. The way to win this struggle is through friendships because every friend of America is one less supporter of terrorism against America.

This IS a war of hearts and minds and the White House is continues to do things that fill those minds with anger, outrage and hatred. Whether or not the ends justify the means, we will never reach our desired ends with these means.

I have been talking with people about the idea of innovation.

In my mind, innovation is coming up with something novel, ie something that is totally new or something that does an existing function in a much better way. Innovation is a leap while refinement is a step. Innovation depends on some inherently creative insight while refinement is a matter of time and effort.

Given this definition, I have been thinking about the differences between innovation at big and small companies.

different rules

Small companies are more innovative. Even though they have fewer resources, small companies have fewer hindrances and more freedom to experiment. Experimenting means trying 10 things and hoping 1 of them sticks. For every big leap that works, there are 9 tries that fail. Since small companies have nothing to lose, they accept those 9:1 (or worse) odds and take the risks. Once in a while, a company hits on something that sticks and it takes off. (We never hear about the 9 other companies that never got a hit and died a quiet death.)

Big companies have all the resources in the world to pay people to be creative. The problem with big companies is that they have too much to lose and this fear of failure puts a huge damper on trying for innovation. If a startup does something stupid, no one notices; if IBM does something stupid it will be in the national news. In order to protect the brand, there is a line of people in a big company whose job it is to say no, who are there to prevent any stupid mistakes. While saying no prevents risks and embarrassing mistakes, it also prevents the occasional home-run success.

Another problem with big companies is the way financial accounting deals with innovation. At a small company, the inventors are spending (wasting) their own money or perhaps the money of professional investors who know they are taking a risk. Big companies however are expected to be stewards of their investors and big wild risks dont look so good on the profit and loss statements if they fail. Since 9 out of 10 tries fails, who's budget is going to pay for it? How do we account for these trials? Innovation just doesn't play nice with traditional accounting and corporate management practices.

different games

Since big companies and small companies play by different rules, they require different strategies. I would argue that innovation at a big company comes from acquiring winners not internal attempts.

Instead of trying to invent things internally, big companies should use their resources to survey the market and the invention-space looking for winners. Then it should purchase the innovative company, rework their design as needed, rebrand it, and market the hell out of it.

I think this acquisition strategy, which is used by Cisco and others, makes more sense although it is not pleasing to engineers. Every engineer in the labs dreams of doing his own startup, of making his ideas a reality. Few of them will take the chance so they all yearn for their large employer to invest more in internal development. I am sympathetic to this desire by dubious of its outcome relative to acquisition.

Small companies are pretty much small companies. They embody the hopes and dreams of their creators along with their personal drive, which may stem from frustration with big companies or just a desire to create. Little companies have nothing to lose so they play to win with reckless abandon; big companies have everything to lose so they play to maintain their lead. At the end of the day, I think most of the big breakthroughs will come from the small innovators.

I had an experience last month that i keep thinking about.

I have heard complaints for a long time about bias in the media. This charge usually comes from Republicans and Religious Republicans and is leveled at at media outlets like NPR. When PResident Bush appointed XXX to head NPR, he went so far as to secretly hire a private consultant to prove bias at NPR. (Happily he was fired for it.)

In school, we learned about the phenomenon called "media bias". Apparently this is a well known effect. The upshot is that people with extreme views often feel that everyone else is biased against them, whether or not they actually are.

Which is a good segue to Israel and my story.

A few weeks ago there was a bombing in Israel by a Palestinian. Some group or other took credit for the attack and it was widely reported in the US. A Palestinian suicide bomber killed innocent people in Israel and broke the fragile peace/cease fire which had lasted for months.

Driving home one night, I heard a BBC report on the same bombing. They described the attack and the Palestinian group the same way the US media did. But the BBC went on to point out that Israel had assassinated a Palestinian leader of that group the week before. They put the two events together and concluded that the bombing was an act of retribution and not of instigation. An assassination? What?

In matters of fairness, it makes a difference who threw the first punch. The US story ignored any previous events that set the context and painted the Palestinians as the aggressor who broke the peace. The BBC reported a more complete story by connecting the dots and pointing out that Israel, not Palestinians, actually threw the first punch. Reporting both events lead to a very different story.

But the BBC went further. They actually included an reporters interview with a top Israeli official. (I cant ever remember the US media interviewing an Israeli official. We rarely interview our own officials.) This reporter asked about the bombing and then asked directly whether or not the Israeli assassination was a provocation of the Palestinians.

The official answered that Palestinians always want to kill Israeli's so it is not actually possible for Israel to provoke an attack. Pending attacks are the status quo so the assassination was irrelevant. I wasnt terribly impressed with that answer and neither was the reporter who kept asking about the link between the two events. (Asking hard questions is another thing that is almost nonexistent in the US media.)

Afterwards i kept thinking about these two very different stories on the same events and the interview. For the first time, it struck me that i was actually witnessing media bias, the real thing. It really made me question the validity of what we hear in the media. It really showed how a slight omission can completely alter the meaning. The experience gave me a lot to think about.

The one thing i can say is that you cant believe everything you hear, you need to ask questions, and you should always try to see things in context because perspective can completely change meaning. I guess that's three things.

NPR tonight had a series of interviews with voters in Louisville KY. The reason these people were interviewed was that they had voted for Bush twice and were now unhappy with his performance. I think the interviews will continue throughout the week in different cities that are meant to represent the "heartland".

One of the interviewees stated that she voted for the president (twice) because of his strong moral character. Her evidence of this strong morale character was that he hasnt cheated on his wife (that we know of).

He hasnt cheated on his wife.

You are asked to hire a person for the most important, most powerful job in the entire world. Your one criteria for this hiring decision is whether or not the person cheated on their spouse (that you know of). OMFG!

The past 7 years or so, I have heard a lot of talk about bubbles of various kinds. "There is a bubble." "There is not a bubble." etc etc.

Probably not much an insight but after some thought my feeling is that by the time people start talking about bubbles there always is one. More significantly, i think there is a natural process of bubble creation in all investments because investors are not as rational and logical as we want to believe. Investing may be mathematical but investments are the product of human nature and emotions. (Yes, i have heard of the efficient market theory; i just dont believe it completely.)

We talk about "rugged individualists" and "leaders" but at the end of the day, we are herd animals. Herd-thinking affects behavior for both the upside and the downside.

The downside. It is always safer to go where everyone else is making money than it is to strike out on your own. If things go south and you are all alone, you have some serious explaining to do; it is much safer to go with the herd and be wrong with everyone else. Even professional money suffers from this herd mentality.

the updside. Everyone wants to be a winner, to be a successful investor, but few people really know what they are doing (they just follow models) and no one can predict the future. It is easier to look at what is doing well and bet that the gains will continue, which they do for a while simply because of an increase in investment dollars. (Assets will rise in value simply because more people want to buy them. In theory the market keeps this price inflation in check but Google at $400/share with a P/E ratio of 88?)

Another contributing factor is the estimation of risks. We are very poor at estimating risks and repeated articles show that investors ignore or forget risks under the pressure for gains.

Despite being clearly stated as an assumption in every economic model known to man, we do not have perfect information nor do we invest logically. (There was even a WSJ article this year on how a certain type of brain damage IMPROVES investments because it removes emotions.) These weaknesses are why insider trading works and why we throw good money after bad hoping things will turn around.

Combine the herd mentality and lack of perfect information (and perfect understanding) with fewer and fewer capital controls, and the result is big piles of money flying around the globe which distort the prices of assets. Returns are good for a while and then there is some loud BANG and the herd stampedes in another direction, leaving financial ruin in its haste to move.

There hasn't been a big investment bubble pop in several years. But that wont last.

We've all heard this saying so why don't we act on it?

Over the past few years, I have become aware of a growing movement in schools focused on happiness. The thinking seems to be that if kids are having fun, if they are happy, they will learn more. If kids are bored with a topic, they shouldn't have to do it.

This is a nice image of school and I am sympathetic to parents who want their kids to be happy but this idea is total hogwash. People are motivated by pain, plain and simple. If they dont feel the pain, they dont make the change. Trying to avoid pain is human nature so it is understandable but our decision to take the easy road in all things is leading us into serious problems.

We all have examples of avoiding the right thing because the wrong thing is too easy. Have you ever been in a crappy or boring relationship, that you didn't end? The pain of breaking up was much bigger in your mind than the pleasure of a better partner so you stayed put. For months. Maybe even for years. Another example is something you want from your boss or your spouse but you never ask for it, you never demand it. The pain of asking, the fear of making demands is to great so you live with things as they are.

You can see this phenomenon in politics too, just look at the Iraq war. Wars are expensive and difficult. People die and bombs cost a lot fo money. In the past, presidents have faced these facts; they raised taxes to pay for the war effort and they told the nation that we need to sacrifice for the greater good. Not so for President Bush who did the opposite. He didn't tell us to sacrifice, he assured us it would be not sacrifice. He urged use to keep spending as we had, to go on with life as usual, and he gave us a tax cut, not a tax increase. Why? Because he knew that if war was painful, we wouldn't support it as much.

The irony is that the Administration is doing the exact opposite thing to the Iraqis. After 2 years of occupation, the administration is now saying that things are too comfortable for the Iraqis. They dont have to fix things themselves because we will do it for them. We need to pull out troops and make them feel the pain so that they will make changes.

Another example is losing weight. You want to know the secret to losing weight? Stop eating and start exercising. Take the stairs now the elevator; if you have to drive, park in the back not the front of the parking lot; eat half of that meal and take the other half home. When you are uncomfortably hungry, you are on the right track.

We American's are the fattest, laziest, least healthy culture on Earth because we have to consciously choose to be otherwise. We have to force ourselves to eat less, we have to force ourselves to exercise. We have to force ourselves to go without - and we cannot do it. We dont have the willpower. The status quo is too comfortable so we get larger every year.

None of this is new, so why bring it up? I bring it up because of my fear that if we dont get some social discipline soon, we are going to be facing some serious problems. I see the signs all the time now so it is on my mind a lot.

Life is good here but how long can that last? Other countries dont have too much to eat. They dont have credit for plasma tvs and huge houses. Other countries are hungry. Their status quo is painful and that motivates them to work and innovate. Our status quo is great so we sit around the ranch in Crawford and ponder our own greatness.

We are accustomed to being at the top of the social food-chain but how long can we stay there as luxury saps our will to compete? What goes up, must come down as the system rebalances itself. The problem is that those changes have a real toll in human terms. To compete on price, our workers will have to take pay cuts but will they? It's more likely they will demand the status quo until forced to change by bankruptcy or total failure.

If you dont make changes on your own with discipline, eventually something comes along and makes it for you, like a heart attack.

As an American who likes living here, Im not eager to see that heart attack.

On my way to class today, I passed a big accident on the freeway. Some Chevy Suburban had demolished two other cars and was being towed away even as it leaked fluids all over the place. Then I passed a Toyota Echo and saw my first Scion xA (which strongly resembles the Cooper Mini).

These observations sum up one of the many battles in America today: the Echo and Scion xA versus the Suburban and Jeep Grand Cherokee.

This got me to muse on how cars have changed in my lifetime.