Wednesday, October 01, 2008

A Call to Practical People

As the US Senate was passing the "Fail-out" bill, my Twitter network was popping with activity. One user in particular was adamant in his opposition. I can't blame anybody for being pissed off about bailing out a bunch of greed-heads to the tune of $700,000,000,000.00. (I like to write it out so you see how many zeros are in that outrageous number. The pennies are for fun.)

Unlike him, I'm fine with this stupidity. Well, not fine, but I'll take it.

Why? Because it's better than the alternative - a prolonged banking crisis as in the 1930s. Most economists agree that the Great Depression was deepened - not caused, but intensified and prolonged - by an illiquid banking system that was allowed to fester for years without any assistance. I pray that we never see the bank runs that occurred then, and I'm happy to have government programs like the FDIC and an active, engaged Federal Reserve to buffer these kinds of shocks. And that's what the real danger is - a systemic shock that could ripple through the US economy and the wider global economy.

I understand the conservative thinking: let the markets work. But, for my money, that's not good enough. Not by a long shot. These kinds of dicta are great in theory, in debate, but they suck in practice when things are really bad. People who insist on brutal destruction so they can "be right" don't have a place in my world. If that's really what you want out of life, I want you in a box somewhere so you can't screw things up anymore than they already are.

Most practical people recognize the limits of political, economic, religious or any kind of theory. It's great within a certain context, but in times of crisis theory goes out the window. Practical people do whatever is necessary to restore stability and move toward the normal run of things where theories have a value.

So it is to these practical people that I make this appeal.

I ask you to join me in a political movement - already extent, if scattered and confused, even self-defeating - that can transform this nation and return it, in spirit if not in circumstance, to original aims of these United States of America. Let's not deceive ourselves; we are in a crisis. Or more accurately, we are in a set of inter-woven crises. But let's start with the two main problems.

1 - We just increased the national debt to yet even more stratospheric heights. The national debt may actually be in orbit after these last 8 years. We have an enormous amount of work to do to stop the bleeding and pay off our creditors. Anybody still reading would never, EVER let their personal finances get to this point. The dollar is going to go the hell, and that will only make things harder.

2 - Worse, more dangerous, and more entrenched, we are a nation not just divided, but tied. We are a nation that has lost its national unity. We are a people who can no longer discuss, debate, agree to disagree. We are a nation of people who insist on being right, regardless of consequence. And, because there are more or less equal numbers on each side, we are paralyzed.

I take it as given that some version of the Fail-out will pass the House fairly soon and that the 2008 election will put Democrats in the White House and give them majorities in both houses of Congress. While my personal political tendencies are to the left, I don't see either of these leading to any longterm solutions.

That's what I'm after - real solutions that work in the longterm. And, as a practical person, I recognize that these will take time to achieve. So this is no quick-fix, feel good movement. It's grassroots. It's bottom up. It's blood, sweat and tears. Just like the Founders.

This is how I describe foundational concept of this movement: our politics are not left or right. Our politics exist in three dimensions, and it's the vertical axis that is most important. I'll give my tedious, geometric explanation later, but first, Green Living blogger Max Gladwell puts it beautifully in a rare for him general-politics essay:
Our political compass points neither left nor right, and we can hardly be described as centrists. Our politics is an individual viewpoint grounded in the principles of reason, morality, freedom, capitalist democracy, and the American Constitution. It is libertarian in so far as the free market is the most efficient type of economic system for a free and democratic society; it is liberal in so far as the free market lacks morality and requires government to regulate it accordingly. This is a delicate balance, which tends to skew one way or another when lobbyists and special interests get involved.
(For clarity, Gladwell has never expressed to me a desire to be part of any movement such as I describe. Nor have I asked his permission to quote his essay. Nor has there been any coordination between us. I'm just stealing his explanation 'cuz it's so much clearer than mine. I believe many, many practical people across the political spectrum share a similar belief.)

Now I'll paraphrase my own comment on that essay. Politics is presented traditionally as one dimensional: a line. Some thinkers realize that the left-right distinction is only meaningful relative to the center. As one travels out to either extreme, governance becomes totalitarian. So the horizontal axis is, in fact, a loop and therefore two dimensional. For those who would build this new politics, two dimensions are also insufficient. Our politics incorporate a third dimension - a vertical axis - where the overall quality of the outcome is the paramount factor.

As in that Shriekback song:
Everything that Rises Must Converge
(I just discovered it's also a collection of stories by Flannery O'Connor. Yes, I'm frequently imperfectly informed and happy to learn.)

How would this practical, three-dimensional politics work? Let's take a difficult, complicated issue for study: use of the US military overseas. The current use of US military forces overseas is exactly why the Founders feared a standing army. But it would be irresponsible internationally to suggest that we immediately bring our forces home from areas of conflict, areas of detente or areas of longstanding peace. It would cause a systemic shock to the international security order, such as it is. Further, it would be domestically irresponsible to immediately cut drastically our spending on military procurement. It also would cause a systemic shock.

To my mind, both of these objectives are desirable, but only within a context where the requisite actions would be responsible. To put it in simple terms, I'd like to see the US Army go out of business for lack of work. I think we all would. Is that an achievable reality? Probably not. But we can get a hell of a lot closer to it than we are now.

I think I've used this example for all it's worth in this context. There's lots and lots and lots to say on this topic, but let's not. For now. Suffice it to say, this is a big issue created over a long time, so reversing it will require a big effort over a long time. All our critical issues share these qualities.

In practical terms, these kinds of changes will require a transition so carefully planned and intelligently implemented that it would withstand the inevitable shocks and challenges that would occur over time. To paraphrase Eisenhower, the plan will prove useless, but the planning will be indispensable.

These transitions will last much longer than even a two-term President, so it is unreasonable to think that executive leadership could affect these changes. Rather, they will take a sustained effort over more than a decade at the minimum. This could only be accomplished with a true grassroots movement that could attract and retain members of both, or all parties. This movement would need so strong a base that it could withstand the momentary political fads that will come and go over the many election cycles.

Where is this base? Who are these leaders? Scary questions, but not as scary as this one:

Where will this nation go otherwise?

Saturday, April 26, 2008

A Second Life for Entrepreneurial Socialism?

Like I don't have enough blogs already, right? Will I've had some thoughts percolating in my little brain and this seems to be the place to make it happen. Likely, I'll move this over to my servers and run it on Wordpress. Just FYI.

Sunday, April 23, 2006

Managers That Hire Undocumented Workers Get Jail

Well, we'll see what ends up happening, but there are some pretty unhappy manangers at IFCO. Homeland Security raided offices of the Houston-based, pallet-making company, arresting managers and undocumented workers.

This Boston Globe story is pretty good. You'll note a healthy amount of skepticism from pretty much all sides. Nobody thinks the Bushies are serious. In fact, some think this is to undermine a more stringent enforcement program rumbling around in Congress.

Loathe as I am to say anything good about the Bush administration and with all due skepticism, still I have to say that this is the right thing to do.

Here's some comments between Tas and I regarding his post on Loaded Mouth that calls for exactly this kind of action. Regardless of whether this is the start of something completely insignificant, I think it deserves recongition.

If only so we can stomp with both feet when the cave in the face of pre$$ure from companies that make something more critical than pallets.

Wednesday, April 12, 2006

Toll Brothers + At Risk Youth = Safer Neighborhoods?

Crazy, right? I think not.

This concept pulls together issues of education, crime, "financial literacy" and urban renewal. It should cost very little to implement. In broad brush strokes, it works like this:
  1. Teams of four carefully selected at-risk youths while still in Juvee enter an intensive training program where they:
    1. Get their GED
    2. Learn basic trades skills
  2. They phase into employment with a development company like, say, Toll Brothers where they, as a team, work specifically on gutting and renovating dilapidated multi-families in the neighborhood where the kids come from.
  3. They move into the first building completed -- figure two two-bedroom apartments per building.
  4. They continue to work, as a team, renovating three more buildings.
  5. At the completion of the program, each buys one building from the developer who has held a small part of their salary in escrow to build up a down-payment.
Obviously, they'll need additional training in financial management and other landlord-type skills, but you get the gist of it.

These kinds of simple, scalable programs that marry diverse or even conflicting interests can transform our country. Let's make it happen.

Wednesday, March 08, 2006

Why Google is Google

I have had, heard and read far too many conversations about Google not to share these thoughts. Many in the financial services industries and the associated press say repeatedly that Google is prone to competition from existing and future players.

Well, duh. Has been since day one. What's the point? The point is that any time they feel like it, Yahoo!, MSN, or whomever can take the Google point-of-view and deliver products and services that mimic what Google is doing. (I feel like I'm in 2nd grade here, but I'm going somewhere with this.)

What's more, any of these organizations could have done this years ago. The important question is: Why haven't they?

The answer is simple: management.

For any company to compete with Google, they will have to unlearn everything about their corporate culture. Specifically, they will have to stop treating users like saps and start treating them like human beings.

As the obvious and dominant example, let's examine how these various players treat advertising. Immediately, we see two camps: Google and everybody else. If anybody ever wants to get fired from Google, they just have to suggest that the company implement "Road Block" ads.

((For those unfamiliar, Road Blocks are the ads that load instead of the page you clicked. No ads are more hated by users, and users hate virtually all ads.))

Yahoo!, where I first encountered this evil technique, must have thought it was a good idea. Trap users between the ad and where they're trying to go. An easy sell to the advertiser and, therefore, a good thing for the publisher.

This is how you have to think when you are subject to the Tyranny of the Marketplace.

Lucky for us, Google has developed a company that is, at least to a large degree, free from TotM.

At Google, the concept of a Road Block is completely anethema to the policies of the company. Google sees clearly that these techniques, while profitable in the short run, only drive users elsewhere. As if the prove the point, Google has grown to be the #1 internet company at the direct expense of Yahoo!.

There is a mountain of scientific research about what users like and what they hate. I've been reading Alertbox for a decade. People at Yahoo! or MSN could read it, too.

In fact, some of them probably do. But when they try to implement these ideas, management sees nothing but red ink.

So, yes, Google is prone to competition. The basic business model is very, very simple. So simple that an understanding of its value eludes virtually every Internet executive in the world.

Monday, January 30, 2006

A Study in Contrasts

Let's not kid ourselves: mining, even under the best of circumstances, is a risky business. How businesses and governments approach that risk defines their approach to governance and oversight.

Mosaic, the Minneapolis-based firm that manages a mine in Esterhazy, Sasketchewan cares enough to have installed "safe rooms" within their mines in case of fire.

Probably not a company idea, when you think about it. Sounds more like some of that socialism from up in Canada. There's about 72 miners right now feel pretty good about it.

Apparently, when the fire broke out, the retired to the safe rooms for food, water, clean O2 and some shut eye. A far cry from West Virginina

Thursday, January 12, 2006

Mad Money Supports Tyranny

On his CNBC show Mad Money, Jim Cramer claims "You are never responsible for the actions of the companies you buy." Uh, wrong, Jim. (See TOTM Part II.) His claim is so exactly opposite from reality, that we wonder why nobody else calls him on this.

The answer is simple: everybody, Cramer included, wishes is were true. But it's not.

The fact is that shareholders, AND ONLY SHAREHOLDERS, are responsible for the actions of the companies that they own.

While it's true that us regular people own so little of any given company that we couldn't even voice our concerns at the annual meeting. Or at least I own so little...

But Jim Cramer -- and this is his real crime -- he owns enough to make some noise, to have some say. The famous "Hedge Fund" that Cramer ran, his "Charitable Trust" are the very institutional investors that can influence corporate behavior.

So shame on you, Jim. You seem like a decent guy. Why don't you have some sack and tell us all what you think about Haliburton. At least tell your viewers the truth.

Don't you have enough money already?