Category Archives: Economics

American Dreaming

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This Norman Rockwell magazine cover, showing Thanksgiving on Walton’s Mountain, is a perfect illustration of The American dream.  The power of Rockwell’s vision of an American earthly paradise is so compelling that we long to believe it even though we know life was never like that and certainly isn’t now.  I started thinking about the power of the dream after reading an excellent article in Time Magazine:  “The American Dream:  A Biography” by Jon Meacham, in the July 2, 2012 issue).  Meacham’s conclusion supports what all of us know but wish we didn’t – the dream is in danger like never before.

The phrase, “American Dream,” first appeared in James Truslow Adams’s The Epic of America , an optimistic history published in 1931, as we neared the depths of the great depression.  Adams wrote of:  “that American Dream of a better, richer, and happier life of all our citizens of every rank which is the greatest contribution we have as yet made to the thought and welfare of the world.”

Even in 1931, there seemed to be cause for optimism:  the day Adams finished his manuscript, President Herbert Hoover turned on the lights of the Empire State Building.  Technical marvels coincided with the Time article as well, but they didn’t belong to us.  On Sunday, three Chinese astronauts manually docked a spacecraft to their orbiting space station, a key milestone in their quest to reach the moon.  On the same day, a Chinese deep sea craft set a national diving record, reaching a depth of 7000 meters in the Mariana Trench.

It took two centuries and a civil war before the right to “life, liberty, and the pursuit of happiness” was officially extended to everyone, and yet for a time, America offered a better chance to reinvent oneself, to start again, to rise above the limitations of birth than any other place in the world.  Abraham Lincoln called himself “a living witness” that any child could grow up to be president.  Somewhere along the line, things changed.

One interesting point that Meacham makes is that “there is a missing character in [the] popular version of the story of America’s rugged individualism:  the government, which helped make the rise of the individual possible.”  The Pacific Railroad and Homestead acts, signed by Lincoln, had much to do with knitting the country together and making allowing dreamers to “go west” or “light out for the Territory” like Huckleberry Finn as well as his creator.  It was government, under a southern president, that enforced the Civil Rights Act, and during the 60’s, launched the drive that put men on the moon and started us on the road to a micro-electronics revolution.

In the end, dreams do not depend on facts and figures, but more on a sense of hope and possibilities.  What was different in 1931 that allowed James Truslow Adams to write The Epic of America?  In it, he said, “If the American dream is to come true and abide with us, it will, at bottom, depend on the people themselves.”

If it did then, it does now.  What happened over the last eighty years?  There aren’t any easy answers, but there are many things we can and should be thinking about.

Andy Grove on How to Create American Jobs

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In the wake of this week’s jobs report, here is a Businessweek article from the July 1, 2010 in which Andy Grove, lays out a path to American economic renewal. If anyone has the chops for this, it’s Grove.  One of the three founders of Intel, he helped light the fire that gave us Silicon Valley and changed the world.

(l-r), Andy Grove, Robert Noyce, and Gordon Moore in 1978, on the 10th anniversary of Intel. Photo courtesy of Intel

The bad news is that Grove’s formula depends on intelligent and focused government action. In 2010, that didn’t seem as hopeless as it does now.  Yet perhaps ideas are like seeds; the good ones grow, even though they may take a while to germinate.

One key problem, according to Grove, is our loss of hi-tech manufacturing jobs, not only because of the human cost, but because of our loss of the expertise that production brings.  He says the US has already fallen too far behind to ever catch up in technologies like solar panels and batteries for fuel efficient cars.  “Not only [do] we lose an untold number of jobs, we [break] the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today’s “commodity” manufacturing can lock you out of tomorrow’s emerging industry.”

Grove suggests we need an employment-centered economy and political leadership.  He cites the performance of several Asian economies, including China, the source of so much hand-wringing in the face of perceived U.S. decline.

Andy Grove, 2010

Grove recommends government incentives to aid the growth of key industries and keep the manufacturing base at home. He ends the article with a chilling bit of history:

Most Americans probably aren’t aware that there was a time in this country when tanks and cavalry were massed on Pennsylvania Avenue to chase away the unemployed. It was 1932; thousands of jobless veterans were demonstrating outside the White House. Soldiers with fixed bayonets and live ammunition moved in on them, and herded them away from the White House. In America! Unemployment is corrosive. If what I’m suggesting sounds protectionist, so be it.

I suggest everyone concerned with employment and US technical expertise take a moment to read what Grove has to say:  http://www.businessweek.com/magazine/content/10_28/b4186048358596.htm

People and the Planet: A Report by the Royal Society

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On April 26, The Royal Society, the UK’s 350 year old academy of science, released the results of a 21 month study of patterns of population and consumption.  Sir John Sulston, chair of the working group, put it very simply:

“The world now has a very clear choice.  We can choose to address the twin issues of population and consumption.  We can choose to rebalance the use of resources to a more egalitarian pattern of consumption, to reframe our economic values to truly reflect what our consumption means for our planet and to help individuals around the world to make informed and free reproductive choices.  Or we can choose to do nothing and to drift into a downward vortex of economic, socio-political and environmental ills, leading to a more unequal and inhospitable future.”  http://royalsociety.org/news/Royal-Society-calls-for-a-more-equitable-future-for-humanity/

The Society issued a 132 page report that makes several key recommendations  http://royalsociety.org/policy/projects/people-planet/report/:

  1. The international community must bring the 1.3 billion people living on less than $1.25 per day out of absolute poverty, and reduce the inequality that persists in the world today. This will require focused efforts in key policy areas including economic development, education, family planning and health.
  2. The most developed and the emerging economies must stabilise and then reduce material consumption levels through: dramatic improvements in resource use efficiency, including: reducing waste; investment in sustainable resources, technologies and infrastructures; and systematically decoupling economic activity from environmental impact.
  3. Reproductive health and voluntary family planning programmes urgently require political leadership and financial commitment, both nationally and internationally. This is needed to continue the downward trajectory of fertility rates, especially in countries where the unmet need for contraception is high.
  4. Population and the environment should not be considered as two separate issues. Demographic changes, and the influences on them, should be factored into economic and environmental debate and planning at international meetings, such as the Rio+20 Conference on Sustainable Development and subsequent meetings.

Please look at this video clip of Sulston summarizing the findings of the report, which he will present at the United Nations on May 1, ahead of the Rio+20 conference.

Of special interest to me was Sulston’s critique of GDP as the key measure of economic wellbeing for nations.  GDP, he says, drives growth to levels that cannot be sustained.  Michael Meade once observed that unbridled growth in the body is cancer, and unbridled growth in the body politic is a parallel ill.

Growth is such an ingrained measure of wellbeing that re-imagining global socio-economics will not be simple or easy.  One tactic, according to the working group, is to factor in real costs:  what are the real costs of disappearing forests and species?  What is the real cost of water when the study predicts that 1.8 billion people will live with severe water scarcity by 2025?

The issue of water brings to mind my previous post, “Another Regulation Conundrum,” http://wp.me/pYql4-21e, which describes a couple’s 40 year effort to create an self-sustaining and non-polluting homestead.  One of their projects was recycling household “gray water.”  The county building codes have no provision for such experimental ways of doing things, and the couple has racked up large fines and an eviction notice.  In a very real sense, the status quo is the problem.  According to the Royal Society, not only our building codes but the mindset behind them must change or the quality of life for everyone will continue its spiral of decline.

One parting thought:  the study was released on Thursday.  Why haven’t we heard it mentioned on any US media?

What is Social Darwinism?

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No, I am not playing Jeopardy, I’m considering the phrase Barack Obama used to characterize the recent House budget proposal.  I thought I had a good idea of what he meant:  survival of the fittest, applied to human endeavors.

I learned a lot more from an article in a New York Times opinionater blog post written by Philip Kitcher, John Dewey Professor of Philosophy at Columbia.  In his article, “The Taint of ‘Social Darwinism,'” Kitcher credits the birth of the concept to 19th century philosopher, Herbert Spencer, who first talked of “survival of the fittest.”  The phrase was never used to describe evolution but survival in the human jungle.  Kitcher characterizes the Social Darwinist view:

“Provided that policymakers do not take foolish steps to protect the weak, those people and those human achievements that are fittest — most beautiful, noble, wise, creative, virtuous, and so forth — will succeed in a fierce competition, so that, over time, humanity and its accomplishments will continually improve. Late 19th-century dynastic capitalists, especially the American “robber barons,” found this vision profoundly congenial. Their contemporary successors like it for much the same reasons.”  http://opinionator.blogs.nytimes.com/2012/04/08/the-taint-of-social-darwinism/?src=me&ref=genera

I can’t help thinking of Charles Dickens’ London, where “the fittest” is the pre-repentant Ebenezer Scrooge.

One not so grand irony is that many of our latter day Social Darwinists were born into wealth and opportunity, while truly self-made men and women, like Bill Gates and Oprah Winfrey, understand the value and necessity of supportive social structures.  In Kitcher’s words, “Horatio Alger needs lots of help, and a large thrust of contemporary Republican policy is dedicated to making sure he doesn’t get it.”

I urge everyone who has a stake in this debate – meaning all of us – to give Philip Kitcher’s article a read.

Of Inflection Points and eBooks

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“Inflection point” is an interesting concept.  Originally a term from calculus, it signifies the mathematical point where a curve changes from convex to concave or vice-versa.

When I was at Intel, Andy Grove, the CEO, spoke of inflection points as key moments of transition in the life of a business or industry.  Here is a good definition of that usage from Investopedia:

“An event that results in a significant change in the progress of a company, industry, sector, economy or geopolitical situation. An inflection point can be considered a turning point after which a dramatic change, with either positive or negative results, is expected to result.”   http://www.investopedia.com/terms/i/inflectionpoint.asp#ixzz1kdT0EAcg

I don’t think we can clearly see inflection points until after the fact.  We can sense the importance of an event, but not be sure until we see the results.  Apple’s introduction of the iPod was such an inflection point, but even if Steve Jobs sensed it, the rest of us didn’t how thoroughly the way we listen to music would change.

A sadder inflection point became clear last week when Kodak filed for bankruptcy.  That was the moment, in 1975, when Kodak invented digital photography, but then chose not to purse it.

I spotted something last night that made me even more certain that Amazon’s introduction of the kindle will be seen as such an inflection point.

Last week I wrote about hearing a talk by Mark Coker, founder of Smashwords.  http://wp.me/pYql4-1DD.  Last night I saw that Coker is one of two keynote speakers, and is presenting three workshops, at one of the better writing conferences, the 28th annual San Diego State conference, taking place this weekend.

I attended the SDSU conference in 2007 because I’d met someone who sold her book there.  In 2007, one speaker talked about Print on Demand.  Ebooks were not even mentioned.  This year there are the same number of seminars on traditional publishing as there are on ebook publishing, and this in a conference that draws a lot of agents and editors. http://writersconferences.com/index.htm

I did a rough count of seminar topics, judging their their emphasis as well as I could by the titles:

39 seminars on craft of writing
8 seminars on how become traditionally published
8 seminars on how to e-publish
8 seminars on marketing or other topics
1 seminar on social media

To me, these numbers do not signify an inflection point; they signify an inflection point that has already passed.  Last week I heard an established writer say “the jury on ebooks is still out.”  I don’t think so.  I think the battle is already over.  When new technologies affect traditional media, be it music, photography, or writing, they always carry it toward greater democracy, toward putting ever more powerful tools in everyone’s hands.  This does not appear to be a reversible trend.

We all miss certain artifacts after they’re gone.  Some music lovers swear by the sound of vinyl, and while I don’t miss the darkroom, silver prints could be beautiful, and I love old kodachromes.

I hope we don’t see a day when paper books become collectors items, but nostalgia will not hold back the tide, especially when it’s grounded in both a sense of personal freedom and economic reality.  To paraphrase what a Zen teacher said about change:  we can be okay with it.  Or not be okay with it.  The one thing we cannot do is stop it.

Yep, thats me. How many artifacts of the past can you count?

Bill Moyers is Back!!!!

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On Sunday evening, I was delighted to catch the first episode of the new PBS series, Moyers & Company.  You can view it, and a lot more, on the new website, http://billmoyers.com/.

Moyers interviewed political scientists, Jacob Hacker and Paul Pierson, authors of, Winner-Take-All Politics:  How Washington Made the Rich Richer–and Turned Its Back on the Middle Class.

The conversation startled me, as Hacker and Pierson said they were startled during their research.  They found that the current income gap in this country – greater than in some third world countries like Egypt – was not an inevitable consequence of free market dynamics or trends like globalization.  It was politically engineered over the last 30 years.  Hacker and Pierson argue that the current American leadership more closely resembles a third world oligarchy than the democracy our parents knew.

“Who’s the culprit? “American politics did it– far more than we would have believed when we started this research,” Hacker explains. “What government has done and not done, and the politics that produced it, is really at the heart of the rise of an economy that has showered huge riches on the very, very, very well off.”

Bill considers their book the best he’s seen detailing “how politicians rewrote the rules to create a winner-take-all economy that favors the 1% over everyone else, putting our once and future middle class in peril.” – (from billmoyers.com)

Jacob Hacker and Paul Pierson on Moyers & Company

Winner Take All Politics is going into my already overcrowded book-queue, since it appears to be of critical importance.  The first step in correcting a problem is gaining an accurate understanding of its nature.  The fact that the assault on the middle class was created and not fated is good news, according to Hacker and Pierson.  Something done can be undone.  Along with Moyers, they agree that our current national sense of outrage is a positive sign.

Moyers’ work and website are important to bring up today.  On the website you can find an April, 2010 interview with two African American lawyers, discussing what Dr. King would have made of America today. Lawyer Bryan Stevenson said:

“I think in America, the opposite of poverty is justice. I think there are structures and systems that have created poverty, and have made that poverty so permanent, that until we think in a more just way about how to deal with poverty in this country, we’re never gonna make the progress that Dr. King envisioned.”  http://billmoyers.com/content/bryan-stevenson-and-michelle-alexander/

These are important things to consider, especially today.

The News on Page 13

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Just some quick notes on a story I have been following, in large part because it is so important and yet so downplayed in the US media. By coincidence (I assume), the latest saber-rattling news was back on page 13 of the Friday the 13th edition of the Sacramento Bee.  The front page headline story involved the closing of a local shopping center.

US carrier in the straits

Thanks to the internet, and especially British news sources, we learn that yesterday, Iranians accused the US of sending one of its ships into the 10 mile “maneuver zone” where the Iranian navy is conducting war games.  In response, Iran threatened to close the straits.  The Obama administration said this would be a “red line act,” that would provoke a military response.

On Wednesday, a top Iranian nuclear scientist died in a bomb blast after a passing motorcyclist attached a bomb to his vehicle.  He was the fourth top scientist to be targeted in the past two years according to a Jan. 12, editorial in the Los Angeles Times, which said, “That’s the kind of clean, covert assassination method favored by Western intelligence agencies.”  Although Secretary of State Clinton denied US involvement, the Iranians don’t believe her, and the Times was skeptical:

“[Clinton] went on to deliver a lecture about the need for Iran to shut down its nuclear program, which we agree with. But we also think the bombing merited something more – a strong statement that the United States decries political assassinations. The U.S. is already on shaky legal and ethical grounds with its own program of targeted drone assassinations of suspected terrorists. But at least we’re at war with al-Qaida. State-sponsored extrajudicial killing is a serious violation of international law, and car-bomb assassination is a tactic little different from the methods used by terrorists. It would be nice to hear Clinton, or President Obama, emphasize such principles.”

The Times editorial went on to say economic sanctions do not appear to be working, but that may depend on who you ask.    I caught an NPR interview with a correspondent in Iran who said, yes, they are working, just not perhaps as we want them to.  He said he went to the store to buy an Oral B toothbrush and there wasn’t even toothpaste available.  The citizenry doesn’t really understand the nuclear issue, but it does blame the US for mounting hardships.  Meanwhile, I’m guessing Iranian leaders are not suffering a lack of toothpaste.

Iranian warship test fires a missile in the Straits, Jan 1

The LA Times noted, you can’t assassinate collective knowledge.  Sooner or later, Iran will have nukes.  Another middle-east war will not close Pandora’s Box.  Yet I still find it hard to believe that this is all about nukes.  I’m thinking of Col. Andrew Bacevich’s 2008 predictions.  http://wp.me/pYql4-1AT.  Until we take the quest for energy independence seriously, armed conflict over oil will be our future.

In 2011, Wikipedia estimated that the price of Tomahawk cruise missile was $830,000.  How many scholarships would that buy for future energy scientists?  How many studies of alternative fuels would that fund?  How many lives and dollars are we prepared to spend trying to push back the river?

Sabre Rattling Over Oil: Better Get Used to It

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The juxtaposition of headlines this morning was strange but telling.  On page one of the Sacramento Bee, under the heading of “Tourism,” was the story of Virgin Galactic, a travel company that expects to offer 2.5 hour rides into space, starting as soon as next Christmas, for a mere $200,000.

You might want try to lock in your price now, before it goes up.  Buried back on page seven was this headline:  “Risk of showdown with Iran escalates as oil prices climb.”  According to Andrew Bacevich, in a 2008 interview with Bill Moyers, we can expect a constant string of oil crises; the choices we make as a nation make them inevitable.  There’s a price to pay for cheap space travel, among other things.

Andrew Bacevich

Bill Moyers 2008 interview with Bacevich is published in, Bill Moyers Journal: The Conversation Continues, (2011).  In the preface, Moyers says, “Our finest warriors are often our most reluctant warmongers.”  Bacevich is a West Point graduate and Vietnam veteran who retired as a colonel after 23 years in the military, to teach history and international relations at Boston University.  Bacevich’s son, Andrew, died in Iraq in 2007.  Bacevich is the author of several books, including the best selling, The Limits of Power:  The End of American Exceptionalism (2008).

In his interview with Moyers, Andrew Bacevich doesn’t pull any punches.  He says our foreign policy, including our wars:

“reflect the perceptions of our political elite about what we the people want.  And what we want, by and large, is to sustain the flow of very cheap consumer goods.  We want to be able to pump gas into our cars regardless of how big they happen to be…and we want to be able to do these things without having to think about whether or not the books balance at the end of the month…”

To our list of wants we can now add, “affordable” space travel, with its guaranteed 5.5 minutes of weightlessness.   As an ex-miltary officer, Bacevich points to the dark side of this, something you never hear in presidential debates, and don’t often see anymore on the front page of the paper.

“One of the ways we avoid confronting our refusal to balance the books is to rely increasingly on the projection of American military power around the world to maintain this dysfunctional system.”

The biggest elephant in the living room is our dependance on foreign oil.  Without oil, Bacevich notes, the middle east has “zero strategic significance.”  Every president since Richard Nixon has promised to address our dependance on foreign energy, and Jimmy Carter staked his political career on finding a solution.  Bacevich paraphrases Carter’s speech in 1979:

“If we don’t act now, we’re headed down a path along which not only will we become increasingly dependent upon foreign oil, but we will have opted for a false model of freedom.  A freedom of materialism, a freedom of self-indulgence, a freedom of collective recklessness.  The president was urging us to think about what we mean by freedom…Carter had a profound understanding of the dilemma facing the country in the post-Vietnam period.  And of course, he was completely derided and disregarded.” 

When Moyers asked him about the realities of al-Qaeda and radical Islam, Bacevich replied that yes, they are violent and dangerous, but are “akin to a criminal conspiracy…Rooting out and destroying the conspiracy is primarily the responsibility of organizations like the FBI, and of our intelligence community, backed up at times by Special Operations Forces.  That doesn’t require invading and occupying countries.”

At the end of the interview, Bacevich, who defines himself as a conservative, says he hopes we will come to understand the war in Iraq as a great mistake.  And rather repeat the mistake in Iran or anywhere else, hopes we will “look at ourselves in the mirror.  And…see what we have become.  And perhaps undertake an effort to make those changes that will enable us to preserve for future generations that which we value most about the American way of life.”

You can read the full text of the interview with Andrew Bacevich in Bill Moyers Journal, along with many other provocative talks with thinkers and artists across the spectrum of contemporary life.