09 July 2020

Winston Churchill's Last Words

Last night I finished Gretchen Rubin's Forty Ways to Look at Winston Churchill.

His mother was to eventually marry a man three years younger than him. As a young man Churchill’s father wrote him a letter in which he said, "I am certain that if you cannot prevent yourself from leading the idle useless unprofitable life you have had during your schooldays & later months, you will become a mere social wastrel .... and you will degenerate into a shabby unhappy & futile existence."

Whether because of or in spite of this fine bit of parental coaching, Churchill’s life was remarkable. He did, said, and wrote dozens – hundreds – of things, any one of which would define a lesser life.

His life spanned the presidencies of US Grant and LBJ. He was born before the use of electricity, the telephone, the radio or the automobile. In 1898, he fought in the last British cavalry charge to use lances as weapons. He pioneered the concept and development of the tank and the British Air Force and wrote “Scarcely anything material or established which I was brought up to believe was permanent and vital, has lasted. Everything I was sure or taught to be sure was impossible, has happened.” He was given to excess. After spending an evening with him, someone wrote, “We had two lovely films after dinner … Winston managed to cry through all of them, including the comedy.” He once traveled on holiday with 800 pounds of luggage. He escaped from prison as a soldier, escaped death half a dozen times, was prime minister twice, was a brave warrior who defeated Hitler, and a casual racist who insulted Gandhi, never attended university and yet won a Nobel Prize for literature (he was impossibly prolific: his papers weighed 15 tons and he created nearly 500 paintings), was given to excess (FDR said of him, “Winston has fifty ideas a day and three or four are good” and after being ousted from office after WWII, in the space of two weeks he drank 96 bottles of champagne while quaffing six or seven whiskies and soda and three brandies a day), was a polo champion, a fencing champion, on a book tour in the US was introduced by Mark Twain, and during his life met fellow luminaires like Charlie Chaplin and Prince Charles (Diana was a distant cousin), Haile Selassie, Keynes, JFK, Nixon, Einstein and HG Wells.

He died at 90 on the same date that his father had died. I don’t know if after such a grand life it was inevitable or incredible that his last words were, "I'm so bored with it all."

06 July 2020

Life as a Shut-In

Occasionally I forget that we've living through a pandemic and find myself suddenly questioning the poor life choices I must have made to be living as a shut-in decades ahead of schedule.

Job Transition Programs To Facilitate Progress

Economic progress means disruption and that creates pain. We could reduce that pain which would not only be a huge kindness but help to facilitate more progress. Some countries spend 2% of GDP on job transition programs. We spend 0.1%

Many European countries invest much more in their job transition programs than the United States. For the 2 percent of GDP Denmark spends on active labor market policies (training, job finding assistance, etc.), it gets high job-to-job mobility (going straight from one job to another) as well as lots of transitions in and out of employment. The rate of involuntary displacement is similar to that in other OECD countries, but the rate at which displaced workers find a job is much more rapid: three in four displaced workers find a new job within one year. Importantly, the Danish model survived the 2008 crisis and recession, with no large increase in involuntary unemployment at that time. Germany spends 1.45 percent of its GDP on active labor market policies, and this went up to 2.45 percent during the crisis, when unemployment was much higher than usual. In France, on the other hand, notwithstanding claims about how it wants to do more for the unemployed, expenditure on active labor market policies has been stuck at 1 percent of GDP for more than a decade. The corresponding measure for the United States is just 0.11 percent.
Banerjee, Abhijit V and Duflo, Esther. Good Economics for Hard Times (p. 314). PublicAffairs. Kindle Edition.

How a Series of Seemingly Random Events Might Shape a Generation: Millennials, 9-11, the Great Recession & a Pandemic

I had an exchange with Jackie and conversation with my son Blake, two millennials born in the late 1980s.

9-11 and its aftermath in the form of the war on terror hit when they were about 10. The Great Recession hit when they were about 20. Now COVID and its aftermath has hit when they were about 30. Every decade, some cataclysmic event that seems to send the future in a new direction.

As context for these events, there is another, bigger shift. 100 years ago, three really big, really important things in life were essentially just given to you, defined for you as defaults that many simply accepted: where you would live, what you would do, and your religion. You lived where you were born. For work, you did what your parent did. And you continued in the religion you were raised in. Now, all three of those are things most wrestle with, have to question, and are often forced to define. (My daughter’s Bachelor’s degree was in a major that did not exist when I went to university.)

Erich Fromm wrote this fascinating book, Escape from Freedom, trying to make sense of Hitler in the wake of WWII and he said that true freedom, true responsibility to define one's own life, is an overwhelming task and one that people might easily flee from - even into the arms of authoritarian leaders who dictate all that. Freedom of choice can be terrifying – or at least stressful. Rather than contemplate our freedom, we might actually turn to authoritarian leaders who will dictate to us what we find too overwhelming to choose or even create.

Jean Paul Sartre and Simone de Beauvoir were also exploring many of their big ideas in the wake of World War 2. This choice we have to define ourselves on so many dimensions is the stuff of the freedom and angst that they explored in their existential philosophy. Sartre argued that it was on the other side of existential angst that one created a life that wasn’t merely a continuation of what came before. Like Fromm, he believed that freedom was really stressful.

Millennials have more freedom – and thus more burden – of choice than any previous generation. (Not that this is a bad thing. I would argue that one measure of progress is exactly this: more choice about how to live one’s life, what to buy, where to live, how to live …) Couple that with the fact that the first decade of their careers is now bookended by two of the most cataclysmic recessions in the last 80 years. They are keenly aware of how contingent life is and how much can be changed by random, big events or even small, individual choices. It’s hard to imagine that they’ll expect any sense of permanence in the midst of this.

Blake opined that this is one of the big reasons the millennials are far more likely to support stronger social safety nets, from universal healthcare to welfare. That sounds right to me. It also makes me wonder the extent to which millennials will be more likely to press into situations that let them maximize freedom or create stability. Whether all this will make them more or less tolerant of uncertainty.

And of course, maybe this is just life. We’re always shocked at falling in love or how adorable a baby is even though every generation before has felt the same wonder at these things. Each generation has its defining struggles, whether it be a civil war or world war or civil rights. But I think the shape of these events in turn help to shape a generation. It’s not clear to me how these events will shape this generation of millennials who I love. The good news is that no generation has been more educated, more aware, and less tolerant of injustice. They seem well prepared. he good news is that no generation has been more educated, more aware, and less tolerant of injustice. They seem well prepared but of course preparation seems like an elusive concept when your life has been impacted by so many seemingly random events.

04 July 2020

Follow Walt Whitman's Advice and "Your Very Flesh Shall Be a Great Poem"

Walt Whitman's Leaves of Grass is 165 years old today. It's fitting that it debuted on the 4th of July as it is such a distinctly American creation. This preface appeared only in the initial edition and I love the bit about re-examining all you have been told but this whole preface is quite the advice, boldly given.

Excerpts from here:

This is what you shall do: Love the earth and sun and the animals, despise riches, give alms to every one that asks, stand up for the stupid and crazy, devote your income and labor to others, hate tyrants, argue not concerning God, have patience and indulgence toward the people, take off your hat to nothing known or unknown or to any man or number of men, go freely with powerful uneducated persons and with the young and with the mothers of families, read these leaves in the open air every season of every year of your life, re-examine all you have been told at school or church or in any book, dismiss whatever insults your own soul; and your very flesh shall be a great poem and have the richest fluency not only in its words but in the silent lines of its lips and face and between the lashes of your eyes and in every motion and joint of your body.
The genius of the United States is not best or most in its executives or legislatures, nor in its ambassadors or authors or colleges or churches or parlors, nor even in its newspapers or inventors . . . but always most in the common people. ..... the air they have of persons who never knew how it felt to stand in the presence of superiors—the fluency of their speech their delight in music, the sure symptom of manly tenderness and native elegance of soul . . . their good temper and openhandedness— the terrible significance of their elections—the President’s taking off his hat to them not they to him—these too are unrhymed poetry. It awaits the gigantic and generous treatment worthy of it.
The old red blood and stainless gentility of great poets will be proved by their unconstraint. A heroic person walks at his ease through and out of that custom or precedent or authority that suits him not. Of the traits of the brotherhood of writers savants musicians inventors and artists nothing is finer than silent defiance advancing from new free forms. In the need of poems philosophy politics mechanism science behaviour, the craft of art, an appropriate native grand-opera, shipcraft, or any craft, he is greatest forever and forever who contributes the greatest original practical example. The cleanest expression is that which finds no sphere worthy of itself and makes one.

Great genius and the people of these states must never be demeaned to romances. As soon as histories are properly told there is no more need of romances.

Only the soul is of itself. . . . all else has reference to what ensues. All that a person does or thinks is of consequence. Not a move can a man or woman make that affects him or her in a day or a month or any part of the direct lifetime or the hour of death but the same affects him or her onward afterward through the indirect lifetime. The indirect is always as great and real as the direct. .... Did you guess any of them lived only its moment? The world does not so exist . . . no parts palpable or impalpable so exist . . . no result exists now without being from its long antecedent result, and that from its antecedent, and so backward without the farthest mentionable spot coming a bit nearer the beginning than any other spot.

America prepares with composure and goodwill for the visitors that have sent word. It is not intellect that is to be their warrant and welcome. The talented, the artist, the ingenious, the editor, the statesman, the erudite . . . they are not unappreciated . . . they fall in their place and do their work. The soul of the nation also does its work.


03 July 2020

1776 and the founding of modern democracy and capitalism

1776 was a good year for world changing documents.

The founding fathers gave us the Declaration of Independence and Adam Smith gave us The Wealth of Nations. Oh, and across campus from Adam Smith in Glasgow, James Watt was perfecting the steam engine.

The combination of markets and democracy since has transformed lives. The two enable each other. Usually, what is wrong with democracy can be solved with more democracy, and what is wrong with markets can be solved with more markets.

It's funny how nobody tells a runner that they should make one leg weaker and yet in my lifetime I've seen lots of folks argue that we would make progress more rapidly if only we made one leg weaker, weakening government or markets. (For instance, the Republican Party was hijacked by Grover Norquist who famously quipped, "My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub." His weird worldview has become gospel for many. Of course now that we're witnessing the literally fatal consequences of a weak government in handling a pandemic, perhaps more people will abandon this odd theology.)

We're looking back to 1776 this weekend. It's worth remembering that the gains we have made since are less product of markets or democracy than what is created in the interaction between the two.

I would like to think that Adam Smith and James Watt were walking on this very spot on campus one day and Adam said, "Imagine someday that a person will be able to capture this image with a device."
"Oh sure," said James. "And then they'll be able to send that image to a friend on the American continent."
And then they laughed and laughed and said, "Ha! We could tell that to our peers, but really, who would believe us?"

Glasgow University. Adam Smith taught here and James Watt worked on campus, tinkering away with the steam engine. When I visited a few years ago, I was giddy.

02 July 2020

Wealth of Nation's Poorest 165 Million is 10X Bezos' Wealth (so there's that)

Jeff Bezos net worth is now $171.6 billion. (It would be nearly a quarter of a trillion if not for his divorce settlement.)

The bottom 50% of Americans hold 1.4% of the country's wealth.
Bezos holds 0.15% of the country's wealth.
So, Bezo's wealth is 10% of the total held by the poorest 50% of (or 165 million) Americans.

So that's kind of interesting.

29 June 2020

Conspiracy Theorists or Believers?

Joe Uscinski on reasoning with conspiracy theorists. (And I'm paraphrasing.)
"People like to imagine that reasoned dialogue changes minds. I'm not so sure. Lock a Jew and a Catholic in a closet for two hours and tell me that they'll come out with some compromise on their beliefs."
We call them conspiracy theorists but of course theories are subject to test and revision. Might be more honest to call them conspiracy believers.

28 June 2020

It's All Made Up (but the consequences are very real)

There seems to be a dawning realization that our social inventions - institutions, norms, culture, processes - are invented just as our products are. At that point of realization, some people become a nihilist, believing that because it is all made up, none of it matters. I feel very differently.

777s are just made up. I was at Boeing in one of the rooms that had file cabinets with various designs for this jet that could carry 400 people 7,000 miles. The complexity is mind boggling. And they have to get it all right to make it successful. A jet is just made up, just invented, but it matters a great deal that designers, builders and operators get it right.

Churches, states, banks, schools, and corporations, even marriage is just made up. But it takes a lot to get them right. And they really do make us different people.

Polygamy and monogamy are completely made up. At different times and in different places, communities embrace one or the other. But the consequences are very real. The 10 most violent nations in the world practice polygamy. When swaths of young men can't get a partner, the community is more violent.

Theocracy and democracy are completely made up. Voice of God or voice of the people? It's all social invention. But the consequences are very real. The 10 most prosperous countries in the world are democracies. Better truths come out of debate and multiple perspectives than from dictates from a religious elite.

About 100, 150 years ago we got much better at product invention. (Edison may have "invented" the first R&D lab. He died with over 1,000 patents in his name partly because he was an inventive genius but more so because he was one of the first to hire people to turn out inventions the way that others hired people to turn out products.)

We are learning more about social invention. One of the things we are learning is that most progress is incremental. A gain of 2% a year in income will double incomes every 35 years. The American revolution that gave religious freedom went much better than the French revolution that outlawed religion. We experiment our way into the future and while we challenge everything we pause before we blow up institutions. (We blew up the monarchy. We did not blow up the nation-state.)

The most important thing we are learning about social invention is that social constructs are like products, like other tools. They make our lives better but they are our tools, we are not theirs. You can love the creative genius of Karl Benz and Henry Ford without wondering whether they would approve of cup holders in a car or marvel at the genius of Jefferson and Hamilton without wondering whether they'd approve of a law banning child labor.

Social invention is at least as hard as designing, building and operating a 777 and it is even more important. If you mess up on a 777, only 400 people die. Errors in social invention kill millions.

So yes, it's all made up. And that should make you take it all the more seriously rather than be more flippant, more nihilistic about it.

27 June 2020

How Narratives Define Racism - even for the victims of racism

Narrative plays a big part in not only how we look at others but how we look at ourselves. Finding a narrative that is both positive and honest is an important trick. Positive - being kind to ourselves - gives us courage to try new things, which is key for development. Honest gives us feedback about what is and what is not working - which is also key for development. Change your narrative about others and they might become someone different. Change your narrative about yourself and you might become someone different.

Here is a revealing excerpt from Good Economics for Hard Times by the most recent Nobel Prize in Economics winners, Abhijit Banerjee and Esther Duflo. It turns out that the narratives of racism are not just something we apply to others but actually something we apply to ourselves.


What is strange about these self-fulfilling prophecies is just how predictable they are. It is always a traditionally disadvantaged person who ends up as the victim of a biased, but self-fulfilling prediction; you never hear about white males being systematically underestimated in anything except sports. The bias stems from a stereotype rooted in the social context.

A study of African American and white Princeton undergraduates shows how deep this runs. The students, who had no prior experience of golf, were asked to perform a series of golf exercises of increasing difficulty. In a first experiment, half of them were asked to indicate their race in a questionnaire before they played (the standard way to “prime” race; that is, to bring group identity to the top of the mind), and half were not. All students were then presented the golf exercises as a test of “general sports performance.” When race was not primed, white and black students performed very similarly. But once race was made salient, the fact that golf is a “white” sport (this was before Tiger Woods) made the African Americans worsen their performance and the white students improve theirs, creating a large gap between the two.

In a second experiment, researchers did not prime race, but instead the students were randomly assigned to one of two treatments. In both groups, the instructions said the exercises would become increasingly challenging. In one group, the instructions said the test was designed to measure personal factors correlated with natural athletic ability. Natural athletic ability was defined as “one’s natural ability to perform complex tasks that require hand-eye coordination, such as shooting, throwing, or hitting a ball or other moving objects.” In the other, the same test was presented as measuring “sports intelligence,” or “personal factors correlated with the ability to think strategically during an athletic performance.” In the “natural ability” condition, the African Americans did much better than the whites. In the “sports intelligence” condition, the whites did much better than the African Americans. Everyone, including the blacks themselves, had bought into the stereotype of the African American natural athlete and the white natural strategic player. And this was at Princeton…

Banerjee, Abhijit and Duflo, Esther, Good Economics for Hard Times (pp. 116-117). PublicAffairs. Kindle Edition.

16 June 2020

Our Policy Penalizes Women for Creating the Next Generation

Given how much we tax women to give birth to and raise the next generation, women who have graduate or professional degrees are twice as likely to be childless as women who are high school dropouts. Women with a Bachelor's degree are 30% more likely to be childless than a woman with only a high school diploma. We penalize women for creating the next generation and the penalty comes in the form of lost income.

(You can find the data for these calculations here:
https://www.census.gov/…/de…/fertility/women-fertility.html… )

We could change these results with a change in policy.

Make the rash assumption that you want someone to give birth to and raise the next generation. Further, rashly assume that you'd like those people to reflect the current workforce - people from the 1st to 99th percentile of income. That is, you don't want only the poor or very rich to be able to afford to take the time and afford the income cut that comes with having babies.

A wise society might not just minimize the cost for having a baby but actually provide a bonus to women who choose to become mothers.

As it is, women's wages first fall when they have a baby and then begin to rise again. But, "While this recovery is encouraging, it is not large enough to return women to their pre-birth earnings path." That is, women not only lose income at the time a baby is born but never quite get back to the same income trajectory they were on. An economist might tell you that the more something costs, the less of it people will buy. As crude as it sounds, the data suggests that this is even true for babies.


Even As COVID Cases Remain Steady, COVID Deaths Drop. The Atlantic's Derek Thompson Explains

Curious stats and theories from Derek Thompson at the Atlantic.

In the last 30 days, COVID cases per capita have remained steady but deaths per capita have fallen by 50%.

Thompson offers a few theories.

1. We're getting better at treating COVID.

2. Policy is more focused on protecting the vulnerable in places like nursing homes.

3. Knowing that the elderly are more vulnerable than the young, the elderly are generally not taking as many risks and not getting sick as often while the young are taking more risks and are the ones who make up a greater percentage of the new cases. If 100 people at random (let's say 33 young and 33  middle aged and 33 elderly and 1 person who would not tell us their age) get COVID, 5 might die. If 100 mostly young people (let's say 55 young and 35 middle aged and 10 elderly) get COVID, 2 might die. Bars filled with young people sharing COVID result in fewer deaths than COVID spreading through rest homes filled with old people.

Data from Florida supports Thompson's third theory: back in early April, people over 50 and under 50 were equally likely to get COVID. More recently, about 75% of the new cases have been among those under 50.

This is good news in that we are figuring out who most needs to protect themselves through physical isolation. It also suggests that 2020 is going to be a very long year for older people for whom shelter-in-place is still the right choice even in a world where things are gradually opening up.

His twitter thread on this is linked here.

14 June 2020

Nationalism vs. Economic Excellence

It still boggles my mind that nationalism has any support.

Here are two pie charts. It shows that the US has 3X as many top-tier AI researchers as it has produced. 

There is no country where mothers' wombs magically enable their children to excel at AI. These children are randomly born around the world. Of late, those babies tend to grow up to come work in the US. Our anti-immigrant, anti-trade policies are reversing that. It's nonsense.

Over the last decade, the US has led in the number of Nobel Prize winners: half of whom were born in other countries.

The US gets so many perks for being the place people come to work and research. The ripple effect of this is so great and goes in so many directions. Short-term, it creates jobs for American restaurant workers, dry cleaners, teachers, nurses ... Long-term, it creates new knowledge, technology, products, companies and industries.

My experience is that the more demanding the field, the greater the percentage of foreigners. It is about as hard for a product development team to be among the best in the world without immigrants as it is for a basketball, baseball or football team to play championship games without any players of color. Among their many evils, racism and nationalism lower levels of performance by creating artificial barriers to contribution and collaboration.

What the Right Gets Wrong About Voting by Mail

My friend Robert was very excited about voting by mail. This surprised me because he never really struck me as the kind of guy who was a big fan of more democracy. In fact, he seems to tilt authoritarian. A bit.

"Finally the left has come to its senses," Robert said excitedly.
"What brought this on," I asked.
"They're talking about voting by mail!"
"You're for that," I inquired.
"Of course! I think it's brilliant. Have you seen the polls that suggest how much that would change things? We would rock these elections!"
I paused a while, trying to process this.
"Robert," I finally responded. "You know that they are talking about voting by mail, M-A-I-L, not voting by male, M-A-L-E, right?"
He grew silent. About a minute later he muttered, "Stupid liberals."

13 June 2020

The Summer of Baby Boomers and Presidents: Trump, Bush and Clinton born w/in 66 days of each other

Tomorrow - 14 June - is Donald Trump's birthday.

14 August 1945, Japan surrendered and 10 months later, Trump was born. Donald Trump, George W. Bush, and Bill Clinton were all born within 66 days, classic baby boomers.

When Bill was born, his father had recently died in a car accident and his mother was working as a hair dresser.

When George was born, his grandfather (who would become a US senator) was a partner at a prestigious bank and his father (who of course went on to become president) was a student at Yale.

Curiously, George and Bill's lives weren't as different as you might think. The house George W. Bush grew up in (in Midland, TX) was fourteen hundred square feet. Both Laura and Hillary wore off-the-rack dresses at their wedding to a future president.

The three baby boomers became president in reverse birth order: Clinton at 46, Bush at 54, and Trump at 70.

Obama, too, gets the designation of baby boomer even though he was born 15 years after Clinton (and at 47, was a year older than Clinton when he became president).

As of inauguration day 2021, baby boomers will have served as president for 28 years in a row, and 20 of those years by three men all born in the same summer.

09 June 2020

How Trump Has Made Police and Protesters Feel the Same: Powerless, Angry, and Alienated

Trump's work isn't done until he's managed to divide everyone. His worldview is "us vs. them," whether the them is Chyna or blue states or guys who served in the military but weren't real heroes because they were captured or ...

He is addicted to conflict and does all he can to stir it up. He still has at least half a year left. He's not done dividing the country because his route to getting all the power he wants is to make everyone else - from protesters who are literally taking over streets to the police who can literally arrest people - feel frustrated and powerless.

"Us vs. them" is the construct. "Us" is the reality. If you want to keep engaging in the fiction of division, well there is drama in that, as there so often is with fiction. Some people who haven't figured out a purpose for their lives need that kind of shallow drama to substitute for a deeper meaning. But it comes with turmoil.

The reality is that you can't escape "us." The argument for globalization isn't to create a world where we impact each other; the point of globalization is to adapt to that world, to that reality. You can't have a great home in a bad neighborhood, or a peaceful, prosperous country in world in turmoil. Progress comes from regularly creating new partners, not new enemies. The reality is that all of us affect all of us.

In the short video in this link, a New York police leader says, "Stop treating us like animals and thugs and start treating us with some respect ... Our legislators abandoned us. The press is vilifying us. It's disgusting."

Those of you who have been paying attention have heard Black protesters say very similar things with a very similar mix of anger and sadness.

You either go all in on "us" or you prepare for a life of conflict and manufactured scarcity. Because down the route of "us vs. them" are protesters and the police united by only one thing: a focus on how alienated and angry and unappreciated they feel. It's not just the police and protesters. The point is for everyone to feel this way. Because when normal people feel powerless, Trump feels powerful. That's the world Trump and a few chaos junkies thrive in. Normal, healthy people don't.

Tweet with video here.

06 June 2020

Podcasts Are Changing Politics Now the Way that Talk Radio Changed Politics in the 1990s

I visited Reagan's Presidential Library about a year ago. I was so struck by the obvious: Reagan had mastered radio and TV before he entered politics. He'd been an radio announcer, then movie star, and then had a radio commentary program before running for office. He was an incredibly effective politician in large part because he had mastered mass media. (He won re-election with nearly 60% of the popular vote and with 98% of the electoral vote.)

He left office with early onset dementia and talk radio came in to fill the gap that this communicator had left. Reagan left office in 1989, the year that Rush Limbaugh's radio career took off.

What talk radio did for politics after Reagan's presidency, podcasts are now doing for politics in the years after Obama's presidency.

Radio fractures attention with lots of ads and artificial deadlines (news at the top of the hour, traffic reports every 15 minutes, etc.). To keep you tuned in, it has to provoke. To get callers, it has to create controversy.

By contrast, podcasts don't have to fit any time slot. The same podcast could be 26 minutes one week and 66 minutes the next, depending on the guest and conversation. No one calls in, so they can explore ideas without feeling the need to make them argumentative. People have time to explain nuance, explore causes, and talk about possibilities. Concise is nice but inadequate for some conversations. Conservatives on talk radio simply have to defend the past and that lends itself to concision; progressives on podcasts are trying to define a new future and that process lends itself to long digressions rather than quick quips. Some issues have taken a long time to develop, will probably take a long time to resolve, and might - just might - take more than 3 minutes to discuss. Oh, and some topics have more than two sides, more than two options for moving forward. Podcasts lend themselves to exploration and not just advocacy and I think they were a big influence on what happened in the 2018 election and what will happen in this year's election.

I enjoy Ezra Klein's podcasts. This conversation of his with Ta-Nehisi Coates is really timely and also a good example of what is possible in a longer conversation that isn't perpetually interrupted by ads and is more intent on manufacturing possibilities than dissent. You may enjoy it.

04 June 2020

How Our Inequality in Educational Policy Drives Inequality in Income

Our country's most elite are beneficiaries of extraordinary investments. Our poor and middle class, not so much. This huge difference in educational investment makes for huge difference in lifetime earnings.

If you are in the top 1% of households in this country, your annual income would translate into $18 million in lifetime earnings. If you are in the 25th percentile, your lifetime earnings will be about a million dollars. This difference of 18 to 1 in lifetime earnings begins with a difference of about 10 to 1 in early investment.

It starts with public schools.

In K-12, Connecticut invests an average of $18,000 per student whereas Mississippi invests $8,000. Wealthy school districts spend even more than the state average. One wealthy school district in New York invests $27,000 per student.

Private, elite schools will invest about $75,000 a year in students.

It's no wonder that by the eighth grade, students from rich families are four grades ahead of students from poor families. A gap of 4 years by year 8.

The investment gap continues at university. $92,000 per year is invested in students at the most selective universities compared to $12,000 a year at the least selective.

"A 2004 study of the most selective private universities found more freshmen whose fathers were medical doctors alone than whose fathers were hourly workers, teachers, clergy, farmers, and soldiers combined." "More distressingly still, across the Ivy League, the University of Chicago, Stanford, MIT, and Duke, more students come from families in the top 1 percent of the income distribution than from the entire bottom half."

In 1967, the ratio of subsidies at the most selective colleges to the subsidies at the least selective was 3 to 1. By 2007, that ratio had grown to 15 to 1. That is, even among the minority of citizens whose university education we subsidize, the disparity has become 5X greater in the last half century.

[All these stats on education are from Daniel Markovits' The Meritocracy Trap.]

What is the punchline? I think it won't be long before Americans insist on equal investments. For our brightest it may come in the form of education. For our most clever it might come in the form of capital equipment. For our most bold, it might come in the form of startup capital. For others it might simply come in the form of a bond or stock that pays an annual dividend or compounds during their working career. Narrowing the gap in investments could do a great deal to narrow the gap in income and wealth.

02 June 2020

Property, Protest and American Traditions

I'm feeling somewhat vindicated this week. My great (a bunch of times) grandfather moved to Boston about 150 years before the Boston Tea Party - in which radicals threw valuable Davison tea into the harbor.
We Davisons protested at the time but were largely - like our tea - drowned out by political activists who supported this looting.
It has taken a long time but finally those so-called "patriots" have come around to understand that property matters more than progress - a pretty surprising insight for a nation of coffee-drinking heathens.

31 May 2020

Exclusion: What the Black Lives Matter and Trump Supporters Have in Common

I've read a ton of history and it has made me think that I know something about the dominoes that fall across a generation. Even history has a history and things in one generation define another. For example, Sir Edward Coke introduced patent law in 1624, a Brit invented the first steam engine in 1699 and by 1800 the West was in the midst of an industrial revolution that raised productivity and wages for the first time since the ancient Greeks. A string of dominoes that fell across generations.

It goes the other way as well. John Maynard Keynes protested the Treaty of Versailles that ended WWI. He was British but knew that the allies' insistence that Germany pay for World War One would be an impossible burden for Germany and would devastate its economy. A big reason Hitler came to power was because Germans were impoverished and humiliated by their defeat and were susceptible to the rantings of a madman who promised a return to greatness. A string of dominoes that fell across a generation.

The people who elected Donald Trump and the Black Lives Matter protesters have something in common. Both are protesting exclusion, showing disdain for systems they think don't benefit them.
Globalization - the shift away from the nationalism that fueled two world wars - has been a clear success. It has made rich nations richer and drastically lowered poverty in poor nations and dramatically reduced deaths from war.

But progress is always disruptive and while globalization has made goods cheaper for everyone and profits and wages higher for some, it has also meant the loss of jobs and industries for some people and regions. Globalization is wonderful but we have not done enough to make its benefits widespread. Trump supporters protest this globalization that they feel excluded from.

Our law enforcement and legal system has been a clear success. Crime rates are lower than at any time in history. The odds that you will be killed go down every decade. But these benefits have not been evenly shared. Blacks still disproportionately get arrested and even killed by police. This weekend people have protested this legal and law enforcement protection from which they feel excluded.

I am so upset when I see Trump destroy, vandalize or attack another institution that supports globalization, that makes the world and not just our country better. Last week he announced - in the middle of a pandemic - that he would stop funding the World Health Organization. Nothing could be more destructive and stupid and yet his supporters cheered him on. Same when he has attacked the WTO, NAFTA, NATO and the UN. He's wantonly destroying these international alliances that support a better world in which we trade goods rather than bullets across borders. As I mentioned, I have a strong opinion about how dominoes fall. Unchecked, his vandalizing international organizations will mean less prosperity and more warfare in the future. It might happen within a year or two. It may take a generation. It will lead to tragedy. You either move in the direction of more harmony between nations or less. Nothing is static. I know that almost no one believes me in this but I'm horrified and gut sick at what Trump is doing and even more so by the fact that all the Trumpbros are cheering him on.

To a lesser extent - because riots and a few buildings is so much less destructive than war and the cost to national economies from trade wars - I'm horrified by the looting and rioting in cities this weekend. But it comes from the same place. People who don't feel like they are benefiting from something don't care if it burns. Trumpbros cheer the destruction of international institutions and some protesters cheer the destruction of businesses or police stations.

We have to do a better job of inclusion. The difference between how fast I can run and how fast you can run is trivial compared to how much faster we both can go riding in a car or plane. Prosperity is not about individual self-reliance. It is about the systems individuals are included in, from education and financial systems to business and legal systems. When a country does better from trade, it needs to do more to include the communities hurt by trade, to heavily subsidize their re-training, re-location and even pump huge sums into the area in the form of startup funding to let that community of talent find a new market, new set of products that can provide wages and a sense of pride.

The same thing needs to occur within our minority communities. These communities need to feel like this is "our police force," not a group of strangers who view them suspiciously and treat them badly. 
The same thing with the courts.

When people feel excluded from an institution or a privilege or a system, they won't care if it gets destroyed. They might even cheer as it burns down.

My visceral reaction to Trump supporters and protesters destroying things is one of incredulity and anger. I'm trying to change that, to figure out what we need to do to make those people feel included in the story of progress that transformed our grandparents' lives and will transform our grandchildren's lives. Progress is a beautiful thing. Rather than get angry at the people who are angry about not being included in it, I need to figure out how we better include them in it rather than tell them that they should care about the systems they don't believe care about them.

30 May 2020

A Tough Trick: Giving People a Sense of Autonomy When Their Work is So Defined by Systems

Political turmoil always comes with economic progress because identity and the work we do is so intertwined.

I think that one of the tricks of the next economy that will be hardest to pull off is this: give people a sense of agency even though their productivity is defined by systems.

Right now almost no one I knows thinks that their salary has anything to do with dozens, hundreds of systems they have nothing to do with and yet what we make is 95% defined by systems rather than our own effort.

Machines automate more and more manual work every year. Algorithms are going to automate more and knowledge work every year.

Factory workers thought that their productivity was about them and not the factories they worked in. Knowledge workers think their productivity has something to do with them and not the educational and information systems they work in. It has been - and will be - tough to realize that's not the case.
We haven't evolved biologically in the last few thousands years but our productivity has gone up enormously. And continues to rise.

What are the systems that let the exact same animals be so much more productive?

Roads and highways and railroads and airports that let us send and get products and services from a broader region.

Educational institutions, unions, companies that have processes that make people more productive.

Information systems that let knowledge workers work more efficiently.

Laws and law enforcement that protect property and extend those principles to things like patents so that investors and innovators will invest in new products and technologies with the hope of returns.

The electrical grid and the appliances that work off it.

The fossil fuels and engines that require(d) thousands of innovators and inventors and that let a guy with a chain saw cut down more trees in one day than his great grandpa could in a month.

The social norms of employer and employee (Between 1800 and 2000, the percentage of workers employed by someone else rose from 20 to 90. By 2000, over half of employees worked for organizations with 500 or more employees; in 1800, none had.)

Language. Writing. Email. Software.

And so on, and so on, and so on.

The systems that most fascinate me appear at the level of economies. An agricultural economy has its own set of principles, practices, beliefs, and technologies. An industrial economy another. Those evolve and change and farmers and factory workers and knowledge workers in an information economy think that is who they are rather than just who people become in order to be productive. That identity, that definition of what it means to be productive, evolves and changes over time as the systems we live and work in evolve and change.

This is a big reason why social invention fascinates me. It means stepping outside of systems to shape them rather than let them shape us. (Okay. That's absurd. Our systems will always shape us.) 

Everything is made up and everything matters. Polygamy or monogamy? Made up. But it matters. The 10 most violent nations in the world practice polygamy which means lots of young men without partners wandering around angry. Dictatorship or democracy? Totally made up. But it matters. The 10 richest nations in the world are democracies.

One big obstacle to progress is that people defend the systems that define them even when those systems - like an agricultural economy for instance - are gradually made obsolete.

Progress comes from challenging and improving and inventing systems. That's tough work. Particularly when people define themselves by those systems. But here's the trick. Here is how you give people agency when their productivity is defined by the systems they live in and work with. You make them systems  thinkers and social inventors. You make their work the work of defining and shaping those systems.

Gloria Steinem Explains Why Women Gamble Less

"Someone asked me why women don't gamble as much as men do, and I gave the commonsensical reply that we don't have as much money. That was a true and incomplete answer. In fact, women's total instinct for gambling is satisfied by marriage."
- Gloria Steinem

29 May 2020

Post-Satiric Satire About How Life Cost Money

I was about to write about how we spend $200 billion a year on law enforcement because of crime (we have 15,000 homicides a year) and then the officers we hire to keep the peace shoot 1,000 more people a year. We spend big money to save lives and instead they add to the killing. We could save money and lives by laying off everyone in law enforcement.

Even better, think of all the money we could save if we spent 0% of GDP on healthcare instead of 17%. (I could go on with the cost savings we'd have if only we cut out all these fancy new costs we've incurred since the Dark Ages. Life expectancy then might have been only 30 years but you could get by on about $200 a year.)

Let me point out that if you think it is absurd that we would accept 1,000 homicides a month because it is too expensive to save lives, note that we simply accept 1,000 COVID deaths a DAY because it is too expensive to save those lives through methods like aggressive test and trace.

Then I remembered that when you have a deranged president beloved by 33% of the population there is no such thing as using satire to make a point and that every stupid proposal just sounds like another proposal. Rather than become an argument to save more lives by spending more money on making our world safer, this point would be seen as a sincere argument to make the world less expensive because, after all, the point has never been about making life longer but instead simply making it cheaper.

Put more succinctly?  
Life cost money.
All in all, though, it's a price worth paying.
Thank you for coming to my TED talk.

28 May 2020

In Praise of Breasts ... and a little commentary on "free" speech on social media

Breasts are wonderful. They feed babies. They're beautiful. And you can't post a picture of breasts on Facebook. You can on Twitter but they warn viewers before one can see them.

Lies and conspiracy theories are awful. Being in a pandemic highlights the fact that a distortion of facts can literally kill people. You can post lies and conspiracy theories on Facebook and now - in some instances - Twitter will warn you when you're about see a lie or conspiracy theory.

If you post a snuff video which results in a death, it will be be taken down (and I'm not sure but think there would be criminal charges as well).
If you promote behavior which results in a death, it gets left up.

Weirdly, people are outraged that Twitter now warns when something is a lie but these people are not outraged that they warn you when you're about to see nudity.

Don't pretend that social media isn't already selectively flagging and censoring content on platforms or that such actions don't already reflect judgment calls. Don't pretend that you want to live in a world where there is not a degree of content moderation and / or warning flags on platforms. Don't pretend that even "speech" doesn't have consequences for which you are responsible.

27 May 2020

An Attitude of Progress and Embrace of the Unsettling

One of the many mini-obsessions I have among the larger obsession of how we make progress is this question of how we deal with the fact that given that progress so often looks and feels like disruption and threat, we resist the very forces that might move us forward.

Some delightful quotes on this theme are to be found in this piece by Maria Popova.

“Cut short of the floundering and you’ve cut short the possible creative outcomes”
- Denise Shekerjian

And from Ralph Waldo Emerson:

“People wish to be settled; only as far as they are unsettled is there any hope for them.”

"The one thing which we seek with insatiable desire is to forget ourselves, to be surprised out of our propriety, to lose our sempiternal memory, and to do something without knowing how or why; in short, to draw a new circle. Nothing great was ever achieved without enthusiasm. The way of life is wonderful: it is by abandonment."

Find the post here.

Global Antipathy Towards Globalization

Sadly, globalization has fewer defenders than nationalism. It's easier to excite the masses with cries of "Us vs. them" than "Us."

Since 1945, globalization has lessened global inequality, dramatically lowered deaths due to war, and increased prosperity. Put more simply, globalization fuels the twin goals of peace and prosperity that only ideologues dismiss as the most important goals of policy.

Here Martin Wolf explains how growing tensions between the US and China are reminiscent of the growing tensions between the US and Germany nearly a century ago.

On Zoom, Nobody Knows If You Have New Shoes or No Shoes

The move came from a deep impulse but little thought. It had been so long since she'd been in the office, so long since she'd worn new shoes anywhere. While on the zoom call she tried to nonchalantly drape her leg over her knee with a dramatic flourish so as to display - albeit briefly - her beautiful new shoe, a work of art she'd found online. What she hadn't anticipated was the leg cramp triggered by the odd angle that caused her leg to flail outwards, knocking her laptop cattywampus onto the floor, the screen cracked, her zoom meeting frozen.

They really were beautiful shoes. Adding in the price of the new laptop, they were also the most expensive pair she'd ever purchased.

Even so, she did get some satisfaction to hear from her friend that after, the frozen image they had of her was just her "absolutely gorgeous shoe and ankle" while they continued in their meeting.
"So not a complete loss," she thought. Plus the three days it took for her new laptop to be delivered - what might be categorized as sick days in this new online world - were the most relaxing she'd had in months.

The Meta-Conspiracy Theory of Trump Supporters

To be a Trump supporter now means having to believe or defend any number of conspiracy theories.

Which is the most popular of the many conspiracy theories Trump supporters believe? That supporting Trump doesn't require believing in conspiracy theories.

22 May 2020

Win-Win - the need for courage and consideration (Thank you Stephen Covey)

One of the cooler things that I got to do was to work for Covey Leadership Center for a few years. I still feel really fortunate that I got to teach the 7 Habits of Highly Effective People seminar multiple times. (Quick people need to take it only once to get it. Those of us who are slower had to teach it multiple times.)

Habit 4 is Think Win-Win. Lots to it but one really powerful framing is in terms of the need for both courage and consideration.

If you are only considerate, inquiring about and respecting the other person's win without fighting for your own win, you will end up in lose-win relationships. They win, you don't.

If you are only courageous, articulating and defending your own win without regard for theirs, you will end up in win-lose or win relationships. You win, they don't.

There is too little time and too many people to put up with those relationships. I still find myself forgetting courage or consideration and need to pause to make things right.

Be considerate and insist that the folks in your life do the same. Or, if you'd rather, be courageous and insist that the folks in your life do the same. Either way it's a win-win.

Be a winner who surrounds yourself with winners.

14 May 2020

Fear of Mexicans and Millionaires, or Immigrants and Billionaires Will Stop Defining American Politics

The 2018 and 2020 elections represent a return to normal politics.

After the Great Recession, we had Occupy Wall Street and the Tea Party. Occupy became the Sanders supporters. The Tea Party became the Trump supporters. They got all the press attention and assumed that they had all the voters. They didn't. They don't.

The average American is not afraid of Mexicans or millionaires, or immigrants and billionaires, and know that there isn't a single example of a prosperous economy that wasn't created by and didn't create both. (Show me an economy without any rich people or without any immigrants and I'll show you a really lousy economy.)

So in 2018 we did - and in 2020 we will - hear from the majority of Americans who are happy to have rich people (on top of everything else they do, they can help with all the taxes we have pay) and immigrants (they can help us to increase supply and demand, helping natives to start and work in businesses and buying the many products and services these businesses generate).

08 May 2020

The Month in Which the Modern Information Age Was Born

In December of 1947, Bell Labs researchers laid the foundation for the world that so defines us today.
Doug Ring and Rae Young wrote a memo "Mobile Telephony: Wide Area Coverage," in which they laid out the idea of a honeycomb of hexagons and repeating frequencies within cells, a system that would eventually be called cellular phones.
John Bardeen and Walter Brattain - working under the management of William Shockley - were perfecting the transistor that became the foundation for computer chips.
Claude Shannon coined the term "bit" as he defined a new field that would be known as information theory. (No one had previously thought of a unit of measurement for something as abstract as information.)
All within one month.
Why mention this?
World War 2 ended in 1945. A tremendous amount of money, problem-solving and research went into this problem of how to save democracy. WWII was a tragedy but it triggered a tsunami of problem-solving and breakthroughs. More importantly, it was a catalyst for new ideas and exposed everyone to new situations. It wasn't just that a lot of knowledge came out of this. It set in place processes, practices and new technologies that continued to generate new knowledge. As all that potential shifted from war to peacetime, it created new possibilities. About two years after the world war was over, its momentum helped to lay the foundation for the smart phone you're holding in your hand right now, a supercomputer in your palm linked to endless libraries of information.
Our response to COVID-19 could be very similar, a catalyst for ideas that will create new worlds. Some good will come out of these odd times.

07 May 2020

A Pandemic of Conspiracy Theories: Why Trump's Followers Feel Like They're Stars in the Truman Show

Ideology lowers IQ about as much as a blow to the head. ISIS, the Nazi Party, the Medieval Church, Stalinist apparatchik, Trump supporters .... every group has people of varying intelligence. But their intelligence is subordinate to the larger group and that means intelligence is channeled into loyalty, not understanding.
There is a stunning number of conspiracy theories running a muck among Trump supporters. All are variants on "MIT, WHO, Gates Foundation, CDC, New York Times, CNN, BBC, the EU, China, (etc., etc.,) are in collusion to control you or profit from you and here is what is really going on ..." First, just from a logistic perspective, getting all of the folks in all of these organizations (these are really, really smart people who really, really pride themselves on original thinking) to agree to fake a global pandemic is inane. In this country alone we can't muster agreement to rebuild crumbling bridges. Second, the conspiracy theories all have the same purpose: undermine the authority of anyone who makes Trump look like the fool he is.
Occam's razor can be explained this way: if you hear hoofbeats, assume it is horses and not unicorns. Go for the simplest explanation. Could it be that experts throughout the world - even the doctors in your local hospital - are conspiring to fake a global pandemic in order to put a microchip in your body so they can track your location? (A conspiracy theory propagated by folks on smart phones with microchips that never leave their person.) Is that possible? I actually think that it's practically impossible given a million things that all have to be aligned to make this true, but let's say, sure, It could be a unicorn.
What's a simpler explanation? Trump has bumbled handling this pandemic from the start and unless he can find a way to discount every expert who might be able to shed light on that fact, he has to take responsibility. He's already done a great job of inoculating his followers from facts by insisting that they stop trusting the mainstream media or twitter or libtard friends and trust only his interpretations. Trump loyalty - as with any true love - demands a level of abstinence from all others, particularly those investigative journalists and so-called experts.
Is the whole world conspiring to make up a pandemic? Are you caught in the Truman show? Or is Trump just a con man? Occam's razor suggests that it's one con man fumbling with a global pandemic rather than a global conspiracy intent on killing millions just to make this one con man look bad.
Are the people who believe these conspiracy theories stupid? Not necessarily. Some of them just want desperately for there to be unicorns. For them this is all a loyalty test. Their revelation won't come from increasing their intelligence. It will come from them simply deciding that its better to be led by simple truths than simpletons.

05 May 2020

Why Trump is Re-Opening the Economy (And Why It Will End Badly)

You might be wondering why Trump announced the dissolution of the COVID task force on the day that we passed 70,000 deaths nationally. Every 3 to 4 days, another 10,000 Americans die. So why shift the focus to re-opening now?

He's got an election and he's trailing badly in the polls. How badly? Hoover is the last incumbent to trail by such a large margin. Trump has to turn things around and wants to look like he's addressing the economy before Friday's numbers come in.

Friday we will learn how many jobs were destroyed in the last month. It will be millions, dwarfing any previous month on record. The talking points for every politician and reporter will be, "Is this virus costing us too many jobs?" You watch. The fact that Trump shifted to reopening will actually make his poll numbers go up a couple of points.

But of course the virus could care less about his poll numbers. It will simply exploit more opportunities to spread as the country re-opens. Meanwhile, it will be tough to get people to shop, dine out, and mingle like they did in 2019 while the number dying is actually accelerating. Trump loves PR but hates actual executive responsibility. The PR boost he'll get for pushing to re-open the economy will fall as people realize that his impatience has given us the worst of both worlds: high death rates AND economic contraction. No healthy economy is going to emerge atop rampant spread of and fears of illness.

02 May 2020

Putting the Cost of the Pandemic into Perspective

In the US, household net worth is $118.4 trillion (and our annual GDP is $21.4 trillion).

If your net worth was $118,000 - let's say you had $68,000 in home equity and $50,000 in stocks and savings - would you dip into it for $2,000 to $10,000 (or take out loans of $2k to $10k) to cover sudden, serious medical expenses? 

Would you consider yourself destitute if you had to?

Estimates vary, but the coronavirus will cost us at least $2 trillion - perhaps more than $5 trillion. It's worth remembering that we have $118 trillion (and the credit score to borrow trillions more).

Couples in Quarantine

She: "I'm going out for a few hours."

He, worried. "Please be safe."
She: "Don't worry. I have protection."
He: "Great."
The door closes. Suddenly it dawns on him that this could mean a couple of things. He does start to worry.


"Please," she raised her hand. "Just ... please. I've had enough of people today."
"Had enough ..." he sputtered. "But I'm the only one here!"
"Exactly," she sighed.


She, sounded exasperated: "We should start seeing other people."
He, alarmed: "What?!?!? You want an open marriage?"
She, disgusted: "What? No! I just literally mean that we should see other people. After 6 weeks I am so ready to spend the evening with someone - anyone - else."


He was outraged. "He's recommending doctors experiment with disinfectant as a way to cleanse the body from this virus?"
"You can't really blame Trump for his confusion about medicine," she said.
"What?!?! He's an idiot."
"Well medicine is confusing for him," she calmly said. "He's had really confusing personal experiences with medicines. For instance, the only time he took Viagra, the only thing that happened was that he was a couple of inches taller for a little while."


He had just stepped in the door and before he could take off his mask, she stopped him. "Leave your mask on," she instructed him as she grabbed his hand. "Speak to me in a French accent," she said as she led him into the bedroom. He mumbled something largely unintelligible in what might have been a French accent and her only response was to pull him closer.
By the end of quarantine, he was regularly uttering largely unintelligible nonsense in various accents, uncertain whether he should be hurt or flattered when she told him that she'd never so enjoyed their conversations.


The first day they re-opened the beach, he saw something remarkable. She was wearing matching bikini and face mask. He couldn’t help but notice that the black material for each breast was the same size, shape, texture and color as her mask. He wondered if in the post-pandemic world women who had a boyfriend or husband would convert the his and her masks into a bikini top and the single women would simply convert their one mask into a monokini. A post-pandemic signal that one was single. Then he thought again. "Probably not what they meant when they said that things will never again return to normal."


He, after a day of silence. "I can't take this anymore."
She: "I know. This quarantine is going on too long."
He: "No. I can't take being with you another week. We need to swap partners. Even if just for a week."
He braces himself, ready for tears, anger, accusations ... instead she calmly says, "Carl."
He: "What?"
She: "I've thought about it too. I would rather be with Carl."
He's offended, angry, confused .... but stands there mute. She goes back to reading. He wanders out of the room.
Neither of them speak of it again.

01 May 2020

Gales of Creative Destruction and the Need for Aggressive Investment post-Pandemic

In the 3Q of 2018, the economy created 67,000 jobs.
In the 3Q of 2019, it created 11,000 jobs.
In the three quarters between, it created 811,000, 525,000 and 182,000 jobs.
That sounds innocuous enough but those are net.

In the 3Q 2019, the economy destroyed 7.3 million jobs and created 7.3 million jobs and the difference between them was this tiny sum of 11,000 jobs. This is what gales of creative destruction look like.

In the last six weeks, 30 million people have filed for unemployment. This quarter the economy is likely to destroy closer to 50 million jobs than it's typical 7-ish million.

What does this mean? To counter this unprecedented level of destruction we will need unprecedented levels of creation. One tactic is to preserve businesses that will hire back once this is over. The other - complementary - tactic is to launch a tsunami of startups, turn cheap money (interest rates are absurdly low) into precious jobs. A third tactic is to literally create new infrastructure, knowledge and industries.

We should stop having infrastructure weeks and start an infrastructure decade - included in that the creation of green energy solutions that hasten the obsolescence of oil. Also, start spending as much research and development for federal departments like Housing, Transportation, Energy, Interior, and Education as we do on Defense.

We have a huge economic problem that will only get more complicated. Like any problem, we'll have to create our way out of it. When you have more destruction, the solution is more creation.

30 April 2020

Who Survives and Who Dies After Shipwreck

COVID-19 fatalities
Days to hit
10k - 41 days
20k - 5
30k - 5
40k - 5
50k - 4
60k - 4

I still don't understand two things.
1. What makes people so confident that we don't hit 100k before mid-May?
2. What makes people think that - other than our fondness for groups of 10 (says the guy typing with 10 fingers) - this will pause or even slow down at 100k? Particularly if we loosen regulations.

I'd love to think that it will take 6 days to hit 70k, 10 more days to hit 80k, another 30 days to hit 90k and 100 more days to hit 100k. That is, I'd love to think this is slowing down.

But is there anything to support that expectation? Other than some combination of hope and fatigue? Am I missing something?

Meanwhile, a study of shipwrecks is revealing about which sort of communities thrive.
In 1864, two ships wrecked onto the same island near New Zealand within months of each other. Neither knew of the other.

The survivors of the first wreck found themselves at the base of a cliff that one was too weak to scale. The rest left him behind to die.

The survivors of the other wreck, by contrast, risked their lives to save the life of another in the effort to first get to shore.
One community was founded with the clear philosophy of, "We're all in this alone." The other with the clear philosophy of, "We're all in this together."
After being cut off from civilization for 12 months, only 3 of the original 19 shipwreck survivors from "we're in this alone" group were still alive. By contrast, every one of the "we're in this together" survivors were still alive 19 months later.
Willingness to sacrifice to help others made a difference. In another wreck from the mid-1800s, a crew member was bringing the captain's chest of gold to shore, an amount equal to $23 million today. The captain ordered him to leave the chest and rescue a girl instead. This visible sacrifice set the tone for how the survivors would look out for each other. The captain and many of the survivors were LDS and the whole group was cooperative and caring. 2 months later, all 51 of the 51 were still alive.
Cooperation and care for each other turns out to be a great predictor of how well these involuntary social experiments in shipwrecks do. There is probably a lesson there.

28 April 2020

When the Ignored Predictions Have the Best Chance of Coming True

Sometimes, your prediction has to be ignored in order to come true.

Someone predicts that a stock will skyrocket in price over the next few years. So, its initial price when it goes public is very high. Because it is so high when it is first available, not only does its price not skyrocket, it hardly goes up at all. The prediction that everyone acted on is made a lie.

Someone predicts that a company is over-priced, so few people buy it when it first goes public. Its initial stock price is very low. Because it started so low, its price rises over time as it performs okay and investors who bought when it first went public see a good gain. The prediction that everyone acted on is made a lie.

Experts warn that hundreds of thousands of Americans could die from a pandemic. They are taken seriously, special measures are taken (people stay indoors and interact with almost no one), and the experts' dire predictions do not come true. The prediction that everyone acted on is made a lie.

Advocates for life as normal argue that the pandemic is overblown and we should go about life as normal, ignoring the panicked advice of so-called experts. They are taken seriously and hundreds of thousands of people die from a pandemic. The prediction that everyone acted on is made a lie.

Predictions and policies here in the US will be volatile. To make it even more complicated, the predictions will change what happens - in the opposite direction of what was predicted.

What is my prediction? Our behaviors, policies and the predictions about it will look like a murmuration of birds.

24 April 2020

In the Long Run We Are All Rich: What Negative Interest Rates Mean for Good Policy

The Dutch have records that go back to the time of Martin Luther - 500 years. In that entire time, including the European settlement of continents, 30-year religious war, the end of knighthood, serfs, industrial revolution, the car, telegraph, telephone, TV, computer, modern medicine, introduction of democracy .... interest rates never went negative. Until about 2 years ago.
Now the Dutch, the EU, Japan and even the US (for the US still only briefly and after adjusting for inflation) have all had and / or have negative interest rates.
This is huge.

One of the things I've not seen anyone talk about is how valuable it makes investments.

Imagine that you start with $100 income. Each year that income grows by 5%. You want to price this income stream for the next 50 years.

If you assume that interest rates are +1%, then you discount next year's income by that amount. $100 next year is worth only $99 this year. You discount the amount by 1%. And of course the further out in time, the more you discount that income stream.

If you assume that interest rates are negative 1%, -1%, you actually increase next year's income. $100 next year is worth $101.

What is the price of a 50 year income stream growing at 5% a year when interest rates ....
are 1%? $1,903.
are -1%? $1,014,861,688
It's the difference between two thousand and one billion.

What does this mean? The lower interest rates are, the bigger the reward for investments now. What kind of investments will pay off long term? R&D. Education. Startups. Infrastructure.

As we come out of this incredibly painful downturn, we should invest money as if we were drunk or billionaires. This will do two things. One, it will employ a lot of people right now in construction of infrastructure, R&D, teaching and working in or managing startups. Two, it will generate future income that is worth more than it ever has before.

Negative interest rates signal a wonderful thing. It means that the future has never been more valuable and with capital so cheap, never a better reason to invest in this future. In a twist on Keynes, in the long run, we are all rich.

19 April 2020

Popularizing Systems Thinking

Models of complex behavior increasingly sit at the background of vital political discussions like global warming and pandemics. It is time to make them a more integral part of our political discussion. Until voters can understand and participate developing models to predict the behavior of systems, we will have unstable politics, particularly in a country like ours that puts so much stock in the opinion of everyone. This country was defined by a way of thinking. It’s time to expand that.
Our founding fathers did not pioneer Enlightenment thinking but they were the first to create a community organized around it. The Enlightenment shifted people from a reliance on authority and tradition (church and king) to reason and debate (science and democracy). Our founding fathers popularized education – most notably, Thomas Jefferson founded the University of Virginia – with an emphasis on rhetoric and analysis as essential to creating smart voters. They generally believed that education was necessary to freedom and democracy. But as it turns out, rhetoric is a poor way to understand or communicate complexity. We need to update what constitutes a good education.
Today we have expert systems thinkers but we haven’t popularized systems thinking, made it a part of the way we organize and act or even a part of what we include in education. Analysis focuses on parts at one point in time; systems thinking focuses on interactions over time, like how viruses spread at different rates depending on how we behave or how CO2 builds in the atmosphere depending on our technology. Systems thinking is as important to an effective democracy in this 21st century as Enlightenment philosophy was to an effective democracy in the 19th and 20th centuries. We can’t coherently debate systems as varied and crucial as our financial, environmental, education, and healthcare systems with fluency in systems thinking.
Hearing Bill Gates talk about a pandemic in 2015 and how serious it will be, he mentions what "our models told us." Listening to California governor Gavin Newsom in press conferences, he, too, references "our models." Models have the potential to explain futures we haven't yet experienced. Models will never be perfect; they can, however, be sufficient to inform good policy.  Once you understand compound interest, you may not be able to predict how much wealth you’ll have in 30 years but you know what to do: invest early and often to maximize that wealth. Once you understand how rapidly the coronavirus can spread, it informs policies like shelter-in-place. Even though models are sensitive to changes in assumptions and inputs, they can still point us in the right direction. The better people understand them, both their limits and the insights they provide, the more credible and helpful these models.
I work with really bright scientists and engineers to plan – or model – their projects to develop new products like drugs, medical devices and computer chips. Two benefits inevitably follow. One, each person gets insights into what others are doing and how that impacts them. Good models are key to coordination. Two, they learn more of what is possible as they play with the model, play a game of “what if” to see how they might accelerate launch. “What if we hired one more circuit engineer?” “What if we doubled the number of clinical trial sites so that we could enroll patients more quickly?” The models let them answer what-if questions and become tools for making really smart people even smarter, in the same way that a spreadsheet can help a financial planner to get and communicate insights. Models that a group jointly creates and maintains could be used to inform an entire populace about their policy options on issues like economic stimulus, global warming, or the spread of a pandemic. Even very simple models can help to illustrate important dynamics more clearly than rhetoric.
Democracy depends on education. Change is accelerating. We’re increasingly dependent on systems. Education needs to include system thinking. In a crisis like a pandemic, we have to react to what the models predict about consequences because if we wait to react to actual consequences or rely on our intuition (intuition informed by completely different circumstances) our actions will be tragically late. Models let us learn from the past and from possible futures. The AI that recently beat the world champion Go player Ke Jie was able to make a move no one had ever before seen, a move learned from millions of game simulations it had simulated play even before playing its “first” game with Ke Jie. When a community encounters something like the coronavirus, it would be nice to be at least as prepared as one might be for a game of Go.
There are a variety of ways to popularize systems thinking. One way might look like video games. Imagine kids learning about global warming or economic development by getting exposed to simple models that play out over time. They first learn to turn the knob on this variable and then that variable. They see which variables are akin to the butterfly's wings in Brazil that causes a snowstorm in Minneapolis and which are akin to a hundred moths beating their wings uselessly against a light bulb. Over time they begin to introduce their own data, their own variables, or even change the structure of the model. The class as a whole could build a model that represents their collective insights and predicts outcomes few – if any – minds are sophisticated enough to foresee.
Good education changes life outside the classroom. Eventually democracy might mean that we have collective, online models that represent our best knowledge and are as widely understood as an op-ed or debate. Policy could come out of millions of simulations that are largely transparent and contributed to and understood by millions of citizens. Perhaps working on models will become as much a part of citizenship as working on campaigns or reading and arguing about op-eds. In the same way that a car lets us travel further than we could on foot, good models can let us create better policy than we can with debates.

Ron Davison lives in San Diego County, wrote The Fourth Economy: Inventing Western Civilization and works with teams in Fortune 500 firms and startups to accelerate product launch. @iamrondavison

A Post-Pandemic Stimulus Plan to Quickly Create Jobs

Adding to the trauma of deaths, illness, layoffs, and social isolation, at the end of this pandemic we will find ourselves with tens of millions unemployed. Without quick, bold policy initiatives, the post-pandemic economy will create even more trauma. The millennials in particular – a generation that began its career in the aftermath of the Great Recession and now face this economic wreckage only a decade into careers – are going to be badly hurt by this.
Unemployment has longer lasting negative impacts than does divorce, being widowed, or being laid off.[1] It’s traumatic and ruinous to someone’s long-term economic prospects and any policy we need to adopt to address tens of millions who are unemployed has to account for this.
What would quickly employ people and stimulate wage and productivity growth? Doing for entrepreneurship what policymakers did last century for capital and labor. That is, invest boldly, at unprecedented levels.
Prices tell you what markets think is abundant and what is scarce. Capital and labor aren’t scarce. Entrepreneurship is.
Proof that capital is no longer scarce is simply this: the price of capital has gone negative. How unusual is that? The Dutch have records on bond sales that go back 500 years. In all that time they never had negative interest rates until just a couple of years ago. Growing affluence means that there are more investors than ever looking to build portfolios. (And hundreds of millions more reliant on markets through investments in pension funds.) Because of this, trillions in capital move around the globe in search of returns.
Education seems to also be providing a lower return than it did half a century ago. The price for college graduates is dropping. The Fed recently reported that a college degree no longer offers a wealth premium.[2] Which is another way of saying that market prices for education – like capital – suggest that it isn’t that scarce. And many millennials, struggling to pay for housing in cities on wages that aren’t terribly higher than those from a decade or two earlier are wondering when their return on a college investment is going to yield a return. It might not.

Once upon a time capital and education were scarce, though, and investing in them gave the country phenomenal returns. A look at what past investments in what was scarce did for wages and job creation suggests what could happen if we make similar investments in what is scarce today. That is to say, to get some sense of what a startup stimulus might do for the economy, we can look at what past investments in capital, education and research did for the economy last century.

In his book, The Rise and Fall of American Growth, Robert Gordon reports that output per hour between 1920 and 1970 grew 2.82% a year. Between 1970 and 2014, it grew only 1.62%. If wages had grown at 2.82% between 1970 and 2019, median income would have been $88,000 rather than the $48,000 it actually was. Compounded over a lifetime, a difference of 1 to 2% is huge. You don’t get returns without making investments, though.
During World War 2, the government invested billions in capital equipment for factories building wartime equipment. Between 1940 and 1945, consumption of capital rose from $19 billion to $116 billion[3], much of that coming from the government.  Additionally, it sent experts on production and management – consultants like W. Edwards Deming and Peter Drucker – to help companies make best use of this capital.
The result was dramatic. On D-Day, June 6, 1944, the Germans could deploy only 319 aircraft. The United States and its allies deployed 12,837. American manufacturing was more powerful than a Nazi blitzkrieg.
When the war was over, the government let companies keep the manufacturing and intellectual capital it had funded. Rather than make tanks and planes, they began making cars and TVs – at rates as impressive as the preparation for D-Day.
Next, the government invested an unprecedented amount in education. Between 1944 and 1949, BA degrees conferred rose from 126,000 to 432,000. The rapid rise in the creation of knowledge workers was essential to the emergence of the information economy.
Finally, the government spent more on R&D, funding agencies like DARPA and the NSF. The innovations resulting from this research – as varied as the internet, communication satellites, and genetic engineering –helped to create hundreds of new technologies, thousands of new products, millions of new jobs and trillions in new wealth. Most R&D investments fail to generate any return. The ones that do, though, continue to compound over time to create value that dwarfs the initial investment. (In this way, investment in R&D is very similar to investments in startups: most fail and the few that succeed generate great returns.)

A startup stimulus could do two things. It could quickly create hundreds of thousands – even millions – of jobs. And it could yield returns as dramatic as the long-term returns to education and research made after World War 2.
While the price markets pay for capital and education seems to be falling, the the price of entrepreneurship – wealth created by successful entrepreneurs – is high and still rising.
In 1987, when he was 31, Bill Gates became the youngest self-made billionaire in history. About a generation later, in 2008, Mark Zuckerberg became the youngest self-made billionaire at age 23. Investments in entrepreneurship could offer high returns.
Big investment in startups – entrepreneurship – will pose as many challenges as big investments in education, research or infrastructure did for past generations. Anyone who knows how difficult it is to identify good startup ideas or to launch a company from scratch will realize that a startup stimulus will be at least as difficult as figuring out how to ramp up production in 1944 to complete one plane every five minutes, launch fifty merchant ships a day, and finish eight aircraft carriers a month. Or land on the moon or launch communication satellites. It won’t be easy but it will yield a great return.
This is a big challenge that promises a big reward. A hundred billion dollars could fund 50,000 startups that employ 700,000 people for 18 months; a half a trillion would fund about 250,000 startups and create 3.5 million jobs. There would be no question about whether a startup stimulus would create jobs. It would be designed for exactly that. We could begin funding startups even as people still shelter-in-place and – depending on how bad unemployment is – adjust the scope of this startup stimulus up or down.
Americans hit by this pandemic could quickly return to work. Rather than a gap in their resume and a hole in their savings, they would get valuable work experience and savings. The trauma of long-term unemployment would be mitigated and their lifetime earnings, productivity and wealth would be greatly different.
What would we get for our return? Tens of percent of these startups will fail as soon as their guaranteed funding is gone, but they will have provided employment at a critical point in the recovery. Tens of percent are likely to continue beyond their window of guaranteed funding for another year or three. Many will become great, viable companies. A few will even become iconic companies, the GE, GM or Apple of their generation. Successful companies mean better products and services for all of us, higher wages and more wealth.
Additionally, all sorts of unexpected benefits came from aggressively investing in capital, education and research. The NSF didn’t start with the idea of genetic engineering or a computer smaller than a pocket protector. The same will happen with great investments in entrepreneurship. As more people become more adept at entrepreneurship, as more communities can at will create new companies able to create jobs and wealth, economies will become more prosperous and less subject to long-term sluggish growth that breeds cynicism and helplessness.
Bold investments in entrepreneurship will not only immediately create jobs but could trigger a steady rise in productivity and wages at least as strong as that of the American economy before 1970. The short and long-term potential of such policy is huge. So is the risk of doing anything less.

Ron Davison lives in San Diego County, wrote The Fourth Economy: Inventing Western Civilization, and helps team within Fortune 500 companies and startups to accelerate product development. @iamrondavison