State of the Nation After 9/11/09

Oh man, where to begin.  I think I’ve been a little frustrated lately because I haven’t written in a while.  So let’s get it out there so I can move on.

National Tea Party, 9/12

This last Saturday was the National Tea Party Day in DC.  The Tea Party is a rallying cry for essentially Jeffersonian anti-big government, anti-taxation, anti-socialism, anti-public option Americans.

I live in DC.  I went to meet some friends at the St. Regis hotel for drinks, since one of our friends was attending a wedding reception there for her friends.  I think there were three weddings in the area because there were people dressed to the nines everywhere.  But interspersed among them along 15th Street, since the St. Regis is due north from the White House, were tons of Tea Party out-of-towners.  They wore the typical uniform of the red-blooded American patriot from the midwest and south.  So imagine little black wedding party dresses and heels and tuxedos mixed in with American flag t-shirts, Don’t Tread on Me flags, large homemade posters decrying socialism, and 13 Colonies flags.  It was quite a scene.  Read this post for an idea of the iconography and symbology they use.  Heavily Confederate, heavily Jeffersonian.

Inside the Tea Party

I am being generous in my description of the Tea Party because here’s what it really is:  despite claims to the contrary (they say they are inclusionist) by those orchestrating it (Dick Armey, FreedomWorks, FOXNews, Glenn Beck), the Tea Party is almost exclusively old, white, fat Americans from the midwest and south (watch the videos, about the only minorities you see are the police, ironically…DC at least in the workplace is diverse, although not so much socially).

This panoply lends itself to legitimate elements of conservatism, as well as attracting isolationism, racism, and antiquated rhetoric, because they want to be left alone by the government, prefer Jeffersonian federalism, and couch their political rhetoric loosely around racist anti-Obama, obstructionist anti-Keynesianism, and anti-national anti-public school/health care/anything that takes money out of their pockets.  As with any movement, the fringe elements make up a lot of the headlines.

medicare

The thing is, their political ideology has a strong historical foundation.  The American debate has long focused around Hamiltonians and Jeffersonians arguing about central government vs. limited government, diplomacy vs. isolationism.  The Tea Party certainly has legitimate doubts about the encroaching danger of a growing government, the problem of being taxed too heavily by hungry and wasteful federal programs, the desire to own guns vs. the fear of the government seeking to seize them, etc.  They are the accountants of American domestic and foreign policy.  Their first instinct is always to say no.  And we need this.

Today’s American Policy Schools of Thought

One significant limitation with solely following this school, though, is that the world has become far more complex than these classic debates (fought out when America was not yet the superpower), and so has American history.  Walter Russell Mead, author of Special Providence:  American Foreign Policy and How It Changed the World, adds two more schools of American thought, the Wilsonians and the Jacksonians.

The Wilsonians can be best described as the non-government organizations in Washington, DC who lobby for peace in Darfur or de-mining Cambodia or human rights in China.  They believe that the American freedoms we enjoy within successful democracy and human equality can be exported; we should spread those ideals abroad.

The Jacksonians are the belligerent, more realpolitik war-fighters who believe strongly in national security, honor, and individualism at any cost.

Naturally you can see that the Tea Party people take a lot from the Jacksonian movement, with their profession of faith for the 2nd Amendment, the vivid display of patriotism and love for the red, white, and blue, and resisting the “public option” of health care in favor of individualized, privatized health care.

But this is not what they choose to make the basis of their movement.  They know that preaching fiscal conservatism is where they will be the most inclusive to the conservative base, judging by their organizing web sites.  What’s interesting about that site in particular is that #tcot is a hashtag meaning Top Conservatives On Twitter (the libertarians’ is #tlot, the liberals are split up) and the site’s style is a direct knock-off of Drudge Report‘s site design (which I’ve since deleted as a bookmark despite it being a great place for a links, because it’s just become too much of a political EFP pushing anger at certain topics).  The Tea Party Patriots web site uses film footage from FreedomWorks, the lobbying group that (and I’m trying not to be too judgmental here, but the FW logo is on everything) is pushing the Tea Parties.

I would describe myself as mostly a Hamiltonian (having had a Keynesian economics grad school education, admittedly), but I also draw heavily from the other schools:  Jeffersonian appropriateness of levels of government and high requirements to declare war, Jacksonian desire for ferocity when war must be conducted and desire for militaristic honor in combat and argument, and Wilsonian dreams of universal human rights.  I share libertarian suspicion of Wall Street and the Federal Reserve (and any organization that is not transparent and accountable to the people).   I support companies in their mandates to earn as much money as possible, but I also think they must do it within the commonly-accepted range of American regulatory institutions protecting the public interest vigorously.  I grew up in a Jeffersonian, libertarian Texas as a kid, fought in a post-9/11 Jacksonian US Army, studied at the afore-mentioned Keynesian economics institution, concentrated in a Wilsonian international development concentration.

What’s Wrong With the Tea Party?

With all that said, I feel as though I am qualified as a well-rounded American to question the motivations behind the Tea Party movement.

First of all, it is exclusionary, in that it is made up of old white people who are afraid of having things taken away from them by illegals, blacks, government, etc.  As this recession becomes more severe, you can expect hatred to increase.  In the past, when the economy did worse, groups like the Ku Klux Klan enjoyed higher enrollment.

I also feel it is out of touch, even down to its name:  the Boston Tea Party desired representation for British taxation, in essence declaring that paying taxes was a way of expressing voting preferences.  The Tea Party is anti-federal government, and desires to pay much less taxes (if not any), and thus, losing voting rights.  This is a horrible distortion of the original meaning of a pretty significant declaration in favor of democracy by our forefathers.

For the Tea Party people to travel to a district (DC) that has no representation, down to the license plate (“taxation without representation”, to protest being over-taxed, seems ignorant.

The Tea Party also called itself teabaggers at first, until liberals informed them that teabagging was a lewd sexual act.  Another massive blunder.

The Tea Party also will not to admit to this, but it consorts with racists.  All-white crowds who bring firearms and yell down opponents?  This is intimidation in its rawest and most public form:  if you’re an illegal, a Latino, a black, a gay, then you better not attend.  Racists rarely come out and say they hate other people (at least the white supremacists are honest about it), but it is intellectually dishonest for the Tea Party to say it is not racist while it does not censor its own members for being racist.

Again I must emphasize that the Tea Party expresses legitimate fears, once you get past the overt lobbying effort at the top of it. It is not a baseless, stupid movement.  DC is a liberal town and most of the residents were unhappy to see the Tea Party show up in town.  But as Mead writes,

“Divided We Coast.  By the closing months of the Clinton administration, American foreign policy could have been compared to a car.  In the front seat the Wilsonian and Hamiltonian schools agreed that the car should go as fast as possible, but they disagreed on the best course.  Their feet were together in pressing on the accelerator, but they wrestled for the wheel.  Jeffersonians, meanwhile, sat in the back and exercised the classic privilege of the backseat driver:  They complained loudly and irritatingly that the car was going too fast, and that it was taking wrong turns.

“The three schools were so busy fighting that at first none of them noticed that the engine — the Jacksonians, whose support gave the car its real power and drive — were no longer responding.  Hamiltonians and Wilsonians pumped the accelerator, but to no avail:  The car continued to slow.”

For all the ill-informed bluster about death panels, socialism, big government, Nazi/Communist Obama Brownshirt Girl Scout Nazi Youths, the Tea Party engine is genuinely scared.  For Obama and liberals to ignore these peoples’ fears and desires would be political stupidity and lack of empathy for fellow Americans.

In fact, the progressives, underneath it all, share a lot in common with these protestors.  Both are deeply sensitive to the powerlessness they feel against elites and big government/business.  They both feel as though the system has been stacked to pay off the elites and not the common man.  Both fear a blow to the middle class.  Both seek reform.  If anything, both now benefit from the increasingly wise understanding of how money, politics, and influence can affect different organizations and legislation and externalities.  We live in the first days of rapidly increased transparency (but not yet accountability, except through smear campaigns).

CNBC is Involved

CNBC has strangely had some connections to today’s debate.  It perhaps began with Jim Cramer’s famous blow-up about how bad the crisis was (which Bush and Obama used stimulus money to prevent, successfully, I might add).

It continued with Rick Santelli, a trader and commentator on the floor of the Chicago Mercantile Exchange, made a massively influential rant on CNBC about subsidizing losers using government money, to the cheers of fellow financial class traders.

Santelli’s video was a rallying cry for the Tea Party before CNBC intervened and tried to have his name removed.

Another CNBC alumn, Dylan Ratigan, left for MSNBC and recently wrote an op-ed for Huffington Post about how the financial industry owns us and we haven’t done anything about it, because we are hostages.

So CNBC is intertwined in all these debates as well.  Those who make the most money in this country, the financial executives and the industries that support them, have a vested interest in stoking up capitalist-socialist fears and monopolistic/subsidized conditions for their profit.

As an aside, I was watching FOXNews and Tucker Carlson (the kid who got beat up in school and is taking it out on us now, and also got beat up verbally by Jon Stewart on TV and was then trashed by CNN) did a smear piece on “The Trouble with Textbooks”, where he’s arguing that progressives and intellectuals are secretly inserting their messages into your kids’ textbooks.  Better take your kids out of public schools.  Let me guess.  Are they going to Christian madrassas?

A Bad Summer

Obama clearly lost control of the message this brutal, brutal political summer during the Congressional lull.  Obviously he fouled up the entire health care debate, allowing FOXNews to dictate the terms of the debate through town hall ridiculousness.  He was not achieving the immediate success in jobs numbers he hoped from the stimulus.  He has not pleased his progressive base by advancing on any civil rights fronts (the easiest of which would be to allow gays in the military).

He needs to engage the Tea Party people and address their demands.  At the same time he should play the base off (Mead’s “engine”, made up of Jacksonians at their core) against the lobbyists and corporatists who are playing them like puppets.  These lobbyists are scaring up the disconnected gap of the midwest and southern states who are afraid of losing more and more during a brutal recession and transformation of the American economy to that of an information economy.  It is scary that lobbyists have convinced whites from the middle of the country to vote in favor of cutting taxes for the richest of the rich, disallowing better health care for those who can’t afford it, and in general voting to allow the most elite in this country to have less responsibility and compliance to the rest of us.

THAT is pretty disgusting.  But Obama could exploit this divide.  Keep in mind that it was Bush, an idealist but running as a conservative, who violated fiscal conservative policies.  It was he who exploded the national budget deficit and negative trade balance.  Just imagine if Obama cut back the anti-recession stimulus measures (which, I might add, he HAD to do, and which DID prevent a financial sector collapse) and ran as a fiscally responsible politician?  He would win away a lot of scared, hurting midwestern whites.

Racism Grows With Recession

I’ll be honest.  I’m getting a little worried.  It is true that Latinos will become a major power in this country, through pure demographics.  This will continue to exacerbate the divide between the cosmopolitan coastal cluster cities and the rural traditionalist interior.  The radical whites that the Republican party has been forced to rely on (i.e. Palin) will continue to be disconnected and feel that the rest of the country does not pay its fair share of respect and resources to them.

Look at this one video of a guy who definitely does not want the US government, law enforcement, or anyone to go near him:

Now compare it to a jihadist video by Azzam al-Amriki, who, American interpretation aside, actually preaches on the face of it a message to the west to leave his people alone, get out of Muslim countries, and stop imposing foreign values on his people.  He is anti-globalization and anti-financial system.

http://www.youtube.com/watch?v=04wpi6TcMZA

In both cases, they are in a private room, secluded, wearing the uniform of their people (cowboy hat vs. kuffia), listening to their music (country vs. jihadist), finger-waving that they will shoot to kill anyone who attempts to infiltrate.  I hate to compare the two, but the similarities are striking; they both complain of an attack on their strong sense of identity, and they are both reacting against what they see are great injustices against their people.

Their concerns should not be ignored.  They should be empathized with and understood properly.  We should get a good sense of this loss of trust.  When we ridicule Iran for rattling its sabre against Israel, we should remember that it is because Ahmadi-Nejad gets votes for being anti-Israeli.  The Republicans get votes for being pro-white, anti-federal government.  When we wonder why the Taliban has such a stranglehold in tribal AfPak, we should look at our own country and see the people who don’t want to live in the cities or be cosmopolitan or be around people who aren’t Christian, hetero, and white.

While fortunately our Americans are not militant, it is not a far cry to see that they one day may be.

A Call for Unity

Which is why it’s so crucial that we unite our nation.  Through manifest destiny and the belief we are a city upon a hill with special providence, we’ve been provided one way or another with a secure geostrategic position nestled between Canada, Mexico, and two oceans.  We are secure, if we are smart about what our vulnerabilities are and work to reduce them.  We have the largest economy in the world and we are the largest country that has the most unified populace.  We have naval, air, and space superiority over all the other nations.  The Russians are weak, the Europeans are wrestling with forming a union, and China is running into significant demographic and political instability risks.

I believe in taking bold steps necessary to maintain American superiority, but I also believe that we must push a more equitable international system, and I also believe that the only risk we have is if we break apart as a nation.  It was quite right of FDR to say that the only thing we have to fear is fear itselfOur position in the world is assured as long as we don’t screw it up.

“And finally, in our progress towards a resumption of work, we require two safeguards against a return of the evils of the old order. There must be a strict supervision of all banking and credits and investments. There must be an end to speculation with other people’s money. And there must be provision for an adequate but sound currency.

“If I read the temper of our people correctly, we now realize, as we have never realized before, our interdependence on each other; that we can not merely take, but we must give as well; that if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress can be made, no leadership becomes effective.”

We face two domestic risks:  that the white base will turn itself against the USA and break apart from the coastal liberal city clusters that provide most of the economic clout (e.g. SF, LA, DC, NYC, Miami).  While they will manage to divide both coasts (which would give the breakaway states the ability to hamper coordination between the coasts), this would be even more destructive to national unity.

At the same time, the southwest continues to build dual loyalties:  those to the union and those to Latino heritage.  I do think that the southwestern states are strong contributors to the union, but if things disintegrated, the cultural, racial, and religious affinities might force them to create a sub-state, much like Kurds in Iraq.  The failed War on Drugs has turned Mexico into a weakened state amongst drug cartel lions whose resources eclipse those of the nations in which they exist.  This brings violence and drugs to our borders, which we can’t hope to guard effectively.  Mexico is a primary national security concern, as a result.  But we do very little to aid Mexico’s stability with our drug policies.

A Russian professor recently got a lot of press for proposing this break-up.  The details are ridiculous (even indicating lack of ground truth knowledge of the USA) but in my mind, it’s the US’s only real risk.

Texas, where I’m from, of course flirts periodically with the idea of seceding from the Union.  Its crazy governor, Rick Perry, is now joining up with Tim Pawlenty of Minnesota, asserting 10th Amendment state sovereignty rights.  This is fine, of course, but legal subtleties barely cover up a seething desire for separation from the Union.

The Tea Party was being sponsored partially by Glenn Beck’s 9/12 Project.  As this essay rightly states, the 9/12 Project is an attempt to commandeer a national event, 9/11, and commemorate it “their” own way.  It separates my 9/11 from your 9/11.  Having joined the Army after 9/11 to go fight terrorists, part of me wonders how many of the 9/12 Project answered their country’s call.  Part of me is offended that they try to co-opt the military as being part of them, when I wore the American flag every day for 5 years too.

Losing national unity is our greatest risk in the long-term.  Our success is so assured that it is almost as if we are doomed to ruin it if we are not vigilant about promoting equality and unity.

On PBS I was watching a documentary on some of the civil war leaders and presidents who tiptoed the line between these schools, in the midst of vicious civil war, America finding its place in the world, and ultimately Lincoln unleashing his generals to fight the Confederacy.  It of course was the bloodiest war the US has ever fought (most civil wars end up being that way).  Now, when political climates have turned poisonous, all these ancient resentments have re-surfaced.  Just like what we might see in Lebanon, or Sudan, or Russia, or China.

There are common threads among pissed off progressives, pissed off libertarians, and pissed off conservatives:  fiscal discipline, getting rid of corruption, re-evaluating our national interest based on risk-reward.  There is common ground that could form consensus, if used correctly.

The Butt of International Jokes

But what are we going to do about this?

What are we going to do?  We are fighting amongst ourselves, ridiculing each other, taking the high road while denigrating and minimizing the strength of our opponents.  Meanwhile, we are losing our competitiveness.  We are not educating our children sufficiently to compete in an increasingly global economy.  While we fight with each other, Chinese kids are working their asses off.  Indian kids are working their asses off.  It’s the same worldwide.  People are learning that they have to compete.  Other countries are laughing at us in disbelief over our fear of socialized health care systems and our inability to deal with border violence, health care, government spending, Afghanistan, Iraq, etc.

Meanwhile, we have strong elements in our country seeking just to preserve what they have.  All these lost jobs in the US will never return.  We have to keep educating ourselves so that we can fill the newly-created jobs.  It will never be the past again, in terms of comfortable blue-collar jobs.  It certainly won’t be that way if we radically privatize our country (no social safety nets, no government benefits for workers or citizens).

Jefferson, in his own inaugural address:

“During the contest of opinion through which we have passed the animation of discussions and of exertions has sometimes worn an aspect which might impose on strangers unused to think freely and to speak and to write what they think; but this being now decided by the voice of the nation, announced according to the rules of the Constitution, all will, of course, arrange themselves under the will of the law, and unite in common efforts for the common good. All, too, will bear in mind this sacred principle, that though the will of the majority is in all cases to prevail, that will to be rightful must be reasonable; that the minority possess their equal rights, which equal law must protect, and to violate would be oppression. Let us, then, fellow-citizens, unite with one heart and one mind. Let us restore to social intercourse that harmony and affection without which liberty and even life itself are but dreary things. And let us reflect that, having banished from our land that religious intolerance under which mankind so long bled and suffered, we have yet gained little if we countenance a political intolerance as despotic, as wicked, and capable of as bitter and bloody persecutions. During the throes and convulsions of the ancient world, during the agonizing spasms of infuriated man, seeking through blood and slaughter his long-lost liberty, it was not wonderful that the agitation of the billows should reach even this distant and peaceful shore; that this should be more felt and feared by some and less by others, and should divide opinions as to measures of safety. But every difference of opinion is not a difference of principle. We have called by different names brethren of the same principle. We are all Republicans, we are all Federalists. If there be any among us who would wish to dissolve this Union or to change its republican form, let them stand undisturbed as monuments of the safety with which error of opinion may be tolerated where reason is left free to combat it. I know, indeed, that some honest men fear that a republican government can not be strong, that this Government is not strong enough; but would the honest patriot, in the full tide of successful experiment, abandon a government which has so far kept us free and firm on the theoretic and visionary fear that this Government, the world’s best hope, may by possibility want energy to preserve itself? I trust not. I believe this, on the contrary, the strongest Government on earth. I believe it the only one where every man, at the call of the law, would fly to the standard of the law, and would meet invasions of the public order as his own personal concern. Sometimes it is said that man can not be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the forms of kings to govern him? Let history answer this question.”

Obviously Americans in Jeffersonian days still battled with the same balance between majority and minority, the Constitution and interpretation.  But are we being played off each other?

In short, and I have said this before, we have a battle between elites, who are seeking to preserve monopoly status and government preference, and citizens who realize that the only way to make it in today’s America is to get rich or die tryin’.  If you don’t get rich, you can’t feed your family.  You can’t pay for health care.  You can’t take any vacation.  You can’t live in a safe neighborhood.  It becomes a Hobbesian world where everyone is out to protect just their own families and maybe even their tribes.  Large corporations, seeking protection under freedom of speech as “individual” entities, throw money at issues affecting them so they can influence policy, while at the same time using Milton Friedmanomics and Reagonomics to deny unions, public NGOs, and government oversight, the only institutions that can match corporate lobbies in influence, purpose, and money.

The American Dream becomes not one of inclusion, where we take in your poor, your huddled masses, promising them a fair start and a chance to get rich.  The American Dream becomes “the greatest show on Earth” (thanks Bill Moyers) where you come to peddle your wares, make your money, and get out of the disgusting, violent market as soon as you can, to go live comfortably in a gated community where you’re safe from the violence and randomness that exists outside.

Choices

We as a country are going to have to make choices.  And they are not really choices at all.  Either we divide, and fall, or we unite, and fulfill what we consider our destiny.

We have to decide that we are true capitalists, who see firms as maximizing profit entities but working within the boundaries of a government that exists to protect the public interest and good.

We have to decide that yes, we are individuals who deserve our own rights, but those rights extend not only to us, but to those who are different than us, poorer than us, richer than us, from different countries, are here illegally, to every human on the planet.  The liberals have to clean up their house, and the conservatives have to stave off death.

We have to remove obstacles towards implementing better project design and implementation.  I don’t know how that will come about, except by the blunt force of inescapable technological advancement.

Mostly we have to decide that we’re going to do this together.   With that, I think I should close with MLK Jr.’s last speech before being assassinated:

Surpluses and Shortages

I’m moving out of my Georgetown rowhouse and just started my job, so I’ve been a little busy and haven’t been able to write much.  That’s one reason Twitter is so great — I’ve been able to just send some quick tweets (the other reason it’s so great is its generativity (see Jonathan Zittrain) — Twitter provides such a vast platform/ecosystem for other ideas to thrive in).

[edit:  I didn’t know this until after I published the post, but apparently the Pop!Tech 2008 conference was focused on the subject of abundance and scarcity.  Fitting!  Here’s the opening video presentation that the Pop!Tech conference began with.]

Anyway, since it’s been so long, I’m going to ramble a bit.  The blog is still great for that.

When I took all my money out of the market back in September/October of 2007, I did it because there were vapor bids on all the stocks out there.  Nothing was supporting any equities.  About two years later, the financial markets have stabilized quite a bit, with the TED spread finally dropping back to the levels before the markets got a whiff of collateralized debt obligations going sour.  Companies have shed a lot of jobs and have made a lot of cutbacks.

As an investor, I’m feeling a lot safer about putting my money back in.  I wanted to wait until at least this summer, when a lot of mortgage and housing resets hit the market.  Now is the dreaded velocity period of August-October, when the market is most likely to crash, historically.  But it can also rally pretty strongly in that time period — I think this has something to do with new fiscal years beginning and a lot of annual inflows/outflows taking place around that time.

I’m still only interested in Amazon ($AMZN) stock, but since it’s already pretty high I have to leave it alone.  There is no other stock out there worth holding right now, in my opinion.  I suspect the next big runner in tech will be a Facebook IPO or perhaps Yahoo! ($YHOO), if  they can ever find a moneymaker.

I went to the premiere of Barack Stars, a play showing at the Woolly Mammoth Theater in DC, done by the Second City Comedy Troupe (SCTV, some Saturday Night Live folks).  It’s a play lampooning the reverence for Obama and all the political scandals in DC lately.  One of the joke skits involved poor laid-off finance guys from NYC.

Funny to be sure (I highly recommend you go see this), but how accurate?  My suspicion is that while a lot of finance types in NYC lost their jobs, it wasn’t long before they found new ones.  All the smart money that didn’t vaporize probably went to the next unregulated market out there, or as some have hinted, towards carbon credit markets, the next bubble target according to Rolling Stone’s Matt TaibbiThe NYTimes just ran a story about how the big brokers were trading with a 3ms advantage on retail traders, racking up tons of money through arbitrage.   This just goes to show you that when you combine fierce NYC finance types with the new quant PhD players, every aspect of the market is a game that no layperson is going to win.  Back in the 90’s, daytrading was somewhat fair, but now the game is entirely stacked towards brokers.  Combine this with the scam that is now common stock:  common stock is worthless, effectively, since there’s now so many classes of preferred and private stock for the company insiders that no common stock holder is actually entitled to as much equity as he/she may have thought.

That really leaves the only effective vehicle for making money in the stock market picking solid companies that are undervalued.  Tech stocks are especially good for this; the thing about NYC types and PhD folks is that they’re not particularly good at identifying good companies.  Yes, they make money selling companies’ stock to their clients, but they come up with long bullshit reports that they charge over $100 for that just basically say how every company in a sector is worth buying.  However, if you know your tech, or you know the zeitgeist about a company, you can still stand to get a triple-bagger on a stock (triples from the price you bought at).  Long-term investing, in my opinion, is dead.  The market is set up to scam you unless there’s a major regulatory overhaul.

Anyway.  Surely there are many people who were working in NYC because of connections, hook-ups, etc. and they don’t have the goods to keep doing it.  But I bet many of the financial class either have merit-based wealth (good skills either in smooth-talking or in quant models) or status-based wealth (being born into east-coast privilege), a dichotomy discussed in John Clippinger‘s “A Crowd of One”.  In other words, they did not lose their money and leave town.  This wasn’t like the Great Depression, where people ended up leaving the cities and going back to their family farming traditions or joining the military.

Sadly, the military adventure continues.  Afghanistan now looks a lot like Iraq a few years ago.  Soldiers are still dying and money is being wasted.  To Obama’s credit, we are now pressing into the Taliban as we always should have been doing, and Robert Gates seems to be a responsible steward of the armed forces.  But the inertia of occupation still continues forth and it’s only those Americans who give a damn and enlist who seem to be paying the price.

The rest of America goes on as usual.  Unemployment is higher, for sure.  This could end up being a large problem, especially since I view those lost jobs as jobs that will never return — the high velocity of job destruction and creation requires adaptability, quick learning, and higher and higher levels of education…qualities that the American innovation and education systems are no longer producing in any citizens except wired kids, who are doing all that learning outside of the system anyway.

The fact that America and the rest of the world are still pumping away and doing okay must be because the world is just awash in money.  There are far too many people you or I or anyone can name who do not seem to have earned their money or their ease of life.  Deals that are completely nonsensical still seem to happen.  People make careers out of nothing more than proposing meetings that never happen.  Job hiring, as I’ve talked about a lot lately, is a complete farce of a system, an inane game that we all have to play.

My own impression of venture capital is that it’s become extremely risk averse and dumb money.  There are some cool angel firm ideas, seeding start-ups with a little money and lots of training.  But look at the trash they are producing.  Some incremental improvement on video watching.  Some tiny adjustment to file sharing.  Did Twitter come out of one of these programs?  No, and it never would:  it had no financial model (if you’re unimaginative, anyway, like most people) and it took a while to catch on.  As it turns out, Twitter is a massively open platform for innovation.  How do you put a valuation on that, exactly, using today’s financial models?  You can’t.  That’s why vencap and angel insistence on financial modeling is so retarded.

If the world is awash in money, why are there so many poor?  Amartya Sen intimates that there are no longer food shortages worldwide, just rationing.  More specifically, he says that no democracy has ever had a famine.  In other words, when food is allocated at least somewhat responsibly and with a conscience towards those who need it, there is enough of it.

The fact that people are poor, hungry, weak, sick, etc. has, in the past, been because of material shortages.  But now it seems as though poverty exists because of socio-political power structures.  Clientelism, warlordism, authoritarianism:  these are the systems that withhold from those who need resources to survive.

The American Republican party itself has become a curious modern system bordering on clientelism but within a democratic system.  Made up of a steeply declining older white male base of paternals, the Republicans have somehow convinced even the poor that cutting taxes, reducing responsibilities and ties to the government, and getting more privileges in society will somehow benefit everyone.  That Republicans immediately think of government as being 100% inept, refuse to pay more taxes to help out fellow Americans (even when more accountability and transparency has been promised, under Obama’s Gov2.0 plans), and yet still claim themselves to be the most patriotic Americans is absurd.  That poor, disenfranchised white people go along with it is even worse.  You have people who have never been rich before advocating that Goldman Sachs plunderers and profiteers MUST receive higher and higher bonuses in order for them to be sufficiently motivated to work at all.  What the heck?

The Republicans have successfully blended Friedman/Reagan trickle-down economics with moral conservatism — highly successful for recruiting, but only if you’re white, old, and usually rich.  No one takes them seriously in financial conservatism anymore, their having been responsible for ballooning the national deficit in the name of security.  Sadly, fiscal conservatism is probably one of their strongest platforms.  That they abandoned it gives you some idea of how defunct their party is.  Perhaps one of the biggest flaws was assuming that the “invisible hand” is naturally benevolent.  Incentives can, at some level, often be predictable, and that’s where economists and public policy people would be important for identifying where the market will exploit resources and prices to make a lot of money.  The proof of this most recently was in the financial crisis, which resulted from the market splendidly moving away from regulated areas into shadow pools through hedge funds, cascading collateralized debt obligations and packaged mortgages on top of each other.  The market did exactly what it was allowed to do.  But that impulse is not always used for good.  Does that not imply a need for government checks and balances upon ravenous capitalist incentive?

So the US needs a jumpstart to get its innovation pipeline going again.  China and India and other countries are hungrier than we are.  They want success more than we do.  And they are at least attempting to modify their education, technology, innovation, legal, and health care systems to get success.

We, meanwhile, are plodding along with a broken health care bill.  Health care is a massive taboo subject in the US and, as I’m interested in reading about lately, anywhere where there’s a taboo, there’s some deep-seated cultural issue that is a dangerous setback for that culture’s competitiveness and advancement within the international community.

Fortunately we have smart people assessing our national broadband plan (Obama has picked some great tech guys and has enlisted the Harvard Berkman Center to look at broadband).  Combined with a great secretary of education, a new CIO, et al, the US should start to pick up again in another 5 years after the investments in basic research and education start to kick in…or at least the promise of them.  The force multipliers of these basic investments will be greatly increased if Obama is elected to a second term.  I can only hope.

The Republicans see anyone in government as being inept and unable to control costs or execute even the most basic project (as David Brooks pointed out recently, this is partially true).  But what is the proposed solution?  Radical privatization?  Are we supposed to trust the “invisible hand” of the markets to manage complex human health care problems or educational pipelines?  The problem with the libertarian viewpoint is that it seems to not take much interest in HOW you actually make people healthier, or make people smarter.  You just let the market do it.  But SOMEONE has to know these things, whether it’s a government or a private company established to do that task.  In a democratic system, citizens are the deciders of how those things are done, so it is their responsibility to become better educated about their mission.  A private company’s sole task is to make money, and combined with profiteering hit-and-run executives, there is little incentive to act with accountability — unless government puts legal safeguards on it to keep it from running off the rails.  For all their talk of incentives, Republicans can be pretty selective in how they decide to employ them.

I see the US government in today’s massively complex world as being a gardener of a national ecosystem.  The libertarians are right that a government with no incentives to cut costs will use its bottomless pockets to buy influence.  But conservatives and libertarians are wrong that government cannot play a role.  It seems anti-competitive to suggest that only private companies should be the sole provider of all goods and services and public space.  The truth is that companies provide excellent goods and services, but only with intense competition.  The truth is that companies are HORRIBLE at providing public space, because giving something away is not part of their incentives.  As Naomi Klein points out, a public square lets you protest and assemble, whereas you can’t even run a camera at a shopping mall because it’s private property, let alone pass out flyers or collect petitions.

So it seems simple-minded now to not talk about an ecosystem where public companies, private companies, the government, non-government non-profits, unions, and community networks all work in the same space with and against each other.  The competitiveness imperative must be extended from not just providing good and services but to also providing public space, social capital, and public capital.

The only factor that has mitigated the lack of such space and capital has been the internet.  Its realm of free speech and free time/space has led to places for minorities and youths and fringe movements to experiment and organize.  It is no secret that social networking has exploded online, while a privatized “meatspace” has become deathly quiet in terms of social capital, as Robert Putnam’s famous “Bowling Alone” book described, with the death of American civic life.

The people who created the building blocks for the internet should be recognized for their massive contribution to society and for bringing an end to a pretty savage era of radical privatization.

The internet and computing have driven storage and connection costs down rapidly, killing many industries and incumbents except those with the power to lobby our old, white Congressmen (i.e. the telcos and “entertainment” labels).  One of the only correct things Tom Friedman wrote about was how the internet, combined with globalization, led to a massive networking of human effort worldwide.

If you are to look forward, it is getting to the point where there are not many shortages left in the world to limit human progress.  I already discussed money — I do not see money as something there’s a shortage of in the world anymore.  Aggregate time is no longer a shortage.  People can be more productive with better online tools, and they are also watching less TV.  As Clay Shirky hints at, this means there’s a lot of surplus time out there now, although it’s up to us to figure out how we want to distribute that time.  Food (energy) is no longer a shortage — while we do it incredibly wastefully and unsustainably, we have figured out how to have more obese people in the world than starving.  There is not exactly a shortage of energy inputs either — “peak oil” seems highly dubious compared to when we will drastically reduce petroleum consumption, while the sun provides easily enough power to provide to the entire world.  If we just knew how to harness it properly.

We can expect processing power and time and storage to continue to plummet.  The cloud online will allow us to build holy grids of collaborative supercomputers, eventually perhaps providing a platform in which we can upload ourselves, the digital singularity.  At that point, it will be interesting to see which people stay and which people “go”.  Who will maintain the systems that keep the internet going so that we may live digitally forever?  When will that question cease to be relevant?

There is, right now, a significant limitation in one area of electronics that has hindered all othes:  energy storage.  It affects what kinds of cellphones we can use (a G1 barely lasts a day with background apps and GPS on), the miniaturization we can achieve with smarter devices, the distance our devices can be from plugs, and so on.

I was using a lot of electronics gear while I was in the Army.  Our equipment could operate off standard power, but it could also run off batteries if we were in the field.  But these batteries seemed to weigh 1-2lbs each, and we needed to replace them maybe once a day.  So if we were on a mission, we might need to carry 7-14 extra lbs of batteries, plus spares.  On top of our other gear.  Batteries just haven’t miniaturized like everything else in an electronic gadget has.  This is holding us back tremendously.  At the very least, we are starting to use RFID chips that are activated briefly by being stimulated by electrical interfaces like at metro stations.

The good news is that Obama has put $2 billion into manufacturing and research for battery technologies.  Even that has a wrinkle, according to the “Breakthrough team”, quoted in a NYTimes blog post:  if money is diverted into deployment, it will take away from basic R&D:

“The Breakthrough team warns that while deployment of today’s technologies is vital, if money for deployment is included in the $150-billion pie, that dangerously reduces the amount of money for laboratories pursuing vital advances on photovoltaics or energy storage and for big tests of technologies that must be demonstrated at large scale — like capturing carbon dioxide from power plants.”

Our inability to localize energy storage has meant that concentrated power has been the name of the game — it is the same for wifi right now, but WiMAX will make that issue obsolete.

So eventually there will be at least one valuable resource which is always limited and finite and definitive of our cultures and personalities:  individual time.  We will only have 24 hours in a day.  If our brains can handle more than one task at a time, our bodies can’t.  We still require sleep, eating, drinking, education, socialization, play, etc.  What’s more, we love to take part in those things, even so far as to do it alone or with others, whichever we have the opportunity to take part in.

What becomes most valuable to us, on an individual level, is whatever we spend our time doing.  And the chances are that it will be interacting with each other, or building things, or being creative, or relaxing.  These, as they should be, will be the most valuable things we both seek and trade and sell and share.  Time will dominate as a currency.

To some degree this is already occurring.  There are a lot of poor people willing to work for next to nothing, and their active time is being used abusively to produce stuff so we don’t have to.  We develop a product and market it and then buy and sell it, but it’s the poor people who put in the hard labor.

I’m not sure this human tendency to exploit the weak and poor will change on its own — certainly not under capitalist impulses.  Perhaps robots could take their place, ultimately becoming more productive than humans, who require food and water and sleep.  This is why some scifi people dwell so much on what happens when the robots decide they’ve had enough with us treating them like slaves.  Less a Terminator outcome than an I, Robot outcome.

The Pope released an encyclical which discussed globalization and economics at length.  I think his emphasis on helping the poor makes a great deal of sense; only through humanity’s constant effort will the number of poor be reduced.  We’re obviously not sure how that is to be done yet — but I think the development economists on the cutting edge who suggest that it has to do with leadership in government and power mainly, but then reinforced by all the other stuff:  human capital, good governance, nutrition and health, girl’s education, non-intervention, etc., are going to figure it out.

I’m not pushing for paternalistic top-down programs by any means, even if I’m talking about strong government leaders and a Catholic papacy.  Certainly I feel I’m as entrepreneurial as they come, wanting to build a massive reputation and identity platform and make big bucks from it, along with fame.  But it has a not-for-profit data-protecting component as well, and I am after all a product of mostly public institutions (public high school, UT Austin, the Army) until I went to a private institution (which is heavily influenced by Catholic Jesuit values).  I have benefited from a healthy blend of so many different structures and organizations, to include a multi-racial lineage and multiple nationalities among my family and friends, that I can hardly avoid seeing the world as REQUIRING a flourishing ecosystem of diversity and intense competition that also provides for learning and apprenticing and mentoring and teaching.

So at some point I’m looking to bring the international development component of my studies back in to my career.  But more and more this is looking like I’ll have to apply development theory to my own country, as it struggles to balance its technological and entrepreneurial bents along with entrenched and powerful radical corporatism, along with a declining propensity to seek bold policy overhauls where it needs it (education, health care).

To me, the economics of our world system demand that the most important future input will be education from low-level grade school all the way to advanced studies.  The effects of technology upon society and economics have been pervasive and profound, and in order for us to continue making breakthroughs, we’re going to need more and more advanced understanding to reach even basic levels of academic research in tomorrow’s future areas:  solar, nano, genetic modification, quantum-level, as well as reputation and forgetting/forgiving, identity, cultural anthropology, ecosystem gardening/curating, gift economics, happiness economics, etc.

The US, being so heavily reliant on its entrepreneurial technology, should be even more concerned in building up its education pipeline than any other country on the planet, because technology and risk is the US lifeblood.  So I feel as though any efforts I make in the future will have to incorporate policy and private incentives towards education.

These are my first few stabs at understanding what my career will ultimately look like, but I see them in line with the needs of the country, the trends of technology, and the progress of social demographics.  It’s kind of exciting, don’t you think?

We Want No Taxation, No Representation

Financial time bombs are no longer shocking to discover these days.  Collateralized debt obligations, the American auto industry, real estate, credit, struggling state government balance sheets, etc.

IRC Stupidity

Yesterday Obama gave a speech on how health care needs to be fixed immediately as costs are spiraling out of control.  The New Yorker just had a good story on health care costs, essentially discovering that a privatization bent (prioritized over the Hippocratic Oath) was leading to ballooning costs at one Texas hospital.

On the daytrading IRC channels I’m on, people predictably took the ignorant, mouth-breathing line, extending health care costs to other financial bombs:

<piratelady> just like fed subsidized education loans brought down the cost of college…..right?
<Me> federally subsidized loans didn’t make college more expensive
<piratelady> u have your opinion, I have mine
<piratelady> not gonna argue the point

<piratelady> buffett not smarter than me ;)

<guppy> if my heathcare is going to cost less,,how are we paying for all this..
<sailohana> obama talking raising revenue…here come the taxes to pay for healthcare

<Char> why can’t we exercise some personal responsibility and get the govt out of individual lives

<jwx> your best health bet is inheriting lucky genes

<boober> Xeus, you don’t think Clinton lied about his surplus , do you?

<boober> you can believe what you want to, but the facts are in 2000 everything fell apart before 911

<sublime> you have illegals flooding the healthcare system adding to skyrocketing insurance rates and healthcare bills too

<sublime> heck let everyone come in so we go bankrupt as a nation then as they roam the streets and violence skyrockets you can look for O to save you.

The daytrading channels are generally filled with old, white retirees who are fairly well-off and pretty rabidly conservative, and, as far as I can tell, detached from modern American life.  They find Larry Kudlow and Neil Cavuto relaxing and reassuring to listen to.

Frank Rich, by the way, just wrote an insightful column, in part on Shepard Smith at FOXNews noticing a increasingly disturbing taint in the viewer e-mails he’s been receiving.

Anyway, today I read a blog post from a guy I follow at UC Berkeley:

“A public relations bomb just landed in my inbox: an email fromUC Berkeley Chancellor Robert Birgeneau and Provost George Breslauer announcing the impending reality of horrific budget cuts across the Berkeley campus and the rest of the UC system as the state slowly faces up to fiscal reality. Instead of the 8% cuts (approximately $67.2 million) that the campus had originally projected during their budgeting process, they now anticipate that the cuts likely to be approved by the legislature will force a 20% (or $145 million) cut.”

University costs are astronomical now and they’re still expanding.  But it’s unsustainable.  Will our American education system, already in hot water for choking off its innovation pipeline in the last decade or so, be able to manage a drastic reduction in outlays for basic research, hiring professors, and recruiting international students?  I’m a little worried.

How is it that our nation has become so incompetent with its finances?  Well, to be honest, it’s not quite that simple — finances often collide with interests in promoting initiatives, expanding a business, lobbying government, etc.  So it’s not just a matter of people not knowing how to balance the books — usually it’s as a result of an organization saying, “We’re willing to go in to debt because we need to do A and B in order to grow.”

But I’m deeply worried about the strength of America’s most important institutions in the competitive international community — namely, its universities, companies, and human capital.

Ideology

I just finished reading Paul Collier’s “Wars, Guns, and Votes”.  In it, he says that security and accountability are the two keys towards bringing about democratic governments.  Without both, a “democracy” and having elections can actually bring about dictatorships, coups, and civil war.  That is, pushing democracy can actually be destructive.

An underlying idea for accountability is one that I suspected in my international development studies but which was rarely addressed:  the idea that taxation is necessary for accountability.

Taxation is a major hot button issue in the US.  Much of the conservative platform is based on the idea of less taxation.

But there is more economic literature and statistical analysis proving that in Africa, where much of the research is being conducted into how governments become stable and democratic, less taxation is actually a coping strategy by dictators and authoritarian governments.  Paul Collier makes the case in his book.

American children are taught about the famous line, “No taxation without representation.” American colonists objected to the British taxing them even though they had no political sway.

Now conservatives push for greatly reducing taxation.  This implies “no taxation” but without the “without representation”.  When we are taxed less, we do not care as much where our money goes and how it is used by the government.  We are less civically engaged.  Our leaders are held less accountable for their actions relative to what we want from them.

Granted, the relationship is not direct — it is possible to have deeply caring politicians or citizens, regardless of what their monetary interests are.  But in general, the more you are taxed out of your own money, the more you are probably going to care about how that money is being spent, in a developed country.

Says Collier:

“The critical invention of the Dutch was political accountability. People were only prepared to tolerate high taxation if the government of the state became accountable to citizens. Not all citizens, of course, but the rich citizens who were paying the taxation. Further, with an accountable state the government was able to borrow: people were prepared to lend once they saw that the government was being forced to conduct its finances in such a way that it would always be able to pay them back. The Hapsburgs found that gold and silver were not quite enough, and so they too decided to borrow. But nobody had forced them into accountability. And so the battle for the Netherlands turned into a battle of interest rates. The power of compound interest to gradually gut the finances of a profligate borrower ensured that final victory would go to the state with the better credit rating.”

Conclusion

I am not conflating increasing costs across the board with conservative allergies to taxation.  I guess my point in this post is that the US is completely confused when it comes to running budgets and controlling finances when placed against the power of the vote.

As a patriotic American, my underlying worry is that the US is losing its competitive edge and is not adequately securing its future in terms of intellectual and human capital.  We need to keep developing clever, intelligent, and responsible bureaucrats just as much as we need clever, intelligent, and responsible teachers and engineers and scientists and doctors and lawyers.

Demanding less accountability from the government is a surefire way to descend us into a failure of providing for public goods that we need to remain competitive.  In a completely privatized world, we lose our national identity and will to collaborate in order to be more competitive.  Certainly we do not want to be over-taxed, and both parties want their money to be used smartly, but there must be a Laffer curve-like medium between being taxed too much and not enough, not just for our pocket books but also for our quality of governance.

Pushing transparency in order to fulfill Collier’s social good of accountability is also big, and so I find it fulfilling to be working on Galapag.us, building an open and transparent reputation system (check out our info page on Galapag.us).  As my buddy Monkey Pope said to me about Galapag.us, “It’s amazing how I see it now in almost all aspects of life — data, the necessary transparency to see that data, and the need for tools to properly analyze that data.”.

But our basic notions of how a successful democracy operates and how to nurture that successful democracy are wrong.  I suppose it is comforting that people like Paul Collier are providing statistically-tested conclusions on what the proper notions should be.

Political Mismatch

I went to a cool meet-up/happy hour between students from my Georgetown MSFS program and Tufts’ Fletcher School last week.  I had a great conversation with one of their students about how potentially there’s now an intellectual mismatch between the Republicans and Democrats.

During the last election, it was interesting that so many hardcore Obama supporters and Democrats were also sharing and passing along information about Ron Paul.  Ron Paul, a strict libertarian from Texas, had almost no mainstream coverage, but gained quite a bit of traction online.  It was predictable that he’d appeal to progressives and the tech geeks who often fall into the Libertarian category, but he was also going viral with liberals.

During my conversation with the Tufts dude, it occurred to us that maybe the Republicans were no longer the intellectual foil to the Democrats.

I might argue that Democrats are happy to find an opposing view to debate against, and that is why Ron Paul appealed so much to them.  Clearly Paul differs from the Democrats on many issues (not the least of which being adherence to a return to a gold standard), but the two parties actually do share a lot of the same sentiments (which, also, are shared by most of the rest of the world), and there was quite a bit of common ground for both sides.

Meanwhile, the Republican party, which has painted itself into a corner, being a white party (although not necessarily a rich white party), advocating radical Friedmanite/Rand/Reagan/whatever free-market ideology even after a clear failure of those principles.  They advocate fiscal responsibility after having jacked up the country on worthless money and a military-industrial complex.  Their patron saint, Greenspan, admitted flaws to his model and even advocated for a fiscal stimulus plan.  Milton Friedman died recently.  It could even be argued that people are catching wise to Jeffrey Sachs.

From an article talking with Nouriel Roubini:

“I believe that people react to incentives, that incentives matter, and that prices reflect the way things should be allocated. But I also believe that market economies sometimes have market failures, and when these occur, there’s a role for prudential — not excessive — regulation of the financial system. The two things that Greenspan got totally wrong were his beliefs that, one, markets self-regulate, and two, that there’s no market failure.”

How could Mr. Greenspan have been so naïve, I ask, hoping to get a rise. “Well,” says Mr. Roubini, “at some level it’s good to have a framework to think about the world, in which you emphasize the role of incentives and market economics . . . fair enough! But I think it led to an excessive ideological belief that there are no market failures, and no issues of distortions on incentives. Also, central banks were created to provide financial stability. Greenspan forgot this, and that was a mistake. I think there were ideological blinders, taking Ayn Rand’s view of the world to an extreme.

“Again, I don’t want to personalize things, but the last decade was one of self-regulation. But in the financial markets, without proper institutional rules, there’s the law of the jungle — because there’s greed! There’s nothing wrong with greed, per se. It’s not that people are more greedy now than they were 20 years ago. But greed has to be tempered, first, by fear of losses. So if you bail people out, there’s less fear. And second, by prudential regulation and supervision to avoid certain excesses.”

It is not that the Republicans do not have important points to make — but they’ve been infiltrated by evangelists and neo-cons.  The Libertarians resemble the Republican party of old.  And the debate between those Republicans and the Democrats has long been a productive one.

I might argue that the Republican party is in danger of dying if it does not internally reform itself.  It might be smart for the Democrats to start engaging the Libertarians as their new counter-part for a strategy for the American vision of the future.

The latest stimulus discussion is distressing.  Republican governors are talking of rejecting stimulus. That is, they’re advocating turning down free money!  At the expense of their own states, which are struggling to pay state and local payrolls and guarantees.

That ideology of a radical free-market without government intervention will not die easily.  As bad as the economic crisis and business shutdown has been so far, I think it will inevitably get far worse, and will be felt more deeply by the people, who so far have seen job losses but not a complete collapse of the support system and a failure of their government to provide them services.  That endgame is still a strong possibility since it doesn’t appear that there’s an appropriate sense of urgency to do things like restructure debt, restructure institutions, and rid accounting books of toxic assets.

So, obviously the Democrats have their heads up their asses too, as they’ve been just as bureaucratic as the Republicans since Obama was sworn in, but if they were to dismiss the Republicans and engage the Libertarians, they might be able to pull off the traditional and moderate Republicans into the Libertarian fold and get rid of the festering cesspool of idiocy, racism, inbreeding, and economic ignorance that currently exists within the Republican party elite.

Recruitment

I was having lunch with a couple buddies of mine, one of whom took Michael Scheuer’s “Al-Qaeda and the Global Jihad” class with me.  He reminded me of one of Professor Scheuer’s best points made during the semester.

I might have forgotten some of the details, so I apologize, but I hope to capture the main crux of his argument.

Scheuer was in the Agency during the days of the Cold War, and so recruitment of Soviets was of course a large priority.

Scheuer drew a large circle with a much smaller circle in the middle of it.  The large circle represented all the Soviet military members.  The smaller one was the top brass, the tight inner circle.

He said that the higher a servicemember got in the hierarchy within the Soviet system, the easier he was to recruit.  The reason for this was that he had more access and could see the faults with the system, how flawed it was and how vaporous it was.  The grand promises extolled by the privates and the junior servicemembers were never delivered, and after promotions and receiving more responsibilities, it became an alienating experience.

Thus the US could recruit them, no doubt in part because the US had a healthy economic and political model to confront the Communist model with.

But Al-Qaeda and the mujaheddin movement is something else entirely.  The US can’t find defectors or agents in the same way.

Scheuer used the same diagram, and then explained that it was in fact those on the periphery of the mujaheddin movement who were easiest to pick off, because they were the least indoctrinated and the most conflicted about trying to earn money versus taking up the jihad against injustice, anti-Muslim policies, etc.

Once people had been through the training camps and had seen how the senior leaders lived and led by example, eschewing comfort and wealth and the pride and glory of the world of the infidels, they in fact became even more hardened.  The inner circle of the mujaheddin are even more devout, even more disciplined in their worship of Islam, even more devoted to their cause.  They are tied together by common suffering and hardship in the camps.  They become even more incorruptible by outside attempts of recruitment.

For more, read Omar Nasiri’s “Inside the Jihad”.

Inauguration Weekend

I’ve been waiting for this weekend for years now…  When I first entertained the thoughts of going to Georgetown for grad school, I recognized that the timing would be such that I’d be in DC for this.

It will be historic.  Everyone’s a little nervous, not sure what will happen.  Hopefully a lot of good stuff will happen, a little surprising stuff too, and nothing bad.  America deserves to celebrate this one.

On Sunday there is a free concert at the Lincoln Memorial in front of the reflecting pool.  I jogged past there last night and the pool was frozen over and there were Port-a-Johns lining the mall.  A stage was being built as well.  I’m going to try to catch some of the music but it is going to be absolutely PACKED…  Not to mention freezing, since there’s a massive cold front moving in.  Guess I should record it off TV too…

“Confirmed musical performers include: Beyonce, Mary J. Blige, Bono, Garth Brooks, Sheryl Crow, Renee Fleming, Josh Groban, Herbie Hancock, Heather Headley, John Legend, Jennifer Nettles, John Mellencamp, Usher Raymond IV, Shakira, Bruce Springsteen, James Taylor, will.i.am, and Stevie Wonder.”

I don’t know what I’m doing Monday yet.  I tried to get tickets for a Beastie Boys/Sheryl Crow concert but it sold out online within ten minutes of being available. =(  Not ninja enough.

Tuesday I’ll try to go downtown and see part of the parade and fun during the day, but mainly to see the spectacle of the throng of people expected.  And in the evening I’m going to the Russian Cultural Center for their Unity Ball — celebrating freedom and democracy by sharing the night with the Russkies.

I’m taking my camera with me…and will try to provide photos and video of the splendor — I’m predicting there will be tons of cool media online after the national celebratory party is over.  Obama is certainly inspirational to the creative artists and “communitas” out there.

OBAMA!

US Forces "Volunteer" to Leave Iraq

It’s interesting to live through the times of American occupation of Iraq.  What the Bush Administration sees as a necessary move, not without its faults, that has eventually led to a nascent democracy, is nothing short of tragically comic.  What we see as “giving peace in the Middle East a chance” will in future history books be seen as imperial overreach, classic quest for respect, influence, and resources, and geopolitics.

It’s clear Americans long gave up on this “war” and no longer want any part of it in any sense except to support the troops, whatever that means anymore. (I suspect “support the troops” is akin to wishing a homeless guy well when you see him but walk on by nervously, hoping he doesn’t attack you).  It’s clear the rest of the world thinks our occupation of Iraq is foolish and naive, and some countries and non-state actors think it’s wonderful that we’re willingly spending blood and treasure on an endeavor that’s going to hurt us for decades to come.

It’s also clear that we’ve learned nothing about Islam, Arabs, history in the Middle East, the international system, or democracy as a result of meddling with Iraq.  Which is perhaps the most tragic thing, given that we’ve invested so much in the damn place.  But I guess when Madoff, the Big 3, big banks, and the Bush Administration take us for fools and we hardly put up a fight, we deserve the pains of our own negligence and ignorance.

So what’s going on in Iraq now?

The US and Iraq “agreed” on the terms of American military withdrawal from Iraq recently.  The full document of the agreement between the US and Iraq can be read on Scribd.

The US is required to leave all Iraqi cities by June 30, 2009.  It is then required to remove all military forces (in which the document goes into elaborate definition of what that consists of) by the end of 2011.  Which is still a full 3 years from now, I might add.

Sounds great, right?  Pretty simple and realistic?

Well, the Sadrists refuse to acknowledge the passing of this agreement by the Iraqi Parliament and Al-Maliki.  Their logic is that the deal would be legitimizing American presence in Iraq, and therefore they disapprove.  Juan Cole has a further breakdown of the various Iraqi parties’ takes on the agreement and on federalism vs. central government.

Real Iraqis do not want us in their country (although they do want security).  The only ones who want us there have interests in keeping us there.

Everyone knows this deal is a farce.  The US does indeed want to remove most of its troops, and thankfully through electing Obama, this seems more of a reality.  But there is no way the US is giving up too much of its military presence in Iraq.  It will continue to provide “technical advisors” and “trainers” for Iraq’s military, air force, and intelligence.  Intel and the central government will undoubtedly be strongly influenced by the CIA and other covert operations.  The US has built massive bases and is still working on a brand-new embassy.  These will require logistics, support, and maintenance.

Iraqis know that the US isn’t going away soon.  It may not be clear (even to Americans) what the US wants from Iraq, but it’s pretty clear nothing good or stable will come out of it.

Meanwhile, Iraq is not going to improve.  If someone says the surge worked, you can just stop trusting anything else they say.  Baghdad is “calmer” now because it’s been walled off and because ethnic separation has already occurred.  The number of troops that were added are not commensurate with numbers needed to be able to quell violence — through the rest of the world or through the rest of history.  It seems as though the US bought off the Sunnis to get them to play ball in getting rid of Al-Qaeda, who should have always been an unwelcome presence in Iraq.

People still don’t get why Bush was so bad.  This guy is dumb.  He is happy watching the illusion of elections and democratic government, but he has no understanding of what all that actually entails.  As long as people go through the motions of voting, he thinks it’s progress.  When it comes to what happens afterwards, like the election of someone he doesn’t like, or massive violence and calls of fraud, he doesn’t know what to do with it.

This is why we’re supposed to elect people who understand politics, regional sensitivities and political levers, and maybe even a little knowledge of economics.  It bothers me that people claim Bush is devious and sneaky; he’s clearly not.  He’s a well-meaning buffoon who’s a puppet of the long-time buddy network he installed underneath him (look at how long Cheney, Rumsfeld, Negroponte, et al have been in the game of Machiavellian imperialism).

He’s happy with Iraq, even though Al-Maliki’s Iraq is somewhat akin to a banana republic, without the bananas.  Al-Maliki is on shaky ground and you can bet as soon as he can, he’s going to wipe out any resistance within his government as soon as the US looks the other way (as he did with “former Ba’athists”, the new red-headed stepchild in Iraq and, more recently, with Sunni coup collaborators).  So if you’re Sunni, better watch out.  If you’re Iranian, welcome!  If you’re Kurdish, you’re hoping everyone ignores you so you can continue to slink on by and come closer to a modern Kurdistan.  Until Turkey decides it’s going to take the same opportunity to throw Kurdistan against the wall like Russia did with Georgia.

Doesn’t it piss you off that Bush is clueless about this stuff?  When has he talked about how the Sunnis in Saudi (his friends, I might add) and the Gulf states and Pakistan feel threatened by the strongly Iranian-influenced Iraq?  Bush has completely depleted all of our political capital and armament to do anything more in the Middle East.  The US public won’t stand for further meddling in the Middle East, and all the international players involved in the region realize that the US has no sway there once its military leaves.

In other words, it’s going to be a bloody, messy fight in the Middle East once we leave.  And we will watch cluelessly with our mouthes agape, wondering why those damn Ay-rabs can’t all just get along.  Al-Maliki and the Sunnis will go at it after we leave.  Any vacuum of power will invite Al-Qaeda and other global insurgency groups back in.

The irony is that it seems as though Iraqi politics is pretty interesting on its own, and the most powerful interests in Iraq (like, for instance, the highest grand cleric, Al-Sistani) are trying to push for a sovereign, independent, democratic government.  But the US is determined to be the “peacekeeper” and state-builder, so it’s decided to stay.  The biggest railroading issue in Iraqi politics is, of course, American occupation, but from our lens, we see it as keeping the place from descending into chaos.

As Bill Easterly, development economist, would call it, this is the white man’s burden.  We feel as though it’s upon us to fix everyone else so they can be perfect just like us.  We spend trillions of dollars on other countries, with no accountability from those who are affected by it, and let the automotive industry in our own country eat it.  Not that we should bailout the automakers, but we sure do wrangle a lot more with smaller amounts of money for our own peoples’ education and well-being than we do about the trillions spent fixing countries we don’t understand.

This shit is never-ending.  When will we realize that the best thing we can do is to not get involved?  Are you looking forward to two decades from now when we’re stuck with a bunch of damaged, hurting veterans and an Iraq situation that’s still chaotic?  This is the same stuff you read about in foreign policy history books where the colonizers drew arbitrary borders for entire peoples and then wondered why it didn’t work out.

I hope that this all will not happen, but the underlying currents of neo-imperialism, interventionism, paternalism, love for war and oil, and more, still run strong and are indefatigible in American politics, even after Obama’s being selected president.

Again, I have to be amazed at how we’re now willfully “leaving” Iraq under an “agreement”, which basically, when translated, amounts to us running with our tail between our legs now that the US public wouldn’t take it anymore (after even a Democratic Congress refused to answer the peoples’ wishes to withdraw).

Of course, the warmongerers (most of whom have never been in a combat environment) out there will call this cowardice and emboldening the enemy.  Well, too bad.  If employing the democratic support of your people to support your foreign wars is too difficult, then maybe the point is that the war isn’t actually worth it?  To argue differently is to question democratic rule by the people.  The flip side of that, if you are a pragmatic warmongerer, is that you shouldn’t start a fight you know you won’t be able to finish, even if you think it’s worth it.

I thought it was fitting that an Iraqi journalist threw his shoes at Bush.  An educated Iraqi who’s in a professional line of work throws whatever he can, given the opportunity.  That’s about as much of a condemnation as you can get.  Bush may see it as bizarre and an outlier event, but that shows how out of touch he is with the world he should be the most powerful leader of.  I would venture to say that a high percentage of the people who saw the event (regardless of nationality, color, creed, etc.) identified instantly with the journalist and knew EXACTLY what he meant.

Are we going to be ready for the pent-up resentment and hostility that will come out after we “withdraw”?  History shows that it’s never pretty when the lid comes off a boiling political pot.  An Iraqi journalist got his ribs cracked and sustained other injuries.  Saddam was filmed during what was basically a Shi’ite execution.  And these events were under US supervision!

Idea for a Georgetown MSFS Start-Up Fund

Hi.  I am currently a second-year student in the Masters of Science in Foreign Service program at Georgetown University.  The program is housed within the School of Foreign Service, one of the best international affairs programs and international development programs in the world.  A list of alumni is at Wikipedia.

I am considering an idea to develop a start-up fund or foundation or some other type of organization within the School of Foreign Service of Georgetown that picks people, not ideas.

Start-Up Competitions

I have a problem with the way start-up competitions are run right now.  Currently, the model is that the best ideas are supposed to win.

But what often ends up happening is that the most previously successful or most monetizable “ideas” win.

That is, some competitions choose a beauty contest format, in which those who make the best business plan win.  This model is flawed, because business plans for early-stage ideas are usually full of made-up vapor numbers, and plans for later-stage companies are usually already financially successful or well on their way.  So of course the latter ideas make it while the earlier ones do not.  Sometimes having the best business plan just means the founder took a class in how to write a sexy, cosmetically-appealing one.  Hence, “beauty pageant”.

What can also happen is that the “ideas” selected in a contest just aren’t that compelling.  This comes from the obvious fact that if an idea was so brilliant, no one else would have thought of it before and probably wouldn’t understand the impact of the idea itself until it was proven.  Renting movies by mail?  A free online encyclopedia that anyone can edit?  A street-level Indian organization that lets streetkids dial in with their problems?  These things aren’t sustainable, monetizable, or realistic, right?

Wrong.  Netflix, Wikipedia, Childline.

Many final-round selectees are incremental improvements on marginally interesting/useful products that were already successful.  So funding these grinder ideas is not really selecting a “great idea” at all.  The biggest ideas can sometimes be “ah hah, that’s so easy!” ideas, but I think more often than not, the ideas that really change things do not make sense to people until much later.

And in fact I would go a step further and say that these paradigm-shift ideas do not occur in a vacuum.  They are the products of great minds.  Much is made of the professor at Stanford who passed not only on Yahoo! but on Google as well.  They weren’t obvious winners initially, but Brin and Page and Yang and Filo went on to do great things like Google.org.  Omidyar at eBay took an idea that people thought would fail against Amazon and has gone on to do philanthropy work.

People still don’t understand Mark Zuckerberg of Facebook but he has the potential to completely control the online social world.

So it is these people who envision what the future is going to look like…  It is not that they happened on an idea by luck and never innovated again.

So why do start-up competitions vote on ideas and not people?

Start-Up Competitions Judged by Start-Ups

I felt as though TechCrunch 50 was a pretty successful start-up contest.  It achieved success through collaboration and openness.  If I recall correctly, the top 50 ideas were voted in by the TechCrunch reader base.  This introduces some serious problems such as bandwagoning and successful block voting campaigns, but it might help to reduce the chaff.  It also doesn’t get rid of the “understanding bias”; a truly large idea may be misconstrued or misunderstood, or a bad idea may hide a truly gifted entrepreneur.

The top 50 ideas pitched their products live at a conference to a panel of serial entrepreneurs, entrepreneurs, and people really knowledgeable in the start-up/web space.  All of this was beamed over the web, and the ideas had web pages put up with reviews of their products.  The feedback was given to them by the panels and through online comments.

Start-Up Literature

What’s funny is a lot of the start-up literature out there spends a lot of time talking about how good the founders of an idea are.  Are those people the type that it takes to be a start-up leader?  Do they have good breadth of knowledge?  Inventiveness?  Adaptability?  Charisma?  The desire to work one’s ass off for a few years before ramping their business up?

In some cases, the literature says that angels and VCs and whatnot will often fund something on the basis solely of its founder and on the idea secondarily if at all.  They know that a good founder will make just about anything work.

So why does it come back to ideas and not the people behind them?

Georgetown MSFS’s Role in the Ecosystem

I think Georgetown MSFS has a unique position; it is placed in DC (a massive swirl of politicians, interns, NGO do-gooders, lobbyists, start-ups, consultants, activists, city dwellers, culture-lovers), is built into a fantastic school with an undergraduate base, has a powerful Jesuit tradition of erudition and moral value system that values diversity, and pumps out graduates who end up doing some of the craziest, most innovative, bizarre, important things you’ve never imagined.

In terms of its competition, MSFS doesn’t have many peers in terms of having fascinating people doing politics.  Johns Hopkins SAIS is closer to downtown but seems to be more applied economics.  Where do SAIS grads show up?  I don’t know…I don’t read about them often except that Tim Geithner just got nominated for Treasury.  George Washington, American, and George Mason are also fine schools but don’t dominate politics quite the same way Georgetown does.  As a caveat I should add that I’m amazed that the calibre of people who move out of these schools — DC truly is a place where anyone you meet on the street ends up being just the most fascinating person.

Schools outside DC (Columbia, Harvard, Yale, etc.) are also extremely good — don’t think I’m taking anything away from them — but they’re not as positioned for what I propose.

A Start-Up Fund for People

So Georgetown, which has a long tradition of truly singular models of virtue, ingenuity, and innovation, could build into its School of Foreign Service an organization that identifies the future possible leaders and issues them a challenge:  start up a company or organization that has the potential to help lots of people.  Instead of funding an idea, you fund a person.  The scope could be limited to social entrepreneurship, and/or to a “social business” model which does not pay out to shareholders but instead reinvests profits into helping more people.  This may be optional; while ideas shouldn’t be limited, you don’t want some SNAFU like this one guy I listened to on a panel once who, in response to “What do you want to do with your life?” answered “I want to create a new financial derivative.”  That was back in 2007 before the financial crisis began.

The fund would support the person enough to live for a certain duration of time, with further money allotted for a company space and, depending, money to hire outside help (like a programmer or two) if it can’t be crowdcoded.

The person could of course recruit other people from the campus or partner with other people chosen by the fund.  People wouldn’t have to apply to be selected — they could be nominated by others.  Any barriers to entry such as long admission applications would be minimal, so that those who are discouraged by doing yet more stupid paperwork for something they may not even have a chance for won’t be discouraged.

Heck, encourage an online standardization:  use LinkedIn for online résumé collection.

A Commons

A further addition to this is providing these people with a commons, as I described in an “Internet Commons Business Idea” post on my reputation research blog.

This would be a common area with laptops, large meeting tables, whiteboards, projectors, office supplies, everyone you need to bring a team together and brainstorm and code and do business, fit with phones, business address, full facilities and services.  Any empty office space can be rented for this purpose.  It doesn’t have to be much — just a place where a founding team can work together in an open area…and even collaborate with other teams.

The Final Piece:  Leveraging Politics

In the same way that Stanford seems to be the nexus for new web start-ups and Harvard/MIT seem to be the braintrusts for a lot of new start-ups and academic projects and research, Georgetown could become the hotspot for political start-ups.  There’s been much talk of Government 2.0, or bringing the US government into the Web 2.0 world of online collaboration.  There’s no greater concentration of activists, lobbyists, NGOs, NFPs, etc. than DC (Geneva?).  Not only is there a massive network of inspired minds here in DC, but they are also somewhat idealistic, risk averse, and willing to do something bold in order to effect change.

Sounds like the perfect place for start-up culture to me.  Combine this with a vibrant Georgetown political life — not the cocktail-drinking elite as John McCain thumbed his nose down upon — but hard-working, innovative, entrepreneurial Georgetown figures and personalities.  You have tons of personalities to choose from to help found this new start-up fund.

What Do We Get?

The end result is a closer approximation to how great ideas actually are made successful.  Choose great people:  you know from your circles of people which ones are always thinking of solutions to problems.  They may be the kinds who just have the energy and risk adversity to go out and start a new company.  They may just be really efficient at small projects.  At any rate, I don’t think these people are that secret.  Some people are start-up people, others aren’t.  Give them time to develop a project and maybe they will come up with a better idea than pure beauty-contest-business-plan start-up competitions can.

Certainly other organizations do something similar to this:  Ashoka, Skoll Foundation, Omidyar.  But an MSFS fund could focus on its core strengths:

  • Utilizing the Georgetown campus, network, and Washington, DC political social sphere
  • Building a core around awesomely diverse, eccentric, and productive students, alumni, and faculty
  • Funding key people, not necessarily ideas
  • Focusing on solving social problems in keeping with Georgetown/Jesuit tradition
  • Incorporating Georgetown’s unparalleled insight into international affairs, policy issues, international development, and interdisciplinary research.

Who else can compete with us there?

I don’t know.  I just think this way makes a lot more sense to how humans innovate.  And I think Georgetown’s atmosphere is one of the few places where that energy could really be supported flourish as part of the community.

[Extra reading:  entrepreneur hotels]

My Tech Policy Memo to President-Elect Obama

For my excellent “What’s Shaping the Internet?” class with Professor Michael Nelson, we had to write a 6-page memorandum to either President-Elect Obama, Google CEO Eric Schmidt, or some other organization head, using three main policy points.

I chose to advocate for an innovation commons, a push for open-source government interfaces, and a national identity system.

I posted the memo online at Scribd, which hosts my other academic papers as well.  Scribd is awesome — it embeds papers within Flash so you can see the original format, and also export to PDF or crowdshare it. I would embed it here but WordPress.com doesn’t let you embed most content. =(

Again, READ THE MEMO HERE.

I know that my memo does not have a conclusion. =)  I opted to leave the explanation to the executive summary, so it’s not a proper structure…  Memorandums are sometimes the hardest papers to write, because they need to be very brief, concise, and appealing.  That’s why our program stresses it so much.  But I strayed from it here.  Hopefully the content carries the weak structure.

What the Memo Said

My logic in the memo was that the government should create an innovation- and business- enabling environment by ensuring universal broadband access, net neutrality, a hybrid public commons/privately auctioned spectrum, and increased R&D with clustering through universities and companies.

After we get more people online and collaborating, we can call upon them to help build and inspect open-source applications to allow everyone to interface with the government more efficiently as befitting a digital 21st century.

And finally I called for a national ID system to help unify all the databases, ensure personal privacy and access controls, and allow us to fix our own information and use it better within the government.

The national ID system would use a social reputation system, part of which I’m hoping to create through my start-up, Galapag.us — see the research blog if you haven’t already.

Underground Warblogging

Warblogging died in 2006.  It died when the military and US government decided that ANY servicemember’s content online must be approved through the chain of command, AFTER informing the command that that content MAY exist. (i.e. registering one’s blog even without posting content to it)

The message coming out of Iraq was warped after this decision.  Crowdsourcing what was happening in Iraq and Afghanistan halted.  We had to rely on embeds and independent journalists (Michael Yon continues to be excellent), and of course, brutal, savage terrorist/insurgent attacks to figure out what was really going on.

I attended the senior Yahoo! fellow Gaurav Mishra’s talk at the Institute for the Study of Diplomacy last week, on the subject of citizen journalism/media during the Mumbai Attacks.  You can read about Gaurav’s coverage of the Mumbai attacks on his own blog.  Gaurav talked about how people were now able to report instantly from the scene.

He had me say some words about my own situation, where I had to remove content from my web site to include photos from Iraq and my journal on my deployment to Iraq, after my command found out and I got in heaps of trouble for it.

This “war” is going to be over soon, yet not as quickly as I’d like.  But I guarantee you, when the smoke clears, there will be a TON of stuff coming online written by the troops on what has been happening over there.  That the military said we couldn’t post it online didn’t mean that soldiers weren’t still lying in their hooches, writing long rants on how fucked up or how successful it was over there to their loved ones.  Soldiers, Marines, and others were still snapping photos and taking video of what they saw.  All that stuff is out there NOW, but it is underground.

It will bubble to the surface once all these people feel that it is safe to do so.  You will probably see more books published again.  Few would be worth reading.  But that’s not the point.  The point is that they will have the ability to express themselves again.

About the best we’ve had lately is a book written by a pseudonymous former Army interrogator who decried US torture practices, and a 60 Minutes interview by a pseudonymous former Delta operator who said his team could have had a good shot at killing Osama bin Laden in the early stages of the “war” in Afghanistan.

Pseudonymity, anonymity…both are great ways to circumvent broken systems.

You can also expect revelations, scandals, and investigations to come soon for other related reasons.  The changing of the political appointees and DC guard will bring out exposés on the Bush Administration.  The financial crisis will expose the corruption in Wall Street (like the latest hedge fund/NYC investor scam).  Much of the rot that’s spread as a result of Dubya will get exposed.  I should add that it’s not that the Democrats are not a part of it too — the politicians all had their hand in the till.

The flood of information that people didn’t want you to hear is coming.

[

edit:  Newsweek just did a great story about Thomas Tamm, the guy who gave the New York Times a heads-up on the wiretapping scandal that would later emerge as a collage of different whistleblowers’ reports.  People won’t be as afraid to report, once the horrible Bush Administration leaves.

My buddy d14n wrote a blog post about Tamm also, and he verified the info on how and where to contribute to the Thomas Tamm Legal Defense Trust.

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