Friday, April 30, 2010

Legislative Reality and Legal Reality

While we wait to see whether or not this week's confrontation between the Senate and Goldman Sachs will lead to any substantive and useful reform of current financial practices, we can follow the case of whether or not Goldman Sachs can be called to task over laws that are already in place. If last week's pornography scandal was intended to undermine the efforts of the Securities and Exchange Commission (SEC) to determine legal grounds for prosecution of abusive practices, then it seems to have failed at its goal. To put the icing on the cake, the target of this specific prosecution will be Goldman Sachs, specifically over those practices investigated by the Senate this week. Actually, as Al Jazeera English reported this morning, the SEC filed civil fraud charges against Goldman Sachs two weeks ago; but as of yesterday the Department of Justice has begun a formal investigation based on the SEC charges. In other words Justice is blind enough to avoid being distracted to titillating sideshows!

Thus far Goldman Sachs has reacted with a willingness to make its case in court. If this happens, then it may be the first time in which a legal decision will involve resolving differences between two constructed realities. From the Goldman Sachs point of view, there were no abusive practices; there were only normative business practices consistent with the constructed reality of Planet Wall Street. If the Senate could not understand this, then the problem had more to do with the cognitive impediments of Senators than with questions of either legality or higher values of right and wrong. However, when the case moves from a Senate Hearing Room to a courtroom, values are no longer the issue. The only real question will be whether or not those normative practices are consistent with the constraints of laws currently on the books. Thus everything will begin with whether or not the Justice Department investigation determines if there is a case involving one or more laws being broken. If there is little overlap between the respective worldviews of Planet Wall Street and Planet Washington, there is at least agreement that Planet Wall Street must honor those laws that are currently in place.

I suppose this may lend support to the Republican position that opposes further reform legislation. They can argue that the laws in place are sufficient, and they just need to be properly enforced. However, this overlooks the arms race metaphor of regulation. All laws have loopholes, and it is a good bet that Goldman Sachs pays good money to lawyers to seek out those loopholes. In other words the creation of new regulations leads to new business practices to get around those regulations; and, with the endorsement of corporate lawyers, those new practices become normative. This leads to new needs for regulation, and the cycle continues. It is nothing more than the coevolutionary process that maintains ecological balance operating in a business setting!

Thursday, April 29, 2010

A High-Level Israeli Considers a Suggestion from Jimmy Carter

Where the Middle East is concerned, what is most admirable about former President Jimmy Carter has been his ability to go in "idea space" where no one else has dared to go before, not with foolhardy force but with the conviction to suggest an "inconvenient" hypothesis worth considering. This is the way I view the opinion piece he wrote last September for the Washington Post, in which he went against all conventional wisdom and commitment to open his mind to the option of a one-state solution for Israelis and Palestinians. When I read his piece I described this position as "a possibility that seems to have progressed only in the fictional world of You Don't Mess with the Zohan;" and, as far as I am concerned, that description has sustained for over half a year.

Today, however, a relatively high-ranking Israeli has decided to stand beside Carter. Here is the report about him taken from Al Jazeera English:

Reuven Rivlin, the speaker of Israel's Knesset, has said that he would rather accept Palestinians as citizens of one country than divide Israel and the West Bank into two separate states.

"I would rather [have] Palestinians as citizens of this country over dividing the land up," Rivlin, a member of the ruling Likud party, was quoted as saying in Israel's Haaretz newspaper on Thursday.

The fact that this statement came from the second-ranking member of the Likud part carries a significance that recalls that it took Menachem Begin to finally break the ice with Anwar Sadat (or, in a broader context, that it took Richard Nixon to decide to recognize China).

The Al Jazeera English report further clarifies that Rivlin's position did not come out of the blue:

Rivlin said last year that Israeli Arabs were an inseparable part of the country that often encounter racism and arrogance from Israel's Jews.

In a speech given in the president's residence, he called for a fundamental change in relations between Jews and Arabs in Israel, urging the foundation of a "true partnership" between the two sectors, based on mutual respect and absolute equality.

"Israeli Arabs are a group with a highly defined shared national identity, and which will forever be, as a collective, an important and integral part of Israeli society."

Haaretz also reported him as saying that the establishment of Israel was accompanied by much pain and suffering and was a real trauma for the Palestinians.

"Many of Israel's Arabs, which see themselves as part of the Palestinian population, feel the pain of their brothers across the green line - a pain they feel the state of Israel is responsible for."

Rivlin's recognition of a true partnership "based on mutual respect and absolute equality" is consistent with the case Carter had made in the Washington Post:

By renouncing the dream of an independent Palestine, they would become fellow citizens with their Jewish neighbours and then demand equal rights within a democracy.

By framing his position in the historical context of the original partition plan, Rivlin strengthens his credibility by acknowledge that the plan probably, in the long run, did more harm than good.

Only one question remains. Will Rivlin's suggestion be taken seriously, or will it be dismissed out of hand? After all, we are only talking about a hypothesis. Can those who disagree give it their best shot with refutations rather than bullets?

Republicans Shift their Strategy

Senate debate over financial reform will finally begin today, at least according to a report from the wire services for Al Jazeera English:

US senators have agreed to debate a bill proposing sweeping changes to financial regulation, after days of blocking manoeuvres by opposition Republicans.

The report offered no explanation of why the Republicans backed off from blocking debate. The best explanation may be that, at least on this issue, their party-of-"no" strategy was just not playing well in the polls:

Polls show the legislation enjoys support of nearly two-thirds of the US public, and continued anger at big banks blamed for the 2008 financial collapse is expected to shape congressional elections set for November.

Nevertheless, if we have learned anything from the attempt to reform health care, it is that we have to be careful about how we set our expectations. For a start we should be clear on just what is being debated:

The bill aims to prevent large firms from taking billions of dollars in government aid when their failure threatens the broader economy and create, for the first time, an agency to protect consumers from shady financial dealings.

It also looks to regulate trade in derivatives, complex financial instruments often used by firms to smooth out volatile commodity prices but blamed for warping the market and encouraging speculation.

Then we should take note of what each side says about the other:

Democrats and the White House have been eager to portray Republicans as siding with Wall Street, while Republicans insist the bill as currently crafted is not ready and must be changed.

Republicans acknowledge a need for reform but say the Democrats' bill is a government overreach, signalling the congressional fight is far from over.

To begin with the Republican position, the language of regulation does not appear very frequently in Article I of the Constitution; and, indeed, that Article says nothing about regulating to protect a consumer against abusive business transactions. However, this does not justify the claim that seeking such protection constitutes "government overreach." At the very least such consumer protection is covered by that "insure domestic Tranquility" phrase in the Preamble; and there is now a rich foundation of precedent regulations concerned with such protection. The Republicans may want to capitalize on the "rage factor;" but, if they plan to do so, they are going to need a better argument.

Most importantly they will need to address the Democrats' claim that the Republicans speak for Planet Wall Street, with the implied corollary that the rest of the nation be damned. However, this does not guarantee that the Democrats have come up with an effective solution. I can think immediately of two cautionary observations to be considered as the debate proceeds:

  1. The lesson yesterday from the Goldman Sachs Senate testimony is that our Senators still do not really "get" the "constructed reality" of Planet Wall Street. Since part of the problem involves a semantic disconnect, one cannot expect Planet Wall Street to accept regulations without first fitting them into the Planet Wall Street worldview. The Senate needs a better understanding of that worldview. If the Republicans really do speak for Planet Wall Street, it will be interesting to see if they can bring that understanding to the Senate floor.
  2. Regulation is not a simple matter of securing the barn door to keep the horses from being stolen. It is a process of ongoing vigilance, which is why Udi Manber's metaphor of an arms race is so applicable. Beyond regulation itself there must be a commitment to an active regulating authority; and that commitment should probably also cover what to do if that authority does not perform satisfactorily according to its "job description." This will be tricky, not only because it is easier to think about products rather than processes but also because those processes will have to be engaged within the constructed reality of Planet Wall Street, even if they have been defined in the constructed reality of Planet Washington.

The point is that we cannot expect that the Senate will come up with a "magic bullet;" but we should be able to hope that they lay the groundwork for better regulatory practices than we currently have. This may be asking for too much from such a politicized organization with such strong opposition. However, it is the reality in which we must keep ourselves grounded; and we need to account for that reality when we communicate with those who represented us or with the mediating agents of their pollsters.

Freedom to Brand?

This morning brought news that the latest attack on the cigarette industry has come from Australia. Here is the basic story as Al Jazeera English edited it from their wire sources:

Australia is set to ban branding, logos, promotional text and colourful images from all packets of cigarettes in attempt to dramatically cut the number of smokers in the country.

From 2012, all packets of cigarettes will look almost identical, carrying prominent, graphic health warnings while the brand will be relegated to a small, generic font at the bottom.

Yesterday I tried to frame the frustrated efforts of Senator Carl Levin to expose abusive practices by Goldman Sachs in terms of whether or not "Planet Washington" really "got" the "constructed reality" of "Planet Wall Street." In this case it appears that the Australian government really "got" how the cigarette industry works. More specifically, what they "got" is that the best way to control a product is to control the marketing of that product. This is not just my opinion. This is the position of an Australian "insider" involved with the imposition of the new ban:

Rob Moodie, chair of the government's National Preventative Health Taskforce, which recommended the legislation, said that stripping packages of their logos would effectively stamp out tobacco companies' marketing campaigns.

"The thing that tobacco companies fear second after price increases is plain packaging because it takes away their last real avenue for branding their cigarettes,'' he said.

"It also takes away their in-store presence."

This may turn out to be a case in which brains will overcome brawn. The move may have been so unexpected that the cigarette industry does not yet "get" what happened to them. Consider the feeble effort at rejoinder from Cathie Keogh, a spokeswoman for the Imperial Tobacco company:

It really affects the value of our business as a commercial enterprise and we will fight to support protecting our international property rights.

She got the first part right. The whole game is all about perceived value, and the Australians finally found the right handle to get their own grip on the consciousness industry. On the other hand her hip shot about international property rights may take off her own toes rather than wounding her opposition. At least as I understand it, international property rights protect you from others trying to use (hijack?) your brand; but they do not guarantee that you can use that brand in any situation of your choosing. The Australians probably are on pretty solid legal ground with their ban; and it will be interesting to see if any other countries (not to mention which ones) decide to follow their lead.

Exploitation CHUTZPAH

I feel very fortunate that the work I currently do from my base of operations in San Francisco's Civic Center has yet to require my driving over the Bay Bridge. The BART and the ferry system have been effective enough that I honestly cannot remember the last time I crossed the Bay Bridge in either direction. This is quite a break when one considers just how many bad-news stories turn up about this bridge one way or another.

One story that attracted considerable attention broke last November after a segment of the causeway had been rerouted in preparation for installing a new span. The new route involved a relatively sharp S-curve; and I suspect that any number of macabre newshounds anticipated that it would be an accident in the making. The rest of us probably realized that any such accident would probably lead to exploitative litigation. According to a report by Joe Garofoli, Staff Writer for the San Francisco Chronicle, that is precisely where matters stand this morning:

An attorney for the family of a 56-year-old truck driver who plummeted from the upper deck of the Bay Bridge in November filed a claim against Caltrans on Wednesday, saying there weren't adequate warning signs alerting drivers to the bridge's new S-curve.

Tahir Sheikh Fakhar of Hayward died when his truck went over the northern side of the S-curve at 3:30 a.m. Nov. 9. California Highway Patrol investigators said they believed Fakhar was driving 10 mph over the 40 mph speed limit as he approached the curve, which had opened Sept. 8 as part of the eastern span replacement project.

The attorney for Fakhar's family, Lewis Van Blois, said it was the first time the veteran trucker had driven over the bridge since the curve was installed. There had been 43 accidents on the curve before Fakhar's, but none was fatal.

Fakhar was married and had two adult children.

"They (Caltrans) failed miserably to warn drivers in advance that they were coming into the S-curve," Van Blois said Wednesday. He said the design was negligent.

This sounds like nothing more than exploiting the grieving family of a man who, for reasons we shall probably never know, chose to disregard both the posted speed limit and his unfamiliarity with the rerouting of the road. It takes chutzpah to convince that family that Caltrans' negligence was the root cause of their patriarch's bad judgment. Indeed, if common sense prevails (which I realize is a touchy antecedent), the only beneficiary from this action will be Van Blois, because he has succeeded in getting his name in the papers; so it seems fitting that the reward for his success should be the Chutzpah of the Week award.

Wednesday, April 28, 2010

Getting It

I have now heard the better part of the exchange between Senator Carl Levin and Lloyd Blankfein, Chief Executive Officer of Goldman Sachs. Poor Levin tried so hard to wring even the slightest sign of contrition from Blankfein and failed miserably. Blankfein, on the other hand, not only kept his cool but also, at least from a technical point of view, managed to give pretty direct answers to the questions he had to field. Indeed, according to the current norms of etiquette, he was surprising well behaved. Had he been more like Eric Schmidt, he probably would have, after having given the same answer for the fifth or sixth time, just erupted with, "You just don't get it, do you?"

This morning Steven Pearlstein, Business Correspondent for The Washington Post definitely got it. He recognized that "Planet Washington" and "Planet Wall Street" exist in entirely separate constructed realities, where "entirely" may even apply to the semantic substrate of the English language that their respective residents both speak. I would therefore side with his conclusion that the only thing we can take away from Levin's failure is an appreciation of how little Planet Wall Street is understood by anyone not living within that constructed reality. Pearlstein thus made his case by focusing on two of the most important misconceptions that the rest of us maintain.

He begins with the basic machinery that has thrown Goldman Sachs into such a negative light:

The first misconception is that having the ability to hedge positions on everything from copper prices to asset-backed securities is unquestionably good for the markets and the economy. Certainly it's useful if farmers can lock the price of their harvest before they plant their seeds, or if pension funds protect themselves from sudden increases or decreases in interest rates.

But as we learned from Tuesday's hearing, the ease with which a firm like Goldman can hedge against losses from esoteric financial instruments can make an investment bank rather sloppy about the securities it underwrites and distributes, or for which it serves as market maker. Indeed, that seems to be exactly what happened at Goldman, according to the documentary evidence uncovered by Sen. Carl Levin and his subcommittee staff.

Although Goldman analysts and traders had private doubts about the quality of the subprime mortgages coming out of lenders such as Washington Mutual and New Century Financial, the bank was more than willing to underwrite and make markets in securities based on those mortgages. Without the ability to hedge so easily and cheaply, Goldman and other investment banks might have been more careful about the securities they created and traded, and buyers would have been more careful about the ones they bought.

The second is the point that Blankfein kept repeating and that Levin never really got (or, perhaps, wanted to get):

The other big fallacy is that investment banks that underwrite securities are actually standing behind them. What we learned on Tuesday is that when Goldman Sachs lends its good name to a new offering and sends its vaunted sales force out to peddle it to some teachers' retirement fund in Omaha or a savings bank in Bavaria, it doesn't actually mean that Goldman thinks people should buy it.

In fact, there's a good possibility that Goldman knows it's a dog, or suspects that the market is about to tank, and has already lined up a big customer who wants to short the entire issue. And as Goldman sees it, the firm has no legal or ethical obligation to inform those buyers of its views or its conflicting interests.

There was a time when issuers would pay a premium to have Goldman Sachs underwrite their securities, just as there was a time when investors would pay a premium to buy into a Goldman-sponsored offering.

Today, Goldman has fully monetized the value of its reputation, and anyone who pays such a premium is a fool.

We can only start asking questions about regulation once these misconceptions are recognized. If we accept the claim made this morning on Democracy Now! that Republicans now get the bulk of the lobbying money from the financial sector, we may better understand why they do not even want regulation reform to be debated. Such debate could only lead to both legislators and the electorate they represent coming to a better understanding of just how Planet Wall Street really works, and Planet Wall Street is clearly in a much better position if that understanding is never achieved.

Tuesday, April 27, 2010

From Undermining Health Care to Undermining Main Street

If the recent efforts to repair the health care system left us with any doubts about the priorities of the Republican Party, the shift of attention to financial regulation should make those priorities clear. John Nichols' post to The Beat blog on the Web site for The Nation gave a straightforward account of what happened and the sort of reaction it provoked:

The party of "no" said "no" again on Monday -- this time to tightening regulation of the nation's financial system.

While 57 Democratic and independent senators voted to open that long-delayed debate, Senate Republicans and a single Democrat (Nebraska's Ben Nelson) blocked a cloture vote that would have opened the debate on repairing a financial system so vulnerable and dysfunctional that it has repeated brought the nation's economy to the brink of collapse.

Monday's 57-41 vote offered a powerful perspective regarding which side the Grand Old Party -- which made its name a century ago as the champion of trust-busting legislation -- is now on.

Tom McMahon of Americans United for Change summed things up when he said: "Look up ‘Quid pro quo' in the dictionary and you'll find a picture of Republican Senate Minority Leader Mitch McConnell with his hand out to hedge fund managers and banking executives just days before leading the filibuster against Wall Street reform. Pretending as if the financial crisis that cost over 8 million Americans their jobs never happened, Senate Republicans today stood in unanimous support of Wall Street over the Main Streets that suffered the consequences of the big banks' greed and recklessness."

McMahon's assessment was blunt and unforgiving:

Senate Republicans stood in unanimous opposition to ending taxpayer bailouts, to shining a bright light on the shadowy derivatives markets, and establishing a new watchdog agency on Wall Street that will protect American consumers against Madoff-style scams. They did just what they were told by the 1,500 Wall Street lobbyists camped out their offices this week that got every dime's worth of the $465 million they spent last year to kill reform.

Counting on Republicans to block financial reform was the safest and surest bet Wall Street executives have made in a very long time. But, with two-thirds of American people in support of stricter regulations for banks and other financial institutions, Senate Republicans just made the riskiest gamble of their careers. In the face of overwhelming public demand that Wall Street be held accountable for laying waste to our economy, it's not a question of whether reform is going to pass -- it's a question of how long Republicans can run from the pitch forks on Main Street.

While I enjoyed reading McMahon's rhetoric, I still think it is important to place this in the context of a bigger picture. Yes, the Republicans seem to be luxuriating in their strategy of being the "party of 'no;'" but they are not so much the party of "no Democratic majority" or "no Obama" as they are the party of "no government 'of the people, by the people, for the people," even if those are the words of the first Republican to win election to the White House. They are the party of those who gain from what Patricia Williams called "failure to govern at all;" and those who gain know exactly how to pay off those who can provide what they want.

Where does that leave the rest of us? It leaves us in a state of helplessness; and, as Naomi Klein observed in her report for The Nation, helplessness begets rage. What does rage beget? That is what I discussed yesterday. We have seen from the Tea Party movement how the Republicans can turn rage to their advantage, even when they are responsible for most of the causes of that rage. On the other side we have a President who sincerely wants to defuse the rage; but if, as recent polls seem to indicate, even a sliver (and the polls would indicate that it is far more than that) of Tea Party rage is over the race question, he will never be able to "talk this over" with the Tea-Baggers. If that is the case, then rage can only beget more rage; and a growing ecology of the verbal rhetoric of rage cannot avoid spilling over into actions of rage.

Once again it seems as if we all need to revisit the Preamble to our Constitution and remember our roots:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Who is willing to confront Republican leaders directly to ask just how much priority they place on the concept of "domestic Tranquility?" How many of them would need to be reminded of the origin of that phrase?

Monday, April 26, 2010

Premature Requiem

It turns out that my report of the death of the CNET brand was premature, one of those consequences of my strategy of selective reading. What did die was Coop's Corner, Charles Cooper's "editorial department" on the CNET News Web site. Here is Cooper's own explanation:

Yours truly is moving over to work on the CBS News Web site, where I'll be working on a terrifically exciting project. There will be more to say about that at a later time. What's more, I'm not going to completely disappear from the map. Fact is that you will still see my byline gracing CNET News from time to time (CBS, you'll remember, owns CNET), though this will be it as a regular gig for Coop's Corner.

Cooper announced this on April 22; and my "Requiem" post appeared on April 23. He obviously did not waste any time getting started in his new location!

Nevertheless, one nagging question remains. How did a hyperlink to Cooper's "debut" for CBS show up on my Google Reader as a CNET article? Is this an example of CBS, in its capacity as owner of CNET, exercising some form of droit du seigneur (with all the original connotations of that phrase attached)? Will we be seeing more CNET writers going over the wall to CBS and taking their links along with them? If so, then I would prefer to let CBS keep its Chutzpah of the Week award for this rather insidious refusal to let CNET be CNET and let CBS be CBS!

The Corollary of Helplessness

Naomi Klein has filed a report for The Nation from Cochabamba in Bolivia, the site of the World People's Conference on Climate Change and the Rights of Mother Earth. However, there is one path that her logical analysis does not follow; and I think it is important, because it addresses a line of reasoning far more general than current environmental problems. Let me begin with how she sets the stage with her opening paragraphs:

It was 11 am and Evo Morales had turned a football stadium into a giant classroom, marshaling an array of props: paper plates, plastic cups, disposable raincoats, handcrafted gourds, wooden plates and multicolored ponchos. All came into play to make his main point: to fight climate change, "we need to recover the values of the indigenous people."

Yet wealthy countries have little interest in learning these lessons and are instead pushing through a plan that at its best would raise average global temperatures 2 degrees Celsius. "That would mean the melting of the Andean and Himalayan glaciers," Morales told the thousands gathered in the stadium, part of the World People's Conference on Climate Change and the Rights of Mother Earth. What he didn't have to say is that the Bolivian people, no matter how sustainably they choose to live, have no power to save their glaciers.

Bolivia's climate summit has had moments of joy, levity and absurdity. Yet underneath it all, you can feel the emotion that provoked this gathering: rage against helplessness.

It's little wonder. Bolivia is in the midst of a dramatic political transformation, one that has nationalized key industries and elevated the voices of indigenous peoples as never before. But when it comes to Bolivia's most pressing, existential crisis--the fact that its glaciers are melting at an alarming rate, threatening the water supply in two major cities--Bolivians are powerless to do anything to change their fate on their own.

That's because the actions causing the melting are taking place not in Bolivia but on the highways and in the industrial zones of heavily industrialized countries. In Copenhagen, leaders of endangered nations like Bolivia and Tuvalu argued passionately for the kind of deep emissions cuts that could avert catastrophe. They were politely told that the political will in the North just wasn't there. More than that, the United States made clear that it didn't need small countries like Bolivia to be part of a climate solution. It would negotiate a deal with other heavy emitters behind closed doors, and the rest of the world would be informed of the results and invited to sign on, which is precisely what happened with the Copenhagen Accord. When Bolivia and Ecuador refused to rubber-stamp the accord, the US government cut their climate aid by $3 million and $2.5 million, respectively. "It's not a free-rider process," explained US climate negotiator Jonathan Pershing. (Anyone wondering why activists from the global South reject the idea of "climate aid" and are instead demanding repayment of "climate debts" has their answer here.) Pershing's message was chilling: if you are poor, you don't have the right to prioritize your own survival.

The concept that deserves more attention than Klein allotted lies in the center of this excerpt, subsequently reinforced by the following two paragraphs. The heart of the problem is the helplessness of those who try to act and the recognition that the only reaction to that helplessness is rage, rather than logic.

I found myself dwelling on this proposition because last week I happened to see Leila Khaled, Hijacker on the Sundance Channel. Much of this documentary amounts to an account of the making of a terrorist, and the fundamental argument is that one resorts to terrorism to get the attention of those who have willfully chosen to ignore one's plight. In other words, when one is helpless, whether as a Palestinian refugee, a disgruntled American citizen living on (or over) the economic brink, or a resident of a country facing "existential crisis" as a result of current climate conditions, there is little one can do but rage. That rage can be localized, but that amounts to banging one's head against the wall. The alternative is to warp that old motto of the Sixties into a more sinister proposition:

If you are not part of the problem, make the problem so bad that someone will have to do something about it.

The consequent of that conditional is basically a prescription for terrorism.

In the wake of 9/11, we experienced the better part of a decade immersed in rhetoric about a Global War on Terror that was as passionate as it was misconceived. After he took office, Barack Obama tried to undo those misconceptions with a concerted effort to establish better communication between the White House and the rest of the world on both national and international scales. From his speeches we felt that he appreciated the nature of helplessness in the face of abusive practices; and we all hoped that he would deal with the helpless with more substance than the I-feel-your-pain platitudes of Bill Clinton. What we probably did not anticipate is that Obama's own strategy would basically follow the first chapter of the Book of Isaiah (Jerusalem Bible version):

"Take your wrong-doing out of my sight.
Cease to do evil.
Learn to do good,
search for justice,
help the oppressed,
be just to the orphan,
plead for the widow.

"Come now, let us talk this over,
says Yahweh.
Though your sins are like scarlet,
they shall be as white as snow;
thought they are red as crimson,
they shall be like wool.

"If you are willing to obey,
you shall eat the good things of the earth.
But if you persist in rebellion,
the sword shall eat you instead."
The mouth of Yahweh has spoken.

For those who have resorted to terrorism in the face of helplessness, an invitation to "talk this over" just does not cut it, not when it involves conversations with the likes of someone like Pershing who will not even grant you the priority of your own survival.

After 9/11 Tony Judt invoked considerable wrath with an article in The New York Review that presumed that there were deeper motives behind those acts of destruction in New York and Washington. His position was that it was more important to address those motives through meaningful actions than to presume that one could wage war on terrorism the way the Allied powers had waged war on the Nazis. It would be fair to say that there are any number of reasons why the Bush Administration did not want to get Judt's message, but now it seems as if the Obama Administration is not getting it either.

If we are defuse the rage against helplessness, we need to turn not to Isaiah but to Oliver Cromwell:

I beseech you, in the bowels of Christ, think it possible you may be mistaken.

Let us not presume that the objective of talking things over is to get others to obey. Rather, let us "think it possible" that, in the eyes of the helpless around the world (including in our own country), we are the ones perceived stereotypically as terrorists. Even if we do little more than entertain the premise, talking things over might then lead to productive actions, rather than meaningless circumlocutions that can only provoke further rage.

Sunday, April 25, 2010

Finding a Context for the SEC Pornography Scandal

Now that the media has had its feeding frenzy over the revelation that SEC employees were using their computers to view pornography during work hours, it is time to pull back from the surface structure of this little bit of scandal-mongering and figure out whether or not there is any deep structure. This is one of those situations in which it may make sense to take stock of things through The Wall Street Journal. Kara Scannell filed a story yesterday that summarizes the basics nicely:

The Securities and Exchange Commission said it has already meted out punishment to a group of employees found to have viewed pornography during work hours.

Thirty-three people at the agency were found to have looked at porn over the past five years, according to a summary of internal probes conducted by the SEC's inspector general. All but two of the investigations were in the past three years.

The report said 17 senior SEC employees, earning between $99,000 and $222,000 a year, were among those who viewed porn on their office computers or on laptops while traveling.

None of the employees were named. The staffers' behavior violated government-wide ethics rules, the report said, and agency spokesman John Nester said each has been "disciplined or is in the process of being disciplined. Some have already been suspended or dismissed."

However, if we want to go looking for a deep structure, we need only skip over a one-sentence paragraph to land on the following observation in Scannell's account:

The disclosures come as the agency faces Republican scrutiny for filing a civil-fraud case against Goldman Sachs Group Inc. and one of its employees at a time when Congress is working to tighten oversight of the financial industry.

This paragraph had a profound trigger effect for the paranoid-conspiracy-theorist part of my character, if not for any of my more rational elements. I immediately thought of Eliot Spitzer and the undoing of his reform efforts by a sex scandal. I do not want to apologize for what Spitzer did away from his desk, but there were strong indications that he was moving in for a whopping kill against big-time abusers in the financial sector. This was one of those situations in which the guy had to be stopped "by any means necessary;" and that is exactly how he was stopped. This time around we have the SEC moving in for the kill, and guess what happened?

When the Spitzer scandal broke, Patricia Williams wrote a piece for The Nation entitled "Diary of a Mad Law Professor." She tried to clear away a lot of media-generated noise to get at what the signal really was. At the heart of that signal was the following sentence:

For it is not merely a failure to regulate Wall Street; it's a failure to govern at all.

Remember, all of this happened in October of 2008; so this was a major shot across the bow at the Bush Administration only a few weeks before Election Day. I, for one, took her analysis to be one of the best statements of the sort of needed change in which I wanted to believe.

So what is happening this time? We have the SEC working with all their might to ferret out abuses in the financial sector, and the strength of their efforts seems to be matched only by the vigor with which the Republican party is trying to ferret out abuses in the SEC. Thus comes the punch line: At the end of the day, that "failure to govern at all" seems to be in the best interests of the Republican Party, regardless of who is sitting in the Oval Office or which party holds how many seats in the two houses of the Congress. This is far more serious than accusing the Republicans of being "the party of 'no.'" This is accusing them of representing the interests of those who benefit the most when government fails, and it would appear that they are doing a very good job of representing those interests!

Saturday, April 24, 2010

Messy Reality

The title of Benjamin M. Friedman's latest piece for The New York Review, "Two Roads to Our Financial Catastrophe," refers to his examination of two recent books analyzing the economic crisis. One is by John Lanchester, who is not known for his work in economics and is described by Friedman as "a British writer better known for his fiction and criticism;" but that background would justify the rhetorical flair of his book's title: I.O.U.: Why Everyone Owes Everyone and No One Can Pay. The other is by John Cassidy, a journalist specializing in economics and finance. His title is less flamboyant but more fascinating for its substance: How Markets Fail: The Logic of Economic Calamities.

Friedman provides an excellent précis of Cassidy's "logical analysis" that bears consideration:

… Cassidy is interested in the people behind what he calls "the triumph of utopian economics," and how their ideas came to be so dominant. As he rightly points out, "the notion of financial markets as rational and self-correcting mechanisms is an invention of the last forty years." Such advocates of market efficiency as the Austrian economist Friedrich von Hayek, the University of Chicago's Milton Friedman, and contemporary economists like Eugene Fama and Robert Lucas (both also at Chicago) all receive careful attention. So do the political figures who championed their ideas, most prominently Ronald Regan and Margaret Thatcher. Alan Greenspan, with his bizarre devotion to the Russian-born ideologue Ayn Rand, stands out as the chief villain in Cassidy's telling, guilty of not just flawed ideas and sinister influence but "much prevarication" as well.

Cassidy contrasts the "utopian economics" that each of these people helped to propagate with "reality-based economics," which suffers not only from the inevitable intellectual messiness that comes with attempts to analyze the world as it is, but also from failing to line up with the interests of the economy' self-aggrandizing elites. The centerpiece of Cassidy's analysis of the difference between the two economic worldviews is the prevalence and potentially damaging consequences of what he calls "rational irrationality"—a situation in which each influential actor does only what makes perfect sense from an individual perspective, but the combined effect of everyone's acting in this way leads to outcomes that make sense for no one.

Ironically, the logic of rational irrationality can be deduced from the very principles of game theory that lie at the heart of utopian economics; and game theorists are at least willing to acknowledge it as a dilemma, more specifically the "prisoner's dilemma." If utopian economics is all about building the right models against which one seeks to optimize payoff, then the prisoner's dilemma is the classic example in which optimization of the group cannot be achieved by each individual seeking his/her own individual optimization.

Beyond such counterexamples, however, is the question of whether or not reasoning grounded in a philosophy of positivism can deal adequately (never mind effectively) with that "inevitable" messiness of reality. This goes back to whether or not one can build those "right models" in the first place; and I have previous observed that all positivism can tell us is whether or not a model is internally consistent. The problem is that consistency offers nothing when it comes to recognizing that inevitable messiness:

Consistency is thus worse than Ralph Waldo Emerson's "hobgoblin of little minds;" it is a pragmatically unattainable goal that distracts us from more realistic goals concerned with "living with the mess" (otherwise known as being-in-the-world).

This emphasis on verbs like "living" and "being" emphasize a further problem with utopian economics, which is that the mathematics of game theory equates optimization with finding an equilibrium point in a complex multidimensional landscape. In other words game theory is, from a grammatical point of view, noun-based and thus totally at odds with verbs like "living." This, again, is a point I have previously discussed invoking one of my favorite twentieth-century thinkers:

Put another way, the worst thing that can happen to an economy is that it achieves a state of equilibrium, because, in the spirit of Isaiah Berlin's approach to the history of ideas, that "state," by its very name, is fundamentally static; and the only time a "living system" achieves stasis is in death!

I would therefore suggest that what makes "rational irrationality" so irrational is its analytic foundation based on the concept of state. That foundation basically clouds any vision of what we have now come to call "gaming the system," which is basically the search of loopholes through which the system may be abused for the sake of personal gain.

This, in turn, provides a lens through which we can think about getting out of the mess in which we are still bemired. If Greenspan has become "chief villain," then his primary act of villainy has been deregulation, which is why so much of the current talk about economic reform concentrates on establishing a new regulatory system. I do not object to such reform, but I think we need to be careful about where it takes us. By their very nature, regulations can only live in that noun-based world, which, in the spirit of gaming the system, can always be subjected to verb-based abuses. Regulations can be useful, but they can only go so far. We would do better to think of the "health and well-being" of economic activities in terms of "Udi Manber's metaphor for safeguarding against abusive and criminal practices on the Internet as an arms race." As I previously wrote, "the safety of the Internet will never be strictly a matter of technology;" and, by the same reasoning, economic health will never be strictly a matter of establishing and enforcing the right regulations. That is just part of the nature of the messiness of reality, which is why being-in-the-world is ultimately a matter of how we act to live with the mess.

Friday, April 23, 2010

Requiem for a Brand

I have never been a regular reader of CNET News. Mostly I just browse their headlines through Google Reader, diving in to read a particular story, if I think it will interest me or one of my friends; and, from time to time, I find the site an inspirational source for what I write on this platform. It was in this latter spirit that I decided to pursue the headline, "Lufthansa to Gray Powell: Drinks are on us," for which Google Reader had provided the following snippet:

The German airline carrier says it wants to fly the suddenly famous Apple engineer to Munich for free.

However, when I clicked on the Google Reader hyperlink, I realized that I had tripped over a topic far more important than the ongoing story about prototype technology getting lost in a bar. In the spirit of a picture being worth a thousand words, this is the above-the-fold image that appeared in my Firefox window:

Note that the only familiarity resides in the banner for the Tech Talk blog. The rest of the screen is consumed by CBS News content, which (with the exception of the advertising at the top that did not quite fit in the window) has nothing to do with technology, computer-based or otherwise.

This was not entirely a surprise. I remember when the news broke that CNET News had been acquired by CBS; but all I really remember is that, once the announcement was made, business appeared to proceed as usual on the CNET News site. So I took this as just another instance of absentee management by an off-site "parent." It seemed as if CNET would go on being CNET, and the site would still be worth visiting.

Fortunately, I am pretty good at ignoring all those distractions that occupy Web designers whose masters are determined to seize my eyeballs. Going below the fold I discovered that this was a blog post by Charles Cooper, whom I have read in the past with both satisfaction and reflection. However, I discovered that, following the article, there was no longer a biographical statement for Cooper, let alone any mention of the CNET Blog Network; nor could I get this information through the hyperlink on his name (which at least still directed me to his other posts).

At this point, however, I found myself on another quest. I needed to determine whether or not CBS had decided to write the proper noun "CNET" out of their "construction of reality" in a manner that would probably set George Orwell grimly nodding his head. The fact is that "CNET" does not appear anywhere on the page for this blog post; and, what it worse, the URL for the blog does not appear on the "Blogs" page managed by CBS! Then there is the TOPICS list, which is sadly impoverished, and the CONTRIBUTORS list, which is no better and far less familiar than I would have hoped. Had the very idea of CNET been purged with all the vigor Orwell had observed in Joseph Stalin and his lackeys?

The one clue I had was that TECH label, hanging in red under the CBS logo. Beneath it was the list of "departments," each of which was a hyperlink. Sure enough, there were a bunch of "divisions" in this "department." This is what I could get to fit on my screen:

The only "division" missing from this display is GAMECORE. From here one could click the SEE ALL link; and the headline for that page is "CNET News." I suppose this is what the suits at CBS would call "phasing out the brand;" but my own perverse sense of free association immediately recalled the I'm-not-dead-yet guy from Monty Python and the Holy Grail.

Given that we are at the end of the week, I had to give this serious consideration with regard to the semantics of "chutzpah." After all, while chutzpah may involve manifestations of stupidity and/or malice, its true meaning resides in how it colors the situation. In this case I would assume that this design change emerged from the premise that, even among the most avid readers interested in technology, the CBS logo would be far more effective than the old CNET logo. Put another way, the assumption was that the CNET logo was losing eyeballs; and the CBS logo would recover them, probably with a multiplicative increase. This constitutes the sort of over-inflated sense of self (or, if you prefer, "corporate identity") that lies at the heart of many of the best examples of acts of chutzpah. Consequently, I feel justified in assigning the Chutzpah of the Week award to whomever declared "Make it so" regarding the redesign of presentation for CNET content. Once again, we are firmly in the territory of negative-connotation chutzpah!

Thursday, April 22, 2010

What the Travelers Said

Today the BBC News Web site ran five statements from air travelers about their personal experiences with the ban on flying over most of Europe's airspace due to the hazards of ash from the eruption of Iceland's Eyjafjallajökull volcano. Four of the five statements explicitly asserted that safety was more important than getting to their respective destinations as efficiently as possible. Of course we have no way of knowing whether or not, from a statistical point of view, these statements constitute a representative sample. At the very least they indicate some body of passengers who clearly disagree with the protestations of Giovanni Bisignani on behalf of the International Air Transport Association (IATA); and the four-to-one ratio at least reinforces the hypothesis that Bisignani has been expressing a minority opinion. There is also at least the suggestion that the European Union is more concerned with the safety of the general public than it is with the efficient operations of the airline industry, leading me to wonder whether or not those still enamored of the previous Administration in the White House would take this as yet another instance of "Old Europe" thinking!

All Varèse?

I could not resist the temptation to read Ivan Hewett's account of Varèse 360, a series of three concerts at the Southbank Centre in London presenting the complete works of Edgard Varèse. I was particularly fascinated to discover that this was the second "outing" of such a "festival," the first having been given a year ago in Amsterdam. Independent of Hewett's critical observations, I found myself wondering if this was yet another piece of evidence to support the premise that our own reactionary tastes will always keep us behind Europe when it comes to "thinking out of the box," as the innovation evangelists like to put it. Varèse, after all, not only excelled in "thinking out of the box" but also seemed to aspire to blowing up the box after leaving it.

Reviewing my records both here and on, I see that I have had only one substantive occasion to deal with a concert performance of Varèse's music; but that turned out to be an excellent data point. It was the BluePrint Project concert given this past February at the San Francisco Conservatory of Music; and the program was conceived with Varèse as the "framing" composer. The evening began with "Density 21.5" and concluded with "Déserts;" and I think it is fair to say that these two works very much set the context for the experience of listening to the other compositions on the program. However, this supports my skepticism over this idea of a complete-works event. We can now begin to apply the longue durée thinking of the Annalistes to the history of music in the twentieth century; and, from that point of view, we need to think about Varèse not only in terms of the music he composed but also in terms of whom he influenced, perhaps the most interesting section of the Wikipedia entry created for this composer. This season, for example, that influence may have been most evident in the performance Henri Dutilleux' "Métaboles" when Semyon Bychkov visited the San Francisco Symphony (although, by way of a disclaimer, I should mention that Dutilleux' name does not appear in that Wikipedia entry).

Thus, I would suggest that taking such a two-pronged approach to Varèse might deal with what Hewett felt was the biggest problem with the idea of a complete-works festival:

Small but perfectly formed, the complete life's work of that great musical visionary Edgar Varèse sits comfortably inside just three concerts. But would one want to hear those three concerts back to back? Though the music has a visionary splendour and literally cosmic ambition - Varèse wanted to write music for mankind's future, when he would be roaming among the stars - its vocabulary of brazen fanfares and thunderous polyrhythms can seem correspondingly small. The air becomes thin at such altitudes.

One could imagine a series of concerts in which selected Varèse compositions would be performed alongside works that show his influence. For example one would have the opportunity to listen to John Cage's "First Construction (In Metal)" in the context of a performance of "Ionisation;" and one could conceivably apply the same strategy to most (if not all) of the other works in the Varèse canon. This would probably require more than three concerts, but the air would not be quite as thin because there would be greater breadth in the listening experiences. Would this not be an excellent opportunity for one of the American performing arts institutions to demonstrate that we can keep up with the Europeans?

Wednesday, April 21, 2010

The Need for a Timeline

Richard Rayner's report, "Channeling Ike," for the April 26 issue of The New Yorker is already available on the magazine's Web site and definitely deserves attention. Indeed, it was through the attention of Jon Wiener's latest post to The Notion, the shared blog managed by The Nation, that I came to read the article in the first place. The primary claim of Rayner's piece is the accusation of "phantom scholarship" made against the late historian Stephen Ambrose. Much of Ambrose's reputation rests on his two-volume biography of Dwight David Eisenhower followed by two popular best-selling books about the Second World War, Band of Brothers and D-Day. Much of the scholarly substance of these books was grounded on the claim that, as Rayner put it, Ambrose had spent "'hundreds and hundreds of hours' interviewing him [Eisenhower] over a five-year period before Eisenhower died, in 1969." Rayner's own argument is concerned with the refutation of this claim.

This refutation is warranted by claims made by Tim Rives, the deputy director of the Dwight D. Eisenhower Presidential Library and Museum. Rives first found reason to question Ambrose's credibility while preparing to moderate a panel celebrating Ambrose's writings on the occasion of the 25th anniversary of the completion of the Eisenhower biography. Those claims began with evidence that, contrary to the story that Ambrose had told on numerous occasions, Eisenhower had not approached Ambrose to initiate the biography project and spiraled down to evidence from Eisenhower's own calendar that his time spent with Ambrose was far more limited than "hundreds and hundreds of hours."

I find it fascinating that so much of Rayner's case comes down to timeline analysis. Many of the specific time points could easily be confirmed; but there is no evidence of whether Rives or Rayner (or both of them) took the time to confirm the entire timeline. Accusations of shoddy scholarship should always be confronted by evidence obtained through scholarly discipline. If Rayner had to deal with space limitations imposed by The New Yorker, then he should have pushed for the strategy often applied by The New York Review: Create a Web site for the details, and tell the reader how to find it.

However, even if the timeline is accurate, why did it take 25 years for Ambrose's purportedly bogus claims to come to light? Any number of people could have done so. Was it just a matter of laziness? Did the biography find its way to many shelves only to sit and gather dust without ever being read? Didn't any of the reviewers of the biography and subsequent World War II books pick up on anything dodgy, such as citations reading only "Interview with DDE" without even giving a date? At the very least we need a better timeline to account for events between the appearance of the biography and Rives' discoveries 25 years later.

My personal hypothesis is that, in the word of writing, there are few settings in which reviews are taken seriously. As an academic and scientific researcher, I used to take great delight in writing reviews but knew full well that they were never regarded as "serious" publications. At best the substance of the review may eventually find its way into a book. One of the reasons I take so much delight in reading Paul Ricœur is that many of his arguments unfold out of reviews of the sources he has read, not just by his contemporaries but also from past sources that receive little attention. However, Ricœur's specialty was hermeneutics, which is primarily concerned with the interpretation of complex texts; so it is not surprising that his own ideas should emerge from his own exercises in interpretation. This is a time-consuming pursuit however, and those constrained by deadlines rarely have time for it. Thus, if we account for both the personal priorities of reviewers and the constraints imposed by publishers and editors, it is easy to see why serious hermeneutic reading has so few advocates these days. This may get at the crux of Rayner's lead sentence:

Nonfiction writers who succumb to the temptations of phantom scholarship are a burgeoning breed these days, although most stop short of fabricating interviews with Presidents.

The breed is burgeoning because the overall "ecology of writing" encourages its reproduction. Ambrose may make for a particularly appalling case study, but it is hard to imagine that Rayner's exposé will do anything to change that ecology.

Tuesday, April 20, 2010

Who is Giovanni Bisignani?

After writing yesterday's post about the extent to which the problems surrounding the eruption of Iceland's Eyjafjallajökull volcano constituted a case study of what happens when the world of bits bumps into the world of atoms, I found myself wondering just who Giovanni Bisignani is and what the organization he leads, the International Air Transport Association (IATA), actually serves. My wondering was further fueled this morning when I realized, while reading the Al Jazeera English account of the current state of play, that Bisignani's "European mess" comment was still reverberating in the news media. So, in the immortal words of Butch Cassidy, who are these guys?

Let us begin on the objective front and gradually work our way to matters more personal. Here is the summarizing paragraph from the About Us page from the IATA Web site:

IATA is an international trade body, created over 60 years ago by a group of airlines. Today, IATA represents some 230 airlines comprising 93% of scheduled international air traffic. The organization also represents, leads and serves the airline industry in general.

As I see it, the key subtext in this statement is that IATA represents corporate interests, rather than the interests of either the industry's customers or its workers. In other words it is the vehicle through which the shareholders call the shots, whether or not their decisions are in the best interests of either customers or employees.

Having established whom IATA serves, we may now turn our attention to how Bisignani serves IATA. It turns out that he is definitely a man from the world of bits. His biography page has much to say about his innovative use of technology to streamline operations in the interest of greater efficiency, which is to say better cost effectiveness and a higher return on investment. As might be imagined, he is one of those "new management" products who can drop into any corporate setting, regardless of what that corporation's business actually is. Put another way, he has never been "in the trenches" (or, perhaps more appropriately, in the cockpit) with those whose work practices are most necessary in the transportation of both people and goods through the air over long distances.

Another point of interest is that, while I was gathering my background material, I visited Bisignani's biography page on the IATA Web site. As I continued my gathering, I navigated away from that page; but when I started working on the preceding paragraph, I could not get back to it! I can think of two explanations:

  1. Others with better qualifications in journalism than I have been piqued by the same question. As a result, the site is now loaded with more traffic than it can bear. The squeaky wheel that has been making the most noise is now getting more hits than its server can handle. (This would be consistent with the problems I had navigating to other informative pages while writing this.)
  2. The more paranoid explanation is that there was a frantic decision to change the "spin" of Bisignani's biography page, as well as the other mission-related pages I was trying to reach with the same lack of success.

Writing that paragraph bought me a bit of time, which was enough to refute the second explanation. The biography page has not been changed, so it looks as if I was just competing with a lot of equally curious traffic. So I now can provide support paragraphs for some of my claims. Here are two about his accomplishments:

In 2004, under Mr. Bisignani’s leadership, IATA began Simplifying the Business - bringing convenience to travelers and cost reduction to airlines through effective use of technology. The program's headline e-ticketing initiative eliminated paper tickets globally on 1June 2008. And the cargo equivalent - IATA e-freight - is modernizing the industry by removing cumbersome paper documentation.

Mr. Bisignani has engaged airports and air navigation service providers to build a new business partnership with a common goal of cost-efficiency. This has delivered billions of dollars in savings. Meanwhile, the Association’s calls for transparency and effective economic regulation of monopoly suppliers are positively impacting legislation around the globe.

Regarding my claims about his background, here are the relevant paragraphs:

Mr. Bisignani’s career prior to joining IATA spans several industries. He launched the European travel portal Opodo and spent five years as CEO and Managing Director of Alitalia. During this time he also served on the IATA Board of Governors. He has been a Member of Pratt & Whitney Advisory Board and Chairman of Galileo International. Mr. Bisignani began his career with Citibank and then held several high-level positions at the energy company ENI and with the Italian industrial conglomerate IRI Group. He served as President of Tirrenia di Navigazione, the largest Italian ferry company and as CEO & Managing Director of SM Logistics, a group of logistics and freight forwarding companies partially owned by GE.

Mr. Bisignani studied both in Italy (Rome) and the United States (Harvard Business School). In June 2008, Mr. Bisignani received the honorary degree ‘Doctor of Science honoris causa’ by the School of Engineering at Cranfield University in the United Kingdom. Born in Rome in 1946, he speaks Italian, English and Spanish. He is married with one daughter and enjoys golf, tennis and riding.

Apparently, when it comes to "recreational transportation," he prefers horses to amateur piloting.

It all comes down to the usual question, this time as it applies to the safety of individuals. Whom are you going to believe? Do you accept the judgment of pilots and the experts they consult to determine how much risk is involved in getting, for example, from London to New York; or do you heed the strident voice of a bean counter par excellence who may never have even seen the inside of a cockpit?

Monday, April 19, 2010

Failure in the World of Atoms

By now we have probably grown up out of Nicholas Negroponte's Being Digital vision in which the world of bits transcends and trumps the world of atoms; but it seems to be important that we receive periodic reminders, however painful they may be, that atoms still matter. It is all the more important when those reminders come on a global scale, since those like Tom Friedman who evangelize globalization have a tendency to see commerce strictly in terms of the exchange of bits, with atoms playing no more than a peripheral role. From this point of view, both Negroponte and Friedman sorely need the antidote that Ken Auletta prescribed to Google in the context of his cautionary remarks about "bumping into" reality.

The reality in this case is very much in the world of atoms; and it concerns the eruption of Iceland's Eyjafjallajökull volcano, which, while showing signs of abating, has created a cloud of ash that continues to cover the better part of Europe. Perhaps the best aspect of this case concerns its impact on aviation and the reaction of Giovanni Bisignani, the head of the International Air Transport Association (IATA), who, in an interview this morning with the BBC, declared the situation "a European embarrassment and... a European mess." Now, in Auletta's terminology, the real "bump" in this situation is between the world of commerce, as represented by IATA, and that of air transport customers. However, this is one of those situations of "mission-critical" decision making; and these days almost all decisions are made through the world of bits, even when they impact the world of atoms.

Bisignani's "mess" stems from the cautionary approach that the European Union (EU) has taken in exercising control over opening European air space to air traffic. The EU is exercising regulatory authority as a matter of safety. The BBC interviewed a jet pilot who had flown through a cloud of volcanic ash over Indonesia and experienced his engines failing, one by one, until none were available to help him bring his craft down safely. (At least we know he survived to tell the tale.) EU air traffic is extremely heavy, moving the atoms of both people and consumable goods (many of them perishable and in need of rapid transport) for the best part of every day of the year. In the world of Negroponte and Friedman, all of this is deftly managed by an even heavier traffic of bits, most of which are moving through the Internet. (I even recall a suggestion from yet another evangelist that, if planes could communicate with each other, they could do a better job of negotiating over runway usage than an air traffic control tower.) However, the world of bits does not really account for the people involved in the process, whether they are flying in the plane or down on the ground in the secure assumption that a plane will not drop out of the sky and fall on them.

From this point of view, Bisignani's outburst basically comes down to frustration because, in this particular situation, the world of atoms just cannot behave the way the world of bits is prescribing. He is right that the situation is a mess, but he wants to resolve the mess by circumventing any regulatory authority and letting the individual airlines make their own decisions about which of its flights are safe enough to resume. This is, to say the least, extremely scary. To take an example of an airline that is trying to exercise its own judgment, if British Airways (BA) were to decide unilaterally that it is safe to resume flights between London and New York, what would United Airlines do? Would it examine the results of the BA test flights? Would it critically review how BA made its decision before accepting its logical soundness? Alternatively, would it quickly follow suit to avoid losing customers to BA?

None of this is to deny the value of bits. It is only a question, as Humpty Dumpty put it to Alice, of "which is to be master." The current crisis over air traffic should remind us that the world of atoms is the proper master, simply because that is our world. Decisions about that world may be facilitated through the world of bits, but we are the ones stuck with the responsibility of deciding whether or not safety is a value to be enforced. The EU seems to have made that decision; and, in so doing, they have recognized and accepted one of the most important principles of governance.

Sunday, April 18, 2010

Not a Good Way to be Number One

Ill Fares the Land is the title of Tony Judt's newly published book. It is also the title of his essay (drawn from the first chapter of the book) in the latest issue of The New York Review. As one may guess from the choice of the words, neither is particularly cheerful; but ultimately Judt's concern is with diagnosis of the illness, rather than laying out its symptoms. From this point of view, however, he presents the symptoms in a way to achieve maximum impact, thus getting our attention when he turns his attention to diagnosis.

One particular graph demonstrates how much that impact is necessary:

This demonstrates just how the United States stands above (if that it the right preposition) all other industrialized nations when it comes to potentials for advancement. Put another way, this graph illustrations just how much a fiction the Horatio Alger myth really is and who benefits from that fiction. The point is that it is virtually impossible for those of modest means to break into the ranks of the wealthy. The wealthy of the United States have created a social framework that protects them from such "invaders;" and, while the "class conscious" United Kingdom may be our nearest neighbor, the distance on the graph speaks for itself. Can there be a more compelling argument that the time for patience with the rich and mighty can no longer endure?

Saturday, April 17, 2010

The Crowd's Excuse for News

I am not sure of its development history, but I have assumed that the current implementation of the technology behind Yahoo! News is based on some kind of crowdsourcing model. This is one of the major reasons that my primary sources of news come from RSS feeds of institutions that still have at least some commitment to that dying practice of journalism. However, I still have a Today's Highlights window on my home page, left over from a time when I could not remove it. However, I think I have come to the point where I am ready to ditch it. I realize that this will remove opportunities to bring my wife's attention to cute pet videos, but these days both of us have no end of better things to do with our time. As a parting shot (pun intended), I did a capture of the window that finally tipped my balance:

I suppose the good news is that the volcano story is there at all. However, that was the first thing I read from this window this morning. If Yahoo! is so good at collecting data about what I am doing, they should know better than to recommend things I have already examined! The rest is all fluff; and my guess is that the "Cheapskate's guide to riches" is advertising in disguise. When professional journalism finally kicks the bucket, this image should probably be pasted on the coffin. That should take care of the what-did-he-die-of question for the few people who think enough of the departed to attend the funeral!

Friday, April 16, 2010

It Took Almost 60 Years!

In 1952 Congress authorized the National Day of Prayer, and since 1988 this date has been set as the first Thursday in May. This year any celebration of that day, at least in a national context, is likely to be in question. In an article for The Christian Science Monitor yesterday, Staff Writer Warren Richey reported that United States District Judge Barbara Crabb has ruled that this statute constitutes government endorsement of religion, which is explicitly prohibited in the First Amendment of the Bill of Rights. Crabb was ruling on a lawsuit filed against the National Day of Prayer by members of the Freedom From Religion Foundation. Crabb's ruling said the following about the law, which has been on the books for almost 60 years:

It goes beyond mere acknowledgment of religion because its sole purpose is to encourage all citizens to engage in prayer, an inherently religious exercise that serves no secular function in this context.

In this instance, the government has taken sides on a matter that must be left to individual conscience.

Those who remember the Fifties or have taken the trouble to study their history know that these were the years when Communism was the greatest threat to what we now call "homeland security;" and one of the favorite adjectives to hang on the nouns "Communism" or "Communist" was "godless." The prevailing opinion was that America would vanquish Communism with the right combination of nuclear weapons and prayer books. In this context it is also appropriate to remember that two year later, in 1954, Congress legislated that the words "one nation" in the Pledge of Allegiance be changed to "one nation under God."

To emphasize the significance of her decision, Crabb further enjoined President Barack Obama from issuing and executive order calling for celebration of the National Day of Prayer. I hope he takes this seriously. I would like to believe that our President is confident enough in his personal sense of faith that he does not have to impose it on his electorate or parade it in front of representatives of other countries. This particular attribute that differentiates him from his predecessor was one significant reason that I voted for him.

Thursday, April 15, 2010

The CHUTZPAH of Denying Humanity

Reflecting on the post I just completed, I realize that we need to recognize that humanity needs to provide a foundation for not only the elevated world of statecraft but also our day-to-day personal interactions. To deny humanity from either of these worlds is as reprehensible as confusing one with the other. This is the context in which we should regard the recent action of the South African Zionist Foundation towards Richard Goldstone, just reported on Al Jazeera English:

Richard Goldstone, a former South African judge, has been effectively banned from attending his grandson's bar mitzvah which is to be held in Johannesburg next month.

Goldstone, who authored a UN report on the war crimes committed by Israel in the Gaza Strip, has been barred by the South African Zionist Federation (SAZF) from attending the event, South African and Israeli newspapers reported on Thursday.

The very idea that the SAZF can so interfere with one of the most important of Jewish rites is an act of chutzpah with the most negative possible connotation. Having just written about the delicacy of statecraft, this is an action that extends beyond Goldstone's personal affairs to the ongoing difficulties of any constructive conversations taking place over the problems in the Middle East. Given the consequences that may ensue from this act, SAZF clearly has a strong right to claim the Chutzpah of the Week award.

Diplomacy through Disintermediation?

The headline for yesterday evening's Politics and Law article for CNET News by Declan McCullagh was irresistible:

Meet Russian President Medvedev, Internet geek

Once we got past the Freudian slip of using Vladimir Putin's name in place of Dmitry Medvedev's, we got to the substance of the claim behind this headline:

During an appearance at the center-left Brookings Institution, the head of the Russian Federation suggested that he and President Obama should dispense with their legions of aides and chat on iPhones through text messaging instead.

"We don't e-mail each other (but) that would be the fastest possible way to talk to each other," said Medvedev, according to a translation. "In this case, we could just have a couple of iPhones and we could just exchange text messages or e-mails. I am quite familiar with that, as well as President Obama, as far as I understand." (Obama has a BlackBerry.)

Medvedev said he no longer starts his day by reading newspapers or watching television. Instead, he said, "I just go online and I find all of the things there," including "media that are favorable to the Russian president, media that hate the Russian president."

However, it was the following quote from Medvedev that most interested me:

We don't need our aides that much today. We can immerse ourselves into information...The time has changed. Whatever I read or President Obama reads, we always have the possibility to go online and see what is happening in reality. This doesn't mean that Internet is the final source of truth. But this is an alternative source of information.

It has been some time since I heard talk of disintermediation, particularly when that talk is advocating it at a time when we are beginning to wake up to its deleterious impact on the retail business. Still, this little remark provides us with a healthy reminder that "knowledge work" (if we wish to use that phrase in a manner that is not merely gratuitous) is not all about getting "immersed" in information. If we want to know "what is happening in reality," we need to interpret that information, not according to some abstract and absolute semantic analysis but in terms of how that information is embedded in the rich context of that reality we wish to apprehend, which is not objective but rather is socially constructed. This is never an easy matter; and anyone who participates in the highly sensitive conversations of statecraft must, of necessity, draw upon the expertise of aides to prepare for those conversations. Indeed, when statecraft is at stake, it may not be an exaggeration to say that every unit of "information" is subject to multiple interpretations reflecting the different contexts of differently hypothesized realities. One must prepare for a conversation with a sense of which of those realities are sympathetic to one's own needs and goals. This involves invoking the methods of Ian Mitroff, through which different perspectives of those realities duke it out with well-formed arguments as part of a process of critical inquiry that makes sense of all that "immersing" information.

There may be some virtue in the idea that Medvedev and Obama could text each other over casual matters having to do with dinner, the latest download from iTunes, or how the kids are doing in school. A conversation between two individuals, each of whom grants the basic humanity of the other, almost always makes more progress than a confrontation between adversaries. Even diplomacy can take advantage of little reminders of humanity, particularly when tensions need to be defused. However, the premise of mutual humanity only gets the conversation off to a good start and keeps it going. The substance of the conversation has more to do with reconciling differences in socially constructed realities and making decisions with such reconciliations in mind. From this point of view, the parties involved in conversation will always have to depend on aides when preparing strategies and tactics before the conversation begins.

Wednesday, April 14, 2010

It Takes a Village to Build a Network

They do things differently on the other side of the pond. Our own consciousness industry tends to promote the proposition that the British are quaint, naive, and out of touch with the latest thinking, particularly where matters of business and technology are concerned. Every now and then, however, those of us who follow the news beyond the boundaries of our own home-made propaganda discover that human values still count for something in the United Kingdom and that there can be a place for those values in the world of modern technology.

Consider the following dispatch to BBC News from Graham Satchell concerning the vision of an entire nation wired for broadband:

A UK village which raised £37,000 to offer 200 homes the super-fast broadband that BT could not deliver has launched its network.

Rutland Telecom will offer the residents of Lyddington speeds of up to 40Mbps (megabits per second).

Other telecom firms had said it was not economical to provide fast services to the village.

Getting fast broadband to rural areas is back in the spotlight as the government shelves its funding plans.

It is estimated that around 2.5 million homes in the UK cannot get broadband speeds of more than 2Mbps.

The Rutland Telecom scheme was a joint effort between villagers fed up with slow broadband speeds and a local ICT firm that was reselling BT's broadband.

Street cabinet

They discovered that there was nothing to stop them becoming a telco.

"We found that any company could do, on a smaller scale, what Carphone Warehouse has done and take over BT's network," said Dr David Lewis, managing director of Rutland Telecom.

They asked Openreach, the BT spin-off that has responsibility for the UK's telephone network, to supply fibre-optic cable to a street cabinet in the village.

It was a slow process and required the intervention of regulator Ofcom but two years later the telco is up and running and already has 50 customers.

"For the first time in UK telecommunications history the telephone lines of customers are completely cut off from the local BT exchange," said Rutland Telecom director Mark Melluish.

The good news is that this is a first rate little-village-that-could story. It offers a moral with a twist: If the giants who think they are running the show think you are too insignificant, find someone else who doesn't. This follows the same line of reasoning that advocates doing business with a small local bank, rather than one of those behemoths that is more interested in inventing new schemes for wealth creation beyond the scope of current regulations. Ironically enough, this village may have stumbled upon its own approach to wealth creation as a consulting "solutions provider" to other villages:

Rutland Telecom has been approached by 40 other rural community groups to see if a similar solution is possible in their area.

It is on the verge of launching similar schemes in neighbouring Leicestershire and one in Wales.

Nevertheless, in the interest of maintaining that sense of reality by which I try to live, I feel a few cautionary observations are in order. Rutland is still connected to BT. It is just that they are now connected through a mediating enterprise. This raises the question of how fee-for-service will fare in the future. If BT raises their rates, that hike will trickle down to the mediator, which is unlikely either to absorb or to mollify the increase. Any effort on Rutland's part to push back is likely to be regarded as insignificant to BT.

There is also the matter of cost. £37,000 doesn't sound like a sum that can be raised through a bake sale or a booth at the county fair, and I doubt that it could have been easily managed by Rutland's budget. Did Rutland find a good price point to charge for the service; and, if so, do they have a good projection for when they will recoup the expense (including any additional expenses if the money had to be provided through a loan or bond measure)? Knowing how many Americans feel about taxes, my guess is that the answer to this second question could well be a deal-killer for anyone trying to apply a similar strategy in this country!