Piketty, Princeton and Robots -- Oh My!

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Let's start with three related data points.  First, the economics community has been abuzz over Thomas Piketty's seminal work "Capital in the 21st Century".  It's a dispassionate, non-ideological examination of rate of return on capital over history, and how it relates to the rate of return on labor and the rate of economic growth.  The upshot is that it is pretty clear that return on capital is always greater than the rate of growth, resulting, all other things being equal, in an increasing concentration of wealth at the very top.

Second, the recent study by Princeton scholars Martin Gilens and Benjamin I. Page that looked at policy outcomes in detail and found - somewhat unsurprisingly, to me - that political outcomes skew to the outcomes desired by wealthy elites. The important contribution of this study is the stated conclusion that the US can no longer be considered a democracy, as dollars have a greater impact on policy outcomes than votes.

Third, the percentage of the population with a job - what the Fed calls the Civilian Labor Force Participation Rate - has been in freefall since it peaked in late 2000. There's a lot of argument about what causes might be contributing to this process, but there can be no doubt that the replacement of human labor, even skilled human labor, with intelligent machines has been a major factor. Just watch the TeeVee show "How It's Made" and you'll discover that the larger the factory, the fewer workers per unit of output are required.

OK. So given these insights into modern America, what have we learned? The important thing to realize is that you can no longer separate economics from politics. EVERYTHING is about money, wealth, interest rates, tax policy and corporate regulation. There is no longer any way to view political policy or ideology without considering economics and financial policy. That alone makes it obvious that there is something terribly wrong with our political process, but with recent high court decisions that corporations are citizens and money equals speech, it's impossible to think about policy without thinking about money.

Here's the thing. I can make a solid case that we're doomed. In an economy starved for demand sufficient to create full employment, with human labor being steadily replaced by intelligent machines and economic policy being driven by wealthy elites to favor their interests, the next couple of decades are going to be brutal to mainstream interests. Increasing inequality, decreasing opportunity, flat or declining wages, low interest rates or even deflation - everything favors capital and nothing favors labor. The political goals of the 1% - lower taxation, reduced regulation, reduced social welfare spending, zero real inflation - are firmly in place and those outcomes are completely party independent.

I'm prepared to listen to any more optimistic take, but I can't find a way to construct one, even one I don't actually believe. The militia/tea party take on the decline of America is ridiculous. The system won't collapse due to economic failure or foreign intervention. But it's hard to take the position that this system is sustainable. The US is too big, too diverse and too polarized to survive as a single nation with 350 million citizens and a $14 Trillion dollar economy. There's no way that works, and with an unnecessary and wasteful trillion dollar military budget sucking the life out of the ability of the system to support its own citizens, there's just no chance that the desires of the plutocrats won't ultimately generate rebellion. By 2050 the US will be between three and five separate nations, with different constitutions and different economic and social policies.

And that might not be the worst possible outcome.
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Of Cars, Guitars and Dogs - A Retrospective

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In 1974 I had a kind of gold/brown Dodge Dart I nicknamed "The Slug".  In the somber tones of a superhero voiceover, I'd invoke our motto: "Nothing can stop The Slug".  Indeed, it took no less than 9 collisions - famously, three of them within an hour in a single trip from Fairfax to Novato that ended only halfway to its destination at the Blue Roof Inn.  In a joke no one (but me) thought was funny, I always insisted that it was an unbreakable rule that The Slug should always be stocked with enough drugs to kill an elephant, because one could never trust those damn elephants.  Some years later I was to learn the complete insufficiency of such an interspecies survival strategy when I tried to prevent a large Brown Bear from eating my salami (and me!) by throwing her the Quaaludes.  Although it generated more annoyance than amusement, I never gave up on the joke about The Slug and elephants, right up to the day that the slug finally threw a rod at the Cheese Factory out west of Novato.

Also in 1974, I had a dog.  Not just any dog.  I had a year old Husky Collie cross, one of the smartest, strongest and uncontestably most beautiful canines since their original domestication.  Named after the mythical and never-actually-seen "Old Man Rooney" in the great old Burns & Schreiber cabdriver and conventioneer comedy skits, I called him Rooney.  He was so smart and so eager to please that I trained him to respond to hand signals - having had an abiding fascination with non-verbal communication going back at least to the novel Dune, and probably before that.  And in those timeless, endless days where every night was a party and every week a vacation, Rooney was my constant companion.

I have this image, a kind of a multi-sensory mental photograph of a moment in time.  Driving through West Marin in The Slug with the windows down, Rooney at my side and the AM radio set to KFRC, playing loud through that single cheap dashboard speaker.  It was a song I hadn't heard before, but it exploded with power and urgency, and even more than that, for the first time I knew what Chuck Berry meant when talked about "playing guitar like ringing a bell".  It was 'Born to Run', it was my introduction to Bruce Springsteen, and it was that day with my dog on that little country back road amid the pines and buckeyes and cedars, that dusty West Marin smell my sister and I called "dried up rattlesnake grass" (we called it rattlesnake grass because the seed pods sounded like little rattlesnakes when the wind blew) blowing in the windows, a moment in my personal history that resonates with so many.

Because down through the years, from the beginning of Rock n Roll down through the decades to today, there have been many in rock royalty, from The Beatles to Mick to Elton to Bowie to Axl to Tupac and so many more, but having arrived here in 2014 there is one elder statesman, one rocker who represents rock n roll and all we love about it, and that's Bruce.  He has experimented with all kinds of songs and lyrics and voices, but he still seems to love to play, he's unapologetically political and he is, for three generations, what we mean when we say rock n roll.

It wasn't very long after I heard that guitar, the urgent lyrics and Clarence's ethereal sax that I went and bought my first copy of Born to Run.  I quickly filled out the back catalog, discovering the gritty brilliance and honesty of 'The wild, the innocent and the E Street Shuffle" and the Springsteen work that has always been my favorite, the perfect blend of anger, fear and hope that underlies every successful rock n roller, "Greetings from Asbury Park, NJ".  Whereupon I heard "Lost in the Flood" for the first time and knew I'd found a home.

Turns out I missed a lot of interesting music because I tended to avoid pretension and afectation in music.  I liked the tee shirts and loud guitars, I liked lyrics that spoke to me poetically, I liked a little grit and pain alongside the the pure, unfettered joy of that beautiful noise.  And to this day, every now and then I'll go back and play 'Born to Run', and I'll hear those three notes, that amazing bell-like guitar sound that sounds like nobody but Bruce, and I'll remember those summer days in the mid seventies with my dog and I'll smile, just a little bit.
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The Boy Who Cried Innovation

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Business as Usual

For about a year I've been seeing grave predictions of the impending demise of Apple due to a lack of "innovation".  While there may ultimately be reason for concern, the panic over the lack of new, breakthrough products seems both unreasonable and inaccurate to me.

First, we seem to have a problem with our perception of the actual pace of innovation in the real world. Apple is responsible for some number of genuine breakthrough products since the Macintosh in 1984 - how many depends on how you view the company and the products, but at the very least one has to include the MP3 player (the iPod), the Smartphone (the iPhone) and the tablet.  Personally I'd also include OSX - a true UNIX desktop operating system with a user-friendly User Interface - but again, it depends upon how you see the various hardware and software products and how they are integrated and sold.

Now, it's true that Apple hasn't released a breakthrough innovation since the iPad, but is that really a sign that they have lost their product-development mojo?  What have other companies released that represented such an innovation in consumer electronics?  Or, put another way, what product category remains undeveloped, waiting for Cupertino's engineering and product design geniuses to build the defining, quintessential version that all others still pursue?

The smartphone market is quite mature - people have their favorite brands, but we know what a smartphone is, and what we expect it to do.  Voice, text, email, camera, music player, game platform, web browser.  There's just not much more you can do with a small, hand-held touchscreen computer.  Apple still has a lead in the tablet market based on the ease-of-use of iOS and the quality of their hardware, but it's not like there's something you could do with a tablet that we haven't thought of already, and like the Smartphone, improvements at this point are going to be incremental rather than revolutionary.

So what WILL the next breakthrough innovation on the level of the iPhone or iPad actually be? Remember, we had thought about, talked about and even seen prototypes of those products for YEARS before Apple released them, so we should have plenty of information to speculate on what might come next.  There's an ongoing buzz around integrating a computer and a television set, but as much as smart people are thinking about it, Netflix and changing the channel from a web browser are about all the uses they can come up with.

I suspect the next breakthrough will be in some kind of commercial or consumer robotics.  The combination of intelligence, mobility and autonomy will lead to any number of consumer products, from lovable robotic pets to self-driving cars.  And the temptation to adapt robotics to man's most ancient endeavor, war-fighting, will ensure that there is plenty of money available to do the development.
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Who Lost on Tuesday?

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Are we finally witnessing Peak Tea?

We know that Bill de Blasio, Terry McAuliffe, Chris Christie and Bradley Byrne won.  In the sense that elections are a snapshot of a frozen moment in time, these winners reflect the current state of the Republican brand more than any particular unifying quality.  But if the winners don't tell us anything about the future state of the American electorate, what can we learn from the losers?

An easy answer is that we are seeing the decline of the tea party, or at least that we have reached "Peak Crazy".  There is no doubt that the overall American appetite for exclusionary, apocalyptic madness has its limits, but make no mistake - Americans will continue to be tribal, bigoted, sectarian nationalists for a long time to come.  So while we may be seeing the end of the tea party as an effective force in American politics, it's worth thinking about to what extent this might be a good thing.

When you think about the GOP as the political arm of an ideological movement, it's important to recognize that it represents two separate political agendas.  The first, primary, overarching agenda of the Republican party has always been, and will continue to be, upward redistribution of wealth in American society.  That means low taxes, limited government spending, limited government regulation and the elimination of government programs that transfer money to the poor or middle class.  This primarily economic portion of the "conservative" agenda is the foundation for all that comes after it, and when all else is stripped away, will remain the hill they will die on every time.

But forty years ago the powerful elites of the Republican party realized that their constituency under those terms - the very wealthy and the corporate leadership - was, by itself, far too small to empower a national political party.  So they turned to the famed "Southern Strategy" to turn the white South into a Republican bastion through racial hatred, and they enlisted the vast numbers of American evangelical Christians through their anti-abortion stance.  These additional factions gave them the numbers they needed to win many elections in the upcoming years, at the cost of dragging the party farther and farther to the extreme right.  In particular, their response to any political setback was to demand greater ideological purity from their candidates.  Eventually, you got the tea party and the inmates were effectively running the asylum.

So you got Todd Akin and Christine O'Donnell, but you also got Ted Cruz and Mike Lee.  And the fever swamp got deeper, and the tantrum got louder, and finally you got the "War on Women", the failure of a perfectly reasonable universal background check law, a spittle-flecked rear guard action in the wake of marriage equality successes and a party that abandoned any hope of a Latino constituency by once again scuttling immigration reform.

So Cuccinelli lost Virginia, Lhota lost New York and Dean Young even lost Alabama.  So, the tea party's on the wane, right?

It certainly would appear so. You can't exclude everybody but white males from your electorate and have much hope of remaining a viable national political entity.  But if we assume that we're seeing the decline of the truly crazy wing of the GOP, the larger question becomes "is this a good thing".  The key thing to remember is that the core ideological principle of the Republican party is toxic and destructive.  If they were to abandon their racial, tribal, gender and sectarian baggage and focus on their core economic agenda, it would not be better for most Americans.  Sure, we'd get immigration reform and marriage equality, but we'd get more pollution, more homeless, more food-borne disease and fewer safety net programs to help the victims.

So if the Republican core "establishment" decides to rid themselves of the tea party millstone, they'd lose many of their most reliable base voters, it's true. But while the extemist Right may well be the GOP's most intense voters, you can't vote 'harder'.  One vote is just the same as another.  So if they stopped alienating women, gays and Latino voters, and started tailoring their message of economic bamboozlement to a more inclusive audience, they could once again begin to be competitive in national elections.  And, of course, like their mirror images on the far left, the far right voters would find themselves with no real option but to hold their nose and vote for the Republican who was on the ballot, not the one they wish was on the ballot.

In a sense, for all their madness and hate, the tea party can be seen as a moderating factor in American politics.  They are the ones who have destroyed the Republican brand.  They are the faction that has turned the 'Party of Lincoln' into a white male regional political organization with no real national importance.  They are the voters who are preventing the election of those so-called 'moderate' Republicans who "only" want to take your job, your health and starve your grandma.  I know people who fear that America has no future with the tea party commanding the Republican party, but I submit that America's future is much darker without them.
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Time After Time...

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Whew.  That was close, wasn't it?  An ugly two week government shutdown was bad for everyone but Democratic politicians, but at least, when the clock was ticking toward midnight John Boehner was true to his word and allowed the House to pass a CR and Debt Limit bill on the strength of Democratic votes.  Everyone on every side - with the exception of the known lunatics - agreed that the US could not be allowed to default, especially not when it would be an unnecessary, intentional act.  In other words, the tea party broke the number one rule of hostage taking - they took a hostage that John Boehner was unwilling to shoot.

Of course, the CR and Debt Limit bill they passed were very short term fixes, with the CR expiring in January and the Debt Limit hitting again in February.  There are some differeences this time, however.  First, it seems vanishingly unlikely that the Republican leadership will allow the threat of a US Sovereign default to be used again anytime soon as political leverage.  The problem with using nuclear weapons in hand-to-hand combat is nobody wins.  But the two events are not so close in time now.  The CR must be extended by January 15th or the government shuts down again, but the Treasury will make use of their "extraordinary measures" to push back the deadline for raising the debt ceiling into the summer, June or even July.

So the tea party will take the budget hostage, and the Republican leadership has already proven that's a hostage they're willing to shoot.  There isn't going to be a budget agreement - the Democrats won't accept entitlement cuts without increased revenue and spending on things like infrastructure, and the Republicans are NOT going to bend on revenue increases. The only way that gets resolved is if the 2014 mid-term election is a referendum on divided government, and the Democrats re-take the House of Representatives.  Until one side or another has the power to actually enact their agenda, this is what American governance looks like.

Discretionary spending at Sequester levels and no important legislation passed for at least another year. Repeated artificial crises and short term fixes, all wrapped in the spittle-flecked hatred and political posturing of an American far-right movement that has lost its mind.  It's telling that they don't even try to describe what they see as the problems with the current government, they just deny that it has any legitimacy.  They say 'Obamacare' is a "train wreck", but they don't explain how that is.  They say government spending is "out of control", when it's at the lowest levels in decades.  They say Obama is taking away their 'liberties', but they don't say which liberties, or how they are losing them.  And in the one case where the Administration IS actually taking away their liberties - the police state levels of domestic surveillance without any oversight - they actually seem to approve.

Meanwhile, the economy sputters along, one real shock away from another recession, as the nation becomes a global laughingstock. Other countries wonder how it is that the most powerful nation on earth can't find a way to solve even its most pressing problems.  They wonder what is so good about a democratic system of governance if it leads to helplessness and chaos.  Emerging global and regional powers are learning lessons from this, but they are not the lessons we'd want them to learn.  They may fear the United States for it's raw military power, but any respect they might have had for our highly-touted values is fading rapidly, and the remaining pool of goodwill is drying up before our eyes.
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Felina

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Annnnnd - That's a Wrap

The premise, from the very beginning, was that Walt was going to die. His death, ultimately felt not only inevitable, but natural.  There was no other way for it to end for Walt.  The question that needed to be answered was how would Walt die - not so much in the mechanistic terms of the proximate cause of his demise, but rather what path he would take to his death, and what would he leave behind.  There was always a certain tension as you watched him build his empire and become the brutal, murderous Heisenberg, wondering whether he would live long enough to die from the cancer that riddled his body. But mainly, it was about how the man and the quest interacted in the process, and how a plan to leave his family with enough money to live after his death became a plunge into madness and brutality that left everyone around him dead or damaged.

It's interesting that such a dark series had such a 'happy' ending, at least in Breaking Bad terms.  There was no fixing the damage Walt had caused, or regaining the love of his family.  Hank was dead, his son and wife hated him, Jesse was gone, and Todd was running the meth business as only a good-natured psychopath could. But there were things Walt could do, a short term bucket list if you will, things that would settle matters and tie up loose ends for him.  The choices that remained for him were to act against the people who represented a threat to his family, the ones who had killed Hank, taken Jesse and brought about Walt's complete debasement.  THEY were the remains of Walt's to do list in which the last item was 'lay down and die'.

Terrorizing the Schwartzes into laundering the White family fortune was a perfect example of Walt's combination of brilliance and brutality.  In checking the first box on the bucket list, he corrupts them, making them in some way complicit in his crimes in a way they can never quite escape.  Walt knows that as time goes by his plan will become their plan, and accomplishing it will be a kind of success.

Item number two was that pesky ricin. It's been in play for years, and now it comes out.  A brief five minute meeting with Lydia in a coffee shop, followed a day later by a triumphant phone call to let her know that even though she's not dead yet, he had murdered her.  Brutal, as the final admission to Skyler: "I did it for me" was brutal honesty.

Then, in an almost cartoonish climax, the old machine gun in the trunk trick wiped out Jack, Todd and the Nazis.  But it had to be - Jack shot Hank in front of Walt, and Walt was never going to let that stand, no matter how weak and helpless he appeared to be in that cabin in New Hampshire.  But it was key to the actual denouement - the final confrontation with Jesse.  And when Walt implores Jesse to shoot him, and Jesse tosses him the gun saying "do it yourself", we are witnessing the true end of Breaking Bad.  Jesse walks out, free and something approximating whole, and it remains only for Walt to lay down next to the meth lab he built and die.
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This Week in Jihad

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Busy week for Jihadis and those that love them.

Respect your enemy - this dude had courage
and commitment

For at least the eighth time, Alabama born rapping jihadi Omar Hammami has been declared dead.  As you might have heard (if you are so pathetic that your life includes paying attention to such things), he had a major falling out with the leader of the al-Shabab organization for which he has previously been a fairly effective field commander in Somalia, and they've been aggressively trying to kill him as part of a purge of “foreign fighters”.  In June he reported via his Twitter account that he had been “shot in the neck” but was, apparently, not dead and he went into hiding immediately afterward.

The FBI had him on its Most Wanted list, which seems somewhat silly as he was fighting in the seemingly endless Somali civil war and not really doing anything the FBI should care deeply about.  For that matter, it certainly seems as if al Shabab head Moktar Ali Zubeyr missed a significant funding opportunity if he simply killed Hammami and buried him in the desert, as has been reported.  The FBI was offering $5 million dollars for him - seems like that would have been a good trade-off for the organization.

At any rate, to whatever extent the world is better off rid of him, I will miss him for the entertainment value he brought to an otherwise mundane on-again off-again African bush war. And while they apparently neither supported nor understood his life’s work, his family misses him too. In his fathers words, "If he indeed died, he died fighting for his principles, whatever they are."

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Fighting Jihad with AKs and VHS tapes
since 1988

This was also the week with another anniversary of the 9/11 attacks, so that means another audio only missive from the worlds favorite terrorist surgeon, Ayman al-Zawahiri.  Much of core al-Quaeda in the Pakistani hinterlands have been decimated by fighting in Afghanistan and American drone strikes, but Zawahiri just goes on, in sole command of the remaining organization now that his partner Osama bin-Laden has gone to his reward.  

While bin-Laden was fixated on very large, spectacular attacks, from the USS Cole bombing to the African Embassy attacks, culminating in the 9/11 hijackings and attacks on New York and Washington, Zawahiri seems to be more pragmatic, cognizant of the reduced operational and financial resources available after more than a decade of relentless attacks by the global counter-terror forces.  And sure enough, in his message commemorating 9/11 he called for small-scale “lone wolf” attacks within the United States.  His premise, essentially accurate, is that these sorts of attacks, car bombs and random shootings, would have a powerful negative impact on the American economy, making the US weaker as we dedicated more and more resources and stripped away ever more civil rights trying to prevent these kinds of attacks.

Indeed, in light of the Snowden NSA surveillance revelations, al-Quaeda terrorists have to acknowledge that their organizational options are significantly reduced as they must work without cell phones, email and web-based organizing and communication tools.  But ever since 9/11, I have been very surprised that organized Islamic terrorist groups haven’t adopted this kind of tactical doctrine against the United States.  There is no doubt that a steady drumbeat of two widely geographically diverse small-bore attacks a month, even with minimal loss of life, would create an outpouring of insanity in American society that would utterly transform the culture and the economy.  The main reason that Americans are so generally comfortable with waging war around the world is that those wars never happen in our cities and towns - they are always thousands of miles away.  You bring even a low level guerrilla conflict to US soil and things will get ugly and stupid very quickly.

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The US must end these drone attacks
immediately. (Wink. Wink)

Meanwhile, in Pakistan, the spokesman for the Foreign Office, Aizaz Chaudhry announced that Pakistan will be taking the issue of US drone strikes to the UN.  I’m still quite sceptical.  It’s true that Nawaz Sharif based much of his campaign on resistance to American bombing of Pakistani territory, and it’s also true that Zardari has been willing to play a classic double game of publicly denouncing drone attacks while secretly authorizing and even encouraging them.  But it’s also true that if the Pakistani government and military leadership sees the aerial bombardment of their land as a violations of their sovereignty, they should be using their well developed air defense capability to at least try to prevent the foreign attacks.  As long as they refuse to do so, one can reasonably conclude that they are more interested in keeping the US funds flowing and paying lip service to political realities while permitting the US to bomb targets in the Tribal Areas.

So what does the UN complaint mean?  And what can the UNSC actually do when America holds a veto?  It’s worth recognizing that the drone bombings in Pakistan have very little, if anything to do with terrorism.  At least 90% of these attacks are about force protection in Afghanistan, killing and disrupting fighters that have safe havens in the Pakistani borderlands.  So Obama is unlikely to discontinue the bombing until the American presence in Afghanistan is reduced or ended.  But regardless of the involvement of the UN, the story has the same ending it always had.  If a nation is under aerial attack, and refuses to deploy its air defenses to resist that attack, it’s safe to assume that nation is complicit in those aerial attacks.  Everything else is just a political smokescreen.

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