~synthesis~

the war on peace

One of our (Americans in particular) most powerful motivators is winning. From its inception, America has had to fight for what she believed, and keep fighting to achieve progress. More often than not, America won - the economy grew, its role on the world stage grew, its contribution to the sciences and entertainment grew, its ego grew, etc. It is therefore clear why this competitive instinct is so deeply-rooted in the American "system," and how it is fundamental to her approach to life, the universe and everything.

From birth to school to work to love to death, Americans view life as a zero-sum game. At birth we're competing for cutest baby, baby closest to the XXth percentile of development, etc.; next it's getting in the right schools; then the best jobs; the best girl/guy; etc. In every instance, keeping score is about besting someone else - the pie is only so big, and for us to win, others need to lose.

The competitive instinct can sometimes lead one astray - there have been many American declarations against rather unlikely foes. Some of these "Wars" include: Poverty (Johnson, 1964 - winner: poverty); Drugs (Nixon, 1969 - winner: drugs); Terror (Bush, 2001 - winner: terror); Greed (US Congress 2008/9 - winner: greed); ...

Even corporations have gotten into it - one recently declared War on Cost. If they actually win, price = free; success = bankruptcy. Not sure the shareholders will approve.

It is pretty hard to spot(!), but did you notice a trend among all these wars? Each has cost a ton of money, wasted a ton of lives, burned a ton of energy, and in every case, resulted in more of the "bad" thing than before the "war" was declared.

Hmmm...

"My fellow Americans there is a cancer among us, it is evil, it is insidious, and it is fomented by those will not stop until they have found the best in every one of us. I call upon every red-blooded American to stand with me, and in the spirit of our founding fathers who prevailed against a superior foe armed only with the power of their ideals, rise as one to combat what is surely the most diabolical axis of evil that has beset our glorious nation.

My fellow Americans - I stand before you today with pride and purpose to declare War on Peace. Peace is the most powerful foe America has ever faced, but I am confident that our relentless pursuit of failure will once again restore our faith and ensure our prosperity.

This is just the beginning - lead by Peace, this axis of evil contains two other collaborators that must also be quelled. Immediately upon losing to Peace, and in the spirit of all that is great, we will first declare War on Wellness, and then War on Education.

Thank you, God bless each and every one of you, and God bless America."

Yes we can!

redemption

In September 2002, President Bush established a Doctrine, which among other things, stated that America will not only wage war on countries that directly and immediately threaten her, but also wage war on countries or organizations in countries that might at some point threaten her.

In December 2009, President Obama endorsed this doctrine when he announced that he would send an additional 30,000 troops to Afghanistan. Despite the fact that Afghanistan or the Taliban pose a direct or immediate threat to America. Some argue that Al Qaeda is a threat, but the consensus is that they are based in Pakistan, not Afghanistan.

So much for a different strategy with the new administration.

But this isn't really the problem. The problem is the absurdity of a "superpower" declaring war on a few hundred disaffected criminals (it's the equivalent of Apollo or Zeus or Poseidon declaring war on the four guys that maliciously starched their chitons). America didn't stop there - they called "them" evil. Intentionally or not, both Presidents Bush and Obama created a much larger "them," one spanning both a whole race (Arabs) and a whole religion (Islam). It gets worse - unlike the superpower who lords her wealth and excess over the planet, these millions of "thems" happen to be among the more impoverished on the planet - so it's kicking sand in the faces of people who are already buried up to their necks.

If you're a sports fan and someone from a rival team thoroughly insults "your guys," are you angry? Do you want to get even, pray that your team beats the crap out of theirs? Yes, but you're not going to take a gun and actually attack their players, you've got too much to lose.

Imagine if you were one of "these people" (poor, without education, without hope) and you were dissed as roundly and viscerally as America just did - the insult wasn't just to your sports team, it was to your religion, your very way of life, your family, and your heritage. How would you react? How would you react with literally nothing to lose?

Now imagine you're a well-funded ~200-person organization looking for recruits to help reassert "our pride and honor against those arrogant infidels that have called our race and religion a cancer, and maliciously killed our women and children." Don't you think that if you offer them a chance for "respect" (not unlike what gang bangers offer young children in many American cities), and give them money to feed and educate their families, that they'd happily join up even if it was (literally) a suicide mission?

For the last eight years, America has wasted more than $210 billion vainly attempting to "eradicate evil" - an evil (Taliban) she helped create and arm when the Soviets invaded not so long ago. Now they will double down with new troops, and activate a strategy of, are you ready for this - training and arming local militias!!!

Jeez! Can we be any dumber than this??

Has anyone ever successfully created peace, democracy and good will by training and arming small communities of testosterone-filled destitute, tribal warriors??

What if instead of giving them a reason and capacity to kill, we gave them a reason and capacity to live? What if the United States worked with other developed nations to create a multi (say 10)-year trade agreement with Afghanistan where their crops (all but opium) were bought by "western" countries at premium prices - one that made it worthwhile for Afghans to put down their guns and ammo, and pick up their hoes and fertilizer? What if we provided them with tools and resources to create more arable land (irrigation, soil improvement, seeds, etc.)? What if we helped each community that was interested build a local cooperative from whom we would buy products?

The next two years are expected to cost Americans ~$100+ billion/year. Let's instead spend that money (along with $$ from other wealthy countries) to overpay for agricultural products. Let's help Afghanis develop the means (over time) to sell their products competitively. Let's give the people of Afghanistan a reason to live and a means to care for their families, and a sense of self-worth that makes it impossible for any terrorist organization to lure new recruits.

Surely this is a truer path towards peace and a self-determined society?

democracy

Leonard Cohen is one of my favorite artists - he is a brilliant poet and a great entertainer - I was (ironically) listening to Democracy as I was reading the news:

It's coming to America first,
the cradle of the best and of the worst.
It's here they got the range
and the machinery for change
and it's here they got the spiritual thirst.
It's here the family's broken
and it's here the lonely say
that the heart has got to open
in a fundamental way:
Democracy is coming to the U.S.A.

The NY Times reported that Dede Scozzafava (R) suspended her candidacy for an upstate New York Congress seat this weekend. Scozzafava's support of gay and abortion rights caused conservative interest groups to embark on an extensive radio and advertising campaign against her (despite he being a fellow Republican). Without missing a beat, the RNC switched its support to a more "mainstream" conservative candidate, but they never consulted the district in question, which of course is upset because the new candidate is a national choice and not a local one.

This is not about calling out the Republican party - this could just as easily have happened with the Democrats if a candidate wasn't "on board" with one of their core issues.

I'm not an alarmist, but the first thing I thought of after reading this article was these words: "Our job as Americans and as Republicans is to dislodge the traitors from every place where they've been sent to do their traitorous work." -- As spoken by Senator Joseph McCarthy in a 1952 speech at the Republican National Convention.

Those were complex times, when fear prevailed in the face of a very scary enemy and the government felt empowered to do whatever was necessary to win. Sound familiar? As today (with Newt Gingrich in the NY Times article), there were cautionary voices that spoke out, most notably:

Sir, I detest, I abhor their [communists'] philosophy, but I detest more than that their tactics, which are those of the fifth column, and are dishonest, but at the same time I never as a citizen want to see our country become urged, by either fear or resentment of this group, that we ever compromise with any of our democratic principles through that fear or resentment. I still think that democracy can do it.
–Ronald Reagan, testifying to HUAC as president of the Screen Actors Guild (1947)

It's easy to understand why the conservative Republican community is so bent on protecting itself. After years of dominance, the last months have been a struggle. When you face this kind of test, you think about what got you here (your last win) and try to recreate it or protect it. In the corporate world, it's strategic entrenchment - where a company tries to milk its cash cows to the last drop, forgetting how they began in the first place, and as a result allowing others to eat their lunch, their dinner, and future meals as well.

A set of principles galvanized a group of people to form the Republican party. If I were in their leadership today, I would remember that moving away from a successful approach is incredibly difficult, and requires serious conviction. But the alternative is someone else eating your lunch, dinner and all your future meals...

As Cohen said:

Sail on, sail on
O mighty Ship of State!
To the Shores of Need
Past the Reefs of Greed
Through the Squalls of Hate
Sail on, sail on, sail on, sail on.

define winning

When a good leader embarks on a journey, he knows why they're going, where they're going, and when they'll finish. The goals and outcomes are clear. Achieving them is a matter of execution and circumstance, but beginning with a clear statement and vision of what success looks like is crucial.

Seth Godin wrote about the problem with transoms being that it's too easy to throw stuff out there in the hopes that something sticks. He argues that without credibility you will likely struggle to make yourself heard above the fray, that companies could make it easier for people to share ideas with them, and who knows what could come of that?

It underscores idea that good leaders know their destination when they embark. If you want your idea to be heard, or you want to be open to new ideas, create the circumstances to ensure that you will get what you want. Don't just hope that good things will come.

But in our world, the focus all too often is on the symptoms and processes and not the underlying cause or the eventual outcome. Your odds of blundering into a good outcome this way are infinitesimal. This is why so many people feel like their company or government seems to relentlessly churn over the same ground every bloody day. There is never real progress, just "metrics that show progress." It really does suck to be us, and worse, we don't seem to be able to get past the suckiness.

Take education - what is the goal? Is it happy teachers? Beautiful schools? Quality curricula? More budget? Competition with other countries? Improved assessments? What about healthcare? What outcome do we want to create? Is it happier doctors? Cheaper medicine? One payer? Happier insurance companies? Universal access? Better hospitals? More innovation?

In both cases, we rudderless because there's no clarity about the end goal. Shouldn't education be about ensuring that every child is best-prepared to excel in whatever future they choose? Shouldn't healthcare be about creating the healthiest society possible? Why don't we measure effective education by what students are capable of doing after they graduate? Why don't we measure effective healthcare by how infrequently people need to go to the doctor?

Without clear guidance, a team flounders. Without clear guidance, a nation can flounder as well. Take the "war" in Afghanistan. What is success? Is it the eradication of the Taliban? I despise what they stand for, but that feels awfully like extermination, or genocide. The Taliban are a socio-political faction in Afghanistan. Others might not agree with their principles, but that doesn't mean anyone has the right to erase its member from existence. I know many people who are passionately opposed to President Obama and the Democratic Party, or Gordon Brown and the Labor Party in the UK, or whatever, but I don't see those opponents building a military machine to exterminate them. We are civilized ...aren't we??

Is it the eradication of Al Qaeda? Terrorism is the use of violence to provoke social change - this is a criminal act, requiring a police force not a military. You don't stop violence with violence - you feed it. It is exactly the reaction they are looking for, and exactly what they can then use to recruit more poor and desperate people to their cause. Racism is a form of terrorism, but Martin Luther King Jr. taught us that "Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that."

If the goal in Afghanistan is to exterminate a political party, we should stop and ask ourselves what that says about us. If the goal is to eliminate terrorism, we should stop and ask ourselves how that work began in the United States of America with the (ongoing) elimination of terrorism against black (and other) people.

Frank Rich's OpEd in the NY Times compares (as many others have) Afghanistan to Vietnam - wondering if we will make this same mistake yet again? I see that the President is taking a step back to deliberate. It is true that Al Qaeda attacked America, but they are a band of criminals, not a sovereign nation.

I hope at a minimum the President's deliberation yields a clear statement of the meaning of "winning"; but I really hope he realizes that the only nation that has declared war thus far is America.

hammers and nails

There's this saying that if the only tool you have is a hammer, everything looks like a nail. It makes sense, doesn't it? If you ask a neurosurgeon what's wrong with you, chances are he'll point to a problem with your brain, but a heart specialist would call out something to do with your circulatory system, etc.

A couple of weeks ago, I wrote about a group of people who met to try and figure out what could be done to increase STEM (science, technology, engineering, mathematics) graduates in America. But the only people in the room were nerds! If you're trying to attract other people to your party, shouldn't you invite some of them to the room to at least explain why they're avoiding you in the first place? But no - that room felt it was an engineering problem - let's keep it just us nerds - hah!

We all approach the world based on our context, but that's not always the best way to actually solve problems.

Today NPR reported on a "war" status update by General McChrystal (senior US/NATO military officer in Afghanistan). We've already been there 8 years; during that time, the enemy has grown in strength despite not having any armored vehicles, aircraft, or advanced communications and weaponry. According to McChrystal, their opponents are using prisons (prisons!) to recruit and train future soldiers! The terrorists are actually using jails paid for by their enemies to house and train future militants.

McChrystal is quoted as saying: "Resources will not win this war, but under-resourcing could lose it." My interpretation: "we have no strategy, so let's stay the course, throw more resources at the problem, and see if that helps." But it's not his fault - he's military - his context is clear, and his approach predictable.

So let's talk strategy. First, you declare war on sovereign nations, not people, and certainly not terrorists. Terrorists are mere criminals; by elevating them to the stature of a sovereign nation (declaring "war"), you give them strength, credibility and righteousness. The police, not soldiers deal with criminals - they're designed to keep the peace and bring criminals to justice. They should lead this effort.

History has shown that occupying a country in the interests of peace and freedom are not only oxymoronic but also futile. Sustained peace and freedom can only come from within.

Mr. President - isn't it time to find another tool?

epic movements

How do you create a global movement? What does it take to start something that sufficiently compels the leaders of governments around world to make the necessary trade-offs on a national scale to make change happen?

About a month ago, I had the opportunity to spend 30 minutes on the phone with Steve Killelea - a very interesting fellow who has taken on an equally interesting mission - global peace. To do this, Steve decided to make peace tangible - define it, quantify it, and build a model that allows each country to be assessed and ranked so that government leaders can see how they compare to each other, and take action.

As our conversation went on, he said that there were three causative factors for peace - income per capita, perception of corruption, and education. So the wealthier, more educated and less corrupt you are, the more likely you are to be peaceful - kinda makes sense. I also learned that the biggest driver of change in a country's ranking is domestic stability; Mexico for example has fallen significantly due to its drug-related issues.

Around the same time, I had the good fortune of previewing the premier of the upcoming NOVA scienceNOW season, where I learned about Luis von Ahn, and in particular this really cool idea he has called GWAP - games with a purpose. von Ahn is a fascinating and rather divergent thinker - he's done some brilliant and powerful work in a variety of areas - watch the NOVA episode when it airs to learn more.

Going back to Killelea's GPI (global peace index), I think it's a bizarrely interesting idea to quantify peace (I would have thought of it like porn - you know it when you see it:-)). First, I think you have to be very sure of your data before you publish - there are some numbers that I do question - the USA is absolutely not 99% literate, nor with a 75% (or less) high school graduation rate is post secondary enrollment 82%. I say this because the countries that this Index needs to influence are those that will dismiss the analysis (which I think is worthwhile) based on any error, and then we're nowhere.

I think for Killelea (or anyone) to create geopolitical change, there needs to be a really (really) big hammer - it's called the power of the people. There's no way you're going to pressure the USA (ranked #83 - remember the three factors - education, corruption and wealth!) to do anything differently without two actions - demonstrate the profundity of their impact, and get their citizens to viscerally understand how widely-felt their country's acts are, and start the change from within (witness recent events in Iran).

To do the first, the Peace Index must include a coefficient of influence for every country that measures and demonstrates the ripple effect on other countries of their malfeasance. So if America does something untoward, the impact spreads well beyond her borders to affect XX other countries. In this way, the whole world can see how interdependent it is, and each country will know just how much it's harshing on everyone else off with its actions. This can be an incredible motivator - both for the one country and those that are affected by its actions.

To do the second, we must humanize. Let's bring Luis von Ahn back into the mix. I think his GWAP is unique in how it connects with people's insides. The two gents need to collaborate and build a game (or other vehicle) that can go seriously viral, that shows people exactly how their government creates un-peace, how it affects them, and then helps them understand and play out approaches to shift the balance so that the country becomes peaceful from within - as Kellelea stated, domestic issues are the biggest driver of changes in ranking - let the people act!

Global change comes from within - let the people be the change they seek.

criminal insanity

To succeed in American politics, all politicians, Democrat and Republican alike must have a reputation of being tough on crime. In fact, on a percentage basis, you're more likely to succeed vs. any opponent if you've got a background in criminal justice (prosecutor, attorney general, etc.), and specifically on the "jes' throw all them f#($ers in jail" side.

According to this, in 2007 more than 7.3 million adults were under some form of correctional supervision. That's 2.4% of the country, or 1 in 41 people! But only 75% of America's population is adults, so it's really 3.2%, or 1 in 31 adults!! OMG!!

This includes those in prison, jail, on parole or probation; so for context, the number of people in prison or jail was just under 2.3 million, or about one-third.

The impact to our economy is noteworthy. Check out the chart on the right - I'm not a mathematician, nor am I a statistician but even my tiny little brain is able to spot the trend here. America spent about $210 billion on criminal justice in 2007, up from just under $36 billion in 1982. This amounts to a pretty modest 583% growth over 25 years. If the trend continues, that would put us at $1.2 trillion in 2032.

Want more? Projecting the 7.3 million people puts us at 29 million adults who would be guests or "friends" of the American judicial system in 2032.

Now take a look at the chart on the left (click to enlarge; source: Wikipedia). Assuming all judicial systems around the world are basically right and that everyone in jail is supposed to be there, the United States of America (home of the brave and land of the free) is by far the most criminally-infested country in the world, followed only by Russia. The rest of the planet is basically filled with decent, law-abiding citizens.

This can't be right can it? This country whose capacity for greatness is limitless cannot possibly also be the one that contains the most evil and socially-divergent people, can it?

It is time to recognize the insanity and abolish the "tough on crime" litmus test. We must instead find leaders who believe in the inherent goodness of people, the idea that crime is not the individual's failing, but rather society's failing. It is the obligation of a great and caring society to seek out and nurture the best attributes of its people and not assume the worst. If we draw the line in the right place, we can create a safer, healthier and more vibrant society where prisons are viewed as an absolute last resort, and we look first at the better angels of every person's nature.

limitless capacity

I am a pacifist - I believe that violence rarely if ever results in a peaceful outcome. I'm not opposed to a military for defense purposes - we can't be naive about human nature. But by the same token, we can't use the military as the first resort. There are absolutes.

Last week I wrote about a new diplomatic approach to the Middle East that began with an apology; achieving this won't be easy - people have emailed me saying that this is too high a price to pay, and too difficult a task for America to achieve. But today I was watching part 2 of the 20 Hours in America episode of the West Wing, and President Bartlet's speech that closes with a reference to a terrorist incident at a school.

...restoring abundance amid an economic shortfall, securing peace in a time of global conflict, sustaining hope in this winter of anxiety and fear. More than any time in recent history, America's destiny is not of our own choosing. We did not seek nor did we provoke an assault on our freedom and our way of life. We did not expect nor did we invite a confrontation with evil. Yet the true measure of a people's strength is how they rise to master that moment when it does arrive. 44 people were killed a couple of hours ago at Kennison State University. Three swimmers from the men's team were killed and two others are in critical condition. When, after having heard the explosion from their practice facility, they ran into the fire to help get people out. Ran into the fire. The streets of heaven are too crowded with angels tonight. They're our students and our teachers and our parents and our friends. The streets of heaven are too crowded with angels, but every time we think we have measured our capacity to meet a challenge, we look up and we're reminded that that capacity may well be limitless. this is a time for American heroes. We will do what is hard We will achieve what is great. This is a time for American heroes and we reach for the stars. God bless their memory, God bless you and God bless the United State of America. Thank you. Source.

The emphasis above is mine. I am not American but I live in the United States. Living with, working with, and knowing the people who live where I now do, I am convinced that even if the people in that practice facility were known to be Middle Eastern Muslims, the swimmers from the men's team would have run into the fire without a second thought.

This speech always touches me, it fills me with pride and purpose, and it brings a tear to my eye. It convinces me that I'm right to be optimistic, despite sorry being the hardest word.

sorry seems to be the hardest word...

I watched Traitor on TV last night - I turned it on because I like its star, Don Cheadle. It's a good (not great) movie about Islamic terrorists, American anti-terrorists, and how one foils the other. There was a scene in the film where one of the terrorist leaders is explaining why they do what they do to prospective recruits, why this war against America must happen, and why everyone needs to participate.

True or not, one big motivator is that "they [Americans] have invaded our countries and killed our women and children, and destroyed our way of life; to remove them and prevent this, we need a persuasive deterrent. Since we don't have an army that can defeat America, terrorist acts are our only option. We must do what we can to stop them." My paraphrasing of the sentiment from that scene.

A quick search led me to this essay on how the Koran has been interpreted to favor the terrorists' goals, and this essay explaining how the only sure path to Paradise for a Muslim is to die fighting in defense of Allah. Finally, I found this excellent paper entitled Motivational Parameters in Islamic Terrorism by Michael Taarnby of the University of Aarhus in Denmark that talks also about the social and Western influences on Muslim reality and how they have resulted in disaffection and desperation. This paragraph from page 16 is telling:

Furthermore, the perceived, and often very real, oppression carried out by the respective governments contributes to the loss of existential meaning for the individual. The Muslim notion of the concept of honor and shame makes this situation hard to bear. Perceiving oneself as a failure is very much like a stain on personal honor, one that does not rub off easily. The correlation between the consequences of modernity and the real or imagined oppression creates a void, a social space in which the desire to change unfortunate circumstances leads to action, sometimes violent. Fundamentalism represents an important tie between the individual and a larger social group, and although this group is a construction it becomes very real for those personally involved. Seemingly incomprehensible acts of terrorism, and in particular the issue of martyrdom, become the ultimate manifestation of meaning and identity.

But what about the West and America in particular - why are they so vilified? Here are four issues that seem to come up a lot:

1. America's seemingly blind support of Israel
2. America's open disdain for any political and social system that is not like theirs, and specifically their antipathy towards Muslims and their forms of government
3. America's willingness and ability to unilaterally perpetrate warfare on countries they don't like
4. America lack of accountability for creating, enabling and supporting some of the worst Middle Eastern situations in recently history, including the Taliban and Saddam Hussein

All this (and much more - read Taarnby's paper) says to me that it's no surprise that Muslims are so easily able to align against America, but not against Christianity for example - it's not a fight among religions.

This is an incredibly complex problem with no simple answers. But if America, the West and Muslims are truly seeking peace and prosperity for all, I wonder if there aren't a few simple steps that could signal the start of a new beginning?

First, I believe America needs to realize that this is their game to control, win, or lose. There is no other player that plays as pivotal a role - America is the quarterback.

Second, as with business habitats, it behooves America to viscerally understand, without judgment, the truth and social reality that is the heart and mind of a Muslim.

Third, America needs to recognize that the approaches taken thus far have failed; and like the typical tourist in a foreign country, saying the same thing progressively more loudly in English does not miraculously endow the French person with comprehension; it just pisses them off.

Here's my proposal for the first steps in this thousand mile journey - but you aren't going to like it:

1. America must apologize - it must publicly demonstrate contrition for all its unilateral actions and how it has disdained Islamic (and other) ways of life just because they are not the American way.
2. America must stop exclusively favoring Israel, and be equal in its support of all peace-loving people in the Middle East, never excluding, or giving any special treatment to any one people. This will cost the American administration a bunch of grief and certainly fund-raising power in the next election, but it's easily worth the price.
3. America, starting immediately, must never have a unilateral military presence in the Middle East, ever. To do this, Secretary Clinton must negotiate a safe transition with the UN and Middle Eastern leaders.
4. America must convert it's Defense investments into foreign investments designed specifically to develop the infrastructure for and economic well-being of Muslims in the Middle East. One approach is this proposal for foreign policy transformation, though I would amend the scope to make it globally-funded with strong personal and financial participation from Middle Eastern leaders.

Beginnings come at a high price, but if nurtured, result in valuable and sustained dividends.

Let's face it there is no way to trump a guaranteed entry into Paradise by dying in defense of Allah. Implication: taking away the perception and reality of a threat to Allah removes this incredibly powerful incentive from the equation!

Let us begin by believing and acting in ways that demonstrate our genuine respect and admiration of Islam and all Muslim people. This is saying that we prioritize Muslims, their religion and their homelands equally to everyone else, their faiths and homes in the world. Steps 1-4 are the beginning of this journey, and in doing this, we must recognize what Taarnby talked about at length in his paper, that this is a matter of face and honor. We must be a part of helping restore face and honor for our brothers and sisters of the Muslim faith.

If our intention and acts are genuine, we will remove the perception and reality of a threat against Allah, and build a pathway towards peace, prosperity and harmony. It won't be easy, but boy will it be worth it.

oversight Easter egg?

When the US Federal Government "took over" key American financial institutions, they imposed executive compensation restrictions, undertook Congressional investigations on bonuses, and decided to legislate how "their banks" would pay their employees.

What did the employees do? Many left. Where did they go? Some (the best and most employable investment bankers and traders) went to smaller, boutique firms where compensation is not regulated by Congress. The NY Times thinks this is a bad thing, but maybe not - here are three possible outcomes, which together might be a silver lining:

I. Dekeiretsuification

The exodus of trading talent means the big (now over-regulated) financial institutions may not be able to rebuild their brokerage/Wall Street presence. This could be a godsend if they go back focusing on their core business. Banks stick to savings and credit, insurance companies focus on actuarials, and trading companies focus on the markets.

If we can go back to a pre-1999, reinstated Glass-Steagall Act state, then government oversight of each type of financial institution is more clear, and conglomerate organizations like today's AIG & Citi are not possible. So even if bad behavior does occur, there should be less need for government intervention, and market forces would prevail.

II. Renegade Boutiquism

As these "quality" traders and brokers move to smaller, boutique firms, they will go back to their roots - commissions by the deal (no long-term view); employing aggressive, creative market-making approaches, looking for every loophole and finding new ways to create revenue streams; and doing whatever it takes to achieve hyper-returns.

Today there is a good regulatory framework (the SEC), but with one gaping hole - the rating agencies. As I wrote here, they were a critical point of failure, contributing signficantly to our current predicament. The SEC and Congress need to focus their energies on repairing this to restore rating integrity. Let the boutiques play - this is the "cowboy" end of the financial services system, and it should remain so.

III. Lax Americana

For those with a big ego who can't let go of "American supremacy," this is the tough pill to swallow. Being meekly Canadian, I'm not so wrapped up in it :-). With tight Glass-Steagall-like regulation, there is no possibility of massive American financial conglomerates. But I'm guessing that Russian, Chinese and Brazilian regulators will not restrain their banks, and these will be the new financial services "powerhouses" of the 21st century.

If US (and the West) regulators can think long term, they will first make sure that their infrastructure's dependency on these mega-banks is limited and managed; and they will resist the teenage male testosterone urge to view these "foreigners" as a challenge to their "manhood".

When they were going after the salaries and bonuses, I thought the Feds were being spuriously regulative. But provided we can re-enact Glass-Steagall, reassert Rater integrity, and stay focused on the long-term health of the economy, the result should be a stronger, more accountable, and better managed financial services system.

Let's hope the Easter Bunny is smiling...

Scalable Angst

Seth makes a great point - only paying lip service to customer service has dramatic effects. If those you dis are passionate about their angst (and who isn't upset and motivated when slighted in some way?), the ramifications of your misdeed/poor service/etc. can be significant.

I talked about the Communication Revolution a while back, which when combined with the pressure to sense, respond and then adapt makes for a tough challenge for those that think bad customer service or bad product experiences or whatever can easily be swept under the rug. Our world makes it possible for someone to vent their angst to hundreds and thousands in minutes. Fixing that can be very expensive.

As Seth points out, it's expensive to staff appropriately for good customer service, but the cost of not doing it is often higher. It can be compounded if other customers end up leaving as a result of a damaged reputation, which also makes it harder to find new ones. We live in a fickle world, and unless you wish to re-recruit your customers every time, earning and assuring loyalty can be difficult. Customer service is worth it - in the short and long run.

Sadly, there are cases where the angst aught to scale, but doesn't; situations where people are sufficiently inured to an issue, that they simply don't engage. This is sad. Military action has become boring to Americans. President Obama's decision to expand American presence in Afghanistan has gone virtually unnoticed. The result of this decision will be more deaths, American and otherwise.

What will be achieved with the military action? That's not clear. It is worth noting that America empowered the Taliban to evict the Soviets; now America has her soldiers in that same country, opposed to the people that we helped create in the first place. This is wrong.

It is expensive (and difficult) to accomplish successful and sustainable foreign policy; the cost of not doing it is absolutely higher. The picture in this post represents the next thousand words in this entry.

photo:  www.aaronhuey.com

Energy Innovation

I was listening to an interview on NPR yesterday with an executive from Shell who said that energy independence is impossible, we just need to talk about reducing consumption. Questions arose. What is energy independence? What happens when you have it? What ought to be the right price to pay for this?

I think it is in Americans' nature to think: "if I see something I want and I can get it, unless someone stops me, I'm going to take it." That applies to buying bad mortgages, it applies to eating fast food, and it absolutely applies to energy consumption. We have big cars, big houses, big appliances and big appetites. This isn't true everywhere in the world, though I've seen it more and more in the Middle East and some Latin American countries like Venezuela.

When gas prices rose above $4/gallon, consumption fell. Instead of driving, more people tele-commuted, conducted e-meetings (vs. face-to-face), and braved public transit. People were even more thoughtful about home heating and whether they really needed to run the dishwasher right now. But when prices came back down, the old habits returned and consumption resumed.

There were hard times. People dependent on driving long distances suffered deeply. The American urban sprawl, was built that way because gas prices have historically been so low. When you travel through or live in Europe, you notice that gas prices are two to almost three times higher than here. Moreover, public transit is much more efficient and available, and everything is a lot closer to each other - you hardly need to drive.

The very nature of American urbanization puts us at a tremendous disadvantage compared to the European Union when it comes to the COGS of our products and services. Today, American workers are a bit more productive than their European counterparts, but one never knows how long that will last, and if that advantage erodes, the increased cost of fuel will make our products that much more expensive to sell and buy.

With few exceptions, public transit is abysmal in the US - first because we don't spend any money on it, and second because people mostly hate to use it. Let's change that! There is a large public transit allocation in the stimulus package, why not take this opportunity to change the game? First, all new public transit vehicles must be natural gas or electric powered, second, let's double gas prices again (for non-public transit consumption) with a tax whose proceeds are earmarked for pubic transit investments, and to expand transit coverage beyond city-centers. The results:

1. Lower CO2 emissions
2. Lower fuel imports
3. Cheaper overall transportation costs
4. A re-thinking of American city planning

I know this hurts the already-ailing auto industry because we'd be reducing their demand pretty dramatically, but maybe it's time to smell the coffee and realize that auto manufacturing has way too much capacity as it is, and is simply not sustainable.

Also - I haven't mentioned one very significant result from all of this. American ingenuity. I think when pressed, and when our backs are against the wall, creativity and innovation will occur - this country will produce the successor to the internal combustion engine. It will produce batteries that are (maybe even organic) smaller, have greater capacity and are more safely disposed of. It will design new forms of transportation that fundamentally change the very concept.

This is really what's needed. But to get there, our backs need to truly be against the wall - that's when the magic will happen.

Tomorrow's players

Nothing binds two countries more than economic interdependence. When you have a financial relationship, certain things naturally happen:

• You pay more attention
• You learn more about each other
• You are more vested in the other's destiny, therefore you care more about their well-being
• You are very unlikely to want to harm that which can feed you
• You are more likely to understand each other better than before the relationship

Some interesting data. According to this article in the Economic Times (part of India Times), the trade between India and China from 2002-2006 has grown at 50% year-over-year. This compares to 25% growth with any other country. India is one of China's top ten trading partners, and trade is growing fastest among the ten with India. Finally, trade has grown from about $5 billion in 2002 to $37 billion in 2007, and is forecast to be $75b in 2010 (assuming a conservative 25% growth), $113b by 2012, and $225b in 2015.

In another issue of the Economic Times, we learn that trade between India and the whole continent of Africa has grown from $5.2b in 2002 to $26b in 2007, and is forecast to grow to $150b by 2012.

The growth rates with both trading regions (China and Africa) is nothing short of phenomenal.

Two more things to ponder:

1. Together, these three regions represent 3.43 billion people, or just over 51% of the world's population.
2. In 2012, the trade between India and China and India and Africa will be $263b, up from $10.2b ten years prior.

In comparison, the combination of NAFTA (Canada, USA, Mexico) and the European Union represent a population of 942 million people or just under 14% of the world's population, and US trade with Canada, Mexico and the EU was $1.375 trillion, which is obviously bigger than $263b.

I know I haven't looked at US trade with Africa, India and China, and recognize that there are a lot of other factors at play here.

But considering the relative economic potential of the populations of the Western countries vs. that of the Africans, Indians and the Chinese, and the fact that India's trade with these two regions has grown 26 times in ten years, one can't help but think that India's got a lot of upside, and that the economic potential of their population (plus of course those of their very large trading partners) is growing at an incredible rate.

If this growth continues, I wonder what the economic potential India will be a decade from now? Greater than the US? I don't think it'll be that high, but here's one thing that I think will happen - in ten years, more Americans will move to India to improve their lot in life (find jobs, etc.) that will come to American shores. This behavior has already begun as more and more people come here for an education and now rather than stay, go back.

I think Africa, China and India's futures are much more tied to each other than otherwise. If they do end up becoming good friends, establishing connections more reflective of Canada/US relations, the West is in for a pretty humbling time.

If at the same time, America looks upon the rest of the world with arrogant disdain (as I discussed in this post), it is inevitable that as others rise and the gap between have and have not shrinks, they will not admire, or wish to befriend this particular "have" as much as others have in the past. It is good that the sitting President seems more about joining with the world than owning it.

Thank goodness that Vice President Cheney didn't run for President. If he had won, I imagine we'd be calling him Kim Il Cheney [apologies to Koreans everywhere], and building a DMZ between us and Mexico, Canada and everyone else. And when as the sun rose in the East, those nations would be that much more motivated to spank America.

Our job should among other things be to focus on building stronger, friendlier, and more symbiotic relationships with this triumvirate (and everyone else of course) representing more than half the planet.

We talk about enemies more than we used to

I was just watching a rerun of one of my favorite shows - The West Wing, specifically an episode from the first season entitled Enemies. This episode ends with Josh Lyman (Deputy Chief of Staff) solving a problem for the President in a very smart and elegant way. And at the very end, he says to the President "Mr. President, we talk about enemies more than we used to."

This episode aired in November 1999. I imagine that we're talking even more about enemies today than ever before in the history of this country.

Recall the refrain during the last election cycle. In both primaries and during the general election, the most frequent discussion was about the ability of the candidate to deal with people or organizations deemed to be against America. In previous elections, it was about being tough on drugs, or tough on crime. In fact, it wasn't possible to win unless you were able to demonstrate that you could hunt and jail people! In every case, the dominant voice is negative. It's about "them" being bad, and "us" being good. It's about eradicating them (whether the "them" are American citizens or not) to product us.

There is truth to the fact that placing trust in someone will create trustworthiness. For example, if you ask a stranger at the airport to watch your bags while you go to the loo, your bags will be safe when you come back.

Looking for the good in people is very likely to result in good being found. Looking for the bad in people will, guess what? result in bad being found.

Put yourself on the other side of this. If someone thinks the worst of you, believes you're evil, thinks that you are less than they, what is your natural reaction?

Now go further, if the person that thinks the worst of you has a full belly, a large home, cars, TVs, and lives in a place of relative safety, health and prosperity, how would you feel? What is your natural reaction?

And now imagine if no matter what they did, we embraced them.

For example - instead of imprisoning and jailing drug addicts, what if we embraced them, helped them, and gave them the means to manage their addiction? Would we have more people in jail or less? Would we have more contributing members of society or less? Would we have more active drug addicts or less? Would the nation be spending less money on crime and more on prevention and help? Yes. Is that a good thing - yes!!

I was recently in a place very much like what's pictured here; where predators, prey, hundreds of species all live together in harmony. They have found a way, despite having much smaller brains than we have. They allowed us in their world without judgment. I remember being in the midst of a school of hundreds of yellow snapper, in that case they allowed us in their very midst, to in some way participate in their rituals.

The rest of the world once viewed America as the promised land; they believed the words on the Statue of Liberty. It now views America as a mass of self-ordained moral superiority that looks upon the rest of the world with disdain.

We talk about enemies more than we used to.

All we are saying...

...is give peace a chance. We all recognize John Lennon's lyrics. Here's my favorite rendition:

My entry entitled A Provocative Defense followed by Outfoxed have sparked debate, and with good reason - it's about a seemingly endless fight between two communities separated by religion but united in so many ways.

The first time I flew to Tel Aviv, I was coming from Dubai, but had to fly via London. Not only was it not possible to fly directly, but if my passport were stamped by Israeli immigration, I would not be allowed entry into most Arab nations. When I got on the British Airways flight at London Gatwick Airport, I was surprised (and a bit worried) when I saw that about a third of the plane was Muslim/Arabs. After a peaceful flight, we landed in Tel Aviv, where I figured the Muslims would be separated out and "specially" dealt with. 

But that didn't happen, far from it. Arabs and Jews live together in Tel Aviv. They live in peace, they live without the acrimony and warlike sentiment that our media portrays. My favorite bakery in Jaffa is Abulafia which as you can see in this BBC report has been in business in since 1879 (that's 130 years!), and is owned by the Abulafia family who are Arabs. Abulafia is an institution, and if you visit Tel Aviv, you must go at least once - ask anyone.

So how is it that an Arab family and their business is so entrenched in Israeli life? The Israeli Jews I have met don't view all Arabs as terrorists. Rather they view terrorists as being evil criminals representing only hate, and all Arabs as people. The Arabs I've met don't view Jews as evil and needing to be eradicated from the face of the earth; they view those that wish them harm warily, and all Jews as people. Talk about enlightened.

Neither side bears anything like the animosity I read about in the news, or hear from select political figures. They're already peacefully coexisting. I felt/feel safer in Tel Aviv than most cities I've been to.

Imagine what it would be like if we could transcend our prejudices as well as the Israelis and Arabs that I've met are able to?

Outfoxed

Alternate title: Is it still wrong if the good guys are the terrorists?

Last week, in response to my entry A Provocative Defense, one commenter (George) pointed me to this blog, which very eloquently argues why "Israel cannot accept its citizens being fired upon, full stop." A very good point. No government should stand idly by while it's citizens are being attacked.

I also read another amazing blog entry which had this quote from yet another amazing blog entry:

Speaking over the phone from Beersheba, Gordon said: “We just had a rocket about an hour ago not far from our house. My two children have been sleeping in a bomb shelter for the past week. And yet, I think what Israel is doing is outrageous. ... The problem is that most Israelis say Israel left the Gaza Strip three years ago and Hamas is still shooting rockets at us. They forget the details. The detail is that Israel maintains sovereignty. The detail is that the Palestinians live in a cage. The detail is that they don’t get basic foodstuff, that they don’t get electricity, that they don’t get water. And when you forget those kinds of details, all you say is, ‘Why are they still shooting at us?’ That’s what the media here has been pumping them with, then you think this war is rational. If you look at what’s been going on in the Gaza Strip in the past three years and you see what Israel has been doing to the Palestinians, you would think that the Palestinian resistance is rational. And that’s what’s missing in the mainstream media here.”

"Gordon" refers to Professor Neve Gordon of Ben Gurion University of the Negev.

Boy - these are rather dichotomous views. How to reconcile? Some questions/answers:

1. What does Israel want? It claims to want peace, coexistence and prosperity.
2. What does the United States want? It claims to want peace, coexistence and prosperity.
3. What do the enemies of peace want? Hate, fear and power.
4. What price are #1& 2 willing to pay for what they want? They state, money, diplomacy, military action (lives).
5. What is it that the enemies of peace have that gives them so much power? As I commented, they invest more in the well-being of their constituency than their opponents.

Huh?? That doesn't seem right! The people who wish for hate, fear and power also invest in food, shelter, healthcare, education, etc. for their "constituents," but those who wish for peace don't?  How does that happen?

I think #3 has out-foxed #1 & 2. How? Where #1& 2 have been busy with their political masturbation machinations, #3's been busy investing in their peeps.

Why has the United States not invested to build hospitals, schools and help create a thriving economy in Gaza and the rest of Palestine? If they were living with health and prosperity, there would be no fighting (they know the Israelis have superior defense and offense capability, and they'd have too much to lose).

Bigger question - why hasn't the US pushed Israel (with whom it has such a special relationship) to co-invest? Surely it would cost less to do that than they're spending flying Condoleezza Rice to the Middle East every week to eat hummus and pontificate? Surely it would cost less than the lives that have been lost or wounded as a result?

There's an incredible irony here - while the protagonists focused on PR and politicking, the "antagonists" (who don't need any of that political cover) have devoted their time to two things - how to keep their peeps happy, and how to goad their enemies to take actions that keep their funders juiced and willing to open their wallets. <-- You can bet that Hamas comes out of this war wealthier than they went in - all the other anti-Israeli players will ante up, I'm sure. How will that help the situation?

Looking ONLY at the activities here, one might almost give credit to Hamas for at least having done something in service of these poor refugees stuck in Gaza. No one else has. No one else has cared.

Don't get me wrong, I do NOT condone terrorism nor do I support Hamas or claim that they are righteous. Terrorists are criminals and should be found out and tried under the full weight of justice and international law. But if you look at their strategy, they've sure outfoxed the "good" guys. What's more, the lopsided results of the bombings (see below) have given them a lot more social credit than they had three weeks ago.

According to the Washington Post, the death toll is 889 as of Sunday (876 Palestinians and 13 Israelis).

Surely the Americans, British and Israelis might have been willing to invest as above to avoid a situation that has cost 13 deaths already?

I guess it boils down to love thy neighbor vs. is it still wrong if the good guys are the terrorists?