Thoughts on COVID-19

I’ve been a part of enough things in my life that eventually became news stories to see a pattern. Whatever is reported is either an exaggeration, a partial truth or an outright misrepresentation of what actually took place.

Rarely is a dispassionate account of the truth rendered.

As a result, I’m skeptical of many things I read. I understand the forces that are at work in the media. The money, the ratings and the ultimate goal of eyeballs and clicks get in the way of the effective distribution of important information. It’s not a conspiracy. It’s a misalignment of incentives. The result is that we should remain healthy skeptics when consuming information.

For many, the appeal of President Trump has been his willingness to challenge what experts, the media or anyone, frankly, is saying. The uncomfortable truth for many of us is that so much of what circulates in our modern information stream is not entirely true or skewed by spin. And so if one decides to “call bullshit” on everything, one has a very good chance at being right quite often.

President Trump has made it a standing policy to call bullshit on everything that doesn’t come from him or that doesn’t align with administration policy. Based on the patterns I just described, he’s often right.

The risk has never been accuracy with this approach. The risk is a loss of confidence in the institutions we need to take action when something eventually isn’t bullshit.

The global COVID19 outbreak is not bullshit. It is real. And it is shutting the world down in front of our eyes. The claims that this is just the flu are not real. Even it it were, doubling a flu outbreak and increasing the mortality rate would still overwhelm our current care infrastructure. Pointing out that it’s just the old and sick that will die isn’t helpful either. We will not simply sit back and let everyone of us who isn’t completely young and healthy die. Along the way, we will shut down daily life and the modern global economy to avoid that end.

Does anyone honestly believe that China is prone to overreact to save some lives? The state that brought you a famine that starved millions to death and a Cultural Revolution that exterminated an entire class of intellectuals shut down the country to keep the virus from spreading. We should take notice. This is not a drill.

There is good news though. Because for once, we actually have some control over our fates.

In a world where we seem powerless against the march of never-ending wars, environmental catastrophe and the erosion of social cohesion, this pandemic gives us an opportunity. This virus needs us to live. We have domain over its host.

For once, we are in control. And we can be heroes.

There are things that spread viruses faster. We know what they are. We have already stopped doing many of them. There are things that impede progress of spread. We should do them. Limiting public gatherings, taking sick days, social distancing, self-quarantining and washing hands are all things that slow the spread of the virus.

Those are the things we can do as individuals. But there’s more. This is an opportunity to address some things.

It’s probably time to have legislation that ensures that the people who serve our food get paid sick leave. Think about that. The people handing you your food all feel like they have to work through being sick. Coronavirus or not, I’d rather that end. Trader Joe’s changed their policy on this immediately. Heroes.

It’s probably time to figure out how more roles can work remote. It’s probably time to figure out how employers handle parents that have to stay home to care for kids whose schools are closed. It’s probably time to identify a national response plan for any epidemic. What buildings get used for overflow. What labs can be used for emergency testing. What funding can be immediately released.

I thought this was all already in place. It’s not.

Today the New York Times reported that we had testing capacity in Seattle weeks ago. The lab there wasn’t allowed to test because of a standing CDC policy. Two dozen people in Washington state are dead. It’s easy to Monday morning quarterback and lay blame. But it’s also easy to stand up and say that for the next six months, all policies prohibiting testing are waved.

One great question this pandemic may bring us closer to answering is this:

How do we pandemic proof our globally integrated economy?

The real risk that we have is that we can’t save lives right now without tanking the economy. What would need to be true in order for that not to be the case?

The United States of America has been at war nearly my entire adult life. Aside from the days and weeks after 9/11, nothing the war has had to offer has impacted Americans the way the COVID-19 outbreak already has. Understanding the risk and what to do going forward should be a national policy issue second to nothing.

The goal is simple. Short Term: Take positive action to slow the spread of the virus to a rate that allows our medical response to keep pace with it. If we don’t, medical facilities will get overwhelmed, people won’t get treatment and our ability to respond to other everyday medical issues will be limited. Longer Term: Drive institutional change that makes us more resilient to future outbreaks.

I’ve worked in risk my entire professional life. The regrets I have from taking actions against things that didn’t materialized into catastrophe are zero. The regrets I have from not taking action when it could have mattered are substantial. Moreover, I have no idea what catastrophes were avoided by small actions early on in the problem. I’ll never know. And I don’t regret that either.

In the world of the material, beyond politics and media swirl, when we work to solve these sorts of existential issues, no one claims we’re overreacting. The word panic doesn’t even wander into the room. Instead, the tone is one of a requirement to be stewards of the resources we’ve been trusted with to carry out the responsibilities we have to those that count on us.

No one calls bullshit. Because it’s not bullshit.

We have a window here. But it’s going to close. If it does, the outcomes won’t be disaster movie extinction. It will be thousands of lives lost, the loss of effectiveness of our current medical care infrastructure and eventually the catastrophic shut down of the domestic and global economy.

That’s one potential outcome. The other is a coordinated and committed effort to doing what we can, while we can to avoid it. So, before you hit share on the witty, people all need to calm down meme, ask yourself this.

What’s the cost of being wrong about that?

The math on this one is clear. And we’re on the clock. This is our chance to be heroes.

Book Review: Tyler Cowen’s Big Business, A Love Letter to an American Anti-Hero

If it seems like I just wrote a review of a new Tyler Cowen book, that’s because I just did. He’s since written another though. With six months between releases, the Tyler Cowen production function is clearly in full effect.

His latest, Big Business: A Love Letter to an American Anti-Hero is well described by the title. It’s a book that few besides Tyler Cowen might have dared to write. It’s difficult to get laughed out of the room for naivety when much of your brand is knowing more things about more things than anyone. For most everyone else, I suspect it would be received differently. The response I got from tweeting a few of the lines from the book without attributing them to Cowen was a combination of eye rolls and followers mistaking it for satire.

It’s not satire though. Tyler Cowen is quite serious. And he’s insistent on using his eclectic super powers to fill a needed void in today’s intellectual rubric; a credible source of permission for calculated optimism.

Cowen’s last book, Stubborn Attachments told us, among other things, not to be afraid to seek hard truths because we could be trusted to do the right things even if we found those truths difficult to swallow. His newest book tells us that one of those hard truths might be that big business is good for mankind. And we shouldn’t fear a world where we trust in it to play an oversized role compared to other alternatives.

That something reasonably obvious should be a hard truth is some part of Cowen’s point.

The general thesis of the book is that, at the margin, big business is a better influence on society than the alternatives. Government, politics, small businesses and even plain old private citizens all have institutional flaws or introduce risk through the power of obscurity or anonymity. Large corporation, on the other hand, have some mandate to sustain their existence and branding with many public eyes on them. Coupled with the motivation of sustainable profit, this makes them inherently trustworthy. At least relatively so.

The theory is one I can put to the test pretty easily with the natural experiment that’s my own professional experience. I’ve worked in multiple industries, presently in the Silicon Valley based tech sector, and also served 15 years on active duty in the military. I’ve spent enough time on both sides of the private and public sector to advance to roles that granted some level of insider experience. That experience has run the tracks for some telling mental thought patterns.

My gut reaction to the recent reports of war crimes in the community and even more specifically within the command in which I served, was disgust. But it wasn’t surprise. In fact, I’m surprised it hasn’t happened or been reported on more over the last 20 years. That is hasn’t is a credit to the individuals that serve and the unique decisions they make to ensure it doesn’t. Because in reality the institutional characteristics of the military make it an inherently risky organization. It has hard laws on the books that purposely subvert transparency, official positions of discrimination on multiple fronts and tolerates high levels of civilian casualties and even poorly thought out wars that destabilize regions.

In contrast, my gut reaction to the Volkswagen emissions scandal was shock. I know why they did it. I have no idea how.  I certainly don’t think higher of the people at Volkswagen than I do of my brothers and sister in arms. But I do know what it takes to make corporate decisions and execute corporate policy. And it’s really, really, really hard to convince leaders to do anything intentionally corrupt at scale. If for no other reason than it’s impossible to keep one of the dozens to hundreds of people it takes to do it from going public.

No one got a review they didn’t agree with from a manager they didn’t like and just put it out there on Facebook…? Really?

I get to stand and be honored in the bottom of the second inning of every baseball game I go to because I served in the military. The idea of calling in the corporate stiffs for the same level of appreciation would be laughable.

That perhaps the appreciation gap should be narrower than anyone wants to admit is part part of the point of the book.

Few disagree that big business does good by producing the things modern society needs to exist and employing and providing benefits for large swaths of the world. The catch is that we believe corporations can’t be trusted to treat employees, the environment, customers or the general public well if its runs counter to their primary motivation of profit.

Simply adding profit as a motivation enables the public to appreciate and trust corporations less than they do the military, an institution constructed to do things explicitly that ought to make us trust them less. Why is probably a topic for another book. Maybe Tyler can take it on over the first three-day weekend this fall.

This book, like Cowen’s last, is a quick read. It runs through counter arguments like CEO pay, the modern working environment, evil tech companies and the financial crisis. Some of the data points feel overfit to the argument. Part of that is probably the commitment to making it a quick read. More intentionally though, I suspect, part of Cowen’s point is that the media narrative is also overfit. It takes advantage of rare one-offs to weave a tight analysis of profit seeking horribleness. An so the data, even if narrowly selected, is at least as believable as the narrative. And so, at a minimum, perhaps the tiebreaker can be the ubiquitous good that comes from the production of everything and the employment of everyone.

My best argument against Cowen’s point is that profit seeking as a rule of law is something more fragile than the inherent rights of man that other organizations claim as a first principle. And so slippery slopes abound. I’ve watched groups slide right down them and nearly take me with them. But they’re far less dubious than most imagine when skimming the sensational headlines. And they’re rarely, if ever, repeated. It’s hard to shake the image of Alan Greenspan in front of Congress in 2009 telling us that the trust he had in free markets was more limited than he had thought though. And so there’s some fear that one day we’ll wake up and have been duped again.

That still seems considerably lower a chance than the guy who painted my house that insisted that I pay him cash because he didn’t want to pay taxes that go towards funding the schools my kids go to or the first responders in our neighborhood. We all have some version of that story of our own. While the stories of corporate malfeasance tend to be things that happened to someone else less real.

Such is Cowen’s point.

The Great Decoupling

In 1880, George Eastman developed a machine that could coat the dry photographic plates used in the sliver gelatin process. In plain English, that means he made it easier to make the things that made pictures. Eight years later, he founded the Eastman Kodak Company in Rochester, NY. Eastman Kodak sold cameras pre-loaded with film for the modern day equivalent of $600.  Continue reading

The Inevitability of the Machine

As long as we’ve been making computers, we’ve been trying to make them beat us at chess. That sounds like an odd thing to do with a computer out of all possible things that can or could be done with one. Until you spend a little time figuring out how one makes a computer that can beat a human at chess.

And then you get it. And then you’re scared to death.  Continue reading

The Hard Problem

Within the first few pages of the second to last chapter of the important book Whiplash: How to Survive Our Faster Future  by MIT Media Lab director Joi Ito and Northeastern University’s Jeff Howe, I found a jarring sentence. It came as part of an introductory description of how MIT Media Lab Synthetic Neurobiologist Ed Boyden looks at the human brain.

To Boyden, “The brain is more verb than noun.” Continue reading

What’s Next?

16 million Americans served during World War II from a country only about 40% as populous as we are today. About half of all working aged men went off to war between 1941 and 1945. So if you were sharing a cab or sitting down for a business lunch or riding in an elevator in 1950, chances were, if you weren’t a vet, the other guy was. There’s a common opinion that what made the Greatest Generation so great was that they fought in the war. And though it’s hard to argue against the enormity of that accomplishment, saving the free people of the world from authoritarian imperialist rule, one could argue that the very next thing that American generation did was every bit as important. Maybe even more.

They went to work.

Vets returning home from WWII came home to one of the greatest eras of productivity the globe had ever seen. They found jobs in the new production economy where one out of every three dollars made in America was made by making something. They built the cars and the neighborhoods that created the American suburbs and the goods that created the American lifestyle most of us today recognize. It wasn’t just industry either. An eye popping 50% of WWII vets started their own businesses. The America they made never existed anywhere in the world in the pre-war era. While the rest of the world dug out of the rubble, America, already at the top of the economic heap, was spared by geography from the destruction of the war. So she hurled herself forward with the energy of a developing nation. And the greatest generation lapped the world.

That was then.

Today, there’s a very different generation of veterans in America. After 15 years of armed conflict, in a country now a little over twice as populated as the one that fought WWII with a war that spanned three times as long, the number of military aged men in the workforce that served in Iraq and Afghanistan is far less. About a quarter million women served too. But for the sake of comparison, we can look at the men and say what was once one in two, is now one in thirty.

There’s another common opinion in America today that we owe a great debt of gratitude to the one in thirty vets that served. I’m one. And I agree. But there’s something uneven about being such a rare commodity. There’s something that happens after a decade or so of being the only guy in a crowded room who served in a far off place doing far off things the other people in that room only saw in movies. You start to live with your eyes firmly fixed on the rear view mirror. Your whole life starts to orbit around the interesting and unique identifier of being a vet. And you start to think, a little bit too much, that the world should care more about you and what you have to say or what you have to offer than others. And that’s a problem.

What made the greatest generation so great was that when they came home from the war, they didn’t spend much time staring backwards at what they had just done-save the world. They didn’t come home and pine about a simpler America that made more sense to their “American” sense of self. One of farms and tradesmen and urban mills. One more familiar but with far less opportunity to make the world better. They moved on. They started families. And lives. And businesses. And they built the modern world. It’s hard to spend much time feeling like you’re owed something more when a dozen other guys on the block did the same as you did. It’s hard to link your unique identity to such a ubiquitous thing. So you go out and you make your next one.

Today feels different.

I may be alone here, but I’ve had enough of stern, oft bearded vets in videos with a tag line that sounds something like “this vets got a message for…” being lobbed over the Facebook wall by folks who mean well or seek to wear their political ideology in the form of patriotic military appreciation. Those are fine, I guess. And maybe a bit useful if the message that service takes commitment and sacrifice hasn’t quite sunk in somehow yet. But I feel like it has. And we’re starting to wander into a more dangerous territory of entitlement. And it’s time we vets dealt with a hard reality.

It’s this:

The war is over. It has been at scale in Iraq for seven years. We’ve had more troops in South Korea than we’ve had in Afghanistan for three years. It might start up again. But those of us that left the service of arms aren’t fighting it. The next generation will with a handful of our buddies hanging around in the senior ranks. And America’s focus and appreciation should rightly turn towards them if it goes that way. For the rest of us, it’s time to move on. And it’s time to stop focusing on the question of what the country owes us for our service. And time to start asking more important ones that actually have a chance at making our future, and in turn America, great again. Ask yourself this:

What’s next?

My generation started the war. I’m 40. We’re not kids any more. If our life is about that war, then we’re wrong. And we need to start doing something about it. It’s time.

If you haven’t already, go back to school. Use the greatest college funding program America has ever seen and get a degree in STEM (science, technology, engineering, math). The world needs science more than ever before now. The slow growth economy that has so many of us wandering around in the wilderness telling stories about Ramadi is here because we haven’t figured out how to drive the next world altering innovation. Think locomotion or manned flight or nuclear energy. Think something besides just computers. We haven’t had one of those in 80 years. I still get from point A to point B in the same thing my grandfather did. And burn the same things for fuel. Science is going to save our country one day from being eaten by places like China and India who can make last century’s goods cheaper. So it’s time we started treating scientists and mathematicians with the level of gratitude we treat vets. Maybe we vets can help that along a bit by being both.

If that’s not your thing, go start a business. The mechanics of it are easier than ever. I started two last year. That’s what half of the greatest generation did. Today, less than five percent of vets are starting their own businesses. So, maybe we might want to try a little less pontificating of our stern values and start spending more time thinking of ideas for a start up. I get it. Talking about making America great again is easier and more gratifying in today’s social media world. But it doesn’t actually do anything.

If business ideas aren’t your thing, then ask  yourself this question. How do the skills that you have help the machine? I don’t mean the figurative one that is a thriving America. Like the economist Tyler Cowen when he asked the same question first in his book Average is Over, I mean the literal one. The computer. How do the skills that you have help the computer? There’s a divide in America. It’s clear as day. It’s different than the political or racial or socio-economic one. It’s not urban or rural. Or north and south. But it’s there. And it’s widening. The most material divide between Americans today, is how you answer the question, how do I help the machine?

Can you build it? Can you design how it works? Can you analyze what it produces? Can you use it to do things better? Can you explain it and sell it? Can you produce it? Can you teach others with it? Can you entertain people with it?

Can you manage teams that do any of that?

If you answered yes to any of those, you will prosper for the next twenty years. If you answered no, then it’s likely that what you do has been replaced by the machine. And you’re going to have less opportunity than you would have in the past. It’s not fair. But that’s the deal. It’s how the free market that so many nostalgic Americans love, works. So go do that thing that your military training taught you. Adapt and overcome. Or piss moan and complain about the old days and get left behind.

The reality is a bit painful. America has plenty of money. The world has endless unskilled labor. We’ve got plenty of government. And plenty of people who protect and serve. But we don’t have enough people that can answer yes to any of those questions above or can enter into professional fields in science or will start their own businesses. So those that can will matter more to America during the rest of our lives than our past service will.

So remember your days in the past with the pride and honor you deserve. And mourn those we left behind. If you’ve got wounds that won’t heal, go get help. It’s never been more available. But if you want the future in the country you thought you were fighting for, it’s not the one in the rear view mirror. America isn’t going backwards. She never has. It’s time to move on to the next thing and get back to work. And remember that thing the military taught us.

No one owes us anything.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

System One

Long, long ago, before the internet or television or electricity or even running water, the most complicated computer the world has ever known was already operating. It’s an incredibly old and incredibly common machine. It’s the human brain. It’s been growing and learning and creating efficiencies for thousands of years-millions if you count those that came before us sapiens. It’s responsible for more of what the world looks like today than anything that has arrived since the time of man.

It’s an easily fooled machine though. For as complex as it is, the shortcuts it takes to make us wondrous sentient beings what we are leave it susceptible to bias and blunder. Because over time, we’ve developed two systems that pull and push on each other at all times. And the fight isn’t always won by the right one.

The first one, system-1, was born somewhere in our lizard brains before we even made it out of the swamp. It’s automatic and uncontrolled. It’s our gut reaction to things. It see’s fire and runs. It assumes much. But understands little. System-2 is slower, deeper and more intentional. It feels turbulence on a plane but overrides our fear and reminds us that planes almost never crash and are built to shake. System-2 is deliberate. It’s where our best thinking on complex issues is done.

Some people are more system-1 than others.

Our brain plays games with us to manage these two systems. Behavioral economists like Richard Thaler call them heuristics. Thaler and co-author Cass Sunstein highlight three types in their 2008 book Nudge .

The anchoring heuristic is a fun one. We use things we know to be our first estimation of other things. If we don’t know the population of Kansas City, we think it’s much higher if we live in New York than than if we live in Daleville. A New Yorker’s population anchor is higher than a Dalevillian.

Then there’s availability heuristic. We assess the likelihood of something happening more frequently if an instant of it happening is available to our recent memories. Kidnapping, for instance, almost never happens. But every time it does, we hear about it. So we are less likely to let our kids play unsupervised at a park than we are to let them swim unsupervised in our own pool. Even though the latter is statistically, far more dangerous.

The representative heuristic makes us think that A must be B because A looks like B. We’re likely to think a large man in his early twenties in an expensive car is a pro football player. In fact, it’s more likely that he’s a lawyer. There are many more lawyers than pro football players. And therefore many more large lawyers in their early twenties than pro football players. But system-1, doesn’t know that. And it doesn’t care.

Things like advertisements and sales pitches try to appeal mostly system-1. You could argue that the best ones are all system-1, because system-2 advertisements take too much time. And maybe too much of a good product. So it’s just a short leap to say elections are greatly impacted by system-1. And the effective electioneers are most effective when they use these heuristics to tap into system-1 while appearing to be talking to system-2. When they target those people whose system-1 is largely in control, they are very effective.

Muslims are terrorists. And shouldn’t be allowed in the country. I can protect you—representative heuristic.

You’re all in danger. Only I can save you from crime and attacks from outsiders—availability heuristic.

America was once great. And you should expect it stay that way. And I can make it great again—anchoring heuristic.

For all of President Trump’s 40 or so years in the public eye, he’s been a system-1 guy. He’s about the brand. Find an idea, pitch that idea, provide some money, not yours if you can help it, and have someone else do the work. Slap the name on it that conveys the feel. Wander away and figure out how to do it again. It’s not stupid. But it’s not system-2 either. It’s all system-1.

Trump Plaza. Trump Marina. Trump Tower. Trump Steak. Trump University. It’s all about the brand. Branding is all system-1 after all. When I say Apple, you feel modern and elegant. When I say Haagendaas, you think of a foreign delicacy. Never mind that it’s made in Brooklyn. System-1 doesn’t care about the facts. Only the feel, facts be damned.

Running the government of the United States of America is a system-2 thing though. It’s early, but man does it feel like it’s being run by a system-1 guy. It’s been a bad week for the administration. But not for the reasons I would have thought. Not because he’s dishonest and motivated by selfish or unscrupulous ends, though that may be the case. It’s been a bad week because Team Trump has been inordinately stupid. I don’t use that word often. It’s a lazy criticism. But I don’t have a better word than stupid for using system-1 for system-2 things this much.

Michael Flynn was fired for cause during the Obama administration. Bringing him on was appealing to conservative system-1 and how good it feels to flip Obama the bird. But you need someone whose not stupid or crazy enough to talk to Russian officials and lie to your boss about it running the National Security Council. The original travel ban felt good to many scared conservatives. But it wasn’t legal. So much so that the White House isn’t going to push it again. They’re making a new one all together because the first one was a bad idea. Repealing Obamacare…system-1. Done. Fixing health care? System-2…crickets.

Hard problems are system-2 things. We’d all feel a lot better if we saw any proof at all that the Trump White House could work at all outside system-1.

 

The Mandatory Future

Once, I was the AUXO. That’s what people called me and that’s what I answered to. It’s one of the fun quirks of serving as a naval officer on a war ship. People just call you what you are instead of who you are. And I was the Auxiliaries Engineering Division Officer on a guided missile destroyer. The Auxiliaries Engineering Division-“A Gang” for short, owned just about every part of engineering equipment on the ship that didn’t actually turn the shaft. Which means my team had to know how to operate, maintain and repair just about anything from industrial grade maritime air conditioners to hydraulic steering units to the toasters in the galley. And they had to do it well, like people’s lives and the national interests of America depended on it. Because they did.

As the officer in charge, I never looked at my enlisted men, Enginemen by trade, as a bunch of people who wished they were me. They didn’t. I never thought that I had succeeded and they hadn’t and that’s why I was where I was, in charge, and they were where they were, doing damn hard work. It wasn’t because I was particularly enlightened as a 23 year old ensign. I simply understood an important truth. That their job mattered. And it was difficult. And that I probably couldn’t do it. I never told them how to fix something. I just made sure that they were resourced and focused enough to be the kind of group that fixed things right. That squared just fine with them. Because that’s all they ever wanted. No more. No less.

Working class America doesn’t want to be management class or professional class or any other class either. Like my team, they want to work. They’re not poor. And they’re not unsuccessful. And they want to continue to be the backbone of our country. They want to continue to be the most productive, efficient and effective group of humans that has ever gathered. They don’t wish they were me, peering out of my Silicon Valley tech firm office surrounded by walls of white boards with “big thoughts” on them. And they don’t want to be “in charge” either. We managers are stiffs. And we don’t know how to do anything useful. And we don’t have any value unless we’re supporting them in doing what they want to do-build and maintain and fix America. It is perhaps the purest, most honorable desire a human can have: to work hard at important work.

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Source: Bureau of Economic Analysis

We’re not going back to making things the way we used to though. We’re not going to employ millions digging holes in the earth or sowing and reaping the harvest or rolling out the last century’s modes of transportation. Those days are gone. We’ve found other ways to make money. We’ve grown finance and healthcare and insurance and real estate and business. We’re about to retire an entire generation that saw their nation grow in strength and their economy boom for almost every year of their life. Their legacy will be fifty years where the only thing that was built was the computer technology industry, by a handful of men, in a small town in Northern California.

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Source: Bureau of Economic Analyis

There’s good news though, for those who want to work hard at important work again, even if it doesn’t sound like it. That good news is that we’re in a whole heap of trouble again. And by we, I mean planet Earth. China and India and the rest of the developing world are trying to make their world look like ours. And that’s a problem. That’s 2.5 billion people moving from 18th century American technology and resource needs to modern America. China appears to be interested in doing it overnight. That’s 2.5 billion people worth of cars burning gasoline, power plants burning coal and air conditioners busting power grids. It won’t work. And they don’t care because it won’t be them that runs out of the resources. And there’s only one way to stop it.

21st century America needs to look a lot more like what the people of 20th century America thought it would look like when we went from the first manned flight to leaving the planet and landing humans on the moon and flying back in a short enough span for one person to have seen both with their own eyes. From 1830, to 1930, we went from horseback and drawn carriage to flight sophisticated enough to use in war. Now, nearly 90 years later, most of mankind is still using some form of the same vehicles today that they used then, burning the same fuel. That life, won’t scale. And it’s not because I’m a tree hugging liberal who cares too much about the environment. It’s because of math. And because the nation that will win the next two hundred years is the one that figures out how make power without burning things. That’s the problem. And it’s not an optional one. That’s the good news.

Putting our strong working class men and women back at the center of what we do and who we are as a country means that we’re going to have to start building and making and maintaining things that don’t exist yet, not last century’s things or the things other places have figured out how to build at scale for low cost. When we do, America will once again be tangibly stronger, with better things and a more effective way to live than anyone else. That’s what makes a people great, what they do, not how they feel.

And if you can’t imagine a future where we aren’t burning things to make our power, than you can’t imagine the mandatory future. And if that’s because of your political or financial interests, then you need to go. That’s the swamp I want drained. Mr. Trump, if you’re listening, put your energy and your ego behind driving the change that wins the race for a different power source and you will be remembered for generations as the man who won the 21st century for America. History forgives quite a bit in exchange for outcomes like that.

If any of my three boys wants to throw on the blue coveralls and get to work turning wrenches and solving problems by fixing material things that actually exist, I’ll be damn proud. But if they choose to enter the professional life, the “management class” then I want them to understand that the life my generation chased, finance and law and computer innovation, won’t change the world the way our future needs it to. If they want to change the world, they need to get back to work in fields like engineering and science that enable greatness. Because if the best and brightest of our young leaders keep growing up thinking that they want to get into Wall Street or be a lawyer or even break into crowded Silicon Valley to figure out the next great app that makes our lives nominally easier, then we’re in trouble. Because we’ve decided once again, to stop trying to solve new problems and focused instead on making more money solving old ones.

Fifty years from now if we are a culture of bankers and business managers, then we’ve failed. Banking and management are enablers to greatness. They aren’t the greatness. The greatness that is America is the genius to understand how to solve real problems and the strong back to solve them. We are a nation that makes things.

Fierce

Leonard Zhukovsky / Shutterstock.com

It’s not close. Our women, American women, are better than yours. At least as far as international athletic competitions go they are. When the 2016 Olympic Summer Games in Rio concluded, American women had won more gold medals than anyone-as in more gold medals than any other country’s men and women combined. Actually, Great Britain’s combined men and women tied them. But you get the point. It was a thorough and complete domination. From the track, to the pool to the basketball court, their 27 gold medals were the best ever performance by any women’s team in history.

If you watched, Brianna Rollins, Nia Ali and Kristi Kaslin stand on all three tiers of the podium-three beautiful American women alone at the top of the world, having just swept the women’s 100 meter hurdles-something never done by any three American women in Olympic track and field history and you weren’t proud, then you don’t get proud. Something struck me when I saw them up there. It was a feeling that grew over the last few weeks as I watched strong American women of all shapes and colors and sizes drubbing their world class competition. It was something more than just the overwhelming emotional sense of pride. It was this: Title IX was one hell of a piece of legislation.

In 1972, Title IX was signed into law by President Nixon. It was a sweeping bill that prohibited gender discrimination in any education system that received public funding-which for the most part is all of them. The reason Title IX is significant to women’s performance in the Olympics is that the law’s most well known provision required equal opportunity for women in athletics.Which means that universities receiving public funding had to invest in women’s sports with things like facilities, equipment and scholarships at parity with their men’s sports. So if you’re the University of Texas, and you want to spend $25 million on your football program so that ticket sales, sponsorship and cable TV deals can make your university $101M (these are the real numbers from 2013 according to Forbes by the way), then you are going to have to find a way to proportionately invest in women’s sports as well.

Of course you won’t make $100M more. But you have to do it. It’s the law. This is one of those times where most agree, without the legislation, the free market isn’t getting us the same outcome. Women’s collegiate and high school sports have been climbing to amazing heights ever since. Like I said, Title IX is one hell of a piece of legislation.

Though the athletics portion gets most of the press, it’s actually just a small part of the law. The rest of it was aimed at eliminating gender discrimination within the entirety of the education system. Before title IX, it was legal to exclude women from the same classes men took. Pregnancy was grounds for expulsion. Most women professors were forced to teach at women’s schools. Title IX also made it the school’s responsibility to fight sexual harassment and discrimination within their classrooms and campuses. There’s more, but you could fill a book with it, or hundreds of pages of legislation. Like I said, it’s a hell of a law. It did more to create the modern educational dynamic of inclusion for women than any one thing over the last fifty years.

The outcomes fostered by the change have been clear in athletics-1 in 27 women participated in high school sports in 1970. Now it’s 1-2.5 and we’re pummeling the rest of the world in the Olympics on my television every four years. But what about the rest of it? Has it been as helpful?

It’s hard to measure in its entirety but the quick answer is yes. According to the Department of Justice, women now graduate from college at a higher rate than men. And the trend pretty much keeps up at High School and post graduate education levels as well.

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Source: Equal Access to Education: U.S. Department of Justice Forty Years of Access to Title IX. February, 2012

Over the last forty years, education and athletics have drastically changed the horizons of American women. That much is clear. Which brings us to the real pay off issue here-women in the workplace. We’ve moved the needle in the early part of life for women in America-school and athletics-but what’s happened in the workplace?

There’s much to be said these days about gender inequality at work. There’s a commonly accepted notion of income disparity and an ongoing political debate about the status of American maternity leave relative to other industrialized countries.Those are the political debates. The ones where we try to figure out how our government or awareness and media pressure can solve this stuff by forcing change at the highest level-top down to right the wrongs. But if you do a little digging and study some of the research by people that actually approach this scientifically, you’ll see that there’s really more going on here then will be solved by laws or PR campaigns. There’s a real, moral issue here that lives much closer to the ground where moral issues tend to live-at the you and me level.

According to a paper published by Harvard economist and professor Claudia Golden in 2014 in the American Economic review, women working full time in America earn about 30% less then men do on an annual basis. In 1980, it was 44%. Much of that difference actually has to do with the types of occupations women choose to enter into-and not straight favoritism towards men. If you normalize the wage gap to compare like experience, education levels and occupation type, that number narrows to 18%. And when you look at women who entered into the workforce more recently, within the last 20 years, the number drops even further to 10%. Which means that it’s getting better. Better, however, means women in the work force, are still valued at 90% of what a man is.

Golden goes on to argue that there are two forces at work here in the gender wage gap. The first she refers to as the explained portion. The explained portion makes up the majority of that original 30% gap and has to do with occupation type, differences in education and job availability for women who entered the work force before today’s generation. That portion is the portion that decreases when we normalize the comparison by like occupations and education levels. It’s also the portion that’s decreased the most over the last 40 years.

The second portion of the gap is less clear. She calls it the residual portion. There’s less firmly understood or proven about that. But with women now more educated then men with decades of equal work experience behind them, it’s fair to say that there’s likely not an acceptable explanation for why a woman is 90% of a man.

The obvious place to look to explain the residual lag in compensation is just plain old sexism. There’s no doubt in my mind, that’s part of it. Not because I ever see it out in the open in the work place in 2016. I know about sexism the way I know about racism. I’m a 40 year old white guy. Which means a lot of other 40 something white guys casually assume I’m part of the racist misogynist club. So when it’s just us, it comes out enough that I know it’s still there. There’s only one reaction you can have if you care about the residual problem in workplace compensation equality, which you should. Stomp it out when you see it. People have enough pain and hardship in their lives to deal with stupid old white guys longing for the days of Mad Men. It’s not cool. It’s not funny. It needs to go away…for good.

The other part is a little more nuanced. There’s a story in the data that Golden shares in her paper. There’s a pattern in how some employers compensate, especially in corporate America where they focus their highest compensation on management. Companies in corporate America tend to compensate workers willing to work longer hours with promotions and higher salaries. And by longer hours I mean over and above the normal 40 a week. Those of us in the corporate rat race know what I mean. 40 hours is a lie. And the higher you rise, the more it grows. 50, 60 hours is the norm.

There’s another interesting thing thing that we can learn from the data. It’s actually what the data doesn’t show us. Those 60 hour weeks aren’t accounted for on any balance sheet anywhere. It’s the hidden expectations of success. We don’t get overtime. We get promotions and big bonuses when our outcomes warrant it. When they don’t, we don’t. So when you look at it, not actually putting in that extra time, doesn’t show up anywhere. There’s nothing to point to that’s absent. It’s silent evidence. Where we see it materialize though, is what happens to the pay gap between men and women as they progress through their career. It grows. And it bottoms out in the late 30’s and early 40’s, then starts to recover. And if you think about it, a strong hypothesis starts to materialize.

The longer a woman stays in the work force, the more likely she is to be disproportionately effected by the commitment of family.

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Source: American Economic Review, April 2014

Now, why that is or if it’s right is something you can’t explain in a two thousand word essay-or a any essay for that matter. Why having a family impacts a women disproportionately more than men is a facet of our society that has been thousands of years in the making. But I can tell you, it’s very real because I see it every day.

Sometimes, it’s a choice. I have female colleagues who willingly take reduced roles, work part time or even change to contractor status in order to reduce their commitment to their job. And in searching my memory, I can’t think of a single instance where a man did the same. Now, because of the industry I work in and the relative stage I am in my career, these women are unquestionably the primary breadwinners in their home. Yet, they still made that choice to cut back though. And I have to be clear, where I work is about as accommodating an environment as you are going to find in corporate America.

Just because some choose to cut back doesn’t mean there’s not a problem though. For every one of those women who have chosen to sacrifice career progression for family, there are several more who would not or could not make that choice. And that’s where we need help. And by we, I don’t just mean government or corporate leadership. Political pressure on high visibility issues like maternity leave and wage discrimination help. But it’s not all of it. The American working woman is an amazing asset. The bigger role they play in anything, the better we get. Just look at Rio. So if we want to rise, they have to rise with us. And it starts by realizing that one thing that has absolutely nothing to do with gender.

When I was on active duty in the Navy, I didn’t work with many women. I went to Annapolis for college which was a little less than 90% male. I served on one of the last all male ships for my first tour. And then I transferred into other units that were only open to male participants. By the time I got out, I’d spent most of 15 years working only with men. Of my three war-time deployments, only my last one had a woman attached to the unit I served in. It’s safe to say that by 2011, when I left that world, I had about as little exposure to women in the workplace as was possible in 21st century America.

That might seem like a problem when it comes to understanding women’s issues. But it’s not. I’ve been at it for a few years now and they haven’t killed me yet. Because what the military taught me, and what is lacking when we don’t stand by our colleagues when they’re doing the human see-saw act that is balancing being mom and a business leader, is that we’re all in this together. And when we can, we take care of each other. Which is something that has nothing to do with gender and everything to do with giving a crap about the other humans you work with.

My commanding officer sent me home from Iraq for a few weeks when my son was diagnosed with autism. And when I came back to finish the deployment, he made me leave on the first set of planes taking us home-even though I’d taken two weeks away, which no one else got to take and officers usually left last. He knew I was a wreck and so was my wife. And when he saw her at the post deployment banquet, he pulled her a side and told her that I did an amazing job. And that she should be proud of all I did. And that he was personally grateful for the strain she took that allowed me to do it. He knew we both felt guilty about it-irrational as that sounds.

He gave me what I asked for because he knew what I needed to stay a part of the team. And if he didn’t, and I had to choose between my family and the team, my family won. So he didn’t let me choose. He didn’t worry about setting a bad precedence or about how it would look. Or maybe he did, because it looked like he gave a crap about me and my family-which he did.

This whole thing-all of it-works better when we realize we’re all in this together. And we do what we have to, to keep each other in the fight. And remembering that is what we can do, to close the gap for gender equality in the workplace-not governments, not shareholders. Us.

So when one of your employees comes into your office and hesitantly tells you that she’s pregnant and her due date is smack in the middle of your peak business season, the only answer is congratulations. And if she tries to apologize-it happens- don’t you dare let her. And when one of your employees who’s just returned from maternity leave asks to work on a part time schedule, for part time pay, because three kids under four and two full time working parents is just about impossible, you say, of course. Because that’s the only answer-even if your company’s policy doesn’t clearly state you have to. Don’t you dare make her choose between her work and her family, if you can help it.

Being a tough leader doesn’t mean coming down on your people. It means finding ways to make those situations work, while making it look easy, up and down the management chain. You could wait for the law or for your corporate policy to catch up with what’s right. Or you could lead and take the strain yourself. If you can’t, maybe this leadership thing isn’t for you.

And if you’re reading this as a professional woman-or man- without a family by choice or otherwise and this treatment strikes you as unfair, you’re right. It is unfair. Just like getting pulled out of a presentation to your CEO as an executive at a software company because your 12 year old got in a fight at school is unfair. Mom is usually who you call for that-no matter who you are or what you’re doing. And yes, that mom has a choice. Leave and go get him, or walk back into the meeting and go about delivering her presentation while being mom gets de-prioritized. Whatever she chooses, and I’ve seen it go both ways, it won’t feel good-either way. And that’s not fair either.

Yes, having a family is a choice-usually. And it’s not your fault they chose it. Rest easy, you’re still getting the better end of that deal. At least at work that is. Even if it simply means never having to make that crappy choice that I’ve seen dozens of times. Because that choice sucks the way few things in life suck. So cut them some slack. The workplace and the world will be a better place for it.

The American woman is fierce. I have no better term for her. They showed the world their strength and grace and toughness these last two weeks at the Olympics. But they show it in super human ways every day, splitting the unfair load of mother, wife, and pro. It takes a fierce woman to choose to jump into it. Why in the world would we ever do anything to keep that kind of fight on the sidelines when we’ve got so much to gain from inclusion.

There’s a lot of this that’s on you and me. And we can do better.

 

 

 

 

 

 

 

 

 

The Great American Economy: A Study in Data and Self Deception

Economy  noun econ·o·my \i-ˈkä-nə-mē, ə-, ē-\ the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location.

When we ask the American people what their top considerations are in any congressional or presidential election, without question one of the top issues they raise is the economy.  From the definition above, it’s hard to actually imagine that people care about the economy in a literal sense though.  The theories and systems related to that which is described by the definition of an economy are best left to classrooms.   What people actually mean when they say “the economy” is that they care about aspects of our fiscal and monetary policy that actually impact our lives.  Fiscal being budgetary and taxation activities.  Monetary being activities conducted by the Federal Reserve that impact interest rates.  We choose to use the word “economy” to sum all that up in one average sized word.  We like terms that we can put in our back pocket so we can pull them out when required in discussion or debate to prove a point.   So the “economy” is what we care about.  And so it becomes top issue.

If you think about it just a little bit more though, you can actually give some purposeful voice to the demands of the people’s economy.  When you think about it in reasonable terms, and its important to be reasonable here because there’s quite a bit at stake, you can produce a pretty distinct list of exactly what we care about. To be even more precise, you can get to eight portions of the economy that we really care about.  Here they are in a somewhat particular order.

What American people want of their “economy”:

1. Income that keeps pace with inflation

2. Job growth equal to employment demand

3. Stable employment rates

4. Historically moderate tax rates

5. Affordable cost of borrowing

6. Participation in growth through investment

7. The ability to retire at a reasonable age

8. A safety net in hard times.

The good news is, we actually have data on all eight of these categories. When you throw economic theory and political principles out the window, you can do some unbiased statistical analysis.  So we did that.  We analyzed 19 separate economic categories that included government spending, income tax rates, interest rates, trade deficits, financial markets, GDP, budget surplus/defecit and corporate profits.  By simple correlation analysis, we can ignore the rhetoric and theory and look at simply what the data tells us.   So here it is both in raw form and commentary.

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What happens when taxes went up? 

People had less money.  But you didn’t need data to tell you that.  But interestingly, job growth increased and unemployment decreased.  The S&P 500 went up.  Corporate profits decreased, which makes sense, because they were paying higher taxes.  In the statistical world, we are always careful to point out that correlation is not causation.  Which means in lay terms, just because two points of data showed a pattern, it doesn’t mean one caused the other.  What we do know is that the data alone does not support the history of dire economic consequences from tax increases.  That doesn’t mean we have to like them though.

What happens when corporate profits increase? 

Surprisingly nothing.  Though profits increased with lower taxation, the growth doesn’t appear to materialize into wage increases, job growth or significant financial market gains.  From a data perspective, the only thing that appears to benefit from corporate profits, is well, corporate profits.  This isn’t a purposeful commentary about the evils of corporate America. It’s simply what the data says.

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What happens when corporate profits decrease?

We don’t know because it’s never happened.   Even during the great recession that started in 2008, corporate profits continued to grow at record rates.  What correlates to the spike in unemployment and the crash in financial markets is a slow down in the rate of growth.  Which means companies were more profitable during that time than in the years previous to the crash, they just weren’t more profitable enough.  And why did it slow down?  As far as the data shows, for no reason at all related to taxes, wages, spending, interest rates etc.  Which leads us to believe that free market forces of expansion and contraction dictate rate of growth; not taxation, wages, spending, trade, currency exchange rate etc.  Again, this is not principle or rhetoric, just data.

Do we spend more tax payers money when we raise taxes?

Oddly, no.  One of the strongest correlations in the entire analysis shows that we spend more when taxes are lower.  Clearly no one is arguing that when we lower taxes, we spend more because taxes are lower.  What we are saying however, is that the data shows us that we spend independent of how much money we collect from taxes.  Which is why our national debt is higher now as a percentage of GDP than at any time in our history.  The conclusion is that it has at least as much to do with historically low tax rates than it is out of control spending.

Is our spending out of control?

We do spend more than we used to.  The increases in spending exist in social security, medicare and medicaid, and social safety net programs.  People live longer then ever before and medical care that simply didn’t exist in the recent past presently does exist.  What we choose to spend on safety net programs is a choice. When unemployment spikes, our government spending does as a result.  Choosing to do so however appears to have no negative impact on any economic outcomes that we care about, other than supplying us with income and resources when we fall on hard times.  It simply means we spend more money.  Which matters, especially when you don’t fund it.

So what’s the “so what”?

What does it all mean?  The rhetoric around taxes and spending and how it impacts our lives is not supported by the data.  We certainly don’t like to pay higher taxes.  Nor should we.  But the increased costs associated with modern lifespans and healthcare are taking their toll.  And this is not because of the Affordable Care Act.  At least not yet. Most of this data comes from well before it was in place..  There is one important consideration though.  Whatever our political affiliation, we all agree that at a minimum, a government’s role is to exist and remain solvent so it can continue to govern. Which is a pretty low bar.  If you take this data seriously, and I do, you see that there’s nothing that actually supports the “trickle down” effect from lower taxes.  Which is actually good in one way.  It leaves us with a clear choice; to have the services that our government presently provides or to not have the services that our government presently provides.  Right now we’re choosing to have them and not pay for them because we’re hiding behind the rhetoric that choosing to pay for them would be bad for the economy.   The data doesn’t support it but our inability to have effective political debates in congress, or anywhere won’t let us get to that choice.  My guess, is we’d have some, divest of others and maybe even improve ones that weren’t working.  We’d be forced to prioritize.  That is, if we could actually talk about this.  Which we can’t.

This level of analysis isn’t particularly hard to do and the conclusions that it yields are strikingly conclusive.  They’re just not popular ones to advocate for because frankly, we can’t have honest discussions any more without being stuck in the irrelevant loop of “government bad” -v- “government good” paralysis.   Which puts us in the impossibly dysfunctional position of having more, paying less and not being able to prioritize anything until we drive off a cliff of insolvency.  Painful truths hurt.  So we don’t say them.  If we don’t want to pay for the social programs, then cut them.  But there will be no denying that we are cutting them in order to preserve the lowest tax rate in my life time. Or, maybe we try reviewing and prioritizing, like any organization on the planet that has a budget. But we can’t, because we’ve stopped talking.   And so the self deception continues and our deficit grows as does our compliance with our insolvency as a nation.  This one actually isn’t that hard. But it’s going to take a discussion.  And we can’t do that any more.