EGYPTS REVOLUTION

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Buried-An Archaeology of the Egyptian Revolution

By: Peter Hessler

Narrated by Peter Hessler

Peter Hessler (American Author, and journalist.)

Peter Hessler chooses to move from China to Egypt just before the 2011 Egyptian revolution.  He, his wife, and twin newborns live in Egypt for five years.

Hessler worked for The New Yorker as a staff writer from 2000 to 2007 and became the magazine’s correspondent for China from 2011 to 2016. 

Hessler looks at Egypt through the eyes of an American who lived in both China and Egypt as a reporter.  His perspective melds Chinese and American acculturation with interesting incite to Egypt’s history, language, and politics.

Egypt is a fascinating country for anyone who has visited or read about its ancient civilizations.  With brief comments about Egypt’s historic monuments and museums, Hessler touches the culture of modern Egypt. 

Hessler notes the extraordinary ability of Egyptians to hold two opposing thoughts and adjust behavior to accommodate both beliefs.  On the one hand, there is a sense of “let it be” when minor or major events occur in the lives of modern Egyptians.  On the other, there is a history of autocratic Egyptian rulers who insist on strict control of society.   In view of the many non-Egyptian’ governments after the Pharohs, it comes as no surprise that Egyptians are adaptive.

Sadat, Mubarak, & Nasser were military dictators before the election of Morsi who is deposed in the revolution by today’s military leader, Abdel Fattah el-Sisi.

Hessler comments on the ability of Egyptians to learn languages at varying ages of maturity.  Language skill is the lingua franca of the ability to adapt. 

From ancient times of the Assyrians, Persians, and Greeks; to more modern times of the Ottomans and British–Egypt remains Egyptian despite their adaptability.

Hessler offers an understanding of Egypt through the eyes of its citizens.  He recounts the tumultuous relationship of an entrepreneurial garbage collector and his wife.  The garbage collector is illiterate.  His wife can read and write.

The garbage collector is in his 30s when he marries his 18-year-old wife.  Their marriage leads to three and then four children.  The garbage collector is exiled from his children with the threat of divorce initiated by his conservative wife.  His wife follows Egyptian culture in covering her face but rejects some of the discriminatory aspects of a patriarchal society.

Hessler’s garbage collector is a great source of information about Egyptian culture because of the details he knows of other lives based on what Egypt’s citizens throw away.  The collector is scrupulously honest about the garbage he collects.  When he finds something in the trash that has value he returns to his customer.  It is a matter of pride; stoked by belief in a cosmic or religious wheel in his mind that tells him what is right.  However, the wheel seems to stop when it comes to relationship with his wife and children.  This leads to what Hessler suggests is a fundamental flaw in modern Egypt; i.e. women’s inequality. 

Because the collector’s wife knows how to read and write, she files an appeal to the court to strip her husband of his house and property.  She files for divorce but recants after finding the consequence of such action would make her and her children destitute.

Surprisingly, their tumultuous relationship becomes less combative as their life together matures. Their personal trials seem a paradigm of Egypt’s “let it be” and autocratic culture.

Hessler reports on the ponderous, corrupt justice system that both aids and thwarts the intentions of married couples seeking help.

Women are discriminated against based on their sex in Egypt. 

Women are raised to believe their role in life is to have and raise children, and take care of their husbands and families.  Girls are not afforded the same educational opportunities as men.  Women are expected to sacrifice their entrepreneurial right to a job when they are married.  Hessler notes female children are routinely genitally mutilated. This is a tradition based on a belief that sexual pleasure and desire are a threat to society. Hessler compares the torture of genital mutilation to the Chinese tradition of binding women’s feet.

Hessler compares Chinese with Egyptian culture to expose the consequence of sex discrimination.  The potential of women’s contribution to the economy in Egypt is eviscerated by its culture of discrimination.

In an adults most productive years, Egyptian housewives cannot work for pay outside of the home.  If a woman has a good job, she is expected to relinquish it when she is married.  In contrast, Chinese women are full participants in the economy.

 

Parenthetically, Hessler notes Egyptian homosexuals are persecuted for their sexual preference.  The irony of that homosexual persecution is in Egypt’s patriarchal culture that discourages social contact between the sexes.  Putting aside genetic predisposition, without social contact with women, male relationships become the only acceptable form of intimate relations.

Egypt’s demonstration against a crackdown on LGBT’ rights.

Hessler’s book is interesting because of his firsthand knowledge of the revolution that removes Morsi from the Egyptian Presidency.  In many conversations with Egyptian residents, Hessler notes the weakness of the Brotherhood in Egypt; both in number and in qualification for political leadership. 

Hessler contrasts the military with the Muslim religion of the Brotherhood.  The military has a long history in modern Egypt.  The tradition of strong leaders has an even longer history.  The Brotherhood is characterized by strong leaders who only press religion; without understanding the nature of society that desires order, safety, and economic opportunity. Order, safety, and economic opportunity are a “good despot’s” alleged intent.

Mohammed Morsi (Fifth President of Egypt for 1 year until removed from office by General Abdel Fattah el-Sisi. Morsi dies of a heart attack in 2019.)

Hessler shows the Brotherhood as an association of religious believers that have little organizational skill.  They are not educated to lead.  They are educated to worship.  That educational limitation exhibits itself in Morsi’s weak government.  Egypt flounders economically with the election of Morsi.  One can argue it is still floundering under el-Sisi but Hessler shows the military is more prepared to lead based on the tenants of worldly desire rather than religious worship.

Egyptian Brotherhood Rally

(In a population of 80,000,000, there are an estimated 600,000 dues paying members of the Brotherhood; of which 100,000 are considered militant.)

Hessler explains there are many conspiracy theories surrounding the Brotherhood’s influence in Egypt. Their small numbers and inept management skill seem unlikely to create a successful uprising in Egypt. The Brotherhood’s revolutionary impact seems symbolic more than real. However, one realizes Russian Bolsheviks were a small minority in 1917.

Abdel Fattah el-Sisi (Current President of Egypt)

Hessler notes that el-Sisi’s popularity is diminished by missteps in funding infrastructure improvements at the expense of more direct economic need.  He cites the expansion of the Suez Canal as an example of a prudent long-term aid to the economy but a neglect of medical services, justice reform, and housing needs for today’s general population.

There is also the issue of repression by el-Sisi.  Hessler recalls the incident of a tortured, and then killed, foreign student that criticizes the current government.  The author notes that el-Sisi’s defenders suggest the murder was an accident caused by young and inexperienced supporters of el-Sisi. 

In recalling my personal trip to Egypt in 2019, the Brotherhood is a big concern of the government. Tourism is a big industry for Egypt. That industry nearly dies with the election of Morsi. Some Egyptians feel something is getting done with el-Sisi; while no economic progress happened with Morsi.

Hessler offers a glimpse of the hardship Egypt faces in the 21st century.  His observations are at a local level of Egyptian society; not at the obscure level of a thirty-day tourist.  Time will tell if el-Sisi is the answer to Egypt’s failing economy. 

Sisi is acknowledged by Hessler as a good communicator.  Sisi is truly an Egyptian focusing on his perception of what Egypt needs now; not the religious salvation of the eternal.  The biggest criticism of Egypt’s leadership in Hessler’s book is the unequal treatment of women.  There seems no action taken by el-Sisi to address that reality. One wonders if the economy is likely to grow quickly enough to avoid another revolution without gender discrimination reform.

GARDEN OF EDEN

Yarbrough (Blog:awalkingdelight)
Website: chetyarbrough.blog

New Zealand in 2019

Written by: Chet Yarbrough

Having the wonderful experience of visiting New Zealand as an America tourist was like visiting a biblical Eden. However, no country is without political controversy.

On the one hand, New Zealand has the ambition of being an ecological Eden with no natural predators and a perfectly balanced environment.

Is that realistic? How can nature be nature without predation? From times untold, wild animals have eaten each other.

And then, there are humans. Humans are by nature predators. Environmental degradation is accelerated by economic prosperity.

American media gives positive marks to the current Prime Minister of New Zealand, Jacinda Adern. In part because of her immediate response to the Christ Church mass shooting but also because of her environmental effort to reduce greenhouse gases and pollution.

New Zealand is blessed with renewable energy sources from geothermal-power, hydro-power, and a burgeoning wind and solar power industry. Not that this is something only the Prime Minister has done in her short term, but it illustrates the environmental sensitivity of the country.

Prime Minister Adern is not universally applauded by fellow New Zealanders. We had the happy opportunity to spend a day and night with a farming family in New Zealand.

The farming family we spent time with explains there is a conflict between New Zealand’ farmers and the current administration. Over 45 percent of New Zealand is farm land. It is distributed among farmers that have an average size farm of over 350 acres. An important distinction between our countries is that American corporations may use farms as a tax shelter while New Zealanders use farm land to produce more product. There are few if any corporate farms in New Zealand. New Zealand farms are owned by real farmers.

However, farming is a major polluter of land in America; as well as New Zealand.

Many New Zealand farmers seem to be quite upset with Ms. Adern. Over 50% of methane and nitrous oxide in the world comes from farm animals. Cattle, sheep, goats, deer, alpaca, llamas, goats, and chickens are common farm animals raised on New Zealand farms. Land, water, and air quality issues being raised by the current administration are a big concern of the farming community.

New Zealand farmland regulation is creating a furor among some farmers that are being told to change their practices to reduce pollution. The cost of these changes are to be borne solely by the farmer according to the farm family we visited.

Real farmers in both America and New Zealand have a reputation for being independent. That independence is distorted by corporate ownership in America but not in New Zealand. The New Zealand farming community is made of farmers who work the land. One gets the impression they will not re-elect Ms. Adern unless she changes direction.

The irony of what we were hearing is that farmers like all people are concerned about the environment. The problem is in the cost of adjusting farming practices to accommodate environmental concern.

From an outsider’s perspective, the solution seems simple. Farmers in New Zealand are not constrained by corporate farming practices like America. New Zealanders do not farm to shelter income but to produce product. It would seem reasonable for the government to assist New Zealand’ farmers financially to adjust to less environmentally damaging practices. The perception we had from the family we spent the night with was that the current government wants all of that cost to be borne by the farmers.

When the word subsidization is mentioned, both husband and wife of the New Zealand farm family seem to wince. Without knowing the history of farming subsidization in New Zealand, one wonders what happened in its history.

As long as real farmers are producing groceries there seems every reason for tax dollars to be used to help farmers mitigate pollution. Farmers are as concerned about the environment as environmentalists. Where would the world be without food production and real farmers?

Visiting other countries is a guilty pleasure. It is an expensive undertaking that many cannot afford. We loved our time in New Zealand. One sees there is no perfect country. Every country has its discontents; America, not withstanding.

BULLY OF THE WORLD

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The Accidental Superpower

By: Peter Zeihan

Narrated by Peter Zeihan

Peter Zeihan (Author, American geopolitical strategist)

“The Accidental Superpower” is a wild ride.  Peter Zeihan is a geopolitical strategist and futurist who argues that geography is destiny.  His prognosis for America is perversely positive.

Zeihan suggests America is in the “cat bird” seat for this and the next (yet to be born) generation.  The “cat bird” seat implies a superior position of survival in a world headed toward crises.

“The Accidental Superpower” is a cautionary tale that suggests the tail will wag the dog. 

If America’s current actions and future intent is to abandon Bretton Woods’ history, then Zeihan implies wars will continue, famine and pestilence proliferate, millions will die, and self-interest will be humanities’ only interest.  In the era of Trump, Zeihan shows the reach and potential of bullies in the world. 

Zeihan builds a credible and terrifying argument.  The Bretton Woods Agreement was created in 1944.  Its purpose was to set up a system of rules to ensure economic stability around the world.  Zeihan notes that America has steadily abandoned the principle of Bretton Woods since 1973 when the U.S. suspended the gold standard for the American dollar. 

It is not to suggest that the gold standard should be re-instituted but that the American dollar became the new standard for world economies.  In part, because the basis for economic wealth became the American dollar.

The American dollar gives the United States an outsize influence in the world. That influence is reinforced by an unparalleled military/industrial complex.

The resources of America became a primary standard for economic stability in the world.  Zeihan argues the legitimacy of Bretton Woods is replaced by the geographic existence of the United States.  America is bordered by two oceans, blessed with an internal river transport system, natural energy resources (including Shale oil which makes the U.S. oil independent), a replenishing labor force (supplemented by immigration), and economic growth. Therein, Zeihan explains America is capable of ignoring the rest of the world.  

This is a disturbing book.  It opens the door to an America dreamed of by ignorant nationalist like the current President of the United States. Zeihan infers the United States can be the bully of the world because of its military superiority, wealth, and geographic isolation. 

Empathy is an essential characteristic missing from a nationalist credo that believes it is “my way or the highway”. With a belief system based on “self-interest”, and the mantra of philosophers like Ayn Rand, the world seems destined to destroy itself. 

Zeihan supports his future predictions with a logic borne from geographic facts, history, and philosophical belief.  Zeihan’s perception of the world’s future creates fear and trembling in any who choose to believe it.

A few of Zeihan’s predictions are:

  1. China will not grow to be a superpower and will follow the path of Japan with an aging population that cannot maintain its economic growth.  The diverse nature of its population is hidden by the false belief that the Han people are of one mind.  Internal dissension will rise.  China is subject to river flooding and hemmed in by mountains and narrow waterways.
  2. Russia will covet the land of other nations because of an economy that rests on dwindling natural resources, a harsh environment, and lack of international trading ports.  The Tatar and Chechen populations will continue to plague consolidation of power in Russia.
  3. South African nations will suffer from starvation because of its lack of arable land.  Angola is one of the few African nations that may escape that fate because of its fertile land and young population.
  4. The European Union will fail because of nationalism, a lack of a viable common currency, and its failure to consolidate political power.
  5. Great Britain will become more dependent on the U.S. for trade and survival.
  6. Turkey will strengthen its influence and control over the Middle East through military strength and a young and growing population.
  7. Uzbekistan will become a more powerful independent nation because of its relatively young population and abundant clean energy (largely from hydroelectricity).
  8. Australia and New Zealand will prosper because of its vibrant agricultural economies, and ocean-bound isolation.
  9. Saudi Arabia will fail as an economic powerhouse because of its dependence on foreign labor for all industrial development. Saudi citizens are minor participants in the labor market, and unprepared to compete in an industrialized world.
  10. Iran is demographically young but burdened by an arid climate.  Its religious intolerance will be an impediment to economic growth.
  11. Spain, Portugal, and Italy are vulnerable to outside influence, inflation, high unemployment, and growing economic weakness.
  12. Germany may once again rise as a belligerent state because of its need to expand to continue its economic growth.  Its driven and well educated population reinforces industrial and technological growth.
  13. Canada will become a failed nation because of its aging demographics and diverse population.  Failure will only be abated by its relationship with the U.S.  Zeihan suggests Alberta should consider becoming part of the U.S. because of its one industry dependence (oil).
  14. The relationship between Mexico and the U.S. will improve because of proximity and mutual trade benefits.  The drug war will continue and perversely improve the Mexican economy. Drug war areas will be isolated to narrow parts of the country.
  15. Climate change is real, but its impact will be mitigated in the U.S. with hardening infrastructure in coastal cities that will mitigate or abate flooding.  Most of Florida will disappear under water.  Many island archipelagos will also disappear.
  16. Pakistan’s diverse population will continue to disrupt political control of the country.  Its conflict with India will continue despite diminishing financial support from the U.S.
  17. India’s economy will suffer from environmental degradation.

In conclusion, Zeihan suggests America will remain a superpower with outsize influence on the success or failure of other nations. 

A caveat might be America may become the bully of the world; at least until a nuclear war or accident decimates the environment. 

There is good reason to have fear and trembling for this world’s future if “self-interest” is the only criteria for well-being.

American Capitalism

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

Americana, A 400-Year History of American Capitalism


By Bhu Srinvasan

Narrated by Scott Brick, Bhu Srinvasan

Bhu Srinivasan (Author, American citizen born in India, Emigrated at age 8 to the United States with his mother.)

“Americana” is homage to the muscular success of capitalism in the United States.  It appears it takes someone born outside America to unapologetic-ally endorse the gift of capitalism to the world. It seems Bhu Srinvasan lives the American dream in the 21st century. 

Srinvasan “leans in” by arguing libertarian-ism’s strengths outweigh its weaknesses.  “Americana” speeds through the history of great men (because women’s contribution is largely ignored) who settle America in the 17th century.  With the help of English entrepreneurs willing to risk investment in the voyage of the Mayflower, the egg of American capitalism is hatched. 

Mayflower Replica

(The Original Mayflower Sailed September 6,1620 and landed on Cape Cod 66 days later, which was 500 miles north of its intended destination in Virginia.)

The investors expect a return on their investment.  They finance the expedition based on an expectation of success from a settlement in Virginia.  The first years of the Pilgrims’ progress is nearly a bust.  The author explains the initial investment is nearly lost but recovered by an agreement among the settlers to buy out their Mayflower investors.  The buyout is a success because the settlers find a ready market for American goods in England; particularly beaver furs which were provided to settlers by native inhabitants.

With growth of the fur trade, new settlers come to America.

The beaver fur business is expanded with new settlers who learn how the Indians ply their trade.  Competition grows and undoubtedly many tribes are shut out of the trade.

This, as in many more stories told by Srinvasan, reminds one of the boon and bane of capitalism.  That is not Srinvasan’s intent, but the effect of competition from acquired knowledge, new technology, and entrepreneurship is repeated many times.  There are winners and losers in the growth of capitalism. What is one life worth?

There is an “end justifies means” theme in Srinvasan’s view of America. This is an attitude reflected by President Trump’s suggestion on March 24, 2020 to re-open America in April.  The reality of quality-of-life improvements in America makes Srinvasan’s, and some would say Trump’s view, a worthy subject of contemplation.  America is the most economically successful nation in the modern world.

Srinvasan glosses over issues of slavery, racism, and corporatism. Trump’s suggestion that America should be reopened for business in April of 2020 is a judgement that suggests ends justify means. The spread and human impact of the coronavirus is unknown.

Many of the harsh realities of a transactional economic system bare down on America with exposure to the coronavirus. Do ends justify the means? 

Carnegie, Vanderbilt, Ford, Rockefeller, Morgan, Edison, Westinghouse, Watson, Gates, and Jobs are a few examples given for the success of American Capitalism. 

What is missed is the “blood in the water” from changes wrought by these men of steel, automobiles, energy, finance, communications, transportation, and technology.  With each advance in American ingenuity, there is a general rise in America’s standard of living.  Indeed, Bhu Srinvasan himself is a tribute to the success one can have in 21st century America. But, Srinvasan tells only one side of the story.

Homelessness in America is a disgrace.  Rat infested ghettos in large American cities perpetuate poverty and crime.  A deteriorating education system is gamed by the wealthy who neglect what can be done to help the poorly educated. 

Corporations have a duty to educate people displaced by technology.  Government needs to move beyond the transactional value of health care to provide basic health services to all Americans.  Environmental degradation needs to be abated before the world’s 6th extinction. 

To ignore the price paid by a growing underclass in America, is side-stepped by Srivasan’s “…History of American Capitalism”. 

America capitalism can do better.  We are no longer a struggling economy like that which existed in the days of the Pilgrims and later so-called robber barons.

Srinvasan is an excellent primer on capitalism but that is history; not a prediction of a future where homelessness, a deteriorating environment, a failing education system, inadequate health care, and racial injustice are ignored.

PISSING IN THE WIND

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

A Fine Mess (A Global Quest for A Simpler, Fairer, and More Efficient Tax System

By: T. R. Reid

Narrated by T. R. Reid

T. R. Reid is a reporter for the “Washington Post”.  He is not an economist.  However, he suggests there are more equitable ways of taxing the American public than presently used by the government.

Reid’s travels around the world investigating other countries tax systems are the basis for his theory for cleaning up America’s “…Fine Mess”. Sadly, Reid has a futile unrealistic attitude that the British characterized as pissing in the wind.

Reid suggests a tax overhaul is due in America.  The last major revision was over 30 years ago.  He argues a mess has been created by incremental tax changes that have greatly exacerbated the wealth gap in America.  Reid illustrates the many ways in which the American tax system is a mess.  An often-quoted factoid is “Warren Buffet is taxed at a lower rate than his secretary”.

There are many economists that would agree with Mr. Reid.  The most famous is the French economist Thomas Piketty who wrote “Capital in the Twenty-First Century”. 

Reid argues the U.S. has the highest corporate tax rate in the world but the lowest corporate taxes collected.  Having the high rate and collecting it are two different things. 

Reid notes corporations like Caterpillar, Apple, Microsoft and others spent millions of dollars to set up legal tax shelters that reduce corporate tax to single digits; to as low as zero for some. 

Reid goes on to explain how billions of dollars are kept in corporate accounts outside of America to avoid taxation, and how that money is not repatriated to the U.S. because of current tax law. 

(Ironically, during Trump’s administration, corporate rate was reduced from 35% to 21%; and continues to be a significantly uncollected tax.) 

Reid persuasively argues that a tax overhaul should be made based on the principle of BBLR, a “Broad Based Low Rate” tax.  The purpose of a tax overhaul would be to eliminate loopholes, broaden and reduce tax rates while equalizing citizen’ tax burden.  Schemes for creating tax shelters would be eliminated.   

As is widely known, millions of dollars are spent by American citizens and corporations to file tax returns.

Preparing and paying taxes is laborious and confusing task for many Americans.  Even basic tax return filings are difficult for many American citizens to complete.  How many do not file because of that difficulty?  Some buy software to file taxes.  Add to software purchases and there is only growing tax-preparation costs to file for others. Those costs are borne by individual tax payers. The expense of our inefficient, and inequitable tax system multiplies geometrically when you add corporation efforts to avoid taxes.

America’s taxing inequity is glaring.  Millions of dollars are spent to avoid taxation through creation of tax shelters.  The formation of these shelters costs millions in lawyer, tax consultant, and auditing fees but save billions of dollars for corporations and the super-wealthy who legally (sometimes illegally) reduce taxable income.

Reid’s point is that America’s “…Fine Mess” can be made simpler, fairer, and more efficient by creating a completely new tax system.  He suggests the corporate tax might be eliminated and replaced by a flat rate with no loopholes.

Reid argues for a “Value Added Tax”.  A VAT would be a combination of local taxes and federal taxes on all consumable goods. 

After collection, this tax would be distributed between States, and cities, as well as the Federal Government.  The purpose of these taxes would be for maintenance of local services (like education, public safety, public works, and administration), and Federally mandated services (like national defense, health, education, and public welfare).

Reid’s argument is that VAT’ enforcement would require less supervision by the government because a VAT applies at each stage of the production of goods.  Each stage of production is rebated for taxes paid by the handler that adds value. The VAT is a combination of taxes at each stage of production which is reported to the government for reimbursement.  The reimbursements must add up to the final tax charged to the consumer.  If the numbers are not the same, the IRS will be able to tell which manufacturer failed to pay their tax.

A simple computer program would be able to monitor the collection of the tax because it must balance to all reimbursements of added value.  In theory, a VAT eliminates much of the need for a massive Internal Revenue Service which Reid suggests is unable to adequately monitor the present taxation system.  Reid notes that it is impossible for the IRS to closely monitor today’s taxing system because of the complicated nature of its Congressionally legislated structure.   

Another BBLR tax recommended by Reid is a financial transaction tax that would be low but capitalize on every financial transaction in the United States. 

This transaction tax would be less than a penny per dollar but capable of raising billions of dollars based on the many financial transactions that occur in the U.S. 

Reid offers the example of Hedge Funds that specialize in massive trades for short periods of time.  These Hedge Fund trades move the stock market by fractions that reap millions for traders.  With a tax on financial transactions revenue would be created for Federal Government programs that serve the health, education, and welfare of the nation.

What concerns a listener about Reid’s argument for a Value Added Tax is its potential for continued inequity.  The poor may have to pay the same price for food, energy, and shelter as the rich.  Reid does not adequately address that concern except to suggest a system would be established to offset that inequity.

Another concern, inadequately addressed by Reid, is the impact on Hedge Fund traders business if they lose the advantage of small changes in quick trades. Will Hedge Fund transactions disappear?

Political will is another issue not adequately addressed by Reid.  What majority of congress men and women will stand up to the many lobbyists who support them in their election?   Will most Republicans and Democrats co-opt or fight special interests that object to a massive change in the American tax system? 

Finally, how would America deal with the lost jobs for tax lawyers, tax preparers, software developers, and corporations that benefit from tax preparation and tax avoidance schemes?

One must agree with Reid’s assessment of America’s tax system.  It is a “A Fine Mess”.  The question is–Do our elected representatives have the political will to clean it up; or at least make it fairer? 

Incremental change of the tax code only makes it less intelligible. In Reid’s opinion, it is all or nothing.  Reid implies “go big” or “go home” because nothing will change if the entire tax code is not replaced.

THE PLAY IS NOT THE THING

By Chet Yarbrough

There are four plays in New York that please some of the people some of the time but not all the people all the time; i.e. “Network”, “Ink, “Tootsie”, and “All My Sons”.  All were excellent Tony Award candidates.  All four had something in common.  Each exposed moral turpitude; three on a corporate level, and one on a personal level.*

Ayn Rand’s mistaken thought that “Virtue of Selfishness” is a social and economic good is eviscerated by these four plays.  They splendidly demonstrate “…Selfishness” is personally, socially, and economically harmful. 

“Network” addresses corporate media and its overarching effect on the public’s understanding of the truth.  “Ink” is about corporate media and how sensationalism and circulation are a volatile mixture that distorts reality.  “Tootsie” is about the personal consequence of lying.  And “All My Sons” is about a CEO’s responsibility to the public.

A book titled “Skunk Works” is a paean to “boys with toys” (before recognition of women at work) and corporate greed. Ben Rich is an engineer that worked for Kelly Johnson at Lockheed.

Kelly Johnson headed Lockheed’s famous design team that created the U-2 spy plane, and the famous Black Bird in the 1960’s. Being an engineer, Rich had a detailed understanding of the facts in plane design, but facts are dead things without a good story. Leo Janos is a writer who turns Rich’s facts into tales of Buck Roger’s daring-do, but a failure of corporate morality.

Ironically, Lockheed became the talk of the century in the 1970’s; not for their incredible design work, but for bribery.  Italy, West Germany, Japan, Netherlands, and Saudi Arabia are paid $22 million dollars to buy airplanes designed by Lockheed. That American law violation leads to the resignation of the Lockheed board.

“Skunk Works” is an entertaining and enlightening history of military weaponry. It illustrates the difference between a scientific research company and an industrial production company. Different skills are needed for managers of research than managers of production.**   

The play “All My Sons” is about a CEO that produces engines for WWII military combat planes in the 1940s.  The assembly manager calls his CEO to explain there is a crack in the blocks of twenty (or more) of the engines they manufacture.

The decision is made by the CEO to weld the cracks to make them look complete and unblemished.  The planes with those cracked blocks fail, and 21 pilots are killed. 

The company is sued.  The managing partner who made the call to the CEO is sent to prison because the CEO denies ever having told the process manager to conceal the defect.  The truth is revealed many years later.  The CEO rationalizes his action based on a selfish belief that he and his family’s life were more important than his process partner’s sentence to prison, or the pilot’s lost lives.  Is their a parallel in today’s Boeing arguments?

In “Skunk Works”, the inefficiency of government is exposed. On the one hand, inefficiency offers more time for deliberative decision; on the other, it impedes productivity and increases cost. Finally, the story opens military competition among nations that leaves only hope that the destructive power of nations will not destroy life on earth.

The last chapters of Rich’s story argue that government bureaucracy gets in the way of military innovation. He argues there is too much oversight and too many regulations increase costs and discourage innovative change.


Of course, the other side of the argument is about what happens when profit becomes more important than honesty or morality. Two Boeing planes, their pilots and passengers are dead as a result of inadequate oversight and what, at best, might be called self-interest.

Boeing 737 Max Malaysia Crash on March 11, 2019 kills 157 people.

The defense industry, like all human enterprises, has its Bernie Madoffs (the stockbroker maven who stole investment funds) and Angelo Mozillos (the ex-Coutrywide CEO who paid a fine for his questionable mortgage lending practices).

Oversight and regulation are essential to all forms of society because of the nature of humankind.  “Network” has the famous line “I’m as mad as hell, and I’m not going to take this anymore!”

Yes, you will be mad. and yes, we do take it again and again.

*It always comes down to a personal level, but the consequence is magnified by corporate immorality.  

**Science and engineer managers rely on worker autonomy.  Process managers rely on set rules for assembly line workers that manufacture complex products. It is science and engineering knowledge, more than rules of production, that determine product.  But, assembly experience, more than science and engineering knowledge, completes product.

JOB CREATION

Audio-book Review
By Chet Yarbrough

(Blog:awalkingdelight)
Website: chetyarbrough.blog

The New Geography of Jobs

By Enrico Moretti

Narrated by Sean Pratt

Enrico Moretti (American author, econonomist, and Professor of Economics at the University of CA.)

Enrico Moretti suggests jobs in America have a new geography.  As a professor of economics, Moretti notes how technology reshuffles the nature and location of jobs around the world.  Great manufacturing cities like Detroit, Pittsburgh, and Chicago are losing jobs in the 21st century.  More jobs are moving to places like Seattle, Portland, Silicon Valley, and Austin.  Tech employment is creating more jobs away from historic manufacturing hubs.

Manufacturing job losses 1997 to 2012 as a percentage of working age populations.

Manufacturing jobs are declining in American cities. That decline is memorialized in a New York Times magazine; distributed in the May 5, 2019 Sunday paper.  The human cost to Lordstown, Ohio, when G.M. closes its Cruze automobile manufacturing plant, is heartbreaking.

In the early years of tech, companies like Apple, Microsoft, and Google chose business locations based on where they wanted to live; not where labor existed.

Moretti suggests new job creators choose city locations based on factors other than manufacturing labor.  Moretti suggests University locations have some effect, but decisions made by early entrepreneurs seem serendipitous; more than reasoned.  Their initial start-ups may be in any community because their ideas are new.  Their technologies are unproven. Their new employees are generally young, inquisitive, college educated, and innovative.  If these new job creators attract investor interest, they grow their companies through culturally shared purpose.

Not only is there the multiplier effect of unrelated domesticate services, there are new technology companies that choose the same communities. The culture grows to what Moretti suggests is enough density to attract the best and brightest in the world.  Incomes rise for all businesses in that community.  Even though these communities become more expensive to live in, they continue to attract tech companies because of the savvy technological depth of the area.

What Moretti notes is that if new tech ideas have legs, innovators locate in the same area.  Like germs on a petri dish, they multiply to create a new culture. 

Moretti acknowledges foreign manufacturers pay their laborers less but, more ominously, he notes foreign countries are doing a better job of educating workers to more fully embrace technology. That embrace begins in grade school and advances through higher education. China’s, Vietnam’s, India’s, Taiwan’s, and South Korea’s emphasis is on science and mathematics.  In the U.S., Moretti cites numerous studies showing the quality of American education, particularly in science and mathematics, is declining. 

Moretti notes manufacturing decline is partly based on automation, but more fundamentally on a deteriorating American education system.

Science Curriculum Ranking in the world.

The irony of Moretti’s observation is that many graduates of American universities are foreign students that are compelled to leave America when they finish their degrees.  They are unable to remain in America because of America’s restrictive immigration policies.  Adding to government immigration policy limit is America’s failing education system; not only at a graduate level, but at the preparatory level of America’s grade and high school curriculums.

As an economist, Moretti explains the multiplier effect of companies that choose to operate in the U.S. and world where labor is best educated; particularly in the field of technology.  Additionally, Moretti suggests foreign governments are proportionately outspending the U.S. in science research and development.  America is falling behind and risks its future as a multi-cultural center and economic power in the world.

Historically, most Americans are immigrants.  Moretti is certainly right in arguing America’s education system must improve, but that improvement needs children of parents who are intent on making their lives better.

What is missed by Moretti is that immigration is important to America; not only for the technological elite, but for first-generation immigrants.   From that pool of humanity, America became the most successful industrial nation in the world.  That prominent position is threatened by America’s current leadership.