Marty Manley on economics, politics, technology, and culture

Whatever Happened to the United Farmworkers?

On New Year’s Day, a friend mentioned that Frank Bardacke had published his long-anticipated history of the rise and fall of Cesar Chavez and the United Farmworkers. It was worth the wait, he assured me and “completely stunning. Just get it and read it. You won’t put it down.”

He was right.

Bardacke, a respected labor activist and educator based in Watsonville California, was first mentioned in this blog six years ago in connection with his research on Cesar Chavez. Like Bill Gates and Mark Zuckerberg, he dropped out of Harvard after his freshman year and moved west to change the world. Unlike them, he joined the Berkeley Free Speech Movement and has had an abiding interest in radical politics ever since. In the early 70s, I traveled to China with Bardacke to get a first hand look at Mao’s proletarian dictatorship. Frank admired all things proletarian; I feared the dictators. Bardacke often views the world through a different template than I do, but I have learned a lot from him and continue to have enormous respect for his views.

Bardacke became a farmworker – one of a handful of Anglos and surely the only former Harvard student to work the celery fields. He became fluent in Spanish and formed friendships with many of the union staff and farmworkers who appear in his book. He spent more than a decade interviewing every major participant in the drama, reading every known book on the farmworkers and scouring every archive. He received help in managing this massive project from faculty in history and politics at nearby UC Santa Cruz.

The result, Trampling Out the Vintage: Cesar Chavez and the Two Souls of the United Farmworkers, is the most complete account yet of the rise and fall of the UFW. It is also an epic, Shakespearean drama with all of the elements of a Hollywood blockbuster. The pitch meeting would be surreal:

OK, picture this: we have a conservative Catholic who fasts and marches like he’s Ghandi. He courts progressive clerics and hires liberal Jews and alienated Anglos to mobilize immigrant Mexicans and Philipinos to fight Slavic and Italian growers. At first David slays Goliath, but then he morphs into King Lear and destroys his newly built kingdom amidst slaughter and recrimination. We’ve got side plot romances between devotees who work for $5/week and bad food trying to raise farmworker pay. We’ve got violent Teamster, UFW, and grower thugs straight out of the Sopranos. We’ve got a certifiably batshit human potential guru who wreaks havoc getting everyone to criticize everyone else. And under the carpet here somewhere, we may even have communists trying to advance a proletarian revolution without a proletariat. How can we miss?”

Astonishingly, it is a true story and Bardacke delivers it with intelligence and compassion. Unique among labor historians, he grounds his analysis in “the work itself”, with brilliant, memorable descriptions of how different stages of production for different crops in different regions of California all affect the ability and willingness of different crews to self organize. He describes clearly why organizing was often sustained by the tight-knit, highly skilled lechugeuros or the celery cutters, not the garlic or asparagus workers or those in ladder crops. He describes the skill and endurance that the work requires, introduces leaders that arise from various crews, and captures in fine detail how they interact with a union that was built on a very different set of principles from farm work. In a decade spent organizing waiters, housekeepers, nurses, bartenders, machinists, cannery workers, and assembly workers, I observed precisely these differences. The work itself shapes our propensity to organize. Bardacke is the first writer to apply this principle to the fields and he does so with a deep understanding and compassion for the work.

Bringing an existing union into a workplace is an act of industrial combat not for the faint of heart — but starting a new union from scratch is a herculean task that almost always fails.  I started a company that has lasted more than a decade, a public agency that lasted three years, and a union (United Espresso Workers – I was a bit early) that lasted all of three weeks. With the proud exception of the United Farmworkers, I cannot think of a single independent union formed in the United States in the past 50 years that was not sponsored and controlled by an incumbent union (I can think of several that tried and died – but none who made it).

This was not always true — new unions once spawned regularly in the US. There are many reasons for the change, but the lack of competition between unions has positioned them nicely for extinction. Organizations evolve through the mutation, variation, and selection that is always produced by competition. The labor movement stopped growing the instant the AFL joined with the CIO and prohibited unions from competing with each other. When two teachers unions competed, both grew. The instant the Teamsters stopped raiding the UFW, growth stopped. I hated the Teamsters (who were kicked out of the AFL-CIO for corruption and are not subject to the noncompete provisions) and I took a nasty beating from them once, but like sharks or wolves, they have their place in the ecosystem. (I am aware of no union leader who agrees with this view, by the way. Most feel that they have all the competition they can handle from employers).

But for a brief moment following the civil rights movement in the 1960s, a new labor union arose in the United States and in the least likely place. If you had asked in 1960 where in the economy a new union might appear, you would never have selected the farmworkers of California. Organizers prefer workers who are tied to one place and to one employer, not workers who are seasonal and often itinerant. Probably wrongly, organizers prefer workers who are covered by labor laws, which had always exempted farmworkers. Organizers like English-speaking Americans, not Tagalog or Spanish-speaking immigrants or Braceros who are tolerated for a season then ushered back to Mexico. A dozen or so failed efforts by farmworkers to form agricultural unions seemed to validate Marx and Lenin’s belief that workers would organize once they were forced into factories and worked for a single employer.

Bardacke demonstrates that Cesar Chavez succeeded in organizing farmworkers because he was, at heart, a brilliant and hard-working Alinksy-trained community organizer. As a community organizer, Chavez pioneered an enormous innovation that had the potential to transform labor organizing: he mastered the secondary boycott (illegal for most workers under the federal labor law, which thoughtfully excludes farmworkers). Chavez tirelessly organized enormous boycott operations in grapes, lettuce, and against major retailers including Safeway.

Farmworker boycotts were the Occupy movement of the 70s and 80s – a way for college students, community activists, and middle class young people to participate directly in the tough work of social change. And credit Chavez’s brilliant leadership, it worked magnificently: faced with effective boycotts, growers raised wages and improved working conditions and politicians begged the army of grass-roots Chavistas to help register voters and turn them out on election day. The UFW became a powerful force for social change.

But the UFW was only briefly a powerful labor union. Bardacke correctly diagnoses the boycott as creating a formidable tension within the UFW. He frames the tension between labor and boycott organizing as a struggle between the “two souls” of the UFW. The metaphor is fraught. As Bardacke demonstrates, the UFW collapses not because it has two souls, but because none of its activities were organized, financed, or led in a manner that enable them to grow. The problem is not that community organizing is a distraction – most American labor unions lack a community service organization and are much the weaker for it. This is tragic: having discovered and refined one of the few recent innovations in union organizing, Chavez cannot let it grow. Instead, he strangles his own child.

One of the heros of Bardacke’s book is Marshall Ganz, one of America’s most innovative labor organizers. Ganz also dropped out of Harvard, but moved south to organize for civil rights before heading west. After his exile from the UFW, Ganz helped the Silicon Valley Central Labor Council build a powerful neighborhood-based political organization for the 1984 elections. He was terrific at posing fundamental questions – and at directing me and others to writers and thinkers who helped answer them. In 1984 he urged me to read, of all things, a business book, In Search of Excellence. I quickly developed an appetite for business writing. decided to get trained in it, and ended up working with the book’s authors. Marshall returned to Harvard, got his degree after a 28 year hiatus, and now teaches at the Kennedy School. (His version of the UFW story, told in Why David Sometimes Wins, is a fine companion volume. It suffers for being his PhD dissertation and dwells more deeply on theories of organizing and less on the dynamics of local struggles).

So let’s ask a Marshall Ganz-like question: what does it take for an organization to grow successfully? Venture capitalists, a group not deeply concerned with the welfare of those who produce their salads, obsess about this question. There are at least as many answers as there are VCs, but common elements include:

• A big market. If there is not substantial demand for the product or service an organization produces, the organization cannot get very big.

• Positive unit economics. If serving one more person imposes more cost on the organization than it generates in revenue, then growth makes no economic sense and the organization will depend for growth on funding from charity or government. Anyone can sell a dime for a nickel; selling a nickel for a dime means that an organization has to add at least a nickel’s worth of value if it wants to grow.

• Customer or member acquisition costs that scale. Every organization has a cost of acquiring a customer that must be repaid over the lifetime of that customer or member. Smart organizations exhibit declining COA: the cost of acquiring each incremental customer declines with scale. Very smart organizations (and effective social movements) are viral: COA approaches zero as current participants recruit new ones. See Facebook, Google, or Arab Spring.

• Leadership. Growth is very, very demanding on an organization. Everyone in a fast-growing organization has to grow with it: jobs change radically every few months. Not everyone grows at the same pace, so leaders must recruit furiously, communicate direction and values continually, promote and replace people regularly, and test what works all the time. It is stressful and a lot of fun – ask anyone who has been involved in a fast-growing company, boycott, strike, or organizing campaign.

Back to the fields. Boycotts have completely different economics than labor organizations. Boycotts have huge markets: liberals eager to shop their conscience. Churches and colleges do the recruiting at very low cost to the boycott sponsors. Every convert adds more value (the grapes they don’t buy) than cost (the very low cost of volunteers leafleting).

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What Lives After: Remembering Five Who Died This Week

Shakespeare’s immortal eulogy delivered by Mark Anthony for Julius Caesar resonates this week: “The evil that men do lives after them; The good is oft interred with their bones.” We lost five remarkable men from different parts of the world. Four of them made the planet an immeasurably better place. One devoted his life to evil that survives his death.

George Whitman, 1913-2011

I have known hundreds of booksellers; the most memorable by far was George Whitman, proprietor of Shakespeare and Company, across from Notre Dame at point zero in Paris.

His store, like its namesake run by Sylvia Beach during the 1930s, became point zero for two generations of writers and wanderers. I am one of tens of thousands of people who was taken in by George, absorbed into his literary world, made part of his little “Rag and Bone shop of the heart”. George never cared about money, food, or finery — he cared about people, literature, and travelers. He was especially drawn to young people, to whom his generosity was legendary.

I last saw George four years ago. My tribute to him at the time reads nicely today. I recalled my days living in Shakespeare in January of 1976, decades after Jackie Onassis had come through as a student and around the time that a young Greek immigrant named George Soros hung his hat at Shakespeare & Co. for several days.

The New York Times ran a wonderful obituary about George, who had written his own eulogy years earlier. Inscribed over a doorway that led to the upstairs of Shakespeare was a motto: “Be not inhospitable to strangers,” it counseled, “for they may be angels in disguise”. George did not, in fact, treat every visitor like an angel in disguise. But he gave visitors a place to discover their literary angels, and more than a few rose to the challenge.

 

Christopher Hitchens, 1949-2011

A life that partakes even a little of friendship, love, irony, humor, parenthood, literature, and music, and the chance to take part in battles for the liberation of others cannot be called ‘meaningless’ except if the person living it is also an existentialist and elects to call it so.”

and

Beware the irrational, however seductive. Shun the ‘transcendent’ and all who invite you to subordinate or annihilate yourself. Distrust compassion; prefer dignity for yourself and others. Don’t be afraid to be thought arrogant or selfish. Picture all experts as if they were mammals. Never be a spectator of unfairness or stupidity. Seek out argument and disputation for their own sake; the grave will supply plenty of time for silence. Suspect your own motives, and all excuses. Do not live for others any more than you would expect others to live for you.”

Hitchens was always provocative, occasionally irritating, and frequently funny. I will miss his voice enormously.

 

Vaclav Havel, 1936-2011

Imagine a political upheaval so profound as to be accurately called a revolution, so bloodless and smooth as to be called velvet, and so artistic that its leader was a playwright who conducted the insurrection from, and I am not making this up, the Magic Lantern Theatre, in Prague. Vaclav Havel is the Nelson Mandela of Eastern Europe, and his personal role as catalyst of the communist collapse his hard to overstate. From the Times:

In 1977, Havel was one of three leading organizers of Charter 77, a group of 242 artists and activists who called for basic human rights in Czechoslovakia. Havel was arrested and imprisoned. He spent five years in and out of Communist prisons, lived for decades under daily police surveillance and suffered the suppression of his literary works.

Later he served 14 years as president, resigning rather than see his country separated. He is author of  19 plays and dozens of essays, including “The Power of the Powerless”, which influenced a generation of activists much as King’s “Letter from a Birmingham Jail” had done in the United States. By the time he became President of Czechoslovakia, Havel had written more serious fiction than most heads of state had read.

Timothy Garten Ash, then a British graduate student, witnessed the remarkable Havel in action during the Velvet Revolution. Havel’s moral standing, his poetic use of language, and his patience made him as the dominant figure in resistance politics in Prague in 1989. Garten Ash reports in his indispensable first hand account of events that year in Prague, Budapest, and Berlin that Havel served as the chief behind-the-scenes negotiator who brought about the end of more than 40 years of Communist rule and the peaceful transfer of power. The revolt was so smooth that it took just weeks to complete and not a single shot was fired.

 

Warren Hellman 1934-2011

In business school, I became friends with Marco, the kid in the next seat everyone called Mick. I recall the day when a classmate told me “his father is Hurricane Hellman — the youngest partner in the history of Lehman Brothers. He ran the place before he turned 40″. Although I only met Warren Hellman a handful of times, I came to respect him as an icon of a group of prominent postwar Bay Area business Republicans who were deeply civic, secular Jews whose contribution to life in these parts is rarely noted. Architect Art Gensler and Gap Founder Don Fischer are others, as, excepting the Republican bit, are banker Bill Hambrecht and Levis heir Robert Haas.

If you live in the Bay Area, it is hard to overstate the impact of Warren Hellman. He saved San Francisco over a billion dollars by financing a ballot measure to reform the city’s tottering pension system. He built the parking garage beneath teh DeYoung Museum in Golden Gate Park. He chaired the Board of Trustees at Mills College and reversed the decision to admit men (still a very popular decision, although I have argued a dubious one). He funded the San Francisco Free Clinic and endowed aquatic sports at UC Berkeley, where he had played water polo as a student. And in 2001, Hellman launched the Hardly Strictly Bluegrass festival, an annual three day event in Golden Gate park that draws more than 300,000 people and is put on for free. Hellman paid the musicians, usually including EmmyLou Harris and the late Hazel Dickens. Hellman himself was a serious amateur banjo player and toured with his group, the Wronglers, until quite recently.

Hellman was not only born into a remarkable family, but he created one as well. He was the great grandson of Isaias Hellman, California’s first banker, who created what became Wells Fargo Bank and built the University of Southern California. His kids are high achievers who share his passion for athletics. Warren competed in extreme sports, once finishing a 100-mile high altitude race in the Sierra after falling and breaking a rib at mile 25. His kids have won championships in m mountain bike racing, skiing, and other sports.

Hellman was the sort of one percenter that the Bay Area loves: a guy who took much more pleasure from giving his money away than he did from making it; who walked away from Wall Street to build an investment firm as “the opposite of Lehman Brothers”, who rarely wore a tie and never seemed to take himself terribly seriously, and who was disarmingly candid about his many failures. He has much to teach the pashas of Silicon Valley; I sincerely hope that they are up to the task.

 

Kim Jong Il, ??-2011

Those looking for evidence that God has a sense of humor had a fine week. Not only did the Iraq war and the life of Christopher Hitchens end on the same day, but the loss of four of our finest was followed by the unmourned death of perhaps the worst human alive.

History will struggle to find a single kind word to say about Kim Jong Il. He built a hermetic garrison state, imprisoned and starved millions of his people, sponsored untold terrorist activities including the downing of a civilian airliner, and undertook military provocations and kidnappings against Japan and South Korea. He developed and tested thermonuclear weapons and sold them to some of the most unstable governments in the world, including Pakistan. He refined his doctrine of Juchu into a personality cult that represents the precise opposite of everything George Whitman, Christopher Hitchens, Vaclav Havel, or Warren Hellman stood for. 

As Shakespeare predicted, the evil that Kim did will survive him. Kim’s sudden death is problem for South Korea but an even larger problem for China. China has tended to treat North Korea as their pain-in-the-ass psychotic kid brother who refuses his meds but performs a useful service by keeping the neighbors on their guard. But an unstable North Korea is not a good thing for China. There is a strong argument that China will need to take over North Korea as a client state — effectively a new province. In a generation or two, Korea would either unify in a Chinese economic sphere or the North would be forcibly absorbed, Tibet-like, into Han culture. It ain’t Jeffersonian democracy, but it is hard to argue that this would be a worse outcome for the people of North Korea than the continued demented rule of the last standing communist dynasty.

Protection That Makes You Weaker

I have taken up running and, like boomers everywhere, I worry about hurting myself. Data suggest that between a third and half of runners get hurt running every year, making running a surprisingly high risk exercise. Why is this?

Journalist Chris McDougall wondered why he was getting hurt when humans have been running for two million years. His best-selling book, Born to Run, is a well-told tale of people who run barefoot without getting hurt and of researchers who discover a paradox: support can make you weaker, not stronger. The more support a running shoe gives you, the more it weakens your foot, ankle, and calf muscles and the more prone you become to injury.

McDougall presents the stories that led to the science and the science that has led to a resurgence of barefoot or minimal shoe running. He visits the Tarahumara, an impoverished clan of long distance runners living in the very remote Copper Canyons of Mexico. McDougall romanticizes their lives, describing men and women of all ages routinely running for dozens of miles in sandals over hot, steep mountains.

Scientists have studied the Tarahumara for years because their isolation makes them good subjects. As roads arrive, the Tarahumara embrace modernity: their diet goes from corn meal and long runs to pickup trucks and Hohos. Epidemiologists have documented the diabetes, cancer, and heart disease that result. McDougall looks past this, focusing instead on the propensity of the canyon-dwelling Tarahumara and some of their more crazed gringo brethren to race ridiculous distances wearing heuraches cut from old tires.

Back home, McDougall consults a Stanford track coach who refuses to let his athletes wear expensive running shoes and discovers data suggesting that both the extent and severity of injuries go up with the price of shoes. He interviews Daniel Lieberman, a Harvard biomechanics professor, who explains precisely how the support a of a running shoe makes most runners over stride and heel strike, which delivers a much sharper blow than a barefoot runner who lands mid foot. A good video of Lieberman explaining his research is below. The peer reviewed work is here in Nature.

Lots of testing and learning is still being done both by individuals and by researchers, but nobody these days takes for granted that running shoes are always helpful. Shoe companies are trying to shift their designs and their message to promote “minimalist” shoes, some of which are now best-sellers.

Is this just a fad? Of course any shoe can become a fad if well marketed. On the other hand, humans have run barefoot for two million years but have worn running shoes for only about 30. I would not bet against barefoot running, given the injury rates that shod runners experience.

Protection turns out to be deceptive. It seems completely normal to me that as a runner, I would prefer a protective shoe. I want lots of cushioning. I want to avoid pronation, which must be awful because it sounds so bad. It would be simple to sell me orthotics — hey, my knees hurt sometimes. Although some people surely do fine in running shoes, for many people, highly protective shoes are like a cast. They reduce your mobility and your foot gets continually weaker as a result.

Economists, of course, know that protection often makes competitors weaker. They believe instinctively that competition strengthens counterparties, be they muscles, individuals, teams, companies, or regions. I have even argued that those who want stronger labor unions need to force unions to compete. Economists left and right can show that trade protection weakens both parties, although this knowledge never stops companies, communities, or workers who are hurt by trade from seeking it. Doubtless some similar principal applies to parenting: too much protection weakens your kids. Fine, now buckle your damned seat belt.

To evaluate social programs or parenting, we need the equivalent of the Tarahumara — a group isolated from extraneous influences that can test whether social protections produce more benefits than costs. Fortunately, an impressive young economist has shown that many of our protective programs are testable. Esther Duflo is an MIT professor, a MacArthur genius grant winner, and the winner of the  2010 John Bates Clark Medal for the best economist under the age of forty. Watch her fascinating TED talk on how she tests programs to fight malaria, educate kids, and immunize children. This is barefoot economics at its best.

Testing of this sort requires an appetite for failure. Politicians, business people, and scientists each approach tests differently, depending on how failure affects them.

• Politicians pay a huge price for failure. This forces them to simplify problems and promise sound bite solutions. If they do not do this, they won’t be elected and they won’t be politicians. Politicians cannot say “wow, this is a tough problem. Let’s try a bunch of things, fail at most of them, and learn what works.” Most politicians suffer from what Tim Hartford calls the “God Complex”. Hartford writes the Undercover Economist column for the Financial Times. He has published a terrific book called Adapt: Why Success Always Starts with Failure. You can get a flavor of his thinking at his fantastic TED talk. The God Complex is the equivalent of intelligent design: certainty that complex systems can best be managed centrally and that complex questions can be answered without the painful process of trial and error. Parents, CEOs, physicians, gods, and anyone else who pays a high price for failure are especially vulnerable.

• Business people embrace trial and error mainly because markets force them to. Hartford notes that ten percent of all businesses fail every year.  A market economy can be looked at as a huge, ongoing experiment that evolves, like every complex system, because of variation and selection. The best leaders of complex systems acknowledge that leading edge problems don’t have obvious solutions and encourage a structured process of trial and error. Hartford’s book discusses the value of lots of small, low cost trials that are decoupled so that they don’t spill over and of carefully documenting and interpreting results. An important and highly recommended read.

• Scientists love failure. It’s how they learn. They understand that humans have evolved as complex systems through millions of years of variation and selection. They reason either deductively from data or inductively to ask have we evolved to run? Evolutionary biologists have long noted that the unique way we sweat for thermoregulation, our hairlessness, our odd bipedal design (more energy efficient than any quadruped), our unusual ability to breath multiple times per step, and our highly engineered feet, ankles, and hips all suggest anatomy designed to run.

But until the 1980s, researchers were stymied by one big problem: we are slow. Why on earth would running matter, when every mammal worth eating can outrun us? 

It fell to David Carrier, a graduate student at the University of Utah, to notice something that had escaped other scientists: we are built for endurance, not for speed. The case for humans designed for endurance running is now widely accepted. This is partly because we have discovered a story that backs the data. Hunter-gatherers in the central Kalahari Desert in Southern Africa still practice persistence hunting: they run their prey to death (there is one other group that practices persistence hunting — or at least remembers it. Our pals the Tarahumara). Running down a large mammal takes as little as an hour or as long as 8 hours, but if a human can keep a mammal galloping so that it cannot catch its breath, cool down, or rejoin its herd, it will collapse of exhaustion before the human does. It appears that before we invented spears, humans survived by high-endurance, persistence hunting. Barefoot.

The BBC managed to film a group of men in the Kalahari hunting a kudu this way. Despite the drums and the breathless narration, it is a stunning film. Notice that the runners are shod in cheap shoes that do not let them heel strike. They look a lot like the sneakers we all wore as kids.

Three Dimensional Science

The World Science Forum currently underway in Budapest is a summit of academics who have traded their lab coats for leadership positions atop public and private agencies that promote and fund scientific research. These are fine people who support some of the best work in the world — balancing real, complex science with often Byzantine organizational and national politics to advance the intellectual work that drives our world forward. To an outsider (that would be me), they are also convivially self-parodying academic Eurocrats and lobbyists who could have walked off the pages of a David Lodge novel.

The United States maintains posh embassies around the world to host worthies from events such as these and our current ambassador to Hungary did not disappoint. Obama’s emissary is Eleni Tsakopoulous Kounalakis, Berkeley grad but Stanford donor, daughter of a real estate tycoon and a California-based Democratic activist of the Phil Angelides school of progressive realtors. She raised more than a million bucks for Hillary, which made her ambassador material. Budapest isn’t bad duty (one can imagine her politely passing on an opportunity to serve in Athens, the family homeland).

She was a fine hostess and thoughtfully included entrepreneurs from interesting Hungarian startups including Prezi, UStream, Logmein, and NNG (formerly iGo). But the highlight of the reception and dinner hosted at the embassy came when Koualakis tapped my shoulder to introduce a short, shy, graying fellow “I’d like you to meet Erno Rubik”. I fought back the urge to bow, shook his hand, and realized that he, like many others in the room, would rather be working.

Rubik is, of course, the inventor of the world’s most popular toy — the maddening twistable puzzle instantly understood by any child and rarely solved even by accomplished adults. It has spawned an industry of competitions, including speed-cubing, foot cubing (current world record for solving a Rubik’s cube using only your feet is a bit over a minute), and blindfold cubing (look at the scrambled cube, get blindfolded, and work from memory. Good luck with that.)

We were all challenged to complete a scrambled cube (yeah, I know. There is an app for that. You photograph the cube and it shows you how to solve it. Erno even earns royalties on every download. But for once, I resisted). Personally, I always thought that the real innovation behind the cube was the weird bit of plastic in the middle that can be twisted every which way without breaking. And yes, I have taken a cube apart to see it, although I admit that there was a hammer involved. (If you want to try it, just twist the top 45 degrees and you can pop the thing apart pretty easily. Of course, you can reassemble it solved — that’s how many people do it).

Naturally neither America’s top scientists nor Hungary’s top entrepreneurs, people who solve three dimensional problems in their sleep, could restore a scrambled cube, which got me to wondering: which came first, the mathematics of the cube, or the puzzle itself? Surely a brilliant Hungarian mathematician like Rubik had computed the various solutions to a cube. Perhaps he had even tried to solve the “God number” question: what is the fewest number of moves that will restore any cube? The God number turns out to be 20 for a 3*3 cube, and a lot of mathematics together with 35 years of Google-donated CPU time went into figuring that out. Turns out however, that Rubik is an architect and game designer, not a mathematician.

There are of course, people who make solving Rubik’s cubes look incredibly easy. For example, the world’s record for solving a cube is….you won’t believe it. So watch — but don’t blink or you’ll miss it.

Hang 30: Time Surfing

Been awhile since we showed first rate surfing videos. This one from Aussie Rip Curl, uses a “30 camera array” and six world class surfers to enable editors to shift perspective, freeze frame from a combination of angles, and create the “Matrix” like illusion of perspective. Pretty cool.

They also produced a video on how they produced the video. Worth a look.

Seven Forces that Doom Bookstores and Publishers

During the past few years, the music industry has been hammered. As music went digital, it was pirated, deconstructed, and mashed. As music stores and labels disappeared, their lobby, the RIAA, screamed bloody murder.

But amidst the carnage, a funny thing happened: the music industry grew larger even though it had fewer labels and far fewer retailers. Revenue from CDs was replaced by revenue from live concerts, ring tones, downloaded singles, merchandise, and sponsorships. The new industry has its challenges (many of them traceable to lousy music), but it has hardly collapsed.

This transformation presages the coming destruction of traditional book publishing and retailing, even as their overall publishing industry grows. Here are the seven reasons that bookstores and traditional book publishers are doomed.

7. Americans have stopped reading books. This is a non-trivial problem (after all, we did not stop listening to music). But the landmark National Endowment for the Arts study “Reading at Risk” confirms what we intuitively know: Americans read less than we used to. 43% of Americans read no books outside of work or school — a number meaningfully lower than Canada or most European countries.

Those who do read books, don’t read many of them. About 24 percent of Americans read eight or more books in 2002, a lower percentage of “strong readers” than two thirds of European countries surveyed. Only 16% of the US population reads a book or more each month. According to Morgan Stanley, 20% of all book buyers purchase a majority of all books. Men read much less than women. NPR reports that among active readers, women typically read nine books in a year, compared with only five for men. Women read more than men in all categories except for history and biography.

When most of us read, we prefer magazines and online articles that are shorter and less demanding than books. Kind of like you are doing right now.

6. Many of the books we read are crap. The largest single book category is still romance novels — a fact so embarrassing to the New York Times and other tastemakers that they exclude the category entirely from best seller lists. These bodice-rippers, together with religion, self-help, fantasy, and thrillers, account for a majority of books sold in the US (Gothic romance, which did not exist before 1972, by itself accounts for a majority of all paperback sales). Nearly all of these sales are to women, but women buy and read a lot more books than men even if you adjust out the Harlequins.

Part of this is, no doubt, that brains exposed to constant media are not well wired for long form reading. We prefer writing that is built around tidy lists…oops. Nice essay to this effect by Alan Jacobs (hey, if you have read this far, you can manage it).

5. We can easily get books for free. Just Google “Torrent” and “Books” along with anything else and you will be directed to many sites that enable you to download books as pdf files easily readable on a tablet or an eReader. The site I checked helps you steal any of several dozen books on religion, most of which presumably counsel the reader against theft.

It is always hard to estimate the economic impact of illicit downloading. I wonder if the net effect isn’t positive, even if authors howl. WordPerfect marketer Pete Peterson had a sensible point when he said that “if someone is going to steal software, I hope they steal ours”. Every illegal download is not a lost sale — but every time a reader finishes a book and raves about it, the marketing leads to new sales. Realizing this, most publishers will let you read the first chapter for free anyway. If we see publishers offering books for free but with advertising, we will know that the torrent sites have struck a nerve.

My current bet is that it won’t happen for the same reason that iTunes curbed illegal music downloading. Customers like the ancillary content and the reliable file quality enough that if the experience is frictionless and the price sensible, we will pay.

4. “Books” are mutating.  Like music and movies, books are becoming a service, not a product. Today Amazon launched its Kindle Lending Library, which turns books into a service like Spotify for music or Netflix for movies. The number of publishers who have embraced this idea? Zero. These guys would rather face the Torrent sites than let Amazon loan their books. But publishers need to monetize their back list. Over time, they will do a deal with Amazon, even if they require Amazon to purchase a new copy after a finite number of rentals. Many publishers require libraries to do that now — and would doubtless oppose libraries as socialist if Ben Franklin hadn’t established libraries before they got organized.

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One more thing: Real artists ship.

In preparation for landing at SFO, I had closed the MacBook Air and turned off the iPad, but as I touched down, my iPhone beeped. The text from my son made my heart sink: Steve Jobs died . At least three people left the plane in tears.

I felt like someone had unplugged my compass. Steve Jobs was by any reasonable measure the greatest entrepreneur and the greatest CEO in American history. He was a hero to his customers, but to most technology entrepreneurs, he was a God. He revered the Beatles and always reminded me of John Lennon: a genius with round glasses, a rebel with a mischievous grin, and an artist who showed the world things that it had not realized it wanted. With both, it takes years to absorb the full loss.  

Steve Jobs had the soul of an an artist. Like Leonardo DaVinci, Samuel B. Morse, or Edwin Land, he lived at the intersection of humanities and technology and could ruthlessly carve away marble until only his vision of beauty remained. He was a practical poet who understood that “real artists ship”. He accomplished his goal of “making a dent in the universe” — but his premature death has left a dent in the hearts of people the world over.

Steve was the rarest of creatures: a business revolutionary motivated by a deep love of technology and its power to change the rules. We always knew that his “Think Different” ad was really about him:

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.

Steve broke rules eagerly. He dropped out of college and dropped acid. He fathered a daughter and disclaimed her, much as his Syrian biological father had lost track of him. He followed very odd diets and lived on communes. At age 20, he made a sojourn to India to see a guru. He learned to focus and focus some more. Often, this meant removing features. The original Mac had no cursor keys. Steve was the first to take away keyboards, mice, modems, floppies, Flash, screens, and CD-ROMs. Reviewers raged and the digerati derided him, but Steve knew that “innovation means saying no to a thousand things”.

His passion often made him obnoxious. Seated next to him on a flight in 1979, he learned that I had made my Apple II usable for word processing by inserting a Z-80 card so that I could run WordStar under the CP/M operating system. He was appalled: “Why on earth would you ever do that?” he asked twice, shaking his long hair and making it very clear that I had flunked the bozo test. He publicly insulted competitors and employees. He launched huge products, including the iPad, with no market research (“it is not the consumer’s job to know what they want”.) At a dinner in 2006, he repeatedly assured me and others that Apple would never sell a telephone under any circumstances. Nobody believed him for a moment (six months later, he unveiled the iPhone), but any other CEO would have deflected the rumor instead of lying outright. This sort of behavior famously got him fired from his own company.

I harped constantly in this blog and elsewhere on his insistence that he control every aspect of the user experience. I recall construction workers building Pixar across the street from my company shaking their heads in awe every time Jobs would land on the property in his baby blue helicopter and take a pencil to their blueprints. He spent millions moving walls and even foundations at the last minute so they would end up precisely where he thought they should go.  He obsessed about details that few CEOs notice (when you upgrade your iPhone next week, notice that as you bring the message shade to a full close, a very tiny animation rounds off the squared edges. Nobody but Steve Jobs would bother to do that.)

Steve Jobs failed. A lot. The Apple III was a disaster. The Lisa sold so poorly that tens of thousands of computers named after his daughter ended up in a large land fill in Utah. You have hardly heard of the Pippin, the Newton, the Copeland, HiFi, the G4 cube, Mobile Me, and several other products that were complete busts. It didn’t matter. Jobs remained unbelievably self-assured and ridiculously demanding. Over the years, I met several Apple employees who worked insane hours and suffered nervous insomnia because they had to present a product or an idea to Jobs – and were terrified at the prospect. One such encounter, possibly apocryphal, was reported in The Atlantic.

When engineers working on the very first iPod completed the prototype, they presented their work to Steve Jobs for his approval. Jobs played with the device, scrutinized it, weighed it in his hands, and promptly rejected it. It was too big.

The engineers explained that they had to reinvent inventing to create the iPod, and that it was simply impossible to make it any smaller. Jobs was quiet for a moment. Finally he stood, walked over to an aquarium, and dropped the iPod in the tank. After it touched bottom, bubbles floated to the top.

“Those are air bubbles,” he snapped. “That means there’s space in there. Make it smaller.”

As I drove north towards San Francisco following the news of Steve’s death, the radio reported that mourners were gathering at Apple headquarters, at Apple stores, at Jobs’ house, and in Dolores Park. Tributes followed from around the world – many of them written and read on devices that Steve built. Here are some that resonated:

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Will Obama Ask Biden and Clinton to Swap Jobs?

Should the President ask his VP and his Secretary of State to trade jobs? This is one of those too-delicious by half ideas that builds up as beltway buzz and becomes the stuff of gossip columns and talk show chatter. Increasingly however, the idea is not crazy if Obama gets the timing right. It cannot cannot happen mid-term, because under the 25th Amendment, the Republican-controlled House would have to approve the switch — and strengthening the Democratic ticket is not high on Speaker John Boehner’s list of things to do.

Why ask them to swap when both Clinton and Biden are by all accounts doing a great job? Mainly because it would revitalize and unify the Democratic ticket, which will face a formidable opposition, contrary to popular wisdom. I don’t know whether the Republicans will nominate Perry or Romney, but I have a pretty good idea of who the short list for VP will be — and Sarah Palin and Michelle Bachman don’t need to wait by the phone.

The strongest VP candidates for Perry or Romney are David Petraeus and Mario Rubio. Petraeus is unlikely to do it. He is a Rockefeller Republican, who Romney could not appoint. He just began a job running the CIA, which takes him out of domestic politics. I hope. He is not Tea Party certified and while he clearly brings huge strengths to any ticket, is not an experienced campaigner (military campaigns don’t count, although the differences are fewer than many realize).

Rubio is a different matter entirely. He is young, son of Cuban exiles, the politically savvy former Speaker of the Florida House, telegenic, and a Senator from a battleground state. He is fully credentialed by the TP crowd. A Romney – Rubio ticket will begin with massive strength in the south and will be very tough to beat in Florida. Romney will play well in the Midwest, where his father was a popular governor, and to conservative parts of New England. Rubio would energize Hispanic voters and extend the Republican base beyond the rich, the pugnacious, and the certifiably looney. It would be a tough ticket to beat — and Obama knows it.

Hillary helps Obama to rally Democrats and Independents. She is a formidable, even relentless, campaigner and she works harder than anyone in politics. It is not simply that she has handled problems in North Korea, Iran, and Israel without upstaging Obama, or that she has been supportive of the president and has been serious, intelligent, and energetic. It’s not just that people in the State Department like her — and some like her a lot — or that she has kept her husband out of the limelight, despite the fears many had. It’s that, unlike Joe, Hillary has a devoted constituency. She draws women, independents, and blue collar voters in much larger numbers than Biden or Obama. She adds deeply to the ticket.

The case for Biden as Secretary of State is also clear: it is the job he has always wanted and he would be very good at it. He was the ranking member and often the chair of the Senate Foreign Relations Committee, he has the requisite rolodex, and he likes diplomacy. He will rely more on personal relationships with foreign leaders than Hillary has, but that’s fine. Biden has built a very solid relationship with Obama and would continue as a senior advisor — a role he enjoys and excels at.

The timing of the Great Swap is constrained by the Constitution. Section 2 of the 25th Amendment states that “Whenever there is a vacancy in the office of the Vice President, the President shall nominate a Vice President who shall take office upon confirmation by a majority vote of both Houses of Congress.” At the moment, that confirmation would be far from assured, so Obama is not likely to ask Biden to resign, appoint Hillary VP, then appoint Biden to State (where his Senate confirmation would be a cake walk). Instead, if he decides to do this, he would plan the move now and nominate Hillary at the convention. Once nominated, Hillary would resign her position and Obama would name Biden to fill it immediately. No House vote needed.

Will Obama make the Great Swap? A lot can go wrong with moves like this — but Obama knows better than anyone that a Presidential campaign requires imagination and energy. Much can and will change before the convention, but we can count on this: Obama is considering this move.  

Promising not to promise….

In yesterday’s New York Times, Warren Buffett argues that super rich folks should pay higher taxes. Had I asserted that the rich should pay more, it would be an entirely unremarkable example of the famous ditty by Senator Russell Long (“Don’t tax me, don’t tax thee, tax that fella behind the tree”). These days, you can substitute “cut” for “tax” and make the same point.

But as the world’s third richest mogul, Buffett seems to be arguing against his own economic interest. Buffett might assert that higher taxes, a more stable economy, and even less inequality are in the long term economic interest of the super rich. Might be true, but it is still unusual for people to campaign against their short term interests. As a group, his fellow moguls are not only fighting for tax cuts, but for cuts in public spending that will not affect them either.  At a minimum, Buffett is showing off the contrarian view that made him rich.

Buffett provides an interesting contrast to Congress, where arguments against interest are as common as snowballs in August. Congress is, by some measures, more divided than at any time in the past 120 years. We badly need Congressional leaders who will argue against their political interest: Democrats who will fight waste, Republicans who will support short term fiscal stimulus. What we get instead is a culture of pledges designed to prevent this.

• The Tea Party is circulating the short, radical, and malign “Cap, Cut, and Balance” pledge, which has been signed by most Republican presidential candidates.
• Other Tea Party members are circulating a more comprehensive “Contract From America“, signed by more than 300 elected leaders.
• The Susan B. Anthony list is circulating an anti-abortion pledge, promising to cut all funding for Planned Parenthood and close all abortion clinics. It was signed by  by Michele Bachmann, Newt Gingrich, Ron Paul, Tim Pawlenty and Rick Santorum.
• Most GOP members have signed Grover Norquist’s Taxpayer protection pledge
• Norquist is also backing the pledge to support the Parental Rights Amendment, which massages the erogenous zones of the conservative family values crowd
• The American Council for Immigration Reform is circulating a Congressional pledge to oppose amnesty in any form for illegal aliens
• The made for Jon Stewart Marriage Vow promises to to oppose same-sex marriage, reject Shariah law and pledge personal fidelity to their spouse . Good luck with that.

These pledges represent a promises not to think, not to negotiate, and especially, not to compromise. The pressure to sign them is intense. Only one leading Republican, Jon Huntsman, has refused on principle to sign pledges (although he joined the band of imbeciles in Iowa who promised to reject a hypothetical budget deal that offered ten times more spending cuts than tax increases).  Huntsman’s campaign is imploding and stuck in single digits. Certified theocrat Rick Perry, who looks from here to be the likely nominee, won’t even have Huntsman as VP.

Democracy is built on negotiation and messy compromise. Pledges subvert this, and are fundamentally anti-democratic. Compromise means your interest does not always prevail — we don’t always tax the fella behind the tree. A leaders takes an oath of office and recites a pledge of allegiance. That’s all they should commit to: on principle, no leader should ever sign an interest group pledge.

The GOP Raises Interest Rates. China Cheers.

As of tonight, it is not at all clear when the US debt ceiling will get extended or when the entirely artificial crisis caused by Republican House members will be resolved. But one thing is now very clear: the ham-fisted GOP tactics will raise interest costs for every American family and business. It is the economic equivalent of a tax increase — except that that it increases government expenses, not revenues. These higher interest rates are caused by Congressional flakiness.

Interest rates reflect perceived risk — and China and other lenders now see the US as a lot riskier than we used to be. Real risk is unchanged — but perceived risk is higher, and that’s what counts. The power to punish political stupidity with higher borrowing costs is what once caused Clinton advisor James Carville to announce that in his next life, he wanted to come back as the bond market, since it powerfully influenced all federal economic decisions.

It used to anyway. At least one rating agency, S&P, is poised to downgrade US debt. This is unlikely to be calamitous, but it is entirely avoidable and it will needlessly increase US borrowing costs. This makes government more expensive, not less. Worse, it increases interest rates for banks whose borrowing costs that are pegged to Treasuries, which is roughly all of them. It erodes our privilege of serving as the world’s reserve currency — the equivalent of a tax break extended by the world economy to Americans but to no other country. The President of France once termed it an “exorbitant privilege” — and he was right.

This is very likely to end badly for Republicans. There is no economic crisis — the US is obliged by self-interest, to say nothing of the 14th amendment, to pay all debt obligations. Obama will however, end up paying doctors and soldiers late or with IOUs, like California did a couple of years back. The fractious Republican Party will quickly begin to devour it’s Tea Party wing, which has already been denounced by Gingrich, McCain, and Anne Coulter — hardly left wingers.

If the market starts downward, plenty of people will buy stocks because many investors regard the “crisis” as temporary political insanity. Economic fundamentals, although not great and not helped by a spike in interest rates, are also not vastly changed. Treasury bonds have to remain the global fixed-income benchmark because there’s no good alternative. The $9.3 trillion of Treasury securities in circulation is five times more than the total debt of countries like France, Germany, or the UK and the $580 billion of US bonds that trade every day is 17 times higher than UK gilts, the next highest triple-A rated government debt security. The world is learning what every bank knows: if I borrow a small amount from you, I am your debtor, but if I borrow a large amount, I am your partner.

Still, Congressional perfidy will cost Americans billions of dollars in needless interest expense. Nobody benefits except banks and China — the banker to the US government. Perhaps there is after all a reason Speaker John Boener cries so often.

 

Amazon.com: America’s #1 Tax Evader?

== Update:

On September 7, Amazon relented and made a deal to pay sales taxes on shipments to California (no doubt the trenchant analysis that follows persuaded them to do the right thing). For details of the deal see http://goo.gl/kNwjQ.

Now every other state in America needs to make a deal with Amazon — even if they have fewer than California’s 10% of the population. This reinforces the need for Congress to enact a cross-border VAT and to rebate 100% of the funds to the state to which the product ships.

==

Amazon’s refusal to collect sales taxes is bad for the company’s reputation, bad for honest retailers, and bad for state governments. Six states have taken modest steps to level the tax playing field, causing Amazon to respond with a business, political, and legal offensive to protect its tax-avoidance strategy. The first battleground will be California, where Amazon and national retailers will fight a very expensive ballot initiative. Longer term however, Congress should close the unintended sales tax loophole created by Article I of the US Constitution.

Unlike almost every modern country, the US has never had a national sales tax. Most states tax sales within their state but are rightly prevented by the Constitution from taxing out of state transactions. Amazon has turned this important limit on state tax authority into a major piece of its business model. Unfortunately, a smart tactic is becoming a stupid strategy. Congress needs to level its head — and then level the playing field.

From its first day of business, Amazon.com has taken extraordinary measures to avoid collecting sales taxes. It locates distribution centers in low population states to minimize the number of customers for whom it must collect sales taxes. It builds complex software to ensure that every possible product ships across state lines so that customers have no tax obligation. It puts engineers and logisticians to work in shell corporations even if they work on Amazon’s retail website just to avoid creating “taxable nexus” — which obligate Amazon to collect sales taxes. It hires legions of attorneys to minimize and manage the inevitable tax claims. When states like Texas attempt to collect taxes, Amazon retaliates by closing facilities and filing f-you lawsuits. When states declare that Amazon’s hundreds of thousands of third party sellers and affiliates amount to a physical presence in the state, Amazon simply closes the programs — as it did last week in California. Today Amazon went even further: they filed a state ballot initiative in California that will let Californians vote on whether or not to pay sales taxes on third party purchases. National retailers are gearing up for a mammoth fight.

Amazon is now America’s Number One Tax Evader. The company says that if you buy Hot Freddy’s Thai Salsa from a Los Angeles seller on Amazon, the sales taxes on the transaction are for you and Fred and the state to sort out. Unlike the corner grocery store, they won’t collect these taxes. Nobody disputes that Fred owes taxes on his sales to Californians, but Amazon says that collecting them is Fred’s job, not theirs. Since, as a practical matter, it costs California more to chase Fred than it is worth, Amazon’s policy needlessly costs California tax revenues and denies Californians badly needed public services.

So California sensibly joined five other states that require Amazon to collect sales taxes on the intrastate sales of third party sellers. The law goes further, and declares that third party sellers or affiliates (sites that earn commissions on traffic they send Amazon) constitute taxable nexus — as do subsidiaries. Jerry Brown signed the measure into law on June 30, whereupon Amazon immediately notified all California third party sellers and affiliates that they were discontinuing their program.

Amazon has built its business model around a court decision. In 1992, the Supreme Court ruled  in Quill Corporation v. North Dakota that a state can compel a company to collect taxes only if they have a physical presence, or a nexus, in the state. Absent nexus, the court held that online retailers and mail-order companies can sell products across state lines without collecting the tax. This decision reflects the current law and our national architecture as a republic formed in an era when very few goods were traded across state lines. It also reflects an odd twist in the way the US collects sales taxes: by taxing transactions based on where the seller does business not based on where the buyer lives, we effectively tax selling, not buying. In old fashioned Main Street America it doesn’t matter: every sale is local. But the rise of mail order and online retail meant that our peculiar approach created a giant loophole. I am aware of no other country that makes this mistake.

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“We are Going to Pass” -10 Reasons VCs Turn Down Startups

Every few years, Silicon Valley grows strong, flies high, makes beautiful music and then, like the Phoenix of ancient myth, burns to ashes and starts the cycle again. At the moment, the Valley is a frenzy of startups. The rest of the country may be in the economic doldrums, but dozens of technology companies are being formed here every day. Many seek to raise capital and at the moment anyway, money is flowing. Angel and venture investing will surely set new records this year.

During the past two months, I have helped three technology startups raise early stage growth capital and casually advised several others. Each business is in a completely different market: mobile, pharma, cloud computing, crowdsourcing, global communications, etc. Each has unique strengths and weaknesses. The entrepreneurs have wildly different backgrounds and personal qualities.

Not all have completed their funding, but in the process each team has learned similar lessons in how best to approach outside investors (investments from friends, family, and fools doesn’t count. They apply different criteria.) Although I managed to raise tens of millions of dollars for early stage businesses, mainly Alibris, I have personally made most of the mistakes listed here and I have made some of them more than once. Nor is this list particularly unique: investors and experienced entrepreneurs write about them all the time.

So here is my list of the top ten mistakes that entrepreneurs make when they try to raise money from outside investors:

1. No story.  Entrepreneurs try to convince investors that they have a winning business – but investors have no idea which businesses will really work. It’s just too complicated. So investors do what human brains are wired to do when confronted with bewildering complexity: they listen for a coherent story. They listen for a particular kind of story that nearly always has three parts: a strong team that achieves impressive traction solving a big problem. These may be called Team has Traction on Trouble or Management has Momentum in a big Market, but to sell your company, you need to tell your version of this story.

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Freedom Comes Out

Gay Freedom does not matter yet to most Americans — but it will, soon enough. Andrew Cuomo’s profile in political courage in mobilizing the New York legislature to allow gay marriage is a civil rights landmark. It is also more evidence that public attitudes have tipped. Twenty years from now, people may wonder what the fuss was all about, but today Cuomo deserves our profound thanks. Watch Cuomo in 2016.

One of the great strengths and great weaknesses of humans is that we form tribal attachments. We are drawn to people like ourselves, which allows us to form families,  communities, enterprises, and governments. Tribes enable science, education, commerce, and religion. Tribes probably enable language itself.

The problem, of course, is that the bonds that tie can also enslave. Tribes have boundaries and reject those who cross them. They have to or it isn’t a tribe. Children have a known tendency to wander from their parent’s tribe. Thank God for that — human progress surely depends on the freedom to form and demolish tribes. In general, the more of both the merrier. Tribes matter — we cannot and will not do without them — but they rarely evolve.

Gay freedom is at least in part about the ability of people to re-form or reshape our tribe of birth. Most members of the LGBT tribe were not born into it and most people outside the tribe are nervous about their kids or friends joining it. It’s an unusual tribe because, unlike being female, black, or Asian, being gay or lesbian isn’t visible. Imagine the history of feminism if first, one had to acknowledge the socially unpopular fact of being female.

This is the context for Tales of the City, the exuberant musical now on at San Francisco’s ACT. It is a huge, sprawling, production based on bits from the beloved books by Armistead Maupin. The play, (like The Beginners, featuring George Plummer as a man who comes out at age 75) is saved from a meandering and implausible script by wonderful characters and spectacular acting, just as the music is saved from forgettable melodies by terrific lyrics and enthusiastic performances. I have not enjoyed myself at a musical this much since Avenue Q, (the talented Jeff Whitty wrote the libretto for both).

Even three years ago, following the passage of Prop 8 in California, it was not clear that New York, backed fully by Wall Street and large numbers of business Republicans, would endorse gay marriage. It was very clearly not true in 1976, the setting for Tales of the City. But some small decisions made that year have rippled forward to the present day.

Recall that in 1976, San Francisco mayor George Moscone prevailed in a campaign to legalize homosexuality by repealing California’s sodomy laws.  That same year, San Francisco was gripped by the trial of Patty Hearst for helping an apparently drug-addled group called the Symbian Liberation Army to rob a bank. Patty was the granddaughter of William Randolf Hearst, the American publishing magnate who printed, among other rags, the San Francisco Chronicle. Then, as now, the Chron was not a real newspaper. We bought it to find out when movies were playing and to read Doonesbury. Also Herb Caen, the irreverent cataloger of left coast life and father of three dot journalism…When interest in the SLA trial began to wane, the editors of the Chronicle decided to try something new: a serialized novel.

Printing a novel in daily installments in the local newspaper was an old idea, not a new one. It is how much of Charles Dickens, first came out (US papers would plagiarize each episode without paying Dickens or his publishers a dime. Made him mad as the dickens…). The Chron ran a column by writer nobody had ever heard of. Armistead Maupin, who called his column Tales of the City.

Oh. My. God….the effect was amazing. It was like soap opera – you hated to miss an installment. Pretty soon you actually cared about the friends and neighbors at Barbary Lane — the fictional community invented by Maupin. The plots never made any sense (a cult of cannibals at one point took over St. Mary’s cathedral on Nob Hill), but it was a helluva lot of fun. And not only that, it was outrageous gay fun — which at the time seemed considerably more fun than the sort the rest of us were having. This was the year that George Moscone nominated a respected community leader, Jim Jones of the People’s Temple, to San Francisco’s Housing Authority and banned roller-skating on public streets. It was the year that Bob Dylan, Eric Clapton, Joni Mitchell, Neil Young, Van Morrison, Muddy Waters, and Ringo Starr performed “The Last Waltz” with The Band at Winterland, which Martin Scorcese made into a fine movie.

Within two years, Maupin was a successful author and an important voice of a gay community that continued to grow in power. In 1978, the Gay Freedom march drew 250,000 people — double the size of the San Francisco antiwar marches of a few years earlier. Reaction was swift: orange juice commercial queen Anita Bryant launched a Save the Our Children Campaign, a crusade that received national attention and politically galvanized conservative churches. The gay community retaliated, boycotting Florida Orange Juice, costing Bryant her lucrative endorsements, and driving her into bankruptcy. John Briggs, the Orange County Republican, tried to ban gays from teaching positions in California. But the cause of Gay Freedom seemed only to grow, spreading from San Francisco and New York to major cities around the country and the world.

What could stop this sort of delirious progress? It was a dizzying, naive, and stupid time — wonderful and amazing to recall. To preserve the momentum hes saw building, Moscone played hardball: he led San Francisco to district elections. This meant that San Franciscans voted by neighborhood. For the first time, they elected a Chinese-American leader, an African American woman, a single mother, and, most incredibly and for the first time in US history, an openly gay man: Harvey Milk of the Castro.

Those who wondered when the progress would end soon found out. San Francisco was forming new tribes and demolishing old ones at a record pace. Some tribes were crazy like SLA wannabes such as the Red Guerrilla Family and the New World Liberation Front. Or the People’s Temple. Moscone responded by installing metal detectors in City Hall. But in November, Jim Jones, who had left the Housing Authority and taken his followers to Guyana, killed 900 of them in a mass suicide. Nine days later, Dan White, a disgruntled Irish Catholic cop and former supervisor who had lost out in district elections, assassinated both Moscone and Milk. He avoided Moscone’s metal detectors by crawling in through a basement window.

Within three years, gay men were being diagnosed with an illness nobody understood. Doctors knew that it was an immune disorder, but had no idea what triggered it, so they could only call it a syndrome, an acquired immune deficiency syndrome. The disease is now a global pandemic and has killed more than thirty million people. Nearly two million people die from AIDS each year, even though it is now a disease that can be medically managed. I can think of no social movement in human history that has been so disproportionately affected by a contagious illness that targets its members. AIDS slowed the cause of gay rights by at least twenty years.

Which makes this week’s victory all the more powerful. Liberty and the pursuit of happiness cannot happen in a closet and often cannot happen in one’s tribe of birth. Those who care about freedom, and that is a very large group, need to defend the freedom of all people to define, discover, and celebrate their own identity at least as vigorously as we protect our ability to form tribes.

Kwik Fixin’ Oakland

I love Oakland. It is immigrant, black, and blue collar. The town has a great history and a solid soul. Ours were among the first neighborhoods in America where all of the whites did not move out when blacks moved in.

Of course, along with a heart of oak, the town also has a brain of well mashed potatoes. We celebrate diversity beyond parody and indulge in thousand clown politics “somewhere to the left of whoopee!”. Our schools work with immigrant kids that show up speaking more than two dozen languages (actually, nobody speaks two dozen languages. That’s the problem. Each kid speaks one. A different one). Like our libraries, these schools are collapsing under the weight of dodgy managers, paleolithic unions, and ineffective parents (not necessarily indifferent, just collectively ineffective outside of Crocker Highlands).

My part of town, near Lake Merritt, has been brought together by a weekend farmer’s market and by the perpetual comedy of the Grand Lake Theater billboard (typical offering: “Prosecute Dick Cheney for torture” followed by “Kick Ass II”).

We have a terrific neighborhood association which, like most neighborhood associations, is where liberals go to be conservative. Ours is earnestly opposed to rich corporations. And to poor corporations. But perhaps not to Trader Joe’s, because they are German and cool. Also not to Peets, because he was Dutch, their coffee is cool, and they come from Berkeley. (Starbucks: you are clearly suspect). We like “small local businesses” because they are so small and local. The Gap is a dilemma. It is local, but not small — so like Starbucks, we tolerate but do not embrace. What matters here is not whether you create stable, well-paying jobs with health care benefits or even whether you deliver useful goods or services. What matters most in Oakland is that you are small, local, and (ideally) ethnic. Our motto: we love you. Unless you succeed.

Which pretty much rules out McDonalds. In 2004, the Golden Arches wanted to take over Kwik Way, a burger joint that had been abandoned for years. In 1980, Commander Cody and his Lost Planet Airmen memorialized Kwik Way in “Two Triple Cheese” on their Lose it Tonight album. The lyrics suggest that the Commander lived in this part of town, even if he takes liberties with the street names. His ode to saturated fat, salt, and cholesterol now enjoys a place of honor in the permanent collection of the Museum of Modern Art in NYC. Watch it below: it’s pretty good.

Post Cody, the Kwik Way became an abandoned dump and a favorite haunt of sketchy crackheads who sold stuff in plastic tubes and left them lying all over the massive drive-in parking lot. McDonalds offered to renovate the place, hire local kids to run it, and keep it swept up. The arches might have framed the Grand Lake Theater quite nicely, but no way. The ‘hood mobilized against the would be corporate trespassers. Conveniently ignoring the KFC next door, we stopped Big Mac by asserting that the traffic would snarl up the place (we argued, in short, that “we gotta stop this restaurant because it might be so popular”).

Gleeful idiocy of this sort mixed with strong coffee is what keeps Oakland running. Truly if you polled my neighbors, 65% would nod solemnly at the assertion that McDonalds was responsible for Dick Cheney and his Guantanamo torture. (The sordid truth, of course, is that McDonalds has killed more people than Dick Cheney ever dreamed of and quite likely contributed to the Veep’s own lousy ticker. But the Oaklandish among us objected to the crowds that McDonalds would attract, not to the celebrated American tradition of serving cardiotoxins to teenagers.)

Kwik Way crumbled until it was finally sold to a local developer with an appreciation of mauve, ecru, and other soothing colors. He relaunched it as a higher priced burger joint a couple of weeks ago. The place sells food that is arguably more salty, fatty, and sugared than McDonalds, but hey, it is small and local. Here is a video of the opening (a prime specimen of neighborhood values appears at the 1 minute mark).

Comparing the two videos, who wants to argue that we have made real progress?

Nostalgia: Not as Seductive as it Used to Be.

With my wife grounded by a nasty ankle injury, we took in three movies and I escaped to a rock band reunion. Oddly, they all confirmed the same lesson: nostalgia is a temptress — fun, but wholly unreliable. 

Owen Wilson is the hero of Woody Allen’s new movie, Midnight in Paris. He is a Hollywood screenwriter working on a piece about a nostalgia dealer even as he visits Paris and is transported in style back to the Lost Generation of the 1920s and 30s. The film is complete with a hysterical Hemmingway, a brilliant Stein, and appearances by Dali, Picasso, and both Fitzgeralds. It is a romp – the sort of film that Allen made in the good old days before he married his step-daughter.

Allen understands that mature cities are built on memories — perhaps Paris most of all. Memory is impossible in emerging cities (in Beijing today, the drivers frequently get lost because entire neighborhoods are transformed so thoroughly that they seem foreign). Mature cities are often wealthy enough to be politically liberal but most are culturally conservative, even as they attract the great minds of every age. Inevitably, the Golden Age of any great city is thus built by people who idolize an earlier Golden Age. Into this vortex steps Wilson, a Texan version of the traditional Woody Allen romantic, neurotic schlurb. It all works well, with the obvious exception of Carla Bruni, who should stick to her day job as the first lady of France. (Unable to cut her from the film altogether, Allen simply created a new character, wonderfully played by Lea Seadoux, to take over 90% of the role offered to the hopelessly wooden Bruni). 

We also treated ourselves to a pair of movies I passed on when they first came out but have since been told by many constitute the best romance films ever made: Before Sunrise and Before Sunset. Both films consist almost entirely of conversation between Ethan Hawke and Julie Delpy. Once again, there are ties to Paris and nostalgia, and some of the ties are subtle. For example, the second film opens at Shakespeare and Company, the famous bookstore founded by Sylvia Plath and frequented by Hemmingway, Dos Passos, and other characters out of Midnight in Paris. Plath famously published James Joyce’s Ulysses, which takes place on a single day, June 16, Dublin. Before Sunrise takes place during a single day in Vienna and ends with our two lovers agreeing to reunite in Paris the following summer on, you guessed it, June 16. The second film opens with viewers wondering whether either had shown up. The movies are wonderfully rendered, brilliantly acted, and an ode to the trap of powerful memory, especially powerful romantic memories. Very highly recommended and available for streaming on Netflix.

On the advice of a friend, I caught the Buffalo Springfield reunion concert down the street at Oakland’s the newly restored Fox Theater. The theater is beautiful, but tells a powerful political tale. It was refurbished by Jerry Brown as mayor using redevelopment money, despite the Paramount, a landmark Art Deco theater one block away. The Paramount was empty the night of the Springfield reunion — and Jerry Brown is now proposing, quite rightly, to eliminate California’s wasteful, zero-sum, redevelopment spending.

The Springfield are nothing these days if not nostalgic. The concert opened with On The Way Home: “When the dream came, I held my breath with my eyes closed”, which pretty much described the graying, cannabis-mellow crowd.  

Buffalo Springfield reminded me of the new atomic elements reported in today’s Times. Like all of the heavy particles, it is highly unstable and blows apart after a split second. The three founders still seem deeply incompatible. Stephen Stills is a classic rocker and always has been. He looked pretty good, he has lost some weight, but he can no longer sing. Furay is a pop singer, good at the girl songs, who should have joined the Eagles. He can sing, but his guitar playing is like a guy leading church camp. Which figures, since Furay has been a Christian minister for the past three decades, but apparently needs another 15 minutes of rock star fame. 

Then there is Neil Young (who Stills once wrongly accused of being “a folk singer who wants to play in a rock band”). Young is just more talented, more committed, and all around more bad ass than Stills or Furay. Young played off to one side, but the stage always tipped his way. In the encore, he broke loose and lit up the place with Keep on Rocking in the Free World, which revealed Stills and Furay to be what they always were: Young’s backup band. The idea that these guys in their 20s and on drugs even practiced together, never mind made albums and toured, is hard to imagine. The reunion produced some memorable music, but ultimately no nostalgia can overcome the core incompatibility of the band’s founders, who stayed together less than two years. 

Toujour L’Audace

In early 1997, Steve Jobs spoke at Apple’s World Wide Developer Conference. At the time, he was an advisor to Apple CEO Gil Amelio, who had just bought Next from Jobs. (That July, Jobs pushed Amelio out in a boardroom coup and regained control of the company he had founded).

I embed Jobs’ fascinating talk above. As usual, it is a tour de force. Jobs proves himself constitutionally incapable of touting a company line. When Apple is messing up, he says so. When he disagrees with management, he says so. When he is being outvoted on something, he complains. He has just been invited back in to Apple and is a consultant — but he respectfully and happily disses executives, managers, and product developers. He announces that some of them have done nothing in years. Several times he lays out an alternative path before noting wistfully that “it’s not my decision”.

Second, he describes his vision of the future. At about 14 minutes, he discloses that whether he is at Pixar, at home, or at work, he never loses a file, has the wrong version, or even has to back them up because Apple has a large server that replicates his content immediately, so he always has the current file.

When asked about Newton, the underwhelming Apple PDA, he comments on the impossibility of supporting three operating systems, noting that two (back then Rhapsody and AppleTalk) was an enormous job. Then he acknowledges that the device isn’t helpful because it has no keyboard and is not connected. “Who wants to use a little scribbly stylus? I don’t. ” If it were connected and had a keyboard, I’d use it in a heartbeat and I would not care what operating system it used.”

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Justin Jr. “J.J.” 2004-2011

JJ died suddenly yesterday. Our family had never had a pet and has never had the experience of losing one unexpectedly. We are deeply sadden and in mourning.

I don’t grieve gladly or for long. I have had uncles drop dead and barely paused between emails, except to reflect that the world was an ever so slightly better place for their passing. Why is the sudden loss of a pet so sad?

It surely is not because pets are innocent or selfless. JJ was anything but innocent. He was demanding and entitled. If you sat down, he jumped on you and begged to play. If you threw something, he chased it and pestered you until you threw it again. He was a terrier who thought he was a retriever.

JJ was a designer dog. We chose him carefully and made him part of the family. I was intrigued by Boston Terriers, so in 2004, following our move to Oakland, my wife and I went to watch a pack of 25 or so Bostons play in the mud (they should have charged admission — it was a riot). Two of the dogs seemed especially attractive and we learned that they were cousins from the now defunct Welcome Ranch in Potter Valley. We began a correspondence with Mike Siebert and Lauren Ash, the vet who selectively bred Bostons. They often bred brindle dogs, not traditional black and whites.

Our boys were 6 and 10 and dog-ready, so we arranged to visit Potter Valley, near Ukiah. We discovered a place straight out of Dr. Doolittle. Lauren was a vet who bred Boston Terriers, exotic birds, and Morgan horses. Within minutes, we were rolling on the floor with a dozen dogs. Mike realized that we desperately wanted an animal and that we had planned carefully how we would accomodate one (they screened owners carefully). He disclosed his secret: a pup had just been born, the single offspring of their show dog Justin. He showed us the tiny fur ball, but we could not yet hold him. Six weeks and some correspondence later, we returned to Welcome Ranch to pick up Justin, Jr, known thereafter as J.J.

Families have to make room for a dog, not unlike a new child. You restructure your daily routines to accomodate a new personality. JJ made his needs clear: he wanted to be wherever we were and he wanted to play. Always.

We took him to obedience school, which was an elaborate joke. He barked obnoxiously at his classmates, then retreated fearfully when they turned on him. Like an insecure, bratty kid, JJ was forever asserting his superiority then turning tail when challenged. He flunked every test, but gladly took the treats. 

JJ grew up to be an extremely attractive dog. His markings and personality literally stopped people on the street — a chick magnet that single men could only envy. He hated other dogs, but was fine with small children petting him.

Some of our best memories of JJ are of seeing him try to swim in Lake Merritt, where he traumatized the Canadian Geese (the only creatures more obnoxious than he was). We loved seeing him run full bore on a beach, chasing strands of kelp until his smiling, drooling mouth was covered with sand. Small crowds would gather to see him chase a ball up a hill with a determination and speed not at all typical of terriers. He slept with us, ate with us, played endless tug of war with us, and took long walks with us. He begged incessantly, tipped over every wastebasket not covered or weighted down, and treated even polite dogs as a personal threat. He was a large personality and in a household that welcomes large personalities.

He survived being hit by a car and had a titanium right hip. Most days, you barely noticed it. He survived the usual dog injuries and infections and was the picture of health until Wednesday night, when he appeared tired. He was holding his head low but not coughing or vomiting. His heart and respiration were normal. He evidenced no pain when poked and he slept well Wednesday night. But yesterday morning he was clearly weak. He may have developed acute AIHA: autoimmune hemolytic anemia. If so, his body was tacking antibodies onto his red blood cells, which tricked his spleen into removing them faster than he could make new ones. In dogs, death from acute AIHA is quick — vets cannot usually get animals stable enough for blood transfusions and the huge doses of corticosteroids that serve as immunosuppressants. I rushed JJ to the vet, who put him on oxygen but he died within an hour. We do not know what causes AIHA, but it is not especially rare in dogs — and in any case, it is just a theory that fits a lot of facts, not a clinical diagnosis.

In the previous post, written with JJ snoring loudly next to me, I quoted Steven Hawking that “Heaven is for people who are afraid of the dark”. Losing a loved one, even a pet, gives you a different perspective. Heaven is our way of remembering. Hawking should restate his theorem: heaven is for people who are afraid of forgetting. 

The Difference Between Pepsico and Al Qaeda

Suppose that you had an al Qaeda-like urge to cripple the world’s strongest economy. Instead of flying planes into towers and killing a few thousand however, you aspire to sicken hundreds of millions of us. You want to poison Americans gradually but in huge numbers. Your goal is to shorten our lives, weaken our children, and cripple our economy with extraordinary health care costs, knowing that  as people become sick and discouraged, they often sacrifice their young and rarely develop memorable literature, arts, technology, or civilizations.  

Your poison of choice might be an addictive, debilitating drug. England demonstrated this approach in the 19th century when they spread opium throughout urban China. The Chinese became so weak that England ruled them for a century. When they tried to revolt, the Brits grabbed Hong Kong for 166 years. The problem with this approach is that it’s too 19th century. Americans recently chased Big Tobacco overseas — we are naturally suspicious of narcotics.

If drugs are out, what about food that is addictive and toxic in excess? This would be ideal, since even Americans who hate tobacco smoke will defend their God-given right to eat unlimited quantities of tasty food.

THE KILLER DIET

In a moment of dazzling insight, you realize that at least three essential foods are both delicious and highly toxic if over-consumed. We are all, in varying degrees, wired to love sugar, salt, and fat — probably because they are both essential and historically scarce. Most of us can overcome a preference for salt and fat in a few weeks. But a strong preference for sweets is evident in newborns and can be an especially tough habit to kick.

To carry out this plot at scale, you would need powerful allies in government, corporations, and the media. Food companies and restaurant chains will rally to your cause. Pepsico, America’s largest food company, would become your closest ally. During the course of a generation, they have made calorically dense, dry, salty, oily, and sweet foods available at very low prices. They offer these foods in gas stations, movie theatres, hotel rooms, airlines, workplaces, and schools. Allied companies make meat so cheap that consumption has risen from less than a pound a week to nearly a pound a day. These companies ensure that taxpayers subsidize cheese, butter, and sugar so that per capital consumption of these ingredients has tripled or quadrupled within a few generations. Drug companies and most doctors will also join your cause because they make billions treating the illnesses you are determined to promote.

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Public Unions 5: Can Unions Innovate?

This post concludes a five part series on public sector unions. The opening post argued that political attacks on public sector unions are more likely to worsen fiscal or political problems than solve them. The second article asserted that low public sector productivity is primarily a management failure. The third article noted that efforts by unions to create tenure or job security for public employees are counterproductive and argued for easy and frequent terminations with mandatory, generous severance. The fourth piece suggested that political activities by public employees to elect their bosses are undemocratic and argued for an extension of the restrictions that have successfully governed federal employees for 60 years. The concluding post asserts that the interests of most public employees are better served by technologically enabled professional associations than by collective bargaining and political lobbying. 

Public employee unions are losing public support, at least in part because taxpayers are unwilling to grant civil servants wages, job security and retirement benefits that they no longer enjoy. Public support is not something that government employee unions take casually. It is literally their oxygen and they die quickly without it. 

Chronic, structural state and local budget shortfalls due in part to unfunded defined benefit pensions, mean that the challenges facing public unions are essentially permanent. Public unions will be tempted to see criticism and attacks as either the temporary product of tough economic times or simple anti-unionism. This would be a huge mistake: the landscape is changing fundamentally and public employee unions will either adapt or they will go the way of their private sector brethren.

What should public employee unions do? Unions are reactive organizations — their instinctive response to a crisis or to criticism is to curse the opposition and to seek comfort in the solidarity of victims. This wastes time. Instead, unions need to rebuild both membership and advocacy services on more solid footing.They need to build professional associations based on technologically enabled membership services. They need to focus advocacy efforts on the needs of private sector families, not their own members. To do this requires leaders focused on service innovation and talent development, not on the protection of an unstable status quo.

This is achievable — indeed many public sector unions have built prototypes. The unions that would emerge from these changes would be less dependent on collective bargaining, less dependent on unsustainable compensation, less committed to protecting the marginally competent and the malign in their ranks, and less focused on using political influence to advance the interest of members at the expense of citizens. Most importantly, these unions can regain the strong public support that is vital to their success.

Many and probably most public employee unions began as professional associations. The larger of the two teacher’s unions, the National Education Association, for example, grew largely by affiliating local associations of teachers. (Its rival, the AFT, embraced political action and collective bargaining from its earliest days and was the driving force behind the movement to universalize tenure in the 1930s).

These associations of county or city employees varied enormously in quality and impact. In most, membership was voluntary and the association rendered symbolic services that combined health care benefits, advocacy, and professional education benefits with discounts to Disneyland. Most regarded unions as too proletarian. The leaders of these associations tended to be genteel advocates, not firebrands. 

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Public Unions 4: Preventing Labor Capture

This is the fourth of a five part series on public sector unions. The opening post argued that political attacks on public sector unions are more likely to worsen fiscal or political problems than solve them. The second article asserted that low levels public sector productivity relative to pay is primarily a management failure. The third article noted that efforts by unions to create tenure or job security for public employees is counterproductive and argued for easy and frequent terminations with mandatory, generous severance. This essay suggests that political activities by public employees to elect their bosses via political contributions are undemocratic and that the federal restrictions on political activity should be expanded to all public employees. Finally. I argue that the economic and professional interests of our most valuable public employees are better served by a technologically enabled professional associations than by collective bargaining and political lobbying. 

My previous post took note of the decline of private sector unions and suggested that it has left public employees unexpectedly vulnerable to citizens who are jealous of the job security that most public workers enjoy. I recommended that we replace job security with very generous mandatory severance and argued that without the ability to replace people, managers cannot restructure, consolidate, or redesign public services.

Job security is not the only public employee benefit that causes envy among private sector workers: the public sector is the last bastion of your daddy’s defined benefit pension. When public workers can retire at age 55 and expect to live another twenty to thirty years, this can represent a multi-million dollar retirement benefit. Aggravation turns to rage however, when taxpayers suspect that these benefits were not negotiated at arm’s length but were purchased by union contributions to state and local politicians.

At one level, this is foolish. If unions could easily purchase politicians and make deals with them, public sector pay would be exorbitant, not merely higher. Teachers and firefighters would be earn as much as physicians – a profession whose collective organization and political influence puts teachers to shame. And obviously businesses and other interests make campaign contributions as well. Why single out public employees?

For two reasons. First, there is solid evidence that small contributions make a big difference in city, county, and school board elections. Second, it undermines both public service and democratic values to permit even the appearance of labor capture – particularly since restrictions on the partisan political activities of federal employees has produced good outcomes for more than six decades.

What has this to do with public employee pensions? Plenty. Nationally, unfunded state and local health and pension obligations now total over a trillion dollars. This is a crisis because these commitments are economically catastrophic and, in many states, constitutionally binding. Court decisions have mandated that pension obligations be honored, even in the event a local government declares bankruptcy. These pension obligations are a ticking time bomb for states and ultimately for public employee unions. 

The financial black hole of public pensions was the result of three forces — not all the responsibility of public unions: bad managers, bad forecasts, and bad politics. The latter, unfortunately, contributes to the former.

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