Sunday, December 29, 2013

Kyrie Eleison… Down the Road that I Must Travel

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While its origins are not entirely clear, it is reasonable to assume that the Roman Catholic Litany of the Saints officially entered the Mass under the papacy of St. Gregory at the turn of the sixth century.  Gregory was born into the opulence of Sicily and, in stories reminiscent of Siddhartha Gautama 1,000 years earlier, he was overwhelmed by the life of the commoner and became a monastic.  As was the case with Gautama Buddha, St. Gregory served as an emissary for greater awakening and understanding and, despite both of their protestations, both were thrust into greater public influence than their ascetic impulse had desired.  Both Gregory and Buddha recognized that their individual lives were not isolated tangible egos but were part of a much greater arc that included those who came before and those who would follow (though Gregory was pretty sure that The End was near – inspired, in part, by the collapse of the Roman Empire).  Both recognized the importance of understanding those whose lives inspired greater approximation to an ideal to which others could be encouraged to strive.  Both formalized catechisms that included veneration of the saints.

In the Catholic Litany, the deity, patriarchs and prophets, apostles, martyrs, priests, and laity are recited punctuated by the congregational antiphons, “Have mercy upon us; Pray for us; Deliver us; Hear us.”  I had the wonderful opportunity to sit in the mountains of East New Britain with the keepers of the fire dance – the Komgi – who like the Catholics and the Buddhists recite, in oral tradition, those who have been keepers of the community across the millennia.  In their dance, which commences with night fall and continues until the last ember is crushed with the first light of dawn, they speak the names of their ancestors and spirit guides as they dance on burning coals as a way of welding the memory of these departed ones in their physical reality.  And in each of these traditions, the veneration of those who came before is not merely a nostalgic retrospective: they all include some variant of the supplication – Kyrie eleison, Lord, have mercy.

As I was out walking Scooby in the woods this morning, I started my litany of my saints for 2013 and thought, “Why don’t I make this my year end post?”  So, without their knowledge, permission or implied endorsement, here are my inspirations for 2013.  Thanks.

Jimmy Smith, founder and CEO of Amusement Park Entertainment.  Jimmy and I come from extremely different walks of life; have as many different as similar world views; and, share a burning passion for making the world a better place.  Jimmy’s gift in my life is his relentless enthusiasm for what could be and his capacity to persist against indifference.

Yaacov Shirazi, founder of Aqua Index.  Not only did Yaacov welcome me to participate with his business but he invited me into the home of his generous partner Nissan Khakshouri and afforded me the opportunity of fellowship with Nissan and his beautiful late wife Louise.  In one evening in Tel Aviv I experienced the most magical dinner of the year in their gracious hospitality.

Theresa Arek, my sister and the founder of Amruqa. Theresa continues to be one of the most reliable, longest-lasting colleagues and friends I have anywhere in the world.  Our friendship and mutual respect transcend any casual human experience.  Together with the Asia-Pacific Power Women – Alise Stunnenberg, Margaret Malua, Enkhtuya Tsend, Battsetseg Shagdar, and Nergui Dorj – these amazing women have evidenced a capacity to challenge the status quo tirelessly and have, in so doing, transformed the experience of millions of people who don’t know their benefactors.

Bob Kendall, founder of Cole Publishing.  If there was ever a person who modeled the generous spirit at the extreme that was kindled in my life by my father, it’s Bob.  Together, our efforts this year ranged from health care in the Caribbean to quantitative trading at the innovative edge of the capital markets and unfailingly, Bob’s enthusiasm and loyalty incarnated with a perfection I’ve never experience before. 

The Fraternity of Unusual Gentlemen (my term) including Edward West, Dustin DiPerna, Jon Darrall-Rew and Leo Burke.  My life has been enriched and enlivened by these four men in ways that defy simple explanation.  Each one individually (and the four of them collectively) have abraded my unconsidered, reflexive resistance to make my work and the philosophy that underpins it accessible to others.  Through hours and days of relentless fellowship, their encouragement has triggered some of the best writing and communications I’ve been able to reduce into accessible form.

Dan Goldstein, Nick Drake, Sebastien Djavadi, Josh McFerrron, and Eric Edell individually and collectively played a huge role in encouraging the formation of the PB1 fund – one of our most significant achievements in 2013.

Lawrence Daveona, Chris Uma, and the team in Arawa and Panguna who showed me gracious hospitality and patience as together we work towards a peaceful stewardship of Bougainville and its vast and varied resources.

Shakara Lyon, Nicole Fegley, Sera Beak, Sofia Diaz, Corinne Vaudroz, and Kelly Bearer for deeply loving my Lady and opening up a deeper sense of purpose in her amazing life.  Each of you have gently shaped in the marble of her form that the bluntness of my hammer and chisel were incapable of offering.  You’ve taught me to put down the hammer and the chisel and let the true essence of the form emerge in its own elegant and beautiful way.

If you’re reading this, you are also in my litany of saints.  The honor that is bestowed in my life through your constant companionship throughout the year provides an unusual fuel to keep my life motivated towards its full purpose and destiny.  I encourage you to add your litany to mine – on the blog, on facebook or in whatever venue you find this post.  I’ve just started the litany in the recitations above but my prayer for the coming year is that we all see the roles that we play in the lives of others and actually set time aside to honor the life that is shared and entangled with our own.  And as with every litany there is a confession and plea for forgiveness: if I’ve neglected in word or deed to honor any of you, I trust that you see in my life a reflection of your gifts and you find in that reflection honor that reverts to you.

As you look from 2013 into the coming year, remind yourself of your inspirational influences and recite them aloud.  If you need a little back up music as inspiration, give yourself a flashback to my favorite from the year I graduate from high school – a gift from Richard Page and his band, Mr. Mister – Kyrie.



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Sunday, December 22, 2013

Social Security: Soaring with Vultures

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So I was sitting at the table this morning, overlooking the ponds and the forest, when I was struck by the stark Roman insignia gracing the top of a dead poplar tree.  While we’ve become accustomed to the Americanized view of Roman standards resplendent with eagles (in our version, drawn by Secretary of Congress Charles Thomson in 1782, clutching arrows as if talons aren’t intimidating enough), we overlook the historical basis for the standard – the vulture.  Even Thomson’s “eagle” holds his wings as a vulture to match the vulture of the founding of Rome.  Mythology states that the selection of the site for the city of Rome was informed by the auspicious omen seen by Romulus – 12 vultures – as opposed to Remus’ 6.  More vultures = better omen!

“Why have we celebrated the majestic bald eagle rather than the prolific vulture,” I thought as I grabbed my camera to snap a few pictures in the barefoot-warm December rain?

The family of birds - Accipitridae - to which both vultures and eagles belong is distinguished with its capacity to soar on the thermals and rip flesh and sinew on the earth.  And while the thrill of the eagle’s hunt is more glamorous than the rotting carrion of road-kill on a lazy summer afternoon, were we given a choice, a world without vultures would be a lot more stinky and less livable – just saying! 

Now, fasten your seatbelt as we take another whirlwind turn in our ornithological time machine.  And trust me, it’s worth the ride.  For millennia, empires and their egomaniacal leaders have sought to instill admiration and fear in all others by selecting predatory animals as their insignia.  Xerxes and the Achaemenid Empire had their fighting stags and vulture-winged lions.  The Sumerians put vulture wings on the backs of lions – an image that has survived to the present as an iconic symbol of power.  The Greeks put vulture wings on Hermes and his shoes (as if wings on your back need a bit more turbo charging).  And as far back as 3,000 BCE, Egypt’s goddess Nekhbet was depicted as a vulture symbolizing purification.  Reminiscent of the Cherokee who referred to the vulture as the ‘eagle of peace’ as it kills nothing but purifies the land, humanity’s appreciation of the vulture has been forgotten at a considerable price.

Thanklessly cleaning up messes.  Capable of soaring.  Purifying the land.  You can learn a lot from a vulture! 

In 1935, Franklin D. Roosevelt signed into law the Social Security Act.  This “Old-Age, Survivors, and Disability Insurance” program is to the U.S. what Pericles’ Athenian Constitution was to Ancient Greece.  FDR forgot to study Pericles when he advocated for the Act or he would have recognized the inherent flaw in “making gifts to the people their own property.”  Falsely labeled “entitlement programs”, the social security system then as now is a great political ruse – a vulture in eagle’s feathers.  And with the coming charade in Washington D.C. early in 2014, we’re going to be treated to another episode of “Debt Ceiling IV: Attack of Tea-drinking Zombies”.  Let’s be clear, the word “ceiling” – implying upper limit – is a misnomer.  The Federal Government has no real “limit” on how much indebtedness it can take on.  It does, however, have a limit on how much debt it can service.  It makes theater of the former and entirely ignores the latter.  It is, after all, the latter that is most paradoxical.  What we’re doing when we raise the “debt ceiling” is authorizing issuance of debt to pay for debt – a necessity directly caused by an economy that does not collect enough revenue to support its obligations.  Inspired by the flamboyant eagle, it loves the thrill of the hunt but is ignoring the growing heaps of plague-infested carrion – carrion too numerous for the available vultures. 

Artificially low interest rates have been great to keep the Federal debt service from further exacerbating the debt crisis (thus described as we have borrowed more than our economy can reasonably service through productivity-linked revenue).  But the Federal Open Market Committee’s policy is to our economy what Dichloro-Diphenyl-Trichloroethane was to eagles.  In solving the short-term pestilence problem, the capacity for future productivity in progeny is forced into certain extinction.  Because, even though low rates today mean you can borrow more cheaply now, it means that your investment in debt is not earning enough to cover the expected returns required for the ‘benefit’ your investment was supposed to generate.  When Paul Hermann Muller’s Nobel Prize winning WWII mosquito-killing ‘invention’ was unleashed on the world, DDT became the panacea for crop infestation and mosquito control.  Neither he nor its proponents knew that the effect of DDT on the aqueous food chain would lead to the extermination of countless desirable life forms including our national emblem – the bald eagle.  Rachel Carlson’s 1962 book Silent Spring suggested DDT’s still unknown effects on human health including the possibility that profligate use of DDT may have vastly expanded cancers in the fumigated populations it was promoted to serve.

Out of the $16 trillion in notional debt we owe, more than 60% is owed to ourselves.  According to the GAO and the U.S. Department of the Treasury, nearly $5 trillion of debt represents ‘investments’ made by trust funds like Social Security and Medicare.  Another few trillion is owned by the Federal Reserve.  And then any one of us who participates in a planned retirement program ‘invests’ heavily in these ‘assets’.  When ‘debt ceiling’ tirades are unleashed in Washington, the public is being duped.  On the right, we’re told that we should decrease revenue while on the left we’re told that we should care for the 99%.  The fact is that neither left nor right is facing the facts: we don’t have an economy to pay for promises we made in 1935 and we don’t have a society that soars together.  With interest rates maintained at record low rates, we have ALREADY defaulted on the Social Security, Medicare and Pension promise we’ve made.  This is a problem that cannot be fixed using the current paradigm.  Pumping more public expectations into a system that is hopelessly broken and broke just increases the scale of calamity.  As a matter of policy, the yield on our investments is so low that we have forced the future into a lower standard of living, less liquidity, and a greater inability to pay for the life-styles to which many have become accustomed.  And while this is not necessarily a negative on the global stage, the broken promises and the irrational responses that they engender are avoidable only if the public is informed today.

In 1966, the Endangered Species Preservation Act put in process the protection of the Bald Eagle so that we wouldn’t exterminate our national emblem and with it a piece of our identity.  Six years later, the use of DDT was banned.  Our industrial ‘progress’ took the estimated 100,000 nesting pairs of bald eagles in 1782 down to 487 in 1963 only to have it celebrated in its rebound to just under 10,000 today.  We’re 1/10 the greatness we were when we started killing our national emblem, metaphorically.

Nearly 30% of America presently relies on an endangered entitlement with over 51% ultimately counting on it for a significant portion of their ultimate livelihood.  We know today that the DDT-effect of our monetary policy is softening the nest eggs of this population to the point that they will not hatch when needed thereby harming our economy as a whole.  We have chosen the individuated eagle metaphor at the expense of the security provided by the rookery of the vulture where the young are protected, the old are fed, and the generations share responsibility at the community level for their collective well-being. 

So this morning’s omen: be warned.  Pericles’ Athens thrived on entitlements while he was alive.  But as the fallacy of gifting the public what was already theirs (the definition of our entitlement systems) unraveled, the great experiment of Greece fell under the talons of Rome. 


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Sunday, December 15, 2013

Not Worth Living

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In Plato’s Apology, he attributes to Socrates the frequently quoted maxim: “The life which is unexamined is not worth living.”  Adjacent to this quote is the unquoted, but potentially more profound statement, “I would rather die having spoken in my manner, than speak in your manner and live…. The difficulty, my friends, is not in avoiding death, but in avoiding unrighteousness; for that runs deeper than death.” 

I reflected on these lines from the Apology in a most improbable of moments this week – at the engagement and wedding ceremonies of some dear friends in India.  As I watched a priest chant mantras in Sanskrit, I inquired of several of the guests how many brides and grooms knew the meaning of what they were reciting during the marathon, smoke and fire-filled rituals. 

“We don’t know what these mean,” was the near universal response.

Sanskrit has been around for at least 3,500 years – potentially one of the world’s oldest languages.  It is reasonable to speculate that more philosophy, religion, sociology and cosmology has been contemplated in Sanskrit than in any other tongue.  This language of wisdom, scholarly inquiry and culture contains not only literal essence but also harmonics and tonal elements that are considered to integrate frequencies and vibrations that literally embody meaning.  Its use in ritual and meditation persists while the wisdom and experience of humanity from which it arose is increasingly eclipsed in the fluorescent glare of emoticons and hashtags.  And why, in independent India has the siren of materialistic artifact been so compelling as to induce the amnesia to the wisdom of ages past?  Why, having cast off the colonial regimentation of industrial empire has India elected to chase the fleeting futility of even greater triviality? 

The answer, in part, lies in the unquoted Apology.  And there’s a bit of irony here.  When Socrates stated that he would rather die speaking his understanding than conform and live, he wasn’t being melodramatic or forming an argument.  In fact, he recognized that to acquiesce to what he knew to be untrue and inconsistent with observable reality was as much death as drinking hemlock for speaking out in a manner so compelling that those around him, “deliberately attached themselves” to him “because they enjoy hearing other people cross-questioned” (the origin of the concept of Socratic learning).  The unrighteousness to which Socrates referred was the willingness to adopt consensus in the evident face of its fallacy.  Preceding Gregory Bateson’s theory of the psychopathology of what he called the Double Bind (in which schizophrenia results from serially observing reality and seeing trusted persons or the crowd act in what appears to be diametric opposition to, or ignorance thereof), Socrates could not tolerate living in a world in which consensus error was reinforced by mercenaries while inquiry and truth were castigated.

Socrates used as evidence of his character his commitment to the transmission of knowledge for free.

If you doubt whether I am really the sort of person who would have been sent to this city as a gift from God, you can convince yourselves by looking at it in this way. Does it seem natural that I should have neglected my own affairs and endured the humiliation of allowing my family to be neglected for all these years, while I busied myself all the time on your behalf, going like a father or an elder brother to see each one of you privately, and urging you to set your thoughts on goodness? If I had got any enjoyment from it, or if I had been paid for my good advice, there would have been some explanation for my conduct, but as it is you can see for yourselves that although my accusers unblushingly charge me with all sorts of other crimes, there is one thing that they have not had the impudence to pretend on any testimony, and that is that I have ever exacted or asked a fee from anyone. The witness that I can offer to prove the truth of my statement is, I think, a convincing one – my poverty.

The notion that wisdom and its acquisition cannot be defiled with monetary compensation opens a more poignant inquiry into the phenomenon I witnessed in the rituals of Brahman priests.  Education – conventionally thought to be the orderly conveyance of knowledge, skills, practices, and norms from one generation to the next – has transformed over time and with it wisdom has been subordinated to technical proficiency to qualify for rent wages mandated by the industrial age.  Value in the transmission of knowledge for the sake of considered inquiry has fallen victim to the opiate of employment.  Proficiency and competency have replaced mastery and transcendence.  Why?  Because we can measure the unit output of trained automatons in monetary rents while we have no conventional mechanism to attribute value to the genius or idiot outlier.  And, by the way, this unit of mercantile productivity includes what was once considered sacred.  I was told by several of my fellow wedding goers that the Brahman caste once shunned money to the point of refusing to come into contact with it.  Now, in the middle of rites, the officiating priests were interrupting the event with overt cash exchanges.  Is it any wonder that a social order that has chosen to defile their own priestly class with commercialism has become untethered from the agency of its heritable essence?

Millennia from Socrates’ celebrated embrace of monetary poverty for the wealth of wisdom and its transmission, post-independence India (like many others), has adopted the language of consensus powers rather than exporting its heritable wisdom inclusive of all of its intricacies and nuances.  Ringtones now replace mantras and this is a mark of success.  Why?  Because having ‘things’ has become more important than examining the essence of life.  Education for job placement is celebrated above incarnating and transmitting persistent, unfathomable wisdom.  And this is happening exactly at a point in the arc of the mercantile industrial paradigm where its utilitarian deficiencies are becoming glaringly obvious. 

As the wedding crowd waned, a group of recent graduates from some of India’s finest schools approached me to ask me how I became a ‘successful’ entrepreneur.  After disavowing the title in its conventional use, I went on to explain the dimensionality of wealth that I describe using the optics of Integral Accounting.  These young men – all in their early to mid-20s – were enlivened by a conversation that included topics like my involvement with the National Innovation Foundation, the Global Innovation Commons, grass-roots initiatives around the world, quantitative text-based trading algorithms, and innovation-based, productivity-linked capital solutions. 

“Why aren’t we taught about these things in business school,” several asked, their faces evidencing a yearning for greater purpose?

As I reflect on our exchange, I realize that these young men, like me, want to live vibrant, examined lives.  Sure, we want to be productive and be capable of interacting in many dimensions of life.  But we don’t have the School of Athens.  We don’t get to “attach” to our Socrates with whom we can “cross-question” and learn.  In a generation and a half, their world has done its best to diminish what millennia of wisdom sought to build.  Until We The People actually end the rush towards automated digital consensus, we run the risk of deepening our version of the European Dark Ages.  It’s high time some of us step up and evidence an alternative: one that seeks to gain knowledge rather than train; to collaborate rather than prevail.  Starting today, read something from a field about which you think you know nothing and find out how great it feels to exercise your mind.  Speak to someone from a different culture or language and find the joy in imperfect communication with perfect intention.  See your world through the smoke of rites and flavored with all the spices of a palate that’s as foreign as you can imagine.  Examine your life and in so doing, we may rekindle the joy of unfettered learning and thereby forge a More Perfect Union.


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Sunday, December 8, 2013

Quantum Entangled Wormholes in Your Wallet

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In their recently published work, Kristan Jensen of the University of Victoria, Canada, Andreas Karch of the University of Washington, Seattle and, Julian Sonner of MIT, Cambridge have been offering theoretical models regarding the nature of quantum entanglement of quarks “separated” by considerable distances.  Describing the Einstein-Podolsky-Rosen (EPR) pair dynamic in which the measurement of one particle simultaneously imparts an effect on the other in the pair, they applied two different mathematical models to ‘measure’ entanglement.  Using different approaches, Jensen & Karch’s model of quarks accelerating through oppositional distance and Sonner’s model of the Schwinger effect of quark/antiquark creation, both suggest that wormholes (in which space, time and other dimensions are extremely contorted) may be capable of facilitating transfer dynamics between black holes.  The theoretical framework suggesting that black holes (massive matter and energy dynamos) and quarks (infinitesimally minute subatomic particles) traffic in wormhole-laced interactions is a delightful reprise of millennia’s past wisdom stating that things are more connected than they seem.

Now before you get concerned that you are reading the wrong blog here, rest easy.  There’s a wormhole between this preamble and the economics to which you’ve become accustomed.  And I’m being a bit more literal here than you might first expect.  The Einstein-Rosen (ER) Bridge that theoretically links two (or more) points in space for simultaneity of existence is thought to be devoid of information transfer potential.  In other words, while parallel universe expressions are certain, progressive or simultaneous sentience is theoretically implausible.

This week, WikiLeaks released information from Stratfor, a strategic advisory consultancy serving government, energy, and industrial clients.  Their threat anticipation advice regarding environmental groups’ opposition to fracking and other North American fossil fuel ventures failed to anticipate their own ‘black swan’ event of being hacked and having their advice made public.  Apparently, they also failed to anticipate being stiffed $14,890 for work that they had done for Suncor.  They correctly estimated that energy firms should pay limited attention to most environmental activist efforts because many of these groups have “too little political influence” to rise to the level of concern.  They bet on the quantum entanglement between fuel ventures and politicians (near infinite mass and energy condensing in infinitely dense space) and won.  But they seemed to overlook that what’s good for the black hole is also good for the quark. 

It was amusing to see that the purported clients sponsoring the presentations that were leaked deny having seen them.  The hubris (the idea that information cannot be deciphered through wormholes) of giving misleading or false responses when ‘caught’ or ‘found out’ is a malignancy that seems to be metastasizing throughout the political and corporate ecosystem.  Sociopathic self-preservation at all costs seems to be the default mode rather than the nostalgic Watergate extravagance it once was.  Extractive industries lie about environments and profits, Apple lies about innovation, Government Sponsored Enterprises lie about fiduciary liquidity, and We the People are simply supposed to accept this fare of deceit as the status quo.

But here’s the problem that strikes me as the evident conclusion from the work of Jensen, Karch, and Sonner; what if events are connected?  What if a $4 trillion Federal Reserve balance sheet actually has to be monetized?  What if tens of millions of permanently discouraged workers get tired of being told that unemployment is stabilizing or improving because they’re no longer being counted in any statistic?  What if the apparent ineffectiveness of intervention is actually building an amazing amount of energy in a system we’re not perceiving nor measuring? 

These are theoretical and rhetorical questions on one level but they’re quite tangible on another.  In 2008-2009, the public was awestruck with the notional value of credit default swaps (CDS) which exceeded the world’s GDP by a considerable margin.  Now, if you go back to 2006, you’ll see that the public was in love with CDS – they just didn’t know it by its name.  Back then it was called mortgage refinancing and it was all the rage.  I heard numerous friends and colleagues celebrating massive ‘interest only’ loans, super jumbos, and other irrationally labeled products.  They were building black holes in one dimension without discerning the worm holes connecting excesses of the mid-2000s to 2008.  When was the crisis?  Spoiler alert – it’s not when you are paying for the consequences of bad behavior; rather, it’s during the mindless preamble during which care and attention is neglected.

In the dimension in which Stratfor operated – a dimension in which their own self-importance is a reflection of the arrogance and confidence of their clients – their assessment was correctly focused on the risk of getting caught by someone who could have sufficient influence to alter behavior they and their clients knew had damaging consequences.  Like last week’s post reflecting on the Union Carbide environmental liabilities, it was not about whether behavior should or should not be engaged.  Their focus was on getting caught and the associated risk to self-interest.

But we’re not better for WikiLeaks.  We didn’t find out anything that we didn’t already know.  And now that we know that a few oil companies didn’t give any mind to a few environmental groups, is there anything about our behavior that we’ll change?  Is there any action that will be altered?  The same protestors will protest.  The same condescending business executives will hold humanity in disdain while cashing the funds flowing out of the self-righteous wallets of fuel-addicted protestors.  And neither will be paying attention to the point in space across the wormhole – that space where consequence and consciousness actually cohabitate.

The Stratfor-gate (doesn’t have the same ring to it, does it?) is another example of irrelevant vigilante fuel on both sides of the fracking battleground.  The likelihood that any part of North Dakota or Canada will be undrilled because of this week’s revelations is measured in single digits, … to the right of the decimal point.  The likelihood that consumers will pay more for their fuel addiction is certain.  Like the patent litigation, agriculture subsidies, and trade wars that tack immoral tariffs on our various addictions, we mysteriously pay more for behavior that we appreciate less and less.  We are entangled particles in an entangled ecosystem.   The more you defend yourself in ‘not knowing’ or ‘not caring’, the more you’re fueling the problem – and giving Stratfor more reason to hold you and your world in contempt.


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Sunday, December 1, 2013

29 Years and Not a Day Closer to Accountability

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We didn’t wake up.  Neither did 3,787 officially.  They didn’t because they were dead.  We didn’t wake up because we don’t want to.  And just a little reality check.  The combined death toll from the World Trade Center, Pentagon, and Pennsylvania conspiracy of terror was 2,996.  Under the guise of seeking justice, we have prosecuted a series of wars which have cost Iraqis and Afghanis over 1 million lives and have cost the U.S. and its allies more than double the lives lost on 9-11.  But the reason why most of you are scratching your heads wondering what mass casualty event took place 29 years ago this week is because the terror gas attack wasn’t a radical Muslim gundamentalist (a term coined by my dear friend Moustapha Sarhank).  It wasn’t a born-again, pro-life Evangelical listening to voices in his head tell him of the depravity of civilization and his god-given role in bringing judgment on sinners.  No, this act of terror was perpetrated by an organization that was founded in 1917 with the union of two organizations which were launched in 1898 and 1886 at the birth of the industrial movement. 

No stranger to death, this organization killed 476 of its own between 1927 and 1932.  Foreshadowing their deadly attack in 1984, this mass killing was also done with an aerosolized agent.  Untold thousands died from other airborne toxins unleashed by this organization silently killing workers and consumers alike.  From 1976 until 1984, insiders and external observers reported deaths and disabilities but the lure of the organization’s ideology was so intoxicating that these were neglected.  And, according to the official inquest following the December 2-3, 1984 mass killing, safeguards installed by the organization were switched off to “save money”. 

And as we see mind-controlled, sedated Americans stampede into the temples built by Sam Walton to worship the same golden calf of “saving money”, it dawns on me how few of the Citizens of the World will actually bother to read this blog post or share it.  Why?  Because taking on this religion (and yes, even religion owes its existence to the same pagan, blood-lusting idolatry) is a heresy too great to stomach.  And 29 years later, no war has been waged by those who were attacked.  No reprisals have been prosecuted.  In fact, the architect of the attack was flown out of the country he attacked in the government’s own plane.  How’s that for a twist?  And in their Deloitte & Touche LLP audited financial statements, they callously footnote that they probably have liabilities for breathing-related illness and death that may be about $2.2 billion.  This figure eclipses the total out-of-court settlement the organization reached with those attacked of $470 million including generous payments to victims with permanent life-altering health effects the stunning sum of $380 and the families of the dead the whopping sum of $950.

If you’ve ever enjoyed a fresh garden vegetable on a tossed salad, you’ve probably ingested a non-lethal dose of Sevin®, the Garden Insect Killer.   This lovely little toxin is now proudly distributed by the “Science For A Better Life” company, Bayer.  And to produce this compound which thankfully is illegal in the United Kingdom, Austria, Denmark, Sweden, Iran, Germany (how’s that for a paradox?) and Angola, you can use a very complicated sounding word (for those of you who think my blog is too difficult to read and understand, I’m warning you… Big Word Coming!) methyl isocynate (MIC).  This little organic compound - CH3NCO – can be highly unstable in the presence of a lot of things, including water.   And MIC was the toxin of choice used by the organization that elected to kill its neighbors – neighbors in the city we all breathlessly read about 29 years ago this week – Bhopal.

The reason why 3,787 people had to die three weeks before Christmas was because Union Carbide needed to save money to boost shareholder profits.  The reason why miners in West Virginia died of silica poisoning was to boost profits.  The reason why audited financials describe “potential” liability is because the actual liability exists and the question is whether they’ll be held accountable.  And the reason why we collectively don’t care is because we want to have our tomatoes and garden vegetables untouched by insects so bad that we’ll kill for it!

Just the cost of industrial economies, right?  Twenty thousand dead in Bougainville courtesy of the abuses of Rio Tinto and, to this day, the world turns a blind eye while Bougainville Copper Limited seeks to pass a mining law illegally so they can do it all over again.  Nearly all of my ‘socially conscious’ friends compose their rants about morality on Apple computers and tablets while the 40,000 workers in China continue to suffer from “numerous labor abuses” including those egregious enough to lead to another 4 documented suicides this year.  Apple, in the spirit of the holidays, agreed to cap workers’ hours to 60 hours per week (wow, really generous of them!).  And their apologists rail against the most recent report of labor abuses by lauding the nearly $500 a month salaries generously paid to workers so that Apple can not return profits to shareholders but rather pump helium into its already bloated stock price.

Next week we celebrate the 72nd anniversary of Hitler’s declaration of war on the United States.  But eight years earlier (80 years ago) another industrial power decided that the lives of its own and others were expendable for ideologies of supremacy and “exceptionalism” (thanks, B.O. for bringing that wonderful term back for us after GW gave us the SS Homeland Security reprise).  Turning a complicit blind eye towards injustice, a great culture and people allowed their inertia to be hijacked into tyranny.  As then, we now have evidence that we could care less about the lives that have been rented, purchased, or killed so that we can consume at a discount.  Twenty-nine years later, we still out-source our consciences to lands remote enough to avoid confronting the cost of our consumption.  And one day, history will ask, where were those who actually had a conscience?  It’s a chilly night.  It’s the night before cyber-Monday!  See if you can actually put your credit card down long enough to find out what your products really cost before you decide that they’d make the perfect gift!  And stop B.S.ing yourself into believing that the dollar you saved didn’t come at a cost!


Hugs and Kisses – Scrooge

Monday, November 25, 2013

Duty of Candor

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I was speaking with a group of investors this week regarding the patents held by one of the world’s most recognizable mobile telephony companies.  As this company has navigated its way, with varying degrees of success, through a tangled maze of consumer expectations, technical improvements and feature modifications they have hastily trodden on the intellectual property rights of others.  They, together with their industry cohorts have filed thousands of patents on everything from the shape of a phone to the resolution of images on diminutive screens – few of which represent actual fundamental innovation but rather hollow impediments to use in an effort to modulate the severity of infringement assertions made by competitors or would-be trolls.

In this particular case, nearly 75% of the patents owned by this firm not only fail to represent bona fide innovation but, in many instances, are clearly direct adaptations (plagiarisms or the more politically correct term I coined years ago “conceptual annexations”) of the developments made by others.  That is not to say, by any stretch of the imagination, that the company does not have some amazingly valuable innovations.  Among their assets include some patents on mobile device payment systems, geo-location, and power management that may be of greater value to others than the entire market capitalization of the firm. 

For years, this firm has been audited by one of the world’s top 4 accounting firms.  When they were taken public, their Initial Public Offering (IPO) was underwritten in the U.S. by investment banking firms that no longer exist having collapsed during the financial crisis of 2008.  Neither their auditors nor their bankers ever asked the question of whether the firm actually had valuable intellectual property assets.  Rather, they asked the question: “Does this company have patents?”

On the eve of this past week’s miscarriage of justice in California (the erroneous jury damages award to Apple assessed against Samsung), the United States Patent and Trademark Office (USPTO) found U.S. Patent No. 7,844,915 (‘915) invalid.  What this means is that when Apple filed for patent protection for the idea of zooming an image on a mobile phone by pinching fingers on the surface of the screen, they actually hadn’t “invented” anything.  In fact, Andrew Platzer and Scott Herz in partnership with the law firm of Blakely, Sokoloff, Taylor & Zafman LLP, had breached the Constitutional intent of the U.S. patent system by cutely describing the movement of fingers to expand or contract an image as “scrolling” “gestures”.  Setting aside the absurdity of presuming that one could “invent” in 2007 what had been in Hollywood movies for two decades already, Andrew, Scott and Apple’s legal eagles misled the USPTO and confused Patent Examiner Xiomara Bautista into awarding a patent on a feature that was neither novel nor non-obvious (two of the three standards which must be met for a patent to be issued).  Quite correctly, the USPTO found this grant to be in error and unfortunately did so in such close proximity to Judge Koh’s schedule for a decision that Samsung wound up having to pay for use of an “asset” that did not actually exist.  Apple knew it.  Samsung knew it.  Even the judge knew it.  But expediency and injustice were more powerful than upholding the law and Samsung has to pay.

Now what’s relevant in these two stories is the fact that the telecommunications company referenced at the top of this post has over 12,000 patents which would, if challenged, likely be found invalid just like the thousands of faux patents held by Apple.  They know it.  Their competitors know it.  But tragically, neither the media nor agents of accountability (auditors, ‘expert’ advisors, the SEC) are willing to inform the public about this giant fraud being conducted under the aegis of “innovation”. 

Under what is referred to as Rule 56, there is a “Duty of Candor” which requires all persons involved in applying for a patent to disclose all of the information they know which could adversely affect the grant of a patent for the invention they seek to protect.  This rule is similar to the accounting principle of what’s known as the “Duty of Care”.  Both of these Duties suggest that the potential for harm arises when a person knowingly fails to fully inform himself or herself with knowable information which could contradict assumptions being made carelessly.  The line between careless ignorance and negligence is one that is frequently gray due to the hurdle of effort (and cost). 

In the U.S. we have laws that are supposed to protect the public consumer from abuses like Apple’s enforcement of a wrongfully procured patent.  When parties knowingly prosecute legal cases against one another with dubious or invalid patents, they both thwart these laws and harm the public.  This will be the case with the telecommunications company’s patents referenced above.  By failing to separate the “wheat from the chaff”, investors and the market will presume that tens of thousands of patents exist in legal enforceability and have value.  This is not the case.  And when those patents are licensed or sold, they will be a real cost involving real money flowing between real parties.  Billions of dollars later, the public will wind up paying inflated prices for a fraudulent conveyance that was knowable (and known) today and the harm will be done.

It is time for the investing public to discontinue their benign neglect of the Duty of Candor and start paying attention to the abuses of law that are going unchecked.  It’s time that companies and the service providers they engage are held to standards that don’t seek camouflage in the ignorance of the public to the systems of proprietary market controls.  True innovation will not be put in jeopardy and consumers will stand a chance to actually see innovative solutions to substantive and meaningful challenges.


 For more, check this out.

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Monday, November 18, 2013

November 17 and the Last 1479 Years

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Happy 99th Birthday, Federal Reserve Bank.  And Happy 1,479th Birthday Codex Justinianus (Civil Law).  In her Congressional testimony this week, Fed Chairwoman-in-waiting Janet Yellen said, “I don’t think that the Fed even can be or should be a prisoner of the markets.”  In this comment she probably truly stated an imaginary desire for an alternative bank in an alternative universe.  However, in this comment, both she and her Congressional inquisitors failed to recall the founding history and practical reality of the very institution she’s being nominated to head.   

Benjamin Strong, the first Governor of the Federal Reserve Bank of New York who opened the august institution 99 years ago on this day stated that the bank was not only created, “to serve the banker, the farmer, the manufacturer, the merchant or the Treasury of the United States… but to serve them all.”  When Strong opened the bank on this day, he had seven bank officers, 85 clerks and $99,611,670 in deposits from member institutions.   In his early tenure, his mission, together with his warnings and admonitions are as eerie as the dense fog that shrouds this morning in Charlottesville, Virginia.  It’s as though he was looking across the future that lay before him and anticipating the moment we’re now embracing.  He wrote:

“And a seventh and last difficulty, although this may not indeed be all of them, is the one which I regard as more serious than any of the others – the exercise of the powers conferred by the Reserve Act upon the Reserve Banks by this rule of personal discretion, I fear, would develop inevitably in time a bureaucratic attitude of mind on the part of the managers of the Reserve banks which would be unfortunate indeed for the welfare of the whole banking System.  Power excites appetite for more power.   Bankers in time would rebel and the public would rebel.”

“Its future depends upon its own good behavior and upon its success in winning and holding the confidence of the public.”

Strong was running a well-funded start-up.  Ms. Yellen is inheriting a bloated balance sheet, obese, unwieldy, diabetic, and Alzheimer’s-afflicted institution.  Strong, by education or intuition, was acutely aware of the Justinian Codex which preceded his leadership which, in its second title, subsection 11, states that, “the laws of nature… are established by divine providence… but the municipal laws… are subject to frequent change, either by the tacit consent of the people, or by the subsequent enactment of another statute.”  Congress and Ms. Yellen would be well-served to read Title 14 of the Codex in which the Romans were good enough to recognize that civil society depends on real contracts and obligations to insure that those who take on obligations understand the nature of their obligations and are bound to restitution in the event that those obligations are unfulfilled. 

Ms. Yellen’s aspiration for the Fed to be emancipated is going to take more than a Lincoln proclamation.  If the markets have told us one thing over the past 5 years it is simple:  the Fed’s lofty goals of employment and inflation management have been weighed in the balance and found wanting.  Employment has not improved and the record number of employment-eligible people who are without adequate compensation is growing at an alarming pace.  And inflation control is an illusion supported by a mutual-assured destruction currency cold war that is allowing manipulation to override the markets that would be evidenced if Free Trade was Free.  While the U.S. has barely returned to 2008 levels in critical areas like Gross Fixed Capital Formation (still well below 2007 levels), the GDP effect of this fixed capital utilization is nowhere near where we were in the mid 2000s.  So, despite pumping trillions of dollars into balance sheet expansion, the desired effect has not manifest.

Moving the goal posts doesn’t win the game if the players know the rules and are paying attention.  Like the Affordable Care Act and the Administration’s response thereto, failed policy is not ethically managed by stating that the rules no longer apply.  The Roman Civil Code clearly recognized that The People will either have “confidence” or they will “rebel”.  If an emperor figured that out fifteen centuries ago, is it reasonable for us to ask for at least equivalent accountability?

It’s time for each of us to realize that our persistent neglect to holding public officials accountable for lack of oversight and integrity is not their failure but our own.  The impulse to criticize is nearly universal.  The integrity to accountably operate evidencing a better path is the road less traveled.  And on this day, in the yellow wood, I, delighted not to travel both, am not standing long and looking down both.  The one well-worn, fair and heavily trodden is one that has led to massive asymmetries of wealth and inhumanity.  The one whose leaves are untouched and overgrown for want of wear is a different path, one less traveled by, and traversing that path has, for me, made all the difference.


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Sunday, November 10, 2013

Starting From Scratch

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I’ve spent a considerable amount of time this week reviewing the creative writing of Australia National University’s Fellow of State, Society & Government in Melanesia Program Mr. Anthony Regan.  Having “specialized in constitutional development” in Papua New Guinea, Sri Lanka, East Timor and Uganda, Mr. Regan has recently submitted a proposed “transitional mining act” to the Parliament of the Autonomous Region of Bougainville. 

And, for those of you who are not familiar with Bougainville, a little history lesson is in order.  Under a dubious entitlement mandate from the United Nations following the Second World War, the Australian government decided that it needed to take possession of the massive metal reserves in the island at the end of the Solomon chain and, in 1967, confiscated Bougainville for their exploitation while ‘facilitating’ independence for the state of Papua New Guinea.  Over the well-documented opposition of many local communities, the Australian Administration and their appointees in the Papuan Administration, the 1967 Bougainville Copper Agreement Act became a supra-Constitutional Agreement between a territorial administration and Bougainville Copper Limited.  As if to prove that they knew that they were violating international legal standards, clause 4 of the amended Act states that “no other law of Papua New Guinea, affects this Act or the Agreement.”  In clause 5 of the amended Act, the Prime Minister (remember, the State had not yet been established) is granted the power to exclusively administer the Act without any consent, approval, or any other law.  In other words, the Australians, in what amounts to unlawful territorial seizure, enacted a law above ANY sovereign law directly expropriating land for their exclusive economic exploitation.  Oh, and for their $5 million trouble of exploring the mineral reserves, the Company (BCL) had to pay the extraordinary sum of 1.25% of ‘applicable revenue’ from the mine! 

In an elaborate scheme reminiscent of the first theft of Bougainville’s assets, Mr. Regan has complied with the wishes of his paymasters and drafted a new mining bill that preserves nearly all the abuses embodied in the 1967 Act.  To add insult to injury, his proposed bill reinforces the corruption quotient by burying in Clause 26 the nullification of the over 200 provisions with the simple empowerment of the Autonomous Bougainville Government to act unilaterally and without consideration of any law as it wishes.  Using his “constitutional” expertise, he’s taken to the U.S. government’s definition of Constitutional Law – if it is expedient, do it and tread on the Constitution to get what you want (thanks GW and BO!). 

Now Mr. Regan and BCL (along with Rio Tinto – the 54% owner of BCL) want to take advantage of the pro-autonomy movement in Bougainville and pull off another heist of gargantuan proportion.  But they forget that the world is more interconnected.  And while they and the BCL shareholders desperately want to take another malevolent trip around their merry-go-round of abuse, they are ignoring the simple fact that their “advice” and extra-governmental manipulation are now available for the world to see.  

Whether the Panguna Mine opens or not is an issue that should be decided by the citizens of Bougainville – including those who participated in the armed uprising in 1989.  But more fundamentally, we should examine what it would take to run an ethical, transparent operation – one that doesn’t require Australian academics to serve as advisory mercenaries to launder unethical behavior in the name of progress.  If the citizens of Bougainville determine that they would like to see their land utilized for mineral extraction, that’s a call that they should make fully informed of all the facts.  They should be informed of the state-of-the-art in development, mining, environmental management, power generation, and market participation at all capital levels.  If Rio Tinto and BCL want to be candidates as future operators, they should step up to the damage that they’ve already done and evidence their candidacy for action not by manipulating the law but by being responsible citizens accountable for past harm. 

This week, Australia has a chance to amend a blight on its post-War legacy in the Pacific.  It can intervene in this miscarriage of due process.  Together with the citizens of Bougainville, Australia can start from scratch and see if it can win in the full light of day rather than in the veiled obscurity of manipulation and corruption.  We’ll see.


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Sunday, November 3, 2013

I Believe I Can Fly

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Despite his age and plenty of free time for thoughtful inquiry, former Fed Chairman Alan Greenspan still doesn’t get it.  Like Daedalus, the famed designer of the Labyrinth in Crete into which the Minotaur was imprisoned, Greenspan and his off-spring have failed to recall that the maze includes Ariadne’s thread which, if followed, can unravel the mystery that isn’t.  During his interview with Charlie Rose, Greenspan evidenced the same myopia that blinded him for over 18 years – cataracts that are alive and well in the eyes of Janet Yellen.  Spoiler alert:  It’s not the housing, stupid.

He was a man learned for those times, of ripe old age, and in his early youth hazarded a deed of remarkable boldness.  He had by some means, I scarcely know what, fastened wings to his hands and feet so that, mistaking fable for truth, he might fly like Daedalus, and collecting the breeze on the summit of a tower he flew for more than the distance of a furlong.  But agitated by the violence of the wind and the swirling of air, as well as by awareness of his rashness, he fell, broke his legs and was lame ever after.  He himself used to say that the cause of his failure was his forgetting to put a tail on the back part.   – Eilmer of Malmesbury recounted by Geoffrey of Monmouth

Eilmer, the flying monk of Malmesbury was not sponsored by Red Bull but, had the chalice been caffeinated back in 1020 CE, he would have been.  There’s a lot that’s cool about Eilmer (or EFM as I imagine his hip, rad Red Bull sponsored code name would be today).  Historians suggest that he may have been one of the few millennials in the 11th century to actually see Halley ’s Comet twice – first in 989 and second in 1066.  But EFM’s 200 meter flight, like the Icarian myth from which it was inspired, actually set in motion innovation that is alive and well today.  Well, let’s pause for a moment.  Popular culture suggests that between 1930 and 1961, 71 of the 75 people working on perfecting the design for the wingsuit paid for their efforts with their lives making this one of the most lethal innovations when measured by mortality rates (much higher than Skydiving 3.3/1000 or summiting K2 104/1000) so we need to be careful with the “alive” part of “alive and well”.

Now what do Greenspan, EFM, and flying squirrel suits have to do with the economy, you ask?  Greenspan and my all-time favorite Fox News demigod Vice President Dick Cheney (who stated that, “I don’t think anybody saw it coming”) continue to recite their conviction that “no one” could have seen the fiscal house of cards collapse risk despite mountains of published evidence (including my own from 2006) that is available to contradict their assertions.  Why would these pilots of policy fail to update their self-evident imbecilic statements?

Well the answer is really quite simple and has four degrees of freedom: Lift, Drag, Thrust and Weight.  These four variables are what makes something fly or, conversely, hang in the air the way bricks don’t (thanks Douglas Adams!).  In this metaphor, I seek to explain economic ideals through the understanding of what it takes to fly.  And the reason for this is really quite simple.  In all human endeavors, lateralized thinking – the ability to apply observed principles from one discipline to another – is helpful in assessing where we might need to go to solve for what seem to be intractable obstacles in the consensus view.

If one aspires to take-off or remain in flight, a fluid dynamic conspiracy must be engaged.  If one seeks to keep an economy going, a fluid dynamic conspiracy must be engaged.  For the purposes of our conversation, let’s unpack the analogy a bit.

For flight, lift is the aerodynamic force that is created when contour creates differential pressures perpendicular to the flow of the wind above and below the wing.  For economics, lift can be understood as the momentum of flow of transactions through the wind of trade.

For flight, drag is the mechanical form that interacts with fluid resistance.  For economics, drag is the expansiveness and complex contour of all types of transactions in trade and exchange. 

For flight, thrust is the acceleration of mass to propel an object into the flow of the fluid.  For economics, thrust is the animation and stimulus of activity in the market.

For flight, weight is the force of gravity opposing lift and creating the higher pressure on the lower surface of the wing to stimulate lift.  In the economy, weight is the carrying cost of the system that includes the entire utilitarian expectations of all things dependent on money.

Our current economic theorists, regrettably, are attempting to fly with only two variables – thrust and drag.  For over 5 years, the Federal Reserve has mistakenly increased the thrust using a variety of ill-conceived stimuli that have added viscosity to the flow.  At the same time, they continue to insist that housing is the wing that will lift the economy back into flight.  They’ve done nothing to alter the momentum of flow – which would require massive expansion of domestic production and consumption rebalancing as the flow is relevant at the surface of the wing – not in bi-lateral or multi-lateral trade agreements far from home.  And they’ve added weight by increasing the number of areas where the economy must serve humanity – more public employment, more indirect government expenditure dependency – relative to all previous periods.  At this time in our economic evolution, we need greater contour and adaptability on the upper surfaces of our wings – more agile businesses and business models; more adaptation at the margins (attack and flaps) – and we need weight reduction (less monetary dependency) if we expect to soar. 

Housing does not a flightworthy wing make.  The financing for housing still requires government intervention (Freddie and Fannie) to sustain what has become an orgy of over-consumption.  Far from shelter, our mini-palace definition of home has seen our houses grow in size 69% from 1973 to 2010.  Like our waistlines (60% of Americans are now overweight and obese), our gluttony has made our capacity to soar diminish.  Now as we blubbered our way into bigger homes, did we actually achieve a more stable economy?  Absolutely not.  Did any of our ‘growth’ actually come organically?  Absolutely not.  We grew our economy by adding weight and increasing drag.  We ignored lift and attempted to make up for our design failures by adding throttle.  The bad news is that this formula works for landing – not for taking off.

We need to regain the svelte attitude of flight.  Highly adaptable models that can respond to flight conditions at the wing.  Highly distributed transactions – more and smaller.  Lower viscosity of the fluids through which we move.  And less dependency on monetary intermediation of all of our transactions.   If we want to fly, we can.  And like EFM, we don’t need to wait for our drunken pilots to climb into the cockpit to crash all over again.  We The People can actually start living on the wing and before long, we can realize that we don’t need Daedalus anymore.  Climb up on the tower (or the face of a giant, Red Bull sponsored cliff), feel the wind on your wings..., breathe, then go ahead, jump with a tail on the back part!


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Saturday, October 26, 2013

Go Jump in a River

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I suppose that I was in one of those ‘been-in-the-air-too-long hazes’ flying over Ur or Sumer en route to the Kingdom of Bahrain when I finished reading the Wall Street Journal, the Financial Times, and the Gulf News.  The monotony of the media’s coverage of troubled banks, EU protestations over U.S. spying, and, pompous morality policing (and scandals) overwhelmingly drowned out all other voices.  Loss of trust, inhumane treatment between citizens of the globe, and deceit are epidemic and, unlike the avian influenza, there’s no quarantine underway.

For the reason I cited above, I decided to break out my favorite cuneiform reference – the Code of Hammurabi – to see whether a journey over the same globe 4,000 years ago would have been much different.  For those of you who don’t have it handy, a quick refresher.  In the slightly over 280 laws, the “wise king Hammurabi” (that’s what he called himself) set forth laws that were to remain unaltered for all time.  The general themes of the law cover topics like Justice (5%), Human Trafficking (3%), Property Rights (8%), Agroeconomics (8%), Money (21%), Marriage and Prostitution (24%), and Civil Penalties (28%).  But one of the more curious elements of the Code of Hammurabi is introduced right at the beginning: Law 2 to be exact.

“If anyone bring an accusation against a man, and the accused go to the river and leap into the river, if he sink in the river his accuser shall take possession of his house. But if the river prove that the accused is not guilty, and he escape unhurt, then he who had brought the accusation shall be put to death, while he who leaped into the river shall take possession of the house that had belonged to his accuser.

It turns out that the Jump-In-A-River test was actually pretty common in Ur and Sumer and is, by no means, the comedic basis for the Monty Python Holy Grail witchcraft mob logic.  Which begs the question of whether or not the first club fitness program for ne’er do wells would have been advisably swimming lessons.  To prove one’s innocence, cast yourself into the river and, if you don’t drown, whatever allegation has been made against you is proven to be false with grave harm befalling the accuser.

Now what on earth does this have to do with the headlines that graced my interminable night of flying 1/3 of the way around the world?  Well really, it’s quite simple.  In the past 4,000 years we’ve not seemed to learn much about human behavior, integrity, or accountability.  And it may be because, like Hammurabi, we’ve been focused on a rather profane and diminished view of humanity.  Personal injury, gender-biased faux morality defined for the benefit of domineering males, and money – the preponderance of Hammurabi’s obsessions – are still prevailing themes today.  And, as was the case 4,000 years ago, life (or the indenture and extermination thereof) and monetary penalties (fines for indiscretion and abuse) are the only two tools we can concoct to mete out a wretched form of justice.  In a world in which we label those who disclose egregious violations of international law “traitors” (despite the justifiable global condemnation for the acts they are unveiling) while in the same moment extract less than 25% of JP Morgan’s 2012 net income in a settlement for massive fraud, can we really continue to suggest that the 4,000 year old system of justice is working?  I think not.

Edward Lee Thorndike is credited with the modern conception of “behavior modification”.  In his dissertation, Animal Intelligence: An Experimental Study of the Associative Processes in Animals (which happened to credential him just in time to become a psychological testing expert to qualify soldiers about to be sent to their deaths in World War I based on their measured proclivity to accept orders), Thorndike reinforced the illusion of stimulus-dependent enculturation and responsivity.  Thorndike and Hammurabi both assumed a linear view of humanity that sought to distinguish ‘man’ from savage or beast.  Thus aspiring to something just above savagery as the laudable trajectory for humanity, is it any wonder that we still find ourselves deceiving, philandering, injuring, and pillaging?

Why does a mercenary NSA spy for its paymasters?  If you seriously buy the “war on terrorism” malarkey, you’ve been watching too much Fox News.  There’s never been a war on terror; rather a war on liberty.  There has been an assault on humanity for the preservation of an unsustainable dichotomy of power dominating the masses.  The U.S. is not sorry that it spies any more than it’s sorry that it maintains power and wealth imbalance across the globe.  It has abused its technology, reputation and power and has acted without consideration of consequence.  Wrapping lies and subterfuge in the American flag does not ameliorate the abrogation of the humanist ideals of liberty and morality once celebrated as the grand experiment of the United States.    It has, in fact, proved one of Thorndike’s assertions – action precedes interaction and association.  Thorndike was credible enough to supplant his own argument about ‘connectionism’ in recognizing that behavior first happens and then is judged with pleasure or aversion. 

“I wish to also say that whoever thinks that, going along with the current which parallels the association, there is an accompanying minor current, which parallels the pleasure and which stamps the first current when present with it, flies directly in the face of the facts.  There is no pleasure along with association.  The pleasure does not come until after the association is done and gone.”

The U.S. is sorry that it got caught.  It’s ‘investigating’ how it found itself, um, … with its hand in the cookie jar (or in Angela’s cell phone as the case may be).  Which begs the fundamental question.  If 100 years ago Thorndike was able to successfully conclude that behaviorism failed a prima facie neurological and logical argument, why are his observations ignored when it comes to our current memes?  Why are we still focused on attributing blame, seeking justice, and penalizing those who violate social order and laws?  We know that this has been ineffective for 4,000 years yet we still persist in the illusion that it preserves order.  We spy to gain an unfair advantage to the detriment of all others.  We perpetually prop up and vilify the global banking system with oversight and then accommodation with such frenetic convulsions so as to insure that no one can have faith and confidence in money or its purveyors.  We abuse one another in ecstatic intimacy and benign neglect.  We are who we’ve been.

How about a different path?  How about living a life in voyeuristic transparency?  By this I mean living in such a way as to celebrate the essential best of humanity so that you see and can be seen not for the fa├žade you deem suitable but for the essence of yourself.  What if you welcomed surveillance to demonstrate the potential of a life unencumbered?  What if you conducted your affairs in such a manner as to proudly take attribution for your successes and failures?  What if you actually lived within your means and strove to insure that others could equivalently do so?  Rather than falling into the ancient social reflex of causality, could you actually see yourself living accountably?  And by this I don’t mean seeking attribution for egoic benefit.  Rather I mean taking full responsibility for the fact that you are, in fact, the perpetrator of your life – not a helpless victim of carnality or causality.  In such a world, NSAs, banks, social conventions, and the like become impotent in the face of a human with nothing to hide. 

So here’s a swimming lesson.  Survey the river to find out where the stones are.  This is important for two reasons.  First, if you choose to dive in, you may want to avoid hitting your head on the way in.  But equally important, once in the water, you may need to display your innocence and, if your arms fail you, you may need to know where to stand.  Strip off your tired clothes and come on in.  The water’s cool and refreshing.


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Sunday, October 20, 2013

Selling Souls for $13 Billion

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Word on the street is that the price of justice has just been auctioned at $13 billion.  Reportedly this past Friday afternoon, JPMorgan Chase Chairman, President, and CEO (can anyone say too many titles?) Jamie Dimon connected with the indulgences-minting Attorney General Eric Holder to see what the going rate for crime is these days.  There’s no question that JPMorgan defrauded investors.  There’s no question that they were not acting in isolation.  There’s no question that the actions they initiated were in violation of numerous laws designed to protect investors and the general public from misdeeds that triggered the Great Depression.  And there’s no question that the U.S. government has sold integrity before and has every intention of selling it again.  The part of the about-to-be-settled complaint that I find priceless is claim 686 on page 260 where the government alleges that, “GSEs justifiably relied on false representations and misleading omissions of J.P. Morgan Acquisition,” (et al) and Claim 687 on the following page, “would not have purchased the GSE certificates,” had they been exposed to the true facts.

Now grab your box of tissues because, according to the civil and criminal complaint, the “immediate victims” were Fannie Mae and Freddie Mac – two dignified, upstanding government sponsored entities whose mission is to provide “affordable housing to millions of Americans.”  The SHAME!  These poor, helpless co-conspirators (oops, how did that get in there?) were too dull minded to know that they were being duped and they – not the ignorant public – were the victims.  The Federal Housing Finance Agency’s (FHFA) September 2, 2011 complaint identifies over $30 billion in securitizations that were subject to the alleged frauds enumerated in the over 260 pages of Quinn Emanuel billable hours.  Over 50 persons and corporations listed as defendants created over 100 “investments” that turned out to be gross misrepresentations of Americans’ ability to live within their means.  Uh oh!  Who is the victim now?  Oh, and the Securities and Exchange Commission (not named as a co-defendant) reviewed the Prospectus for each of the securities and no one there is culpable?  Seriously?

Just when you thought the criminality of the system couldn’t get more outlandish, Warren Buffett dismissed crimes against investors with the pandering statement that, “If a cop follows you for 500 miles, you’re going to get a ticket.”  Well Oracle of Omaha, thank you for punctuating the indictment on the market and any sense of propriety.  “You can’t be active in a big business without making some mistakes, and sometimes they may be big ones,” he clarified. 

Mistakes?  Getting a ticket?  Warren, get a grip, man!  These are not misdemeanors and accidental oversights.  These are crimes perpetrated against millions of people for billions of dollars of damage.  And when the public is told to just look the other way courtesy of $100 million here and $13 billion there, the contempt for justice and the rule of law actually goes up.

In his testimony in January 2010, Jamie Dimon blamed most of his firm’s troubles on “some unscrupulous mortgage salesmen and mortgage brokers.”  He also stated that, “you know, that home prices don’t go up forever and that it’s not sufficient to have stated income in home [loans].”

Now before you go off and conclude that I find Jamie and the JPMorgan gang unique in their behavior, think again.  The one place where I agree with Warren Buffett is in his observation that everybody is doing it.  And there’s no question that when the government was trying to staunch the bleeding in the ’08 meltdown, Jamie was asked to pull a whale of a task in swallowing the toxic Jonahs – WaMu and Bear Sterns – and refer to both as ‘strategic business combination transactions’.  So, while we’re throwing criminals under the bus, let’s think about who was in the White House, the Treasury and the Fed and add them to our perp walk.  He played ball with the cover-up of government endorsed fraud and, in a warped moral contortion, could actually blame the government for a chunk of his problems.  Oh, that’s right, he has!

If the U.S. wants to gain a modicum of credibility for the rule of law, Attorney General Eric Holder and New York Attorney General Eric Schneiderman should walk away from the $13 billion and actually take the real list of defendants to court.  But that would actually demonstrate that the victims weren’t; that the public harm was actually the public’s economic indiscretion orgy coming back to bite all of us; and, that the system hasn’t gotten one bit better since 2008.  There will be no justice in this case because there cannot be any.  In his A Theory of Justice, John Rawls postulates that people determine their perception of justice behind a “veil of ignorance.”  Worse still is a public where justice is ignored in cold, sterile contempt for the rule of law.  Our recent debt drama in Washington, our neglect for our own accountability, and the collective cataracts that blind us to what is being done in our name for our own ‘benefit’ are all symptoms of our incapacity to apprehend morality.  We have, in fact, sold our souls.


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Sunday, October 13, 2013

Render to Caesar

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Silver is the instrument and measure of commerce in all the civilized and trading parts of the world.  It is the instrument of commerce by its intrinsic value.  The intrinsic value of silver considered as money, is that estimate which common consent has placed on it, whereby it is made equivalent to all other things, and consequently is the universal barter or exchange, which men give and receive for other things they would purchase or part with for valuable consideration: and thus, as the Wise Man tells us, Money answers all things.

In his 1691 treatise entitled “Concerning Raising the Value of Money”, John Locke laid the foundation for the single most pervasive and destructive myth of his time and of ours.  Ironic that this text was the opening of an attempt to advocate for the Parliament to actually increase faith and confidence in sovereign monetary systems – a novel and tenuous proposition at the time.  In the same manifesto, he paved the way for Adam Smith and others who would come to see the productivity of humanity through the distortion of rented anonymous labor for which humans prostitute their lives until their disability or, more often death.  Paradoxically, while the White House and Congressional Republicans were exchanging epithets about each other’s dereliction of responsibility ignoring the self-evident reality that the capital exoskeletal remains of the U.S. economy are rapidly desiccating, I was listening to a cacophony of those who would seek to change the world clamoring for monetary funding for their endeavors.  Projects that would power civilization by harnessing energy from the Earth and cosmos, would nourish, shelter, and hydrate the world – technologies that could be harnessed for ‘free’ – all were held in embryonic suspension waiting for monetary sufficiency to set them “free”.

John Locke was wrong.  His progeny are wrong.  And the charade in Washington D.C. is also wrong.  On the 100th anniversary of the Federal Reserve, we know that the core assumptions derived from Locke are grossly flawed.  We know that the Fed has not succeeded in its publicly stated mission of controlling and facilitating a healthy labor market and controlling inflation.  But further, we know that the current theatrics do nothing but confirm that no one in D.C. (nor in their European counterparts) is yet willing to confront the central failure inspired by Locke’s maxim.  Our shared problem is not the cost of energy, the size of our national debt, or the tirelessly maligned capital intermediaries.  Our problem is our addiction to Locke’s maxim.

Just a quick reminder.  When the Federal Reserve was born, the long-dated asset (the 30 year Treasury) was meant to serve as a stabilizing economic keel for the economic ship called the United States.  In its first maturity cycle, we entered the Second World War masking illiquidity with massive wartime consumption.  In its second maturity cycle, we had the combined suspension of the Bretton Woods gold standard and Congress and the White House paved the way for foreign governments – including the Communist People’s Republic of China – to purchase our debt and call it an “asset”.  In the third turning, we had a string of atrocities in September of 2001 which distracted the nation from the grave statements made by the Bush Administration regarding “trillions” of dollars of fiscal holes in the coffers of the country.  And, when the government was unable to respond, it turned to the assets held by citizens – their homes – and induced the abuse of mortgages as ATMs which in turn blew up in 2008.  The “monetary system” that we extoll as our succor has, in fact, never completed a full cycle without war or manipulated intervention and has never stood on the full faith and confidence of American productivity.  Rather it has relied on propaganda and inducement of foreign interests to be buoyed as the most tolerable illusion.

Einstein is quoted to have stated that, “No problem can be solved from the same level of consciousness that created it.”  In the company of those who seek to transform our energy dynamos from centralized fossil fuel combusting grids to whirring magnets and toroidal vortices, Einstein’s quote is the staccato to the underlying pulsating beat of Tesla adoration.  And to be sure, both of these brilliant minds were both genius and fodder for the industrialist hegemony into which they were born.  Both were set upon by those who sought to control the mercantile future of their work and both were manifestly dependent on purse strings to their own undoing.  I find it fascinating that in all the adoration of Nikola Tesla, J.P. Morgan is the villain.  With all his brilliance, did Tesla genuinely remain ignorant of the source of the funds that were his remuneration?  Did he really think that capitalists in the late 19th century were overcome with such a philanthropic sense of humanity as to not desire a metered power system?  Was his genius, and that of so many suppressed and derided inventors to follow, so monotonic as to ignore the ancient truism: “Render to Caesar what is Caesar and to God what is God’s?”  Not at all.  The desire for the coin of the realm was too loud a siren to ignore and, when recompense was due, lately acquired morality had departed.

So here’s my adaptation of Einstein’s postulate.  I offer it as my Archimedean Theorem VII:
No systemic breakthrough can be provisioned solely reliant on the same currency that maintains the incumbent status quo.

Think about it.  We want politicians accountable to the electorate but we fall for those who have spent the most donor money in their campaigns.  In the name of peace, we acquiesce to persistent terror.  We want connections with people so we intermediate flesh with Facebook and Skype.  We want knowledge so we drown ourselves in the edited, curated content Google chooses to render visible.  And in a room full of would-be inventors for a “new” humanity, references to “non-disclosure” and “patent” out-numbered the clarion calls to collaboration.  Why?  Because that which separates us and ‘protects’ us is beholden to money.  Must we accumulate the life-blood of the system we deride because in our hands we’ll do better?!  Hogwash.

Now let’s be abundantly clear.  Money – a transitive and temporary unit of stored value – serves a vital role in intermediating time and pulsatile seasons of production and consumption.  Money provides exceptionally efficient neutrality in denominating social consensus in transactions.  But money as judge, jury, and executioner of ideas, technologies, social benefit or power attribution is an offense to a mercantile system.  It is a utility devoid of wisdom, ignorance, or any other attribute.  And its utility, when celebrated as the artifact of supreme importance, is lost in its obsession.  Now is the time for We The People to call John Locke’s bluff and start answering the exchanges between humanity with values that are as diverse as humanity’s capacity to apprehend.  Only then will conscious enterprise stand a chance.


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