Drone strike appears to have killed al-Awlaki

http://news.yahoo.com/us-officials-us-attack-yemen-kills-al-awlaki-130835684.html

I guess it's good for US national security that this man is dead, but what is to stop another similarly dangerous individual from taking his place and even doing a better job?

It is disconcerting that the US gov't can sanction the assassination of a US citizen living legally in another nation where we have no official military jurisdiction. All the "evidence" against this person is classified (actually he has not even been officially charged with any crime!), so we just have to go on the hate sermons he has released online and his alleged ties to the underpants bomber and Ft. Hood shooter. No due process, no explicit attempt to apprehend him, and it wasn't an interdiction to stop him from imminently harming others. Just shoot to kill, and the order came from a C-in-C who used to be a ConLaw professor.

Plenty of US citizens have committed treasonous behavior over the years (and yet our nation still stands), but Washington did not issue kill orders for them. In fact some of them today live comfortably and have radio/TV programs. I guess this shows Americans that under some set of conditions, our gov't can unilaterally and spontaneously murder us. But probably not being an extremist Muslim reduces our chances.

Interesting story of the Conficker worm

http://www.npr.org/2011/09/27/140704494/the-worm-that-could-bring-down-the-internet

The author of "Black Hawk Down" recently published a book about internet security and the Conficker worm, the most successful malware program known to date. I am not an IT guy, but from the interview, it seems that Conficker was written by expert hackers in Ukraine (who still remain anonymous) to tunnel into millions of Windows PCs and subtly control some of their processing resources, and then answer to a mother computer. Their aim seems to be the creation of a massive "botnet" of 10-12M slave computers worldwide that basically aggregate their processors to become the most powerful supercomputer in the world (even better than our best, expensive NSA comps). It's like those movies with the little nano-machines piling up to become a huge scary monster.

With this asset, the masters of Conficker may be able to brute-force crack computer encryption, presumably to guess passwords to steal money and/or secrets. 128-bit encryption technology can maybe produce gazillions of possible passwords (>10^38), which would take too long for even modern supercomputers to plow through. But the Conficker botnet can do this much quicker, and it's masters are now "leasing" the botnet resources to other criminals seeking to steal something. In theory, the penetration of Conficker is so great that its masters would be able to shut down the global internet if they wanted, but they seem more inclined to use it to steal, so it's left unharmed.

How the heck does Conficker infect PCs? Good ol' Microsoft did not make Windows XP very secure, and their engineers eventually discovered a vulnerability for remote access. So they issued a typical software update/patch to close the hole, and anyone who regularly updates their Windows OS should be safe. But the problem is that most PCs running Windows worldwide are using pirated versions that are not eligible for updating (another consequence of OS piracy: exposing the whole internet and trillions of wealth to crime; thanks a lot, China). So those users are totally exposed unless they download antivirus software or a free anti-Conficker program written pro bono by the "Conficker working group" near Stanford (calling themselves "the cabal," a team of volunteer cyber-security experts who recognized the danger of Conficker and are trying to stop it on their own time and own dime, because gov'ts are way behind the curve and doing nothing).

The irony is that Conficker started infecting PCs after this Windows patch. It's possible that the hackers analyzed the patch to reverse-engineer and discover what the Windows vulnerability was, so MS gave the bad guys a free how-to guide to hack Windows! By trying to fix their product, MS brought about the Conficker infection (in addition to many other similar malwares that have been since identified, and lord knows what we haven't found yet). Another consequence of monopoly: concentrated risk. And even though Conficker doesn't affect Mac or Linux, that's not to say that those OS's are any more secure. The Conficker masters just see less value in infecting the much smaller global population of Macs and Linuxes, which would create a much wimpier botnet. So take that, Apple snobs (and FYI, iOS has been hacked repeatedly so far).

Why can't we identify and shut down Conficker? Infected PCs show virtually no symptoms of infection, and are blocked from receiving any new updates, so it is a very clever parasite (and as I said, most of the infected PCs are not in the West). It just uses the processor selectively without slowing down your normal apps. But all the slave comps must answer to the mother comp for instructions, right? Why not just use that communication to locate the criminals and shut it down? Well, Conficker is elusive and doesn't just route all slave communications to one IP address. Then it would be easy to track, like a phone trace. But each day Conficker commandeers 250 IP domains, so it requires more effort to track down, and recent Conficker strains now use 2,500 domains and even 5 "high level" domains that are very secure. The hackers know that the poorly-funded cabal is the only group trying to stop them, so they just needed to make Conficker communications too costly to trace and block.

So where the hell is the gov't in all this? Isn't our security and economy at risk? Conficker seems a lot more of a concern than a couple of Taliban fighters with AKs. Obama just started a US Cyber Command within the NSA, a whole year after Conficker was discovered, but I surmise that they are grossly unprepared for the challenges ahead. Russia crashed Georgia's e-infrastructure with a worm/virus prior to its military invasion. McAfee pretty much implicated China in hacking some major US websites too, so the writing is on the wall. Hasn't anyone seen "Live Free or Die Hard?" We need McClane to rescue us.

The cabal approached the Pentagon and NSA to ask for help to fight Conficker, and maybe even sequester their computing resources. But they were summarily turned down, possibly over territorial or state secrets issues. I am sure that the NSA has a couple interns working on this (what else could be a higher priority for them, Mugabe's cell calls?), but clearly they are not winning (like Charlie Sheen). Here's another hilarious side-story. Remember how the US and Israel crashed Iran's computers controlling their uranium enrichment program? It set them back like a year. It's quite possible that our spooks hired the Conficker botnet to do that, or at least created our own similar worm inspired by Conficker.

Corporate and gov't cyber security is not up to task, but in this climate of austerity, it may be a hard sell to demand more investment in this area. No one cares to protect themselves until after the first disaster strikes (even though a few have already struck, but we just didn't care). I am sure the Ukrainian gang is a super-talented bunch of hackers, but they should be nothing compared to the resources that China or Facebook (no connection suggested) can devote to cyber-security, or cyber-warfare. Modern states already know that the best way to bring each other down (besides nukes) is to crash our e-infrastructure that we so depend on and take for granted. And even so, a cyber attack could disable our nukes and military. The internet was developed by idealistic engineers who wanted a free flow of information, so unfortunately it's structure is inherently vulnerable. We take the good with the bad, but ignoring the problem to this degree is just unacceptable. Fortunately, the likelihood of worms directly stealing our passwords and meager e-weath is still quite low. But what's the value of our little savings account if our national financial system gets wiped out?

The interesting tale of the Nets' move to Brooklyn, and what is says about the lockout

http://www.grantland.com/story/_/id/7021031/the-nets-nba-economics

Does Jay-Z have to look cool all the time, even with a tilted hardhat? What Ratner did will definitely be studied at Harvard Business School for years.

The silly owners-vs-players argument seems to be the same for NBA and NFL. The players' assets are their special sports talents. The owners' assets are the real estate and team name, under the protective umbrellas of the NBA/NFL monopolies. But say the Jerry Joneses and Mark Cubans of the world decided to retire and donate the franchises to charity. The players wouldn't be screwed. A new bunch of billionaires would build new arenas, pay the athletes probably higher salaries, and the only difference would be the New York Knights (TM) instead of the Brooklyn Nets (TM). Say Lebron and Brady decided to retire as well - their presence would be missed much more.

Profits (economic rent) should go to the scarcest, more demanded resources - in this case the players. People don't watch the games because of who owns the teams. The only reason the owners have such bargaining leverage is the anti-competitive nature of pro sports, so that other interested billionaires can't make better offers. Some thought it was ridiculous that NFL stars complained that they were treated like "slaves," but there are some undeniable similarities (and obviously some notable differences, like their still-enormous salaries, which should be bigger at market rates though). The AFL, USFL, and ABA tried to offer legit alternatives (in some cases paying players better and offering a more entertaining brand of sport), but the NFL/NBA used their legal-political-financial muscle to absorb or ruin them. Check out the ESPN "30 for 30" documentary on the USFL if you have time. They actually won an anti-trust case against the NFL, but they foolishly sought only $1 in symbolic damages, so the legal fees from that fight ruined them (and so did Donald Trump, seriously).

http://30for30.espn.com/film/small-potatoes-who-killed-the-usfl.html

So for the owners to piss and moan that they're going broke is a joke. If they don't like the business, then quit and start a hedge fund. There will be a line a block long to buy their franchise - since for a rich guy, it's such a rare feather to have in your cap, like a Picasso. It's not meant to make money (even though it does, plenty), it's a hobby to them. It's like the rich CEOs going to DC to beg for bailouts in their private jets and $10,000 suits.

"The rich have gone from being grateful for what they have to pushing for everything they can get. They have mastered the arts of whining and predation, without regard to logic or shame. In the end, this is the lesson of the NBA lockout. A man buys a basketball team as insurance on a real estate project, flips the franchise to a Russian billionaire when he wins the deal, and then — as both parties happily count their winnings — what lesson are we asked to draw? The players are greedy."

Emphasis was mine.

Confidence Men: the dysfunction and rivalries among Obama and his economic team

http://www.npr.org/2011/09/20/140594464/confidence-men-ron-suskind-on-white-house-woes

This recent book describes how Obama and his hand-picked economic team poorly managed the gov'ts role in the financial crisis, and in fact couldn't handle the group dynamics of their "team of rivals." Obama was a "brilliant amateur," who was dynamic enough to rise to the presidency, but grossly unprepared to handle the current burdens of the job. Wall Street alliances of course helped to fund Obama's campaign, but once the magnitude of the crisis came to light, Obama knew and articulated that the nation needed strong, Roosevelt-ian reforms to clean up the Street. But he subverted that goal by hiring Geithner and Summers, two individuals who were about as cozy to Wall St. as possible without being total insiders.

Larry Summers headed Obama's economic team, comprised of economists and officials with top credentials. Obama himself did not have much background in economic theory and policy, and often deferred to Summers in meetings - a man who by most accounts is a total a-hole and has to run the show, which further undermined the president. Obama's stubborn desire to achieve team consensus often delayed or hampered effective decision making. Summers was alleged to compare Obama's team to "Home Alone" with no adult in charge, also claiming that "Clinton would have never made these mistakes." Typical Summers to contribute to Obama's struggles and then criticize him for it.

Obama's hiring of Rahm Emmanuel as chief of staff was a mistake; Emmanuel was a temperamental strategist, not an effective manager. He often forgot to invite key people to meetings, especially the women in Obama's cabinet (deliberately or not). Obama recruited some of the most talented women in the country, yet many of them felt unengaged, disrespected, and resigned in disgust. During some meetings, the "boys" would band together and Obama would mostly listen to them and forget to consult with the women.

Treasury Sec. Tim Geithner felt that Obama was economically naive and also believed that America didn't need a major financial overhaul, so therefore Geithner had to protect the system from the president. Obama made it clear very early that the "TBTF" big banks should be broken up. But instead, Geithner "dragged his feet" on that order to say the least (they only got bigger under his watch), and some would say committed insubordination by instead giving aid to those banks. Clearly this was a herculean task even if Geither was 100% in agreement with Obama, and this was a rare chance to clean up the Street but instead nothing was done. Obama was very displeased with this, but stuck with Geithner so as to not cause additional controversy and economic anxiety. So to avoid the drama, he kept a disloyal, anti-reform guy in a key regulatory role. Maybe that pretty much sums up the squandered potential of the Obama presidency.

----------

I've seen this story making the rounds.  I basically don't buy it, for two reasons.

First, I don't think the explanation is sufficient.  They're making the argument that Obama wanted to be more progressive in his response and harsher on the banks, but that he was prevented from doing this by the intransigence of his economic team.  However, (A) he picked that economic team, knowing full well their support for the banks.  If your goal is to crack down on the banks, you don't put a pair of guys with a decade-long history of supporting banks at the head of the table.  (B) The pattern of pro-bank behavior is too consistent, and it's positive support as well as negative support.  That is, the White House support for banks wasn't just "not breaking them up" (support by lack of action), it was also actively propping them up (taking positive action) with TARP and TALF and HAMP and Fed discount window and blah blah blah.  An intransigent Treasury Secretary might be able to block breaking up the banks, assuming a sufficient level of incompetence from Obama in overseeing that (does he not periodically ask "hey, how's progress on that break-up?").  But the rest of the positive actions that the WH has taken in support of the banks?  And this continues up to the present: just a few weeks ago the WH was leaning on the NY AG to stop doing real investigations into banking misconduct.  A couple rogue advisors don't create this consistent pattern of behavior.

Second, I think the timing is too felicitous.  In 2007 and 2008 when Obama was campaigning, he said all the right things as a progressive.  Once he got into office, he dropped all of that and took a much more conservative tack than he'd suggested in the campaign.  Now we're getting back into election mode, and Obama is back to playing progressive.  We've got a new jobs bill that says all the right things, but which we all know has zero chance of getting passed.  And now there's a book out which does a nice little whitewash on all of the pro-bank policy Obama did and continues to push, claiming that he wanted to be progressive, he was sabotaged, but *now*, now he's going to really be able to be progressive.  Right.

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I see what you mean and I share in the suspicion. But it seems a very bizarre tactic for Obama and his supporters to downplay his pro-banks behavior with an explanation of incompetence/leadership vacuum. They try to remind America that he was a true progressive after all as we approach campaign season, but Suskind's narrative also reminds us that Obama is a bad manager and not very presidential at times. Would that make anyone more likely to vote for him? People like Summers have vehemently denied ever uttering anything anti-Obama while serving under him (though that is to be expected). If this is a PR ploy, it's either genius or wacko, but definitely risky.

While the banks helped Obama get to the White House, it's not uncommon for presidents to turn their back on some supporters once they take the reins of power (or at least not fully live up to the supporters' expectations). Though looking back, I don't think Wall St. has much to complain about Obama, except for maybe a few provisions in Dodd-Frank that eliminate some bank fees (the rest of the act can easily be circumvented by big institutions, and banks are already devising new schemes to replace the lost revenue from the outlawed fees). Obama took Wall St. money in 2007-2008 for sure, but I find it reasonable that in 2009 he wanted to enact financial reform as part of his overall vision for improving the country and responding to voter sentiment. He just had no idea how to implement it, and turned to the wrong people for help.

Obama's naivete came through in his hiring of Summers and Geithner. He's not an economist, so he wanted to defer to "experienced guys". I am sure Summers and Geithner said all the right things while they were being vetted, and maybe Obama ignored their track records, or didn't know enough (and certainly didn't ask the tough questions), or felt confident that his great leadership skills would keep those guys in line with his agenda. I'm not trying to excuse his mistake, but just proposing a possible explanation. Everything about Obama's first quarter was rush, rush, rush to respond to the fin. crisis. And with the GOP being a-holes and trying to block many of his nominations, maybe Obama just wanted to make "safe" choices for his econ. team, which would also hopefully reassure Wall St. and calm Main St. If he hired true crusaders for those posts, it would have been mutiny. Obama wanted to be a different type of leader who achieves change through consensus and cooperation, but set himself and the nation up for disappointment. I don't think he was pulling a fast-one on us; it was just a combination of conditions, inexperience, and poor planning.

And once Summers and Geithner revealed their true selves in DC, it was too late for Obama. Dismissing or marginalizing them (if even possible) would send a bad message. A real leader would have found a way to do something though, rather than keep tolerating Geithner thumbing his nose at Obama's plans. Or maybe Obama was just too gullible and loyal with Geithner - who maybe kept telling him, "I'm working on it but it's really hard to get the ball rolling - it's the GOP, man!" And Obama isn't one to step on toes and micromanage (especially on stuff he doesn't understand), so maybe he just left it on the back burner while he focused on health care and Afghanistan?

Overall, I don't think the book can persuade people one way or another on Obama's progressive bona fides. Conservatives already think he's a socialist, and fed up progressives think he's a phony and a sellout. Even if he is committed to his campaign agenda, is he competent enough to make it happen? Sadly, Obama tells Suskind in the book that after his staff shake-up after the horrible midterms, he now has the team in place to be the president the nation expects, and he's starting to hit his stride with the job. Well it's a bit late for that. Suskind does seem to paint Obama as a victim, but a lot of it was of his own making (despite the best of intentions), so I don't have much sympathy. But you have to agree that so many factors were aligned against him that even if he made flawless decisions, a lot was out of his control. It's possible that not much would be different today.

Honeybees and colony collapse disorder: much of our food at risk

http://www.pbs.org/wnet/nature/episodes/silence-of-the-bees/introduction/38/
http://en.wikipedia.org/wiki/Colony_collapse_disorder
http://www.ars.usda.gov/News/docs.htm?docid=15572

Maybe you guys have been following this colony collapse disorder (CCD) crisis. But since 2006, as much as 90% of honeybee hives in US communities have suddenly died in a matter of months (this has been observed in EU nations too). Bees are some of the most evolved, beautiful, and efficient creatures in natural history, and the species is 100M years old (humans have been using them for honey for 6K years). Their mass deaths are likely attributed to human actions. Analysis of dead bees reveals symptoms similar to human AIDS - their immune systems were compromised, which hampers digestion, cognition, and makes it easier for fungi, mites, or other pathogens to attack them. Also, forager bees (that usually have excellent navigation and communication) fly out in search of food, but then don't communicate normally and don't find their way back, so the hive starves.

Weakly-supported culprits include wireless radiation, pesticides, global warming/pollution, and GM crops with anti-pest properties. Concentrated pesticides and pollution can definitely kill bees, but CCD also occurs in areas without high incidences of these phenomena. It's most likely a confluence of several of these factors, and maybe others that we haven't identified yet. The presence of a virus in CCD-affected bees seems to be the most prevalent stressor, but the virus alone can't account for all the deaths. Some research is now directed towards cross-breeding virus-resistant African bees with domestic honeybees, but that is no guarantee of eliminating CCD (and new GM species carry their own concerns). 

Bees pollinate over 100 key flowering crops (including some plants that our livestock eats), contribute to 30% of our food supply (pretty much all ag. products besides staple grains that self-fertilize), and their low-cost services are worth at least $15B in economic output to the US. 3/4 of all current plant species depend on animal pollinators to reproduce. There is no insect substitute but the less effective and more fragile butterfly, and as far as I know only one province in China is trying out another species. They use human workers to spread pollen in their lucrative pear orchards, after industrial pollution wiped out local bees. Already in the US, habitat loss from urbanization and air pollution have wiped out most indigenous bees prior to this CCD crisis. Now there is a need for commercial beekeepers to truck mobile domesticated hives around the nation to pollinate various crops when in season (if local bears don't get to the honey-rich hives first). But among that population, about 1/3 of them (or 800K hives) have collapsed. Now we depend on costly Australian bee imports to make up the shortfall.

CCD should be a reminder of how fragile our civilization actually is without the help of very simple organisms that we take for granted. But their destruction will almost certainly lead to ours (or at least a more monotonous, unhealthy diet), so it behooves us to be much more aware and careful. Is it worth it to risk this much just to squeeze out some bucks of profit from another megawatt, strip mall, or bushel of corn? It's easy for industrialists to keep up their damaging practices while they hide behind the excuse of "where's the proof?", and nothing will change without new laws or massive public uproar.

Scientists think we're almost "lucky" to observe CCD, because it serves as a reminder and indicator of environmental stress likely due to human actions. Who knows about all the other harmful, toxic processes and problems that go unnoticed? Companies should be required to strongly demonstrate safety before being permitted to sell new products, like we do with drugs and foods. The absence of evidence of harm doesn't necessarily prove safety. And environmental impact assessments are clearly lacking if we approve so many projects that still end up causing damage down the road. But I forgot, regulations kill jobs. Well irresponsible companies kill living things, including people. What do we prefer?

The US transconti​nental railroads: not exactly a poster child for capitalism​, or are they?

http://www.kqed.org/a/forum/R201109061000




Richard White, a Stanford professor, recently published a book on the history of US railroads and the tycoons who ran them. Contrary to the popular mythology about the "heroic" and "self-made" champions of industry like Huntington and Stanford, it turns out that those men and the companies they ran only made it into the history books due to massive corruption, abuse of gov't resources, and human/environmental damage. And we have the general notion from econ 101 that firms make money by providing demanded goods/services to consumers in a cost-effective way. But for the railroads, every sort of business and market perversion you could think of (prior to the derivatives era) was attributed to them. Though we still have this strange adoration of the railroads as a romance and celebration of America, Old West freedom, and industrial capitalism.



Yes it was impressive that we could lay track from the Mississippi River to the Pacific in just a few years, and made amazing technological advances during the process, but it turned out to be a net loss for the country. Despite our misconceptions, many railroads went bankrupt or needed gov't "bailouts" to survive. And it was hardly free-market: transcontinentals were just not needed in the late 1800's (the demand for long-haul freight and personal transport just wasn't there to justify the huge costs), and even after the railroads were built, it was still cheaper and quicker to use SHIPS to get from SF to NYC, around South America and all. So what was the point of building them? Railroads were not reliable (especially during the winter months), so merchants still favored ships. Like any great capitalists, the railroads didn't respond to this deficiency with improved performance, but engaged in anti-competitive practice instead. They bought up most of the excess capacity on freight ships, creating scaricty and bringing ship rates closer to railroad rates. They negotiated with ship lines to get them to slow down their vessels too. Why try to outdo your competitors when you can just pay them to come down to your level instead?



The most respected railroad men avoided transcont. projects like the plague, and what was left were speculators, washed-up entrepreneurs looking for another chance, and crooks (sound like other modern industries we know?). What was significant about this period was the advent of corporate lobbying. The US railroads were pretty much the first manifestation of the modern American corporation. They pushed for Washington to create the conditions necessary for their flawed businesses to survive, similar to a Maoist or Soviet failed central-planning project. They were justified as a necessary "public good", even though the public had virtually no need for their services at the time. But when something is a public good, we may irrationally spend to keep them going even if they aren't doing any good for us. And of course stakeholders needed to justify their decisions and get public buy-in with propaganda and marketing, hence the Manifest Destiny, pride, and nationalism angles. There's nothing that US industry can't do, we're settling the savage lands with good old US hard work, go west for adventure and riches young man, yadda yadda. Sadly, there was more public outcry against the greedy, inept railroad corporations back then vs. the current greedy, inept firms today. The author speculates that this is due to enhanced marketing and penetration of US corporations today (corps play a much bigger role in US life today), so we are less likely to condemn something that we are associated with.



DC gave the railroads (RRs) huge guaranteed loans and literally millions of acres of free land (that they still own today and don't pay taxes on), even on terribly risky projects with no evidence of future profitability. RRs sold junk bonds to eastern investors by hiding much unflattering financials from traders (in fact, the big 3 US ratings agencies were started to rate RR bonds). And still the incompetent RRs needed several public bailouts to break even (even though the tycoons and big investors made out quite well off the US dime). And worse, the RR bankruptcy terms were so lax that the same doofus execs were allowed to retain control of the firms (not like Obama forcing GM to change their leadership team in exchange for bailouts, just when their execs were getting effective). Their debts were written off, so now these failed firms had a huge financial advantage over the viable, honest RRs (also sound familiar?), and drove some of them out of business. Talk about dysfunctional markets: the weak kill off the strong? Like the fruit companies in Latin America, the RRs asked the gov't to step in to violently break up labor strikes, clear out local Indians, and such. As many people died working on the RRs each year as the Civil War battle of Shiloh, often without investigation, punishment to firms, and compensation to victims (especially if they were Chinese).



So now that these joke of RRs were built, what to do with them? The firms had to get people to use them to gain revenue, so there was a big push to encourage settlement (although net population transfer was eastbound in the early RR years), buffalo hunting, cattle ranching, and mining in the West. There was no real demand for increased cattle ranching, silver, and buffalo, but the demand was manufactured with major gov't incentives, often with terrible environmental consequences (overgrazing, buffalo near extinction, mining pollution). And all the booms associated with those economies of course ended in bust and disaster for many Americans too.



If we learned our lessons from the RRs, the current dot-bomb and housing crashes might have been avoided. It's ironic that the most ardent libertarian proponents of the free market are the ones who most strongly advocate for our most uncompetitive industries. It's not the free market principles that they love, it's just taking advantage of whatever system is in place (loopholes and all) to come out ahead, no matter the cost to others. Obama and others talk about the need to invest in the future so we don't fall behind. But the problem is investments are based on predictions and many of those made by gov'ts turn out to be wrong. Look at the CA high-speed rail project - another total boondoggle where the true demand just doesn't justify the huge costs. Considering all the areas where CA needs more cash, it is a huge opportunity cost to sink billions into another rail gamble. But this is the price you pay when ideology trumps economics.



We wanted to settle the west and make tons of money, so we thought building RRs would get us there. But it was ahead of its time and caused a whole bunch of other problems. If you believe in the free market, let the market demand tell you when it's time to build RRs. If they are so desirable and well-planned, then they will easily get their own funding and won't need gov't loans and bailouts. The author contrasts the Dakotas. South Dakota's RR network was built bailout-free, and turned out to be much more high-performing than the nearby gov't-supported RR in North Dakota. In Europe and Japan, RR firms had to raise their own private capital before breaking ground, so their networks were a lot leaner, better, and weren't subject to the moral hazard associated with US firms wasting other people's money without accountability. Or if the RRs are truly a public good, nationalize them with a set of transparent laws and public input governing their operation. Of course there is the opposite extreme with China, where the gov't invested billions into another un-needed high-speed network, just to create jobs and grease the palms of various bureaucrats. But projects were rushed, safety standards and training ignored, and many of their trains run with mostly empty seats.

Looking back on 9/11 and the "terror industrial complex" it spawned

Maybe you all are like me, already sick of the emotionally-manipulative 9/11 remembrance content all over the mainstream media. Instead of more footage of twisted rubble, crying women, and the stars-and-stripes, how about something that's actually thought-provoking:

http://www.npr.org/2011/09/06/140056904/the-top-secret-america-created-after-9-11

Some of this we already know, but the Pulitzer-winning author Diana Priest has documented many ways that the secrecy-antiterrorism industry has exploded since 9/11... to a point that it is literally "out of control" as evaluated by security experts. No one knows how much we are spending, what we are doing, and who we are employing. The gov't was so unprepared for this growth that they needed to hire contractors to be able to run background checks on all the new contractors they were hiring. It's incredible: now 800,000 Americans, or 1 in 375 of us, hold top-secret clearances (many of them have not taken loyalty oaths to defend the US, and instead serve the profit motive). For all the GOP complaints about the size of gov't and its inability to sustainably create jobs - I guess they meant all other industries but this one.

And security contractors are paid much more than similar "public servants", so the CIA saw a brain drain where junior analysts would accrue the necessary year or so to acquire the basic skills sought by the security firms. They would then leave the CIA, get hired by Blackwater types, and do the exact same job for 3X pay, with the gov't and ultimately taxpayers on the hook to cover the higher expense.

If we thought CIA was covert, they are getting one-upped by JSOC (Joint Spec Ops Cmd, that used to do hostage rescue but now is the gov'ts elite hit squad that nailed Bin Laden and others). JSOC has all the power and resources of the CIA (if not more), yet isn't bound by law to report its activities to Congress or others. Obama has given them the green light to step up their activities, and to their credit they have killed/captured many more "terrorists" than the CIA. But it is scary that some secret org can decide to put a name on a kill list, and then just go out and do it without asking anyone for permission (yet are funded by us). They represent us but don't answer to us, so we get the blowback if they mess up (like errant drone strikes in Pakistan whipping up anti-Americanism).

Let's also remember all this stuff on the anniversary of 9/11, including the tens of thousands of non-Americans who have died as the result of our wars.

Worker disengagment and poor management are very costly

Here's another doozy about workplace dysfunction from the NYT:




http://www.nytimes.com/2011/09/04/opinion/sunday/do-happier-people-work-harder.html?_r=1



"Since January 2008, ...Americans now feel worse about their jobs — and work environments — than ever before. People of all ages, and across income levels, are unhappy with their supervisors, apathetic about their organizations and detached from what they do. And there’s no reason to think things will soon improve... Gallup estimates the cost of America’s disengagement crisis at a staggering $300 billion in lost productivity annually."



Wow, that is bigger than the GDPs of most nations.



I don't get why firms seem to just accept this. This is big money. Even if the "touchy-feely" worker motivation stuff is probably beneath most execs, the middle and lower managers just don't ask the necessary questions (or are too busy to pay attention), and no one is holding them accountable if they don't. No one likes the "adult babysitting" part of management, but if you want productivity, loyalty, and high-functioning groups, this is probably the most direct and effective route. Corny rah-rah speeches at all-hands meetings (that usually do not resemble reality) and sending out cliched worker satisfaction surveys (yet not acting on the findings) only hurts morale further. Are leaders smoking something, imagining that their departments are perfect utopias where workers always come pumped up to give their best (because of their brilliant leadership, of course)? And obviously it's about more than compensation.



Some managers are awesome, but others seem generally clueless when it comes to knowing their workers. They make threats, falsely promise or delay rewards, and set unrealistic goals, and as they watch their people scramble to meet them, they think it's validation of their good leadership. Wow, look at them go for me, and I didn't even need to bribe them! Some managers think (or make it appear) that their groups are high performing despite heavier burdens on them, but they never ponder if that is the best way. And I don't mean, "Can I squeeze even more out of them?" It's a tough climate for job-seekers now, but that shouldn't be a green light for managers to abuse captive employees and impose unreasonable expectations. "It's dog-eat-dog out there and we have to get tough to survive." Well a lot of sick, immoral stuff has been justified that way over the centuries.



I think especially in the tech fields, emotional IQ is so lacking and there isn't a serious effort at manager training/improvement monitoring. Sure it's a two-way street and workers share some blame for not speaking up and proposing solutions, but due to asymmetric communication and reputation implications, this can be nearly impossible to pull off. Basically, bad managers and management systems aren't getting fixed because (a) workplace culture from the top down doesn't take employee satisfaction seriously, (b) the higher bosses don't collect the right data to evaluate management skills and incentivize improvement, and (c) it is too risky or difficult for workers to inform the proper parties on their managers' shortcomings. Blind leading the blind kind of stuff.



Management seems to prefer to reorganize, rotate VPs, and alter budgets (to make it look like they've got a plan), instead of getting to the roots of employee dissatisfaction - which seem to be plainly obvious and intuitive, so it's not like a Herculean feat. They just aren't willing to give what the workers need. Or maybe some managers are more concerned with their own career advancement, politics, and other BS, so they want to hoard credit/attention and don't allow their workers a chance to take on more responsibilities, feel more engaged, and get noticed, all of which strongly correlates with job satisfaction and productivity (workplace creativity, a critical part of business success, is highly correlated with positive mood as well). Maybe it's some subconscious, antisocial behavior where managers can't help but keep their people down to satisfy their insecurities, like frat hazing or abusive parenting.



Maybe firms like Google (with plenty of super-smart but bad managers I'm sure) are trying to get on the right track. Use data-driven methods to improve management and worker engagement. Try to close the gap between a manager's false assumptions and what workers truly feel (and what is actually happening on the ground).



http://www.nytimes.com/2011/03/13/business/13hire.html

Solyndra bankruptcy

http://www.forbes.com/sites/toddwoody/2011/08/31/what-solyndras-bankruptcy-means-for-silicon-valley-solar-startups/


http://www.kqed.org/a/forum/R201109020900



This is a terrible sign for US cleantech and manufacturing just as US jobs reports are quite bleak. Solyndra was the poster-child of green start-ups. They got over $1B in private VC funding, $535M of guaranteed loans from the DOE as part of the Stimulus Plan (the first private firm to get a DOE loan), and even a visit from President Obama as part of his campaign to push for a cleantech-fueled economic recovery. Obviously the GOP are jumping all over this, citing this example as proof that Obama is clueless about economics and jobs: http://www.sfgate.com/cgi-bin/blogs/nov05election/detail?entry_id=96638.



Solyndra was so confident about its business prospects that it rapidly grew to 1,100 workers and set up a huge $700M plant in Fremont (yes, expensive-as-hell Fremont) to manufacture thin-film cylindrical PV panels. The writing was on the wall, but it was still a big shock that the firm declared Ch. 11 recently and laid off its entire workforce. So why did it happen? Is solar just a flop? Well, Solyndra's competitive advantage was using cheaper but less efficient thin-film technology at a time when silicon PV panels (the industry standard) were fairly expensive and China's solar sector was tiny and unproven. But since the 2008 downturn, China launched huge in capital investment projects, including building up a solar manufacturing industry from stractch that quickly became the largest in the world. The global price of silicon plummetted (demand declined due to the recession and supply increased due to development in China), wiping out Solyndra's advantage. The 70% price drop is great for global clean energy, but not for US manufacturers.



http://www.greentechmedia.com/articles/read/contract-silicon-prices-fall-50-close-to-spot-price/



So China was already subsidizing its solar manufacturing sector (basically free land, credit, and labor) to undercut the market, and now it's priciest input just got cheaper. So Solyndra was pretty much screwed, even if it had the best technology (2 other Bay Area solar firms also recently folded). But maybe we should learn from this example that cleantech firms shouldn't try to win through cost leadership. China will own us there every time. Our businesses have to utilize sophisticated technologies, innovative product development, and strategies so that China can't easily copy and undercut us (think Apple). Sure let's outsource the cheap, easy stuff like manufacturing and logistics, but we can't beat China on their terms - especially when their gov't isn't paralyzed with debt and partisanship, and they are 100% behind rapid high-tech and economic growth.



So what do we do now? The libertarians say this validates their views that gov't shouldn't be in the VC business. Maybe Obama's people were so awestruck by "the green panacea," that they didn't perform due diligence on Solyndra's prospects in a recession and vs. Chinese competition. But plenty of savvy private sector investors (such as Richard Branson and the Waltons) also threw money at Solyndra and got hosed (and that was during a time when VC money was pretty tight, before the exuberance over Facebook and such). Some big-gov't folks would say to not change course because Washington funded the interstate highway program, Internet, and GPS, and all those radically changed history and exponentially increased economic growth. True, but how about all the projects Uncle Sam funded that were utter failures, that we don't know about? Like usual, I guess the prudent course is some sort of middle ground. Gov't involvement but vetted as well as possible to avoid pork and boondoggles. The problem is, China is bankrolling ventures big time, and they can afford to have a 5% success rate and still gain market share on us. We can't afford to be wrong as much, especially with so much political resistance to cleantech and gov't spending now.



Another challenge is the industry itself. Highways and the early Internet are fairly straightforward concepts to develop, just plan and do it. But no one knows which horse to pick in cleantech. I suppose it would be wisest to diversify and place many small bets, but then no single industry will get to economies of scale quickly. Imagine if the gov't had to pick a search engine to back in the dot-com days. So now we have geothermal, wind, solar, biofuels, and fuel cells, with several variants of each. The gov't doesn't have the expertise and resources to properly evaluate all these options. The private sector doesn't have all the answers either. For example, one of the big Mojave Desert solar farms just decided to retool its entire setup from mirrors (focusing solar energy to heat water and spin a turbine) to conventional Si PV panels, since the global price dropped. Conditions are changing so fast that firms need the flexibility and investor patience to be able to adapt, if possible. But with Washington dithering and private credit still tight, we are only falling further and further behind. Good times.