News potpourri

• New bipedal robot from Boston Dynamics is amazing, terrifying, and pitiful all at once
• We already knew that tech workers can be immature and insensitive, but this suggests that elite wealth/education isn't doing a good enough job on race issues either (and living in the cosmo. Bay Area doesn't guarantee racial awareness either)
• BTW, MS-FB-Google are ~2% black, and Apple is super-diverse at 8%
• This Trump thing has evolved from a joke/curiosity to real national concern; if he wins the nomination, then ALL OF US seriously have to volunteer (and get our networks to do so, also) to help his main rival, if we care about America
• http://youtu.be/DRauXXz6t0Y
  
  
  It is understandable for some to oppose abortion, but this video describes the almost cruel/vindictive ways that some red state governments obstruct patients and providers. America is not even going after ISIS this passionately.
• More John Oliver recently vs. Trump: http://www.vox.com/2016/2/29/11132366/john-oliver-donald-trump-last-week-tonight
  
  As his GOP rivals said, the guy is a glorified watch salesman; all talk/image no substance. Maybe supporters are voting for the name, just like Clinton I guess (I assume most of her supporters can't really articulate her major career accomplishments and Senate voting record). We buy based on what we think the benefits of the brand are, and brand ultimately leads to happiness more than product features. But Oliver's point was that the "Trump" image has nothing to do with the candidate/man (he can understand why people like the mythical notion of a "Donald Trump" leading America, but that is not what we'll get on inaug. day). Actually his actions only merit the "Donald Drumpf" brand.
  
  
  Very entertaining, but the only downside is that it could help Rubio/Cruz (whose stated policies are not that different to those of Trump). However, I don't know which of these guys pose the greatest challenge to Hillary (I support Sanders, but I know the odds are against him).

Zuckerbergs plan to give 99% of their FB shares to charity

https://finance.yahoo.com/news/mark-zuckerberg-away-99-percent-211800451.html

We will give 99% of our Facebook shares -- currently about $45 billion -- during our lives to advance this mission. We know this is a small contribution compared to all the resources and talents of those already working on these issues. But we want to do what we can, working alongside many others.

Small contribution - is that like humble bragging? :) All US corporations give about $15-20B/year, so Zuck can spot corporate America for like 3 years.

https://www.charitynavigator.org/index.cfm?bay=content.view&cpid=42#.Vl42q8omz9k

Maybe this is a brilliant strategic move too, because if FB prospers, then that means humanity ostensibly prospers too. So will that make people and gov'ts more friendly to FB's interests? :)

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I'm imagining a time 20 or so years from now when we find that the extremely well funded pet projects of these super rich are found to be counterproductive in those communities.  Similar to food aid to Africa destroying local food economies.  So hopefully he, and others, donate to well established orgs instead of koch style spending.

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Yeah I guess the impacts are yet to be seen. But I think Zuck will be more like Gates than Koch (btw the Gates Fdn. is generally hailed as the best run philanthropic NGO in the world). The mission is sufficiently vague/broad that they could invest in almost anything though. Maybe Zuck is already at the point in his career where he is less concerned with his business empire and more focused on "moonshot" projects and impacting humanity (like Gates circa 2000 and Page now). I don't think selling more FB ads is what fires him up every morning (or if it ever did).

On a side note, I do think that the IRS should abolish all tax incentives for charitable giving (or maybe have a very low cap on deductions like $1,000/pers and $100K per company). That might impact the total amount of giving, but at least it sends the message that rich people can't get "paid" to support their Koch-esque pet project causes that are really political spending. Also, I don't think rich donors should be rewarded for giving millions to some orchestra (whose customer base is almost exclusively rich people) or a university so their name can be on a bldg -> causes like that which have questionable overall social benefits.

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I just heard something on PRI that hasn't made it to the web yet re: Zuck's donation: http://www.pri.org/search/node?search_api_views_fulltext=zuckerberg&sort_by=field_date_published&sort_order=DESC.

As I said in the OP, it's could be a double-edged sword when stock shares are donated to NGOs, or when those orgs invest their endowments in the markets. Of course these groups would prefer to make (tax free) cap gains so they can advance their mission more, but there can be a tension between their mission and how their cap gains are generated.

The Gates Fdn. is very interested in reducing climate change, yet they own over a billion USD worth of stock in the fossil fuel sector (collecting dividends directly from the sale of a polluting product). So do you want to make money, or do you want to not support polluters? I guess that's why some universities divested from gun/fossil fuel/etc. industries in favor of "impact investing" like Gore's fund (see our prior post below, "Al Gore profits from going green"). So there could be a time when the beneficiaries of Zuck's shares may see their mission at odds with FB's business interests. At that point, what do they do? Accept the shares or say no thank you? It might not be a big deal for Zuck, because I'm sure there is a line around the block of orgs who are OK to take his shares (and what comes with it), even if it could send the wrong message or even hurt their stakeholders.

But tech companies always, without fail, do good for the world, right? :)

http://www.newyorker.com/news/john-cassidy/mark-zuckerberg-and-the-rise-of-philanthrocapitalism?mbid=social_facebook

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http://www.theatlantic.com/magazine/archive/2015/11/the-planet-saving-capitalism-subverting-surprisingly-lucrative-investment-secrets-of-al-gore/407857/

His fund called Generation (a tiny $12B under mgmt. but growing) is gaining attention because it only invests in ostensibly green, sustainable, ethical businesses. These businesses also happen to be outperforming their dirtier (in many senses of the word) rivals. But maybe it has less to do with ethics/cleanliness and more to do with "proper capitalism" - firms that preserve and grow value with a long-term horizon in mind (i.e. businesses that Buffet types like), not the quick buck companies at the mercy of the quarterly earnings report (to show short-run gains, they often have to sacrifice long-term value and social/environmental good).

We know that the average fund manager (even hedge funds) barely outperform passive index funds (way to earn their salaries), and most definitely don't sustain abnormal performance over time (regression to the mean). But so far Generation's global equity fund is earning 12% returns vs. 7% for index funds and traditional funds (after mgmt. fees). And Generation is one of the least volatile funds of its class, which investors also love to see. Unfortunately they won't take investors with less than $3MM to contribute. :P

George Packer on the socioeconomic contradictions of Silicon Valley

http://www.kqed.org/a/forum/R201306061000
http://www.newyorker.com/reporting/2013/05/27/130527fa_fact_packer?currentPage=all
http://www.newyorker.com/online/blogs/georgepacker/2013/05/silicon-valley-taxes-and-libertarianism.html

"Move fast and break things."

- Zuck

"The Valley is a little bit at risk of moving in the direction that Wall Street went in... Losing sight of the real purpose of technology, just as Wall Street lost sight of the real purpose of finance. And instead looking at that little narrow way to a big payoff. But that can be very short-term and not particularly productive."

- G Packer

When financiers say that they’re doing God’s work by providing cheap credit, and oilmen claim to be patriots who are making the country energy-independent, no one takes them too seriously—it’s a given that their motivation is profit. But when technology entrepreneurs describe their lofty goals there’s no smirk or wink. “Many see their social responsibility fulfilled by their businesses, not by social or political action,” one young entrepreneur said of his colleagues. “It’s remarkably convenient that they can achieve all their goals just by doing their start-up.” He added, “They actually think that Facebook is going to be the panacea for many of the world’s problems. It isn’t cynicism—it’s arrogance and ignorance.”

- G Packer, New Yorker

Joshua Cohen, a Stanford political philosopher who also edits Boston Review, described a conversation he had with John Hennessy, the president of Stanford, who has extensive financial and professional ties to Silicon Valley. “He was talking about the incompetent people who are in government,” Cohen recalled. “I said, ‘If you think they’re so incompetent, why don’t you include in a speech you’re making some urging of Stanford students to go into government?’ He thought this was a ridiculous idea.”
- G Packer, New Yorker

In New Yorker style, a very long but detailed and thoughtful presentation of Packer's argument that the "Siliconization" of the US economy/culture is not necessarily good for everyone. The interview on his book The Unwinding is interesting too. I was surprised that he didn't get more rebuttal call-ins, since KQED is a Bay Area station after all.

I am too tired to properly summarize the story, but basically Packer is saying that the features that make Si. Valley great are also leading to some negative social effects. Innovation requires boldness, unorthodox thinking, and almost a "F it" attitude about consequences. Si. Valley embodies that paradox of socialist-Utopian desire to make the world more connected and better vs. the cutthroat, libertarian pursuit of riches unfettered by any regs or CSR (VC culture, Foxconn, avoiding taxes, FB IPO scam, you name it).

You can't be great and rise above the pack by playing it safe and by the rules. But that's the big difference between the Great Expansion of the '50s and '60s (blossoming of the US middle class), and the Great Divergence of today (the widening wealth gap and shrinking middle class). In the past, a WASP with a HS education and decent intellect/work ethic could have a job for as long as he wanted it, and earn enough to be middle class, provide for his nuclear family, retire in comfort, and set his kids on a path for the upper middle class. That hasn't happened too often in human history. But that was probably an outlier era, as Reaganomics/globalization put an end to that.

For Gen X and the Millennials, we get the sense that only schmucks and working stiffs believe in that old system of playing by the rules, working hard, and making a decent living. Now it's all about getting that mad loot ASAP, and stepping on whatever is in our path. Packer uses the example of Jay-Z to describe this attitude: he came from nothing and with little hope of achieving the American Dream. So he unabashedly sold drugs to finance his music career, and he used his music riches to build a corporate empire. Of course he needed a lot of hard work and luck too, but Jay-Z "skipped the line" to the upper crust. In interviews, he is surprised that more people don't hate him. But instead, we cheer for him, because his story makes us believe that we can be him too. He is both hero and villain, and 100% modern American. So for the rest of us who aren't blessed with entertainment, athletic, or drug-selling skills, basically we have to find a way to succeed in finance, tech, or medicine... or be just another chump.

But getting back to the Si. Valley paradox, it should be telling that Gates didn't engage in philanthropy until he was the richest man on the planet, and Zuck didn't either until "The Social Network" came out and his company went public (but to his credit, Zuck has now become one of the most socially-conscious CEOs in the Valley). For tech guys who are obsessed with efficiency and creative problem solving, it's awful convenient to believe that you are saving the world while you're getting rich and helping yourself. But we know what the order of priorities is.  Though if Si. Valley was so public serving, then why are some of the most economically depressed and violent zones in the Western US (Richmond, Oakland, East PA) located just short drives from the Google and Apple HQs? Their geniuses can figure out how to put the Internet on eyeglasses and revolutionize what a mobile phone is, but they can't reduce crime and poverty in the Bay Area?

Let's be honest, tech companies make the world better for rich people - they are invested in solving rich people problems (and they do it really well), because obviously there is a market for that. There is nothing inherently wrong with that - the business of America is business. But then don't act so superior. Remember those older Apple commercials showing images of Gandhi and MLK with the slogan "Think Different"?

http://www.youtube.com/watch?v=cpzvwkR1RYU

Despite their marketing intentions, such a commercial is basically comparing a for-profit company to heroes who devoted their lives to fight injustice, and died poor. That is frankly outrageous. As Packer said, the hypocrisy is evident in Apple's calls for immigration reform, so they can get more visas to hire cheaper Asian engineers. They say they can't find enough qualified candidates domestically, yet their tax-evasion tactics have served to starve our public education. Don't complain about the quality of workers here when you aren't investing in them. And of course it's not just Apple.

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The buses—whose schedules are withheld from the public—have become a vivid emblem of the tech boom’s stratifying effect in the Bay Area. Rebecca Solnit, who has lived in San Francisco for thirty years, recently wrote in The London Review of Books, “Sometimes the Google Bus just seems like one face of Janus-headed capitalism; it contains the people too valuable even to use public transport or drive themselves. Right by the Google bus stop on Cesar Chavez Street immigrant men from Latin America stand waiting for employers in the building trade to scoop them up, or to be arrested and deported by the government.”

One question for technology boosters—maybe the crucial one—is why, during the decades of the personal computer and the Internet, the American economy has grown so slowly, average wages have stagnated, the middle class has been hollowed out, and inequality, has surged. Why has a revolution that is supposed to be as historically important as the industrial revolution coincided with a period of broader economic decline?

I honestly despise living [in the Valley], in many ways. I detest the "Silicon Valley Masters of the Universe" narrative and all the fuckers in BMWs who tailgate me on my way to the grocery store. I hate the fact that people around here go on and on about "innovation" yet spend their lives on yet-another-bullshit-useless-copycat-web-startup, instead of actually working on solving real, hard problems (many of which, as you point out, A, can't really be solved with software, or even hardware). I hate the fact that said bullshit web startup can get millions of dollars in funding with comparatively little effort, while people working on actual hard problems have to beg or fight tooth & nail for fractions of that amount from governments or foundations. I hate the cognitive dissonance of the inequality experienced by the line cooks, baristas, waiters, and janitors who serve all of the self-important pricks around here; some of them have even been forced into homelessness, as reported on Bill Moyers' show not long ago.

The Valley desperately needs this kind of takedown, repeatedly. Bring it on.

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This stuff is so spot-on and poignant that I have to stop thinking about it or I'm going to start destroying work equipment in rebellion. But I think the Millennials are in general more conscientious, so I hope enough of them will see things for what they are and try to fix them. Of course some will become selfish pricks like their parents, but I have hope. It's great to see that fast riches are not a major priority for a lot of young people (despite their possibly spoiled upbringings). They want to be happy, better themselves, and help others - which we need very desperately today.

The FB thread brought up a good point - since the PC/internet revolution, why hasn't the average worker gotten richer? If anything they have gotten poorer due to job insecurity and rising prices as you said. The only sector that has consistently profited is the 1% and corporations (or those who had the disposable income to invest prudently). So the promise of tech making our lives better/easier may be anecdotally and superficially true, but actually empty. As you also said, tech gets co-opted by business interests anyway, so the "good potential" is often diminished. 

I wonder if the Masters of the Universe were born during a previous era, what would they be doing? Guys like Jobs, Zuck, Gates... would they have been as great as Edison or Ford, or at best a middle-manager chump? Clearly Zuck and Jobs don't have what it takes to be anything but the boss. But people change with the environment, and maybe they would be a lot different without such great opportunities available to them (especially as a Jew and a half-Lebanese orphan).