Relevant and even prescient commentary on news, politics and the economy.

Mind F*K, Cambridge Analytica

I am posting this Fresh Air interview of Christopher Wylie and his book about Cambridge Analytica here because I strongly feel that the subject matter is not getting enough attention.

The way the technology Mr Wylie worked with was applied by Cambridge should be viewed as being as dangerous as any weapon humans have devised.  I realize some will say I’m being hyperbolic.  Have at it.

I remember being taught, even in school, how to understand the goals and effects of advertising including the means by which subliminal messaging works.  It’s banned in some places, sort of regulated in the US.  I was taught to be aware when watching TV.  When we look at the progression of communication, the written word leaves the emotional interpretation to the reader and their personal life experiences as reference for understanding the author’s message.  The ability to add a picture opened up a means for the author to be more specific in the message being presented. With the advent of recorded sound, even more specificity could be had via tonal inflections.  But, when video came around, there was little room for the recipient of the message to not “get” the message.  Jerry Mander wrote about this in his book: 4 Arguments for the Elimination of Television.  More relevant today with the consolidation in the industry of broadcast.  Watch his 9 minute talk and then read on.  Today it’s the internet I believe that has replaced the TV.

Yet, even with the ability of video, the message was broadcast widely hoping to catch the few receptive.  Not anymore.  Data is the issue.  There is the ability to build a digital you. Not the physical image of you, but you the person as lived via you brain.  Your mind is digitally catalogued.  You could say we have found the fountain of youth.  Unless your data is destroyed, you will now live on for all eternity.

Cambridge Analytica is a tail of technology in the hands of “the evil genius”.   As you will hear in Mr. Wylie interview, the development of the data processing was for the purpose of finding those who could be “radicalized” and then reach them before that might happen.  Along comes Steve Bannon, a big money backer and the machinery gets turned on society.  The intention was to target those who could be incited to anger and then incite that anger.  Specifically mentioned is the Alt Right type personalities.

This technology is using all we know about how the brain/mind works and turning the knowledge on society for selfish want.  Imagine how miserable, hurt, depressed, angry you have to be to want to move the world to be as you are?  That’s Bannon.  I’ve known people like this first hand.  “I hurt and I want you to hurt”.  This is consensus building without those targeted even being aware their consensus is manufactured.  This is power beyond the threat of nuclear war.  The goal is not to mold everyone.  The goal is to mold enough such that serenity within society can not exist for the likes of Bannon.  For others it is just power for one’s purpose.  In the end, it is the ultimate tool of selfishness.

The company no longer exists.  The machinery still exists and is still being used as a weapon.  Defensive or offensive is a matter of one’s ideal/ideology of life.   This goes beyond elections.  I touched upon this a bit in my post looking at the phrase “Rat Race” and how it’s not a commonly appreciated concept anymore.   The present process of “normalizing” or the idea of moving the Overton Window.

Or, it could be the ultimate tool for selflessness.  But, we’er not even thinking about that question are we?  Oh well, I guess the “free market” will solve it for us…Don’t ask me what I think of you, I might not give the answer that you want me to.

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The Truckers are not happy

I’ll just post this link and let it speak for itself.

Truckers voted for Trump in droves. Now they say his trade war is ‘killing’ their ability to make a living.

Its starts wtih:

Morris Coffman has been a truck driver for 35 years. And he’s been a conservative for even longer than that — his whole life.

“That said,” Coffman told Business Insider, “[Trump] is absolutely a moron. His idiotic ideas will tank the economy even further.”

Truckers, like Coffman, lean conservative. A Verdant Labs analysis of Federal Elections Commission data found that nearly three-quarters of truck drivers are Republican — one of the most conservative jobs in America, along with surgeons and farmers.

 

Maybe they should have been listening to music instead of talk radio while driving.

There is this headline also:

At least 2,500 truck drivers have lost their jobs in 2019 as the transportation ‘bloodbath’ unfolds. Here’s the full list of bankrupt trucking companies.

A tough lesson this group of salt of the earth, heartland breed American citizens are learning.  I hope they are learning.

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Income Inequality (I’m tooting my own horn)

I’ve been on the beat of income inequality since I started blogging here.  My theory: We changed the way we make money from one of making it from producing (polishing rocks into tools) to one of making money from money.  When you can make money from moving money, you don’t need to compete.  Just buy back your stock, just collect rents, just get your tax cuts.

The World Bank has a new report out on Inequality 2018.   I want to direct you to a chart that appears on page 7.

World Bank Inequality 2018 Report Chart

Now, here is one half of the chart I posted December 7, 2007.

Income vs Consumption 1963 to 2005

Notice the approximate time of the crossing over of the Bottom 99%’s income vs the Less chained Personal Outlay?  Look at that top chart from the World Bank. Notice the date?

I will tell you, that the 2 dates coincide with one other number.  15%.  That is the share of income I calculated at the time of crossing over of my chart for the 1%.  All of this was done using Saez’s data.   One more chart.  The other half of my December 7, 2007 posting.

Income vs Consumption 1929 to 1962

This is the first half of my data for that December posting.  Notice what happens around 1942.  At that crossing over, the top 1% share of income falls below 15%.  Coincidence?

Prior to 1942, we were coming out of the Great Depression.  The relationship of the 3 lines in my chart prior to 1942 look to be the same as after 1996.

One other thing to notice, around 1988.  The share of income for the 99% fell below disposable income.  Prior to this since 1942 it was riding even to sometimes above the disposable income.  You know what happened in 1988?  Two years past the 1986 tax law with the reduction of the top tax rates, reduced to 3 brackets and changes made to be able to pay more with stock shares.  Prior to that, it became legal in 1982 for companies to buy back stock.

We changed how we make money and no one is pointing this out as to why the nation is in such a mess.  It won’t matter if we bring back manufacturing.  It won’t matter if we raise the minimum wage.  Neither of these things will make the full change we want such that we revert back to post 1942/pre 1988.  We have to change the way we make money.

One last thing I wish those running for president would point out: Taxes are not bad.  They are not the problem.  How we are spending the money is the problem.   You know, spend it so we are actually building nations/public capital instead of letting the current capital be sucked dry!

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Interview with Andrew Yang

Now that Andrew Yang has made it into the first debate by meeting the fundraising threshold, and being on Morning Joe this morning,  it is time to post this interview of him via Freakonomics.

I was impressed by his thought approach.  He is the first person who is talking about the economy as a ecosystem of society.  That is, it’s not just about making money.  He does not come out and say it as I would but I think he is thinking about a question I have asked here in the past: What do we have an economy for?  Is it to just produce the biggest most powerful engine in the world and watch it run?

My concern is that the MSN is not prepared to do a proper interview with a person who actually wants to discuss a comprehensive idea regarding social structure and present a plan for it as observed on Morning Joe today.  You could just tell they wanted to throw out the memes of name calling:  “socialist”, “taxing the rich”, “taxing business”, “far left”.  But, I think Mr Yang handled it well considering the short time he had vs his scope of policy.  Plus Mr. Yang had facts noting his “freedom dividend” is what Alaska has.

I don’t expect him to win, but I do hope he and his ideas get more coverage and thus pushes the Overton window back toward society.  The problem is,  his idea is very comprehensive.  It’s talking about society.  Unfortunately, our mindset wants discussion boiled down to the “1 item” reductionist meme.  You know: How are you going to bring the nation together?  My answer: Oh, I don’t know.  How do you handle a 2 year old that always says No? (Mitch McConnell  et al)

 

Here is the link: http://freakonomics.com/podcast/andrew-yang/

 

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Hey Rustbelt and beyond, Losing factories is not new

(There’s a movie at the end!)

For decades we have been hearing about the loss of industrial production through out what is called the “Rust Belt”.  It’s presented, even as recent as the prior presidential election as a relative regional problem that only began post Reagan.  What gets me though is that the reporting and ultimately the politics are as if the rust belt is/was unique in their experience with the west and east coast experiencing nothing of the sort.  The presentation is of the west coast Hollywood economy and now the “tech” economy, the east coast (namely New York/Boston) being the money economy.  The south east is not considered other than Disney and orange production.  The north west?  Microsoft and Starbucks.  Well I think it used to be lumber.

Wiki notes that the rust belt is not geographic but is a term that “pertains to a set of economic and social conditions“.     It includes the northeast which is proper in that industry started there but I have had the feeling for a few decades now that such history is forgotten and thus no longer considered when we look to understand what the hell happened to the middle class.

Let me start with this fun fact.  Rhode Island was the most industrialized state per capita in the nation at one point.  Wiki notes that:

…Aldrich, as US Senator, became known as the “General Manager of the United States,” for his ability to set high tariffs to protect Rhode Island — and American — goods from foreign competition.

We were where the super rich came to escape the heat and play.  And then it started to die.  Not just here though.  Neighboring Massachusetts was hit as was Connecticut.  If you ever get a chance, come visit the New Bedford  Whaling museum and read about the massive industry that was there.  Example, the worlds largest mill of weaving looms.  Some 4000+!  Whaling from that city in the later 1800’s generated some $71 million per year!  Not impressed? Well, using the GDP deflator it’s $1.480 billion per year!

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NYT video series on Fake News. Worth the watch

I had heard about a video series on NPR’s Fresh Air regarding the origin and current issue with the concept of Fake News via Russia.  You can listen and read the interview of the author, Adam Ellick here. 

There are 3 videos of 15 to 17 minutes each.  The series is titled: Operation Infektion,  Russian Disinformation: From Cold War to Kanye You can watch them here.   It begins with the AID’s hoax that it was a biological weapon developed and released by the US Military and how the KGB planted it and got it to spread such that it was ultimately reported on a US national news broadcast.  This hoax still has it’s believers.

We learned about propaganda from our experience with Nazi Germany.  With the advent of the internet, propaganda has become a more effective and a less costly means of waging war.  Based on the reporting in the last episode of this series the US is vastly behind the curve when it comes to protecting our self from the harm it causes.

This really is an issue as large and significant as any of those most directly effecting us such as health care, climate change, income inequality.  Unfortunately unlike those whose effects are directly experienced, propaganda/fake news has a virtual reality cover.  Which leads to me to the question: What happens as humanity becomes more accustom to experiencing life via virtual reality than naturally?  I suspect we become more susceptible to the intent of propaganda/fake news.

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Greenspan promoting “Entitlement” cuts as the necessary solution to the economy. 25% worth!

From an interview on NPR’s Here and Now comes:

“The official actuaries of the Social Security system say in order to get our Social Security and retirement funds in balance, they’d have to cut benefits by 25 percent indefinitely into the future,” he says. “Do I think it’s going to happen? Well I don’t know, but this is one of the reasons why inflation is the major problem out there. So long as you don’t do it, you’re going to cause the debt overall — the total government debt — to rise indefinitely, and that is an unstable situation.”

He adds: “In the book … discussing what the long-term outlook is all about, we say that the issue of the aging of the population and its consequences on entitlements is having a significant negative deterioration over the long run. The reason for that is what the data unequivocally show is that entitlements — which are mandated by law — are gradually and inexorably driving our gross domestic savings, and the economy, dollar for dollar. And so long as that happens, we have to borrow from abroad, which is our current account deficit.”

He also said:

“When you deal with fear, it is very difficult to classify,” he tells Here & Now‘s Jeremy Hobson. “But you can look at the consequences of it, and the consequence is basically a suppressed level of innovation and therefore of capital investment and a disinclination to take risks.”

I agree with this, but not just as it relates to “ a suppressed level of innovation…” but instead as it relates to the 2005 World Bank report on what produces wealth in a developed economy like ours. It comes down to trust.  Trust in your judicial system and trust in your education system.   I discuss this in the following 3 posts: 2007, 2009, 2011

Human capital is where it’s at!

This election at it’s core is about trust.  Destroy that, and we have no democracy, we have no economy.  It’s that simple.   That McConnell et al has decided he will not abide by the rules agreed to in conducting the business of the Senate means we have no currently functioning democracy.  That is how fragile democracy in the US is.  Our democracy comes down to two people, the leaders of each party in the Senate agreeing to the rules.  When one decides not to, there is nothing that can be done other than vote.

You can hear the full interview here:

 

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In consideration of Trade and Tarrifs

Updated, also fixed last link

This past weekend, I was in North Adams, Ma.  We did some exploring of the area and came across a company started in 1837 that still exists today in Buckland.   It no longer produces there, as it has moved to Westfield, Ma.  It’s only move in 178 years.   However, it has not survived the trend of Capital Investment companies.  Though, their being purchased does not appear to be a bad thing based on their website.

This picture I took is why I am posting.

The letter struck me as to what we are and have been discussing for decades now: globalization, off shoring, tariffs, industrial policy, etc. In particular, it is this sentence from the letter:

It affords me special pleasure to see American manufacturers succeed in making those things which are generally articles of import.

There has always been global trade.  What appears to have changed is the nature of the competition event.  Look up North Adams.   Arnold Print Works.  They had offices in New York and Paris  France.  

At its peak in 1905, Arnold print works employed more than 3,000 workers and was one of the world’s leading producers of printed textiles. Arnold produced 580,000 yards or 330 miles of cloth per week. Arnold had offices in New York City and Paris. In addition to printing the textiles, Arnold Print Works expanded and built their own cloth-weaving facilities in order to produce “grey cloth”, which was the crude, unfinished textile from which printed color cloth was made.[5]

Update:  There is this one other line regarding Arnold Print Works which reminded me of another prior post.

In 1942 Arnold Print Works was forced to close its doors and leave North Adams due to the low prices of cloth produced in the South and abroad,…

My prior post is (11/28/08) regarding a past Democratic Senator, Ernest F. “Fritz” Hollings.  He hated unions.  He hated “free trade” (off shoring of jobs).  But he failed to see that his work of promoting the South as a cheap labor nonunion region was exactly the same thing he was hating regarding the off shoring of jobs.

This facility was followed by Sprague Electric.   I recognize the name due to my guitars.   As to it’s demise, there is this:

Also by the 1980s, many electronic assembly plants were overseas, and there was more inclination to buy local or from areas closer to assembly. This was an area Sprague Electric could not compete.

Which gets me to a past post of 9/13/09.  As relevant and more so today as when I posted it.  It is worth reading just for the understanding of the theory of “Stars, Cash Cows and Dogs”.    A fable: The Guitar Player who sold his gear or, Bruce Henderson vs. Gordon Moore

What Arnold Print Works and Sprague Electric have in common is that these were companies that were founded on the idea of making a product.  Arnold Print Works applied current technology.  Sprague was actually a creator.  Not a “job creator”.  Just a plain old creative power.

 

 

 

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