Tuesday, November 26, 2013

Space Opera

First a quick music note: the Wednesday Night Blues Jam has moved back to Lynagh's at Woodland and Euclid. We were there for around 9 months in 2007 I think. Slightly larger stage than Cheapside, and no homeless people -- which is the major downside of downtown Lexington.

I finished reading "Leviathan Wakes", by James S. A. Corey, which is apparently 2 guys, one of whom has worked for George R. R. Martin. This is book 1 of "The Expanse" trilogy. I picked this one up because the 2nd book of the trilogy, "Caliban's War" got nominated for the Hugo award. The 3rd book, "Abaddon's Gate" is already out. The books are all about 600 pages each and were released in 2011, 2012, and 2013 respectively -- so these guys are really cranking them out.

This was a very enjoyable read. 200 or so years in the future, humanity is on Earth, Mars, the Asteroid Belt and the moons of Jupiter and Saturn when an unlikely alien first contact appears -- complete with vomit zombies! There are two narrative threads. One follows a burned-out police detective following the standard cheap detective, film noir story arc: the crime whose roots keep reaching further and further out and higher up the food chain. The other thread follows a dishonorably discharged Earth Navy officer who we first see as the XO on a water hauling tug. Kind of a different character, too honest for his own good by a long shot. Very good plot and pacing, and an unexpected but satisfying conclusion that creates a decent sense of closure while it also sets up the rest of the series. Not too much emphasis on the hardware or the military aspects of the story.

Here's a fragment I liked, nice sense of history here.

On Ceres, Eros, Tycho, the bore of the standard corridor had been determined by mining tools built to accommodate the trucks and lifts of Earth, which had in turn been designed to go down tracks wide enough for a mule cart's axle.
Hmmm, time to clear the magazine stack, then I think I'll read the other two of these before starting Keynes's "General Theory". It's the holiday season after all!

Sunday, November 17, 2013

Damn Plutocrats!

I finished reading "Plutocrats", subtitled "The Rise of the New Global Super-Rich and the Fall of Everyone Else", by Chrystia Freeland, 352 pages. This wound up being somewhat not what I expected. There is a short intro and a short conclusion and 6 main chapters. 3 of these -- chapters 2-4 -- seem to be a bit of an apologia for the plutocrats -- not what I expected. But, I guess it is a good idea to really try to understand these guys and where they came from.

Chapter 1, "History And Why It Matters", after a quick review of the feeds and speeds of our current plutocrats, talks about The (First) Gilded Age at the end of the 19th century of the great robber barons: Carnegie, Mellon, Morgan, etc. (plutocrats v1.0). One of the conclusions of the book that is pretty much the topic of Chapter 4, "Responding To Revolutions", is that times of social upheaval -- revolutions -- offer enormous opportunity for the quick and the cunning to amass vast fortunes in a relatively short time. For The First Gilded Age, the upheaval was the Industrial Revolution.

Some interesting FFTKAT (Fun Facts To Know And Tell) of the history leading up to The First Gilded Age: From 1 AD to 1000 AD, the GDP of western Europe fell by around 0.01%/year. From 1000 AD to 1820 AD, it rose by 0.34%/year. "Then the world changed utterly": between 1820 and 1998, it rose by 2.13%/year, while in the US, Canada, Oz, and NZ, it rose by 3.68%/year.

I had seen this quote from a letter written by Thomas Jefferson in 1814 before:

we have no paupers, the old and crippled among us, who possess nothing and have no families to take care of them, being too few to merit notice as a separate section of society, or to affect a general estimate. The great mass of our population is of laborers ; our rich, who can live without labor, either manual or professional, being few, and of moderate wealth. Most of the laboring class possess property, cultivate their own lands, have families, and from the demand for their labor are enabled to exact from the rich and the competent such prices as enable them to be fed abundantly, clothed above mere decency, to labor moderately and raise their families. They are not driven to the ultimate resources of dexterity and skill, because their wares will sell although not quite so nice as those of England. The wealthy, on the other hand, and those at their ease, know nothing of what the Europeans call luxury. They have only somewhat more of the comforts and decencies of life than those who furnish them. Can any condition of society be more desirable than this ?
"Can any condition of society be more desirable than this?" This was the USA at the time of its founding, the USA of the Founding Fathers. Sigh :-(

That completely changed with The First Gilded Age. Carnegie and his ilk thought that the vast wealth they had earned/stolen was right, reasonable, and appropriate. But the inequalities became so great that they gave rise to the progressive movement, which lead to trust-busting, government regulation, and income taxes.

In Europe, with its hereditary aristocracy, the inequality was even greater, leading to "the first coherent political ideology of class warfare -- Marxism". And although the Communist regimes of Russia and China were economic failures, and brutally murderous (see my blog post on Pinker's latest book), they did stir things up enough that FDR's New Deal and the social welfare systems of western Europe were created to stop their spreading to the West.

The current situation is being driven by the technology revolution and globalization. This has given rise to twin new Gilded Ages: one mostly of the technocrats of the developed world; the other of the robber barons in the developing world, particularly BRIC (Brazil, Russia, India, China). So a 2nd Gilded Age in the west, a 1st Gilded Age in the developing world.

Chapter 1 concludes with a review of data in the Credit Suisse annual wealth report. I spent some time with the latest version of this when it came out a month or so ago. Really interesting numbers. Total wealth of the world? $241T (trillion). Amount held by the 1% (actually the 0.7% worth more than $1M)? $99T, 41% of the total. By the next 7.7% (worth > $100K)? $103T, 42%. Everyone else, $40T, 16%. The top is absolutely booming, the bottom of people with crap jobs is also growing, but the middle is being hollowed out. Au revoir, middle class. :-(

Chapter 2, "Culture of the Plutocrats", is all about how the .1% live. British public schools, US Ivy League colleges. The billionaire set is largely becoming stateless. They own homes all over the world, but particularly like the "world capitals": New York, London, Hong Kong, Dubai. They attend the same events: Davos (economic forum in Switzerland), Wimbledon, TED in California, the Oscars, the Cannes Film Festival. The worst thing about this, commented on in chapter 6, is that from within this bubble of privilege, they very quickly lose sight of what life is like for the rest of the world.

Most of the latest crop of billionaires are "working rich" -- per Forbes, ~2/3 of the world's current billionaires are self-made. 2/3 of them work, as opposed to 1/5 100 years ago. Their kids will get to be the idle rich, we'll see how that goes, I guess. Funny to me that she defines alpha geek / technologist as being the most common background for the new billionaires -- technocrats, my tribe. But, I was never a candidate. Not driven enough by a huge factor, and way too many side interests.

The current billionaires have a new take on charity as well: "philanthro-capitalism". They'd rather found their own charitable foundation and show that it can solve some world problem better than the other plutocrats' foundation can. And in chapter 6, the plutocrats are quoted as saying, we can do this better than the government, don't tax us, let us figure out now to spend our money for the public good ourselves. The problem I have with that is that religious groups have been saying the same thing for years relative to addressing problems like hunger -- but, there are still too many children hungry, so, sorry, == epic fail. IMO taxation and government is the only sure kill, at least until we get to a post-scarcity, anarcho-utopian type state.

There is some discussion of conflict between the 0.1% and the rest of the 1%. Worldwide there has been some conflict between these groups, but in the US, millionaires normally see themselves as billionaires in waiting.

Also worth noting: being a billionaire is a boys club. Of 1,226 billionaires in 2012, 104 were women. "Subtract the wives, daughters, and widows and you are left with a fraction". "The plutocracy ... still lives in the Mad Men era". Per Larry Summers: "They don't have the killer instinct, they don't want to fight, they won't go for the jugular." Another reason to get more women in positions of power.

Chapter 3, "Superstars", talks about the "superstar" effect: "the tendency of both technological change and globalization to create winner-take-all economic tournaments in many sectors and companies". This occurs in music, art, sports, cooking, lawyers. I think everyone is coming to realize that the "long tail" the Internet creates is not particularly helping with this -- Lady Gaga probably outsells the lowest 1,000,000 musicians out on the long tail. The first recognition of the superstar effect is attributed to Alfred Marshall in 1875. In the 20th century, Sherwin Rosen recognized that technological advances, particularly in distribution, intensify the effect. And most recently, Roger Martin has posited that superstars power has increased to where they can extract more wealth from their employers -- talent beats capital. So in the late 20th century, capital defeated labor, but so far in the 21st century, talent is defeating capital. Good, I guess? But the ones who are really "making out like bandits" are:

  • bankers, with salaries 2x the average for modern knowledge workers;
  • CEOs, who are almost never "company men" anymore, but rather superstars who move from company to company.
Chapter 4, "Responding to Revolution" I have already mentioned. Revolutions can be technological or political. Being able to respond to revolution may have a genetic component (high dopamine levels) that is probably higher in immigrants. Hence the Americas, being composed mostly of immigrants, as hotbeds of intellectual revolutions. But the US in particular has had it so good for so long that it is becoming more conservative -- such that the big profits are now in the developing world.

There are lots of samples of plutocrats across the world making their fortunes by responding to various revolutions.

Chapter 5 is "Rent-Seeking". OK, finally we're getting to it. "Rent-seeking" refers to making money without doing work. This is where you distinguish between someone who works hard, builds a company, and makes a fortune (yay) and someone who figures an angle to extract wealth without adding value or particularly working (boo): "we need to be constantly alert ot efforts by the elite to get rich by using their political muscle to increase their share of the preexisting pie, rather then by adding value to the economy and thus increasing the size of the pie overall." Paul Ryan says we should:

lower the amount of government spending the wealthy now receive. ... true sources of inequity in our country ... corporate welfare that enriches the powerful, and empty promises that betray the powerless ... a class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules, and preserve their place atop society.
Really??? Paul Ryan??? Boy, I doubt that's what he says behind closed doors.

The various sources of plutocrats vary from country to country:

  • In the US, new plutocrats are largely technologists.
  • In Russia, they are men who gambled and aggressively bought up state resources when the communist system was broken up. (Ms. Freeland's earlier book, "Sale of the Century", documented this historic event.) Unfortunately for Russia tho, most of their GDP now comes from natural resources, which tends to lead to corruption and stagnation.
  • In China, the plutocrats are mostly members of the government. But if they go too far, they can be stripped of wealth, jailed, and even executed.
  • In India, the "License Raj" controlled industry. In 1991, it was done away with, and the Indian economy took off. But the government is still heavily involved, and very corrupt, with bribery as a fact of doing business.
  • In Mexico, Carlos Slim jumped in when the Mexican phone company Telmex was privatized.
You know, I have posted several times, "privatization" === "let some fat cat buddy of mine make $100Ms". These stories I think bear that out. But in a lot of these cases, liberals actually drove the sell-offs, trying to bring life to stagnant, inefficent, state-owned companies -- and wound up with plutocrats and oligarchs for their efforts. In some cases, the companies did become more vital and competitive, in others not. I think we just need to harvest some of the wealth back from the plutocrats.

Chapter 5 ends with the run-up to the 2008 financial meltdown, which was preceded by years of the financial industry bitching about how too much government regulation was stifling them. Wall Street claimed the business would all move to London. Meanwhile, Canada, with well-regulated, stodgy, risk-avoiding banks completely dodged the financial crisis.

Annual bribes worldwide: $1T. "But orders of magnitude more money was being made thanks to that he dubbed 'legal bribery'" -- the army of incredibly funded lobbyists, many of whom are in a revolving door relationship with the government and its bureaus, the pervasive influence peddling.

Chapter 6, "Plutocrats and the Rest of Us", starts out really depressing. After a tour of Zappos (?!?!?), plutocrat after plutocrat is quoted:

I think we ought to honor and uplift the 1 percent, the ones who have created value.
Do we feel bad for the growing gap between the rich and the poor in the U.S.? Of course not; we celebrate it, for we were poor once and we are reasonably wealthy now. We did it on our own, by the sheer dint of will, tenacity, street smarts and the like.
If a man is not an oligarch, something is not right with him. Everyone had the same starting conditions, everyone could have done it.
Which is of course not correct. I don't think that we'll ever lack for alpha types able to build companies and amass fortunes, but, luckily, the vast majority of the population do not have the possibly psychopathic or sociopathic genetics that is apparently often part of being a successful CEO.

There are many anecdotes of how the plutocrats wind up living in a bubble, expecting deference to all their whims. There's funny (but sad) stories of Wall Street types refusing to take any responsibility for the meltdown, blaming instead anyone who got caught up in the frenzy of the housing bubble.

Of course, finally, John Galt comes up -- you knew he was going to eventually. I've said several times, any plutocrats wanting to Go Galt, go for it! There's plenty more where they came from. The Seasteading Institute is studying man-made islands which will become floating Libertarian paradises, yes!

But finally, we do talk to some plutocrats who sympathize with Occupy Wall Street, and who see the incredible inequity as bad and unsustainable.

I liked the discussion of Willem Buiter's "cognitive state capture": that the mindset and worldview of so much of Wall Street, the Fed, the SEC, the Department of the Treasury, and all financial institutions is so similar that it goes without saying that "what is good for Wall Street is good for everyone". Before the 2008 meltdown, they all thought it would be best if the financial industry policed itself -- yeah, right.

Canadian Mark Carney, current governor of the Bank of England and chairman of the G20's Financial Stability Board, is apparently emerging as a voice of reason re regulation of financial markets. Funny, like the rest of the rulers of the financial world, he is a Goldman Sachs alum (13 years) (the blood sucking vampire squid ;->). He had some good head-to-heads with Jamie Dimon of JPMorgan/Chase -- and I will say came out the winner. He totally calls Dimon out re, a financial crisis is something we have every 5-7 years, as Dimon says he told his daughter. Plus the London Whale lost JPMorgan/Chase (investors?) $6B on Dimon's watch.

An interesting discussion of my BFF Barack Obama in this chapter. The contention is, he's not an idealist, a socialist, a liberal, a centrist; what he is is a pragmatist. What will work? That's all he cares about. Sounds highly possible, how disappointed am I to have to let go of "hope and change"? I will advise.

More depressing news, that the ultra-rich have subverted the intellectual class and created their own alternate reality and infrastructure of conservative think tanks (oxymoron?), etc. Clearly a done deal, man I sure hope we can fight against $B of attack ads, lies, etc. My god, the boilerplate press releases of my Tea Party congressman Andy Barr ("we made 14 attempts to keep the government from shutting down, and Obama ignored them all!") are coming from a universe other than the one I live in.

Meanwhile, our legislators become more aligned with the plutocrats because they are getting richer and richer all the time. Wow, "between 2000 and 2007 the Clintons earned $111M, nearly half of it in Bill's speaking fees, many of them paid by global plutocrats ..." :-(

The chapter closes with the unbelievable Paulson story. The Secretary of the Treasury happens to mention in a lunch with a bunch of his Goldman Sachs buddies that Fannie Mae and Freddie Mac are going to be taken over by the government -- insider trading info of the highest order. And, anybody called to task for this? In a word, no. Planned, or cognitive capture as earlier mentioned?

Maybe the most revealing quote of the entire book:

When you have a financial incentive to see reality in a certain way, you will see it that way, not because you're bad, but because you are human. -- Professor Dan Ariely
Finally, in the conclusion, we get to what I thought would have been the main push of the book. First, a very nice story about 14th century Venice. It grew to be a financial superpower by inclusive, upwardly mobile business policies. Then, those in power decided to lock themselves in, fuck future upward mobility, 100 years later, they were done.

This brings us to what I somehow thought the whole crux of this book would be: Daron Acemoglu and James Robinson and their thesis that states succeed or fail based on whether they are inclusive or extractive. As I mentioned earlier, inclusive == meritocracy, work hard and succeed (or fail), reap the rewards of your hard work; extractive == rent-seeking, make your money without working, rig the rules to work in your favor, play king-on-the-hill, kick the people trying to come up the hill in the face.

Re Eric Schmidt of Google:

So I think it's very important to distinguish between rich people who get there by taking the economic rents of the country for their own benefit versus the people who, in fact, create a new corporation or a new source of wealth.
But Ms. Freeland, says, dividing plutocrats per the above principle is hard. And maybe she's right. At some level profit is profit. But I say, still we have to try to incent and reward the real job-creators, and to penalize (via taxing the hell out of) the rent extractors.

The final cautionary tale: the Great Gatsby Curve: "as societies grow more unequal, social mobility is choked off." Haha, Ms. Freeland interviews the president of Brown U, who says, no getting rid of legacy admissions soon, because "I have a granddaughter. It's not time yet." I am proud that my alma mater, M.I.T., which used to give alumni children one extra application review for admission, now gives the children of alumni absolutely zero of a leg up.

OK, we're done. And I've noticed that "creative destruction" in the economy, particularly the job market, which is mentioned several times, had not heretofore been mentioned. So check that off the list.

The official review: chock full of stuff you didn't know, particularly re Russia, India and China, the book is a quick read at 350 pages. I read it in 3 days, a few hours each day max. It is definitely worth a read. It has much hard data on the political issue -- wealth inequality -- that several politicians are trying to frame as the central debate of our current zeitgeist.

On a final hopeful note, Ms. Freeland has apparently retired from journalism and is now the Liberal Party candidate to become a Canadian MP! Best of luck to her in politics!

Monday, November 11, 2013

1 Novella, 2 Novels

So, into the Sci-Fi/Fantasy to-read stack. Finally (duh) figured out that I could manually create a "Unread" self in the Kobo eBook reader and put my unread books there. Oops, 14 there. It's way to easy to impulse buy eBooks. The Kobo eBook reader seems to crash less but still, unbelievable that it does not have a "search text" function.

First off, read "Equoid", by Charles Stross. It's a novella set in his The Laundry series of books, I think like $1.99 for the eBook. Stross has so much fun taking the base mix of Dilbert, H.P. Lovecraft, and James Bond and then finding some much beloved fantasy meme to throw in, normally with horrible consequences. In this case it's unicorns -- and I'll never be able to watch My Little Pony again :-(

Then I read the 2nd and 3rd books of The Inheritance Trilogy, by N.K. Jemisin: "The Broken Kingdoms", and "The Kingdom of Gods". The first book, "The Hundred Thousand Kingdoms" was blogged ... or apparently not, hmmm. I enjoyed it enough to try these two.

This woman writes very well, and I really like the way this trilogy is structured. The protagonist changes in each of the novels, with other protagonists and supporting characters threading through all 3 novels. She has created what I think is a nice workable mythology. Chaos spawns 3 gods (she seems to like trinities of 2 males and 1 female, not sure what that means): male gods of light/day and darkness/night, and a female god of grey/twilight. The gods are capable of manipulating reality on pretty much any level they want. The gods' children are demigods, who can live in the physical world or in the god realms. They typically have to have a theme, like a Greek/Roman god -- the protagonist of the 3rd novel is Sieh, trickster demigod of children/childhood. They can manipulate reality like the gods only in limited fashion. Demigods breeding amongst themselves or with the gods produce more demigods. Demigods breading with humans create demons (not sure why she chose that term) who may have various magical powers.

The writing is good, the pacing and plotting decent. All 3 novels have male (demi)gods having sex with human women, with no sex going the other way -- is this a standard feature of the paranormal romance genre, which I guess this falls into to some degree? There is also male homosexual action in the 3rd novel, mercifully with very little detail (I guess that goes with the 2 male god / 1 female god trinity thing).

So overall, well written, nice mythology building, nice structure. 3 stars.