Maryland's fraudulent terrorism investigatons: a Bush/Cheney legacy

Imagine how miserable it would have been to read this with a President Palin on the way.

We'd all be thinking that the Soviets had won Cold War I.

Now we read it as the waning evil of one of the most wretched and incompetent governments of any democratic nation in the past forty years. Emphases mine.

Police spy on climate activist while global warming goes unarrested | Environment | guardian.co.uk

I'm not sure what's more shocking: the news that the Maryland State Police wrongfully spied on me for months as a "suspected terrorist," or that, despite surveillance of me, officers apparently wouldn't recognize me if I walked into their police headquarters tomorrow.

I'm a former Peace Corps volunteer, an Eagle Scout, church member, youth baseball coach, and dedicated father. I also happen to be director of one of the largest environmental groups in Maryland, a nonprofit that promotes windmills and solar panels in the fight against global warming. So imagine my shock to get a police letter last month saying I was one of 53 Maryland activists on a terrorist watch list that has been discontinued because — can you believe it? — there's "no evidence whatsoever of any involvement in violent crime."...

... The mess all began last summer when astonishing evidence surfaced revealing that the Maryland State Police — under former Republican Gov. Robert Ehrlich — posed as activists and infiltrated an anti-death-penalty group, attending the organization's meetings and taking secret notes to send back to HQ. But what were they doing to me and my organization — the Chesapeake Climate Action Network — during this surveillance program in 2005 and 2006? Bugging our phones? Reading our emails? Monitoring me as I walked my kid to the bus stop?

I still don't know for sure. Yielding to public pressure, the police finally gave me a printed copy of my "file" on October 29. It raised more questions than it answered. Seven of the 12 pages were withheld without full explanation. And of the pages I did receive, at least half the words were redacted — blacked out with a marker.

There was a photo of me on the last page, lifted from my website. And on the first page, there were these words: "Crime: Terrorism, environmental extremists."

What terrorism would that be? My file — what little of it I have — makes reference to a morning speech given in Bethesda, Md., by then-governor Robert Ehrlich on November 17, 2005. A small audience of invited guests and journalists attended inside a classroom at Walt Whitman High School. Ehrlich wasn't doing enough to fight global warming, the Chesapeake Climate Action Network believed, and several of my staff arrived to peacefully demonstrate and hold up signs that said things like, "It's Getting Hot in Here, Gov!" But troopers with the governor's "Executive Protection Division" believed this was extreme, according to my file. For example, CCAN staffers invited high school students to hold up protest signs during the governor's speech. Pretty extreme, huh?

There was no civil disobedience at this event. No one was arrested. No county, state, or federal laws were breached. The entire affair was utterly peaceful, above board, and appropriate. Political demonstrations exactly like this happen a thousand times a day in America. There were no media reports of anything unusual.

Yet Ehrlich's security team considered this "aggressive protesting." Afterward, the troopers contacted the Maryland State Police's Homeland Security and Investigation Bureau. The result was creation of intelligence files on me and three of my staff under the crime category of "terrorism, environmental extremists." The real motivation, however, appears to be political spying. We were opponents of the governor's policies. We were organized and vocal about it. We wound up on an intelligence list along with dozens of other innocent, nonviolent opponents of the governor's policies...

... the state police say they've released everything to me that's relevant to me, but I don't believe them. Since July, the state police have made numerous public statements related to this spying controversy that have proved to be factually untrue. They initially said, for example, that the entire surveillance program was limited to anti-death-penalty activists. But we now know activists for peace, immigration, and the environment were spied on too. I believe more of the spying story is yet to come out, however. With the help of a heroic Maryland attorney, David Rocah of the American Civil Liberties Union, and an equally heroic Maryland state senator, Jamie Raskin of Takoma Park, I believe all the facts will soon surface and we'll see legislation in the state General Assembly in 2009 specifically banning police abuses like this....

This insanity involved state Republicans and state police, but the terrorism laws came from Cheney/Bush. They blocked protections that would have prevented this kind of abuse.

We don't deserve to have escaped the dark age of Bush, but somehow, inexplicably, it's receding into history.

Outsourcing AppStore review fraud - a 21st century crime

This is so 21st century.

Positive reviews in the iPhone App Store are worth a lot of money to developers.

So they've found various ways to cheat.

The most recent strategy is to use Amazon's Amazing Turk service to globally outsource app review.

Since only people who purchase applications can review them, the author offers to pay for more than the cost of the application.

The catch is the reviewers have to buy the app first, then leave the review with a tell-tale five period marker, then trust the application auther to pay them for the fraudulent review and cover their upfront costs.

It's a measure of the power of Amazing Turk that it found people who were not only themselves crooked, but they would also trust a fellow crook to pay them for their crooked work.

Honor among thieves, apparently.

It's hard to believe this will scale, so I suspect Apple's current comment strategy will work. Even so, it's a classic 21st century crime!

The Fall of Citigroup means we don’t understand what’s happening …

So it now appears that the US government, at the least, will come to own Citigroup. October had the first CPI fall in … well … a long, long time. Switzerland is teetering on bankruptcy …

End of the beginning? — Crooked Timber

The failure of Citigroup, which looks increasingly likely to happen in the near future, would mark the end of the beginning of the financial crisis…

… Citi is not only too big to fail, it’s too big to rescue with any of the half-measures that have been tried so far. Only outright nationalization is feasible, and that will probably require joint action by a number of governments; Citigroup’s global operations are too big for the US to handle alone….

… The national bankruptcy of Iceland seems likely to followed by something similar for Switzerland. As Citi itself points out, UBS and Credit Suisse are bigger, relative to the Swiss economy, than Kaupthing was for Iceland. Felix Salmon (also predicting doom for Citi, has been all over this).

Given a failure and rescue, Switzerland would probably have to follow Iceland in a rush application to join the EU (which might have its hands full rescuing some of its own members). It’s a safe bet that the end of secret bank accounts, “wealth management” through tax minimisation and the like would be part of the price…

… If even part of this plays out as it seems likely to, the financial system that emerges from the crisis will be radically different from the one that went in: massively smaller, with far fewer institutions and products, and tightly regulated where it isn’t under outright public ownership.

But before we can even get to that point, we’ll have to survive a global recession which is already the worst in decades, even though it’s still in the opening phase where unsold inventories pile up on wharves. Obama’s inauguration is going to look a lot like that of FDR in 1933.

Is this a part of the unwinding of $300 trillion in derivatives that we’ve been wondering about? Who’s winning in these monstrous money flows?

In the good-old-days of five days ago, I wrote:

One theory is that the combination of the 1994 Gingrich Marketarian [3] "revolution" and consequent firewall demolition, combined with at least one major technology transition, produced accelerated returns at the cost of new instabilities. Over a long enough timeline investment returns might be somewhat lower than with a balanced regulatory environment, but "safe" investment timelines are now 20-50 rather than 10-15 years.

I think that's true, but not the entire story…

… We know humans are predictably irrational. We know people will aggressively search for cheap gas when prices are rising, but won't when prices fall -- even at the same income/price ratio. [5] Similarly we know humans will criticize balance sheets when share prices fall, but not when they rise.

This means that market volatility enables predictable predation strategies during rapid rise. Money can be diverted into senior executive compensation, into insider trading, into payments to political parties and senators, and into sophisticated financial instruments that none of us have the ability to fully understand or model.

This form of market predation (parasitism really, since a dead host is not useful) is bad enough by itself, but it's aggravated by "ratchet effects" [4]. CEO compensation doesn't fall as quickly as share prices. Senatorial contributions can't be stopped without risking undesirable electoral outcomes.

Volatile markets, like those of the past twelve years, can start to look an awful lot like Amway…

So does the combination of technology transition, firewall demolition and volatility-facilitated fraud account for what we’re seeing? How about if we throw in the rise of China and India? What role does skewed wealth concentration and the effective “disabling” of about 20-40% of the US population?

What was it Reich wrote last March …

… American consumers are coming to the end of their ropes and don't have the buying power they need to absorb the goods and services the U.S. economy is capable of producing. This is likely to mean fewer jobs, which will force Americans to pull in their belts even tighter, leading to still fewer jobs – the classic recipe for recession. That recession may turn into a full-fledged Depression if fiscal and monetary policies can't make up for consumers' lack of buying power. And there's reason to worry they cannot because consumers are in a permanent bind. They're deep in debt, their homes are losing value, and their paychecks are shrinking...

...We're reaping the whirlwind of many years during which Americans have spent beyond their means and most of the benefits of an expanding economy have gone to a relatively small group at the very top. Adjusted for inflation, the median wage is below where it was in 1999. The nation's median hourly wage is barely higher than it was thirty-five years ago. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. The rich, meanwhile, can't keep the economy going on their own because they devote a smaller percentage of their earnings to buying things than the rest of us: After all, they're rich, and they already have most of what they want. Instead of buying, they're more likely to invest their earnings wherever around the world they can get the highest return...

... Go back to the years just before the Great Depression and you see the same pattern. As I've noted before, Marriner S. Eccles, who served as Franklin D. Roosevelt's Chairman of the Federal Reserve from 1934 to 1948, noted this in his memoir "Beckoning Frontiers":

"As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped."...

So here’s my current list of the contributing factors …

1. firewall demolition enhancing returns at the cost of instability (rise of the Marketarian religion)
2. technology transitions – computing and communications
3. globalization – rise of China and India
4. wealth concentration in the hands of people who don’t need to spend to live – they can sit on their money
5. fraud (including quality collapse) and wealth diversion enabled by firewall demolition and rapid market rise
6. aging populations in wealth producing nations

Bush and the GOP have responsibility for #1 and #4 and partial responsibility for #5 (culture of greed, think “broken windows” for CEOs). They don’t have responsibility for the entire catastrophe, but they may own the critical mass.

Silence can speak loudly. Nobody I read is now saying Depression is impossible.

The “end of history” seems pretty funny now. Hah, hah.

Update: I'd forgotten about a earlier post that covered things from a slightly different angle. I have more to say about the complexity factor in a later post.

Update 1/12/2009: This 2003 post feels relevant. Generational wealth transfers and the Bush estate tax cut combine with declining family size to boost high end real estate purchases.

See also:

1. Lewis and Einhorn: repairing the financial world
2. The role of the deadbeats
3. Complexity collapse
4. Disintermediating Wall Street
5. The future of the publicly traded company
6. Marked!
   
7. Mass disability and income skew
8. The occult inflation of shrinking quality
9. GD II: How great is global idle capacity
   

Broken window effect size – surprisingly large. Mow the lawn?

I love to see experimental testing of human culture and behavior. Maybe the experiments aren’t as well funded or robust as well done clinical trials they’re still a big improvement over our unreliable “common sense”. On the other hand, if they get published in Science they’re probably pretty darned good.

We now have the results of several experiments that, together, suggest that “broken windows” and other features of a disordered environment affect the incidence of crime and antisocial behavior. This is not a surprise to teachers, parents or police, but the effect size is notable.

A doubling of anti-social behavior is enough to justify a lot of investment in the prevention of ‘social crimes’. I now have a business justification to mow my lawn more frequently …

The “broken windows” theory of crime is correct | Can the can | The Economist

A PLACE that is covered in graffiti and festooned with rubbish makes people feel uneasy. And with good reason, according to a group of researchers in the Netherlands. Kees Keizer and his colleagues at the University of Groningen deliberately created such settings as a part of a series of experiments designed to discover if signs of vandalism, litter and low-level lawbreaking could change the way people behave…

… The idea that observing disorder can have a psychological effect on people has been around for a while. In the late 1980s George Kelling, a former probation officer who now works at Rutgers University, initiated what became a vigorous campaign to remove graffiti from New York City’s subway system, which was followed by a reduction in petty crime…

… Dr Kelling’s theory takes its name from the observation that a few broken windows in an empty building quickly lead to more smashed panes, more vandalism and eventually to break-ins. The tendency for people to behave in a particular way can be strengthened or weakened depending on what they observe others to be doing. This does not necessarily mean that people will copy bad behaviour exactly, reaching for a spray can when they see graffiti. Rather, says Dr Keizer, it can foster the “violation” of other norms of behaviour. It was this effect that his experiments, which have just been published in Science, set out to test.

… When the alley contained graffiti, 69% of the riders littered compared with 33% when the walls were clean…

… In the “order” condition (with four bicycles parked nearby, but not locked to the fence) 27% of people were prepared to trespass by stepping through the gap, whereas in the disorder condition (with the four bikes locked to the fence, in violation of the sign) 82% took the short cut.

… With no fireworks, 48% of people took the flyers with them when they collected their bikes. With fireworks, this fell to 20%.

.. In a condition of order, 13% of those passing took the envelope (instead of leaving it or pushing it into the box). But if the post box was covered in graffiti, 27% did…

The power, and the glory of a Science pub, comes from the experimental designs and the consistency across multiple settings. These experiments were done in the Netherlands, so of course effects may vary in different cultures.

Doubling. That’s big.

Local police should have no trouble justifying budgets to prevent ‘social crimes’ with these results. There are obvious implications for military and economic interventions in the world’s trouble spots as well.

I guess I need to rake my leaves too …

Update 11/22/08: Obvious follow-up study. Is the effect relative? So if you eliminated all the Graffiti, would rust become the new differentiator between order and disorder? If the effect is relative, then we'd always be chasing our proverbial tails. The return on broken window policing would be transient.

Do you think Lexington is bitter?

The Economist's "Lexington" has been an understated shill for the GOP for the past decade. I'm guessing that covers several pseudonymous writers.

Today s/he turns on her masters ...

The decline of the Republican Party | Ship of fools | The Economist

... in a desperate attempt to serve boob bait to Bubba, he appointed Sarah Palin to his ticket, a woman who took five years to get a degree in journalism, and who was apparently unaware of some of the most rudimentary facts about international politics...

Whoa. That's harsh.

Somebody is feeling a wee bit bitter.

Wasting money: Ginkgo biloba joins the pile

None of this is in any way surprising:

Herbal supplement Ginkgo doesn't stop Alzheimer's: Scientific American

The widely used herbal supplement Ginkgo biloba does not appear to prevent Alzheimer's disease in healthy elderly people or those with mild cognitive impairment, U.S. researchers said on Tuesday...

...Those who took the ginkgo were no more or less likely to develop Alzheimer's or any type of dementia, the researchers wrote in the Journal of the American Medical Association....

... Dr. Murali Doraiswamy of Duke University Medical Center in Durham, North Carolina, noted that other Alzheimer's prevention failures include statins, estrogen, anti-inflammatory drugs, vitamin E and drugs called cholinesterase inhibitors...

...Michael McGuffin of the American Herbal Products Association said the findings do not undermine earlier evidence that ginkgo is useful in relieving symptoms in people who already have Alzheimer's.

Daniel Fabricant of the Natural Products Association said a study starting when people are in middle age rather than almost 80 would be the best way to analyze Alzheimer's prevention....

Of course the usual suspects are convinced that it still works somewhere, somehow, on someone. They'll never give up.

The interesting question is whether the study was a waste of money.

Well, since lots of people take Gingko to slow cognitive decline, maybe it was worth doing to persuade them to save their money. On the other hand Gingko is probably a relatively cheap placebo and it's not like we have anything that works. Maybe we should have just ignored the question.

What I'm most interested in is whether there was really any good scientific evidence that it was worth trying Gingko biloba to treat early dementia. Were there any persuasive animal studies? Anything observed in the lab that was really remarkable? Or did we just study it because a lot of people liked it?

Money is not endless. We should be researching promising directions, and we should subject truly interesting "herbal" drugs to the same testing regimens we apply to manufactured drugs.

Old notes: Techniques for problem solving by creativity

Before there were blogs, before there was Netscape, back when I used Mosaic on a Mac, I authored web pages. Even then I was struggling towards something like a blog post.

One of those early pages contained a review of what is still one of two or three most interesting business books of the 20th century -- reengineering the corporation.

Since it was tedious in those days to create new pages, I just extended the original page. Eventually it became a collection of odd notes.

Today, the whimsy of a full text search pulled up my old page. I found some interesting bits.

Now, of course, we have blogs.

So I'll periodically extract a few of the better parts -- the better to feed my prosthetic memory.

Starting with one on creativity ...

Management and Related Notes

Sutherland and others

1. Examine the symmetry of the problem, and you may find the symmetry of the solution.

2. Build a taxonomy of the problem and you may discover new combinations to explain

* divide problem into features
* make a each feature a dimension or axis
* organize dimensions into triplets (vary the triplets)
* each triplet forms a box: explore the box

3. Identify categories of the problem -- explore the inverse.

4. Attach the most generic and expansive version first .. A simpler version ... A special case ...

5. Describe the problem aloud to another person

6. Read papers, attend lectures on unrelated subjects.

7. Sleep, exercise.

Dead Lively teaches lessons

Consider this a cheap lesson, Lively users ...

Official Google Blog: Lively no more

...we've decided to shut Lively down at the end of the year...

...We'd encourage all Lively users to capture your hard work by taking videos and screenshots of your rooms.

Now you understand data lock.

The lesson will serve you well the rest of your life. You will never look at The Cloud quite the same way.

Yahoo's coming user education will be even more brutal.

Anyone recall when Dave Winer shutdown his UserLand hosted blogs?

Update 11/20/08: In response to a request for more details, see Bradley's post.

Gwynne Dyer: newly posted

Six, all at once. I'm curious to what he says about Obama.

October 24 Perfidious Albion
October 30 Obama: The Limits of Power
November 4 China: Taiwan: Porcupines On A First Date
November 7 The Threat of Green Obama
November 13 Realism in Ukraine
November 14 Never Waste a Crisis

Monty Python. On YouTube.

What will Skynet make of this?

In the same week that Google and LIFE launch a high minded image archive, Google's YouTube launches the Monty Python channel.

YouTube - MontyPython's Channel

... None of your driveling, mindless comments. Instead, we want you to click on the links, buy our movies & TV shows and soften our pain and disgust at being ripped off all these years...

Righty oh.

I've subscribed to the feed: http://www.youtube.com/montypython.

New Macs won't let some video play on projectors

Old televisions, projectors, LCD panels -- they're not "HDCP" compliant. So they won't always work as expected with new Macs. Only media that enforce the DRM chain are fully acceptable (emphasis mine)...

AppleInsider | Apple's new MacBooks have built-in copy protection measures

Apple's new MacBook lines include a form of digital copy protection that will prevent protected media, such as DRM-infused iTunes movies, from playing back on devices that aren't compliant with the new priority protection measures.

The Intel-developed technology is called High-bandwidth Digital Content Protection (HDCP) and aims to prevent copying of digital audio and video content as it travels across a variety of display connectors, even if such copying is not in violation of fair use laws.

Among the connectors supported by the technology are the Mini DisplayPort found on Apple's latest MacBook, MacBook Pro, and MacBook Air, in addition to others such as Digital Visual Interface (DVI), High-Definition Multimedia Interface (HDMI), Gigabit Video Interface (GVIF), and Unified Display Interface (UDI).

ArsTechnica reports that Apple has apparently acquired a license for the technology and is now using it across its DisplayPort-enabled MacBook lines to to prevent transmission of purchased iTunes content to devices that don't include support for HDCP.

"When my friend John, a high school teacher, attempted to play Hellboy 2 on his classroom's projector with a new aluminum MacBook over lunch, he was denied by the error you see [below]," writes Ars' David Chartier. "John's using a Mini DisplayPort-to-VGA adapter, plugged into a Sanyo projector that is part of his room's Promethean system."

... As a licensed adopter of HDCP, Apple agrees to pay an annual fee and abide by the conditions set forth in Inte's HDCP License Agreement [PDF].

For example, the terms stipulate that high-definition digital video sources must not transmit protected content to non-HDCP-compliant receivers, as described above, and DVD-Audio content must be restricted to CD-audio quality or less when played back over non-HDCP-digital audio outputs.

Hardware vendors are also barred from allowing their devices to make copies of content, and must design their products in ways that "effectively frustrate attempts to defeat the content protection requirements."...

Gee, I wonder why the makers of Audio Hijack couldn't get permission to put their apps on the iPhone.

We know where this ends up.

We will all have little chips implanted into our acoustic and ocular nerves. The chips will decode encrypted media, which will look and sound like nonsense to the unchipped. That way every family member will pay separately for their holograms.

You think I'm joking.

Hah.

Anyone know how I can make anonymous cash donations to the bandits of Sherwood Forest 2.0?

The enemy of my enemy is my friend.

See also: Palladium.

Update 11/20/08: Additional details. If Apple had provided another port they'd have been ok, but that would have ruined the vibe.

Update 11/25/08: This is partly a bug. Apple has a QT fix. The Macs were supposed to be able to output regular video to non-compliant monitors, but not HD video.

Google love: The resurrection of LIFE's ten million image archive

Consider this one image.

Prisoners gathering en masse at distribution point to receive their daily rations of food, at Civil War-time Andersonville prison.
Location: Andersonville, GA, US
Date taken: August 1864

It's blurry. Chaotic. Hard to make out. A jumble of mud and anonymity. The men are posing for the camera, while waiting for rations.

Just one of millions of photographs now available in Google's archive of LIFE magazine. There will be 10 million of these in months to come. (I checked, http://images.google.com/hosted doesn't show any other hosted repositories yet.)

Resurrected from dusty negatives and prints...

Official Google Blog: LIFE Photo Archive available on Google Image Search

The Zapruder film of the Kennedy assassination; The Mansell Collection from London; Dahlstrom glass plates of New York and environs from the 1880s...

... We're excited to announce the availability of never-before-seen images from the LIFE photo archive. This effort to bring offline images online was inspired by our mission to organize all the world's information and make it universally accessible and useful. This collection of newly-digitized images includes photos and etchings produced and owned by LIFE dating all the way back to the 1750s.

Only a very small percentage of these images have ever been published. The rest have been sitting in dusty archives in the form of negatives, slides, glass plates, etchings, and prints. We're digitizing them so that everyone can easily experience these fascinating moments in time. Today about 20 percent of the collection is online; during the next few months, we will be adding the entire LIFE archive — about 10 million photos....

... These amazing photos are now blended into our Image Search results along with other images from across the web.

Once you are in the archive, you'll also notice that you can access a rich full-size, full-screen version of each image simply by clicking on the picture itself in the landing page....

Sometimes I think of Google as a device sent back in time to create archives for the Skynet's reading pleasure. What wondrous things, she thinks, those apes were.

I wonder if this cost Google anything other than scanning fees? The images weren't doing LIFE any good, and now it has Google to manage them. LIFE can even monetize the copies of the images that can be ordered from the "hosted" (implying non-ownership) archive.

Astounding times.

Marked! Where did all our investments go?

Disregarding dividends and taxes, of which the latter is the bigger, we're back to 1998 now:


Figure: S&P over our investing lifespan - 1985-2008 - click to enlarge (Yahoo!)

So what happened?

One theory is that the combination of the 1994 Gingrich Marketarian [3] "revolution" and consequent firewall demolition, combined with at least one major technology transition, produced accelerated returns at the cost of new instabilities. Over a long enough timeline investment returns might be somewhat lower than with a balanced regulatory environment, but "safe" investment timelines are now 20-50 rather than 10-15 years.

I think that's true, but not the entire story.

First, a brief digression. Twenty years ago a friend of mine did quite well by an Amway-like multi-level marketing business. Unlike the pyramid (Ponzi) schemes that devastated Albania in 2000, or the riot-inducing Columbian scheme of 2008, these businesses do sell a physical product. Like classic Ponzi schemes, however, there's a lot of cash flow from new recruits to established executives.

Some would call these new recruits "marks" [2].

People working in these businesses are taught to draw comparisons to the stock market. That's what my friend did twenty years ago, and it's stayed with me ever since. The difference, in theory, is that at best a Ponzi scheme is a zero sum game. All wins come from someone else's losses. In theory everyone can play the market and win -- because it's ultimately powered by global productivity and economic development.

In practice, however, natural selection happens. It always does.

Think of the market as a vast, indigestible feast. Sooner or later, bacteria will figure out how to eat it. It's as predictable as the sunrise.

So how does natural selection play out in this scenario -- remembering that for a biologist fraud is just another name for a survival strategy.

We know humans are predictably irrational. We know people will aggressively search for cheap gas when prices are rising, but won't when prices fall -- even at the same income/price ratio. [5] Similarly we know humans will criticize balance sheets when share prices fall, but not when they rise.

This means that market volatility enables predictable predation strategies during rapid rise. Money can be diverted into senior executive compensation, into insider trading, into payments to political parties and senators, and into sophisticated financial instruments that none of us have the ability to fully understand or model.

This form of market predation (parasitism really, since a dead host is not useful) is bad enough by itself, but it's aggravated by "ratchet effects" [4]. CEO compensation doesn't fall as quickly as share prices. Senatorial contributions can't be stopped without risking undesirable electoral outcomes.

Volatile markets, like those of the past twelve years, can start to look an awful lot like Amway.

We've been Marked.

So what do we do?

About a year ago I drew a crude line from the sane growth curves of the early 90s and I reasoned that share prices weren't too crazy any more. I resumed the share purchases I'd de-emphasized since 2002. Since then the market has fallen a lot more, but we're still doing our index fund dollar-cost-averaging.

It's not that I don't think there's a major parasite effect in the Markets. I think that is a part of what's going on. On the other hand, it's not like we have great alternatives.

I am, however, looking for alternatives. I'd like to find a way to start investing in select privately held companies, companies that are relatively resistant to market-oriented parasitism strategies. Companies that can be driven by the desirable, but arguably irrational, strategies of founders who seek to combine their own wealth with delivering useful goods and services.

Anyone know how we can do that?

See also:

• July 2008: 1999 to 2008. Now what we expected: In which I conclude that the "safe" period for investment holds looks like 50 years, not 10 years.
  
• Jan 2008: The Dow is Down
• May 2007: Eight lousy years

Footnotes -----------

[1] When I visited the Wikipedia link for Amway I came across this fascinating tidbit. Recall that Sarah Palin, darling of the dark core of the GOP, also has dominionist links. Emphases mine.

... its founders contributed $4,000,000 to a conservative 527 group in the 2004 election cycle...

... Former Amway CEO Richard DeVos has been connected with the dominionist political movement in the U.S...

Multiple high-ranking Amway leaders, including Richard DeVos, Dexter Yager, and others are also owners and members of the board of Gospel Films, a producer of movies and books geared towards conservative Christians...

... In 2000, current President George Bush appointed Timothy Muris, a former anti-trust lawyer whose largest client was Amway to head the FTC, which has direct federal regulatory oversight over multi-level marketing plans. ...

Amway co-founder, the late Jay Van Andel (in 1980), and later his son Steve Van Andel (in 2001) were elected by the board of directors of the United States Chamber of Commerce as chairman of that organization.[29]...

Bush appointed Amway's attorney to head the FTC. There are only 12K Google hits on this, so it's not surprising I missed it. It's things like this that make it so hard for me to understand how, 8 years later, Obama won.

[2] The intended victim of a swindler, hustler, or the like.

[3] Marketarian: Someone who subscribes to Marketarianism, the neo-Calvinist / pseudo-libertarian (objectivist) religious belief that the Market is not simply an efficient satisficing mechanism for finding local minima but is a god-like entity that defines moral qualities. See also, Yahwism.

[4] I've been trying to remember the engineering and economics term that describes "stickiness" or "ratchet" effects, where things move more easily in one direction but move more slowly in another. If anyone can name this concept I'll be very grateful. Ratchet effect is the best I can do but I think there's a better name in engineering.

[5] This is why gas stations make money when prices are falling, but lose money when prices are rising rapidly. It's the opposite of what most people think. Convenience stores let them hedge their financial risks.

Future Shock and the Southern white male: Oil, GM, Nascar, Pallor, and Obama

I've been thinking about these numbers ...

Southern Whites for McCain

... Alabama 88%
Mississippi 88%
Louisiana 84%
Georgia 76%
...
Arkansas 68%
North Carolina 64%
...
California 46%
Connecticut 46%
Minnesota 46%
New York 46%
...
Massachusetts 42%
Vermont 31%

In most states there's about an 8% male/female party gap, so the numbers suggest that 92% of the white men at the heart of the slave-holding confederacy voted for McCain.

Those white men have had a rough few years.

Five years ago Nascar culture was ascendant. Now Nascar is fading. Five years ago oil was cheaper than water, now we're in Peak Oil land. Four years ago Bush had finished off John Kerry, now Bush is a fading memory.

Two years ago GM's Hummer was selling well, now both GM and its Hummer are dying.

A year ago these men, largely poor and the victims of America's worst schools, held their ethnic identity tight. Now pallor is passe.

A few months ago they were the coddled core of the GOP. In the new electoral map they're irrelevant ...

Well, at least they still have Rush Limbaugh.

Some look on the fallen mighty with undisguised scorn ...

Frank Schaeffer: Sarah Palin Will Never Be President -- Trust Me

... The small smear of red on the otherwise blue electoral map looks more like a minor bloodstain on a dirty Band-Aid than anything resembling a national political party. Who voted for McCain/Palin in bigger numbers than they even voted for Bush/Cheney? Only one shrinking group: uneducated white folks in the deep south and a few folks in Appalachia. Take away the white no-college-backwoods-and/or-southern McCain/Palin vote and the Republicans would have been approaching single digit electoral college oblivion...

... The Republican Party--and I speak as a former lifelong Republican who, up through the 2000 primary campaign supported John McCain and even worked for him by arguing his case on various conservative and religious radio stations--is now the toy of the Rush Limbaugh windbags...

Scorn is never a good idea. It's a particularly bad idea to kick sand on a population with limited education, limited opportunities, deep culture shock, and disproportionate enrollment in the US military. I've been listening to stories of past cultural upheaval; they're enlightening.

Maybe we can't do affirmative action for the southern white male, but we need to keep 'em in mind. They've got a lot to work through, and it would be good to keep 'em out of trouble.

Update 11/20/08: further analysis, via DeLong.

Escape from the Cloud - lessons from my surgeon days

"Surgeon days" you say?

When was John a surgeon?

Well, technically McGill gave me an MD,CM degree, and I think the CM was Latin for master of surgery. More to the point, I assisted with surgeries in the good old days of open abdomens and hands-on anatomy, before scopes made things so dull.

Some surgeries, frankly, are pretty easy. Anyone with a modicum of attention, diligence, and practice could do 'em.

As long as nothing goes wrong.

When the feces fly (inside joke there), that's when those brutal hours in the surgery residency matter.

I thought of that as I contemplated the ruins of my recent iPhone and Cloud experiences. Most of the time I don't miss all those Outlook features.

Except when something goes wrong, and I'm up the creek and paddle-free.

It's the old story. When everyone praises the Cloud, it's time to bail. A lot of Cloud companies are struggling, and when they go ...

So goes your data.

Even if they don't fail, there are too many gotchas. God Help You if you start synchronizing non-trivial data across the Cloud.

I'm ok with Google Calendar, GMail, Picasa and many Google properties. Outside of Google, however, I'm putting a moratorium on storing any data I care about in the Cloud.

It ain't ready for the likes of me.

Ok, so that's only two people. Still, the Canary in the Coal Mine has just keeled over.

Be warned.