Try Not To Be A Bllionaire

Silicon Valley has obviously been a highly successful center of innovation, technology and wealth creation.  In general, most Americans like the many of the products, like the entrepreneurial energy that has spread from Silicon Valley to the rest of the country and generally support people getting incredibly rich by creating incredibly successful businesses.  In earlier years, I'm sure many of those innovators thought that were improving the world while they also wanted to make money.  More recently, it seems pretty obvious that the initial goal is to become a billionaire.  And, the only way one can do that optimally is to provide free services and products, that attract huge amounts of users who provide huge amounts of their own data so that the company can then sell that data to advertisers who want to target the users in very sophisticated and narrow ways.  A company like Facebook has nearly perfected the process of extracting, analyzing and selling the users' data.  Advertisers pay top dollar for access to that data and to target Facebook users based on that data.  At some level, we congratulate Facebook and marvel at what a great business model that they have created.  Obviously, that business model is what attracts investors, who look for the businesses who can maximize profits.  Again, that's how capitalism works we generally like that.
However, we need to consider whether these technology companies, especially the social media companies are special cases due to their technology-business models that allow them to scale up so quickly and often take most or all of their markets.  That is, are they really akin to monopolies and are their activities essentially abuses of dominant market positions?  Typically, mainstream economics and government policy would then state that such businesses need to be highly regulated and, on occasion, broken into pieces in order to avoid negative consequences to innovation or user choices.  It seems obvious tha this should be under serious consideration.
My view is that the Facebooks, Googles, etc. of the world do need to be regulated and very likely broken up.  But, my bigger concern is the nature of the business models that drive these businesses and create these consequences. One of them is that the nature of technology businesses (like software or media) allows for incredible value creation once scale has been reached.  This is largely a question of when variable revenue starts to exceed variable costs - in economics, this is called "contribution margin".  In businesses based on intangibles, this is how incredible wealth is made.  But, I don't think we want to or can outlaw a highly favorable business model (although we could inordinately tax profits derived from very high contribution margin).  My bigger issue is the "free" nature of these business models to the users.  The most profitable, scalable and dominant of these companies do not cost money for most of the users (aside from "premium" accounts, etc.).  That is because the data that users give to the company is way more valuable than any subscription fees that users might otherwise pay.  So, those business models cause those companies to relentlessly pursue more users and more usage, so that they can get more data and sell more data to advertisers.  Because these companies have investors who know that such persistent scaling creates more profits, those investors push management to drive more and more growth (and management is generally legally required to do that on behalf of shareholders).  That's entirely logical, but it is very negative for users, society and the economy for several reasons, including that the incredibly sophisticated micro targeting of users allows the advertisers to have an incredible degree of control and persuasion over the users and their economic activity.  From a privacy and policy perspective, we should want to avoid this.  It also leads to extreme over-consumption by users, which is not good for society and certainly not good for the financial well-being of the users.  Again, we should want to avoid this.  All this could addressed through smarter and more aggressive policy and regulation.
Social-minded entrepreneurs could also avoid these business-model consequences.  That is, if an entrepreneur desires to develop a technology business that can bring great good to the world, but avoid the negative consequences of the current business models, then a subscription-based approach is much more socially responsible.  For example, if Facebook charged a monthly fee instead of using a non-fee model, then it would not need to monetize every data point of its users' lives.  It also would not then be selling micro-targeting advertising.  It also would not induce extreme and wasteful consumption.  The users would also get a service that it actually wanted (because a user would only pay for what it wanted) and not a push-model of exploitative services that don't bring value to the users.
Sure, such a model would possibly not make the entrepreneurs billionaires, but if they provide a great service that users are willing to pay for (in exchange for not having their data and lives manipulated in ways inconceivable to them), they will still be very rich - and will actually be contributing to society instead of only extracting value from society.  In fact, my guess is that there is a huge segment of the population who would very much pay a monthly fee if they could be confident that their data would not be exploited and they would not have to put up with non-stop advertising pushing unwanted and unneeded consumption. So, maybe entrepreneurs should really think about the social impacts when developing their business models.  Maybe, they should Try Not To Be A Billionaire by refraining from socially negative business models and instead just try to be very rich by using socially responsible business models.

Mental Health Check for Gun Ownership is the Right Solution

In the aftermath of the school shootings in Parkland, Florida, the defender of gun manufacturers (i.e., the NRA and the Republican Party) have made their usual remarks about now not being the time to discuss gun laws (even Secretary of State Rex Tillerson parroted this line during a press conference in Lebanon).  And, they have brought up the increasingly discussed issue that persons with mental health issues should not have access to guns.  For the NRA and Republicans, the reference to mental health issues is a way for them to deflect any discussion about gun laws directly.  They typically discuss how everyone should inform the authorities when they see social media or other signs of mental instability or a propensity toward gun violence.  That's certainly a good idea, but that doesn't stop a person with mental issues from getting a gun.  And, it does not touch how to deal with a person whose mental illness has developed after he has legally purchased a gun.  But, since the Republicans and the NRA are using mental illness as their main talking point now, those who actually want to do something about limiting such persons from possessing guns should take the issue and run with it. That is, federal legislation should be proposed that required mental illness evaluations for anyone seeking to purchase a gun, ammunition or accessories (in any venue, whether privately, at a gun show or in a store), the gun should then be registered and a mental illness re-evaluation should be required every 5 years in order to allow that person to continue to own and possess such items.  Of course, a process and a system would be required to implement these rules (authorized psychiatrists would need to be qualified, the mental illness evaluation would need to be incorporated into the background check system, etc.).  Of course, mental illness checks would delay the purchase of a gun, but almost no one needs to purchase a gun immediately - to say otherwise is disingenuous and really just an attempt to limit regulation.  The NRA and the Republicans will come up with all kinds of arguments of why such mental illness evaluations would be a violation of the 2nd Amendment, etc., but if supporters of decreased gun violence are looking for an opening for some Republicans and their supporters find a justification for how they can help reduce gun violence, legislation proposing mental illness evaluations made be an opportunity.

Now Is The Time

Another mass shooting at another school in the U.S.  I expect the same round of actions and discussions:  A pile of flowers and candles will start to appear at the school; local leaders and parents (especially parents who lost their children) will speak; most will speak about the children that they loved; some will speak out against the lack of gun laws or the lack of enforcement of the gun laws; a few politicians will get press coverage for proposing some change (even a little change) to our laws relating to access to certain types of guns, background checks, etc; others, including the National Rifle Association, will say it is disrespectful and too soon to talk about changes to the law and enforcement while people are mourning; a bill will eventually appear in Congress; that bill will sit and then die; another shooting will happen and the cycle will start again.

Although candle-lit vigils, piles of flowers and speeches may express grief and get a lot of coverage, that's exactly what the NRA wants to happen.  They don't want protests, discussion in legislatures, etc. because they know over time that they can manage the situation to make changes go away.  To the contrary, they can exploit the situation to put more fear into the NRA followers that stronger gun laws may come into being, get those followers to give more money to the NRA and then the NRA and their followers will put more pressure on the legislatures to defend the status quo.  They have even become good at exploiting such events by arguing that every teacher should carry a gun and that students should be able to carry guns.

A few things could happen to change this cycle.  First, someone or some credible organization could start to explain to the followers of the NRA that the NRA is lying to them; the NRA does not care about them and the 2nd Amendment, except to the extent that those followers empower the NRA act on behalf of the gun industry (not gun owners) to sell more guns.  That is, the followers of the NRA are being lied to and being duped by the NRA, not being supported by the NRA.  Second, call out legislators and others who call these events "tragedies" or, as Florida Governor Rick Scott said yesterday, that the shooter was "pure evil".  This type of language is intentionally describing these events in unknowable, unstoppable and even religious tones.  But, these events are not tragedies, they are direct results of ignorance, politics and culture that lead to these outcomes.  The shooter is not "evil", he is almost always mentally ill and yet has had access to powerful weapons.  Finally, and I think this is the most important thing that can be done, do not conduct vigils and speeches of rememberance.  Instead, do protests and don't stop until changes are made.  Imagine the press coverage and the pressure on legislatures if all the surviving children at Marjory Stoneman Douglas High School refused to go back to school until actual changes were made; if they had sit-ins, speeches and protests on the school grounds for as long as it takes; if the parents and children in those protests refused to allow NRA apologists like Governor Scott and Senator Marco Rubio from participating or attending and to shout back whenever they or others make the well-tested excuses for the NRA and the lack of action.

One thing is clear, as it should be clear immediately after every other such event, Now Is The Time!  Now Is The Time to stop accepting the NRA's lies. Now Is The Time to reject the fatalist language of our legislatures that these events are unstoppable.  Now Is The Time to stop playing into the hands of the NRA by having vigils and speeches.  Now Is The Time to have massive and long-standing protests after each event.  Students, parents and teachers at Marjory Stoneman Douglas High School, Now Is The Time to change the entire direction of these issues.  Go on strike. Student and teachers should not go back in the school, but go to the school and yell like hell until you are heard and changes are made.  Now Is The Time. 

Back Blogging

To the 1 or 2 people who may be watching this space, my good friend Jorge Costales pointed out to me that I have not posted in over a year.  That's partly because this last year was a complicated year with lots of transitions.  But, that's all in place now.  Hopefully, I can live up to Jorge's standards going forward.  

Fake Titles

I recently have had an energetic LinkedIn exchange with someone prancing around New York City claiming that he is "HRH Prince of Yugoslavia".  He voluntarily calls himself that on LinkedIn, a public social media site.  He posted a photo of himself receiving some award from some other "HRH" of Yugoslavia and was quite proud of it.  I had the audacity to comment on his post to say that he should stop using such a title, if for no other reason than because Yugoslavia no longer exists.  And, it is now divided up into various republics which are republics and have no royal families or systems.  He aggressively replied to my comment by claiming that I was an "ignorant American" and didn't know anything about history.  He then professed that "I have ancestors" who were royal family members and, apparently, he thinks that entitles him to continue using a silly title like "HRH Prince of Yugoslavia".  He also said that I needed to better understand "constitutional law".  So, when I asked him to explain exactly why he is entitled to call himself a "HRH Prince of Yugoslavia" and to which constitution he was referring, he continued to throw insults at me, but made no actual arguments for why he should be calling himself by some non-existent title.  Then, he blocked me from his LinkedIn account.  That all was not very convincing.
Next, his cousin (apparently half New Yorker and half "royal family of Yugoslavia") jumps into the discussion.  She argues that I have no business commenting on her cousin's title and that it is a shame that I am so "ignorant" (apparently a favorite word of "royal Yugoslavs").  And, she tried to make a comparison that calling her cousin "HRH Prince of Yugoslavia" was akin to calling Bill Clinton "Mr. Clinton" instead of "President Client.  I told her that there can be no comparison between the titles of democratically elected officials and so-called inherited and unelected titles, especially of a non-existing royal family and royal system.  I also clarified that Bill Clinton is no longer President and so, of course, he is now Mr. Clinton, although ex US officials often love to call themselves by their former positions (e.g., President Clinton, Secretary Clinton, Speaker Gingrich).  When they do that, it is "trafficking in titles" in the same way that "HRH Prince of Yugoslavia" (and countless Prince and Princesses of Nowhere) like to do.  Of course, having no valid argument, she also again called me "ignorant" and blocked me from her LinkedIn account.  This is apparently a favored social media tactic of the "royal family of Yugoslavia".
It is all pretty clear to me.  Any so-called royal system was the result of someone many centuries ago conquering some land, subjugating its people, giving himself and his descendants a bunch of silly titles and declaring that they were the representatives of God on Earth (at least for the area that they controlled).  The fact that someone is a descendent of such a made-up system, especially one that no longer exists, doesn't mean that any of us need to (or should) call them by the silly titles that they have given to themselves.  More to the point, we should oppose that nonsense wherever we find it.

Trump, Russia and China

President-Elect Donald Trump has everyone guessing what his foreign policy will be like, especially in relation to Russia and China.  There is wide-spread concern that a President Trump will be too friendly to Russia.  I find that to be a bit strange in that he has never actually said he liked Russia or Putin or that they are anything other than unfriendly foreign powers. Yes, he may admire Putin's strength or various successes, but there is no evidence that he desires the outcomes of Putin's various activities.  In any event, my calculation is that this "play nice with Russia" approach is one of the biggest head fakes in history. My view is based on a number of realities and then a possible strategy. 
The first reality is that China is a way more important competition to the United States than Russia is.  Russia has a horrible economy, ineffective or non-existent social and other institutions and little prospect for economic growth or global influence outside of its traditional sphere of influence.  Yes, Russia has a capable military to interfere in those areas of traditional influence, but it scarcely has the financial capability to do that, let alone to go beyond those areas.  And, Russia's kleptocratic economy does not bode well for improving Russia's situation, even if Western sanctions are eventually lifted.  China, on the other hand, is a massive economic power with much more room to grow, albeit at a slower growth rate than over the last few decades.  Despite lots of potential pitfalls in China's future (very high levels of debt, inefficiently allocated capital, etc.), there is every reason to believe that China's GDP and GDP per capita will continue to grow. And, consequently, China will be very capable of financing growing political, economic, military and social influences around the world.  Russia and China have no comparison.  The main issue would be that the US would not want to run a fight against both of them at the same time.
As such, my view is that Trump's approach of playing nice with Putin is that Putin and Russia cannot really hurt the U.S. (perhaps other than via cyberspace, which is another thing and I doubt we'll play nice on that front) and so it makes sense to at least pretend to work with Russia for now while the US takes on China on all sorts of issues and levels - South China Sea, North Korea, Chinese cyber attacks, trade, currency, Taiwan and Hong Kong, etc.  The main point is to not be nice to Russia, but to not encourage Russia and China to team up as an anti-US front.  Thus, softening relations with Russia can be explained as preparing for the direct attack on China issues, not anything to do with liking Russia or Putin.

FaceBook and China

According to New York Times story today, Facebook is developing a tool to effectively allow China to block content on its news feed.  In return, Facebook would finally get to enter the Chinese market.  Although Facebook does provide blocking of certain content in other countries (e.g., content that is allegedly inconsistent with local culture and laws in places like Pakistan), the apparent willingness to cooperate with China's government to block actual news that helps it blockade information to the Chinese people is a step way beyond what Facebook has done to date.  And, it further reflects that Mark Zuckerberg's consistent statements about facilitating communications for the common good is a lie; he and Facebook clearly are only interested in becoming more profitable, even if that means cooperating with the massive censorship programs of the Chinese government. And, while I'm generally in favor of companies making as much money as possible based on the quality of its services and products in the market, directly cooperating with an oppressive government and developing tools to facilitate that oppression should called what it is: collaboration in censorship and oppression.  The US government should be concerned that US companies are actively supporting and encouraging the oppression of millions of people by a foreign government, especially one that is hostile to the US.  Perhaps the US government should also consider passing laws that prohibit US companies (and Facebook is not the only one; also, Cisco and others) from doing business with or in such countries if their business is used to facilitate such oppression.