Avram, the Merchant Seaman

November 4, 2011

Reading the Steve Jobs bio made me want to share a bit more about my past just in case Walter Isaacson does not write my bio.

I got my high school diploma because my mother pretty much  bought  for me from a private school called Drew in San Francisco were we lived..  I took a bunch of tests, showed up a few times and there I was a  graduate.  It was clear by that time that I would never succeed in college and I had no interest in going there anyway.  My teen years had prepared me for little more than being a poet, political protester, fledging jazz pianist and composer and one of the skinniest guys around (107 pounds and 5.8 tall).  I was human laser beam and could walk through walls by turning sideways.

My maternal  grandmother, Della Silverman, was married to her second husband, Jack Silverman.  Her former husband, Mark Harris, my grandfather had committed suicide  in 1948 at the age of 50.  Not too much later, Della married Jack.   He was an interesting man that played a pretty significant role in my life from time to time.  For instance, Della and Jack lived for many years in Las Vegas where Jack worked in a casino as a dealer and Della managed the gift shop at the Sahara Hotel.  My younger sister, Beverly, and I would visit them for the summer when we were young. She would park us at the hotel pool.  I remember Betty Grable watching out for me as did a number of show girls.   Jack thought me how to tip the captain to get a good seat at some of the Vegas shows (Bev and I saw most of the Rat Pack).  I use to joke that I gave 20 dollars to the captain of the airplane to sit up front.

Anyway, there I was turning 18 and every one in the family was worried about my future. They thought  I would end up as a failure.  My mom did not care since she would love me no matter what.  Then Jack had an idea.  I should join the merchant marines, specifically,  the National Union of Marine Cooks and Stewards.   They had a training facility in Santa Rosa (strangely my home in Kenwood CA is just ten miles away), and he could get me in (by paying some people off).  Since I had no other plans I said yes.

The training school  was located  Santa Rosa, California and had two programs.  One was for  cooks and the other was for stewards and waiters. I was enrolled in the stewards program where we learned to be waiters (of the five star type) and stewards (which was like being a maid with trousers).  Associated with the school was a retirement home for merchant seamen.  So these guys had their rooms tended to by the trainees and they had the same kind of meals you would get on a luxury liner (Baked Alaska was a favorite desert I recall).  They were mostly a group of assholes.

I actually enjoyed learning to wait tables.  I could take the orders for a table of ten people in my head.  I loved carrying a fifty pound tray filled with plates of food (which turn out to be very damaging to me which I will explain later).  I liked the other trainees.  About half of them were gay and it was the first time I really interacted with gay men. One of them thought me how to use  creams to keep my skin in good shape.  I also developed a close friendship with a man named Nate who  was also the head waiter at the Purple Onion in San Francisco.  He did not really need to be trained but he had to go through  the program part of the time to get his diploma. He wanted to sail to Japan.   I would spend my free days staying with Nate and his Japanese wife at their apartment on Bush Street.   They were the guardians of two Japanese  twin girls my exact age.  The girls were singers and had steady job in San Francisco.  I  fell for one of them, Kaiko and we were sort of dating.  But we were always chaperoned. I would go to the club where they were performing and then a large group of us would go to some after hour club where we could dance.  I still remember  dancing with her to “I left my heart in San Francisco”.  I only got to kiss her a few times.  She and her sister did not speak english and I started learning  Japanese.   I really got into Japanese culture for a while.  Unfortunately, I took a roll of photos which were taken of  the two of us to my grandfather, Bill Goldfinger to develop. He owned a camera shop on Post Street near Market Street.  I did not know how much he hated Japanese people (WWII). He would not talk to me after this for many years.  Eventually, Kaiko and her sister went to Las Vegas to work.  I was invited to join them but I decided this was not the life I wanted to live.

Merchant  seamen jobs were controlled by their union.  If you were qualified for certain time you would put a card  in for the job.  The cards would age up to 90 days and then reset.  The person with the oldest card would get the job.  So you had to kind of bet on a bunch  of factors to decide what and when to bid on a Job.   I really wanted to get a job on the President Roosevelt because it was one of the few ships that sailed around the world.  I would have gotten it I think if I had not almost died first.

One day as I was waiting to put in my card, I felt a very strong pain in my left chest.  If I had that now, I would think I had a heart attack but I was only 18 and was eating a cheeseburger at the time.  I called my mom in terror because the pain was so great.   She said I should go directly to my doctors office.  So somehow I drove there.  He examined me and then called an ambulance.  The next thing I knew, I was at Mt. Zion Hospital with what they call a Spontaneous Pneumothorax.  Mine was really bad.  They tried a number of treatments but nothing worked.  My left lung was collapsed and would not heal.  They ended up having to do a Thoracoscopy which involved opening my chest wall (I am missing a few ribs) and basically gluing my lung to the chest wall.  Anyway, I was in the hospital for a number of weeks and almost died.  I was left with the equivalent of 1 1/2 lungs and a massive scare.  The really awful thing was I was not able to put my card in for the Roosevelt.  But I did mange to get a gig on the President Cleveland as the Steward for the officers.

The ship was it own world.  There were thousands of passengers and four times as many crew.  The crew was divided into those that interfaced with passengers or officers  and who had blue union cards and those that did not and had red union cards. Most of  the red card holders  where chinese and did not associate with the rest of us other than at the gambling  tables that were set up for the crew.  Of those that interfaced with the passengers, about half were gay and half were straight.  I found that out the fist night we sailed when I was walking around in ship and found a party going on with some of the most beautiful women I had ever seen (they were not actually women).   So we sailed to Honolulu where I went to the beach.  It was crazy because I had the biggest and yet unhealed  scare up my back.   I didn’t care. I was alive.  When we were at sea, I  get up early and go up to the highest deck on the ship and watch the sun rise.  Given the earth curvature, I felt that I was sitting on a dime.  Everything in ever direction was round.

While at the school I had developed a friendship with an American Japanese person.  He was a  Nisei (second generation Japanese) named Ken. He could speak Japanese but not that well. However, he married a very sweet woman from Japan and brought her back to San Francisco. I spent a lot of time at their home.  When we  went to Japan (Yokohama ) for the first time, Ken took me on a little trip.  He knew that I was still a virgin (at 18) so he took me to this bar.  It was actually very nice and there was no one there.  Then a very sweet 18 year old girl was introduced to me.  Her name was Miyoko.  I still did not know what was going on. She took my hand and brought me to a room.  I will not go into details but when I left, I was no longer a virgin.  Then Ken came back with two girls. I remember I said “I did not know you could do it with two”.

Things were pretty dangerous on the ship. There would be fights with knives and people actually got killed. Sometimes men were thrown over board. I am not kidding!!  I have not idea how I survived.  The fist time I went to Hong Kong (Hong Kong in 1963 was very different then now), I went to a bar where the officers that I served happen to be. Each had to buy my a drink.  We were on the mainland (Kowloon).  I got totally drunk.  I wanted to go to Mt. Victoria because  I had seen the movie “Love is a many  splendor thing” . So I got onto a Star  Ferry boat.  And of course I choose to buy he lowest class ticket.  I ended up on the bottom level of the boat where the Coolies were.  It was a sea of black clothes.  I got scared as we were traveling across the bay and got closer to the side of the boat. Then I fell over.  They stopped the boat and and I was pulled in.  I was all wet but took a tram up to Victoria Peak.   By the way, Hong Kong was a third world country in 1963 with people sleeping in the streets on bare mattress.

After Hong Kong we went to Manila.  There were bars that said “please check your guns”. I was warned to stay away from the bar girls because they were really transvestites. I did.  People constantly tried to rob me especially young children. I was once shot at.  I did not like the place but Ken and I found that we could sell cigarettes for a lot of money and then buy purses which we could sell in Japan for a lot of money. They we too the money back to the USA were could buy Yen cheap (black market) and then buy cigarettes in Japan which we sold in Manila to buy purses and around and around we went.  By the time I was 19 years old I made about $100,000 in todays dollars  this way.  I stopped in around Sept. 1963 when I met Holly.  But that is another story.

 

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The Republican Nominee was not on the stage at the debate

October 19, 2011

The next president of the United States could well be a republican but it will not be any of the clowns we have been seeing at the republican debates. I believe that none of the current list of candidates will get a majority of the votes but rather it will be split. While Romney may have the most he will not have enough to secure the nomination. The voting process is very complicated. In addition to delegates that are elected via the primary or caucuses, there are delegates that are just important members of the party. I remember the days when political conventions did not have a clear winner going in. The was a lot of arm twisting and back room deals and then someone was nominated from the floor. I could see Christie or someone like that getting the nomination without ever having to have run for the primary. That person would be “drafted” and would say they had no choice. They would also not have the baggage of having run in the primary. I think that person would have an excellent chance of beating Obama unless Obama gets smart and has Hillary run as his VP. The republican convention will be held in Tampa Florida starting on August 27, 2012. The democratic convention is scheduled to be held during the week of September 3, 2012.

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Siri

October 16, 2011

This is the first blog that I have dictated. I have dreamed of the day that I could really use voice dictation instead of typing. Maybe this day has finally come. I am doing this blog on an iphone 4s and I am dictating with my voice.

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PSA Testing Debate

October 16, 2011

There have been a number of recent articles in the press (most notably at the New York Times) about the advisability of giving men routine PSA tests to detect if they have Prostate Cancer.  A government panel has recommended that the practices of giving men over 50 (or over 40 if there is family history) be stopped because it results in needless procedures that are costly and effect men negatively without saving lives. I believe this is a dumb recommendation.  The PSA can provided valuable information that can save lives.  It is not the PSA test that is the problem it is what is done after the results come back that is the issue.  Those of you that are regular readers of my blog know that I have written a number of times about Prostate Cancer, a disease that I was treated for in 1996.  At that time I was 51 years old.  My PSA was 4.4 and had been gradually  increasing.  I had a biopsy that showed a Gleason Score of 6.  Today, my cancer would have been classified as low risk by most specialist.  Many would recommend that I would not be treated by that I would have active surveillance .  But many still would argue that I should  be treated and depending on their discipline (urologist, radiologist etc), they would have my prorate removed by surgery  or radiated either by external beam or implanted seeds.  I know that if I knew then what I know now, I would not have been treated at that time and may never have been treated.

I am convinced that most men who have Prostate  cancer will not die from it.  Prostate  cancer is probably not one disease by many and most are slow growing and will not spead.  If only we could tell which ones would have the aggressive version and treated only them.  But we cannot do that yet. I suspect we will be able to in the next ten years.  The problem in my view is not giving PSA tests to men.  The test is easy and inexpensive.  It is what happens with the data. Doctors are driving to prevent disease and seem willing to treat 100 men that do not need treatment to potentially save one that might.  And  most men finding out that they have prostate cancer, want it out of their body and sometime in the most aggressive way (surgery).  The side effects of treatment are in my opinion not properly communicated to patients.   You can read about the effect on sex life here.    What is crazy to me is that probably over 2/3s of these men are overweight and they could increase their life expectancy by loosing weigh and exercise.  That is what the doctor should be pushing.

My point of view is that PSA test should be given regularly.  If the PSA is high or rising quickly over time, a biopsy should be given.  If the Gleason Score is high (8 or more), treatment should be considered. The only treatment that makes sense for most men would be Brachytherapy.  I believe that there is good evidence that this treatment is both the easiest and most effective way of treat prostate cancer.   I can recommend Peter Grimm for this procedure.  Peter has a paper that will be published soon on the effectivity of most of the methods of treating prostate cancer which will be published soon. He will share it if you write to him here.   The practice of removing the  Prostate  by surgery should be stopped. It is barbaric.  When I first learned that I had prostate cancer, I was told it was the Gold Standard (the most effective method) but I think it was only the Gold Standard in that it put a lot of gold in certain doctors pockets.

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Steve Jobs and me

October 7, 2011

This is not so much about Steve Jobs but about how Steve effected me.

Like so many, the death of Steve Jobs has played a  big role in my thinking since hearing the news on Wednesday.    Steve played an important role in my life although he hardly knew me.  The first time I met Steve was at the PC Forum in 1982 which was started by Ben Rosen and later taken over by Ester Dyson.  There are some great photos of the PC Forum over the years,  but unfortunately, they start at 1984. I remember setting next to  Steve in the audience  and having some discussion. He was 26 years old and I was 36 years old.  I wish I could remember what we discussed.  At that time Apple was selling the  Apple II.  I had come to announce the Pro 300 series (I was responsible for that product line at Digital Equipment Company which was the number two computer company in the world  then).  It is probably hard for those that know me now to imagine that  I was probably as passionate tabout product design then as Steve was to become later.  Here is the Pro 350:

Here is the Apple II

I will come back to this a bit later because it really  has the most to do with what I am trying to express in this blog.  It is easy to imagine  during my  conversation with  Steve that he could have asked me to join Apple Maybe I would have but probably not.  I doubt that could have seen myself working for someone so much younger than me (ego) and I probably would not have been willing to take the financial  risk.  At that point, my career at Digital was ascending.  I had the strong sponsorship of the CEO (Ken Olsen) and I really thought my efforts with the Pro would change the world of computing.  I could hardly have guess that just two years later, I would be the president of an Apple II Clone company, Franklin Computer, and locked in a legal battle with Apple and Steve Jobs.

The evening before the forum,  I attended the speakers dinner. It was an amazing dinner and really my first real introduction to the world of PC entrepreneurs.  Amongst the attendees were Steve Jobs, Bill Gates (also 26), Don Estridge who lead the development of the IBM PC,   and Adam Osborne.  Adam I recall said the key to wining in the personal computer market place was building and adequate but low cost product (similar to the net book argument). Steve eventually took the opposite approach.  Of these, only Bill is still alive and is no longer active in the computer industry.   Don died a few years later at the age of 48.  Adam died in 2003 at the age of 64. Steve died just now at the age of 56.  These and some of the others attending were really the founders of the PC era.   My own contribution(not to be compared to Bill and Steve of course)  to creating the computer industry we now know would have to wait a decade more,  when I as Vice President of Corp Development at Intel, drove much of the early development of today’s residential broadband networks.

I left Digital Equipment in early in 1983.  It was clear to me that my work there was not going to be successful.  The Professional 300 series computer that I had developed with so much love and passion was incomplete and two expensive albeit way ahead of their time with the first 5 inch winchester disk, bit map graphics and Ethernet connectivity (all this in 1983).   Digital did not have the desire or ability to really market in the developing PC world.  So for a while, I considered leaving with a few of my most talented staff and to start a local area networking company (by that time I was in love with networking technology).   However, I was too scared to do a start up and when I got the offer to join Franklin Computer, I took it.  You can read a pretty funny article about me and Franklin here. Franklin had a clone of the Apple II just as Compaq had  clone of the IBM PC.  But there were lots of legal differences and Apple sued Franklin in a landmark case.  Apple never actually won but the destroyed Franklin’s ability to raise capital.   We were growing very quickly and approaching 100 million dollars in sales in a first full year of operations.  But without the ability to raise additional cash and with our bank canceling our line of credit the company was headed for disaster.  I had joined  Franklin to use its  momentum  and the money we expected to raise in an IPO (were in registration when the appeal court decided to re hear the case)  to build a real computer company to fully compete in the market.  We tried to work things out with Apple.  We offered to pay them a big licensing fee and help develop the market.    John Sculley who was then CEO of Apple seemed interested in some possible arrangement and settlement but evidently Steve Jobs would hear nothing of it and wanted us dead.  He got his wish.  I left  a few months before Franklin went into bankruptcy for a brief period in order to wipe out the common shareholders.

A few months later, I joined Intel in 1984.   About ten years later, Andy Grove asked me and Les Vadasz  to join him  and visit Pixar with Steve Job.  We went to Steve’s house in Palo Alto. The same house where he died.  We sat in the kitchen with Steve and talked for a while.  His wife Laurene was there and maybe one or two of the kids I seem to remember.  Steve then drove us to Pixar and introduced us to John Lasseter. We learned about the computer automation process they were using.  The purpose of the visit was to expose Intel to the high end needs of graphic rendering and the idea of using multiple PCs to do it.  I was a bit nervous that Steve would remember me and my role at Franklin.  Either he did not remember or he did not care because he was very  civil to me.  That was probably the last time I actually interacted with Steve.  And while that meeting was a good experience, I was no fan of Steve Jobs at the time.  And later when he rejoined Apple,   I felt his closed business strategy was mistake and I was a strong proponent of the Microsoft/Intel approach which was a very open architecture (as long as it was based on Intel and Microsoft).

The amazing transformation of Apple in the last ten years has been and will  continue to be discussed  by so many.  Frankly, I still do not understand  how it could have happened. The combination of insight, marketing and execution under Jobs leadership was exceptional.    About three years ago, I became a convert to all things Apple.  I am writing this post on a Macbook Air.  I read about Steve’s death on my iPhone and later in more detail on my iPad.  My email is housed at www.me.com.  I can’t wait for iCloud.

I am left feeling sad for his death, admiration for his accomplishment and frankly, disappointment that I was no Steve Jobs. And grateful  that I am still alive to love my wife, children and friends.

Steve contributions will stay with us but  his greatest gift  may yet  to come; the book he allowed and helped Water Isaacson to write,”Steve Jobs”.  Maybe, we will finally understand.  We need to understand.

 

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Posted in about business, Avram's Past, Business Managment, Technology | 2 Comments »

The future of the world economy as seen from the counter of Avis, Barcelona.

September 25, 2011

We went to pick up our rental car at Avis in Barcelona today so we could drive north to the Costa Brava.  I am a member of the Avis Chairman’s club and normally get great service from Avis.  For instance, they drive us in our rental car to the terminal when we return the car.  I did not expect that kind of service in Spain but was shocked that after a long wait, I was told by the Avis person that they did not have the car I had reserved and intact they did not have any automatic cars.  We are not use to driving a stick shift car and did not want to practice in Barcelona.  The only think he could offer was our going to another Avis location where they had a car for us.  We took a taxi there and then after another long wait, we were able to get a car.  As the young man behind the counter check us in, he had a number of interesting remarks.  He said, this is just the begin of the decline of our civilization.  He said companies like Avis where paying the minimum to their staff and had fewer and fewer people doing more and more work.  He said workers no longer cared and the person that was suppose to make sure our car was at the original location probably just could not be bothered to enter the data.  He said, “the best days are over”.  I am afraid he is right.

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Me and my belly: Not exactly a love story

August 31, 2011

First of all, I am very surprised that I would be blogging about weight loss.  About four months ago, a dear friend told me something that I believe has changed my life.  Richard had lost a great deal of weight.  He told me he did this by  changing his diet not by dieting. He ate as much as he wanted to.  He gave me the name of a book that would explain all of this.  It is  called Why we Get Fat by Gary Taubs.  I highly recommend it.  After, I read it, I discussed what I learned with my personal physician as well as some other doctors who are friends and have followed my health and given me advice from time to time.  All of them agreed with what Taubs said but they never explain the concept (very low carbs) to me before. I guess they thought I knew.  So I feel, I should take this opportunity to share what I learned with those of you the follow my blog.

While I was marginally over weight (my BMI was a bit over 25) before I read Taubs’ book,  I was not fat.My problem was that all the extra fat was located in my belly.  There is a term for this.  It is called Metabolic Syndrome and it can kill you. It causes a variety of diseases.  The most prominent of these  being heart disease.  The key sign of Metabolic Syndrome is belly fat.  Other indications are poor cholesterol scores, high Triglycerides  and high blood pressure.

First a bit of background.   In 1969, I weighted 107 pounds.  I was about 5.9 tall (I am a bit shorter now).  I was really skinny and use to joke that I was a human laser beam.  Over the years I slowly put on weight.  At first I was glad of that.  I was happy being 120 pounds and even 130 pounds.  But the increase did not stop there.  When I left my position at Intel in 1999  I weight about 153 or more.   Something happened to me in 1996 at the age of 51 that accelerated my weight gains.  I was diagnosed with prostate cancer which I have discussed a few times on this blog.  It was thought that fat and in particular, animal fat increase the probability  of developing prostate cancer and also that it might accelerate the growth of prostate cancer.  See this study. It was also though that meat in addition to having animal protein also might contain growth hormones.  So, I like many men dealing with prostate cancer went on a low fast and low meat diet.  In particular I avoided, butter and red meats.  I used olive oil but only a little.  My diet was made up of mostly carbs (both simple carbs and complex carbs).  So I started really  putting on weigh.  By 2003, I weighted 182 pounds.   One of the arguments for the low fat/low meat diet was that Japanese people for instance had almost no prostate cancer.  They also had low fat diets and did not eat much meat.  Of course, they also had no belly fat.

Much of the weight gain went to my middle.  Every few years, I had to buy new clothes. And those of you who know me, realize that I like to look stylish.  When I stood up and looked down, I could not see my feet.  I was really unhappy with myself and decided I had to loose the weight. So I went on Weight Watchers Online.  I liked their point systems.  It was kind of like having a budget.  I had a certain number of points per day and through exercise I could even add points.  Being the scientific type, I figured as long as I burned more calories than I consumed I would loose weight.  While that is in principle true, it is really a vast over simplification of a complicated system which you will understand once you read the book.

I did loose weight.  And the good news is I lost it pretty quickly.  However, I was also kind of miserable because I was not getting enough to eat.  I was hungry but I was disciplined and committed.  In about five months I lost more than 20 pounds and got my weight down to 160.  My stomach was flat and I could see my feet. I had all my clothes taken in because I promised myself I would never gain this weight back.  But slowly it started to come back and I found myself in the high 160s and then I found myself in the low 170s.  So i was back to buying new clothes again and feeling bad about myself.  Then I would go back on weight watchers and diet again.  I would get back to 160.  I was pretty good at staying at 160 when I was not traveling but when ever I traveled the weight would come on.  Probably this was due to all the butter and stuff restaurants put on food even when they say they are not.  More wine and cocktails also probably helped.

In the summer of last year, I had my weight down to about 162 when I went to England, Egypt, Israel and Greece.  When I came back I weighted 172 and I was gone for just three weeks.  I did not go on a diet and it just stayed around 170.

My dear friend, Dr. David Agus, really got on my case about my belly.  He did not like the results of the various blood tests I had taken recently and he could see the belly.  So I got committed once more to dieting.  I started to loose weight as always but also I was hungry.   That is when a chance exchange with my friend Richard resulted in my learning about Gary Taubs and his book.

This book explained it all.  I realized that all the ideas I had about eating were wrong.  I learned that the body really deals with protein, fat and carbs differently.  In particular, I learned about Insulin Resistance and why the crappy American diet which I grew up on could effect how I dealt with carbs (as opposed to how the Japanese).  It was at the role that High-fructose corn syrup probably played in changing the way my body processed carbs.
So now, I the only carbs I eat are vegetables.  I hardly eat fruit.  I eat as much fat and protein as I like.  At first I felt guilty eating such things as butter and steak but I soon got over that.  Now I am enjoying salami and cheese (but no bread).  I still have a vodka cocktail every evening (which turns itself into carbs) I must admit.  In two months I lost ten pounds (the first five very quickly) and got to 160 again.  Then in two more months I got below 155.  My body fat is about 18%.  I am hoping to get to 150 pounds and 15% body fat but I will probably have to increase my aerobic exercise to accomplish that.  The good news is that I can travel and eat out and it is not a problem.  Restaurants can lie about how much butter they put in their preparations but not how much carbs.  I just order a steak and say hold the potatoes and give me some more veggies.

The result of all this was fantastic with respect to my blood tests.  My blood pressure is down. I have great cholesterol results and my Triglycerides  went from 230 to 90.

If you have a weight problem and especially if you have belly fat, please read Why we Get Fat.  I am tell you this because I wish someone had told me earlier.

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Introducing the Four Day Work Week

August 14, 2011

As some of you know, I plan to run for President via Americans Elect if nominated.  I will be posting some of the planks of my campaign platform
Here is one:  Introducing the Four Day Work Week
As some of you know, I plan to run for President via Americans Elect if nominated.  I will be posting some of the planks of my campaign platform from time to time.  Here is one – Introduce the Four Day Work Week.
I hate to be the one to tell you, but the jobs that were lost in the debacle that  resulted in part from  the real estate bubble,  are not coming back.  The combination of globalization, increased productivity resulting from technological advances and  resource depletion  are  permanent.  Rather than dealing with that reality, we masked it by the using of easy credit.  So rather than having growth we simulated growth.  That allowed Americans to buy homes they could not afford with debt that they could not pay back. Building these homes created many jobs but those jobs could not be sustained.  In the mean time, increasing real estate values allowed the rest of us to feel more wealthy  and more comfortable spending our savings or, even worse, borrowing from the equity of our homes.  I think you probably already know all this.  But our government leaders are telling us (both parties) that we just have to return to growth and everything thing will be ok.  The two parties do not disagree with the end objective – growth.  They just disagree on how to get there. And they are both wrong.
So if we are going to have 10%  unemployment (it’s really more like 20% but we don’t count the people that had given up looking for work), more or less permanently (although will likely get worse), then what does this mean for our country?  If so many people are unemployed permanently, things are going to get ugly. Unemployment insurance can not maintain standards of living.  And unemployment insurance will not be extended for ever.  So many families will find themselves with greatly reduced incomes or even no income.  Family not directly effected will fear that they will be next to lose their jobs.  This means that in addition to living with great anxiety, they will also be willing to work longer hours for less pay and less benefits which, while increasing profitability for their employers, will have the effect of actually reducing job growth.  Not all parts of society will be effected in the same way.  For instance young people and in particular young people of  minorities will be even more effected.  You only have to look to the recent riots in the UK to see how well this works out.
So is there an alternative?  Yes, we can go back to the promise of a four day work week, something I was told to expect when I was growing up in the 50s and 60s.   If we reduced the work week to 32 hours,  after a period of adjustment, everyone  could be employed.  Yes, we would all be earning 20% less but we would have a full extra day in our lives.  This in effect would add increase our days off by 50%.  We would stop having to worry about losing our jobs.  We would once again have some bargaining power with employers.  We would have not to be fearful of gangs of young men who have never found work.

So rather than think about a reduction of your salary by 20%, think about all the great things you will be able to do with the extra day.

Here is a pretty good video talking about this concept.

New Dream Mini-Views: Visualizing a Plenitude Economy from Center for a New American Dream on Vimeo.

 

…..

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Posted in Government, Policy, Political Views | 5 Comments »

Bridges not Bombs

August 9, 2011

It seems like a lot of people,  particularly those in government, are confused about the difference between building a bomb and building a bridge.  A bomb does not have much function other than to blow up people.  I guess you could argue that in the right circumstance it might provide the owner with some protection against an enemy,  but I think it would be hard to really make the case that the majority of weapons have a utility.   Given that our government is running  about a 40% deficit (it takes in revenues that are about 60% of what it spends), we must borrow money to build the bomb.  Now, I don’t actually think we should build bridges ( although I think we should repair the ones we have) but I do think there are things that we could do to create value and actually pay back the money and interest we  have to borrow to build to such things.  A great example would be a national smart grid to improve the distribution of electric power.

It seems that the government and our citizens cannot tell the difference   between borrowing money to create value and borrowing money to destroy value.  What if we used our soldiers and the industries that provide materials to conduct wars (remember the USA spends more money in defense then all the other countries of the world combined) to actually build things that would pay for themselves over time?  This kind of borrowing can be  supported by our economy.  There is a difference between borrowing money to finance a vacation and borrowing money to get a college education, but it appears our political leaders cannot see this difference.

There is an other example of lack of understanding.  Government officials and TV pudents talk about how much money  America corporations  have in their treasuries.  They say companies are not spending this money because their is no consumer demand for more of their products. But there is another reason that seems to escape all these talking heads.  So much of the profits of American companies were made overseas and are not subject to US tax until they are brought back.  So if  an American company wants to use this cash to invest in the USA they first have to pay about 40% in tax.   Given our situation we should allow companies to bring this money back without tax- provided they invest the money in creating US jobs or  pay dividends to their shareholders.  This should get the money in circulation.  And speaking of dividends, they are taxed twice. First they are taxed at the corporate level and then at the individual level.  Not only should they be taxed only once but frankly, I don’t think they should be taxed at all.

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Posted in Policy, Political Views, World Situation | 2 Comments »

The story of USA Industries and its new CEO

August 7, 2011

You have been brought in to run what had been one of the most successful companies in the world, USA Industries.  The previous CEO had made a number of strategic and tactical mistakes the resulted in tarnishing the companies brand, reduced revenues, poor relations with strategic partners, and depressed employees.  Not only that but this CEO committed the company a number of very expensive project that would be hard to get out of but which would add no value to the companies balance sheet and would in fact reduce the balance sheet.  In order to deal with  the short fall in revenue and the increase in expenses the previous CEO borrowed increasing amounts of money.  The money was spent to keep the company going during this difficult but largely self generated times.   They main interest the former CEO had been to keeping his large institutional investors happy.  He did that by throwing lavish parties,  and giving them discounts on the companies products. He was also concerned  with how the top rank of his company saw him.  He did not want them to question his actions so he kept giving them bonuses.  When the old CEO’s contract was up,many members of the  board felt they needed a different kind of CEO.  They wanted someone young  energetic that would break out of the patterns established by his predecessor.  Other members of the board were concerned about making any changes and felt that business would just come back if they just gave it time.  But they also felt that there should be substantial cut backs in the companies spending.  One of the old guard was also considered for the role.  Both candidates presented their ideas to the board.  Enough of the board believed it was time to change course and so the young man was brought in as the new CEO.

He moved with his wife and daughters to the city where the company was headquartered.  The company dominated the city and it could really be said that it was a company town.  The new CEO rapidly found that he knew little about how the company really operated.  To make matters worse, he had almost no experience working in the companies industry and had never really run a company before.  He was more like a staff person and had spent a many years in academia.  He had many ideas about what to do but he lacked confidence in implementing them.  Most of the key employees had been with the company for decades and did not really want to change the way the company operated.  Some of the department heads were close to members of the board and a number of them had direct relationships with large  shareholders.

The new CEO realized that he would have to cut back on expenses and reduce the borrowing or face  the possibility of bankruptcy in the future.  But he was scared that if he took the actions that were required like laying off many employees, killing off some products that were not profitable and getting out of the very expensive long term projects started by the former CEO, the financial markets would react and  both the stock price would go down and the cost of borrowing money would increase.   The company was facing ever increasing competition from an other company.  This company, Asian Enterprises  had been around a lot longer and was going no place for the longest time.  But then there was a management transition.  A much younger and smarter group came to run the company. They believe that there was great opportunity in the market especially since  USA Industries was not really investing in new products and manufacturing processes.  They were right.

The members of the board of directors of USA Industries grew unhappy with the CEO they had chosen.  The members that had not wanted this man as CEO kept telling the other members what a mistake it was to have brought this inexperienced person on.  In the mean time the financial markets began to realize that the company was really in trouble.  The stock price started falling.  Many employees had their retirement funds in 401Ks with large amounts of  company’s stock.  Senior people saw their stock options become valueless.  There was a growing concern that the company would not be able to continue to borrow money and if it could,  it would be at higher rates. The greatest fear was someday the loans would come due and the company would not have the funds to pay them back.  So the new CEO began to cut back.  He started by cutting R&D even though that meant that the company would not have competitive products in the future.  In the past the company was active in bringing in young people and giving them training.  This program was cut.   He cut salaries and benefits for employees but because he was scared of the senior staff, he exempted them and in fact gave many of the salary increases hoping to buy their loyalty.

Things just got worse.  So the CEO sold off some of his factories.  He sold the  real estate the company owned and leased it back.  Over time, Asian Enterprise got even more successful. They were a tough competitor and very focused.  Their employees  were willing to invest in the companies stock which caused it to increase in value.  This allowed Asian to begin to buy other companies and increase its expansion over time.    The board of directors of USA Industries began to realize that they had to replace the new CEO.  But now they were really fighting in the board room.  Many wanted to find someone that could promise to bring the company back to its old position as a leader in its industry.  But others knew that this no longer was possible.  They wanted someone that could reorganize the company. Give it a new mission that was achievable.  Get it scaled down etc.  But one major problem could not be solved if the company went in that direction.  That was the massive debt that could not be paid off including pensions to former employees.  Some members of the board argued that the new CEO should stay.  They said he was still the right person for the job.    But at the same time the board of Asian Enterprises had agreed on a new strategic objective.  It was nothing less than the acquisition of USA Industries.  They key to this plan was that Asian would loan money to USA  making it easier for USA industries not to deal with their problems.  Not only did this make USA less competitive but hasten the day when Asian could call its notes and force USA Industries to sell it massive amounts of  the assets of USA Industries and many the corporation itself.

The only thing that could prevent that is if the new CEO can find the courage to act.  What could he do?  First he could be honest with the board, his employees and his shareholders about the serious problems they face.  He could ask all if the employees to take salary cuts and work longer hours so that the companies products will be more competitive.  He needs to replace many members of his staff with new people how have different ideas about and talents and can help the company increase its revenues.

What ideas do you have for this CEO?

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Posted in Government, Political Views | Leave a Comment »

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