Is the Stock Market Wrong?

Since Donald Trump won the election the stock market has shot up.  Is the market making a big mistake?  I no longer think so.  I think earnings and profits at large American corporations will go up at least for a while.  Here's why.

The biggest component of the economy is consumer spending.  It represents something like 70%.  If consumer spending goes up then overall economic activity goes up.  We have seen this play out in the crash of '08.  When the economy cratered consumers pulled their horns in and stopped spending.  This made a major contribution to the downward spiral that followed the crash.  Since then things have recovered but consumer spending has not been robust so the economic recovery has been anemic.  Let me dive a little more deeply into this.

It has been widely and correctly reported that the incomes of those below the top 10% have stagnated or dropped.  People can't spend money they don't have, right?  Wrong!  They can spend borrowed money.  And they borrowed and spent at high levels before the crash.  The belief was widely held that consumers had racked up way too much debt and that this was bad.

This was true to the extent that when the economy contracted consumers had a very difficult time keeping up with debt service.  But a key component is the whole economic contraction part.  If consumer income had been rising steadily, which it was not, and had stayed at a high level, which it definitely did not, then consumers would have had enough money to keep up and there would not have been a problem.  But those ifs were not true and we had a big problem.

And that leads to a key fact that seems to never be newsworthy.  Debt is good for the economy as long as there is sufficient capacity to service the debt.  Debt only becomes a problem when there is insufficient capacity to service the debt.  We lost a lot of debt service capacity in the crash of  '08 and debt immediately became a big problem.

We currently see consumer income rising slowly.  If consumers continue to maintain the same level of debt they have post-crash then the consumer component of the economy will grow slowly and the stock market will have gotten it wrong.  But what if consumers increase their spending by increasing their debt?  Then the rate of economic growth goes up and the stock market looks smart.  And the willingness to incur more debt depends on psychology.  If consumers think things will get better then they will start the virtuous cycle of more spending producing a better economy producing more consumer income, etc.

These psychology induced increases in consumer spending can only go on for a short time without the need for actual economic growth happening to support it.  One of the thing s that has happened during the recovery is that small bursts of increased consumer spending were not matched by substantial economic growth so they petered out.  But I see a real possibility of an increase in the rate of economic growth.  It can't all be consumer driven, however, so let me move on to the second component.

Most of consumer income comes from wages.  If wages go up or more people become employed, or even better, both go up then consumer income goes up.  But corporate management has a lot to say about this.  If they increase salaries or hiring then they generate more income for consumers who, in turn, can buy more of their goods and services.  This grows the economy and the markets the business serves.  It's all good.

But businesses have adopted the Walmart model.  They operate on the theory that some other company should hire more people and/or raise wages.  If most companies don't follow the Walmart model then those companies that do will fare very well.  And Walmart did very well for a long time.  But if every company keeps costs down by suppressing investment and wage increases then no company's market grows and we all do badly.  And that's what we have seen during the recovery.  Companies have used aggressive cost cutting, layoffs, and financial tricks to keep their profits high while their fundamental business grows slowly or not at all.

As the economy has recovered we have had a slow but steady growth in jobs.  The unemployment rate is way down.  But the new jobs pay poorly compared to the old jobs so overall consumer income growth has been anemic at best.  We have finally seen the job market tighten enough to force wage increases in the last few months.  We seem to be at the point where this trend of wage increases is likely to continue.

And corporations have psychology just the same as consumers.  Corporations have believed that markets will grow slowly at best.  This has justified a layoff and cost cutting strategy that has created a self fulfilling prophecy.  But what if corporations change their psychology and decide that there are market opportunities out there?  That will cause them to increase their rate of investment and to be less aggressive at holding salaries down.  If they do that then consumer income will go up.  And that means that an increase in consumer debt makes perfect sense.  And that will contribute to an increase in the rate of economic growth.  And we will have a virtuous circle going.  Moving on . . .

The next most important component is government spending, particularly Federal government spending.  If neither the consumer nor business is spending the government can step in and fill the void.  This was done early in the Obama Administration with the "stim", a little over 800 billion dollars in Federal spending that was designed to stimulate the economy.  And contrary to Republican talking points, it worked.  But the effect was modest.  In part this was due to the fact that it was poorly constructed.  But the components that were a bad idea were explicitly put in to attract Republican support.  That failed.  And most economists felt that it was too small.  Finally, mostly what it did was halt the hemorrhaging.  It did not grow the economy.  It merely halted the decline.

And Republicans ramped up their "debt and deficits are bad" meme.  Somehow debt and deficits are not a problem when a Republican is in the White House.  Reagan and both Bushes ran up huge deficits which pushed our national debt to astronomical levels.  Carter kept deficits under control.  Clinton took us from a deficit situation to a surplus situation.  Obama halved the deficit between the early years when the economy was severely damaged and large deficits were inevitable to the last few years when the economy was reasonably healthy.  I expect the debt to balloon under Trump.

So, ignoring their inconsistency, are Republicans right?  Again the issue is not how much deficit and debt there are.  It's whether the capacity exists to service that debt.  And let me freely concede it's a Ponzi scheme.  The Federal government issues new debt to repay old debt.  Supposedly all Ponzi schemes are bad.  But this assumes that the debt needs to be repaid eventually.  And that is incorrect when it comes to immortal entities like governments.  And the Federal government is in a unique situation.  It could literally print enough money tomorrow to pay off the entire national debt.  So ultimately it can repay the debt.

The problem is that printing enough money to repay the debt would render US money worthless.  And that's bad for everybody.  So printing that amount of money is not a practical approach.  We end up yet again with psychology.  Investors believe that the Federal government is a sound institution from an economic perspective.  So they buy new debt even though they know its a Ponzi scheme because they believe that they will ultimately be able to get their money back because someone else will buy government debt in the future.  And that will allow the Federal government to make good on the current debt it is issuing.  So the real question is "what would critically damage that trust?"

Republicans have claimed whenever there is a Democrat in the White House that the trust is on the verge of being lost.  This justifies drastic measures like cutting the deficit.  (Somehow the other option, raising taxes, is a bad idea for [insert reason here].)  Whenever a Republican is in the White House the bad thing that was about to happen magically goes away.  And this is in spite of the fact that Democrats have a long record of fiscal responsibility and Republicans have a long record of fiscal irresponsibility.  Go figure.

Anyhow, Republican have succeeded in keeping Federal spending depressed during the entire period of the Obama Administration.  So there has been no pressure on the economy to grow at a fast rate from the Federal government.  This leaves the final component, the banking system in the form of the Federal Reserve.

The Fed is the only one that has been actively trying to get the economy growing and growing at a good rate.  But this is not something the Fed has the appropriate tools for.  They have been forced to resort to extraordinary measures.  These measures are often lumped into something called "Quantitative Easing".  But these tools are indirect and don't work very well.  So the best the Fed has been able to manage given that they have received no help from consumer spending, corporate spending, and Federal spending, is modest growth.

But if consumer spending goes up because consumers feel good and corporate spending goes up because corporations are feeling optimistic and the Federal deficit goes up because that's what Republicans do when there is a Republican in the White House then the Fed can get out of the business of using extraordinary measures.  A modest tilt toward the good by the other three components would be way more effective than what the Fed has been able to do.  In this scenario economic growth can easily perk up at the same time the Fed is shutting down its extraordinary measures.

Notice that Trump's only contribution so far is engineering a change in psychology.  He doesn't have to actually do or not do much of anything.  In fact, he can't actually do or not do anything until inauguration day.  Trump has promised massive tax cuts.  Since Republicans like that idea and they control both houses of congress he is likely to get his wish.  He has also promised lots of spending.  That may or may not happen.  Congressional Republicans seem to be of two minds on this.  They may sort it out and go along with massive spending.  That's what history predicts.

Or Trump may find himself uninterested.  Who knows.  But a big increase in the deficit leading to big increases in the debt seem baked in.  And as long as investors retain confidence in the Federal government's ability to pay the Ponzi scheme will continue humming along.  I think it is unlikely that investors will lose enough faith to change their behavior in the short run.  Who knows what will happen in the long run.

So I see smooth sailing for the stock market in the near term.  I see corporate profits growing.  I also see compensation packages for senior executives growing.  And that's all that is necessary to justify the stock market's current optimism.

But I don't see the situation for the rust belt blue collar workers who put Trump into office improving.  There is another group of people who are likely to be hurt.  That's the people who rely on the social safety net of Social Security, Medicare, and Medicaid.  Republicans seem bound and determined to scale all three programs back.  And that's if they can't figure out a way to privatize them or eliminate them.  Many of these people voted for Trump because he promised to protect or enhance these programs.  It seems unlikely that he will do so.

Besides the 1% I do see some people doing well.  I think the trend toward knowledge work will continue.  STEM (Science, Technology, Engineering, and Math) people obviously fall into this category.  But I also see creative people doing well.  There is a lot of art involved in a good web design and I think artists in general are going to do surprisingly well.  We'll see.

Another group that will do well are older people with some money of their own.  Back in the day a little old lady could buy a few shares of AT&T or a utility company.  The investment was safe and paid a good return.  And this investment was available to people of middling means.  The modern equivalent is government bonds or bank CDs.  But as of a few months ago these investments, while safe, paid essentially no return.  Several months ago a 30 year Federal bond paid just over 2%.  The more popular 10 year bond paid around 1%.  And government guaranteed bank CDs paid even less.  You could keep your money safe but you couldn't get any income from it.

Since Trump's election interest rates on government bonds have shot up.  The income is still well below historic levels but it is much better than it was only a few months ago.  The Fed is likely to increase interest rates this month (December, 2016).  If economic growth kicks substantially up then interest rates are likely to continue to climb.  This will cause the rates on government insured bank CDs to also go up.  Whether and how long it will take to get back to historic rates is a question I am not qualified to answer.  But things are definitely looking up for people who have some money of their own.  And these people tend to be older.

If the economy perks up then I have absolute confidence Trump will find a way to take credit for it.  And if people credit Trump for getting the economy growing more quickly, whether he deserves it or not, they will be willing to forgive him for many sins.  Of course, he has it within himself to do something so catastrophic that it actually derails economic growth.  And even if I am right I think it likely that many Trump supporters will be left behind.  Before the election I would have believed that they would figure out they had been conned and turn on him.  But he ran as such an obvious fraud then and people put their faith in him anyhow, I really don't know what it would take at this point to change their minds.

Mr. Robot

"Mr. Robot" is a TV series airing on the USA cable channel.  It's second season aired last summer but I only got around to watching it in the last few days.  It is not for everybody so this is not a "go see it now" commercial disguised as a blog post.  But even though its appeal is limited I think it is worth talking about.

Mr. Robot conforms to a now popular model.  It is in effect a novel broken into one hour episodes analogous to chapters in a book.  In the old days TV shows consisted of a number of stand alone episodes.  That's not what's going on here.  Each episode advances the story.  To completely understand what's going on you have to have seen earlier episodes.  The most visible example of this sort of thing is "Game of Thrones", airing on HBO.  Game of Thrones is based on the "Song of Ice and Fire" books by George R. R. Martin.  Each season is a condensed version of one of the volumes in the series.  But in this case there is no book underlying "Mr. Robot".  So what's it about?

At one level it is the ever popular "David versus Goliath" story.  Instead of a single individual we have a small band of plucky nobodies taking on the large and powerful "E" Corporation.  At least from the point of view of the show, our band is the good guys and E Corp is the bad guy.  And oh boy does E Corp fit the role of villain.  They do pretty much every bad thing a corporate villain is supposed to do.  They are powerful and completely unscrupulous.  They literally kill people by poisoning the environment.  They buy and sell politicians.  And in true villain fashion they occasionally straight up assassinate people.

The case for our plucky band being heroic is mush less straightforward.  They seem like good people but they end up doing a lot of bad things.  In one case one of them actually kills someone on purpose.  They do other bad things because, you know, "the ends justify the means".  The moral ambiguity (to put it politely) makes for better drama and we definitely get lots of drama.

And you will probably be less than totally surprised to find out that there is a chief good guy.  His name is Elliot and he is played by Remy Malek.  And, this being a modern drama, Elliot is a hacker par excellence.  Season one revolves around the team's efforts to pull off a giant attack on E Corp.  BTW, the E Corp logo looks a lot like the logo for Enron.  The nickname for E Company in the series is Evil Company.  This nickname would have fit Enron very well.

In the show E Corp houses all the records on who owes money to who.  By wiping out E Corp's databases (and some other stuff that's necessary to make the plan work but is too complicated to go into here) our plucky band seriously injures E Corp.  But they also plunge the world (or at least the US) into chaos.  For reasons I never was quite able to figure out only cash and a Bitcoin-like payment service housed on smart phones continues to work after the attack.  E Corp somehow owns the phones but not the payment handling service.  But the payment service leaves digital tracks behind so anyone who has access to the right computer systems knows how you are spending every penny.

That's where season two starts up.  E Corp is wounded but still very much in business.  Lots of people are chasing after our band and it is obvious that "stage 2" is necessary to complete the job of defeating evil and raising up good.  I am mostly through the season and so far almost no progress has been made with respect to stage 2.  In a "behind the scenes" companion show one of the actors opined that the series might run 5 seasons.  So I will be very surprised if things are resolved by the time I finish watching the remaining episodes.  And if you want to know more about what happens you'll have to get your hands on the episodes and watch them.

But I want to step back form the twists and turns of a specific episode and look at what is happing at a more macro level.  "Mr. Robot" follows a pretty standard model, albeit in its own idiosyncratic way.  And the basic idea is that the "David" group exposes and documents the bad behavior of the "Goliath" group.  Then everybody recoils in shock and horror and the cops round up the perps and we all live happily ever after.

There is a specific example of this in season 2.  The good guys by nefarious means secure an audio recording of the bad guys doing bad things.  They, again by nefarious means, upload this audio file to the Internet then draw attention to it.  The audio is quickly copied far and wide so that the bad guys can't suppress it and everyone reacts in shock and horror right on queue.  Then the cops, or in this case a Senate committee, swoops in and starts reining the bad guys in.  This is pretty much standard stuff.

It happened that way in "Three Days of the Condor", a 1975 movie.  The last scene features Robert Redford in front of a The New York Times sign.  The implication is that he has provided all the information he has uncovered about bad behavior in the CIA to the paper.  They, in turn, will publish it and the bad guys will be punished accordingly.

And the poster child for all this is Watergate.  Dogged reporting, most prominently by Woodward and Bernstein, eventually exposed nefarious doings by the Nixon Administration.  Eventually Nixon was forced to resign and a number of people ended up in jail.  It is important to note that "Three Days of the Condor" came out only a few years after Watergate.

But the question that now haunts me is:  does this model still work?  The Nixon people worked very hard to keep their bad behavior out of the public eye.  They knew what they were doing was wrong and that even if it wasn't it would look wrong and that would be damaging.  But we have moved away from things working that way since.

Part of it has to do with the definition of what constitutes bad behavior.  In 1928 Al Smith was deemed an unsuitable candidate for President because he was a Catholic.  That rule held until Kennedy was elected in 1960.  In 1964 it was widely believed that Nelson Rockefeller was an unsuitable candidate for President because he had been divorced.  That rule held until 1980 when Reagan was elected.  In 1972 Thomas Eagleton was deemed an unsuitable candidate for Vice President because he had undergone certain treatments for a Psychiatric condition.  And then there's the whole Monica Lewinski thing with Bill Clinton.  President Clinton survived the whole impeachment process because the general public did not think that his behavior justified the punishment.

We now have something called Borking.  Judge Bork was a well respected jurist.  He was nominated for the Supreme Court.  His nomination was eventually blocked because too many Senators felt that his positions were too far out of line with mainstream judicial thinking.  It has since been forgotten that two Democrats voted for Bork and six Republicans voted against him.  (He had been nominated by Reagan.)  On numerous occasions afterward Republicans have accused Democrats of "Borking"  one Republican nomination or another.  This has the desired effect of deflecting attention away from the actual substance behind any opposition.  This allows any opposition by any Democrat to any Republican nomination to be characterized as "political" and, therefore, unworthy.  It should work the same way for Democrats.  They should be able to "Bork" Republican opposition to Democratic nominees.  But that never happens.  This tactic is one of many that has resulted in the increased polarization of politics.

That's bad enough.  Democrats in the Bork case presented substantial evidence to back their contention.  But it turns out that unsubstantiated attacks can work.  The classic example is birtherism.  When Obama first threw his hat into the ring there was a legitimate question as to where he was born.  So in 2008 he released his "short form" birth certificate.  Republican government officials in Hawaii immediately confirmed that it was authentic.  Various news organizations were quickly able to confirm that birth announcements had appeared in the two largest newspapers in Honolulu.  This all happened in 2008.  That should have been the end of that.

But then the most unlikely figure took up the cause.  Her name was Orly Taitz.  Look her up.  You wouldn't believe a person with her background and expertise could be seen as a credible source of information on the subject but she was, at least by some.  She was able to put on a good enough performance to justify repeat bookings on conservative radio and TV shows.  She never came up with anything substantial but that didn't diminish her popularity on these shows.  That resulted in Obama going through all the hoops necessary to obtain and release his "long form" birth certificate in 2011.  That only resulted in a change in the cast of accusers.  Donald Trump took up the cause.

Was any new information unearthed?  No!  Trump at one point announced that he had sent investigators to Hawaii but never released any results from the "investigation".  Nor did anyone else turn up anything else.  And let me repeat.  The matter was definitively settled in 2008.  President Obama was born in Hawaii.  Yet the "birther" controversy persisted until a few weeks ago.  Donald Trump made a short announcement that President Obama was born in the US.  Will that finally put this nonsense to bed?  If past is prologue then the answer is a resounding no.  But the President is leaving office soon.  This will remove the actual reason for all this bad behavior.  So I actually expect the issue to finally die the death it should have died all the way back in 2008.

What all this has in common is the inability of truth to drive out nonsense in public discourse.  Truth can be made invisible and falsehoods can be made visible if enough people want to disbelieve the true thing or believe the false thing and if enough effort is put behind it.  In our fictional universe does Evil Corp have the resources and the ability to make truth invisible and falsehood visible?  They sure do.  And, unfortunately, I am very concerned that the real world analogs of Evil Corp are be able to do the same.

We are seeing the success the Oil industry is having at creating and maintaining over a long period of time the fiction that there is a controversy over global warming and the extent to which human activities are responsible for it.  There is a long, well organized, and successful effort by biblical literalists to convince people that Intelligent Design is a reasonable and scientifically valid alternative to Evolution.  It is neither.  The "birther" nonsense has proved completely impervious to any and all applications of fact for almost a decade.

Finally, in the interest of fairness let me list some areas where lefties are either the prime movers or active co-conspirators in this kind of behavior.  Many on the left believe that GMO crops are wildly dangerous.  There is no evidence to back this up, only suspicions.  There has been an active and well funded search lasting many years for such evidence.  But no one has come up with anything yet.  However, that failure hasn't stopped the anti-GMO people from acting like vast amounts of evidence of harm has been collected and confirmed.

Then there is the anti-vaccination movement.  Vaccines have literally saved millions of lives.  The current vaccines in general use are incredibly safe.  Yet a single small and poorly done study that has since been entirely repudiated was enough to set off a craze that continues to this day.  The result is millions of parents, mostly liberals, failing to vaccinate their children.  People have died as a result.  But the anti-vaccination movement, while diminished, continues to motor on.

The final item on my list is nuclear power.  I should probably do an entire post on this subject.  But here's the Cliff's Notes version.  Nuclear power is dangerous.  But so are all the alternatives.  So the appropriate question is:  how safe is nuclear power compared to the alternatives?  And the answer turns out to be remarkably safe.  Coal kills lots of people by giving them black lung disease.  Coal mining trashes large parts of coal country.  Coal creates incredible amounts of incredibly dangerous byproducts.  By comparison, nuclear kills and grievously harms far fewer people.  It trashes far less land.  And it creates far smaller amounts of dangerous byproducts.  But by comparing nuclear to a theoretically perfect alternative that doesn't actually exist liberals make it sound incredibly bad.

I am not going to connect the obvious dots at this point.  I think you can all do that without me.

An Open Letter to Trump Voters

I understand why a lot of people voted for Donald Trump.  Those are not the people this letter is addressed to.  It is addressed to a specific group of people who voted for Trump.  With this group I frankly and freely admit I do not understand why they voted for him.  I'll lay out the reasons why I'm confused below.  But before I do that I want to be clear about exactly what group I am talking about.

Hillary Clinton lost a number of "rust belt" states.  The margins were extremely thin.  As of late yesterday (Thursday, November 10), the combined Trump lead in Pennsylvania, Wisconsin, and Michigan was just over a hundred thousand votes.  If Clinton had carried those three states she would now be the President elect.  Instead she is behind in all three and two of them have been called for Trump.  Mr.Trump did very well in these states with white men without college degrees, the classic "blue collar" demographic.

It is clear, at lest if you can trust reporting on the subject, that these people switched their votes because they felt abandoned by Clinton and that they decided Trump was their guy.  That's the part I don't understand.  The rest of this post is about the sources of my confusion.

If you have read my posts you know I often start with a historical perspective.  I'm going to run true to form once more.  From the '30s through the '70s blue collar workers in what is now nicknamed the "rust belt" were solidly in the Democratic camp.  In the '60s and '70s you could point to a large number of Democratic politicians who styled themselves as champions of the blue collar cause.

A typical example was Hubert Humphrey, who ran for President and was defeated by Richard Nixon in 1968.  In spite of the loss Humphrey continued to champion the cause of "labor".  He included blue collar workers in his "labor" category but also extended it to include the lower echelons of the white collar workforce.  And the thinking was that what was good for blue collar workers would also benefit white collar workers so the primary focus was on blue collar workers.

This played out as strong support for the labor union movement and for worker's rights.  Democrats championed a forty hour work week, paid sick leave, a minimum wage, and many other initiatives designed to improve the lot of the ordinary working man.  Labor returned the favor by voting for Democrats and labor unions provided a lot of the money and manpower necessary to run an effective campaign.  But something big happened in 1980.

A large number of these people voted for Ronald Reagan, the Republican.  He basically said "you are being taken for a ride and I will take better care of you".  They bought that argument.  But the first thing Reagan did was destroy the Air Traffic Controller's Union.  This was not an isolated incident.  His administration was uniformly on the side of management and firmly opposed to labor, organized or otherwise.  In short, he did the opposite of taking care of blue collar workers.  But substantial numbers stuck with him and have stuck with the Republican party since.

At one level the situation couldn't be simpler.  You either empower labor or you empower management.  If you empower labor they will see improved wages, benefits, working conditions, etc.  If you empower management you will see depressed wages (or wages growing more slowly than they otherwise would), downward pressure on benefits, poorer working conditions, etc.  Republicans have consistently sided with management and the results are now obvious.  The standard of living and the general plight of working men is much diminished compared to what it was in the '60s and '70s.  And this is just what you would expect.

And if we examine the period that followed the '80 election we see Democrat after Democrat who had been a traditional champion of labor lose elections to Republicans.  The Democratic party abandoned their aggressively pro labor stance because being pro labor did not win elections.  Instead we got Bill Clinton and "triangulation".

Clinton was a southerner and southerners have historically not been pro labor.  But what triangulation was all about was to try to find a common ground between traditional Democratic positions and traditional Republican positions and see if something that would do some good could get enacted into law.  So we saw welfare reform and criminal justice reform and NAFTA and "Don't ask - Don't tell".  All of these programs were a mix of Democratic and Republican ideas.  People now have a lot of bad things to say about all of these.  But what they are mostly unhappy about are the Republican components.  Clinton argued at the time that "he got the best deal he could under the circumstances" and there is plenty of evidence to support this position.

So why did he get such poor deals?  Because Republicans kept winning elections.  Clinton faced both a Republican House and a Republican Senate for much of the time he was in office.  And one reason Republicans won elections then and now is that they were able to pick up significant support from blue collar workers.  But Republicans never advanced a single piece of pro labor legislation or implemented a single pro labor policy during this entire time.  Instead they systematically championed the side of management.  And it is not surprising that as a result the economic prospects of the middle class, and particularly the blue collar component of the middle class, has stagnated.

Bill Clinton saw record numbers of jobs created and substantial increases in the take home pay of blue collar workers.  In spite of this, Al Gore, his vice president and a fellow southerner, and someone who would be much more pro labor than Bush, lost in 2000.  If blue collar workers had been solidly behind him then he would have won easily.

I won't re-litigate the Bush administration, except to note that he maintained the Republican tradition of being pro management and anti labor.  And this stance was not enough to cost him the election in '04.  Republicans became unpopular shortly thereafter but for other reasons.  And Obama was able to bring enough blue collar voters back into the fold to win in '08 and 12.  But Democrats did badly in '10 and '14 and an important reason for their losses can be traced to lackluster at best support from blue collar workers.

And, if anything, Republicans have amped up their attack on labor during the Obama years.  They have successfully blocked efforts to increase the minimum wage at the federal level.  They have blocked efforts to reign in health care costs.  Not a single Republican voted for the "stimulus" in spite of the fact that a lot of money went into the pockets of blue collar workers in Republican districts.  In fact, they engaged in a systematic deception.  They held dozens of public events where they took credit for bringing Federal money into their districts.  In fact, they had done the exact opposite.  The money was from the "stimulus" bill that they had voted against but they were successful in hiding that fact.

Meanwhile they attacked spending initiatives that benefit blue collar workers and protected tax loop holes that advantaged large corporations and wealthy individuals.  The most egregious example of this was the bailout of the auto industry.  It garnered no Republican support.  And, while it certainly helped a lot of senior executives, investors, etc., it also meant a lot of blue collar jobs in the rust belt were preserved.  They also attacked efforts to strengthen the hand of labor when it was dealing with management.  And there was certainly no outcry from the Republican side of the aisle to lock up fat cat bankers after the crash.

Now let me move from the general to the specific.  And the "specific" in this case is Flint Michigan, a classic rust belt city that has been hit hard.  A Republican governor single handedly caused the lead poisoning crisis in Flint Michigan.  Yet for the most part he was successful in deflecting blame to nearly everywhere else.  Neither the governor nor the Republican controlled state legislature has stepped up to make good the damage the governor caused.  Instead, they have consistently obstructed efforts to make permanent fixes.  Flint is still being hung out to dry.  And there are things the Federal Government could do.  But the Republicans have consistently obstructed and, in many cases, completely blocked efforts there too.

And the "fix" in Flint would create lots of "shovel ready" jobs for blue collar workers.  No high tech solution is necessary.  The work can not be outsourced.  So something that should be done, something that is a good thing, something that would improve the lot of blue collar workers and is strongly supported by Democrats in general and Hillary Clinton in particular, is being blocked by Republicans.

And the Flint situation is the specific example that illustrates the general problem.  It is common knowledge that our infrastructure is in bad shape.  The Flint problem is an infrastructure problem.  President Obama has made proposal after proposal to invest in repairing and modernizing our infrastructure.  These proposals have broad and enthusiastic support from Democrats in general and Hillary Clinton in particular.  They are very popular with the public in general and blue collar workers in particular.  And moving ahead aggressively would create large numbers of good blue collar jobs.  And all of them have been blocked over and over by Republicans.

This is the disconnect I see and which I just can't understand.

Hillary got involved with the Flint crisis and devoted significant effort to trying to improve things.  Trump did one "drive by" appearance and that was that.  More broadly, Hillary started her campaign with an extensive listening tour.  And she listened.  And based on what she heard she developed specific plans to help.  Trump made vague promises and left it at that.  And then there's Trumps business record with blue collar workers.  He repeatedly stiffed them as he did with small businesses.  And he was happy to buy his suits and other "Trump" merchandise from around the world.  He certainly made no effort to understand what was going on in the lives of these people so his plans were little more than slogans.

And what were the slogans?  He promised to reopen the factories and coal mines.  Basically he promised to roll the clock back many decades to the good old days.  But what if he actually tries to make good on these promises?  The big rust belt job killer has not been trade policy.  It has been a combination of a tilt toward management, allowing them to cut salaries and benefits, and automation.

Fifty years ago it took a lot of man hours to make a car.  So making a million cars produced a lot of jobs.  Now manufacturing is heavily automated and it takes far fewer man hours to make a car.  And so making the same million cars produces far fewer jobs.  And those jobs have much poorer wages and benefits associated with them than they did in the good old days.  Domestic industrial production has actually grown substantially in the last decade and looks to continue growing.  But automation means it will not employ people in the numbers it used to.

The same is true of coal.  The big killer of coal jobs has been fracking.  Fracked natural gas is cleaner and cheaper than coal.  Is Trump going to reduce the production of fracked natural gas?  Well, actually no.  Instead he plans to increase production.  So his promises to coal miners are every bit as empty as the ones he has made to blue collar workers in the rust belt.  Yet these promises have been enough to convince blue collar workers that Trump is their man.

Finally, there is a wide spread belief that blue collar workers are forgotten and invisible when it comes to Democrats in general and Clinton in particular.  Based on their behavior blue collar workers want empty promises repeated frequently in stump speeches.  Democrats, on the other hand, have made proposal after proposal that shows that they have thought hard about the plight of these people and are willing to roll their sleeves up and dig in.  But that has not resulted in many of these people coming home to the Democratic party and abandoning Republicans.  This has deprived Democrats of the clout necessary to get their proposals enacted into law.  That's extremely frustrating.  But is it really the fault of Democrats?

What have Republicans offered up in the Obama era?  Gridlock.  They decided that they would oppose everything Obama approved of, even if they originally proposed it.  The classic example is Obamacare.  It started out as a proposal from the conservative Heritage Foundation.  It then morphed into Romney-care under the sponsorship of the 2012 Republican candidate for President while he was the governor of Massachusetts.  Whatever flaws it has, many of them can be traced to its Republican roots.  Obamacare differs little from Romney-care.  It was a good idea when Romney, a Republican, implemented it.  It was a bad idea when Obama, a Democrat, implemented it.  But it is the same program.

I bring Obamacare up solely to explain how Republicans operate.  It looks like something similar is about to play out.  Trump has proposed a massive infrastructure program.  Obama has routinely proposed this sort of thing each year.  Republicans have made sure it goes nowhere.  Both Clinton and Trump have made it part of their agenda.  Trump's plan may go through.  Why?  Because it is a Republican initiative.  And then again it may not.  There is significant resistance from factions within the Republican party.  They may end up being successful in blocking it and we have no idea at this time how serious Trump is about the whole thing in the first place.

Obama was fairly successful in his first two years in office when Democrats controlled both chambers of the legislature.  But the Republicans' "just say no" strategy was successful enough that he was only able to get a few things done.  Then voters rewarded Republican obstructionism by tossing many Democrats out of office in the 2010 election.  The Republicans then shut down the government, put the full faith and credit of the government into question, and generally behaved irresponsibly.  Were they punished for this irresponsibility at the polls?  No!

The results of this election allow us to make some calls.  Divisiveness won.   Irresponsibility won.  Ignorance won.  Bad behavior won.  Macho won.  Secrecy won.  White privilege won.  Republicans who publicly opposed Trump and were up for re-election lost.  So the Republican party now owns the campaign that Trump ran.  And Trump owns the Republican party.  It is generally believed that a lot of Republicans would have lost without the boost they got from the Trump's win.

There are many people who believe that Trump is going to pivot and behave quite differently now that he will soon be President. There are many people that believe that what Trump said on the campaign trail was standard political rhetoric and he will govern responsibly and effectively.  We'll see.  If he can actually deliver increased employment and increased income to blue collar workers I and many others of his fiercest opponents will be impressed.  Certainly that's what the blue collar workers who voted for him expect to see happen.

And he has made many promises to many others on foreign policy, law and order, immigration, etc.  It will help that, if we go by the experience of the George W. Bush administration, he will get the active co-operation of Republicans in congress.  Campaigns, especially campaigns in which so many promises have been made, generate mandates and expectations.  I and many people like me believe that the agenda Trump laid out in his campaign is a bad one.  We also frankly do not believe he can actually deliver on most of it.

He will be able to wipe out most of Obama's achievements.  Executive orders can be reversed.  Republicans have railed against numerous Obama initiatives for years.  In January they will have all the power and control they need to do what they have so frequently and vociferously promised to do.  It looks like the Democrats are in no position to stop them.  At best they can slow them down.  I think doing this is a bad idea but my side lost.  And I think that many of the blue collar workers who voted for Trump will find that they are hurt badly by the absence of the very programs Republicans have been so successful at demonizing.  We'll see.

And then there is the agenda that is uniquely Trump's, the agenda that goes beyond just "roll this or that Obama initiative back".  We'll all get to see how that works out too.  Given the behavior of Republicans during the Obama administration and the dramatic differences between the agendas of the two candidates the Democrats are under no obligation to provide any assistance at all.  Trump and his Republican colleagues are on their own when it comes to delivering results.  The blue collar workers who voted for Trump think they will end up better off or at least no worse off than they are now.  I think they will quickly find themselves far worse off.  Maybe I'm wrong and they're right.  Either way, we'll see.

Wikileaks Revisited

One of the earliest posts to this blog concerned WikiLeaks, the web site that posts classified information.  Here's a link to the post:  http://sigma5.blogspot.com/2010/11/wikileaks.html.  It's a short post so I can unreservedly recommend you take a look at it.

As I said then "99% of everything that is classified is not classified because it needs to be.  A large percentage of classification is CYA.  Someone doesn't want the embarrassing stuff to leak out.  Something is rotten in the state of Denmark and someone doesn't want the rottenness to be put on public display.  An even greater source of unnecessary classification is bureaucratic."  I'll leave it at that because I want to leave some reason for you to check out my previous post.

And in spite of the fact that the post was written almost six years ago, things have changed very little in the interim.  And the little that has changed has changed for the worse.  Back then I wrote "[i]t is still necessary for WikiLeaks to demonstrate that it is not just on some kind of anti-US jihad."  WikiLeaks has not done that.  Instead they have reinforced the case that all they do is engage in anti-US behavior.

And it's worse.  The jihad is more narrowly targeted than that.  They seem to be focused on embarrassing Democrats while leaving Republicans alone.  My local newspaper has a story today about a recent trove of documents posted with the obvious intent of embarrassing Hillary Clinton and her allies.  And WikiLeaks has been happy to publish material whose obvious source is the Russian government or Russian intelligence services.

Let me be clear.  Putin is a demagogue who is actively hostile to what WikiLeaks purports to support and believe in.  What the Hell does WikiLeaks think it is doing when it cooperates with these people?  And we have a candidate who is running for President that seems to be a fan boy of Putin and Putin-style government.  The WikiLeaks dumps seem to be aimed at supporting his candidacy.

When I posted my previous remarks WikiLeaks had not been around all that long.  There seemed to be a pattern to their behavior (the previously mentioned anti-US slant) but it was too soon to say for sure.  They have now been in business long enough to justify firm conclusions.  WikiLeaks' primary mission seems to be to embarrass the US and, for the moment at least, to particularly embarrass US Democratic party.

I noted then that WikiLeaks was rumored to be sitting on a large trove of data that was about the US but not about the US government.  If they actually had the data they were rumored to possess they chose not to publish it.  There are bad governments all around the world.  There are also far too many examples of good governments all around the world doing bad things.  There are also many non-governmental entities all over the world that are engaged in bad behavior.  It would be a good thing if more of this came to light.  But WikiLeaks has made little or no effort to go after these other targets.  I can't believe this due to a lack of material.  In fact, events have shown us that there is lots of other material available.

A recent example is the "Panama Papers" incident.  Panama has very lax corporate governance laws.  As a result many companies are registered in Panama so that they can be used to hide bad behavior.  Early this year millions of documents from a Panamanian law firm specializing in this were leaked.  The leaked information was quite revelatory and a useful contribution to public discourse.  These documents were not leaked via WikiLeaks in spite of the fact that WikiLeaks was the obvious channel for this information.

The Edward Snowden NSA revelations were also not disclosed through WikiLeaks.  Why?  Because careful observers have noticed the strong anti-US and, judged by their inactions, pro-everybody-else bias of WikiLeaks.

I am still strongly of the opinion that there is far too much secrecy around.  I was disappointed in 2010 with the actions of the Obama Administration in continuing or enhancing Bush Administration policies I disapprove of.  I am still disappointed.  But everybody does it.  This is not to excuse the Obama Administration in particular, or the US more generally.  It is to say that everybody's dirty laundry needs to be aired.  First, there is a lot of dirt there that needs to be exposed.  And secondarily, and ultimately equally importantly, it is important to be able to have the appropriate context within which to judge the actions of the Obama Administration and the US.  Finally, it would be nice to generate some push back on unnecessary classification and unnecessarily delayed declassification.

And that's my segue into another topic, the Hillary Clinton emails.  The discussion of this "controversy" totally lacks context.  And it is rife with exaggeration and downright lies.  Let's take a look at the actual facts.  The most damning accusation comes from FBI director James Comey in a July 5 press release and accompanying public statement.  He subsequently testified before congress but the key elements did not change.  (The press release can be found here:  https://www.fbi.gov/news/pressrel/press-releases/statement-by-fbi-director-james-b-comey-on-the-investigation-of-secretary-hillary-clinton2019s-use-of-a-personal-e-mail-system).

According to Mr. Comey, 52 out of over 30,000 email chains contained information that was classified at the time the email was sent.  How serious is this?  Well, consider that about 2,000 additional emails were subsequently up-classified. This is when information that is initially considered unclassified is later classified by some bureaucrat at some agency.  So how do we know what should be classified and what shouldn't?  The short answer is "we don't".  No individual or group of individuals knows with 100% certainty what should be classified.

Well, actually some bureaucrats think they know.  In their opinion everything should be classified and should stay classified forever.  And that's the world we live in.  Secretary of State Clinton, a very busy person, was supposed to know that some person somewhere thought something was classified.  And in this environment she was supposed to do her job.  Secretary Clinton has since remarked that a number of the questionable emails concerned drones and drone strikes.

Is a drone strike a classified subject?  You bet it is.  To this day the US rarely publically acknowledges that a strike occurred.  And they certainly don't provide any details.  ("not publicly acknowledged" is bureaucratese for "it's classified".)  And the program is run either by the CIA, a classified government agency, or highly classified parts of the Defense Department.  There is very little about drones or drone strikes that is not considered classified by somebody.  And a lot of the time one bureaucrat or another thinks that TOP SECRET, the highest level of classification, is the appropriate level of classification.

So what are you as a public official and representative of the US Government supposed to say and do when there is a strike and there are lots of pictures, video, etc. that provides absolute proof that the strike happened at a certain place at a certain time?  This is a common situation in Afghanistan, Iraq, and a number of other places in the world.  In many of these cases the US maintains total air superiority so there is no doubt as to which country is responsible for the drone strike.

Secretary of State Clinton (as she was at the time) is a public figure whose full time job is diplomacy.  People, government officials, the press, random members of the general public, are going to ask her about drones in general, US drone strike policies and procedures, and specific drone strikes.  Is she supposed to restrict her response to "no comment" or "I can't talk about that because it involves classified materials"?  And if she does is she appropriately advancing the interests of the US and its allies, her job?  If she had always gone the "no comment" route she would have been roundly and justifiably ridiculed by the very people who are now so exercised by her "sloppy" approach to classified material.

We have to depend on leaks for the most "damning" information supposedly contained in the emails.  Three of them, we are told, contained pictures that included a "c" in the caption.  Apparently this indicated that the image is classified.  Seriously?  Apparently so but still ridiculous, in my opinion.  And, again going by leaks (because the base material is, you know, classified, but no one is going after the leakers) these apparently classified pictures were not at the top of the email.  They were buried somewhere in the "chain".

We are all familiar with email chains.  Someone sends an email.  Then someone sends a reply that contains the original email.  Then someone sends a reply to the reply and it contains both the reply and the original email.  And so on.  This is a common situation and most people most of the time do the same thing.  We do NOT review the whole chain.  We just review the email on the top of the chain.  Oh, occasionally it will be necessary to dive down the chain for something.  That's the justification for the chain.

And this behavior of only paying attention to the top of the email is what people using smartphones almost always do.  You will be less than totally surprised to know that I sometimes write long emails.  Now I am NOT talking about a chain, just a single long email.  And I have long since lost count of the number of times it has become obvious that the person replying did not read the entire email.

And this is most common with people who use a smartphone to deal with their email.  They pay attention to what's on the screen of their phone and rarely scroll down to see what else might be there.  We know that the most common method Secretary of State Clinton used for dealing with emails was by using her Blackberry.  So in all likelihood she never saw the pictures because they were off screen.  And she most likely did not see the "c" that indicated they were classified.

I am just having a lot of trouble getting exercised about this.  If there was anything that was really serious in any of the "inappropriately handled" emails we would know about it because someone would have leaked it in an effort to damage Ms. Clinton.  It is telling that "charges" are based on the level of classification of one or another piece of material and not on the contents.  This is the kind of technically wrong behavior that conservatives accusers are exercised about when they start talking about "political correctness gone awry".  Is the behavior a breach of the letter of the law or regulation?  Yes.  Is it a serious or important breach?  No.

And then there is FBI Director Comey.  Mr. Comey first attracted widespread attention as a special council to the Ken Starr Senate Whitewater Committee.  That operation was famous for a number of things.  But one of them was that it leaked like a sieve.  All investigations and internal deliberations are supposed to be kept completely secret until they are presented in public sessions of the committee.  But the Starr investigation leaked prolifically.  Apparently key people had absolutely no respect for the rules of secrecy they were supposed to maintain.

The Committee operated for years.  The rampant leaking was noticed quickly and the committee was made aware of the problem.  But the leaking never stopped.  It didn't even slow down.  And the leaking was biased strongly against Preident Bill Clinton's interests.  So it was politically motivated.  During this period Mr. Comey, who must have known what was going on and why, could have done the right thing.  He could have exposed who was leaking or at least resigned.  He did neither.  And he was eventually rewarded with the directorship of the FBI by the George W. Bush administration.

Mr. Comey's remarks on Secretary Clinton's emails fall into two broad categories.  Those that are essentially opinion and those which are grounded in regulations, policy, and law.  The damning part of what he said all fell into the opinion part of what he had to say.  When it came to regulations, law, and policy he was much more measured and had much more positive things to say about Secretary Clinton's actions.  This behavior, going all in on the political stuff and taking a measured approach on the legal side, was entirely predicted by his history.

So what do we have?  We have an environment where vast over classification is the norm.  And when bureaucrats are put into the spotlight their instinctive, and from their perspective reasonable, response is to classify and up the security level of anything for which there is the tiniest shred of justification.  So they did.  And a political hack makes a lot of insinuations before rendering a "not guilty" verdict.  And the press covers all this ad nauseam because that's what they do. And, because no one sees it in there interest or as their jobs (hello press!) to provide context, no context is provided.

If Mr. Trump's remarks about women are "locker talk" then Ms. Clinton's email activities are the actions of a saint.

Comedy

There is a saying that goes:  "Those that can, do.  Those that can't, teach."  I'm not even good enough at comedy to teach.  Instead in my own blundering way I am going to try to say something insightful about comedy.  We are all experts on comedy.  By the time we reach adulthood we have been exposed to many thousands of hours of it, perhaps even the 10,000 hours Malcom Gladwell says are necessary to achieve expertise in a subject.

So we all end up with well informed opinions about what is good comedy and what is bad comedy.  But I think there is a genetic component involved.  I have never been a fan of The Three Stooges or Lucile Ball but millions would beg to disagree.  There is comedy I like and comedy I don't.  And what I put into each category will differ, at least in small ways, from what any other single individual would.  Part of what good comedians are able to do is to create comedy that a large audience will find funny.

And I am a terrible audience.  Performers want a reaction.  They want you to obviously signal what you like and don't like.  Good comics will take this in and adjust their act in ways large and small to more completely pull the audience in front of them in.  And a good comic wants a tough audience.  They want a challenge that drives them to put on their best performance using their best material.

They take great pride in winning over a tough crowd.  But they also disrespect a crowd that is either too easy, will laugh at everything, or too hard, will laugh at nothing.  I will often find something funny but not visibly react.  That is unfair to the performer and also a bad idea.  If everybody was like me then the performer would over correct or under correct and I would get a performance that wasn't as good as it could have been.  So it's my loss but I seem to be wired that way.  If I remember I try to be more responsive.

Time for a digression, and you know I love my digressions.  What are the pillars of success?  There are three of them but they don't get equal attention.  The one that consistently gets the most attention is effort.  As mentioned above, Malcom Gladwell in an essay entitled "The 10,000-hour Rule" popularized the idea.  (See his book "Outliers" for this and other essays on the subject of Success.)

Charlie Rose frequently interviews successful people like athletes.  He always asks about their secret of success and they typically answer by talking about how hard they work and perhaps what their training regime is.  This pattern is similar to the one that almost all interviewers use almost all the time.  And it is pretty useless for gaining any real insight.  To be helpful you have to compare what successful people do with what unsuccessful people do and look for the differences.  But the unsuccessful people are almost never interviewed.  Nor have they ended up being the subject of a Gladwell essay.

Many second, third, etc. place people also train incredibly hard and use top flight training techniques.  They do pretty much the same things the winners do.  Level of effort does not separate out the winners from the also ran's.  What does are the other two pillars of success.  The most obvious one is basic ability.  If you do not possess sufficient strength, agility, quickness, balance, etc. it really doesn't matter how or how hard you train.  There are high intensity tennis camps for kids.  If you attend one of these camps for a few years you can easily rack up the requisite 10,000 hours.  And many of them feature the newest and best training techniques.  But only a few of the graduates of these programs make it into the ranks of the pros.  And only extremely special individuals make it to a number one ranking.

If the difference in ability is great enough even unskilled people like myself can pick out the few that have a chance to be great from the many who will never be better than mediocre.  A great deal of skill is necessary to separate out the best from the merely very good and, more importantly, to know how to help them be their best. This aspect of success is occasionally acknowledged.  You are born with a certain level of ability.  And if you have the requisite amount of ability the decision as to whether you will put in the necessary effort and discipline is yours alone.  In other words, you do have some control over your fate.  When it comes to the third aspect of success, however, everything is completely out of your hands.

And that is fate, or, if you prefer, luck.  I like to use Bill Gates to illustrate how important luck is to the super-successful. The founder and long time president of Microsoft, Mr. Gates has long been the richest man in the US (and often the richest in the world).  It doesn't get more successful than that.  (For a good reference on the path that took Mr. Gates's from birth to helming Microsoft at its most powerful I recommend "Gates:  How Microsoft's Mogul Reinvented an Industry and Made Himself the Richest Man in America" by Stephen Manes and Paul Andrews.)  It doesn't get more successful than that.  And he attained that exalted status purely as a result of skill, right?  Consider:

He was born in Seattle, a city with a good tech culture and one that could offer him unprecedented access to computers as a High School student.  (See the Maines book for details.)  This kind of opportunity was available in few other places at the time and is still relatively rare.

He was born of white parents and was, therefore, white.

He was born male.  He has a sister.  There is virtually no difference in how they were brought up but he is known around the world and most people don't even know she exists.

He was born at the right time.  His signature skill is computer expertise.  A little sooner and there was no opportunity for anyone to rise as spectacularly as he has.  A little later and he would have had a lot of difficulty standing out from the crowd.

He selected his parents well.  His father was a successful attorney, well known and respected in the Seattle business community.  His mother was a long time member of the University of Washington Board of Regents.  Getting this job requires political connections.  Keeping this job requires a great deal of skill.

He was brought up in a very competitive environment.  He was taught the skills necessary to thrive and succeed when up against "type A" personalities.

Change one of these attributes, all completely the result of luck, and the Bill Gates we know would never have existed.

Steve Jobs was born in San Francisco near silicone valley.  San Francisco at the time was unique due to the existence of the Home Brew Computer Club.  Had he grown up anywhere else Jobs would probably now be as well known as Gates' sister.  Mark Zuckerberg was born in New York near IBM world headquarters.  Here too we have a nearly unique environment.

Consider all of the people who have built a company from nothing to a Fortune 500 ranking in the last fifty years.  Nearly all of them are male and nearly all of them are white.

Mr. Gates' parents were part of the Seattle power elite.  He literally learned how the decision makers in large businesses think and operate as a child at his father's knee.  He and his siblings were forced as children to hone their competitive skill.  The early growth years of Microsoft involved building and maintaining a close relationship with IBM.  Knowing how IBM executives thought and operated was invaluable.  And his competitive skills helped him get the best of IBM by negotiating a non-exclusive deal for DOS.  Being able to license DOS to all comers was what catapulted Microsoft from a company no one had heard of to a tech powerhouse.

So Mr. Gates' spectacular success is due to the lucky factors that he was a white male with the proper social background who was born in the right place at the right time to be in the right position to apply his talents.  And that luck enabled him to be as successful as he has been.

We see this all over the place.  If Tiger Woods had been born 20 years earlier he would have been a complete unknown because he would never have gotten a chance to play.  The first couple of times he played in the Masters the Augusta Golf Club still barred blacks from becoming regular members.

Edison could not have become "Edison" if he had been born in another country or been born a woman or been a person of color.  No one would have given him a chance to show what he was capable of.  To be a great success you must be allowed to be successful and you must have access to the external factors like education or training that are necessary to your success.

Certainly all three factors contribute.  If you don't have the necessary abilities you are doomed before you start.  If you don't have the right kind of luck you never get a chance to get into the ring.  You can get a certain distance on luck and ability.  This was definitely true in sport a hundred or so years ago.  Star athletes were often naturally gifted individuals like Jim Thorpe.  But the level of competition has increased so dramatically in so many fields today that to excel you now need to put in the training, often from a very young age, necessary to hone your abilities to their peak.

So after that long digression, back to comedy.  And here's my justification for the digression.  Comedy is now much more competitive than it used to be.  Mark Twain was largely self taught.  He achieved significant success almost from the start anyhow. Will Rogers was also self taught.  It seems unlikely that this is still possible.

Most successful modern comics now serve some kind of apprenticeship.  They are part of Second City, the Chicago based improve group (or others based in elsewhere the US or elsewhere).  Or they do years of stand-up in small clubs and eventually work their way up to larger venues. From there they graduate to Saturday Night Live or perhaps score a short run comedy show on a cable channel.  If the show is successful (most of them flop quickly) their show gets extend.  Or if the first show is a flop they somehow manage to get another chance and succeed.

Steven Colbert is a classic example of this.  He did an apprenticeship at Second City.  He then scored a gig on The Daily Show with Jon Stewart.  He then moved on to a successful nine year run on cable.  He is now holding down the seat formerly held by David Letterman in the 11:35 PM weekday slot on CBS.  Some details are different but Jimmy Kimmel's (ABC), Jimmy Fallon's (NBC) and Conan O'Brien's (TBS) trajectories are similar.  Numerous SNL alums have scored big in the movies or with long running TV shows.  But their SNL gig was not their first comedy job.

Most successful comics say that time in front of an audience is critical to honing their craft.  You need to know what actual people think of your material.  They are the ultimate arbiter of what is and is not funny.  But lots of people have gotten time in front of an audience at a club and only a few have made it big.  Again if you don't have the talent and the luck then all the time in the world in front of an audience is not going to turn you into a success.  And I can't imagine any comic has put in 10,000 hours before making it big.

I am an engineer. I like to know how things work even if I have no interest or ability in actually doing it myself.  So I have checked out many interviews of many comics over the years.  I have picked up a couple of nuggets.

Jerry Seinfeld says comedy is like looking for nuggets of comedy gold in a mine.  They are few and far between.  You can learn how to better recognize them and where to look for them with practice but it is never easy.  The audience is good training.  If you get in front of an audience frequently you can make slight changes to a joke by tweaking the contents, the delivery, the timing, and see whether the change gets a bigger laugh.  Over time this hopefully teaches you to better construct the joke in the first place.  This seems like common sense to me.

But Jon Oliver made an observation that was not at all obvious to me.  He said if you are really serious about the business of comedy you have to do whatever it takes to land the joke.  This often means leaving aside politeness or even basic human decency.  You have to completely commit and be willing to suffer the consequences.  Often the most successful comedy has a streak of meanness or outright cruelty in it.  In its least unpleasant form the comic denigrates himself.  Rodney Dangerfield's signature line was "I can't get no respect."  Phyllis Diller called her husband "Fang".  Yet she was married to the original Fang for more than 25 years and had six children with him.

Another interesting example is that of Joan Rivers.  She started out doing soft humor deprecating herself and her long time husband Edgar.  But over time her humor became much more hard edged.  This was especially true after Edgar committed suicide.  The event happened shortly after the cancellation of her night time talk show, the one that had caused a split between her and Johnny Carson, the then long time host of "The Tonight Show" on NBC.  She became adept at putting down hecklers at her stage show.  She also characterized herself as a complete tramp and made very specific and vulgar jokes about the physical wear and tear this entirely fictitious bad behavior had caused.  This turn was a classic example of doing whatever it took to land the joke.

A lot of humor depends on having a handy a punching bag.  It is sometimes the comedian herself, or the spouse, or a misbehaving member of the audience.  Don Rickles, unique among comedians, has perfected the art of using random audience members as his punching bag.  He is famous for even doing this to known mobsters.  He was not at all sure it was a good idea the first time he was asked to do it.  But the mobsters felt it was a badge of horror to be publically ridiculed by Rickles.  After that, anyone of any notoriety expected to be singled out for abuse.

Rivers also found herself in a unique position when her daughter Melissa asked to work with her.  By this time Joan's "top dog" persona was well established.  As was her "go for the jugular" approach.  Melissa was well aware of this but wanted on board anyhow.  And the pairing worked well.  And as expected Melissa became a frequent punching bag.  In perhaps the most famous example of this they both appeared on the same season of "The Apprentice".  Joan won by, among other things, forcing Melissa's elimination.  Whatever it takes to land the joke.  The good news is that there is every indication that they had a very warm and loving relationship offstage.  Whatever it takes to land the joke is can be hard on personal relationships but apparently they found a way to make it work.

Finally, I am going to make what even I think is a feeble attempt to deconstruct a joke.  Fortunately the joke is short, only four words.  Generally credited to Henny Youngman the joke in it's entirety is:  "Take my wife -- please!".  It is a classic joke with a setup and a punch line.  The setup is "Take my wife".  It sets up an expectation that the wife is going to be discussed.  And this immediately establishes a whole framework of expectations.  Specifically, the normal expectation is that marriages are happy unions.

This expectation is totally destroyed by the one word "please".  (Note:  For the joke to work properly there should be a short pause between the setup and the punch line.  This short delay allows the audience members to settle in and accept the framework of expectation implied by the premise.)  The punch line tells us that the expectation conveyed by the setup is completely wrong, that the marriage is, in fact, an unhappy one.

And this leads me to my observation that a good joke should set up a framework of expectations.  The more economically this can be done the more likely the joke is to work.  It's hard to imagine being more efficient than doing the whole thing with just three words.  Then the punch line should force a perspective shift that compels a complete re-evaluation of the expectation.  It turns out that our brains are very good at this and in the right circumstances can do this in a remarkably short period of time.

But timing is important for the effective delivery of  a joke.  And experience in front of an audience informs the comic just how long the appropriate mental processing takes.  If you go too fast the mind set of the audience is not in the proper place when the punch line is delivered and they literally miss the joke.  If you take too long the audience gets bored and their attention wanders away from where you want it.  Then they understand the joke but it has lost its punch.

And that is pretty much everything I know about comedy.  And its not nearly enough to be able to do it well.

50 Years of Science - Predictions

I have been publishing a series of "50 Years of Science" posts for some time now.  The most recent post (part 7) can be found here:  http://sigma5.blogspot.com/2016/08/50-years-of-sceince-part-7.html.  That post also contains information on how to find the rest of the posts in the series.

For this post I am going to take a slight detour.  The series is based on the work of Isaac Asimov and so is this one.  Here I want to focus on a piece he wrote in 1964 for the New York Times.  It can be found here:  http://www.nytimes.com/books/97/03/23/lifetimes/asi-v-fair.html.  I found out about the piece in an article Kim Stanley Robinson, another highly respected Science Fiction author, wrote for the September, 2016 issue of Scientific American called "The Great Unknown" (see page 80).  The subhead for the article is "Can we trust our own predictions?"  And it turns out that some of the material in this article is based on a piece he wrote that can be found here:  https://www.scifinow.co.uk/blog/kim-stanley-robinson-on-isaac-asimovs-1964-predictions/.  I recommend them all.

I have been consuming predictions (frequently) and making predictions (occasionally) for some time.  If you don't take it too seriously it's a fun exercise.  It turns out that everyone is really bad at it.  That's why predictions that cover any significant period of time should be evaluated primarily based on their entertainment value.  Robinson in his Scientific American piece goes into some of the reasons everybody including the experts are so bad at it.   And, of course, Science Fiction writers, when not being graded on the curve, are almost as bad as everybody else.

This can be excused based in their particular case on their need to be entertaining above all else.  Hence their heavy reliance on space babes.  Various alien creatures, then primarily bug eyed monsters, now more benign creatures like Spock, also feature prominently.  But so far we haven't even found any single celled alien creatures.  And that means we also haven't found anything larger.  And that, of course, means that space babes are currently strictly confined to fictional realms.

An argument can be made that this is to be expected but still.  More importantly we have now spent over fifty years looking for radio signals from far away places and we have struck out here too.  But enough of picking on the work product of people whose background and interests were primarily in the arts rather than the sciences.  Let's move on to an actual science guy.  Mr. Asimov was an actual science guy (PHD, Biochemistry plus one scientific text book to his credit) and see how he did.

Mr. Robinson gives him high marks.  But he is grading on the curve.  And Mr. Asimov's '64 piece was produced in conjunction with the 1964 World's Fair.  So he was definitely interested in being entertaining.  This resulted in Mr. Asimov predicting that various science fiction tropes that were then common would be reality fifty years later.  This led Mr. Asimov badly astray in a number of places.

He goes on about underground houses which use electronics to simulate the natural world.  We now have that capability, at least when it comes to the visual aspect, but we don't use it.  And some variation of smell-o-vision is resurrected periodically but never seems to catch on.  It turns out that there are people are like Mr. Asimov who like an artificial environment and don't enjoy being out in the natural world where there are actual plants and animals about.  These people don't bother with a simulation.  And the far more populous group who actually likes a natural environment prefers the real thing to a simulation.

Mr. Asimov goes on about kitchen gadgets.  He got a lot of the specific details wrong but he nailed the broader trend.  He failed completely when he predicted that power cords would go away.  This prediction was based on an assumption that small energy sources would be broadly available.  Based on radioactivity would provide a compact high capacity energy source that would eliminate the need for a power cord.  Alas we are still dealing with batteries that don't work a lot better than those available in the '60s.  So we have power cords all over the place.  We also have a scourge he completely missed, data cords.

On an industrial scale he predicted the development of power plants based on nuclear fusion.  In the intervening fifty years tens of billions of dollars have been invested and we are still trying to get to the prototype stage.  It looks like many tens of billions of additional dollars and a decade or more of additional work will be required to get us to a working model.  And that's if everything goes well.  But that looks pretty unlikely.  He predicted solar power stations but he got the technology wrong.  His were based on mirrors in space, no doubt a result of his science fiction background.  Instead we have wind farms and solar panels.

He is perhaps at his most "woo woo" when it comes to transportation.  His predicted low flying cars (and boats) have not turned up as they are quite impractical.  Tires are still the technology of choice for ground transportation and boats still float in the water.  Another science fiction staple, moving sidewalks, has yet to be found practical outside a few tiny niche applications.  Moving goods around using pneumatic tubes, common in office buildings at the time, have faded away rather than seeing expanded use.

At the time copper signal cables under the oceans were the preferred method of sending electronic messages long distances.  Asimov predicted, as did many others, that geosynchronous satellites would replace them.  They didn't.  Such satellites introduce about a quarter of a second delay.  People find this annoying when making phone calls.  They might have put up with it but something better came along (see below).  Asimov forecast a substantial population of people living off of the surface of the earth.  This included substantial populations occupying space stations and lunar colonies.  Instead all we have are  a few people occupying the International Space Station in what is mostly a public relations stunt.

He predicts a substantial evolution in the job market.  "Mankind will therefore have become largely a race of machine tenders."  This is a bit of an over-reach but, as a trend, it is correct.  Robotics and automation are reworking the workplace, particularly in manufacturing, and a lot of what people now do can accurately be described as machine tending.  There is currently a fear that employment will never return to traditional levels.  Asimov seen this as a good thing.  If the "disease of boredom" becoming widespread is the worst problem mankind faces then to his way of thinking things must be pretty good.

I have skipped over one prediction Asimov made and that is population trends.  He very accurately predicted world population as of 2014.  And he was very concerned about our ability to feed so many people.  This latter fear turned out to be baseless.  We do a much better job in 2014 of feeding everyone than we did in 1964 even though world population has grown substantially.

That's the background.  Now I want to add my thoughts to Robinson's on the business of prediction.  He gives Asimov full credit for his population prediction.  He attributes Asimov's success to the fact that population growth is what he calls a "historically dominant" trend.  These kind of trends are ones where the driving factors are so powerful that only the most powerful unexpected event or trend can derail them.  As its basic level population trends are driven by only two basic factors.  How many children are women having?  How many of these children live to become old enough to have children of their own?  It is very easy to determine the answer to these questions to the accuracy necessary to make accurate predictions.

Demographers have been tracking these two numbers for many decades now.  Women in advanced nations have been having few children for several decades now.  This has now been going on long enough that we can predict that for the next few decades the population of these countries will, at best, grow slowly, and in many cases shrink.  In general more and more people are living long enough to reach child bearing age.  That makes little difference in advanced countries because it is more than offset by how far the children per woman number has dropped.  But the population is still continuing to grow in the rest of the world because large families are still the norm there.  And longevity continues to increase.  Only large and easily identified changes in one or both of these factors can significantly change the trajectory.

Robinson identifies a second "historically dominant" trend, global warming.  It behaves much like population.  A few easily monitored processes are responsible for most of the trend.  These processes often operate on a time scale measured in decades.  So a lot of the change we can expect in the next few decades is already baked in.  And any changes big enough to make a noticeable trajectory change will be large, prolonged, and easily spotted.  Like population trends we will know well in advance if projections need changing.

Now let's down size a little.  I next want to introduce a trend that is only somewhat "historically dominant".  I want to talk about integrated circuits, commonly referred to as computer chips.  A critical patent in the field was issued in 1959.  It was just coming to the attention of a more general audience about the time Asimov was writing his article so he can be forgiven for missing its significance.  The trend associated with computer chips was dubbed "Moore's Law" in 1965.  The rapid introduction of personal computers in the '80s quickly resulted in the law becoming well known.

Moore predicted that computer chips would continue to get smaller, faster, and cheaper at a rapid clip.  And computer chips in their more broadly useful guise of integrated circuits ended up being plugged into all make and manner of gadgets.  The fact that the capabilities of integrated circuits rapidly improved meant that the features and capabilities of these myriad gadgets could also rapidly improve.  So they did.  Moore's Law held for about thirty years.  It still holds to some extent today.  Integrated circuits are no longer getting smaller and faster at a rapid pace but they are still getting cheaper.  And industry keeps finding more and more ways to use them.

Robinson identifies several kinds of trend curves.  The one that fits computer chips is the "S" curve.  It took a while to get good at them.  This resulted in the early part of the curve being flat (low growth/improvement).  Then industry got good at making them and improving them.  The curve bent up sharply into a period of explosive growth.  Now basic physics have put limits on how much better computer chips can get so the curve has flattened out.

The computer chip story is in the middle of the list of ways trends can play out.  At one end of the list we have breakthroughs.  Before you have nothing then after things take off like a rocket.  In 1964 the laser had just been invented.  Lasers took off and are now used in many ways that were unimaginable at the time.  People were predicting this at the time but at the time it was only a guess.  This prediction eventually panned out.  Another invention that later became significant came along some time later, that of fiber optic cables.

By itself this invention was not that significant.  But the combination of lasers, fiber optics, and computer chips enabled out modern "internet" communications infrastructure.  Vast quantities of data can now be moved around the world nearly instantaneously.  This alternative to communications satellites is why they went out of favor.  It is almost impossible to predict this kind of synergistic behavior where multiple developments combine to change the world.  Without all of them there wouldn't be much going on.

At the other end of our list is the foreseen breakthrough technology that never materializes.  The classic example of this is rockets.  Rockets today are pretty much as they were in 1964.  So it is just too expensive to put people in space so we don't.  And so any prediction that requires easy access to space turns out to be wrong.

I don't know specifically what Asimov had in mind that would enable ground transportation to float above the ground and water transportation to float above the water.  But whatever it was it never showed up.  So land vehicles still use tires and water vehicles still float.  Underground houses with fake windows failed to catch on not due to a feasibility problem.  They could have been built then and can be built now.  It's just that few people want to live in them.  They are an idea that never became popular.

Asimov did not know about the whole Moore's Law thing.  In spite of that he managed to make reasonably accurate predictions about computers.  He just took it on faith that computers would continue to get better and they did.  His take on general computer capability (i.e. language translation) turned out to be pretty accurate.  Computers are much better at some things than he probably expected and much worse at other things.

A lot of Asimov's fiction involved robots.  So it is perhaps no surprise that he did pretty well on them.  He foresaw household robots that would be large, clumsy, and slow-moving.  We have more computer power available to apply to the task but the task requires more computer power than was predicted.  The two misses balanced out.

And then there are the unforeseen breakthroughs.  The chemical structure of DNA had been determined for about a decade.  But DNA is not even mentioned in Asimov's story.  The intervening half century has seen breakthrough after breakthrough.  The idea that you could quickly and cheaply sequence someone's DNA and determine where their ancestors came from or diagnose some diseases or positively identify an individual using a trace so small it is almost undetectable to the naked eye were so far out that not even science fiction writers imagined them.

DNA in particular and biotechnology in general are now coming things.  Our knowledge in this area is exploding.  I confidently predict that a lot of progress will happen in the next fifty years.  But most people would probably put that prediction into the category of a "historically dominant" trend.  So let me go out on a limb and make a prediction about something that is much more iffy.

There has been vast discussion about "the singularity".  There seem to be two schools on the subject with not much else getting any exposure.  It's either "It's going to happen and any day now" or "anyone that thinks it is ever going to happen is nuts".  So what is "the singularity"?  It's the day when computers get smarter than humans and escape our control.  It is the computer equivalent of the Frankenstein scenario.

An early take on this focused on the phone system.  Certain components could be seen as the equivalent of brain synapses.  When the component count exceeded that of the human brain some magical transformation was supposed to take place and the phone system was supposed to come alive.

Another scenario envisioned some kind of Watson style machine only more powerful.  At some point some threshold would be passed and it would become sentient and take control of its own fate.  It is easy to shoot down these kinds of scenarios.  Robinson even does so in his Scientific American article.  The phone system is not wired either for intelligence or for independent action.  As Robinson observes in the Scientific American article, "if it can't happen, it won't happen".  His response to the Watson scenario is the observation that Watson can be unplugged.  But is there a way to thread the needle and end up with a third way?  I think there actually is.

The whole field of artificial intelligence is evolving quickly.  A recent book, "Weapons of Math Destruction" by Cathy O'Neil has some interesting things to say about the field.  What she's talking about is generally referred to as "big data".  Its most obvious aspect is the unbelievable amount of data that is available to and accessible by computer systems.  People want to monetize it.  In plain English this means they want to make money off it.  The problem is that the amount of data is so vast that it is literally beyond the ability of people to make sense of it on their own.  The solution is "machine learning" or, as O'Neil calls it "invisible algorithms".

Clever software roots around in the data looking for patterns.  There is so much data that it is a mistake to ask "is this specific thing in there somewhere"?  Instead "machine learning" and other computer science techniques are used.  (See O'Neil's book if you want more details.)  These techniques look for any pattern or regularity in the data.  How they do this is now so complex that no one knows how they go about it or often what in detail they find.  You have to take what the system spits out on faith.  In the end the only question that is important to the people putting up the money is "if we do what the computer says will we make money"?

We saw this sort of thing run amok on Wall Street in the financial collapse.  "Trading algorithms" that no one understood made lots of money for big banks until they didn't.  When everything went sideways the Wall Street firms could literally not afford to pull the plug on these systems.  Instead they tinkered around the edges and promised "it's fixed and bad things will never happen again".  But the promise had no substance behind it.

Since then computer power and data storage have gotten cheaper.  And the algorithms have gotten more complex  In other words, even less is known about what they are actually doing.  But this kind of thing has become even more wide spread.  O'Neil's subtitle says that the situation has progressed to the point where it "Threatens Democracy".  This kind of real world experience with actual systems makes a good case that some computer systems are already more intelligent than human beings.  And the Wall Street example demonstrates that it may not be possible to turn an even an obviously misbehaving system off.

Let's do another "what if" with something that is looming on the near term horizon.  We are within a few years of having self driving cars on the road.  Since we at doing a "what if", what if self driving car technology is quickly and widely adopted.  And what if it works so well that the traffic fatality rate plunges.  Say it quickly goes from the current 30,000 per year all the way down to 1,000.  It now becomes feasible to thoroughly analyze every fatal incident.  So let's take things one final step further and go full Frankenstein.

What if in 900 cases the self driving software is completely blameless.  Say the fatality is caused by a catastrophic mechanical failure or a lightning strike or whatever, anything that lets the self driving technology completely off the hook.  But now what if in the remaining 100 fatalities it turns out the self driving technology has done something crazy, something that by no stretch of the imagination is what it should have done.  And now what if the software people and the hardware people go over everything with a fine tooth comb and can find nothing wrong.  They are completely baffled as to why the self driving technology apparently actively decided to kill someone.  Then what?  Well the system could be turned off.  But that would raise the fatality rate from 1,000 to 30,000.  So that can't be done.

My point is that it is actually pretty easy to create a credible scenario where people are not able to figure out what is going on but something bad seems to be going on but there are good reasons why the system can't be turned off or even reverted back to an older version.

I don't know exactly what "sentient" means.  I don't think sentience will manifest itself in some kind of unambiguous "it's alive" moment.  And what exactly does it mean if you say that the computer has "taken control of its own destiny"?  Many machine learning systems already in use evolve their behavior as they process additional data.  Certainly computers are currently able to make decisions and take actions in the real world based on those decisions.  But are they self aware?  I don't know.  Does it make any difference?  I don't know.  The best I have is that at some point well after the fact we may look back and decide that at some previous point something important changed and as a result we are not in complete control any more.

Is that a prediction?  I guess it is.