Computers and computing (2)

In this series of posts about computers and computing, it is worth considering some of the history of the technology and the way things used to be.


The first computers were real live people who solved equations and performed other lengthy calculations for scientists and engineers. The technology available to them included mechanical and electromechanical calculators as well as slide rules. The Manhattan Project employed hundreds of "computers" to support the design of the first atomic bombs.

Then came electronic computers. Even though the transistor - the most critical component of any computer - was invented in 1947, the process of miniaturisation and cost reduction took decades. By 1957, however, the cost of transistors (a "transistor radio" given to me as a birthday present that year had exactly three transistors - each the size of a thimble) had finally dropped enough that they had become competitive with vacuum tube technology.

The earliest electronic computers enabled scientists, at least in well funded applications such as nuclear weapons and reactor design, as well as the space program, to dispense with their armies of living "computers".

As much as any organization, NASA is responsible for driving computer miniaturization and improved performance during the 1960s. The cost of moving mass to orbit - and even more so to the moon - was so high that saving ounces mattered. Minimizing the use of electrical power was another critical objective. Replacing vacuum tubes with transistors saved space and mass while reducing power consumption and increasing reliability. We take the extreme miniaturization of transistors for granted now but there was no reason to do so then.

Even so, it took until the early 1970s for the first electronic calculators to become affordable for consumer use. I recall buying a basic four function calculator (with a memory) in 1974. The cost, then, was approximately $200. Using today's depreciated currency, that would be equivalent to about $800!

I bought my first personal computer in 1982. It was an Osborne 1 whose operating system was one of the many versions of CP/M. It was slow - taking as long as 15 seconds to save a ten page document - but for a writer whose typing skills were less than stellar, the ability to edit and revise a document without spending hours retyping, was the major benefit. Easy correction of spelling errors was a bonus. More important than being a word processor, however, the Osborne 1 was capable of running one of the early spreadsheet programs.

Since much of my work was, and still is now, the provision of advice and assistance to entrepreneurs, the use of this newly available tool provided me with major productivity and quality improvements. No longer was I forced to create financial projections on 14 column spreadsheet pads where, since errors were inevitable, the work was done in pencil and losing one's eraser was a disaster!

As annoying as the modern computer - and the uses to which it is put - can be, it is hard to imagine returning to the days of typewriter, pen, paper, and pencil. What we now regard as historical curiosities, with minimal capabilities, still provided major productivity improvements.

Computers and computing (1)

Not until 1945 did the term computer begin to refer to a machine. Before that, a computer was a person, for some reason generally female, who solved equations and did calculations by hand or, more often, using a mechanical calculator and a slide rule.

People as computers, although no longer referred to by that name, survived for many years after the invention of the electronic computer.

In 1965, I worked at the Special Projects Laboratory at the Zinc Corporation in Broken Hill, New South Wales. After a day running our experimental equipment, we would spend the next day, sometimes longer, calculating the results.

Two of us, using different technologies, performed the calculations. One sat at a desk, using an electromechanical calculator to do addition and subtraction while scribbling down the interim results. The other person, standing behind the desk so that he could read the interim results, would use a slide rule to do the necessary multiplications and divisions. Then the interim results from the slide rule were written down so that they could used for the next set of additions and subtractions. After a while, we switched positions.

It all took a very long time. Because of the intrinsic limits on the accuracy of a slide rule, as well as the lack of a printed record to catch input errors, the accuracy and precision of the results was usually OK but no better than that. Ensuring quality required that the calculations be repeated to check their accuracy.

Had a personal computer been available, running an early spreadsheet such as VisiCalc, only one person would have been needed. Work that formerly required two man days could have been completed in an hour or two with greater accuracy.

Those who long for the "good old days" neglect the fact that highly qualified scientists and engineers spent far too much of their time just performing very routine calculations. If they did not do the calculations themselves, then they were expensively supported by a small army of living and breathing "computers".

There are few recent innovations that have contributed as much to increased productivity - and therefore wealth - than the invention of the electronic computer and the demise of its flesh and blood predecessor.

Where next for the Republican Party?

Three obsessions come to mind when one hears the term 'Republican Party'. They are abortion, gay marriage, and tax cuts.

While opponents of the first two, and proponents of the latter, are passionate about their causes, these issues alone are far from sufficient to win elections or, having won, to govern.

All of us would rather pay less in taxes. However, even if taxes are increased to the rates proposed by President-elect Obama, the effects on incentives will be trivial. Compare his proposals to the situation that existed prior to the Kennedy tax cuts of 1964 when the top income tax rate was 91% (not a typo). The top tax rate remained at an extortionate 70% level until the Reagan tax cuts of 1981.

Abortion and gay marriage simply do not resonate with the part of the electorate which would rather have the government stay out of its personal business. Many such citizens are naturally inclined to support Republicans but regard freedom from government regulation as paramount.

That a center right electorate should entrust the Presidency to a very left of center liberal merely emphasizes the intellectual bankruptcy of the Republican Party.

Senator Barry Goldwater's defeat (losing all but six states) in 1964 was more comprehensive but marked the real beginning of an intellectual and philosophical renaissance which culminated in the election of President Reagan. The defeat of the Soviet Union and the destruction of the conventional wisdom that confiscatory taxes were legitimate can both the attributed to the fact that the Republican Party's actions and policies were underpinned by a political philosphy rather than a mere desire to wield power.

Republicans will not soon regain the White House, the Senate, or the House of Representatives until they are seen to stand for something positive. There is an almost endless list of difficult issues - relations with other nations, radical Islam and terrorism, poverty at home, health care, climate change and energy to name only a few - that demand the development of serious policies. Mere opposition to left wing conventional wisdom will not be sufficient.

It is not obvious who will lead (there is no clear successor to William F. Buckley) but there is a very big question that needs to be answered.

What do we Rebublicans believe America stands for - at home and abroad?

Enough stuff?

The election is over although some votes remain to be counted and the results of three Senate races are still unknown.

Meanwhile, the state of the economy may be indicating that old ways are coming to an end. Certainly, the tasks facing us - and our newly elected politicians - will require new ways of thinking. Albert Einstein put it well when he said: "The significant problems we face cannot be solved at the same level of thinking we were at when we created them."

Since the end of World War II, economic growth in the United States, and the developed world, has been driven by consumers. For the past twenty five years, unrestrained consumer spending has been supported by a flood of credit card and mortgage debt. The idea of "buy now, pay later" became quaint and old fashioned compared to the apparent reality of "buy now, never have to pay at all".

An economy driven by ever increasing consumer spending is a house built on sand. As shown in the retail sales numbers (almost all major chains are reporting sharply lower sales), the financial storm of excess debt is threatening to wash away the "more" culture. While there are many in our country who live in poverty, most of us have far more "stuff" than we really need. The danger that our possessions, and our expensive activities, will come to own and define us is all too real.

The transition from a society of borrowers and spenders to one of producers and savers will not be easy. If we make it successfully - and there are no guarantees - the greatest benefit will be time to spend with family and friends, or in reflection, rather than existing on a treadmill that takes us from work to store and back again.

President Eisenhower, reflecting on a past period of economic turmoil, summed up the situation this way: "Some people wanted champagne and caviar when they should have had beer and hot dogs."

Socrates, during his trial for heresy, indirectly made the case for time with this remark: "the unexamined life is not worth living."

Frugality and modesty are the heresies of the consumer culture. In the long run, however, intangibles - friendship, love, service, the acquisition of knowledge, and the time to enjoy all of these - are likely to add far more quality to our lives than the mindless acquisition of "more stuff".

After losing the election...

Many politicians concede defeat without much grace. Here are two remarks that, although lacking grace, are worth repeating:

"You may all go to hell and I will go to Texas." Davy Crockett (conceding defeat in his 1835 re-election bid for the U.S. House of Representatives from Tennessee)

"The people have spoken, the bastards." Rep. Morris Udall (on the collapse of his Presidential Campaign in 1976)

Senator McCain's concession speech demonstrated his genuine concern and love for our country. Parts of it are also worth repeating:

"Senator Obama and I have had and argued our differences, and he has prevailed. No doubt many of those differences remain. These are difficult times for our country. And I pledge to him tonight to do all in my power to help him lead us through the many challenges we face.

I urge all Americans who supported me to join me in not just congratulating him, but offering our next president our good will and earnest effort to find ways to come together to find the necessary compromises to bridge our differences and help restore our prosperity, defend our security in a dangerous world, and leave our children and grandchildren a stronger, better country than we inherited.

Whatever our differences, we are fellow Americans. And please believe me when I say no association has ever meant more to me than that. It is natural. It's natural, tonight, to feel some disappointment. But tomorrow, we must move beyond it and work together to get our country moving again."

Now that the election is over, the Republican Party must determine what it stands for and who will lead it.

President Bush and Vice President Cheney pushed socially conservative policies, exhibited an authoritarian approach to the problems of terrorism and jihad, alienated our allies, and successfully subjugated the national interest to the short term desires of large corporations - all with an irritating attitude of self-righteousness.

They have severely damaged the party and created a recipe for electoral defeat far into the future.

The Republican party could once be described as encompassing a wide range of generally conservative views. Now, as our nation appears to be more polarized than ever, old style moderate Republicans, who can also appeal to Independents and dissatisfied Democrats, appear to be increasingly unwelcome. In opposition, the party must be aware of the error, albeit on the other edge of the political spectrum, of the British Labor Party whose 1983 manifesto (platform) espoused such extreme views that it was trenchantly described as the longest political suicide note ever written.

The party also needs a leader. It is not clear who will emerge but Governor Palin, an ill-educated, uninformed, quasi-rock star with no coherent political philosophy, is not the leader that our nation, or the party, needs.

Senator Obama's victory...

It is not strictly accurate to describe Senator Obama as President-elect until after the Electoral College meets in December. Nevertheless, all else being equal, he will be our next President so, in spite of my usual insistence that words be used with a certain level of precision, I intend to grant him the courtesy of the title.

In his acceptance speech, President-elect Obama was gracious and said many of the the right things. Particularly:

So let us summon a new spirit of patriotism; of service and responsibility where each of us resolves to pitch in and work harder and look after not only ourselves, but each other. Let us remember that if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers – in this country, we rise or fall as one nation; as one people.

Let us resist the temptation to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long. Let us remember that it was a man from this state who first carried the banner of the Republican Party to the White House – a party founded on the values of self-reliance, individual liberty, and national unity. Those are values we all share, and while the Democratic Party has won a great victory tonight, we do so with a measure of humility and determination to heal the divides that have held back our progress.

As Lincoln said to a nation far more divided than ours, “We are not enemies, but friends…though passion may have strained it must not break our bonds of affection.” And to those Americans whose support I have yet to earn – I may not have won your vote, but I hear your voices, I need your help, and I will be your President too.

President-elect Obama is young and his political experience is limited. He will be sorely tested in the early days of his term in office and we must hope that he, his cabinet, and his staff will be up to the task. If he is serious, however, about changing the nature of American politics, he will have to pass a major test before he even takes office.

That test is whether he can bring to heel the Democratic Party's icons of the old, vicious, partisan politics.

These icons are Speaker of the House Nancy Pelosi (D-CA) and Senate Majority Leader Harry Reid (D-NV). It is all too likely that they will try to ignore the reality that the size of the party's victory in the Presidential, House, and Senate races owes much to the intense disapproval of President Bush' record and little to the performance of the Congress since their party won back control in 2006.

That they will have the votes to pass number of very liberal (this is an Orwellian euphemism for left wing) programs is clear. That they will voluntarily exercise restraint is less so. We must hope that President-elect Obama can lead the whole of his party rather than just the part of it that controls the Executive Branch

The world would be well served if politicians, and citizens, were to remember that restraint is often - admittedly not always - the best course of action even when the right, the power, or the votes exist to act unilaterally.

Election Day

I voted today. The lines were long and absentee, or 'early', voting might have taken less time. On the other hand, I consider voting to be a community, not a solitary, affair.

Since the choices were quite unpalatable, I held my nose (not too hard because I didn't want to hurt myself), and voted against those that I did not like. On the other hand, in Alexandria, Virginia, we were spared the avalanche of Questions, Initiatives, and Constitutional Amendments that afflicts voters in many - mostly western - states.

We usually exhibit a spectacular lack of trust in our politicians - often expressed by permitting laws to be passed by Initiative while also requiring some spending and borrowing to be approved by the voters. That is no bad thing although obsessive single issue voters may have more influence than we might like.

The initiative process becomes a problem when Constitutional Amendments appear on the ballot. Constitutions should concern themselves with process not policy. Matters that are properly addressed by constitutions include the organization of government and its method of operation, the powers granted to the government, the limits of government power and the rights and obligations of citizens. When constitutions stray into matters of policy, trouble often ensues.

That was certainly the case when the Volstead Act, which legislated Prohibition, became nearly graven in stone with the ratification of the 18th Amendment in 1919. The damage to society caused by organized crime - and by turning ordinary citizens into criminals - was recognized quite quickly. Prohibition, however, could not end until the Congress finally proposed the 21st Amendment in February 1933 and it was ratified by the states in December 1933.

Legislation that turns out to be bad or misguided can be repealed - and the authors evicted from office. It is hard to repeal ill thought out Constitutional Amendments and even harder to hold the authors responsible. Better, then, to avoid entrenching policy decisions in Constitutions.

Upcoming election (3)

Very high turnout is predicted for our upcoming election. While many will go to be polls, at least by American standards, many other countries consider our efforts to be somewhat lacking.

There are far too many citizens who do not bother to vote because of laziness or lack of interest, work and family obligations (even though absentee or early voting is available), an inability to make a decision, a mistaken belief that their vote will not count, or just plain disgust with all of the candidates.

For an American citizen, voting is a right. As a naturalized American, I consider voting to be my duty. Even if I am appalled by every single candidates, I will still vote although I may just write "none of the above" or some other more creative insult on my ballot

See you at the polls tomorrow.

Upcoming election (2)

As the election approaches, we may be tempted to think that we are seeing the light at the end of the long dark tunnel of President Bush's miserable tenure.

Don't be so certain. There is an all too strong possibility that we are actually seeing the headlight of an oncoming locomotive.

The probability that Senator Barack Obama will be our next President is high. Although lacking age and experience, he does say some really good things. That some of those things are very politically incorrect only adds to his appeal.

He may also share President Ronald Reagan's ability to attract, and listen to, some really competent advisers. Of note are Paul Volcker (former Chairman of the Federal Reserve Board), Robert Rubin (former Treasury Secretary in the Clinton years) and Warren Buffet.

Perhaps he will be able to attract an equally strong foreign policy team. Certainly former Secretary of State Colin Powell's endorsement provides some encouragement.

The real dangers of an Obama Administration will appear if the likely results in Senate and Congressional races come to pass.

There is a high probability that the that the new Democratic majority in the House of Representatives will be such that controversial, and highly partisan, legislation can be passed without the need for serious discussion or compromise. In the Senate, it is also likely - although not guaranteed - that the Democratic Party will have a filibuster-proof majority of 60 or more votes. These majorities will permit the Democratic Party to impose its will on the nation with little need for reasoned discussion or compromise.

This sort of power, in the hands of honorable and substantial Senators and Representatives, is dangerous. When the likely wielders are highly partisan lightweights such as Speaker of the House Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Appropriations Committee Chairman Harry Byrd, the Chief Porker of Legislative Branch, we have good reason to worry.

Worse, Senator Obama, if he is President, is likely to be sparing in his use of the power to veto such legislation.

Much as I am disappointed in Senator McCain, and appalled by Governor Palin, I shall hold my nose and vote for divided government. It works at least as well as, and usually better than, a government where one party controls both the White House and Capitol Hill.

Upcoming election (1)

As we approach Election Day on Tuesday, it is important to remember that, as well as voting for President and Vice President, we also elect all of the Members of the House of Representatives and one third of the Senate.

Given the Congress's pathetically poor performance (polls give it an approval rating even lower than that of President George W. Bush) over the past eight years, Oliver Cromwell's 1649 dismissal of the Rump Parliament is worth considering:

"You have sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go"!

If in any doubt, then, vote against the incumbent.

Healing - or just business?

Recently The George Washington University Hospital mailed me an eight page full color entitled “Health News”.

The title was about as misleading as it could be.

Providing real news about health issues is useful, but this was not news. Excluding the small part of the back page used for my address, the entire publication consisted of advertisements for services offered by the hospital. Six pages were devoted to surgery and physical therapy for back and neck pain, one page to listing upcoming “seminars” which were clearly designed to drum up business, and the remaining two thirds of a page offered membership in their ‘Senior Advantage’ program (whatever that may be) as well as breast cancer screening with the latest and greatest [really expensive] technology.

Infomercials on television are clearly labelled as 'Paid Programming'. This publication was nothing more than an unidentified advertisement designed to sell expensive procedures and services. All it will really do is contribute to the current excessive consumption of medical products and services.

Perhaps the idea of doctors as healers, above all else, is naive and old fashioned. Sadly, the current situation seems to be that most organizations and individuals are in the health care business for financial reward.

Really low interest rates

Interest rates are extraordinarily low and the Federal Reserve is keeping them that way. Yesterday the Fed lowered the target rate, otherwise known as the Federal Funds Rate, for overnight interbank lending to 1.0%.

The commentariat talks about the help that low interest rates provide to commercial and individual borrowers but largely ignores a group that suffers severely from interest rates significantly below the rate of inflation. That group is composed of savers – many of them elderly – who wish to avoid risk and who keep their money in FDIC insured bank accounts, money market funds, and certificates of deposit.

It is not just individuals, either, that are being punished. Many small businesses, clubs, condominium associations and other non-profit organizations have cash reserves which may be needed at short notice (liquidity) and safe (FDIC insured). The interest rates offered to these groups can best be described as pathetic.

Low interest rates transfer wealth from the prudent and thrifty to borrowers - some of whom are far from prudent.

Worse, everyone has agreed to pretend that all interest is real income, on which tax can justifiably be levied, when a large part of it is merely compensation for the declining value of money.

Since governments tax the nominal return, rather than the real (i.e. in excess of inflation) return, the result, except in extraordinary times, is a distorted wealth tax - rather than an income tax - with rates that increase with the inflation rate. So, in addition to the destruction of wealth caused by inflation, savers incur real tax bills on phantom income.

We may hope that Federal Reserve Chairman Ben Bernanke has learned from the mistakes of his predecessor. His objective must be to return interest rates to a normal level as soon as the present panic has ended. Since it is unlikely that the "geniuses" of Wall Street have learned any long term lessons, the risk of yet another asset price bubble is high if he does not.

The conviction of Senator Stevens

There is little doubt that Senator Stevens (R - Alaska) is a nasty piece of work who deserves everything that he is going to get. His conviction, on seven counts of felony corruption, is an outrage but not the only one.

That the voters of Alaska should have elected and re-elected such an obviously corrupt person is the first outrage. As citizens and voters we have a duty to our country to reject those whose sole objective is to raid the Federal treasury for our parochial benefit. We have all too few Senators and Representatives who are willing to act in the interests of our country as a whole.

Senator Stevens's relatively minor crime of lying on his financial disclosure forms is, I suspect, only the tip of the iceberg.

That, however, is not the point.

Think about the prosecution of Al Capone who, in 1931, in spite of his long history of racketeering and violence, was tried and convicted of the relatively minor offense of tax evasion because prosecutors were unable (or unwilling) to address the real crimes. Mr. Capone was also a person who deserved everything that he got but, as in the case of Senator Stevens, the outrage is that the power of the state is used to "get" an undesirable rather than to seek real justice.

A third issue in the trial of Senator Stevens is prosecutorial misconduct. Withholding potentially exculpatory evidence and encouraging false testimony, as happened in this trial, is another outrage.

The founders of our nation had little trust in the government's ability to wield power. We, in our turn, must constantly demand that the government's use of power conform to both the letter and the spirit of the Constitution.

Thomas Jefferson warned us about granting too much power to government:

"A government big enough to give you everything you want, is strong enough to take everything you have."

Theodore Roosevelt, were he still alive, would have understood Senator Stevens:

"When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty'."

Voting for a warmonger?

Those who consider that John McCain, if elected President, will be a warmonger should consider his experience.

His war (Vietnam) began as a pilot, insulated from the particular horrors of ground combat and able to sleep between sheets each night. It ended with five years as a prisoner of war enduring, without a break, torture, untreated wounds, and solitary confinement for longer than most of us can imagine.

This simple statement sums up his philosophy:

"War is wretched beyond description, and only a fool or a fraud could sentimentalize its cruel reality."

The last President with a real understanding of war was Dwight Eisenhower. His aversion to war was as real as his determination to defend the interests of the United States. War was to be avoided but never to be ruled out if truly necessary.

I believe that Senator McCain will, if elected, follow this same path.

Surviving the financial storm

As we try to make sense of economic conditions - now and in the future - there will be more than enough comments and advice from the pundits.

My only advice is that a high degree of scepticism is warranted. After all, these are the people who failed to see that a bubble existed and that it would burst - sooner rather than later.

These words from economist John Kenneth Galbraith are worth considering:

"The only function of economic forecasting is to make astrology look respectable."

Enough said!

Medicine and the market

There are a number of conditions necessary for a market to operate effectively. Among them are these:

• there is a provider who is paid and a buyer who pays;
• the buyer has as much access to relevant information as the seller;
• the costs and benefits associated with the goods or services in question are reasonably clear and available to the buyer.

On November 4, Arizona voters will be asked to approve a Constitutional Amendment (Proposition 101) which is designed to prevent, in Arizona, the implementation of a possible future National Health Service, as in the United Kingdom, or a single payer system as in Canada.

Proposition 101's premise is that the market is the most efficient way to allocate resources. The current financial crisis, however, casts considerable doubt on such a belief.

The exact text is this:

ARTICLE II, SECTION 36. Because all people should have the right to make decisions about their health care, no law shall be passed that restricts a persons freedom of choice of private health care systems or private plans of any type. No law shall interfere with a person or entity's right to pay directly for lawful medical services, nor shall any law impose a penalty or fine, of any type, for choosing to obtain or decline health care coverage or for participation in any particular health care system or plan.

Leaving aside the dangers of writing policy, rather than process and organization, into a constitution, there is little in the way of a working market for medical products and services:

• patients, who are purportedly the buyers, do not pay for the majority of the goods and services delivered by the sellers: insurance companies and government (Medicare, Medicaid, Veterans Administration and TriCare) are the primary payers;
• the uninsured pay little for the care provided through emergency rooms. Costs are shifted to those who can pay.
• few patients have the information, or the ability, to evaluate the merits of any proposed course of treatment.
• the more that sellers "do" to the buyer, the more that they get paid.
• doctors' actions are driven partly by remembered knowledge which may no longer be accurate or complete, partly by patient demands - fueled by direct to consumer advertising, partly by self interested desires for higher incomes, partly by "conventional medical wisdom", partly by fear of tort lawyers, and all too rarely by scientific evidence.

Proposition 101 is intended to perpetuate the present dysfunctional system. Arizona voters should vote 'No'.

The current payment system is largely socialistic - not free market - because it relies on pre-paid medical care plans rather than insurance (a catastrophic, high deductible, plan is real insurance), on government payments, and on cost shifting.

Market failures come about when one person (the doctor or seller) decides what is to be done to a second person (the patient or buyer) who has inadequate information and knowledge to evaluate the proposed course of action. Asymmetry of information is a primary cause of inefficient markets and leads, with few exceptions, to overpayment by customers. Any used car salesman from the pre-Internet era will attest to that!

(In the interests of full disclosure, I did sell used cars - and learned many interesting lessons - for a while in 1971.)

The biggest reason for market failure, however, is that a third person (government or insurance company) pays but has little to say about the cost effectiveness and value of the proposed therapy. Since patients do not pay, they have no financial incentive to seek out the most cost effective treatment. When insurance companies deny reimbursement for treatments that they consider unnecessary or ineffective, they are universally condemned for their heartless behavior.

Politicians who maintain that a free market system can address the woes of the present medical care system are either uninformed, lying, or merely stupid. Our present system is broken and, in the long run, unaffordable. There are surely good reasons why every other civilized country has a universal health care system. Almost all of them - Canada is a notable exception - permit private payment.

The need for leadership is critical. Perhaps, Senator Obama or Senator McCain (whichever is elected next week) will dare to challenge the conventional wisdom, the sterile ideology, and the special interests. Medical care costs will, sooner rather than later, swallow our economy. This must be a priority for our next President.

I may be naively optimistic that either of these two politicians will challenge the special interests over the structure of a sector that accounts for approximately one sixth of our economy. The American model, unfortunately, delivers worse results than the much less expensive and more effective, but "socialist", European models. Given, however, that Senators Obama and McCain appear to be men of intelligence and integrity, we can hope.

At my age, I have little at stake in the decision. I will likely be in another place before the crisis reaches its full flower. I do, however, feel a moral obligation to the next generation, so I will continue to encourage. Others may describe it as nagging, but I beg to differ.

A curiosity of colors

In most countries, the color associated with left wing or socialist political parties is red. Blue is the color most often associated with right wing and conservative parties.

Why, then, do political commentators in the United States refer to Republican majority states as 'red' and Democratic majority states as 'blue'?

Given the Republican Party's hatred of communism and disdain for socialism - even the social democratic version found in Europe - why would it accept being tagged with the color made infamous by the Soviet Union and the People's Republic of China?

Definitely a head scratcher!

The evolution of language - Machiavellian

The meaning of language evolves and the term Machiavellian is now used to describe politicians, and others, who engage in underhanded and manipulative behavior.

Niccolo Machiavelli's http://tinyurl.com/hvct3 most famous work 'The Prince' was published in 1532. Although embodying a realistic and cynical approach to power, it was not an instruction book for self serving or gratuitous political manipulation. While it is certainly a primer on gaining and keeping power, most of the book offers critical lessons on the practicalities of governing.

Senator Obama promises us 'change' and Senator McCain offers 'reform'. The one that is elected will need to understand the realities that prompted Machiavelli to write these words:

"And one should bear in mind that there is nothing more difficult to execute, nor more dangerous to administer than to introduce a new system of things; for he who introduces it has all those who profit from the old system as enemies, and he has only lukewarm allies in all those who might profit from the new system."

Strategic thinking...

Too many politicians - and business people - engage in very sloppy thinking driven by emotion and preconceived ideas. What is really needed is a thoughtful consensus on where we want to go before we try to decide what to do.

Lewis Carroll, in the classic 'Alice in Wonderland' defined the problem better, and more succinctly, than any of the management gurus who opine on strategy:

"Alice came to a fork in the road. 'Which road do I take?' she asked. 'Where do you want to go?', responded the Cheshire cat. 'I don't know.' Alice answered. 'Then,' said the cat, 'it doesn't matter.

If you don't know where you are going, any road will get you there."

Enough said!

More on sailboat racing...

I cannot think of a better lifetime sport than racing sailboats.

The enormous number of different boats that can be - and are - raced, means that, with appropriate changes of equipment, and some applications of cash, it is possible to compete effectively until one is really very ancient.

Part of this is because sailboat racing requires both physical and mental talents. As the boats get bigger, crew members must specialize. Those whose physical skills are not what they used to be are often very welcome for their understanding of weather, tactics, and rules.

And, so long as you don't insist on being the boat owner, the cost of racing is not high!

As I have previously discussed, I am a double leg amputee. I am still an active racing sailor (aged 62) and intend to continue for many more years. As a person with a significant disability - at least according to conventional medical wisdom, one of the really important things is that I can compete against able bodied sailors, under the regular rules of the sport, with no quarter given - or asked.

I just don't know of any other sport that permits this. Wheelchair basketball players are superb athletes but effective competition in the able bodied world, against even a modestly competent High School JV team on its feet, is impossible. Basketball is a sport in which lack of height is too important to be overcome. Without legs, competitive golf becomes really difficult: for those with spinal cord injuries, it is all but impossible.

In sailing, however, we can win if we are good enough. This is proven by three World Champions in the [open single-handed] 2.4 Meter Class http://www.inter24metre.org/ in the past twelve years. At the time of their victories, one was an arm amputee, one had Lou Gehrig's Disease (ALS), and the third Friedrich's Ataxia. There have also been several winners of open events in the Sonar Class. Those are only a few of the successes of sailors with disabilities competing against the world.

To borrow a slogan from the PGA Tour: "These guys [and gals] are good."

If you are interested in more information, try checking out these sites:

International Association for Disabled Sailing (IFDS)
http://tinyurl.com/IFDS2008
US SAILING - Council for Sailors with Disabilities
http://www.ussailing.org/swd/
Sonar Class Association
http://www.sonar.org/

Manwhile, sail fast and, if you haven't tried it yet, come and join us.

Sailing and sailboat racing

For the past three days I have been in Florida attending the annual meeting of US SAILING (http://www.ussailing.org). Mostly we are focused on sailboat racing, which is an Olympic - and Paralympic - sport, but there is a significant part of our work that just involves getting people out on the water.

That I should choose to spend my leisure time racing a form of transportation that clearly became obsolete when James Watt invented the steam engine might seem strange. But no stranger, perhaps, than the activities of those who use a variety of sticks to propel a little white ball into a very small hole located hundreds of yards from the starting point. That sport, of course, is golf!

Whether we race, cruise gently from here to there, or venture out into a too-large ocean in a too-small boat, these words written by Kenneth Grahame in the classic children's book "The Wind in the Willows" http://tinyurl.com/6lt38z sum up, better than anything that I can write, the reason why we do it:

“There's nothing . . . absolutely nothing . . . half so much worth doing as simply messing around in boats” .

Too good to be true...

An old adage, ignored by too many, is that if something seems to be too good to be true, it probably is. The latest example is "Joe the Plumber" who, after an encounter with Senator Obama over taxes, became the poster boy of the McCain-Palin campaign.

Now it turns out that "Joe" isn't a real plumber and owes nearly $1,200 in back taxes to the State of Ohio. Not exactly a prizewinning poster boy!

Senator McCain, and his advisers, should have been much more cautious when faced with an opportunity that really was too good to be true.

A brief break from pandering

After listening to part of the Presidential candidates' debate, and reading the entire transcript, I have a question.

What was Senator Obama thinking when he made this statement during the Presidential Candidates debate on October 15?

"But what is absolutely true is that, once we get through this economic crisis and some of the specific proposals to get us out of this slump, that we're not going to be able to go back to our profligate ways.

And we're going to have to embrace a culture and an ethic of responsibility, all of us, corporations, the federal government, and individuals out there who may be living beyond their means."

That politicians should ever suggest that Americans are less than perfect, and may not be able to 'have it all - right now', has become so politically incorrect that few dare to say so. Then, in his response to the final question about education, Senator Obama went on to commit another monstrous political incorrectness:

"But there's one last ingredient that I just want to mention, and that's parents. We can't do it just in the schools. Parents are going to have to show more responsibility. They've got to turn off the TV set, put away the video games, and, finally, start instilling that thirst for knowledge that our students need."

Thank you, Senator, for those moments of honesty and leadership.

Sadly, nothing that Senator McCain said came close to those remarks.

Education and Prosperity

The mix of jobs, and the skills required, in the U.S. economy is now such that most high school graduates - let alone those who drop out - can no longer aspire to a comfortable middle class income.

As a result, higher (college/university) education has become a necessary precondition for most well paying careers - and for many modestly paid ones as well. Unfortunately, higher education is both overpriced and not very responsive to student needs. For the list price of an undergraduate education at Harvard University, for example, to be $50,000 per year is extraordinary. That most of the teaching is delivered by ill paid graduate teaching assistants is outrageous.

While teaching should be the primary mission, it is a low status activity. Faculty members, with a few honorable exceptions, focus on research and regard teaching as beneath their dignity.

Nothing much has changed since Adam Smith penned these words more than 200 years ago:

"The discipline of colleges and universities is in general contrived, not for the benefit of the students, but for the interest, or more properly speaking, for the ease of masters."

Another quote worth considering comes from John Ciardi:

"A university is what a college becomes when the faculty loses interest in students."

It will take years to change the culture but change is critical.

Leadership

U.S. Marines have a saying: "lead, follow, or get out of the way".

Are you listening Senators McCain and Obama? Congressmen and Congresswomen? Senators? Politicians at all levels?

Voting for Senator McCain

According to press reports and opinion polls, the McCain-Palin campaign is running well behind that of Obama-Biden. In a current Washington Post - ABC News poll, Senator Obama is ahead by 53 - 43 percent among "likely" voters. Even if that is reduced to account for the "Bradley" effect (the tendency for people to say they will vote for a black candidate while having no such intention), the prospects for Senator McCain's election are beginning to look poor.

Include me among the very disaffected McCain supporters although I am not yet on Senator Obama's side of the ledger.

I live in Virginia, which is now a swing state, so my vote should be important. I describe myself as an old fashioned Republican who believes in strong defense, economic conservatism, and social tolerance. Having some eduction as an economist, I have grave reservations about totally unfettered markets although substantial and intrusive government control is equally unpalatable.

If it is true, as reported in the current issue of Time Magazine, that Virginia GOP Party Chairman Jeffrey M. Frederick compared Senator Obama to Osama bin Laden, it is an outrage. (For those who have not seen the reports, Mr. Frederick is quoted as having said that Obama and bin Laden both have friends that bombed the Pentagon.)

Governor Palin, aside from her inexperience and lack of knowledge of both international and national affairs, is playing a major part - directly and as a cheerleader - in the barrage of negative attacks. That pit bulls, even those with lipstick, can be dangerous to their owners should be well known.

If Governor Palin were to withdraw from the ticket - no matter how feeble the excuse - the likelihood that I would vote for McCain would rise significantly. However, if Senator McCain really wants my vote, his campaign must drop the negative attacks and return to discussing policies. Leadership is Senator McCain's greatest strength and the primary reason to vote for him. Leadership also includes taking "pander" off the menu.

Maybe Senator McCain just doesn't care about my type of Republican. For the sake of our country, and the Republican party, I hope not.

At the moment, I am undecided but leaning slightly to McCain. Odds on my vote are are 25% McCain, 70% stay home, and 5% Obama.

Freedom and Security

As we approach the Presidential election, there is little doubt that the current financial crisis is the most important topic. In all of the discussions, however, the impositions of the state, in the name of "security", are being neglected by the candidates.

Freedom must take priority over even the economy. If the candidates are serious about leading - as opposed to just getting elected - they should discuss their approaches to balancing the inherent, and unresolvable, conflicts between security and freedom.

These words spoken by Louis Brandeis, Associate Justice of the United States Supreme Court from 1916 to 1939, should be in the forefront of our minds:

Experience teaches us to be most on our guard to protect liberty when the government's purpose is beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.

Senator McCain and mortgages

Senator McCain wants taxpayers to help “homeowners” who are behind on their mortgage payments and facing foreclosure. This help would consist of the government acquiring, at face value, unaffordable mortgages which then, presumably, would be restructured at a significant loss to the taxpayer.

It is bad enough that the majority of these troubled mortgages were taken out by the greedy and irresponsible: they deserve much of what is happening to them. Far worse is that Senator McCain is proposing to make whole the overpaid, incompetent, idiots who lent the money in the first place or, later, bought the toxic securities allegedly backed by these mortgages.

So, pray tell, what is to become of real homeowners who saved their money, made a substantial down payment, and have been, faithfully and honestly, making payments every month? Is anyone offering them any help? Why do I ask? The answer is a resounding "no".

Senator McCain knows about responsibility and honesty. He should be upholding the former standards of the now derelict Straight Talk Express. Many of us who pay our bills - and our taxes - on time have become truly disgusted by his pandering to the incompetent, to the greedy, to the irresponsible, and to the corrupt.

Financial Panic

Is there a leader in the country who can address the financial panic? Who will address the causes of the nightmare?

Looking to President George W[orthless] Bush is fruitless. He is the lamest of lame ducks - even though his successor has not yet been elected.

If anyone is to restore calm to the markets, it will have to be the Presidential Candidates who have yet to get beyond platitudes, partisan attacks - aka mudslinging, and ideological accusations. We need someone to step up and tell us the truth. That is the definition of a leader.

Peggy Noonan, in her column in the Wall Street Journal (a subscription site but almost worth it just to read what she writes http://online.wsj.com/public/article/declarations.html) quotes Senator Tom Coburn (R-OK) who is one of the fiercest opponents of out of control spending:

"Neither party has clean hands. Or rather, both parties have dirty hands. Here is the truth, spoken by the increasingly impressive Sen. Tom Coburn: 'The root of the problem is political greed in Congress. Members . . . from both parties wanted short-term political credit for promoting homeownership even though they were putting our entire economy at risk by encouraging people to buy homes they couldn't afford. Then, instead of conducting thorough oversight and correcting obvious problems with unstable entities like Fannie Mae and Freddie Mac, members of Congress chose to . . . distract themselves with unprecedented amounts of pork-barrel spending.' That is the truth."

Ms. Noonan goes on to say:

"Why would anyone trust either [Presidential] candidate to help dig us out of this if they can't speak frankly about what got us into it?

One had the sense this week that our entire political class is playing Frisbee on the edge of a precipice, that no one is being serious enough, honest enough, that it's all too revved, too intense, and yet too shallow."

It is hard to put it better.

Fools and the financial crisis

When trying to understand the current financial crisis, ignore greed: that is a given and doesn't change much from one century to another.

The purpose of regulation is to restrain greed, at least partially, while protecting us from excessive folly. This time there was too little regulation and much of what was in place was poorly designed.

The ultimate causes of the financial crisis were the actions of fools:

• individuals and families who bought more home than they could afford.
• the same people who did not have the knowledge or common sense to refuse outrageous and risky mortgage terms.
• the same people who knew that the terms of their mortgages were outrageous and risky but took them anyway believing (hoping?) that they could refinance later.
• the bankers who forgot that cash flow is the source of loan repayment and that the assets which secure loans are merely safety nets to be used in case of default.
• the bankers whose credit standards fell lower than a cheap whore's underwear.
• The Wall street geniuses who created one way bets but forgot that these bets are supposed to make them the winners - always - and never the losers.
• The ratings agencies (Moody's, S&P, Fitch) who tried, and failed, to turn manure into roses and fooled us all for a while.
• All of us who ignored the smell of rotting manure and trusted the ratings agencies for too long.
• The speculators who traded funny paper (their name for it was toxic waste) without understanding what they were doing other than just trying to profit from price changes rather than investing in true value.
• The speculators who bought this toxic waste - securities built on borrowed money - with more borrowed money until the whole system was so fragile that a barely perceptible breeze could, and did, bring down the house of cards.
• And more and more and more...

There is no question that all of these characters should suffer the consequences of their actions. The problem is that inflicting a suitable, and well deserved, level of pain is likely to blow up the rest of the economy.

So, holding out noses, we are forced to bail them out. While we do so, however, we must think about the future and these words written by Herbert Spencer, an English philosopher who lived from 1820 - 1903, are worth considering:

"The ultimate result of shielding men from the effects of folly is to fill the world with fools."