Thank you Uber, but I'll take the open road

George Maharis and Martin Milner in "Route 66"

It was summer in farm country. The sun threw shadows across verdant hayfields, waves of grass rippling in the breeze. Corn, approaching knee high, promised the harvest to come. Grapes, robustly leafed out, small, green fruit forming, arranged in tidy rows. Cows grazing in broad pastures, hilly with a number of fresh water ponds for drinking, wading, and cooling. Large tracts of forest interspersed and surrounded the fields, divided by country dirt roads, two-tracks that wound and stretched between fields and over the hills, connecting our farms with each other and nearby towns.

Our nearest chums were a half-mile away, with others quite farther. And the only mode of transportation available to poor farm kids was shanks’ mare – we walked. We walked to perform chores, walked to go camping in the woods, walked to go fishing, walked to visit our friends. The walking was hot, tiring, and seemingly endless.

Then one day, Dad decided that we should have bicycles.

We climbed into the family jalopy and journeyed to a small, outlying farm on a high ridge where the proprietor also ran  a small business repairing and refurbishing bicycles. Imagine “Pee Wee Herman’s Big Adventure” and his heavy, fat-tire, bike. That’s what we ended up with, although certainly with less panache and quite a bit more chipped and rusty. But functional, and worth the five bucks.

The sense of freedom was fabulous!  We struggled, standing on the pedals, up long hills but swooped and soared down the other side, and arrived at our neighbors' farms in minutes, not hours. The mechanical genius of the bicycle was not lost on us.

Tractors were another dream to young kids, big and powerful, moving through the fields and traversing the roads with ease, even in mud season or the deep snow of winter. These machines were the epitome of empowerment. And as we became older, and were permitted to drive them, enhancing our sense of self. Mastering a machine which was capable of turning the earth, hauling huge burdens of crops, or dragging thick, heavy logs from the woods did wonders for the self-esteem of a youngster.

And then our older cousins visited in their automobiles, shiny Detroit muscle machines that shook and  rumbled and promised the wonders of the open road. Freedom. Route 66. Drive-in movies. The desert, mountains, California.  How could we not be compelled by this vision?

So getting a driver’s license, borrowing the family car, and eventually buying one of our own, was the height of achievement, irrespective of the cost. Working on the farm, haying, plowing, mowing, and then in town, at the local McDonald’s, all to earn a few bucks to buy that jalopy. The siren call of the highway was irresistible.

All of that has come to a crashing halt.

Today’s youth are largely urban or suburban. They are transported by their parents, buses or subways, or Uber rides. A recent WallStreet Journal article reveals that between 2000 and 2015, the rate at which young adults (16-34 years) purchased new cars fell by nearly a third. This trend promises to continue.

They no longer dream and strive to possess their own freedom machine, that 1966 Ford Mustang or Chevy Camaro. Now, they simply finger the Uber or Lyft app on their phone and summon up a ride to the mall or party of choice. Long, dusty foot journeys through the countryside are outside of their ken.

While there is some bit of nostalgic loss, this all makes sense. It is far more efficient for shared autonomic vehicles to carry shoppers and partiers to their destinations. It is safer and more ecologically sound.

But somehow, the romance of the open road, Tod and Buz on Route 66 in their vintage Corvette, will be greatly missed.

Thank you Uber, Amazon, Apple, Google, for transforming our lives. But I will cling to my memories. They are comforting, and inspirational.

Sorry chump, your lack of skepticism has now caused a whole bunch of trouble

Skepticism is a highly underappreciated trait.

Some of us have it naturally. Others learn, usually after one or several hard experiences.

Still others of us never acquire the skill, and are repeatedly taken to the cleaners.

To be skeptical is to harbor doubts about the veracity of some proposition, be it political, commercial, or emotional.

The politician offering something for nothing. The telemarketer promising low, low, low rates. The handsome blond hunk professing his love. Seemingly reasonable and attractive propositions to many, but all viewed dispassionately, from a distance, awaiting corroboration, by the practiced skeptic.

The downside of skepticism is that we might miss out on some genuine opportunity. But the upside is that we could sidestep a scam or worse. A friendly-seeming member of an opposing tribe might really be telling us where the deer are gathered, or she could be luring us into a trap. The evolutionary imperative, survival, might well be served by a good dose of skepticism.

Which brings us to the twenty first century.

We are no longer likely to be enticed into a wooded glen there to be trapped and trounced. But it is very probable that some crook, pursuing our money, will entice us into taking an action which reveals our identity or purloins our financial information. Not as mortal, but highly disaffecting and, once realized, very disturbing. We feel as if we had been despoiled; the world is no longer safe.

All of this can be avoided with a healthy sense of skepticism.

Here is an example.  Imagine that you receive an email from a good friend, or a trusted company that you’ve done business with for years. This friend or business presents something of interest, or makes a request, but in some way tries to get you to click on a link in the email.

Your emotional shields are down. After all, this is your colleague Sally, or sister Phyllis, or banking provider Santander, and the request is so simple. Just click on that link!

Sorry, sucker. You just screwed up.

The information identifying the sender of the email can easily be hacked. It was not sent by your colleague, but by an Eastern European hacker. He got your email address by, perhaps, previously hacking a friend of yours.

The link that you clicked will download malware onto your computer. The logon information and passwords of your financial accounts are now transparent to the hacker, as well as your contact list and access to your email and social media accounts. He will now cascade his attack to all of your friends. Sorry chump, your lack of skepticism has now caused a whole bunch of trouble.

Here is a real example. Regard the email shown here. The sender (blanked out) was purportedly a well-known, trusted source. The request, simple – click this link to view “some important documents.” But something doesn’t ring true. Hi to who? There is no salutation. What important documents? Wouldn’t this sender normally have mentioned what it was all about? And the gobbledygook about security reasons? What??

So your intrepid columnist did not click this link and was saved the ignominy of infecting his and his friends computers. The link was, indeed, a phishing attack.

Avoiding this is not brilliance. It is not genius. It just a bit of skepticism.

Skepticism which you should also use when you receive a phone call, or a mail solicitation, or a knock on the door.

Skepticism. A cheap, effective defense against the scammers who surround us. Practice it early and often.

Although, one must say, it is hugely disappointing that so many are striving to take advantage. Do unto others, after all, is still the key human prescription for peaceful coexistence. Perhaps one day we will all treat each other so.

Until then, skepticism.

A celebration of wealth

While it is fun to throw stones at the wealthy, they are generally loaded because they have created value.

Value is created in many ways. Entertainment and sports may be frivolous, but people are willing to pay vast sums in order to be amused or distracted from everyday life. Who in New England can deny that Tom Brady deserves his wealth? And Jeff Bezos, the fabulously wealthy founder of Amazon, pleases us every day when our toiletries and groceries are delivered promptly or we stream “The Man in a High Castle.” Or, by the way, purchase a book.

But it is interesting to note the sources of wealth in our vast country. A study of wealth creation by Arizona State Professor Hendrik Bessembinder, as reported in the Wall Street Journal, gives us a fascinating look into the process. The professor’s analysis shows that only thirty companies created a full third of all the stock market wealth since 1926. And that’s out of 25,782 publicly traded companies.

Who are these engines of prosperity and why do we care?

At the top of the list is Exxon Mobil, the energy behemoth that Attorney General Healey loves to hate. While we can argue anthropomorphic global warming till the cows come home, it is indisputable that the energy economy built up over the last century has enabled the plush lives that we live today. Plush, that is, in comparison to anyone living in an energy vacuum, such as our ancestors or today’s tribesmen.

Next on the list is Apple. Who would have guessed in April of 1976 what Apple would become? The awesome power of networked, interconnected supercomputers in everyone’s pocket has transformed our lives, in some ways even for the better. Apple has become the most valuable company of all time. And the end is nowhere in sight as Apple invests in such things as autonomous cars and augmented reality.

In third place is General Electric. Another energy related company, but focused on the infrastructure to bring usable energy into our homes, offices, and factories. GE was created in 1892 when the Edison Electric Company merged with the Thomson-Houston company (led by Charles A. Coffin, a former shoe producer from Lynn, Massachusetts).

Fourth on the list is Microsoft, founded by Bill Gates in April of 1975. Microsoft is the butt of many jokes, some well-deserved. But it undeniably enabled the personal era of computing, bringing the wonders of Solitaire and the internet into our homes. More seriously, Microsoft created a fabric of servers supporting business functions in thousands of worldwide businesses, and they have established a very credible beachhead in Cloud computing.

In fifth is IBM, the rock-solid purveyor of commercial computing. IBM is synonymous with mainframes, the computers which powered our information economy in the last half of the twentieth century. IBM has fallen on hard times lately, but is gamely fighting back with artificial intelligence (Watson) and Cloud computing.

These five firms, alone, account for over ten percent of the wealth created in the last 90 years. To a materialist, who believes that the universe consists of nothing but information and energy, this is no surprise. All five are either energy or information companies. We need to move a way down the list before we come to a Walmart or a Coca Cola.

Why do we care? Why should we cheer success and great wealth?

The bromides of jobs created and taxes paid by these companies and their stakeholders, while true, seem unconvincing in the face of social justice warriors such as Bernie Sanders and Elizabeth Warren. Economics and rationality don’t stand a chance.

But here is why teachers care. And firefighters, police, and an army of government workers. Their pensions are  paid from invested funds, and when the market does poorly, that is, wealth creation falters, there is less in the retirement pot. In a very real example, the Providence Journal recently reported “Rhode Island’s $7.9-billion pension system will expect lower future investment returns and larger taxpayer contributions to pay for public employee retirement benefits.”

It is simple, really. If the stock market can’t fund the retirements of state workers, then taxpayers will shoulder a greater burden or retirees will take a haircut or both.

So while it’s entertaining to stone the wealthy, remember that there are consequences. Wealth creation is good for us all and we should celebrate it.

Projecting the future is a fool’s game. So let's try...

“The Jetsons” was a Space Age science fantasy cartoon premiering fifty five years ago to the delight of young baby boomers and their parents.

As seen from 1962, the future was to be radically different. This was not surprising based on the rate of change that our grandparents had already witnessed. The electrification of America had just recently been completed. Television was opening a window on the world. The atomic bomb had been invented, and used. Humans had traveled in space. New-fangled jet airplanes roared through the sky. Computers calculated the census and projected election results. It’s no wonder that the future appeared so strange and wonderful.

As The Jetsons creators saw it, we would have space colonization, flying cars, towering futuristic buildings, nearly human robots, video phones, flat-screen TVs, and conveyor-belt sidewalks, all in garish color and with lots of laughs.

While the phones, TVs, and even the moving sidewalks met or exceeded prognostications, the rest of the forecast fell flat. Why is that?

There are two major reasons:

1. People cling to things they like, and;
2. Physics is a hard master.

Look at New York or Boston or London. There are buildings hundreds of years old. And many of them will be still be there for hundreds of years more. The wiring will be different, the wifi systems upgraded, the thermostats and appliances all smart, but the buildings will look much the same. Not replaced willy nilly by towering, radically modern edifices, but remaining old, retaining character, perpetuating community. People like what they like.

What about the flying cars, or space colonization? Both are strictly limited by available energy. While we are beginning to make progress, the physics of energy production versus weight has been an extremely tough barrier. It is one thing to fill up a Tesla Model S with lithium ion batteries, but the power-to-weight ratio would be prohibitive to allow that car to fly. Although Tesla is to be commended, we need still further energy breakthroughs.

What if we were to make our own projections of the future, say fifty years hence? It is very difficult to do so, but here are some technologies that will drive real advances.

1.       CAS9/CRISPR gene editing

This is a truly remarkable capability, allowing scientists to make custom alterations of genetic material. Although we have been modifying genes for ages by selective breeding (note dogs from wolves), this is nearly instant. It will allow us to genetically alter Zika-bearing Aedes aegypti mosquitos so they become infertile and gradually die out. While this seems a good thing, the power to act as God is immense, and has deep moral and ethical considerations.

2.       Quantum computers

We are already seeing the impact of a million-fold increase in computing power. How do you think the Segway keeps its balance, or Space-X boosters are able to return to earth and land gracefully? What about autonomous cars, which already possess dynamic cruise control and lane departure warnings? All of these are driven by massive increases in computer power, sensor development, and Artificial Intelligence (AI) advances. Quantum computers will help drive the next million-fold increase in computing capacity, with yet unknown breakthroughs to come. It is quite possible that all cars, flying or not, will be controlled autonomously. Allowing a human to drive will be just too darned dangerous.

3.       3D-printing

For millennia, we have manufactured things by removing unwanted material with lathes and saws and drills. Then we bolt parts together into a thing, like a refrigerator. 3D-printing is the opposite – it is called accretive, or additive, manufacturing.  A computer model of a thing is provided to a 3D-printer and it builds up the finished product, slowly, layer by layer. But here lately, it’s not so slow, and the materials being accreted have vastly expanded. It is possible to envision 3D printers being used to create a genetically accurate beefsteak, ready for the grill. Or a human heart, suitable for transplant. Or an entire high definition LCD TV. Perhaps 3D printers in the home are how the Amazon of the future will deliver your goods.

4.       Urban agriculture

There are now grocery stores in New York City which are hidden among  grim factories and warehouses. They are not meant to be visited by customers, who enter their orders online and then await the delivery of their orders in the comfort of their homes. And some of those warehouses contain forty-foot high agricultural systems, urban farms, with the sun replaced by LED lights and water and nutrients optimized and delivered to thriving plants by computer. California was made famous by delivering fresh lettuce to the east coast by rail. But now the lettuce can be gown literally a stone’s throw from its consumers.

Projecting the future is a fool’s game. The fact that it depends on people, and that people are just so unpredictable, makes it nearly impossible. But we know that several nascent technologies have real legs, already proven, and will shape our world in wild and wonderful ways.

If only we can keep it. We have been, and will remain, our own worst enemy. God bless us, every one.

A beautiful mind redux

Charles Steinmetz with Albert Einstein and other engineers

It’s almost impossible for us to imagine a world without electric power. The very oldest among us might remember a time when kerosene lanterns provided light for cooking and eating and reading. But not many, and then only on rural farms or lake camps in Maine.

The electrification of America began in the late nineteenth century and by 1930 “70% of American households were electrified in the U.S.” according to Wikipedia. The rapidity of this deployment rivals that of the internet in recent years and was driven, as you might expect, by economics.

Both in factories and in homes, electricity was far cleaner and more efficient than the power sources that preceded it. And other than lighting, the most important use of this new power source was rotary force, that is, motors. The advent of electric motors revolutionized American life. Imagine the motors in your home – ceiling fan, dish washer, clothes dryer, washing machine, vacuum cleaner, kitchen blender, air conditioner. In the garden shed there are weed whackers, power saws, sanders, and electric drills. The list is nearly endless.

Likewise in factories the use of electric motors was instrumental in vastly improving industrial output. Lathes and milling machines and drills and grinders – again, an extremely lengthy list. It’s almost impossible to imagine what came before, how we managed to cope without electricity for light and heat and motive force.

Electric motors displaced steam engines and water wheels and even dogs on treadmills as sources of power. And as any kid knows, a lot of elbow grease, as human manual labor was common and cheap and gruelingly used in farming and manufacturing.  The electrical revolution fundamentally changed human life on earth.

And while Thomas Edison and Nicola Tesla are famous figures in the history of electrification, a little known German scientist and engineer had enormous direct impact on your life today.

Charles Proteus Steinmetz was born in Germany in 1865 and showed enormous promise as a student in mathematics and physics. He had a beautiful mind but was physically afflicted, having suffering from polio, dwarfism, hunchback (kyphosis), and hip dysplasia. After attending university in Poland, he emigrated to the United States in 1889.

Steinmetz first worked in the burgeoning electricity research and development community in New York City and soon ended up at General Electric, where he was considered a prodigy. While his work contributed to advances in a wide range of electrical theory and application, it is his development of Alternating Current (AC) theory that shaped the world we live in today. AC generators and motors and the transmission lines that move power into our factories and homes were all greatly influenced and facilitated by Steinmetz.

Steinmetz moved from New York to Lynn, Massachusetts, where he continued his work for General Electric. Eventually, he moved once more to Schenectady, New York, another GE site and a community into which he was embraced. Steinmetz served on the Schenectady city council and the board of education, and taught at Union College until his passing in 1923. He was an important part of his adopted community, loved and respected and mourned when he died.

Steinmetz was not an attractive man. He was short and misshapen and often smoked smelly cigars. In our age of beauty worship, he would not compare well to Brad Pitt or George Clooney. But it is undebatable that he had an enormous, positive impact on your life, far more than Brad or George ever will.

There could not be a more powerful example that beauty, indeed, is only skin deep.

United Airlines and the Cuban Missile Crisis

An eon ago and half a continent away, your earnest correspondent was studying at a well-known Midwestern university.

The topic at hand was decision theory and various models were studied.

Using the Cuban missile crisis as a case study, we probed how the United States realized that the Soviets had installed nuclear tipped missiles within close striking range of our major cities. It turns out the Red Army deployment manual for nuclear missiles required that they be surrounded by a ring of defensive surface to air missiles (SAM). So while the nuclear missiles themselves were quite well hidden, they were each surrounded by an obvious circle of SAM sites, easily observable by our U2 spy planes. And thus the dastardly plot was revealed.

The culprit (from the Soviet point of view) was that deployment manual, and the Red Army’s blind obedience to it. We can only thank them for that.

The bureaucratic process model (also known as organizational process model) describes how most governments, corporations, and other organizations operate. Policies are formulated. Processes are documented. Rules and regulations are promulgated. These guidelines are all followed, else the risk of one’s job.

The only problem with this approach is that not every condition or combination of conditions can be anticipated, nor the proper response prescribed. A static rule book does not fit well in a dynamic world.

The recent United Airlines imbroglio is a case in point. Unless you’ve been living in the allegorical cave, you are aware of what happened, but here is a quick review of the essential facts. On Sunday evening, April 9, United Airlines needed to move four crew members from Chicago to Louisville to staff another flight the next morning. United Express 3411, sold out, had already boarded and was ready to depart. The gate agent halted the departure and informed the passengers that the flight wasn’t going anywhere until four of them deplaned. Initially $400 vouchers were offered, later increased to $800. No one accepted.

At that point a United manager decided that four passengers would be selected for involuntary eviction. Three of them grudgingly complied. Dr. David Dao did not, the cops were called, and the rest is already history.

United’s CEO Oscar Munoz, an award-winning communicator, blew it. Not once, but several times. Finally after being dope slapped by his customers, the public, and a growing cadre of legislators, he found wisdom. United has changed their policy and this should not happen again. Until, that is, an unanticipated combination of circumstances arises that the new policy prescriptions do not fit.

That is the problem with the bureaucratic process model. There is another way, values based.

Let’s say United recognized that their customers were the key to success, and that customer satisfaction was a valuable commodity. This would be a major departure from the view that passengers represent just so much squishy cargo.

The idea of vouchers to buy a customer’s cooperation is a step in the right direction but has several flaws. First, a voucher has varying value to different passengers. To a frequent United customer who plans future trips soon, an $800 voucher is worth pretty much face value. But to an accidental traveler, who doesn't plan any future United excursion, that voucher is fairly worthless. Solution – drop the vouchers, deal in cash.

Next, the preset limits delegated to gate agents and escalated through various level of management are a perfect example of a rigid approach designed to minimize costs, not maximize customer satisfaction. Try a reverse auction at the discretion of any United employee present.

A reverse auction is a bidding process where a buyer (the airline) is attempting to buy a valuable commodity from a seller (a passenger with a seat). Say that you, a passenger, make a rather ridiculous bid of $20,000 to give up your seat. There is little chance the airline will need to actually accept this bid, because some other passenger will likely counteroffer at $10,000, or less, and so on.

This is market based allocation, where a valuable commodity (the seat) is purchased from the lowest bidder. No involuntary eviction, no cops, customer value respected, and customer satisfaction maximized. What's the problem?

Only that executive management must express goals and values clearly and trust their employees to carry them out.

One wonders, if this approach works out well for the airlines, perhaps we could apply similar reasoning to our regulation-heavy government. Markets can work magic.

The Passing of a Queen

The Sears, Roebuck and Company, founded in 1886, is in trouble.

In the late nineteenth century, the novelty and utility of a mail order catalogue fueled the enormous growth of this revolutionary firm. Largely agrarian America had heretofore shopped in small town general stores with limited selections and relatively high prices. Sears exploited the postal system of the United States to distribute its catalogues, receive completed order forms, and ship the purchased goods to the happy shopper. Imagine Amazon.com at a snail’s pace.

This process may seem absurdly slow, but try to envision the status quo of the time. Instead of a limited range of expensive goods available locally, a world of possibilities was opened. The Sears catalogue, for those who haven’t seen one, offered a veritable cornucopia of goods to isolated farm families. Tools, linens, toys, clothing, and much more. According to the Sears historic archives, specialty catalogues included such items as “bicycles, books, clothing, groceries, pianos and organs, and sewing machines.” To read these catalogues was to dream of a richer existence than the wide, desolate reaches of rural America could offer.

By 1907, the firm had racked up annual sales of $50 million (over $20 billion in current dollars, approximately equal to Dollar General in 2016).

Obviously, an itch had been scratched.

This success translated into the construction of Sears stores in hundreds, then thousands of communities. The Sears Tower in Chicago rose to claim the “world’s tallest building” record for many years. The firm became a conglomerate, acquiring or creating many other concerns including Kmart, Dean Witter, Coldwell Banker, and Allstate Insurance.

But as of 2017, the ride was over. Sears had discontinued their catalogue in 1993, becoming dependent on in-store sales. But waves of competition and technological advances beat on the hapless firm, who just couldn’t seem to catch up. In our visits to a nearby North Attleboro Mall Sears store several years ago, we sensed the end. Shabby and drab, disheveled shelves, dispirited clerks. The success of Amazon and eBay and Walmart had stolen the thunder of this 130 year old queen of retail. God bless her memory, but the tides had turned.

Sears is now closing stores, laying off employees, and selling off well-known brands. Craftsman, the famous marque of life-warranty tools, for instance, has been sold to Black and Decker. There is a real threat that Sears will go bankrupt.

If that happens, thousands more jobs will be lost, hundreds of properties vacated, and stockholder investment reduced to rubble.

It will be a sad end to a wonderful enterprise that brought satisfaction and joy to millions.

But what will happen to the vacant buildings, the sacked employees, and the few remaining investor funds?

The buildings will come to life with economic use of greater utility. According to a recent article in “National Real Estate Investor,” the buildings will be repurposed.

“Office space is a workable solution thanks to usually ample parking space. In addition, in certain cases municipalities have bought the stores from Sears and turned them into charter schools or municipal offices. Community colleges have also picked up some of the properties. That solution works in cases where Sears owns the land the stores are built on. We have also seen the space reconfigured for office space—call centers, medical space (direct primary care, outpatient clinic).”

The workers are another story. Some of the older workers will remain unemployed or decide to retire early. The younger ones will largely find other jobs in going concerns – those more successful than Sears – perhaps in the very businesses mentioned above exploiting the now-vacant Sears locations.

Likewise investor funds, those few returned, will be invested in wiser investments. Perhaps some in the nascent Amazons or Teslas of tomorrow, to reap millions only a decade hence.

This is creative destruction. In a government managed economy, we might try to keep Sears alive, an ultimately wasteful expenditure of taxpayer funds.

But those same taxpayers, in their separate but superior role of free citizen and consumer, have voted to kill Sears. And will vote to support the up and coming competitors who tickle their fancy.

There is wisdom in their vote, something that bureaucracy can’t recreate.

Witness Venezuela.