All You Can Eat--Just be Grateful
Crosscut.com today carries my thoughts about the quiet food revolution--improved quantity, variety and quality--available to the contemporary American.
Crosscut.com today carries my thoughts about the quiet food revolution--improved quantity, variety and quality--available to the contemporary American.
There were and are WMD in Iraq, and now there are Wikileaks that support the claim. What to do? Maybe start by taking that old "Bush Lied, People Died" bumper strip off your Volvo?
Like a lethal virus, Islamist terrorism continues to spread around the world, even while President Obama underestimates it. There is little effort in the White House or media to connect the dots, to chart a trajectory. The opposition Republicans need to take up this task, getting as many Democrats as possible to join them.
In the 2012 campaign the Obama-Biden team asserted that that the killing of Osama bin Laden meant that. Even the deadly mortar attack and siege of the U.S. compound in Benghazi, Libya that fall was treated as trivial--and falsely represented as a spontaneous reaction to an anti-Muslim video.
Now, the problem worsens--and we have to be alert to the chance of another terror attack on the U.S homeland. There are roughly a hundred Americans (people who understand technology and media), and several thousand Europeans, training with terrorists in Syria. Is there any doubt that those who survive will come back to the U.S.?
Once again the White House is slow and unprepared. On Iraq, Mr. Obama is telling us what he will not do (send in troops), but not what he will do.
Maybe the best solution would be a new hashtag campaign led by the First Lady: "#Don'tOverrunIraq".
Or organize a huge lead-from-behind Twitter campaign--world-wide! with Angela Merkel and David Cameron and all the rest dispatching messages on their iPhones to bring the Al-Qaida linked terrorists to account! Meanwhile, since the President is a very busy man, Vice President Biden should be tasked to publicly admonish the terrorist-in-chief, Mr. Al-Bagdadi, that taking over democratically elected regimes and beheading the police and forcing the Christians to flee or convert and generally tyrannizing the population is really something that is "not done" in the 21st century.
Send the ISIS a stern message, Mr. President, and insist that they "must" stop.
Francisco Maroquin University (UFM), located in Guatemala City, may be unique in the Spanish speaking world: a university that treasures ideas more than sponsors and that scorns the pretensions of the political correct competition in El Norte. Last week it awarded an honorary doctorate to Discovery Senior Fellow George Gilder in recognition of his many contributions to economics and social thought. Gilder, a Harvard graduate, gets no such notice at his alma mater where the current obsession of President Drew Faust seems to be climate change.
Not only did Maroquin salute Gilder--and bring almost all its students out to hear him in various venues--it also has named a center on technology and economics in his honor.
The negative cast of contemporary politics is displayed nowhere so much as in the debates over the environment. In capitalist U.S. rivers have been cleaned up, air quality in big cities greatly improved and energy conservation achieved even as relatively cheap and abundant energy is available. The key word is "abundant".
Meanwhile, in big cities in Communist China the air is so foul that tourists are beginning to avoid most of the year.
The Small is Beautiful movement came about in the 1970s, not coincidentally, perhaps, after the U.S. gave up the Vietnam War and anti-war protestors, missing the old spirit, sought out a new secular millenarian cause. The 1973 book by E. F. Schumacher was snapped up by young people for more than a generation. The good side of the cause was the effort to humanize life with small scale, local farming, a return to craftsmanship in wood products and many "artisanal" (as they came to be known) food products.
The bad side was the Luddite effort to halt almost all development and to imagine that the U.S. was leading the world to sick and ultimately fatal ecological diseases.
It's a long story and it doesn't get told much in the major media. Matt Ridley has a fine piece along these lines, though, in the Wall Street Journal.
"Inside Academe," the always interesting newsletter of the American Council of Trustees and Alumni (ACTA), reported in its winter issue (I realize I am late getting to this) that the 25 top liberal arts colleges in the United States (based on the US News ratings) are not "liberal" in the old way.
I would add that they are, of course, liberal in the new progressive way.
According to the ACTA study, few of the liberal arts schools still have general education requirements. "We asked whether each college requires seven basic core subjects: Composition, Literature, Math, Science, US History or Government, Economics and intermediate-level Foreign Language. Twenty schools required three or fewer of these subjects. Five required none at all."
"Not one school," the ACTA report continues, "adequately protects freedom of speech and expression." A parallel study of speech codes by the Foundation for Individual Rights in Education found that, on the contrary, "every single one maintains at least one policy that threatens free speech and expression on campus."
The FDA can affect your life in ways you don't even suspect. Critics say that bureaucratic fear of mistakes--ones that may affect a few people--too often delay approval of procedures, medical devices and pharmaceuticals that could help many. The trouble is that the bureaucracy knows that the few people who suffer from mistakes will get lots of attention, while the many whose care is delayed will seldom even know it, let alone organize and complain.
I tend to side with the critics.
At the same time, I am an enthusiast for modern medicine and the freedoms, training and technology that enable it. Let's remember our era's debt to those who have gone before.
I'm scheduled for surgery tomorrow to replace my heart's aortic valve. All else in my heart and elsewhere seems to be in good shape, so I qualify to have a "minimally invasive" operation. (That, nonetheless, is "invasive" enough as far as I'm concerned.) It involves a five inch cut through the sternum and maybe an hour when the heart is stopped and a heart/lung machine takes over. I'll also be given a relatively new kind of treated bovine valve that requires only three sutures, enabling a shorter operation and, therefore, one hopes, a somewhat shorter convalescence. The upper body gets beaten up in any case, so I figure that recovery time is about the same as from an auto accident--six weeks. But success is likely (95%).
David Hatch of Citiscope alerts us to a CBC story on alternatives communities are using for de-icing roads in winter. Sand clogs drains and can pile up in cities that have lots of snowfall each year. By March a place making repeated use of sand is a mess. Salt is better for a city like Seattle where the salty water runs down to an already salty sea. But salt also affects dry land vegetation adversely, and some think it can hurt pets who lick at it.
So inventive Americans and Canadians, among others, have devised alternative ways of coping with the slippery winter stuff--from molasses to beet juice to solar panels.
However, the question left hanging is, how much does all this cost?
Maryland and Washington are among the states employing molasses to get the salt they do use to adhere longer to road surfaces instead of running off into ditches and gutters. Since molasses is relatively abundant and biodegradable, it's a winner. But who knows how much it costs the taxpayers?
The following article by Bret Swanson, founder of Entropy Economics, ran on the excellent Forbes site on Christmas Eve. Since you probably were otherwise occupied that day, it is both saluted and reproduced here. These are excellent insights into George Gilder's new book, Knowledge and Power that should be kept in mind during the current economic debate:
In three short months, Obamacare has exposed, with 200 proof concentration, the fundamental mismatch between government's limited knowledge and its unattenuated power.
The Administration is now "discovering . . . that insurance is complicated to buy" - and to assemble, price, purvey, and regulate. Many health care experts predicted Obamacare's failures with amazing specificity. But why did the Administration's claim that Healthcare.gov is now "operating with private sector velocity and effectiveness" prove such a deep self-indictment?
In his latest book, Knowledge and Power, George Gilder shows -- fundamentally -- why enterprise excels, and government often fails, at these complex tasks. From top to bottom, foundation to spire, atom to bit, Gilder has integrated economics with the most powerful force of our time -- the science and technology of information.
Kansas is a supposedly conservative state, but it has an exceptionally pugilistic liberal counter-culture at the Universal of Kansas. When the subject is criticism of Darwin's theory--on scientific grounds, mind you--the left is eager for blood. There have to be some limits to toleration, but criticism of a science theory considered crucial exceeds those limits! Just try to get tenure at any university in Kansas--and not just in the Biology department--if you express public doubts about Darwinism. The faculty could hardly wait, moreover, to urge the State a few years ago to prevent high school teachers from raising any questions about Darwin's theory whatever.
But, historically, there is a funny thing about censorship; once it starts it doesn't know where to stop. So now we get University of Kansas faculty and their media backers all in a dither because the Administration has cracked down on a tasteless tweet about the NRA. Surely, it should be open-season, so to speak,on the NRA! Not Darwin, mind you, just the NRA!
George Gilder, who helped found Discovery Institute 23 years ago and is the author of the recently published Knowledge and Power, foresees a new model of economics based on information theory, representing a force that is transforming many fields. He was interviewed last night at Town Hall, Seattle by Tom Alberg, original managing director of Madrona Venture Group and another influence on the development of Discovery. Audience reactions and a long line of book buyers afterwards indicated that the chemistry between the two old friends was effective in exploring what Gilder identifies as the great challenge to our economy: how to connect the entrepreneurial "high entropy surprise" that creates knowledge--and therefore, progress--with the "low entropy" reliability of predictable power in institutions of government and business.
Gilder said that information theory elucidated 80 years ago by Claude Shannon offers insights not only into the fields of physics and technology, but also into economics, biology, education and even political science.
Venture capitalist Tom Alberg reviews George Gilder's Knowledge and Power today for Geekwire.com, managing to sound objective while still pushing the Gilder analysis forward. Well he should, as they are old friends of decades' standing.
Next Monday, September 23, Alberg, a founder of the Madrona Group, will interview Gilder before an audience at Town Hall in Seattle. You can register online for the event here.
(Town Hall is at 1119 Eighth Ave., downtown Seattle. Sponsored by Discovery Institute, Madrona Venture Group and Washington Policy Center, admission to the event is $10, which includes reception at 6 p.m. and program at 7:00. Book signing to follow.)
One of the most powerful market analysts, John Mauldin, publishes George Gilder today in "Outside the Box." The online site attracts hundreds of thousands of readers.
This is a superb essay. If you want to understand George's Knowledge and Power, it's an excellent introduction.
Frank Gregorsky of Discovery Institute calls to our attention two articles from Forbes (and a YouTube piece) that describe in the first case how hackers can take over your car from a distance, and in the second, how they can make computerized items in your house go crazy.
The point is, if creative young American hackers can do it, criminals and international enemies cannot be far behind.
The revelations of politicization of government functions--such as the IRS and national security agencies--cannot help but undermine people's trust in government itself. The latest story in the Washington Times is about how the White House leaked highly classified documents to the media about secret operations in Iran. The clear implication is that they were leaked to bolster the reputation of the President and his Administration, recklessly indifferent to damage to our security and allies.
Hard working people in the security agencies are being abused and cheapened by such misuse of their efforts.
There also is a chilling effect on civil discourse as the result of stories about surveillance. Privacy is not something you value lightly when you see how it can be violated--and your every email and conversation can be misrepresented and made public. Knowing that you have little privacy left is one thing; knowing that a government in power cares little about protecting that privacy is another.
Fifteen years ago Discovery Institute and its fellows were part of the national debate over regulation of telecommunications. The pro-regulation crowd thought the government was needed to spread the new benefits of broadband. But here has what has happened in just the past few years (hat tip to C. L. Hoewing of Verizon):
THE STATE OF BROADBAND BY THE NUMBERS
*In the year 2000, 4.4% of American households had a home connection to broadband; by 2010 that number had jumped to 68%.
*Broadband networks at a baseline speed of >10 megabits per second now reach more than 94% of U.S. homes.
*Overall, average delivered broadband speeds have doubled since 2009. In 2012, North America's average mobile data connection speed was 2.6 Mbps, the fastest in the world, nearly twice that available in Western Europe, and over five times the global average.
The NSA controversy has some people in both parties understandably worried that the Government has over-reached. However, it is likely that we will find that the NSA's broad sweep of data is far safer for civil liberties--and for national security--than the alternative means that might be needed if the NSA were not on the job.
Regardless, we are in danger of the NSA imbroglio distracting us from more imminent and damaging domestic intrusions on citizen privacy. Do you remember when the President after the 2010 elections--and the return of a Republican House--let it be known that he would effect his will through administrative means, rather than relying on legislation? In agency after agency that is transpiring in ways that endanger liberty.
Hand-wringing about computer security breaches by foreign and domestic hackers, combined with NSA's intelligence-gathering and hacking counter-attacks, leave the individual feeling helpless. The annoyance factor is monstrously large, though hard to quantify, but the danger of serious compromises of intellectual property and personal privacy is in even more serious territory. George Gilder's recent breakthrough paper on this should be read by anyone concerned about the developing headline story.
Meanwhile, Dell is one example of an original equipment manufacturer that is trying to fill an obvious need with a new private product. Constant fixes and patches are not enough.
The issue of trust in government agencies like the Bureau of the Census is sure to come up in confirmation hearings for John H. Thompson, President Obama's new nominee for Director. That is not due to any problems with the distinguished Dr. Thompson or with the Census Bureau, despite cyclical demands that the Census stop asking people so many questions.
The looming trouble for the Bureau and other data-gathering agencies is that people's fears and indignation have been excited as never before by the recent IRS scandals, the snooping on AP and FOX and revelations about cyber-data gathering. It bears noting, therefore, that the Bureau's questions are not unfair or adversarial, let alone selectively targeted at any group, and that they are well justified under both the enumeration clause and the commerce language of the U.S. Constitution. That's why Sen. Rand Paul's legislation to sharply limit Census questions, however appealing it may appear superficially, isn't going anywhere.
The Census should not bear the stigma of the IRS' shame. That's not only important to the Bureau and other statistical agencies, but also to the public.
Every day carries new stories of hackers and the damage they are doing to American businesses and government. "Pentagon Moving to Stem Hacker Attacks," the Associated Press reports today. Our country's defenses, power grid and business operations--and individuals--are at risk. It is not an over-statement to say that our country as a whole is at risk.
Yet there is no sign yet of effective defenses.
Two crucial ingredients are missing in news stories and articles on the subject: 1) Hardly anyone knows enough about the problem to explain it in technically correct terms that also are comprehensible to the average informed citizen. 2) Virtually no articles until now have explained what needs to be done to fix the problem(s). Domestically, a few very annoying crackpots in garages get arrested. But the serious problems come from overseas. Mostly the Government talks darkly of retaliations and remonstrations, whether the putative villain is in China or Iran. Businesses, perhaps fearing lawsuits and hoping to escape the hackers' attention, meanwhile, keep mum.
What the public has not had, therefore, is an explanation of what can be done on a large scale and why what we are doing now does not work.
George Gilder, Sr. Fellow of Discovery Institute and author of several books on technology and public policy (Microcosm, Life After Television, Telecosm, The Israel Test, etc.), has written a white paper that does the job.
A Saudi Arabian has been detained as he entered the US at Detroit carrying a pressure cooker in his luggage.
The Tsarnaev brothers' weapon of choice, the pressure cooker apparently can be converted to a bomb following directions online, courtesy of al Qaida.
Will we soon have pressure to ban pressure cookers? Well, some Miami-Dade County students have a petition for just that cause. Williams-Sonoma already has taken pressure cookers off their store shelves. Can Crate&Barrel be far behind?
John Cook, of Seattle-based GeekWire, reports that Apple has enough cash reserves to pay off eight EU countries' debts--if it wanted to, which, of course, it doesn't.
This story, based on an infographic from MBA Online the day before, puts Apple's big quarter in prospective. GeekWire characterizes their revenue as "Three Yahoos, two Googles and a Microsoft". It's also interesting, and worth noting, that 2/3 of it is stored overseas.
Here we have a company that makes trinkets, bought voluntarily by free people, produced willingly by free people. Yet even after giving billions of dollars to the governments they labor under, they still make more money than even the most irresponsible governments can lose. Consider: Governments take money from people by threat of force, they have more resources than a corporation can dream of, they can quite literally eliminate their competition, and by-in-large, they're above the law. Yet they still can't take enough to rival what this one corporation can get people to freely hand over. There are of course many mitigating factors on both sides, but the numbers still stun. This company, with its relatively minimal staff, produces more in a year than the GDPs of 2/3 the world's countries. ...but big government is clearly the answer.
Sr. Fellow George Gilder just returned from two weeks in Israel where he thinks high tech innovation has a new, better home than almost anywhere else. Globes magazine contrasts Gilder with local pessimists in Israel.
The consequences of Israel's high tech prowess are felt here not only in the business world, but, perhaps most significantly, in national security. For some reason, major media are not following the remarkable story of Israel military inventions. Do you think they will if a war starts up?
Chiropractors are warning about the new malady of "text neck," what you get from craning your cranium too much and too often in the direction of your cell phone or similar device.
Cell phones are useful, of course, but also over-used. They are the cigarettes of our time, a handy way to look busy and cool while achieving essentially nothing. In an elevator or escalator they are a prop, something to take your embarrassed boredom away from the moment and project it elsewhere--the eternal cyber-consciousness where everything is more interesting than whatever is happening wherever one happens to be.
Remember Bogey dragging on a smoke while waiting for gangster to show up, or the image of a famous writer at his typewriter (a pre-computer device once upon a time employed for text development), tapping ponderously on his cig between taps on his keyboard? Can't smoke like that any more. Smoking conveys anxiety now, not coolness. But, except in church or a meeting with your immediate boss, feel free to text away or even to sprint out of a meeting to take a cell phone call. Maybe it's a message from your chiropractor.
Peter Thiel, the high tech entrepreneur who founded PayPal and the angel investor of Facebook, has the cover article this week in National Review (not yet online), "The End of the Future." Science and technology are not living up to their billing, he writes. Suffocating government regulations and ideological blinders are slowing progress. Moreover, we are not at the beginning of this decline, but about forty years into it. Real economic progress, which follows scientific and technology gains, has not recovered from the oil crisis of the 70s. While the computer may have advanced society, continuing failure in the energy realm has pulled us back.
"Even before Fukushima, the nuclear industry and its 1954 promise of 'electrical energy too cheap to meter' had long since been defeated by environmentalism and nuclear-proliferation concerns."
It is hard to put ones mind around the many complex fields of science, let alone to evaluate them, Thiel says. But, "Indeed," he asks, "how do we even know whether the so-called scientists are not just lawmakers and politicians in disguise, as some conservatives suspect in fields as disparate as climate change, evolutionary biology, and embryonic stem cell research, and as I have come to suspect in almost all fields?"
Thiel has harsh words for cultural decay, "from the soft totalitarianism of political correctness in media and academia to the sordid worlds of reality television and popular entertainment." But at the root is a decline in science and technology. On the other hand, he wonders "whether the endless fake cultural wars around identity politics are the main reason we have been able to ignore the tech slowdown for so long."
(from Disco-Tech site)
Hance Haney, Discovery Sr. Fellow
Blocking the merger between AT&T + T-Mobile is apropos of this administration's strategy for creating jobs, according to James M. Cole, the deputy attorney general.
The view that this administration has is that through innovation and through competition, we create jobs. Mergers usually reduce jobs through the elimination of redundancies, so we see this as a move that will help protect jobs in the economy, not a move that is going in any way to reduce them.
Remarkably, someone forgot to include that in the complaint filed by the Department of Justice in the District Court for D.C. The complaint itself does not allege that the merger will cost jobs, nor does it suggest that blocking the merger would create or save jobs. As a technical matter, antitrust is not concerned with job protection, although many seek to exploit it for that and other purposes. More on why that is a bad idea in a minute.
Reason TV has just put up its Nick Gillespie interview of George Gilder from the recent Freedomfest in Las Vegas, and, as usual, George is entertaining and provocative.
Gilder thinks President Obama is a "hard leftist" by background who has done more damage to America's economy than a "nuclear bomb". He would take any of the Republican alternatives, but when asked who would be best, he says, "Newt Gingrich, if he weren't such a jerk."
But mainly the 21 minute program is a tour of Gilder's works over 40 years and his efforts to link supply side economics with technology futurism and social conservatism.
(Also at Freedomfest, Gilder "debated" Peter Thiel on whether the future of technology is bright or dark. See Richard Rahn's article in The Washington Times.)
Friend and former colleague Dr. Richard Rahn has rendered a clear, concise report on the debate last weekend between Discovery Sr. Fellow George Gilder and entrepreneurial investor Peter Thiel at Freedomfest, the annual libertarian confab in Las Vegas.
The "debate" (which I enjoyed moderating) was really the exposure of two sides of the same coin. Thiel and Gilder both are thinking deeply about the problems of Big Science--government funding of winners and losers in science and technology, the allies/cronies in academia and the toadies in politicized big business. This is a topic of robust potential and vital importance to our civilization's future.
Thiel was represented as a pessimist and Gilder as an optimist, but their analyses and prescriptions are remarkably similar.
This was particularly illuminating in light of George's assumptions before the debate that Peter Thiel was totally absorbed in social media. Turns out, he's not.
In the Great Depression you could still make money if you invested in movies, radio, some automobiles and some utilities. These were all what one might call adolescent industries that had fared well in the 20s and were growing fast when the Depression arrived. They kept going and growing when older--and newer--industries faltered. The West was opening to electrification, people needed a cheap escape (radio, movies) and new technologies spurred automotive advances as well as communications and energy.
Today, it seems to me that the industries with a full head of steam (to use an industrial age metaphor!) are Internet sales and advertising that, among other things, let you purchase goods for less (Amazon) and enjoy a cheap escape (the Internet generally). Medical devices also are in a high tech adolescence industry, with fast paced changes enabling new solutions to health problems--and often saving money as well as lives.
A friend with a tumor in his head can now be treated with a neutron radiation device that has a success record three times as good as surgery, with less time (and, hence, less money) required for both doctors and patients. Better results for less money.
This weekend at the libertarian "FreedomFest" in Las Vegas, George Gilder will debate Peter Thiel (Paypal founder, angel investor for Facebook) on the theme of "Future Shock: Has High Tech Run its Course?" Peter is a pessimist on the topic, George an optimist. (I am moderating.) But I bet both will share many criticisms of our current government mismanagement of the entrepreneurial economy and some similar prescriptions for reviving science as well as tech. I know they both are skeptical of credentialism in education--the big bloated money eater of the old economy that is now stumbling and falling.
NOTE: George Gilder will speak at Discovery's Seattle offices on Friday, July 15 at 12:00 noon on "How High Tech Will Rebuild Our Economy." Phone 292-0401, x 102. Space is running out!
The Wall Street Journal today carries Discovery Sr. Fellow George Gilder's article on why America needs Israel as much as Israel needs us. No one has made the economic and strategic military case better than George. The staggering thing is the indifference of much of the American intellectual community. They can't dispute it, only ignore it--and attack Israel for not capitulating to its enemies.
The Japanese have come up with a new electric car charger that can provide a Nissan Leaf (for example) a complete charge, good for 200 miles, in only five minutes. It's a potentially serious advance.
However, it is important with all these stories to note that energy is still needed to CHARGE a car. You save gasoline (and its fumes) in this process, but you don't save net energy. If one lives in an area that generates energy through hydropower, it's all a plus; almost the same with nuclear power; less so with natural gas; none at all or even a minus with coal or oil.
Steve Jobs, who grew up in Cupertino, CA, has blessed his home town with a proposed new campus for Apple that is spectacular in its vision, as well as in its optimism about the company's future.
In a matter-of-fact presentation to the Cupertino City Council Jobs presented plans that were received with stolid approval, but that justified celebratory balloons and a town band. That's because the new scheme is a design breakthrough. The new headquarters Jobs wants to build will transform land that once was apricot orchards and is now a sprawl of undistinguished high tech office buildings into a spectacular single building that will house up to 13,000 people in a kind of donut shape of glass, steel and cement with a vast interior courtyard. It also restored much of the 150 acre landscape to its Old California feel.
Whereas 20 percent of the current property is devoted to landscaping, 80 percent will be so dedicated under the plan Jobs unveiled. There will be 7000 trees in space with 3700 trees now. Some of the new trees will be in apricot orchards, a perfect tribute to the pre-tech days of Silicon Valley. Ninety percent of the parking will be underground or in a new parking structure, whereas ninety percent today is in asphalt lots.
Energy for the new campus will go off-grid for primary usage (employing natural gas, Jobs says), reversing the company's current process that puts grid-use first, backed up by generators. For a computer company, that's quite a commitment.
One of the City Council members, undoubtedly thinking she was in some run of the mill rezoning hearing, asked Jobs whether he would provide some "benefits" for the public if his plan is approved, like, she suggested "free wi-fi". The Apple founder replied, drolly, "We pay taxes," and then added that Apple is, indeed, the biggest taxpayer in town, by far. You can use our tax monies on free wi-fi if you like, he suggested. A little fog lifted with that remark, and all the rest was well-deserved Council praise.
Photo: Reuters/Cupertino City Hall
It is getting harder to make a dishonest living these days. In particular, burglaring doesn't pay any more, just as running a movie rental outlet doesn't pay, or running a shop that makes photo copies. Technology is rendering old fashioned property crimes, at least, somewhat obsolete.
Most of us know now that crime rates have been going down, even during the recession (or whatever it is we have been in since 2008). One happy effect in social science is an end to claims that bad times cause bad crimes. It never was true. Crime rates were low in the Great Depression and high in the roaring '60s. Now even the media have caught on.
So what does account for falling crime rates? Several ideas are offered, and each has some validity. The most obvious explanation is that we have more criminals in prison now than ever before. For example, they can't rob people (except maybe other prisoners) when they are behind bars.
One excellent analysis was offered in the Wall Street Journal by James Q. Wilson, who sites a number of factors.
Dr. Wilson, the Christian Science Monitor and others make good points.
I'd just add this one, at least apropos property crimes such as burglaries and robberies: There is not as much around to steal that one can sell easily, and selling it doesn't bring in enough for a crook to live on.
1) There's not as much money lying around to steal. Pick someone's pockets and you'll find slim pickin's. You can't use the credit cards for long and the ATM cards are useless without the pin number. People just don't carry as much cash on them these days and they don't have it around the house, either.
The June issue of the American Spectator carries a "Special Report" by George Gilder on "The Arab Debt to Jewish Settlement" that pokes a very large and new hole in the foreign policy of the Obama Administration. I think that even those familiar with Israel and its history will be surprised at the historical information our Discovery Sr. Fellow (and institute co-founder) has assembled to show how a sparsely populated part of the world--"the Palestine Mandate" of the British, post World War I--became an agricultural and economic success thanks to the painstaking sacrifice and enterprise of Jewish settlers.
Some readers may remember an account of "the Holy Land" from the 19th century visit of Mark Twain, reported in Innocents Abroad, 1869. There wasn't much there then--including people. Wrote Twain:
"Renowned Jerusalem itself, the stateliest name in history, has lost all its ancient grandeur, and is become a pauper village."
Then came Jewish settlers, who figured out how to make the desert bloom. Their prosperity enticed more immigrants, not only Jews, but also Arabs--who went on to call themselves Palestinians.
It's a key essay that will repay your attention.
Huge efforts are being made by Democrats to reconcile President Obama and American Jews who are favorably disposed toward Israel. To some extent the efforts are successful, witness the campaign of Rep. Debby Wasserman Schultz to turn conservative Jews' criticism back upon them as "partisan". The issue, you see, is not the President's call for "1967" borders, but the impudent criticism of that position.
Meanwhile, however, opinion of Obama in Israel is strongly negative, as many articles and interviews, and a new poll in The Jerusalem Post, indicate. Only 12 percent of Israelis consider Mr. Obama pro-Israel.
This subject is not academic to Israel. Egypt has just reopened its border with Gaza, making it far easier now for Hamas to get weapons to attack Israel. Indeed, rockets already are raining down on Israel.
Discovery Sr. Fellow George Gilder, author of The Israel Test, spoke in recent days in New York at The Israel Project and an American Spectator event on the Middle East, helping to show that support for Israel is not just a correct moral and military posture for America, but an extremely important for our economy. George also has an article just out in the June issue of The American Spectator, a "Special Report" on "The Arab Debt to Jewish Settlers." It's a rebuttal to the accepted account of American progressives.
Senior Fellow Hance Haney's take on the recent T-Mobile takeover was published today in the San Francisco Chronicle:
If you haven't already heard that the wireless market would be left with a struggling competitor if AT&T acquires T-Mobile USA, you soon will. As the FCC and members of Congress begin debate about what this merger would mean to the wireless industry, and specifically for Sprint Nextel Corp., it's important to remember that the competitor's long-standing struggles have nothing to do with this merger.
Many of today's consumers have long forgotten that Sprint's troubles date back at least to its own problematic merger with Nextel in 2005. The struggling carrier has been losing customers and revenue ever since, and this year alone lost $3.5 billion.
by George Gilder (borrowed from Disco-Tech blog)
Does the rise of Facebook portend the end of the real world, the collapse of dictatorships, the fall of Google, and the rise of love and peace and network neutrality?
Do smart pods and pads and Edenic walled social networks mean the end of the Web?
From Money, Fortune, the Economist, and Technology Review to a galore of blogs and newsletters, pundits predict the collapse of the web. Last September, Wired put it all together behind a lustrous eye-blasting pink cover, with Chris Anderson-Michael Wolff grafitti declaring "The Web is Dead." Many see Facebook, Twitter, and Apple's mediacopia as bringing about the decline and fall of Google, the outbreak of world revolution, or the revival of the U.S. economy of innovation.
George Gilder is down on the government and not impressed, either, these days with Silicon Valley (much of which is in bed with the government). But he is high on Israeli innovators--and pleased that his predictions about the "teleputer" (what has become your iPhone, iPad, etc.) have come true.
He also thinks, like Peter Drucker, that the last person to understand your business is your CFO. Ouch.
George--our Senior Fellow who helped found Discovery Institute--wants more respect for venture capitalists. So do we all at Discovery. It will take a innovation-led boom to bring America out of the cramped and crabbed economy that confines us now. To get that boom we have to encourage and reward knowledgeable risk takers.
Read the interview George had with Steve Forbes for Forbes magazine.
If the United States were growing as well as our Israeli ally, we'd be in fat city right now. The news from the little Mediterranean powerhouse just keeps looking up. GDP rose 3.8 percent last quarter, down from 4.5 percent in the previous quarter, but still very brisk. Technology stocks overwhelmingly lead the way.
George Gilder's thesis in The Israel Test is thus validated daily.
Imagine a developed country that sells more to China than it buys!
The shift is as big as from telegraph to telephone.
Our founding Fellow, George Gilder, thinks the Internet already is on its way out. He explains why and how.
The damage down by the WikiLeaks publication of diplomatic cables (none top secret so far) was limited (as noted in the previous post), but it certainly will crimp diplomatic activity for months and maybe years ahead. The earlier publication included information that compromised security in the Middle East and endangered lives, so, in that sense it was more serious. Now comes word that WikiLeaks may soon publish bank data stolen from the head of a major bank. The consequences could be felt in your wallet.
However NPR termed it, this is not about "whistleblowing". It is about a peculiar cultural form of antagonism to the West and to existing institutions. It something new, cyber-anarchism.
Indignation is growing in Washington. We are all waiting to hear what they are going to do about it.
(Meanwhile, colleague John Wohlstetter has an excellent review of coverage at Letters from the Capital.)
One of the realities of the Cold War is that the USSR often did know our secrets. Most damaging, they learned how to make atom bombs, and then hydrogen bombs. At the end, however, the Kremlin must have been very demoralized. Though "knowledge is power", as Disraeli said, it isn't everything. The Soviets could spy on us effectively but they still could not keep pace with our technical ingenuity and economic prowess.
Similar thoughts arise following the latest release of secret documents by "Wikileaks", publicized by The New York Times. (Apparently the Times is prepared to embarrass the United States government anytime, even when a Presidential Administration is led by someone they like, such as Barack Obama.)
Regardless, it seems there are few matters in the previously secret cables that will damage the United States very much. That is because we already are such an open society that few of our secrets are kept very long anyhow. More than many other countries, what you see with the US is what you get in these cables. I would be more worried about them if I were a foreign government--revealed as corrupt, for example--than I would be as someone at the State Department.
In fact, there probably is some perverse pride in Foggy Bottom as the public finds out what vivid writing sometimes is accomplished in secret cables. The Wikileaks haul is as much a trove of journalistic gems as it is of state secrets.
You might wonder how the newly elected House majority members have time to read, but of course busy people often read the most. So it is that George Gilder's The Israel Test and Claire Berlinski's Why Margaret Thatcher Matters are named in an article today by Tevi Troy at National Review Online. (Hat tip to Alex Lykken.)
If you are going to someone's house for Thanksgiving you might want to bring them one of those books ("It's what they are reading now on The Hill") instead of a bottle of wine or flowers. Or consider God and Evolution, edited by Jay Richards and just published by Discovery Institute Press, especially if you have a misguided relative who thinks Darwinism is compatible with orthodox Christian or Jewish faith. Guaranteed to keep the table talk lively.
Watch out for what is not being covered prominently in the news. There were many warnings about Islamist terrorism before 2001, including an explosion detonated at the World Trade Towers. Yet Americans preoccupied with domestic politics in September 2001 were caught unawares by the jihadists, changing our lives ever since. Likewise, the Bush Administration itself, and Sen. John McCain, were warning about Fannie Mae and Freddie Mac and the mis-regulated housing market as early as 2003. Yet they and all of us were thinking about politics, not economics, when the bubble burst in the fall of 2008, bringing about the slump we still endure.
Today, we are getting news about cyber-warfare that should alert even the politicos and observers fastened completely on next week's mid-term Congressional elections. Seymour Hersh is not my favorite writer, but give him credit for the warning in the latest New Yorker, "The Online Threat".
According to Hersh, there is a bureaucratic territorial struggle between the Department of Homeland Security, which is adding 1000 cyber security staff, and the N.S.A. (Sound familiar?) There is also a struggle between the cause of defending against cyber-attacks--which would militate in favor of everyone, public and private, obtaining encryption (which is available already)--and the interests of the military in having as much acces so computers as possible in order to catch cyber-terrorists in the act.
But surely if we know that encryption is the way to go, so do our opponents? To put it another way, if encryption is outlawed (or discouraged), only outlaws will use encryption. That is an exaggeration, but sanguine predictions that the kinds of terrorists who would like to destroy us (e.g., al Qaida) rather than merely spy on us (e.g., the Chinese) are unlikely to attack successfully and soon remind me of the same sanguine attitudes toward homeland attacks on the Twin Towers and the Pentagon--prior to September, 2001. It will not go well with today's national leaders if they fail this time to protect us. Of course, in case of a successful cyber-attack, it will not go well with any of us.
(George Gilder addresses Wired's September cover story, "The Web is Dead", by Chris Anderson and Michael Wolf.)
May I be so bold as to contradict my old friends at Wired? I would suggest that they have the picture wildly upside down. What is dying is not the Web but television and the Internet. The onrush of video bits as a share of traffic is irrelevant to the prospects of the web, which is measured not by bulk traffic but by information entropy: by impressions, transactions, and servers. The video flood, however, is deadly to the Internet with its ungainly TCP aks-naks, buffers and security patches, multi-layered latency and dropped links. It is the Internet that must die as a result of the dominance of video traffic.
Video will kill the cumbrous, porous seven layer Internet model just as the rise of voice killed the old best efforts, asynchronous, non-deterministic telegraph network. As my friend Henry Gau ingeniously explains, the rise of voice communications with their needs for deterministic synchrony required a new Bell infrastructure to replace the old Western Union tap-tap. Similarly video's needs for deterministic synchronous delivery precisely parallel the previous demands of voice streams when they became the prevailing form of traffic early in the last century with the rise of telephony.
Who will build this network remains in question but the floods of video all the way down from the server through the living room to the desktop to the handset cannot be handled by some Microsoft, Symantec, or Cisco patch on the old Internet.
At the (George) Gilder Telecosm Forum we learn that Evogene, Ltd. (TASE:EVGN), a genetic engineering company, claims that its Israeli castor oil plant-based biofuel product is suitable in composition and chemistry as a raw material for producing bio-jet fuel. Evogene's US subsidiary is collaborating with NASA on to create jet fuel from plant oils.
The tests of the product were conducted by Honeywell International Inc.Co. (NYSE: HON) petrochemical and refining unit UOP LLC, which is now developing a range of biofuels for various uses.
Writes GEORGE GILDER,
"I am suspicious of any green energy breakthrough that depends for its appeal on low emissions of "greenhouse gasses." But Evogene is significant as an existence proof for the value of Compugen (CGEN) in silico platforms for drug discovery.
"In Israel [last week], one of the most impressive public companies I saw
(among 12 private companies) was CGEN, where my host Jeffrey Grossman introduced me to the management. In the last year they have launched four further platforms,
the last two in March and April of 2010. Martin Gerstel has reportedly gone euphoric on the company's prospects, talking of not 10X but orders of magnitude larger potential beyond 10X and predicting that half of all the future pharmaceuticals in the industry will be based on his silicon genetic models and platforms.
Buried in the news about the "Peace Flotilla" is the business news of huge new gas reserves off the Israeli coast--enough to power Israel for several generations and leave some for export. This is a major advance for the Israeli economy.
But, Israel, an energy exporter?
Here is what you are not getting right now, even from that section of the media in America that is still pro-Israel: Israel is as important to the U.S. as the U.S. is to Israel. To the extent we damage our most reliable Middle Eastern ally, we are damaging ourselves.
George Gilder's The Israel Test is the one book out now that tells, extensively, how Israel matters to both the U.S. economy--especially in the cutting edge high tech field--and to America's strategic aims. It treats the cultural and historical reasons for U.S. support of Israel, but others do that, too. What matters, and what is missing from our national discussion, is how vital Israel is to American inventive prowess, manufacturing relevance and national defense. Israelis even have invented a device to let soldiers see through walls to activities that might be going on in a building they are about to inspect!
The popular Instanpundit correctly cites George Gilder for his early prediction of the Internet (what he called the Teleputer):
"LIFE AFTER LIFE AFTER TELEVISION: With nearly 20 years of hindsight, the blurb for George Gilder's book Life After Television, published in 1992, shortly before the first browser was available for consumers to access the still-nascent World Wide Web, sounds remarkably prescient:
"Gilder's thesis, written in layman's terms, is that the United States will soon lose its rightful preeminence in the telecommunications field to foreign competitors, particularly the Japanese. Unless, that is, American business executives, legislators, judges, and consumers look beyond separate, limited, and hierarchical forms of communication such as television, telephones, and online databases to a multifunctional, interactive, and democratic "telecomputer." Instead of envisioning a brave new telecomputerized world, the powers that be in American business, government, and law are wasting time protecting obsolete existing systems, he posits. Gilder also warns that expensive, user-unfriendly online databases such as Dialog and NEXIS are, at best, transitional technologies. Though much of Gilder's argument is based on his own opinions and peculiar personal preferences (Gilder doesn't seem to like to leave the house*) rather than real evidence, his thoughts make interesting reading."
Now what? Gilder, Discovery Senior Fellow who helped found the Institute in 1990 privately is predicting a replacement for the Internet. Stay tuned.
A sudden decision by the head of the Federal Communications Commission to accept Net Neutrality rules flies in the face of the economic arguments--and the fairness arguments--against such a departure. Hance Haney made the case earlier this week in the Seattle Times.
"An open Internet where broadband providers do not block access to websites or discriminate between content or applications isn't a vision," he writes. "It's a description of the unregulated Internet we already enjoy today. Those in Washington, D.C., who want to change it could stymie it instead and damage the economy." He was speaking of the FCC.
I don't care if Bill Gates believes in man-caused global warming, he is right about at least one creative and practical response to the energy problem: The former Microsoft head has teamed up with Toshiba and--putting his money behind his ideas--is figuring out how to make the small nuclear reactor, via "Traveling Wave Reactor" technology, a business reality.
Toshiba's model nuclear reactor
Meanwhile, the Wall Street Journal has noticed the opportunity, too, publishing an op-ed today by Steven Chu, U.S. Secretary of Energy. "Small modular reactors would be less than one-third the size of current plants. They (would) have compact designs and could be made in factories and transported to sites by truck or rail."
My own dream is something even smaller: a nice, safe nuke for a neighborhood or city district. Even your private basement. ("The Bloom Box.")
Senior Fellow George Gilder has shot a little arrow into the Obama Administration plans for "net neutrality". The Tuesday Wall Street Journal carries George's attack.
The author of Life After Television, Microcosm and Telecosm, among others, has been trying hard to make the point that the very cutting edge of our economy is high technology and its abundant success is the product of freedom from government over-regulation. Obama and Co., he says, hope to change that.
Net neutrality is Orwellian. It is further evidence of America's careening drive into a planned economy--and stagnation.
The government expansionists have had their eyes on the Internet ever since Al Gore claims he invented it. Of course, the Feds' DARPA did help birth the Internet, but there is no reason why Washington now should imitate the Iranian mullahs or the Chinese and start restricting access and imposing financial or technical controls.
It is not just because the technology is new that it has made such a huge contribution to our economy; it's also because the new technology has been relatively unfettered by the government.
The whole subject of federal regulation re-emerges in a major way in coming weeks. Watch this space.
Meanwhile, Mark Landsbaum of the Orange County Register (in a column that I missed when it first came out) is among those trying to sound the alarm about losing freedom on the Internet.
Take note before they take it away.
Michael McConnell, former national security director, says the United States could lose a cyber-attack, and that such a major assault on the enormous U.S. reliance on computers and the Internet is likely. It may be our most under-recognized national security threat, potentially precipitating a sweeping economic crisis.
Legislative and technical fixes are in the works, but they have been in the works for too long a time. Leading Senate advocates are Senators Rockefeller and Snowe.
McConnell predicted that the United States will suffer a catastrophic cyberattack before it takes strong action, and said that America's cyber posture will be strengthened greatly after any attack. He added that the strongest action should focus on securing financial transactions and the financial sector. a bill in preparation.
Testifying before a Senate hearing, Information Week reports, "McConnell predicted that the United States will suffer a catastrophic cyberattack before it takes strong action, and said that America's cyber posture will be strengthened greatly after any attack. He added that the strongest action should focus on securing financial transactions and the financial sector."
Israeli prowess in technology is the subject that started George Gilder on the path to writing The Israel Test, and it is the subject also that Gilder will emphasize in the upcoming Gilder/Forbes Telecosm 20009 conference in Tarrytown, New York November 10-12.
In Israel last week to promote his book and to meet with Prime Minister Benjamin Netanyahu, Gilder talked to many old and new friends in the remarkable Israeli technology industry that now is second only to America's. Among the topics he investigated was the invention of new long life batteries at Technion, "the MIT of Israel."
The batteries seem destined to revolutionize electronics and eventually to lead to the long-sought, long term electric automobile battery that was discussed this past week, also, at the "Beyond Oil" conference sponsored by the Cascadia Center at Microsoft's Redmond, WA campus.
(Reminder to the media: Gilder is director of Discovery Institute's Technology and Democracy program, and Cascadia is a center within Discovery Institute.)
"Bibi" Netanyahu, in his meeting with Gilder, apparently expressed enthusiasm about the varied themes of The Israel Test, which he recently read; not just the explanations for Israel's dramatic contributions to technology in the past decade, but also Gilder's original insights about Jews, Israel, capitalism and the nature of creativity.
Gilder has lined up a stellar cast for Telecosm 2009, a project co-produced with Forbes, and he says he expects the political and cultural vibrations to nearly equal the investment and technology interest this year. The annual Telecosm conference is not a program of Discovery Institute, although a number of our fellows, in addition to George Gilder, take part.
In Israel, The Israel Test already is the number one book (in English) on Israel.
Hance Haney of Discovery's Technology and Democracy project describes the peculiar state of technology in this economy in which Verizon simply opts out of the regulated (over-regulated) field of landline telephony because unregulated wireless is more lucrative. Thus has government (the FCC and Congress) outsmarted itself and failed the consumers--that is, the people who pay the Feds' salaries.
There is much to be grateful for tonight here in Washington. Our senior fellow John Wohlstetter, who is writing on nuclear proliferation, a public policy topic so old it is new again (or going to be), just held an exquisite book party to celebrate his Discovery colleague George Gilder's The Israel Test (#590 on the Amazon list, #1 on the subject of Israel). In John's apartment in the famous Watergate, looking over the Potomac at sunset, George described the inspiration of his father, who visited Germany in 1936 and vowed to come back to the U.S. and do all he could to defeat Hitler. His father did that--a mere 22 year old, but well-connected in New York society--and then enlisted as a pilot in what became the Second World War, and died.
In The Israel Test, George has written an astonishing love letter to Israel that somehow also manages to be a new treatise on his long time theme of capitalism as a system that prizes human exceptionalism. He sees the need to defend Israel and the potential for Israel truly to become again a light to the nations.
Human exceptionalism is also the theme, as it were, of Stephen Meyer's Signature in the Cell. As George Gilder says, Meyer's book is a debate changer, the most comprehensive examination yet of the issue of Darwinism versus design. No one can claim to understand that debate without it. (The American Spectator reviewer, Dan Peterson, described himself as "Blown Away".) It's 700 on Amazon's list, and tops in at least two science categories.
Then there are all the books that have come out lately from Ben Wiker (Darwin's Myth) and Jay Richards (Money, Greed and God), among them, and hold your breath for David Berlinski's forthcoming The Deniable Darwin. Senor fellow Wesley J. Smith's current cover story in National Review, on Creeping Euthanasia, is a prelude for his new book this winter.
I add the film on the Cambrian Explosion of life forms 580 million years ago--"Darwin's Dilemma"--by Illustra Media that is just about to premier at the Oklahoma Museum of Natural History, featuring many Discovery fellows. Adolescent-acting Darwinists are trying to disrupt the opening, but their Acorn-style agitation only will add to the piquancy of the film's signal achievement. I was a guest at an early screening and conclude that it is going to be another winner.
The materialist Left is losing out.
One walks down Sixteenth Street near the White House and sees the monstrous, four story posters for "card check" and "full employment" on the lobbying organizations that now sidle up to power. One hears the stories, on the other hand, of the plain folk who showed up on the Mall in the hundreds of thousands last week to protest government health care, and one sees the cracks in our social consensus.
But that is the present. The future is in the minds--and writing--of colleagues like Gilder and Meyer, et al. In a gloomy time, they are a reason for gratitude and good cheer.
The Israel Test by George Gilder continues to get stunningly positive reviews by conservatives, such as this one today by Clifford May in National Review.
Somehow, however, the liberal media are pretending not to notice.
The best book reviews are the ones that add not only to what one knows about a subject, but also to what the book author knows. That is what characterizes Sol Stern's City Journal review of George Gilder's The Israel Test. Stern knows how Tel Aviv is faring in the current economy--which is, great--and how French Jews are buying condos on the new Israeli Riviera. And how, if the Palestinians had some control on their rage, Gaza's sandy beaches could become a huge tourist draw, too.
Needless to say, this all supports Gilder's themes in The Israel Test, and Stern, needless to say, thinks Gilder's book itself is outstanding. He goes on to express an amused observation about the likelihood that Gilder's "stark, almost apocalyptic terms will bring out all the old Gilder haters." Who might they be? Discovery Institute friends will know.
"Just as his seemingly elitist defense of the traditional capitalist virtues and of the nuclear family infuriated them, just as they were enraged by his objections to modern feminism and, more recently, his evangelizing for Intelligent Design, they will surely reject out of hand (Gilder's) understanding of the underlying factors behind the current conflict in the Middle East. That's too bad."
I'll say. But for all those who appreciate the full Gilder canon, The Israel Test will prove an exciting adventure.
John Wohlstetter is prejudiced in his praise of The Israel Test; he's a friend of the author, George Gilder. Of course, a review by an author's friend has never happened anywhere else, has it?
Regardless, John is a friend and colleague of mine, too, and I know what he does when he disapproves of a friend's views: he goes silent. This article in The American Spectator is, in fact, a very good introduction to the George Gilder's book.
The best lines are these, at the end:
Israel could be the economic engine for the entire Mideast. This is the new Israel, no longer a financial ward of America. It is this Israel that most Americans know not of. "Israel Inside" would be a great slogan for an ad campaign educating Americans about the new Israel, and its supreme value to America and the West. In lieu of an ad blitz, Gilder's book does the job beautifully.
Israel does need an "ad campaign" right now because its foes seem to have a great many people intimidated. George is fearless. His book goes where many media voices seem afraid to go.
George Gilder's new book, The Israel Test, is starting to get around. We ourselves have already filled over 1,000 book orders in house. (Actually, we recommend that purchasers go to Amazon.com to order. For both orders you can still come to us.) Mona Charen had a terrific column a few days ago on George's appearance at the AEI. David Pryce Jones has a fine article out in the National Review, and The American has published a long excerpt of the book.
The growing buzz may have somthing to do with the fact that there really is an Israel test going on right now in international affairs. We definitely are on the case -- led by George.
The Ahmadinejad regime in Iran has been wounded internally, thanks to the brave advocates of freedom who took to the streets, but it probably will try to stabilize its position by foreign policy truculence and a "breakthrough" on nuclear weapons.
It is in this incendiary environment that George Gilder's incredibly timely book, The Israel Test, is coming out (pub date, July 23). It already is getting noticed.
Here is a tiny excerpt--and an admonition at the end!
"The central issue in international politics, dividing the world into two
fractious armies, is the tiny state of Israel.
"The prime issue is not a global war of civilizations between the West and
Islam or a split between Arabs and Jews. These conflicts are real and
salient, but they obscure the deeper moral and ideological war. The real
issue is between the rule of law and the rule of leveler egalitarianism,
between creative excellence and covetous "fairness," between admiration of
achievement versus envy and resentment of it.
"Israel defines a line of demarcation. On one side, marshaled at the United
Nations and in universities around the globe, are those who see capitalism
as a zero-sum game in which success comes at the expense of the poor and
the environment: every gain for one party comes at the cost of another. On
the other side are those who see the genius and the good fortune of some
as a source of wealth and opportunity for all.
"The Israel test can be summarized by a few questions: What is your
attitude toward people who excel you in the creation of wealth or in other
accomplishment? Do you aspire to their excellence, or do you seethe at it?
Do you admire and celebrate exceptional achievement, or do you impugn it
and seek to tear it down? Caroline Glick, the dauntless deputy managing
editor of the Jerusalem Post, sums it up: "Some people admire success;
some people envy it. The enviers hate Israel."
". . . . Today in the Middle East, Israeli wealth looms palpably and
portentously over the mosques and middens of Palestinian poverty. But
dwarfing Israel's own wealth is Israel's contribution to the world
economy, stemming from Israeli creativity and entrepreneurial innovation.
Israel's technical and scientific gifts to global progress loom with
similar majesty over all others' contributions outside the United States.
"Though Jews in Palestine had been the most powerful force for prosperity
in the region since long before the founding of Israel in 1948, more
remarkable still is the explosion of innovation attained through the
unleashing of Israeli capitalism and technology over the last two decades.
During the 1990s and early 2000s Israel sloughed off its manacles of
confiscatory taxes, oppressive regulations, government ownership, and
Socialist nostalgia and established itself in the global economy first as
a major independent player and then as a technological leader.
"Contemplating this Israeli breakthrough, the minds of parochial intellects
around the globe, from Jerusalem to Los Angeles, are clouded with envy and
suspicion. Everywhere, from the smarmy diplomats of the United Nations to
the cerebral leftists at the Harvard Faculty Club, critics of Israel
assert that Israelis are responsible for Palestinian Arab poverty. . . .
Denying to Israel the moral fruits and affirmations that Jews have so
richly earned by their paramount contributions to our civilization, the
critics of Israel lash out at the foundations of civilization itself--at
the golden rule of capitalism, that the good fortune of others is also
"In simplest terms, amid the festering indigence of Palestine, the state of
Israel presents a test. Efflorescent in the desert, militarily powerful,
industrially preeminent, culturally cornucopian, technologically
paramount, it lately has become a spearhead of the global economy and
vanguard of human achievement. Believing that this position was somehow
captured, rather than created, many in the West still manifest a primitive
zero-sum vision of economics and life. . . ."
Get an advance copy now! This is classic Gilder and on a "new" subject. I had the pleasure of editing it in two stages. This is going to be a winner.
Authoritarian regimes from China to Iran have made it their business to try to control what their peoples can see or do on the internet. It is usually about politics. Now Turkey joins the pack, even while its leader quips about how easy it is to thwart the government's censorship efforts.
In this useful article from Radio Free Europe, Claire Berlinski wonders how Turkey thinks it is going to get into the European Union when it employs such behavior.
What George W. Bush named "The Axis of Evil" included Iraq, North Korea and Iran. Iraq is relatively, if perhaps deceptively, quiet, but Iran is "hot" and North Korea seems bent on getting into our faces whether we want to see them there or not. This AP story by Lolita Baldor should push the federal government--as well as the private sector--to greater defensive action. Computer security is national security, and in that light it is worth noting that cyber attacks have increased almost three fold in three years.
This is the kind of story that, in retrospect, may be seen as a lot more significant than what is daily emphasized in most of our hedonistic, anesthetized media.
Both hardware and software defenses are being evaluated and, in some cases, mounted by the feds, as well as by OEMs (original equipment manufacturers) and the private companies that purchase their products. But the general public is still in the dark about all this. There doesn't seem any over-riding interest in computer security options yet. But that may be about to change.
(UPDATE JULY 8: http://www.bloomberg.com/apps/newspid=20601087&sid=aVEB6XhdZTFA)
Cell phones are wonderful, especially the complicated new ones that do everything short of cooking dinner and baby sitting the children. The future George Gilder predicted thirty years ago in Life After Television is here.
But when it comes to cell phone etiquette we are stuck in the barbarian past. Some people still shout into the little devices as if they couldn't be heard otherwise. That is annoying even out on a busy street. But the worst bores are those who ruthlessly ignore everyone around them in restaurants, theaters and meetings, dulling their (probably well-justified) loneliness by talking loudly on their cell phones to whoever they think might validate their existence and the importance of their every fleeting thought.
A woman at the neighborhood coffee house sat right across from me one recent morning and for twenty minutes blathered on her phone about her job as a university soccer coach. She talked about her pay, the team's schedule, even the supposed derelictions of her fellow coaches.
There was no reading my paper; she had seized me by the eardrums and wouldn't let go. Like many with cellphonitis, she stared straight ahead, resolutely avoiding eye contact. Other patrons squirmed, finished their coffee and left. So did I. Too bad we couldn't have charged her for our time.
I am not going to let this happen again. Lady, you are going to be confronted. If you are happy to broadcast your private business to an uncaring world, fine, but I plan to share my own discomfiture in being forced to share that activity--and I will share it with you. I won't raise my voice, but I will stand in space where you can't avoid me and start discussing the situation reasonably with you until you give up your call and quit bellowing.
Meanwhile, here is a good indication that cell phone providers--like liquor makers who run ads about "responsible drinking"--are alert to the irritation their product can cause.
I don't want another law (please), just enforcement of a custom that civilized people respect in other situations. Keep your conversations to yourself.
There certainly is some hand-wringing at CNN and in the major media generally about the criticism of CNN. Much of it is coming from Iran. The widely cited Twitter address #CNNfail is based on disgust with that network. CNN is more popular internationally and has more sophisticated content, someone should point out, than does CNN inside the U.S.
To some analysts the rise of #CNNfail is a matter of demand for more coverage. http://www.ojr.org/ojr/people/robert/200906/1752/ CNN, they say, is held to higher standards than, say, Fox. That seems a peculiar reading of the Twitter and blog traffic
Try out this interpretation instead: CNN failed the Iranian people and its international audience because it was slow to acknowledge the breadth and depth of popular discontent in Iran. CNN's coverage exhibited this failure. CNN correspondents and anchors reflected the network's diffidence. They acted as if they lacked sympathy for the protesters. Perhaps that was because, at first, at least, they did lack such sympathy. A liberal (small "l") revolution in Iran didn't fit their template, for some reason.
That is why we have seen the phenomenon of #CNNfail. Even young Iranians are media critics now.
A Tehran University student's computer, purportedly broken during a militia raid.
The discussions in the White House right now must be fascinating and maybe heated--should we openly side with the Iranian demonstrators or hold to the neutrality pose? Just now the President's spokesman said he hopes Twitter will continue to delay needed maintenance downtime so that direct news can be reported from the Iranian people. That's a positive step. After all, Western reporters are being ordered to stay in their offices and not to report from the street. So brave reports from Iranians are all there are to get the truth out. (Two top Twitter sites #IranElection and #CNNfail--a running reproach to CNN's less than helpful coverage.)
Right now there are a spate of Twitter messages saying that there are more deaths today and raids of homes and offices; also that the Army has entered Tehran to confront the demonstrators. If so, this escalation raises the prospect of rank and file Iranian soldiers being called upon to attack their fellow citizens. It is a different prospect from the actions of the Basij ("Mobilization") militia that are a kind of kind of palace guard for the theocrats and have been beating demonstrators with batons over several days. In many revolutions, a critical moment comes when ordinary citizens in Army service are asked to fire on other citizens. They may do it once, even twice. But eventually, they may refuse their orders and then, whether planning it or not, may switch sides. If that happens, the revolution reaches a new, more explosive stage. Remember, too, the soldiers are young, and so are most demonstrators. They are all Iranians.
An alternative scenario is that the supposed reformer Moussavi goes on TV (which the Twitterers also say he is trying to do) and essentially cools down the protests with minimum demands, whereafter the regime regains control.
Regardless, as Amir Fakhravar, the former head of the Iran Student Confederation and a prisoner tortured repeatedly in the infamous Iranian prisons, said today, the people of Iran have not had a chance to express their will about the main contours of the government. The real powers in the theocracy merely present them with pre-approved candidates they can choose among. Fakhravar spoke eloquently at Discovery Institute two years ago; today he pointed out on FOX News that the Iranians are expressing themselves in the street as never before. The demonstrators are an appealing lot, not hateful, but peaceful, almost too pleading. And they are braver than the demonstrators of 30 years ago who were standing up to forces that already were crumbling.
They need to know our moral support.
Twitter in San Francisco must be uncommonly proud. Its service is defeating the Iranian censors. As this article indicates, Ahmadinejad government is playing "whack a mole", wielding centralized technology by theocrats against distributed technology in the hands of democrats.
(UPDATE: The most disturbing Twitter reports are of non-Farsi-speaking thugs attacking students and others in Teheran. Twitter reports believe they are Hizbollah and other imports. Many are on motorbikes. Michael Ledeen has fine analysis at Pajama Media. (Final note: It's nearly noon Tuesday in Iran. The country is literally on its own time--eleven and HALF hours later than Pacific Coast time, which is to say, eight and a half hours later than the East Coast.)
By George Gilder
(Cross-posted at Discovery's Disco-Tech's Blog.)
President Obama received a Cyberspace Policy Review from cybersecurity experts this week and pledged to create an Office of Cybersecurity Coordinator in the White House.
A federal cybersecurity coordinator may help government agencies better coordinate their responsibilities and authorities and eliminate duplicative or inconsistent efforts.
But most of the networks and computers which power the world's most dynamic economy and support the strongest military are owned and operated by the private sector, as the cybersecurity experts and the President acknowledged. The private sector has been hard at work improving the reliability of software and building security features into the network.
The importance of the network in combating cyber attacks has largely been overlooked. Network operators eliminate most spam, which, according to Semantech, comprises 90 percent of email.
Unusual traffic patterns give network operators early warning of worm strikes and distributed denial-of-service attacks. Network operators can divert malicious traffic to scrubbers so it never reaches its intended destination. Networks are the first and possibly the most effective line of defense.
The federal government will not dictate security standards for private companies nor monitor private sector networks or Internet traffic, according to the President. But with new high-level officials there will be a continuing temptation for government to micromanage the dynamic technology, telecommunications and cable sectors.
The President may bemoan the extent of taxpayer investment in cyberspace,
just as we failed in the past to invest in our physical infrastructure -- our roads, our bridges and rails -- we've failed to invest in the security of our digital infrastructure,
but unlike roads, bridges and rails, there are still opportunities for profit in software, hardware and broadband.
The biggest threat to continued private investment in cyberspace may be the President's oft-repeated support for net neutrality regulation, which would divert investment away from the core of the network. Cybersecurity requires investment throughout the network. The network is an ecosystem in which everyone has an important role to play.
The President's interest in cybersecurity is a good thing. But the federal government can do more to harm cybersecurity than to promote it.
One purpose of this blog is to call attention to issues that may well be about to assume increased public policy prominence. An example is the seemingly mundane matter of computer security. That includes security for public records.
Recently there have been disconnected stories about foreign efforts to attack military and commercial computers in this country and schemes to steal identities of credit card holders and other people whose personal data have been entered into computers. In practice, just about all of us are affected.
The past week the Obama Administration announced that it would like to put many of the nation's medical records--now on paper or on disparate computer files--into a centrally organized data base. The proposal in principle has merit as a way to make medical cases more portable for patients and to speed insurance and other processes. But it raises questions of cost, of course, and, even more importantly, questions of privacy. Who wants to see their private medical information bandied about on the Internet or, worse, sold to vendors of various kinds?
There appear to be new technologies to prevent such problems and at reasonable cost, but the overall problem of vulnerable computer security--on medical records or national security--is not a minor threat for the country as a whole or for our citizens as individuals. It won't solve itself. It needs high priority notice by government and businesses alike.
One scary new idea is that the president could be empowered to close down the nation's computer systems to protect against cyber-attack:
Dr. Medved, Seattle, 2008
David Medved, RIP
By David Klinghoffer
Whether in science, politics, or religion, one of the qualities most lacking in modern culture is breadth of vision. This is the gift of being able to see and express the whole, not merely a part. In the fields of thought and endeavor that matter most, too many of our leading figures are caught up and blinded by the narrow view of their little area of interest. Such narrowness breeds timidity and a suffocating orthodoxy.
All too painfully, we were reminded of this with the passing of our friend Dr. David Medved, a model of broadmindedness, in Jerusalem this past Tuesday. He was 83 and, last time we saw him, admirably vigorous in mind and body. Scientist, entrepreneur, and man of faith, father of radio host and Discovery Institute senior fellow Michael Medved, who is no less a dear friend, Dr. Medved was an amazing gentleman.
Accompanied by Michael and his Michael's wife Diane, David visited our Seattle offices last May to speak about his recent book, Hidden Light: Science Secrets of the Bible. A particular moment in his lecture seemed to crystallize much of what made him so special. There he was, tall and lean, standing in front of a huge map of the universe, displayed on the wall by a projector at the back of the room -- the famous WMAP picture of the cosmic microwave background radiation. What could be a more appropriate image, symbolizing breadth of thought?
DI president Bruce Chapman was standing to one side and gestured with a pointer to a spot in the upper left hand corner, noting dryly, "Seattle is right here." Dr. Medved smiled indulgently and carried on, mapping his own vision of the oneness of Biblical and scientific wisdom, hints of which he found scattered through the Hebrew Scriptures. You didn't have to agree with every detail of his interpretation to appreciate the major thrust of his perspective on the world.
That perspective was, in the words of the central Jewish prayer Sh'mah, that "the Lord is our God, the Lord is One" (Deuteronomy 6:4).
That kind of vision, increasingly rare today, is just part of what made David so unusual and so valuable. More personally, he was an exceptionally warm and charming man. A hero to his four sons -- Michael, Jonathan, Benjamin, and Harry -- he reminded other, younger fathers of the way we should hope to be regarded by our own sons and daughters some day.
He was a most kind and generous friend to the Discovery Institute. On trips to Israel, where he lived and worked, groups of DI-affiliated visitors David was our tireless guide, councilor, and chaperone. He seemed to know absolutely everyone, by whom he was held, without exception, in high and affectionate esteem.
David was, finally, an Orthodox Jew. From his viewpoint now in the supernal world, the Garden of Eden, he would no doubt be gratified if those he left behind would, according to Jewish custom, bless God in his merit with the brief prayer Baruch Dayan Ha'Emes, said upon hearing the news of a loved one's death: "Blessed are You, Lord, our God, King of the universe, the true Judge." May his family be comforted.
David Medved and The Israel Test
By Bruce Chapman
Friendships that suddenly arise late in a man's life; what an unexpected blessing for all concerned! Such were the friendships that David Medved developed with George Gilder, me and several of the rest of us at Discovery Institute in recent years. A physicist, an inventor, a businessman, he was an early signer of the list of scientists who Dissent from Darwin, and that is how his name first came up here. But then we started learning about so many other facets of David's remarkable personality and career. A resident of Israel, he described the best part of his daily routine as the prayers he he would offer on his terrace overlooking old Jerusalem as the morning sun broke through. That is the mental image of David I will always cherish.
David will also be recalled on the pages of George Gilder's new book, The Israel Test, that appears later this spring. David truly helped inspire and foster it by his devoted sponsorship of George in Israel, by his descriptions of his life in science, technology and business, and especially by the example of his own aliyah--his personal rediscovery of Israel and its significance for the modern world. The memory of his generous smile brings a smile to me now, and my own prayer of gratitude.
What is coming in Israel after this week's exciting elections is a coalition, as usual. But, facing stressful and consequential days ahead, this coalition could turn out to be unusually conducive to vital domestic stability.
It is in this sensitive moment that Discovery Senior Fellow George Gilder is completing the edits for a new book, The Israel Test. This work will surprise many of his fans, but it makes sense in the progression of George's interests over four decades--from war to politics to families to "wealth and poverty" to entrepreneurism to technology and technology companies to (now) the Israel of the past dozen years that concatenates new free market policies, brilliant minds and the most fecund technology, acre for acre, in the world. For Gilder, the success of the United States is now linked as never before to the success of Israel. The links are more than sentiment, and more than political and military interests. The new links are shared technical knowledge, imagination, business acumen and, most of all, mental agility.
Benjamin Netanyahu helped usher in this new era when he was finance minister in the 90s. Now, as George first found on a Discovery-sponsored trip two years ago, the country is fairly bouncing with brash young businesses that have made tiny Israel an amazing tech powerhouse. In his distinctive fashion George weaves a story of the people who made this happen and their successors today. He interprets this account in the context of the history of the Jews in modern times and gives a frank report on the undeniable genius of the Jewish people.
Our Discovery colleague David Klinghoffer, who writes often on Jewish matters, read a draft this week and tells me he found it "brilliant, visionary, original, exciting, and beautiful... The fundamental insight about an 'Israel test' we all face is so intuitive and obviously true--yet not like anything I've heard before. Once he articulates it, I know exactly what he means and have to admit I've not always passed it myself.... It snaps so much into perspective, unarguably, I think."
Gilder is original. He's also funny and challenging.
Richard Vigilante Books is the publisher. The Israel Test is slated for publication this spring.
You heard about it here first.
Senior Fellow Hance Haney entertains the useful contrarian suggestion that in some spheres, such as technology, less government regulation is needed--maybe to the extent of abolition.
Abolishing the FCC stands little chance in the Obama Administration. But worthy ideas require a long road to implementation, and that one might as well start now.
By George Gilder (taken from his weekly subscriber newsletter):
It is the view of The New York Times' Tom Friedman that the Israelis, who hold less than half of one percent of mid eastern territory, should trade land for peace with the Palestinians:
After thirty years covering this area, cataloguing every olive tree in the
Middle East, Friedman no can longer see the imperious forest of basic
facts before him in the region. G.K. Chesterton got it right. As I
paraphrase: "If it were true that the man who is trained is the man to be
trusted--if the man who saw something every day saw more and more of its
significance--the argument for expertise would be unanswerable. But the man
who sees and studies and practices something every day does not understand
more and more of its significance, but less and less."
Reflecting this blindness of expertise is the utterly conventional and
obviously fantastic consensus view of Friedman and nearly all the other
authorities on the subject. The key problem in the mid-East, they conclude
in chorus, is that Israel has too much land. Their remedy is for Israel to
give up land for the creation of yet another fanatical Moslem nation-state
in various areas of Palestine amazingly even more cramped than Israel.
Created would be a prospective nation with no identity to sustain it
beyond the Palestinian sense of grievance and its hatred of Israelis.
It is hard to imagine two more preposterous ideas so widely and
prestigiously upheld by experts. Chesterton's law is fully vindicated by
Also supporting this pastiche of absurdities is French writer-"activist"
Bernard-Henri Levy. Author of a book on the killers of Daniel Pearl of the
Wall Street Journal and articles and essays galore on Israel and
anti-Semitism, he amazingly slips into an objectively anti-Semitic mode
himself. Believing that Israel must trade land for "peace," and give the
Palestinians a state, Levy fails to explain why, of all the nations of the
world, the only one not permitted to command a defensible territory,
capture the staging areas of invaders, or exclude immigrants devoted to
their destruction are Israel's Jews.
By contrast to Israel, the Palestinians are surrounded on all sides by
spacious and compatible Arab countries of whom they theoretically could
become citizens. Why not the East Bank? That's Jordan, where 100 thousand
Palestinians voluntarily fled during the 1967 war? As David Pryce-Jones
witnessed at the time on the Allenby bridge, "Fear did not seem to be the
motivation. These people had not seen a single Israeli soldier....Something
in the culture more powerful than either self-interest or common sense was
A Moslem Arab state from time to time sustained by Israel and created in
part as a home for the Palestinians, Jordan held the West Bank until King
Hussain's treacherous 1967 invasion and shelling of Jerusalem. Jordan
retains a far more compelling obligation to these people than Israel does.
In the 1980s, Palestinians taking refuge in Jordan did attempt to
overthrow the Jordanian government. So the Jordan solution may take some
work, but it is surely more practical than the seawater solution favored
by the Palestinians.
Should the Palestinians shun Jordan, perhaps they would prefer the Soviet
Jihad state of Syria, which in its guise as "Greater Syria" stretches its
reptilian tentacles throughout the region, including nearby Lebanon.
Moreover, Egypt is contiguous with Gaza and could easily absorb the Gazan
Palestinians. It is outlandish to say that, because of some democratic
nicety interpreted tendentiously by the U.N., Israel must commit effective
suicide by giving citizenship and equal voting rights to 4.5 million
anti-Semite enemies who want to kill them.
Yet Jeffrey Goldberg of the Atlantic, in a helpful piece called "Is Israel
Finished?" reports that accepting this line of democratic thought are not
only leading Israeli writers such as the prizewinning Amos Oz and my own
favorite, the eloquent Edward Grossman, but also the then incumbent prime
minister Ehud Olmert himself. Grossman's waffles may be understandable
because of the loss of his son Uri during the Lebanon War in 2006. But
Olmert and his allies had no excuse. Nonetheless, this former mayor of
Jerusalem nominally dedicated himself to removing the some 400 thousand
Jewish settlers in the West Bank and Eastern Jerusalem. Goldberg's article
justifies this surrender by suggesting that, together with the demographic
trend, the West Bank settlements are "a castastrophe." Echoing Jimmy
Carter's ingenuous view, Goldberg even raises fears that "Israel will
become a state like pre-Mandela South Africa, in which the minority ruled
Clinching the argument, Goldberg writes: "If the Arabs of the West Bank
and Gaza were given the vote, then Israel, a country whose fundamental
purpose has been to serve as a refuge for persecuted Jews [where they
could live as a majority], would disappear, to be replaced by an
Arab-dominated 'binational' state."
This is a democratic ideology that accords no significance to the prospect
that an Arab run Israel would quickly expel all its Jews and cripple its
capitalist economy. Such rules of democracy would make democracy a suicide
Without a functioning and legally protected capitalist system, democracies
swiftly sink into ochlocracies, ruled by mobs. Without the independent
private sources of power imparted by free businesses, unbiased courts, and
other institutions of economic order, any democracy becomes a despotism
ruled by any tribe of thug politicians that manage to gain control. If
they have oil or foreign aid they may stay in power for decades. The
failure of leading Israeli intellectuals and politicians to comprehend
this reality is far more portentous than any supposed demographic trend.
In stark terms, Israel and Palestine raise the issue not only of the
prerequisites of viable democracy but also of the nature of capitalist
wealth. Are entrepreneurs, in Israel and around the world, chiefly givers
and benefactors, or are they predators and exploiters? Should policy focus
on fostering economic growth for all or on closing "gaps" between rich and
poor? Should it seek to enable an economic spearhead of excellence and
creativity or to dispossess the successful to subsidize the wretched of
the earth? Clutching their Fanon and their Koran, their Howard Zinn and
their Noam Chomsky, the ersatz voices of the "wretched of the earth"
punctuate their claims by a flaunted fist of hate, a clenched mind of
murder. Does Israel owe anything at all to such people?
To many observers--in the army of the left--it is obvious that Israeli
wealth causes Palestinian misery. How could it be otherwise? Jews have
long been paragons of capitalist wealth. Capitalist wealth, as
Pierre-Joseph Proudhon put it in regard to "property," is "theft." Karl
Marx was said to have shaped his opposition to property rights and his
Jewish self-hatred, by reading Proudhon, who in anti-Semitic virulence,
exceeded even Marx. In an 1883 diary, Proudhon declared that, "The Jew is
the enemy of mankind. This race must be sent to Asia or eliminated." This
fits well with Osama Bin Laden's view that warping the entire U.S. economy
and its global impact has been the effects of Jewish usury.
History, however, favors the view that poverty springs chiefly from envy
and hatred of excellence--from class war Marxism, anti-Semitism, and
cleptocratic madness. It stems from the belief that wealth inheres in
things and material resources that can be seized and redistributed, rather
than in human minds and creations that thrive only in peace and freedom.
In particular, the immiseration of the Middle East stems chiefly from the
covetous and crippling idea among Arabs that Israel's wealth is not only
the source of their humiliation but also the cause of their poverty.
Most of the world, even many citizens of Israel itself, want to muddle
these issues. The favored answer to all categorical pronouncements is:
"All of the above." Democracy, equality, multicultural kumbaya, Sharia
law, gay marriage, capitalism and freedom, the children of coddled West
want it all in a cornucopian cocktail party of inebriated contradictions,
from green austerity to entitled affluence. They mix nominal political
support for Israel with celebration of Palestinian voters who elect and
applaud anti-Semite terrorists. They match a devout belief in abortion
with fears of demographic disaster in Israel, and with continual bows of
political reverence toward an ever-diminishing complement of children.
They combine opposition to nuclear weapons and defense spending with
demands for American intervention everywhere the U.S. has no conceivable
national interest, from Burma to Tibet. They oppose nuclear proliferation
while urging US nuclear disarmament that hugely enhances the incentives
for secret nuclear programs. Without peremptory US nuclear superiority a
small complement of nukes can confer global dominance and make it
impossible for the US to defend Israel or anyone else.
The Israel test forces a remorseless realism. It disallows all the bumper
sticker contradictions of pacifistic bellicosity. Either the world,
principally the U.S., makes the sacrifices to support Israel or Israel,
one way or another, will be destroyed. There are no other realistic
choices. And if Israel is destroyed, capitalist Europe will likely die as
well, and America, as the epitome of productive and creative capitalism,
spurred by Jews, will be in jeopardy.
Discovery Sr. Fellow George Gilder, co-founder of Discovery Institute, has a fine Forbes magazine piece up today that shows the confidence and hope the political candidates are missing.
The answer, George Gilder tells me, may be hedge funds.
The disappearance of Lehman Brothers and the transformation of Morgan and Goldman Sachs into heavily regulated commercial banks presents an opportunity for entrepreneurial risk taking by someone else. Such as hedge funds. New technologies make it possible for them to stay in touch with clients and handle trades quickly.
The turmoil in the markets world-wide disagregates the economy and makes new entitites possible. Dispossessed "animal spirits" will surely find a new home.
It is worth pausing here to recall that Fannie Mae and Freddy Mac helped over several decades to get home ownership up to 70 percent in this country. Very good, up to a point. They were distinguished by one advantage, government guaranteed money, and one vice, greed (or, if you prefer, self-serving ideological pride). Financial organizations looked at this situation and saw opportunities to build huge new leveraged edificies on top of it. They and Fannie and Freddy went overboard.
The "mark to market" regulation, meanwhile (for all you who love regulations) quite possibly has made the current situation seem worse than it needsto be. No one really knows what the price of a house is if it isn't selling, so the mark to market exercise is conducted with far too little knowledge. Now we see through a glass darkly.
Overall, is this not a political problem as much as an economic one? Is not the risk of posturing members of Congress now at least as big a scare factor as the housing market and financial markets?
Former colleague Richard Rahn writes in The Washington Times that inflation is high or low depending on what you are buying and how you are living. High technology products actually are making many activities more efficient and cheaper. See below:
The Washington Times
What is Measured?
By Richard W. Rahn
Published February 29, 2008
Do you think inflation is rising faster than the government says (an annualized of 4.1 percent in December)? Many people do, because they are keenly aware of supermarket and gas station prices, but that is not the whole story.
Inflation is defined as an overall increase in the price level, but the "inflation" that each individual faces is different. Over the last year, there has been a big jump in the price of gasoline and in many foods, such as milk and bread. (The increase in food prices is almost entirely due to the government"s foolish policy to subsidize corn for ethanol, thereby driving up the price of not only corn, but every crop that competes with corn for field space.)
However, if a person spends a lot of money on electronic items and communications, and does not drive much, his or her total expenditures might have declined as a result of the continuing rapid drop in prices of most electronic items and communications.
If you bought a Blackberry or Apple iPhone, you purchased an item that can replace your computer for Internet and e-mail access, cell phone, Rolodex and calendar, camera, calculator, global positioning navigator, personal music and video player, etc. To replicate all the things you now get in one Blackberry or iPhone would have cost you many thousands of dollars even a decade ago (even if available).
In the late 1990s and the early in this decade, inflation as reported by the government was quite low, though asset prices, such as homes in many areas, were rising at double digit rates. Now prices of homes and HD flat-screen TVs are falling.
Government economists and statisticians responsible for measuring inflation do not have an easy task, which is only getting more difficult. As the rate of technology change increases, the goods and services we consume radically change, so historical measures become less and less relevant. Yes, bread and milk prices have not changed much, but as people become more affluent, the portion of income they spend on such staples becomes smaller and smaller.
At the same time, the Internet, which for most people is only a decade-old, has caused prices to drop for millions of items -- most information now is almost free as are international phone calls using Skype and its competitors.
If inflation becomes more and more difficult to measure, how can central bankers determine how much money to produce to keep a stable price level?
Some call for a return to the gold standard, but that is not the panacea some may think. Gold prices over the last three decades have swung back and forth between $250 and the current $900 per ounce. Sales of gold by governments, as well as global market psychology, can cause substantial price shifts; and the additions to the gold supply each year tend to be less than the potential increase in global GDP, which can have a deflationary effect. Despite these problems, gold may be better than some other alternatives.
For readers desiring a more in-depth, but clearly written and brief discussion of the pros and cons of alternative money systems, I highly recommend a new book with the off-putting title, "One Currency for Bosnia," by Warren Coats. Mr. Coats is a highly regarded monetary economist who has specialized in setting up new monetary and banking systems for countries whose economic systems have collapsed because of war or revolution (i.e., Bosnia-Herzegovina, Iraq, Afghanistan, many of the former communist republics, et al.).
The book is a riveting tale of how Mr. Coats and his International Monetary Fund teams have quite literally risked their lives to help rebuild the economies of war-torn countries. And it is also a wonderful and easy to understand primer on money and banking, in which key concepts are presented in succinct inserts.
Measuring the value of money and inflation within a national economy is difficult enough; but when it comes to measuring real global price changes, the problem is greatly magnified. Why should the cost of a Big Mac (identical to one in America) be 50 percent more in some European countries, even where their real wages are lower than in the United States?
Why should the value of the euro and the dollar swing more than 60 percent against each other in only five years? These relative currency and price swings wreak havoc with global business people who engage in long-term contracts or build manufacturing operations in several different countries. While the search for a global monetary constant will always remain elusive, there is a need for a more stable reference point than either gold or any national currency can provide.
A highly regarded nongovernmental private organization, with no vested interest (other than enhancing its reputation), could provide a greatly needed service by creating an artificial monetary unit to measure against the price of any good or service on the globe. This unit would need to be a transparent basket index of standard goods and services produced and/or consumed in many countries (the index would evolve over time -- like the Dow-Jones stock index -- as technologies and global consumption patterns change). Once established, contracts, and even interest-bearing securities, could be written in the monetary unit. Such a widely accepted unit would substantially add to global economic stability and better resource allocation, leading to higher global economic growth.
Richard W. Rahn is the chairman of the Institute for Global Economic Growth.
At the very time when the media are warning about threatened unemployment, the technology sector is complaining about the lack of available qualified personnel for all the new jobs opening up. This reminds me of the comments of Sen. McCain during the Michigan primary: We cannot recreate the old industrial jobs that we have lost. Instead, we have to train and retrain for the jobs of the future.http://www.cioinsight.com/article2/0,1540,2248193,00.asp?sp=0&kc=HOTTOPICS012308STR2
Our Senior Fellow George Gilder and I were in Israel recently so that he could meet with high tech entrepreneurs--led by the tech investor, executive Jonathan Medved--and also to meet with academics interested in the intersection of technology and intelligent design.
Israel's dynamic technology scene--it rivals our own and surpasses all others in inventiveness and sheer business panache--should be the subject of another blog. But here I would like to call your attention to the excellent article published by the Jerusalem Post after our visit. Ruthie Blum conducted an adroit interview that managed to provide comprehensive context and yet allowed George to speak for himself and in his own voice. It was refreshing to have a reporter who was so self-confident that she didn't feel obliged to interpret his words for him. It should be a common strength in a reporter, but it actually is rare.
In a couple of places, as an interview subject will do, George fails to provide connective tissue between two thoughts; i.e., when he discusses "multiple universe" theory, he seems by implication to criticize Richard Feinman, when he means only Richard Feinman's less able followers (I checked to be sure).
And Ms. Blum terms Gilder a "scientist," which, of course, he is not and doesn't pretend to be.
What George does do is integrate the world of computer technology with the debate over intelligent design.