What's Russia really up to?

With ISIS and the Syrian refugee crisis on the news so often, it’s hard for some Americans to relate to the comments of General Joseph Dunford, the new Chair of the Joint Chiefs of Staff.  Testifying before the U.S. Senate during his confirmation hearing in July, he identified Russia – not Iran, North Korea, China or ISIS – as the greatest threat to US national security.

Many analysts and journalists have speculated on the motives of Russian President Vladimir Putin.  Following the Russian incursion into Ukraine, the Los Angeles Times ran an op-ed piece titled ‘Is Vladimir Putin Insane?’  In it, German Chancellor Angela Merkel is quoted as saying that Putin lives in “another world’.  Other pieces have described him as a tyrant and compared him to Hitler.   Meanwhile, General Lloyd Austin, Commander of U.S. forces in the Middle East admitted to Congress that he was completely flummoxed by Russia’s military actions in Syria. 

Yet, I have seen very little said or written about Russia’s compelling national security interests as a key driver of their behavior.  As I see it, there are two geographic factors driving Putin’s and Russia’s behavior. 

Russia is a vast plain that is easy to attack from every angle, except the sea.  So, they have been attacked throughout their history from both the East and West.  Their compelling interest is to create buffers between themselves and potential attackers.

 That said, Putin knows he doesn’t possess the military strength stand up the US.  So, he exploits the vacuum we created in the Middle East to his advantage by becoming the enabler of Iran’s compelling interest.  The consolidation of Shia power from Iran through Iraq to Syria serves them as well as it does Russia, which gains a buffer zone to its south.  It also threatens both Turkey (a NATO member) and Saudi Arabia, an American ally and, like Saddam’s Iraq, an Arab nation ruled by a Sunni minority.  

As for Ukraine, Russia’s actions — from annexing Crimea to carving out a swath of land that gives them access to it — are driven by another compelling interest, access to the sea.  Like all nations, access to sea routes is essential to commerce.  Securing Crimea provides them with access to the Mediterranean.  

There was a bit of coverage about the Arctic Ocean when President Obama visited Alaska a few months ago.  Our Coast Guard has only one icebreaker to Russia’s 27 securing their access to the sea routes that open up as the ice floes melt.  

Americans tend to take our security for granted.  We are geographically too far from Europe and Asia to have suffered from the ravages of war in the last century.  Very few are aware that the US Navy has secured 100% of the world’s waterways since WW II.  We ensure peaceful commercial sea traffic for every nation in the world.

Now, we are reducing our military presence throughout the world and downsizing our navy.  Is it any wonder that Russia sees an advantage and takes it?  Their incursion into Ukraine tests NATO’s resolve while their support of Syria’s Assad advances a refugee crisis that tests the EU’s economic resilience. 

The Obama administration has been criticized in the press for lacking a cohesive foreign policy. Yet, there may be long-term benefit to the U.S. letting the Middle East and Russia be Europe’s problem.  Our so-called ‘pivot to Asia’ will have greater economic benefit through stronger trading and security relationships that challenge China.  Our Asian allies seem to care about that.  

Does Europe care?  Will they stand up for themselves?  They are already sounding like Chamberlain. 

WHO WILL LEAD?

#Tweeting this blog a la #Trump

When writing this blog, I endeavor to be provocative from time to time and usually get an earful from one end of the political spectrum or the other – or sometimes both at the same time.  However, the biggest complaint is that the blog is “too long”.  I now limit it to 800 words but that is still too long for many whose attention span is no longer than it takes to read the screen on their smartphone without scrolling. 

Perhaps I should emulate Donald Trump.  The New York Times reports that Trump thinks of Twitter as his own personal newspaper.  With a 140-character limit, a tweet has no room for any qualifiers.  You can’t say, “Some may disagree with me and I hope this doesn’t offend anyone; however, I believe….”  You just type the words after “believe”. 

Here are a couple of Trump tweets:

“I have never seen a thin person drinking a Diet Coke.”

“So many ‘politically correct’ fools in our country.  We have to all get back to work and stop wasting time and energy on nonsense!”

He gets his point across without all the research and attention to composition that typically takes up about 6 hours of my time.  Here’s his latest (as of this writing):

“For all my FANTASTIC supporters, and for the U.S.A., we are going to WIN AND MAKE AMERICA GREAT AGAIN, maybe even greater than before.”

I notice that he doesn’t use any hashtags.  He doesn’t need to.  He’s his own hashtag. 

So, I thought I should give it a try (notice it took me more than 300 words to get this far).  Here is my best effort to summarize five years of blogging in 140 (or less) character snippets:

#Capitalism = #prosperity = #freedom

For the long version, check out:  ‘Let’s just understand what socialism means to us’ or ‘Progress or Greed… Which Is It?’

Or how about this one?

#Economics: You don’t get it!  No, really, you don’t!

Long version… here you go:  ‘Robert Reich, the corporate income tax and the middle class’ or ‘One Issue and One Issue Only’

Lest you think I am a dogmatic, right wing conservative, I offer the following quite liberal views:

My tweet: Open the #border with #Mexico, no really… I mean it!

My blog:  Open the border… Wait! It’s already open

Or how about this?

My tweet: I don’t care who you #marry

My blog:  It’s not religion… It’s not politics… It’s personal

Are you ‘pro-life’?  This will piss you off:

My tweet:  My body, my #choice

Well, I am not a woman, so I wrote:  Orphan Black, Margaret Atwood and a Woman’s Right to Choose

From time to time, I get philosophical.  I have to work hard to clarify my thoughts and even harder to articulate them.  One of my favorites got virtually no response:  Hope, Love, Forgiveness… Can Society Achieve It?  Yet, another struck the right chord:  Leadership and the Space Between the Notes.  The first title could be a tweet, the second, not so much.

I could go on.  (I usually do.)  I’m just wondering… should I just tweet it a la Trump?  If you’ve read this far, please let me know.

WHO WILL LEAD?

What if Barbie could pass the Turing Test?

If you’re a movie fan or a cryptologist, you probably know who Alan Turing was.  In the movie ‘The Imitation Game’, the code breaker savant was portrayed by the omnipresent Benedict Cumberbatch.  Among his contributions to society is the Turing Test. A machine passes the test when a human interlocutor cannot determine if they are conversing with said machine or with a human.

Toymaker Mattel now endeavors to have its classic doll, Barbie, pass the Turing Test – at least when conversing with a 9 year-old girl.  In a wonderful article in the New York Times magazine, James Vlahos describes the development of a soon-to-be released Barbie with the artificial intelligence to hold a real conversation with its (her?) human companion. 

What most interested me is the idea that it’s not necessary to pass the Turing Test if your human companion knows a machine’s limitations but treats it like a human anyway.  If you’ve had kids (or remember being one), you know that a youngster can have elaborate, imaginary conversations with a stuffed bunny, the family pet or with Barbie.  No response required. 

So, what if Barbie could talk back?  Would a child know that Barbie is just a toy just as she knows that Fido is just a dog?  Probably.  Would Barbie pass the Turing Test?  Probably not.

The implications are interesting if not yet well understood.  A study done by economists at Deloitte and Oxford University reports that technology has been changing the nature of the work we do for centuries, eliminating the most monotonous, dangerous or physically challenging work.  Yet, when technology destroyed jobs, it created many more new ones.

The report also provides a list of those likely to lose their jobs to technology in the next 20 years. At the top of the list – are you ready for this? – Telephone Salesperson.

It took a moment for that to sink in.  What if the recorded robo-call you received just as you sat down to dinner was from Barbie instead of a recorded message?  Or, to turn it around, what if Barbie were programmed to answer 800 numbers instead of being programmed to talk with 9 year-olds?  Hold queues would disappear. 

Could she handle it?  Maybe not today…. But soon!

What of the workforce as a whole?  It’s easy to assess the historical impact of creative destruction on people’s jobs.  Assembly line workers who lost jobs to robots needed to be retrained for something new. 

On the other hand, it was once thought that accountants would lose their jobs to Excel Spreadsheets.  Instead, they have prospered by using that tool to offer new services. 

And, so it goes.  Jobs that barely existed at the turn of the Century are now plentiful --- webmasters, solar panel installers, optical engineers – while others have faded away – telephone operators, draftsmen, travel agents.

Futurists like MIT’s David Autor and Andrew McAfee suggest that we might see a barbell effect.  Those in very high skill professions – brain surgeons, for example – will use technology to be more productive and effective at their jobs.  Others, like legal secretaries and the aforementioned Telephone Sales people, are vulnerable to being pushed down the compensation ladder to personal service jobs like nursing assistants or hotel workers. So, high-income professions will become more productive and create more value while low-income jobs become more numerous.  The middle gets hollowed out.

McAfee is optimistic, telling the Huffington Post “the technological progress we are experiencing is the best economic news on the planet, bar none. It will increase the material bounty of our world, giving us higher volume, more variety and better quality goods and services at lower prices.”

He worries, however, about how quickly the workforce can adapt.  Our public schools still prepare students for the jobs of the 20^th Century.  Our infrastructure is crumbling and our government’s policies stifle entrepreneurs.

Technology improves productivity and drives economic growth.  People lose jobs as it happens.  It’s an unstoppable force. 

Big companies and government are not driving these changes.  Consumers are.  We prefer low-friction, efficient service.  It’s easier to shop on your smartphone than to go to Wal-Mart.  It’s easier to print your boarding passes at home than to wait in line at the airport.  And, it’s easier to send an email than to mail a letter. 

We can’t stop the unstoppable.  We need to find ways to deal with it.

WHO WILL LEAD?

Governor Cuomo, thanks for the big, fat favor

Welcome to New York… That’s what my property tax bill might have said when we moved back to our home state.  My taxes are higher than my mortgage payments.

I suppose that may or not be true for every resident of the state.  However, this much is true:  New York has the highest tax burden and the secondhighest amount of public debt per capita in the country.  So, despite taking more of my income than any other state, our government can’t seem to improve its balance sheet.

All of this was rolling around in the back of my mind while I was listening to one of my favorite talk shows on public radio.  At noon each weekday, Evan Dawson interrogates reality on WXXI, our local NPR affiliate.  He is incisive and upbeat.  Listening to his show is a great way to learn about our community – locally, nationally and globally.

Last Tuesday’s show featured University of Rochester President Joel Seligman and others leading an initiative to “win” one of three $500 Million economic development “prizes” being offered by the state government and touted by our governor, Andrew Cuomo, as part of his commitment to upstate New York. 

I came away impressed by Seligman and his colleagues and feeling that our endeavor was in good hands. 

But, here’s the question no one bothers to ask…  Why are competing to “win” back our own money?

The very idea that we should compete for the benefit of tax dollars is appalling. 

And, if we “win” (I can’t seem to stop myself from putting the word in quotes), the governor will no doubt show up in town and act like he is doing us a big, fat favor.

He’s done it before.  During his reelection campaign, he designated $3 Million to the environmental cleanup of a new commercial development in a nearby Finger Lakes community and then declared that it was the kind of “investment” the state would make “all day long”, as though he was doing us a big, fat favor. 

No doubt the project will create some construction jobs for the duration of the project.  And, no doubt the resulting development will provide some retail and service jobs for the longer term.  However, the $3 Million goes into the pockets of the already wealthy real estate owners and developers driving the project.

Thanks for the big, fat favor, Andy.

This paradigm is so ingrained in the public mind that no one even questions it anymore. 

The mentality also affects our thinking in other endeavors.  The state takes some of our tax dollars and gives it back to the school districts that educate our children.  Now, the governor – in an apparent effort to make scapegoats of teachers – is specifying how they should be evaluated.

Whether you agree with his ideas on how to evaluate teachers of not, you have to wonder why our money has to go to Albany so that some group of bureaucrats can decide how our school systems should be managed. 

There is a financial cost to sending money to a central government (economists call it ‘agency cost’).  And, there is a non-financial cost to our community to placing our future in the hands of people who don’t live here and are subject to political and social agendas that don’t necessarily serve our local interests.

It’s time to place these events in perspective.  Our high taxes and bureaucracy have cost us jobs and endangered the future of the (once) Empire State.  Local employers who have the resources often invest in projects to expand their businesses in other states.  Others have left the state completely.  Meanwhile, a recent study has judged New York to be one of the hardest states in the nation to start a small business. 

If the governor wants to do us a big, fat favor, he could start by eliminating a bloated state bureaucracy and lowering our tax bill so we don’t have to compete to “win” back something that was ours to begin with.

Then he can stop doing us big, fat favors.

WHO WILL LEAD?

The Evolution of the Employee

A while back, a friend of mine posted this graphic on Facebook. It’s a well-presented picture of the changing landscape for 21^st Century participants in the economy. 

The next to bottom rung of this ladder resonated most with me.  For much of the last 15 years, I have earned compensation by virtue of results I have achieved.  No salary – just commissions or splits of revenue or profit.  So, rather than being paid for my time, I was subjected to the forces of the market without an employer as an intermediary.   

Sometimes it’s more than a little nerve wracking.  I spent five years as an intermediary representing private businesses for sale.  In a good year, I would get five or six paychecks. In a not-so-good year, three.  It’s hard to plan your future when you’re not sure what you’ll be making this year or next. 

On balance I like the flexibility of being an independent contractor.  But, I am a professional earning a good living.  At the other end of the pay scale, there are legitimate concerns.  Our social insurance system has been built around traditional employment.  In the sharing economy, workers are typically independent contractors.  For some, that’s not an appealing arrangement.

The online forum for Uber drivers (UberPeople.net) captured this sentiment from a driver using the pseudonym Honkadonk, "Uber's whole game … is to make everything some weird frayed-line, grey area where nothing is their responsibility. It's ride share but Uber is "everyone's private driver". We're IC but we have rules, answer to bosses, and can be fired. We're illegal cabs but it's okay because we're not cabs. We earn $35/hr except we f---ing don’t.”

Well, he’s right of course and Uber isn’t the only example.  It is the basic nature of corporations to shift liability to third parties.  That’s why we need regulation.

But, how much regulation?  Smartphone apps and the Internet reduce the ‘friction cost’ of doing business.  It’s to everyone’s advantage to benefit from the efficiency that’s created.  The challenge is finding the right regulatory balance so as not to stifle innovation and the disruption that is native to the free enterprise system.

Plaintiffs’ lawyers and politicians continue to try to reinforce the fraying social contracts of the last century.  An article written for the website Hill.com predicts that the National Labor Relations Board will soon tighten rules for independent contractors so that even franchise owners – the millionaires who own McDonalds franchises, for example – would be considered employees. 

We would be better served if we endeavored to place this new reality at the center of our values.  After all, market forces are unstoppable.  It’s not the consumers or the Uber drivers really being hurt by this new paradigm, it’s the entrenched interests of taxi companies, unions and regulators who have the most to fear.

We should be asking this question: how can we decouple the employee safety net of unemployment insurance, workers’ compensation and social security from the framework of full-time employment?  Like it or not, Obamacare has already done so for health insurance coverage. 

The Wall Street Journal’s Lauren Weber has suggested a new status – the‘dependent contractor’ to which we might extend some of the same benefits. 

For their part, Uber contracted with a Princeton economist to analyze the relative pay of Uber and taxi drivers in key markets.  The results show an Uber driver makes an average of $6 per hour more than the average taxi/chauffeur/limo driver.  Here is the chart they have published:

The Huffington Post followed up with an analysis of their own suggesting that the fallacy of Uber’s study is that it doesn’t consider that Uber drivers bear the cost of operating their own vehicles. 

Fair enough.  However, the line of thought that suggests that the sharing economy is sucking jobs from traditional 9-to-5 employment is off-base. 

In a survey of its drivers, 78% reported being satisfied working for the company.  The survey also revealed that many drivers (32%) consider their Uber gig as a fall back while they are looking for a better job.

Would we rather have them depending upon unemployment compensation?

Whatever it is that draws workers to this kind of work and consumers to this kind of service should be embraced not resisted.   The only question…

WHO WILL LEAD?