EricGardner.net

Author: Eric Gardner

  • Classic Reads: Simon Johnson’s “The Quiet Coup”

    Classic Reads: Simon Johnson’s “The Quiet Coup”

    In May 2009 The Atlantic Magazine published an article by Simon Johnson titled, “The Quiet Coup.” Today, “The Quiet Coup” stands as one of the watershed articles on the 2008 financial crisis. Johnson, the former Chief Economist of the IMF, argued that roots of the financial crisis was not interest rates or poor people taking out loans they could not afford, but that financially and politically the United States had more in common with Russia than Germany.  “Elite business interests,” he wrote, “played a central role in creating the [financial] crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed…”

    To put this in entertainment terms, the closest thing to Johnson’s pronouncement would be if Meryl Streep suddenly gave up serious acting and began producing hard-core pornography.

    It is also the exact reason it is a classic article.

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  • 5 Life Philosophies from Harold Ramis

    5 Life Philosophies from Harold Ramis

    Harold Ramis, a writer, director and actor who shaped American culture more than perhaps any comedic figure died this week of an autoimmune disorder. Listing his credits is similar to listing the Beatles discography; nearly every modern variation of comedy can trace itself to one of Ramis’ creations. “His work is the reason why so many of us got into comedy,” Judd Apatow said, “…He literally made every single one of our favorite movies.”

    Ramis was much more than the creative force behind Groundhog Day or Animal House, he was a guy trying to understand the world. ““When I was twelve, I read the line, ‘An unexamined life is not worth living.’ ” He told a Buddhist Publication, “I took it seriously to heart. And literally. Like it was a requirement in life, akin to the Buddha’s suggestion that we maintain ‘sufficiently inquiring minds.’ ” Like many people I spent the last few days reading up on Ramis’ life. What struck me was not his accomplishments or sense of humor [1. Which are amazing], but the level of wisdom he articulated. After reading a handful of features and interviews a number of themes became evident. I curated them below.

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  • Income Inequality: Why Conservatives are Wrong

    Income Inequality: Why Conservatives are Wrong

    [drop_caps]I[/drop_caps]n 2012 the top 1 percent of Americans took home over 20 percent of the income generated in the country. According to Annie Lowrey of the New York Times, this level of income equality was one of the highest rates since 1913, when the federal income tax became law. Think about that for a minute. Things are more unequal today than when John D. Rockefeller was alive. “That should offend all of us,” President Obama remarked in a December speech addressing the topic.

    In a lot of ways income inequality is like climate change. Both are happening, both are exacerbated by our current system, and both threaten to upend the entire world.  Deniers of both situations create an environment where facts become debatable. Despite 97 percent of climate scientists agreeing “that climate-warming trends over the past century are very likely due to human activities,” it is still acceptable for a mainstream American politician to argue if it is even happening. The same holds true for income inequality. “In far too many countries the benefits of growth are being enjoyed by far too few people,” Christine Lagarde a managing director at the IMF told a group at the World Economic Forum. If a leader at an organization whose answer to every economic problem is tax cuts and trade liberalization says income inequality is a problem, it is a problem.

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  • Hypothetical History: Talking Points with Eisenhower

    Hypothetical History: Talking Points with Eisenhower

    The below is a history hypothetical. Inspired by Chuck Klosterman’s HYPERthetical’s, the following asks a seemingly ridiculous question rooted in historical fact. Remember, the premise is not 100% true, but is meant to stimulate an absurd conversations. In this case, Mamie Eisenhower did not make an emergency stop in Europe during WW2, but Eisenhower and Summersby were certainty involved. 

    [drop_caps]I[/drop_caps]t is May 1944 and you just joined the army. D-Day is weeks away and planning is in full throttle. One small mistake could upend months of secret logistics and strategy. To your surprise you are assigned as General Dwight Eisenhower’s personal driver for the initiative. In an odd bureaucratic maneuver, you don’t report to the General, but rather Kay Summersby, a beautiful Irish girl who is his Senior Assistant and takes fencing classes every day from 6:30-7:30pm. You’ve been told it is a tremendous opportunity. You are responsible for chaperoning the leader of the invasion, and making sure his life runs smoothly. A fresh Eisenhower means a fresh commander, which means the Allies have a shot at winning the war.

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  • Climate Change and Supply Chains

    Climate Change and Supply Chains

    [drop_caps]L[/drop_caps]i & Fung’s client list reads like a phonebook of discount stores in Omaha, Nebraska. The Hong Kong based enterprise helps Wal-Mart, Sears, Macy’s and Kohl’s bring $7.99 sweatshirts to Americans. [1. When asked about Li & Fung, Cathy Feingold the director of international affairs for the A.F.L.-C.I.O. referred to them as “the sherpa showing companies the fastest route down that slope.” The slope was of course a race to the bottom.] Since 1906 Li & Fung has acted as a middleman between cheap Asian labor and the developed world. The company began by bringing Chinese toys to the shores of America and now handles all aspects of supply chain management. The New York Times called them the, “most important company that most American shoppers have never heard of.” My guess is that they like it that way. Li & Fung revolutionized modern commerce by connecting over 15,000 suppliers in 60 countries and has 8,000 words less in their Wikipedia page than Gangnam Style [2. Li & Fung clocks in at about 1,000 while Gangnam style almost hits 9,000.]

    Li & Fung handles over 2 billion items and doesn’t own a single factory. Their network is the company’s sole value. They can find you a factory to make 10,000 custom socks in a week. They can make sure the crate gets on a boat without hassle. Hell, they can probably get you a toe by 3:00 this afternoon. With nail polish. In 2012 the company utilized their network to generate over $20 billion in revenue. To put that in perspective, if Li & Fung were an African country they’d be nestled right between Mozambique and Namibia in terms of GDP.

    It also has a businesses model that climate change will turn obsolete.

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  • President Johnson and Thurgood Marshall: The Art of Persuasion

    President Johnson and Thurgood Marshall: The Art of Persuasion

    The following is the transcribed conversation of President Johnson asking Thurgood Marshall to become the first African-American Solicitor General of the United States.  The Solicitor General is essentially America’s lawyer, representing the Federal Government at the Supreme Court. It’s a remarkable display of persuasion.

    President Johnson: I have a rather big problem that I wanted to talk to you about.

    Marshall: Right.

    President Johnson: I want you to give it some real thought because it’s something that I have thought about for weeks and I think that we can’t think of how it affects us personally. We’ve got to think about the world–

    Marshall: Right.

    President Johnson: –and our country.

    Marshall: Yes, sir.

    President Johnson: And our government. And then ourselves way down at the bottom of the list. I want you to be my Solicitor General.

    According to Marshall he had no idea the question was going to be posed. When his assistant told him the President was on the phone, his response was, “The President of what?”  I love how President Johnson sets the stage and cuts right to the chase.

    President Johnson: Now, you lose a lot. You lose security and you lose the freedom that you like. And you lose the philosophizing that you can do. And I’m familiar with all those things.

    Marshall: The number one [unclear].

    President Johnson: Well, you won’t lose any. And I want you to do it for two or three reasons. One, I want the top lawyer in the United States representing me before the Supreme Court–

    Marshall: [Unclear]–

    President Johnson: –to be a negro.

    Marshall: Oh.

    President Johnson: And be a damn good lawyer that’s done it before. That’s–so, you have those peculiar qualifiations.

    Marshall: [Unclear.]

    President Johnson: Number two, I think it will do a lot for our image, abroad and at home, too, that this is the man that the whole government has to look to to decide whether it prosecutes a case or whether it goes up with a case, or whether it doesn’t, and so on and so forth.

    Look how President Johnson leads with the negative saying, “You lose security and you lose the freedom that you like…” At the time Marshall was a Federal Judge and had a lifetime appointment. Giving that up to become the Solicitor General, who serves at the leisure of the President was a big deal. President Johnson than quickly lays on the praise softening the news.

    President Johnson: Number three, I want you to have the experience and be in the picture. I’m not discussing anything else–

    Marshall: Yeah.

    President Johnson: –and I don’t want to make any other commitments–

    Marshall: Yes, sir.

    President Johnson: –and I don’t want to imply or bribe or mislead you.

    Marshall: Right.

    President Johnson: But I want you to have the training and the experience of being there day after day for the next few weeks anyway.

    Marshall: Right.

    President Johnson: Maybe the next few months if you could do it. Now, I’ve talked to Ramsey Clark, whose father is on the Supreme Court.

    This is where it gets into perfection. “I don’t want to imply or bribe or mislead you,” but after I talk about all the reasons you should take this I’m going to allude to the Supreme Court.

    In about two years as Solicitor General Marshall won 14/19 cases he brought to the court, and in 1967 he found himself on it.

    You can read the whole transcript in the archives.

  • Obama, Thurgood Marshall and the Importance of a Long Term Vision

    Today marks the 21st anniversary of the death of Thurgood Marshall.  He was a complicated man and perhaps the person most responsible for ending segregation in America; first as Chief Counsel of the NAACP’s Legal Defense Fund and then as a Supreme Court Justice. Marshall had immeasurable courage, once saving an innocent plaintiff from certain execution by interrupting a poker game between the President of the United States and the Chief Justice of the Supreme Court. When asked by Marshall to sign a stay of execution Chief Justice Fred Vinson remarked, “I’ll tell you one thing, if you’ve got guts enough to break in on this, I’ve got guts enough to sign it.”

    For those interested in learning more about Marshall I’d recommend Gilbert King’s Devil in the Grove a Pulitzer Prize winning investigation into the 1949 Groveland Four Trial. The book offers a history of the civil rights movement, a biography of Thurgood Marshall, and a parallel to Obama’s second term strategy. [1. All unattributed quotes in this post are from King’s book]

    Overturning 100 plus years of institutional racism needed not only courage, but a legal and strategic genius. Marshall was both. If he found out that a judge liked English precedents he would craft a brief overflowing with English cases from the 1700s. If he needed help from federal officials he would release a well-placed memo condemning communism. If he needed information from a rival he would take them out drinking. “He’d get a lot of outside lawyers together in a room, and he’d be talking and laughing and drinking along with the rest of them and getting everybody relaxed and open, and he’d seem to be having such a good time with them that you wouldn’t think he was listening.” Franklin Williams a former NAACP lawyer turned diplomat later recalled, “But after they’d left, there it all was—he’d had the benefit of all their brains, which was his strategy in the first place.”

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    Today marks the 21st anniversary of the death of Thurgood Marshall.  He was a complicated man and perhaps the person most responsible for ending segregation in America; first as Chief Counsel of the NAACP’s Legal Defense Fund and then as a Supreme Court Justice. Marshall had immeasurable courage, once saving an innocent plaintiff from certain execution by interrupting a poker game between the President of the United States and the Chief Justice of the Supreme Court. When asked by Marshall to sign a stay of execution Chief Justice Fred Vinson remarked, “I’ll tell you one thing, if you’ve got guts enough to break in on this, I’ve got guts enough to sign it.”

    For those interested in learning more about Marshall I’d recommend Gilbert King’s Devil in the Grove a Pulitzer Prize winning investigation into the 1949 Groveland Four Trial. The book offers a history of the civil rights movement, a biography of Thurgood Marshall, and a parallel to Obama’s second term strategy. [1. All unattributed quotes in this post are from King’s book]

    Overturning 100 plus years of institutional racism needed not only courage, but a legal and strategic genius. Marshall was both. If he found out that a judge liked English precedents he would craft a brief overflowing with English cases from the 1700s. If he needed help from federal officials he would release a well-placed memo condemning communism. If he needed information from a rival he would take them out drinking. “He’d get a lot of outside lawyers together in a room, and he’d be talking and laughing and drinking along with the rest of them and getting everybody relaxed and open, and he’d seem to be having such a good time with them that you wouldn’t think he was listening.” Franklin Williams a former NAACP lawyer turned diplomat later recalled, “But after they’d left, there it all was—he’d had the benefit of all their brains, which was his strategy in the first place.”

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  • Average is Over and Obama’s New Manufacturing Initiative

    Average is Over and Obama’s New Manufacturing Initiative

    [drop_caps]L[/drop_caps]ast week President Obama announced plans to build a high tech industrial institute in Raleigh, North Carolina. The public/academic/private partnership will produce next-generation semiconductors, and is the first of 3 planned manufacturing projects by the Administration. “We’re not going to turn things around overnight,” President Obama told the crowd, but “we are going to start bringing those jobs back to America.” Stump speeches are great, but change happens is in the details, and the details haven’t been answered yet. The News Observer reported that specifics of the agreement “remain to be worked out in contract negotiations.”

    One thing is clear, American manufacturing has been devastated in the last 20 years. The cause differs depending on which side of the political isle you stand, but it is hard not to believe that poor policy hastened the decline. According to a 2012 Yale study, the establishment of normal trade relations with China directly contributed to America shedding about 6 million manufacturing jobs from 1970 to 2007. Others  argue about labor unions killed the factory, technology hastened the death, and  the  gravity of globalization made the preceeding two irrelevant. The simple fact is that America is now defined by cheap consumer goods, rising structural costs (healthcare and infrastructure) and stagnant incomes. “You have an economy,” Obama told  The New Yorker in January 2014, “that is ruthlessly squeezing workers and imposing efficiencies that make our flat-screen TVs really cheap but also puts enormous downward pressure on wages and salaries.”

    What do we do about it?

    We start by turning one of the causes of the decline into the solution.

    Essentially all economists agree that technology hastened the decline of American industrial labor, in fact I’d argue that most middle class jobs will be either replaced or supplemented by computers in the next twenty years. This is not unique to America or to modern information technology. Just as IT made many factory jobs expendable, the car killed horseshoe makers, and the cotton gin decimated hand weavers. In his latest book Average is Over, Economist Tyler Cowen chronicles the increased inequality of the American labor market, with a special focus on the impact of smart machines. Technology has replaced a large amount of middle class jobs with service jobs, and his underlying assumption is that artificial intelligence will do the same to accountants, lawyers and factory workers. The key questions facing future employees will be:

    Are you good at working with intelligent machines or not? Are your skills a complement to the skills of the computer, or is the computer doing better without you? Worst of all, are you competing against the computer? Are computers helping people in China and India compete against you?

    It is early, but these questions have not been answered yet. Will this initiative place workers in tandem with smart machines or in competition? If production and not analysis is the goal (Cowen argues that smart machines will eventually be used as a guide to production, where workers take a computer’s analysis into consideration but make the final decision), we may be jumping head first into a commodity pricing. The last 20 years have shown what happens when we tried to compete on price with humans. We can’t expect to win the battle against a computer.

  • Charlie LeBuff, Detroit: An American Autopsy, and a New Business Model

    [drop_caps]I[/drop_caps] first found out about Charlie LeDuff when I saw him expose the decline of Detroit’s Meals on Wheels Program. Little did I know that he previously won a Pulitzer with the New York Times and followed it up with 2013’s Detroit: An American Autopsy.

    Detroit is an incredibly well written and heart felt exploration into the decline of one of America’s greatest cities. It details the ongoing legacy of racial tension that sparked 2 major race riots, but lacks a macro view of the policy crisis that led to a major American city losing over a million people in under a generation. LeDuff makes up for it with a detailed take down of local corruption and a nuanced report on the people who still call the Motor City home.

    One of the best parts of the book isn’t “ruin-porn” but comes from his description of the mortgage crisis (of which his brother was part of) [1. Although there is plenty, especially an infuriating story into why Detroit firefighters are using broken equipment, which eventually costs a man his life.]. His brother sold, “bullshit mortgages, subprime, negative amortization,” and admits, “A lot of people got fucked.” By now it is clear that mortgage fraud decimated the lives of millions of Americans and upended the structure of society, what LeDuff’s brother argues is that the whole thing was one big ploy. He describes:

    “You get the guy in a loan and then you call him 3 months later and tell him the loan he’s in–the loan you got him in–is a bad deal, and you sell him a different loan. It was a shell game. And the company pushed us to do it. We were making six points on every deal. Six! And nobody cared, ’cause everybody was getting what they wanted for free.”

    This business model is strikingly similar to the model that most major blogs operate on. That is, error is built into the business plan.

    Ryan Holiday, writing for The New York Observer explains

    Why do blogs publish hoaxes and hit pieces so often? So they can post “corrections” after benefiting from the rush of traffic from the sensational first draft. The upside is traffic, the downside is … more traffic. Take the recent Shell Oil Hoax, which was orchestrated by Greenpeace, and which Gawker Media fell for. Gizmodo, Gawker’s sister site, broke the fake story: “Malfunctioning Cake Ruins Party and Spews Liquor All Over Oil Tycoons” for a quick 30,000 pageviews. Later in the day, Gawker got around to debunking the story their sister site had created the market for with a post called “Viral Video of Shell Oil Party Disaster Is Fake, Unfortunately” that earned three times as many viewers.

    The cynic in me wants to say welcome to 2014, but the capitalist knows that firms that adopt this model will experience short term gains, only to fail spectacularly.

  • The Problem with Thought Leadership

    With shrinking tenure rates the impact that higher education has on the intellectual landscape of America is uncertain. What’s even more petrifying is it’s replacement. Ann Friedman’s “All LinkedIn with Nowhere to Go” is one of my favorite articles of the year, precisely because what it questions and addresses one of the problems of one of the largest social networking sites on the internet.

    What the hell use is it?

    “If the poor, as John Steinbeck once observed, see themselves as temporarily embarrassed millionaires,” she writes, ” it seems fair to assume that on LinkedIn, followers see themselves as temporarily embarrassed thought leaders.”

    Generally speaking LinkedIn sucks, despite their promises most jobs are still filled by personal connections, but what struck me was how dead on Ann Friedman was with her attack on the current state of thought leadership. The problem with thought leadership today is a mixture of inverse incentives and lack of heft.

    She writes

    A post by “Technology Futurist, Innovation Expert, Business Strategist, Bestselling Business Author, Keynote Speaker” Daniel Burrus instructs would-be Steve Jobses to “take the time to think both short-term and long-range. Build your future by competing on things other than price, and by asking the right questions, especially when it comes to consumers.” Never mind that Burrus hasn’t built an Apple-like company; such perorations are like the incantation of a devotional prayer: they call down the mercies of a remote techno-deity in order to ritually cleanse the grubbier aspirations of the business-strategizing, keynote-speaking class. And in the same circular fashion, the point of encouraging users to connect and follow and exchange points of view on LinkedIn is to marshal those users behind the simple, world-conquering faith in networked connectivity. The thoughts that lead the LinkedIn experience, in other words, are usually subtle advertisements for the LinkedIn experience. Or not-so-subtle come-ons: one post promises to help people answer the question “What should I do with my life?” in three steps—by using LinkedIn.

    In short, we have an army of “thought leaders” who haven’t had an original thought.

    Source: Ann Friedman – All Linked in With Nowhere to Go