Wednesday, September 17, 2014

[tt] Brookings: Daniel M. West: Billionaires: Reflections on the upper crust: Chapter 1

Now that you have had my essay, "How to Think about Rising Inequality,"
for six days, you can examine this book chapter along some of the lines I
have suggested.

There is no inkling, using probability theory, that the rich do live in a
different world, from which it would follow that the issues about the rich
(fear of too much power) and those about the rest (job instability more
than abstract concentration statistics) are separate.

No discussion either of who, among the wealthy, benefit from a high
concentration of income and wealth.

He never defines "democracy," but complains about the wealthy suppressing
it. Aren't constitutions supposed to restrain the operation of Mr.
Mencken's characterization of democracy as three cannibals and two
missionaries deciding what to eat for dinner?

What I did not find in the first chapter is anything on businesses trying
to get exempt from paying for the negative externalities they generate,
such as pollution. (I've never seen an estimate of it.) Nor why the rich
favor immigration of unskilled labor, since they tend to vote Democratic.
Nor why an individual business expects to gain from cheaper labor when all
his competitors can do the same. Maybe they want status and social
acceptance among right thinkers.

Since the first chapter doesn't get into these matters, I'll have to buy
the book. I hope to learn from the rest of the book (the first chapter
does give some useful facts). I mean learning knowledge about reality, as
opposed to meta-knowledge about what the author thinks.

Paste that last sentence on your bathroom mirror or at least in your meme
box.

I thought I might be done with the inequality issue, but not yet.

Daniel West will be talking at Brookings
on Friday, 2014.9.19)
10:00-11:30 AM EST (= 14:00-15:30 UT). It will be broadcast and almost
certainly available later. I don't think it will be captioned. Here's the
link.
http://www.brookings.edu/events/2014/09/19-billionaires-reshaping-politics-philanthropy-society

Amazon is releasing it on Thursay (tomorrow)
http://www.amazon.com/Billionaires-Reflections-Darrell-M-West/dp/0815725825/ref=sr_1_1?s=books&ie=UTF8&qid=1410910515&sr=1-1
Kindle $12, Hardcover $22, paperback $16.

Daniel M. West: Billionaires: Reflections on the upper crust: Chapter 1
Washington, D.C.: Brookings Institution Press, 2014.9.18 (release date), 269
pp.
http://www.brookings.edu/~/media/press/books/2013/billionaires/sample%20chapter.pdf

Contents
1 The Controversy over Billionaires (pages 1-19)
Part i Billionaire Activism
2 Can Rich Dudes Buy an Election?
3 Referendum Campaigns and Policy: New Models of Philanthropy
4 New Models of Philanthropy
5 Elections Abroad
Part ii It Takes a Village to Make a Fortune
6 The Global 1,645
7 Innovative Ideas
8 Not a One-Person Act
Part iii What Can Be Done?
9 Better Transparency, Governance, and Opportunity
10 Hope for the Future
Acknowledgments
Appendix
Notes
Index
<\contents>

CHAPTER 1: The Controversy over Billionaires

At the time of his reelection campaign, several conservative billionaires
were unhappy with the job performance of President Barack Obama. The economy
was not doing well. There was uncertainty in foreign policy. Many of them
believed that Obama was a poor leader. Irate about how things were going,
they decided to devote several hundred million dollars to defeating the
president. Individuals such as Sheldon Adelson, David and Charles Koch, and
the late Harold Simmons and a group of wealthy donors assembled by
Republican strategist Karl Rove felt that they needed to speak out to ensure
that the country had stronger leadership and moved in what they considered a
better direction.

But they were not the only super-wealthy people who were politically active.
In recent elections, there has been an explosion of activism by the rich.
Billionaires such as Michael Bloomberg, George Soros, and Tom Steyer have
poured extensive resources into supporting their favored candidates and
causes. In addition, wealthy individuals have bankrolled advocacy campaigns
at the state level-- for example, in support of same-sex marriage and
marijuana legalization or in opposition to Obama's health care reform and
higher taxes on the wealthy. Aided by friendly Supreme Court rulings and the
rising cost of election campaigns, affuent people have discovered that they
are in a strong position to affect a variety of different issues.

In researching this subject, I discovered that it is not just an American
development but something that is happening globally. Billionaires have run
for offce in Austria, Australia, France, Georgia, India, Italy, Lebanon, the
Philippines, Russia, Thailand, Ukraine, and the United Kingdom as well as
the United States. Most of them have won. Oligarchs in Russia, so-called
princelings in China, and tycoons in many other countries are becoming
politically active and affecting public policy. Their political involvement
raises important questions about excessive infuence, especially in places
where there is weak rule of law, overt corruption, and limited opportunities
for social or economic advancement. The activism of the super rich is taking
place against a backdrop of poor transparency, weak news coverage,
accountability problems, and performance challenges on many different fronts
in political systems around the world. With the wealthifcation of
politics, those in the upper echelon, who as a group hold policy views that
differ signifcantly from those of the general population, have access to
many ways to infuence the political process.

Wealth-- its uses and its abuses-- is a subject that has intrigued me since
my youth in the rural Midwest. I was born on a dairy farm and grew up poor.
When asked what our house was like when my parents moved to Ohio in 1947, my
mother said, There was no running water in it or hot water of any kind. No
bathroom. Water was carried in from the barn. It was not until 1952, two
years before I was born, that the house got cold running water. Indeed,
because of the cows, the barn had running water before our house did. To do
the laundry, Mom heated water on a gas stove, washed the clothes in a manual
washer, ran them through a hand-cranked wringer, and then hung them on a
line outside to dry. She didn't have an automatic dryer until much later in
her life. Hot running water and an indoor bathroom were added in 1960, when
I was six years old; the bathroom replaced the outhouse that the family had
the controversy over billionaires used before. In 1965, we got a furnace to
replace the coal stoves in the kitchen and living room.

The contrast between the poverty of my youth and the privilege of my
adulthood makes me very attuned to the role that wealthy people play in the
United States and around the world. Not only has it made me curious about
the lives of the rich, it has led me to ask questions regarding their
political impact. The world's billionaires have had a major infuence on
other people. They have created new businesses, launched new products, and
altered how people live, work, play, and communicate.

Yet much of the current debate regarding the political role of billionaires
suffers from ideological short-sightedness. Progressives fear political
activism when it is undertaken by conservative billionaires yet applaud it
when liberal billionaires swing into action. Conservatives get worried when
left-leaning billionaires dump a lot of money into elections but appreciate
the advocacy efforts of their own billionaires and pro-business special
interest groups. What each side misses are the challenges raised by
billionaire activism for the system as a whole. Billionaires' extensive
resources and advocacy efforts provoke questions about political infuence,
transparency, and accountability. At a time of high income concentration and
dysfunctional political institutions, it is important to understand the
impact that the ultra rich have on national life and the need for policies
that promote better disclosure, governance, and opportunity.

Here, too, I have a personal perspective. From my perches in both the Ivy
League, at Brown University, and the Brookings Institution, I have seen
Americans of great wealth do positive things with their money and improve
the lives of other people. Most of those that I know personally display
admirable traits-- vision, innovativeness, and entrepreneurship. Moreover,
having received research grants from leading foundations as well as people
of great wealth over a number of years, I have benefted professionally from
their philanthropy. Some of those discussed in this book are or have been
benefactors of Brown and others of Brookings, and they are identifed as
such. Their careers and practices illustrate different themes and
observations, but what they have in common is a respect for institutional
independence, academic freedom, and public transparency regarding sources of
funding.

It is possible to admire individual billionaires but also fear their overall
infuence on elections, governance, and public policy. According to Forbes
magazine, there are 1,645 known billionaires around the world, 492 of whom
live in the United States. In this book, I study their political efforts in
the United States and other countries and describe how they have pioneered
more activist forms of politics and philanthropy. I argue that such activism
presents major challenges in the areas of political infuence,
accountability, transparency, and system performance. Countries everywhere
need policies that promote better disclosure and governance and preserve
opportunities for a broader range of people.

INCOME CONCENTRATION

The assets of the U.S. super wealthy-- as reported on the Forbes list of
billionaires-- have more than doubled over the past decade. Ten years ago,
these individuals controlled around $1 trillion; now their wealth has risen
to more than $2 trillion.1 Economists Marco Cagetti and Mariacristina De
Nardi show that 1 percent of Americans now own about one-third of the
country's wealth.2

Economists Thomas Piketty and Emmanuel Saez document how income
concentration has risen over the past century. Figure 1-1 charts the share
of pre-tax income accounted for by the top 1 percent of earners from 1913 to
2012.3 In 1928, the year before the Great Depression, that group garnered
21.1 percent of all income in the United States. Over the next 50 years,
that percentage dropped to a low of 8.3 percent in 1976, then rose to 21.5
percent in 2007. It dropped to 18.8 percent in 2011 following the Great
Recession, then rose again to 19.6 percent in 2012.4 Those fgures show that
income concentration today is similar to what it was in the 1920s the
controversy over BillionAires and is more than double the degree during the
post World War II period.

Figure 1-1. Pre-Tax Income received by Top One Percent, 1913-2012
Source: Thomas Piketty and emmanuel Saez, Income Inequality in the united
States, 1913 1998, Quarterly Journal of Economics, vol. 118 (2003), pp. 1
39. For 1999 to 2012 numbers, see the web page of emmanuel Saez
(http://emlab.berkeley.edu/users/saez).

More detailed statistics demonstrate that after-tax income stagnated for
most workers from 1979 to 2009 but rose dramatically for the top 1 percent.
Charting the percent change in real after-tax income for four groups of
workers shows that during those 30 years, earnings rose 155 percent for the
top 1 percent of earners, 58 percent for the next 19 percent of earners, 45
percent for the middle 60 percent, and 37 percent for the bottom 20
percent.5 And if a recent book by Thomas Piketty, Capital in the
Twenty-First Century, is correct, money is likely to become even more
concentrated in the future. Drawing on data from several countries over the
past 200 years, he argues that the appreciation of capital outpaces that of
the economy at large and of wages in particular. That benefts the people who
already hold a lot of fnancial resources and increases the overall
concentration of wealth.6

Still another way to look at the income gap relies on the Gini coeffcient,
an economic measure developed in 1912 by the Italian sociologist Corrado
Gini that is used to express inequality among different income levels. It
runs from 0 to 1; 0 indicates that everyone has the same income, and 1
indicates that one person has all the income. The Gini coeffcient for the
United States was around .38 in 1950, dropped to .35 around 1970, and rose
to .45 in 2010,7 demonstrating that fnancial inequality has increased
substantially over the past 60 years.

Alex Cobham and Andy Sumner of the Center for Global Development have
proposed a new metric that they call the Palma ratio, after economist
Gabriel Palma, who argues that it is important that the middle 50 percent
remain stable to ensure a society's social, economic, and political
well-being. The Palma ratio compares the share of national income held by
the top 10 percent of households with the share held by the bottom 40
percent. The authors fnd that the United States ranks forty-fourth among 86
countries in terms of inequality, a rank that makes U.S. inequality worse
than that of virtually every other developed nation.8

As a sign of how profound income divisions have become, increasing
inequality has widened the gaps between different social groups. Over the
past 25 years, the fnancial gulf between whites and blacks has nearly
tripled. In 1984, the difference in wealth between the races was $85,000; by
2009, it had increased to $236,500. The gaps in homeownership, education
level, and fnancial inheritance are responsible for most of these
differences; for example, according to researchers, the home ownership rate
for whites is 28 percent higher than that of blacks. 9 As Jennifer
Hochschild and her collaborators at Harvard University point out,
policymakers need to think seriously about the impact of these trends on
social cohesion and political representation.10

Financial concentration has increased not just in the United States but in
many other countries around the globe. Research by Thomas Piketty and
Gabriel Zucman fnds that wealth has risen much more rapidly than incomes in
eight developed nations: the United States, Britain, France, Germany, Italy,
Canada, Australia, and Japan. They fnd that wealth-to-income ratios in
these nations climbed from a range of 200 to 300 percent in 1970 to a range
of 400 to 600 percent in 2010--a doubling of the wealth concentration over
that time period.11

The reality of inequality has generated considerable attention in many
countries. In Russia and Eastern Europe, the super wealthy, who profted
enormously from the cheap sell-off of state-owned enterprises following the
fall of communism, are derided as oligarchs. In China, the children of
prominent Communist Party leaders, who are able to accumulate extensive
wealth by using their family connections, are known as princelings. A
study undertaken by the China Family Panel Studies program at Peking
University that examined 14,960 households in fve leading Chinese provinces
found that the top 5 percent earned 23 percent of the nation's total income.
In addition, the top 25 percent in those provinces earned 59 percent of
total income while the bottom quarter earned only 3.9 percent. That gave
those areas a Gini coeffcient of . 49.12

Despite those numbers, one Chinese billionaire downplays the dangers of
income differentials. We don't need to solve the problem of the rich-poor
gap, we need to solve the problem of common prosperity, said Zong Qinghou,
one of the richest men in China. He has a great fortune, which he earned
from companies that sell soft drinks, milk for babies, and children's
clothing. If we had egalitarianism, we wouldn't have enough to eat, he
said. In an argument that would resonate with many conservative politicians
in the United States, he claimed that the best way to create wealth in China
is to lower taxes in order to stimulate fnancial investment and economic
growth.13 However, at least one migrant worker in China did not take kindly
to his remarks. Shortly after they were publicized in the media, Zong was
attacked by a knife-wielding jobseeker in Hangzhou. Some tendons in one of
Zong's hands were cut, but otherwise the billionaire was not seriously
harmed.14

Looking at the world as a whole, the United Nations World Institute for
Development Economics Research showed that in 2008, the top 1 percent of
earners owned a total of 40.1 percent of overall global wealth, a share that
is larger than the one-third of national wealth owned by the top 1 percent
in the United States.15 As shown in fgure 1-2, the Gini coeffcient for
global income has increased substantially over the past two centuries.
According to World Bank economist Branko Milanovic, inequality rose from .43
in 1820, .53 in 1850, and .56 in 1870 to .61 in 1913, .62 in 1929, .64 in
1960, .66 in 1980, and .71 in 2002.16

Figure 1-2. global Inequality, 1820-2002
Source: Branko Milanovic, global Inequality and the global Inequality
extraction ratio: The Story of the Past Two Centuries, World Bank,
September 2009
(http://elibrary.world-bank.org/doi/book/10.1596/1813-9450-5044).

POLITICAL ACTIVISM OF THE WEALTHY

The wealthy are much more politically active than the general public. In a
frst-ever public policy survey funded by the Russell Sage Foundation of
economically successful Americans, political scientists Benjamin Page,
Larry Bartels, and Jason Seawright measured the activism and beliefs of the
rich. They worked with the Wealthfnder rank A list of the top 2 percent of
American households based on wealth and supplemented it with an Execu-Reach
list of high-level business executives of major companies. In order to reach
their intended population, they screened for the top 1% of wealth-holders
and completed interviews with those individuals.17 In talking with them, the
percent of the wealthy said that they voted in presidential elections,
almost double the rate of the general public. Most (84 percent) also
reported paying close attention to politics. Two-thirds (68 percent) made
campaign contributions to politicians; in stark contrast, only 14 percent of
the general public does.18

The reason is clear. Wealthy people know that political engagement
matters.19 Being involved in politics yields benefts and enables them to
express their views and infuence results. Unlike the general public, which
tends to be cynical about politics, believing that there is no difference
between Republicans and Democrats and that politics is not a very good way
to produce change, many affuent people seem to believe that politics matters
and represents a way to affect national and international affairs. Indeed, a
study by political scientist Lee Drutman of the top 1,000 campaign donors
from 2012 (those who gave at least $134,000) found that two-thirds favored
Republicans and the largest number of them came from the fnancial sector.20

Given the importance of engagement, it is not surprising that the wealthy
report in this survey a large number of high-level political contacts.
When asked whether they had contacted public offcials or their staffs in the
last six months, 40 percent indicated that they had contacted a U.S.
senator; 37 percent, a U.S. House member; 21 percent, a regulatory offcial;
14 percent, someone in the executive branch; and 12 percent, a White House
offcial.21 Those rates are much higher than the rates for the general
public. A national survey undertaken at the University of Michigan
documented that about 20 percent of ordinary people said that they had
contacted a member of the U.S. Senate or House in the preceding four
years,22 through telephone calls, letters, or visits to legislative offces.

DISTINCTIVE VIEWS OF THE WEALTHY

It is important to analyze wealth in democratic systems because the super
rich, as a group, hold policy views that are signifcantly different from
those of ordinary citizens. In their survey, Page, Bartels, and Seawright
asked the wealthy about a range of public policy issues.23 Comparing their
opinions with those of the general public, the researchers found that top
wealth holders differ rather sharply from the American public on a number
of important policies. For example, there are signifcant differences on
issues such as taxation, economic regulation, and social welfare programs.
24 Table 1-1 summarizes the gulf in policy preferences between the top 1
percent and the general public. The wealthy are more likely than the general
public to favor cuts in Medicare and education (58 percent versus 27 percent
for the public), while they are less likely than the public to believe that
the government has an essential role in regulating the market (55 percent
versus 71 percent, respectively).

TABle 1-1. Views of the Wealthy and the general Public
Source: Benjamin Page, larry Bartels, and Jason Seawright, Democracy and
the Policy Preferences of Wealthy Americans, Perspectives on Politics, vol.
11 (March 2013).

Most surprising, however, are the differences in views about social
opportunities. In the abstract, it might be assumed that there would be
little gap in this area. According to the Credit Suisse Global Wealth
Databook, two-thirds (69 percent) of wealthy individuals came from humble
origins and conceivably could favor a limited government role in the economy
but still value equity of opportunity.25 But that is not what Page, Bartels,
and Seawright found in their survey. Their data show that while 87 percent
of the general public believed that the government should spend whatever is
necessary to ensure that all children have good public schools, only 35
percent of the top 1 percent did.26 The wealthy also were less likely than
the general public to want the government to provide jobs if private sector
positions are unavailable, to believe the government should provide a decent
standard of living for the unemployed, or to be willing to pay more taxes to
support universal health care.

This research indicates that those with great resources are far more
conservative than the public on a range of issues related to social
opportunity, education, and health care. They do not support a major role
for the public sector, even when government actions further economic and
social opportunities for the general public. They are much more likely to
favor cuts in social benefts and programs that beneft less fortunate members
of society. These views of the super rich lead them to favor tax cuts-- even
though they reduce the fnancial resources to invest in education and health
care-- and to place more emphasis on defcit reduction than on pump-priming
that stimulates economic growth. If politically active rich people favor tax
cuts and support austerity measures, as has been the case in recent years,
it is diffcult to generate political support for programs that help the
nation's low- and middle-income people better themselves.

THE "GET A SENATOR" STRATEGY

It is no accident that the Page, Bartels, and Seawright survey of the
wealthy fnds them seeking infuence most frequently through members of the
U.S. Senate. Because of Senate rules granting unbridled authority to
individual senators to block nominations through secret holds, object to
unanimous consent motions, and engage in flibusters (that is, block action
through unlimited debate), a popular tactic among those with extensive
political connections is to develop a close relationship with a senator who
sits on a key committee or who can exercise infuence in other ways and
persuade that person to block undesired nominations or bills.

Holds can be used to stop legislation that a senator doesn't like. Senator
Rand Paul (R-Kentucky), for example, has been unhappy with a proposed treaty
that would force Swiss banks to release the names of 22,000 wealthy
Americans who have hidden an estimated $10 billion in offshore accounts.
Even though the treaty likely would win the approval of the Senate as a
whole, for several years he single-handedly has prevented action because he
believes that the new rules would permit the invasion of people's privacy.27

Through what one wealthy individual described to me as the get a senator
strategy, a person needs to obtain the support of only a single member to
prevent the chamber from a taking particular action. In a system of
fragmented political institutions characterized by decentralized
decisionmaking and multiple veto points, having a senator who acts on one's
behalf is an effective way to stymie unwanted government action or delay
appointments affecting particular industries. Along with lobbyists
representing businesses and other vested interests, those who are rich and
connected can stop measures that they deem detrimental to their pocketbooks.
For decades, if not centuries, the political ramifcations of great wealth
have provided cartoonists with inspiration and material, as illustrated by
the New Yorker cartoon reprinted below.

Billionaires sometimes enlist senators to write letters to federal
regulators asking for investigations of other companies. An example of this
came to light in the case of hedge fund manager William Ackman, of Pershing
Square Capital Management. For years, the billionaire fnancier has run a
campaign against the nutritional supplement frm Herbalife, alleging that its
sales practices amount to an illegal pyramid scheme. Ackman has invested $1
billion in his belief that the company is overvalued.28 Not content with
drawing his own conclusions regarding the business practices of Herbalife,
he persuaded Senator Edward Markey (D-Massachusetts) to write letters to the
Securities and Exchange Commission and the Federal Trade Commission
criticizing the frm and demanding a formal investigation. Ackman personally
lobbied Markey's staff and hired a Markey aide to join his lobbying team. As
soon as Markey's letter was made public, the Herbalife stock price dropped
by 14 percent, partly achieving the billionaire's goals.

According to Princeton sociologist Martin Gilens, infuence peddling is not
rare. His analysis indicates that there is a strong link between affuence
and infuence. Through a detailed analysis of policymaking, public opinion,
and income levels, he demonstrates that affuent Americans' preferences
exhibit a substantial [positive] relationship with policy outcomes whether
their preferences are shared by lower-income groups or not. He argues that
there is virtually no relationship between policy outcomes and the desires
of less advantaged groups when the preferences of the latter diverge from
those of the wealthy.29 And in a follow-up study with Benjamin Page, Gilens
examined the impact of average citizens and economic elites on 1,779 policy
issues over the past 30 years and concluded that ordinary people had little
or no independent infuence. 30 The issue of distinctive political infuence
was brought home to me when I met my frst billionaire at Brown University,
where I taught political science. A Rhode Island businessman named John
Hazen White Sr. had endowed a lecture series, and we invited legendary
broadcaster Ted Turner, who had attended the university three decades
earlier, to speak. Although he had been kicked out in the 1960s for
disciplinary code violations involving alcohol and women, years later Brown
had awarded him an honorary degree in recognition of his development of CNN,
the frst all-news cable network. Pleased with the honor, Turner had funded a
faculty position and pledged a multimillion dollar gift to the school (he
also has been a Brookings donor). That made him what Brown euphemistically
called a friend of the university.

Accompanied by his then-wife, Jane Fonda, he came to campus in 1995 to give
a lecture about the environment entitled Our Common Future. Turner was
alternately serious, funny, and outrageous. He explained the importance of
the environment to the future of humanity and talked about why he was
raising buffalo on his huge Montana ranch. Then, in an unexpected twist, he
joked that what he really liked about living in the West was being able to
take a whiz off his front porch. The Ivy League audience laughed
uproariously.

Turning back to his broader message, he related the lessons of his life. His
most diffcult challenge, he said, had been making the frst million dollars;
after that, everything was easy. Money begets money, he bluntly observed,
thereby making it possible to gain even greater wealth through social and
political connections. That, of course, is the crux of the controversy about
the role of billionaires in society. Wealth in and of itself is not
problematic. It is how rich people convert fnancial might into political
power for their own beneft that creates problems.

TRANSPARENCY PROBLEMS

It is perfectly reasonable for rich people to express their views, lobby
Congress, and attempt to infuence elections as long as others are aware of
what they are doing and can organize accordingly. Even if the wealthy have
more money than other people, openness helps protect the general population
and allows the public to assess the actions of the wealthy. The problem,
however, is that many efforts to exercise infuence have migrated behind the
scenes and often are invisible to the news media or general public. As a
result of court rulings that treat freedom to spend as equivalent to
freedom of speech, campaign fnance has become much more secretive. Wealthy
interests can fund advocacy organizations with no disclosure of their
contributions required.

These kinds of judicial decisions bias the political process in favor of the
ultra rich. Former GOP presidential candidate Newt Gingrich, whose super PAC
received $15 million from billionaire Sheldon Adelson, notes the
extraordinary importance of the rich in contemporary elections. Whether
it's the Koch brothers or Soros on the left or Sheldon, if you're going to
have an election process that radically favors billionaires and is
discriminating against the middle class-- which we now have-- then
billionaires are going to get a lot of attention, he observed.31

Wealthy people across the political spectrum have pioneered new activist
models of political involvement that combine electioneering, issue advocacy,
and philanthropy. They pursue infuence through interlocking networks of
foundations, grassroots organizations, tax-exempt groups, and super PACs
(political action committees, independent committees that can raise
unlimited amounts of money). Dubbed by reporters as the Koch model, after
conservative billionaire activists Charles and David Koch, this approach now
is being emulated by liberal billionaires Tom Steyer and George Soros (who
also have donated to Brookings) as well as by businessman and former New
York City mayor Michael Bloomberg, among others. Rich people like this
approach because it's adaptive, data-driven, and they [the Kochs] are the
most propitious capital allocators in political activism. 32

The combination of wealth and secrecy, however, is toxic to democratic
systems. In the realm of political persuasion, the messenger can count as
much as the message. Voters need to know who is behind particular messages
so that they can assess the reliability of the information and the quality
of the arguments. With lack of transparency, it is diffcult for citizens and
reporters to evaluate campaign discourse and advocacy efforts.

THE WEAKNESS OF COUNTERVAILING INSTITUTIONS

Billionaires pose another risk. They typify the combination of social,
economic, and political privileges that American sociologist C. Wright Mills
famously described in his book The Power Elite. According to Wright, the
interplay of money and politics enables rich people to use their fnancial
resources to gain special advantages. Columbia University economist Joseph
Stiglitz has gone even further, arguing that some of the rich have gotten
wealthy by manipulating the system. In his 2012 book, The Price of
Inequality, Stiglitz claims that certain wealthy interests have used their
fnancial resources to gain undue infuence and thereby increase their own
power.33 Political scientists Jacob Hacker and Paul Pierson complain in
their book Winner-Take-All Politics that the concentration of monetary
resources has damaged the political process by giving the wealthy few the
power to gain disproportionate benefts.34

Others dispute those claims and argue that many factors limit the infuence
of the wealthy. One is social and political divisions within the upper
elite. According to this perspective, the activism of liberal billionaires
balances the activism of conservative ones and entrepreneurs in different
business sectors don't always agree with each other; group divisions thus
prevent billionaires from coalescing into a single, monolithic class and
using their wealth to impose their views on other people.

In addition, a number of countries, such as the United States, have
countervailing forces that limit the power of the wealthy. If the rich gain
undue advantage, according to traditional theory, politicians can use
political parties and media appeals to mobilize the large number of voters
whose interests are harmed. Even in the face of great wealth, investigative
journalism and party organizations preserve equity in the political system.
Reporters keep society informed about possible infuence peddling and
wrongdoing. If the wealthy deploy their money for selfsh ends, the media
will write negative stories about them and help other politicians curtail
their infuence.

In the contemporary period, however, there is considerable doubt about the
ability of these forces to limit the power of the rich. On some issues,
notably taxes, liberal and conservative billionaires often are united in
opposing tax increases, at least for themselves. Regardless of their
particular ideology, on certain issues class trumps ideology and there is no
pluralistic universe of voices. It leads to what political scientist Larry
Bartels calls unequal democracy. 35

The news media have gone through massive changes in operations and business
models that have sharply diminished the quality and quantity of their public
affairs coverage.36 For example, according to the Pew Research Center's
State of the News Media report, the transition from print to digital
publications has disrupted the usual business model of newspapers. The
substitution of digital advertising nickels for print ad dollars has
seriously weakened corporate revenues and thereby affected the ability of
reporters to cover the news. For every $16 in print ad revenue lost, it is
estimated that only $1 in digital ad revenue has been gained.37

The loss of advertising dollars has weakened the news media and led to a
decline in coverage, a problem that has been especially acute at the state
level. American Journalism Review surveys of reporters who cover state and
local news have found a staggering loss of reporting frepower in America's
state capitols. Overall, the number of full-time newspaper reporters
covering state government dropped from 513 in 1998, to 468 in 2003, and then
to 355 in 2009 (an average of just seven reporters per state). Nearly every
state in the country has witnessed additional declines since then in local
reporting.38 As a result, special interests often are able to work their
will in near-secrecy at the state level.

Many political observers worry about the effectiveness of mechanisms for
furthering accountability. They claim that both major parties in the United
States have been so corrupted by corporate money that ordinary people cannot
count on either party to represent the public interest. Both Republican and
Democratic candidates are beholden to wealthy donors, and that accentuates
the power of the rich over ordinary voters.39 In recent years, money has
devolved from political parties to super PACs controlled by the wealthy.
According to Rob Stein, the founder of Democracy Alliance, money is leaving
the parties and going to independent expenditures groups. These now are
fracturing the big tents' of our old two-party system into independent,
narrow and well-funded wings. 40

Globally, billionaires have short-circuited democratic accountability by
purchasing major news organizations. In countries such as Australia, the
Czech Republic, France, Georgia, Italy, Russia, the United Kingdom, and the
United States, the ultra rich own leading newspapers, magazines, television
stations, and Internet portals. They use their media control to promote
particular messages and thus have weakened countervailing forces within
civil society. The result has been what journalist Dean Starkman describes
as watchdogs that don't bark. One thing that everyone should realize is
that overall, our reporting and fact-gathering infrastructure has been
weakened far below acceptable levels, and needs to get stronger, he
observed.41

INCOME CONCENTRATION AND POLITICAL POLARIZATION

Discussions about the role of the wealthy often are quite intense. In her
book Plutocrats: The Rise of the New Global Super Rich and the Fall of
Everyone Else, Canadian journalist Chrystia Freeland writes about the
ramifcations when a small number of people have tremendous fnancial
resources.42 She says that plutocrats deploy their considerable resources
to favor policies that beneft themselves and oppose policies that create
opportunities for less fortunate people. Because they have so much money,
their activities skew policymaking and engender anger among others.

Activists representing poor and middle-class constituencies fear the power
of the rich and employ rhetoric attacking the wealthy for having money. That
makes the well-to-do feel that advocates are unfairly engaging in class
warfare. Arthur Brooks, the president of the American Enterprise Institute,
wrote recently about what he called the politics of envy. Citing public
opinion surveys, he claims that there is increasing envy in American
politics and that it leads to destructive social comparison. He says that
people's fears that the game looks rigged, combined with increasing
anxiety about income inequality and rising sympathy for income
redistribution, lead to resentments that are unhealthy for the body
politic.43

Researchers examining these claims have found a strong connection between
income inequality and political polarization. Using data on U.S. House of
Representatives roll-call voting and the top 1 percent's share of income
from 1913 to 2008, political scientists Adam Bonica, Nolan McCarthy, Keith
Poole, and Howard Rosen-thal fnd that the two indicators rise and fall
together.44 From 1913 to the 1930s, when the top 1 percent earned a large
percentage of income, political polarization was high. When their income
share dropped between the 1930s and 1970s, polarization dropped. As the
wealthy class's share of overall income increased over the past few decades,
polarization returned to and even exceeded its levels during the early
twentieth century.

Part of the polarization in rhetoric and representation is driven not just
by self-interested behavior but by the current system of campaign fnance. A
research study by political scientist Lee Drut-man found that wealthy donors
push candidates to the extremes, especially on the Republican side.
Analyzing the campaign contributions of top donors along with data on the
voting records of members of Congress, he argues that the more Republicans
depend on 1% of the 1% donors, the more conservative they tend to be. His
conclusion is that wealthy donors exert a conservative tug on American
politics. 45

THE DONALD TRUMP ENCOUNTER

A chance encounter with one well-known billionaire gave me a frsthand look
at the sensitivities of the rich. Donald Trump attracted considerable
attention in 2012 when he criticized President Barack Obama for raising
taxes on the wealthy and, Trump insisted, for not being born in the United
States. Amid all that controversy, there was talk about Trump addressing the
Republican National Convention. Asked for a comment on that possibility by
the D.C.-based newspaper Politico, I suggested, tongue in cheek, that the
GOP should instead send Trump on an all-expenses-paid trip around the world
because allowing him to deliver a nationally televised address would bring
the party nothing but trouble.

The day my July 2012 quote was published, I received a call from Trump's
assistant asking for my e-mail address. I gave it to her, and she sent me an
angry missive from the billionaire himself. He pasted my media quote into
his message and wrote in large, black caps: DARRELL, YOU ARE A FOOL.' Best
Wishes, Donald J. Trump.

The thin-skinned Trump need not have worried about my comment because there
are prominent experts who publish very favorable arguments in support of the
ultra rich. In a paper entitled Defending the One Percent, Gregory Mankiw,
a Harvard economist (and former economics adviser to President George W.
Bush), conceded that monetary income in the very top bracket in the United
States has grown much faster than average but argued that people should
accept inequality because these high earners have made signifcant economic
contributions. 46 According to Mankiw, the rich have gotten wealthy because
they are visionary, creative, and innovative. Since most of them are
self-made individuals, he said, they are models of effective
entrepreneurship who have transformed obsolete or decaying businesses into
productive enterprises.

This interpretation is comparable to views expressed by Republican
presidential nominee Mitt Romney. In an infamous, secretly videotaped May
17, 2012, campaign speech to a group of wealthy donors, the GOP politician
distinguished makers from takers. Romney said that society was divided
between a small group of productive people who build companies and
contribute to society and a larger set of unproductive moochers who create
nothing and take money through government programs.47 From his standpoint,
income concentration is not a serious problem because those with lots of
money work hard, innovate, and do things that better the lives of others.
Wealth should not be criticized, but rather appreciated for the good things
that it allows billionaires to accomplish. Political leaders should favor
policies that promote wealth creation, such as lowering income taxes,
cutting the capital gains tax, and eliminating the estate tax. Even if those
policies disproportionately beneft the wealthy, they stimulate economic
growth and aid other people in the long-run, according to this viewpoint.

Such arguments by Romney and others miss the risks that resource
concentration raises for governance and policymaking. There are takers who
make and makers who take. People with large fnancial resources have access
to political leaders, giving them more opportunities than others have to
make policy pitches. As mentioned earlier, studies suggest that the wealthy
often employ direct channels to express their views at the highest levels of
government and succeed in getting benefts for their businesses and
themselves.

THREATS TO SYSTEM PERFORMANCE

Income differentials pose challenges to the performance of many aspects of
political, social, and economic systems. When one small part of society has
a disproportionate share of money, is politically active, holds distinctive
policy viewpoints, and has numerous ways to make its infuence felt, it is
diffcult for democratically elected offcials to address policy problems in
an even-handed fashion. Tycoons and their lobbyists are aware of veto points
within the electoral, legislative, and regulatory processes and funnel
considerable resources into stopping measures that they oppose and advancing
ones that they support. When the general public sees these efforts by
special interests-- which is not always the case, since the most effective
lobbying takes place behind closed doors-- it feels that it is being ignored
and that its interests are not being represented.

For example, the challenges of income inequality and social mobility have
been discussed by many observers, but it has been diffcult to produce
concrete improvements in either area. The politics of so-called income
redistribution are fraught with controversy, and advocates for programs
benefting the poor have trouble fnding the money to advance their causes.
Many wealthy people feel that calls for more equality punish success and are
patently unfair. Less advantaged individuals complain that excessive
compensation of corporate executives, unfair tax policies, and some
corporate practices have pushed up the incomes of a small number of people
while wages for most others have languished.48

Addressing inequality and addressing economic immobility involve different
dynamics. Inequality is rooted in unequal distributions of fnancial
resources; immobility refers to the inability of many workers to move up the
income ladder. But the two are related in that lack of money makes it
diffcult for people to invest in education or training that allows them to
advance economically.

As Brookings fellow Richard Reeves notes, It seems harder to climb a ladder
when the rungs are farther apart. 49

Research by Jason DeBacker and colleagues fnds that the increase in earnings
inequality in the United States has developed in part because of changes in
technology and required skill levels.50 On the basis of their analysis of
U.S. tax returns for 35,000 households from 1987 to 2009, they argue that
some people make more money because they are among the small number of
individuals who are highly skilled and much in demand. By contrast, others
experience limited wage growth because they are poorly trained and not in
demand. This is most apparent in the high-technology area, where some
individuals with innovative ideas have gotten rich quickly by launching
companies and taking them public a few years later. Those individuals
parlayed their vision of new products or new services into popular
enterprises and became instant billionaires, in some cases while still in
their twenties or thirties. Similar things have happened in the hedge fund
and private equity areas, where executives have been lavishly compensated
for their investments and gotten incredibly rich through annual compensation
packages in the tens or even hundreds of millions of dollars.

Demand for working-class labor, meanwhile, has been depressed by the
globalization of the economy. Workers in Toledo, Ohio, now compete with
those in Shanghai for wages and jobs, and there has been a hollowing out
of the workforces in the United States and other countries once described as
industrialized. With the decline in labor unions and changes in collective
bargaining, it is harder for average workers in one place to demand higher
salaries for goods that could be made more cheaply elsewhere. That restricts
wage growth and makes it diffcult for working-class people to improve their
economic fortunes.

Public policies play a substantial role in social mobility and wealth
creation.51 Governments have considerable impact on education policy,
poverty programs, business operations, and tax rates. Each of these areas
affects the opportunities that people have to get an education, rise out of
poverty, launch businesses, and keep what they make. For the past several
decades, many countries have reduced income tax rates and tilted a range of
public policies to favor the affuent. In the 1980s, President Ronald Reagan
cut income taxes and spurred wealth creation. That was followed in the 2000s
by generous tax cuts, advocated by President George W. Bush and approved by
bipartisan majorities in Congress, that gave the greatest benefts to the
wealthy. The top income tax rate was reduced from 39.6 to 35 percent, while
the tax on dividends dropped from 39.6 to 15 percent and the capital gains
tax went from 21 to 15 percent.52

Education is part of the income story because of the substantial differences
among groups linked to educational attainment. There are well-documented
differences in income level among high school dropouts, high school
graduates, college graduates, and those who have done post-graduate work.
According to recent U.S. Bureau of Labor Statistics data, an American high
school dropout earns, on average, an annual income of $24,492; a high school
graduate earns $33,904; a college graduate earns $55,432; and those with a
professional degree, such as doctors and lawyers, earn $90,220.53 Those
differences refect a situation in which individuals trained to compete in
the knowledge economy do well while others stagnate.

Others point to the marriage gap and its impact on earnings. Senior fellow
Ron Haskins of the Brookings Institution noted that between 1970 and 2010,
the percentage of 35-year-old women living in married-couple families with
children fell from about 78 percent to 50 percent while the percentage of
women who were single and living with children more than doubled, from 9
percent to over 20 percent. 54 According to his data, those living in
single-parent households are the most likely of all people to be poor.
Recent research by Jeremy Greenwood and colleagues also cited marriage as a
crucial factor in income inequality due to assortative mating, that is,
the tendency of well-educated people to marry one another and together earn
a lot of money.55

Billionaires don't directly create problems of inequality or immobility. But
it is diffcult for those born in disadvantaged situations to move up the
economic ladder when incomes are highly skewed and programs intended to
advance economic opportunity are under attack. People in the middle or at
the bottom of the income spectrum have trouble raising the funds to invest
in education and health care. Economist Julia Isaacs found that those who
grow up in the bottom quintile of family income have only a 6 percent chance
of earning an income in the top quintile while those who start out wealthy
have a 39 percent chance.56

DANGERS IN THE DEVELOPING WORLD

The developing world exhibits greater inequity than developed nations and
therefore has more of the political and social problems associated with
great wealth. Latin American nations have the highest level of inequality,
with a Gini coeffcient of .48, followed by Sub-Saharan Africa (.44), Asia
(.40), the Middle East and North Africa (.39), Eastern Europe and Central
Asia (.35), and high-income countries (.31). Within the developed world,
however, there is considerable variation. Countries such as the United
States and the United Kingdom are at the high end of inequality (with Gini
coeffcients of .37 and .34, respectively), while Denmark (.22), Finland
(.25), and the Netherlands (.25) are at the low end.57

Many poor nations have weak rule of law. They do not have strong electoral
or governance systems that can help balance the political demands of those
with great wealth and the interests of the general public. For example, the
Electoral Integrity Project at the University of Sydney, Australia, reports
that the lack of a level playing feld in political fnance and campaign
media was seen by experts as the most serious risk to integrity worldwide.
58 In some cases, typically authoritarian regimes and military
dictatorships, there is a nearly perfect union between economic resources
and political power. The strong man and his relatives amass tremendous
fortunes while the people languish in extreme poverty. This arrangement is
most evident in African nations, along with some in the Middle East, Asia,
and Latin America. The dramatic contrast between rich and poor in those
countries destroys opportunity, makes citizens cynical about their
government, and inhibits overall economic and political development.

These problems are aggravated when a country's legal system makes it easy to
transfer wealth across generational lines, whether through customary
practices in which money stays within the family or public policies on taxes
and estates that facilitate large wealth transfers. Such situations raise
tremendous risks in terms of inequality, poor governance, and limited
opportunities for mobility. The riskiest situation arises when possession of
great economic and political resources combines with easy transfer of wealth
across generations. That combination creates a regime in which social
mobility is stifed and hereditary forces dictate the distribution of wealth.
In the worst cases, family lineage becomes far more important than talent,
creativity, and ability to innovate. That is the case in many parts of the
Middle East and in nations ruled by autocrats. The least risky case exists
in nations such as Scandinavia and some others in Europe, where political
power and economic resources are more separate and it is hard to transfer
fnancial resources across generations. In such situations, it is diffcult
for any single group to dominate consistently over time, and that promotes
the type of healthy societal competition that rewards merit and excellence.

Allowing oligarchs, tycoons, magnates, or princelings to dominate a society
by means of their own wealth or hereditary transfer of privilege--as in too
many places in Africa, the Middle East, Latin America, and Asia-- frays a
country's social, economic, and political fabric. When I visited Bahrain
several years ago, for example, local residents told me that they needed the
emir's offcial approval to buy personal property; it was not possible for
private individuals there to buy or sell homes and businesses independently.
Bahrain represents an extreme example of a modern-day feudal system that is
a perfect environment for corruption and insider dealing. But even in less
extreme cases, common in the developing world, formal and informal
restraints on economic mobility engender public cynicism and destroy hopes
for future advancement. People feel that even if they have good ideas, there
is little chance that they will be able to pursue their vision or have a
decent shot at developing their own business.

One already sees worrisome signs of cynicism and despair in developed
nations such as the United States. A 2013 survey of the American public
found that 70 percent believed that the income gap between the rich and
poor has gotten larger during the past 10 years. 59 Even more troubling,
many believe that the American Dream is fading. Fifty-two percent of
respondents thought that their generation is better off fnancially than
their children's generation will be, and only 18 percent anticipated that
their children will have the same level of prosperity that they have. It is
hard to imagine that those who live in some parts of the developing world
feel much better about opportunities within their societies.

PLAN OF THE BOOK

The plan of the book is as follows. In chapter 2, I discuss how billionaires
infuence candidate elections. They do this either indirectly through
campaign fnance or directly by running for offce themselves. I present an
analysis of the 2012 presidential election and the fundraising role that
billionaires played and case studies of the electoral campaigns of two
billionaires who sought elective offce: Michael Bloomberg's New York City
mayoral campaigns and Meg Whitman's gubernatorial run in California. I argue
that billionaires can't easily buy offce when there is extensive media
coverage, robust party organizations, and opportunities for opposing forces
to organize voters. But money is infuential in how campaigns unfold and in
what kind of policy arguments get made. In addition, there were
idiosyncratic conditions that allowed Barack Obama to triumph over Mitt
Romney, and there are no guarantees that conservative billionaires who
backed the GOP nominee will lose the next time around. If they fnd a better
candidate, adjust their advertising appeals, and build a stronger feld
operation, they will be in a stronger position to win, even if Democrats
rail against them.

In chapter 3, I look at a series of advocacy campaigns at the state and
local level bankrolled by wealthy individuals. They include campaigns
against gun violence, health care reform, climate change legislation, and
higher taxes on the wealthy and campaigns in favor of marijuana
legalization, pension reform, same-sex marriage, and stadium renovations. At
a time of declining press coverage of state government, much spending has
been done below the radar of the electorate and has impacted several policy
debates. Referendums and policy campaigns have become a major target for a
number of billionaires, and they have been successful in infuencing the
debate over marijuana legalization, same-sex marriage, public pension
reform, and taxes. In campaigns in which they have been infuential, there
generally has been one-sided electoral discourse and limited media coverage.

Chapter 4 examines the new activism in philanthropy. Many observers
rightfully point out that people beneft from the giving of others. By
funding charitable foundations and supporting particular causes, rich people
make generous contributions to society as a whole. Yet researchers need to
examine new models of gift giving. Increasingly, certain activist
billionaires are combining philanthropy with electioneering and policy
advocacy. Because of these new forms of philanthropy, the country needs to
think about better disclosure and transparency regulations, particularly in
regard to tax-exempt organizations that participate in election campaigns.

Chapter 5 looks at politics and elections abroad. Billionaires such as
Silvio Berlusconi in Italy, Bidzina Ivanishvili in Georgia, Serge Dassault
in France, Zac Goldsmith in the United Kingdom, Frank Stronach in Austria,
Clive Palmer in Australia, Petro Poro-shenko in Ukraine, Thaksin Shinawatra
in Thailand, Vijay Mallya and Nandan Nilekani in India, Najib Mikati and the
late Rafq Hariri of Lebanon, Manuel Villar of the Philippines, and Mikhail
Prokhorov, Andrei Guriev, and Sergei Pugachyou in Russia have run for offce,
and most have won. Many of them have been accused of buying votes, infuence
peddling, and overt corruption. The manner in which they have used their
abundant fnancial resources raises serious questions about the ties between
money and politics.

The background and manner in which billionaires make money are relevant in
policy and political debates concerning the super rich. It matters for
public policy whether the wealthy earn their fortunes through their own
innovations or become affuent at least in part through public investment and
tax policies. In looking at wealth formation, I argue that in many cases it
takes a village to make a fortune. The role of societal forces in wealth
creation suggests that billionaires have responsibilities to the country as
a whole and should help promote opportunities for other people.

Chapter 6 presents a demographic, geographic, and industry profle of global
billionaires. Using data from the 1,645 people on the Forbes billionaires
list, I show that they are overwhelmingly white, male, and older and that
many benefted from public investments and decisions that aided their sector.
Chapter 7 analyzes how several prominent billionaires earned their fortunes.
Many of them, dissatisfed with the status quo, displayed considerable skill
in developing new products, services, or market niches that were not
well-served by existing frms. While such vision is important, chapter 8
demonstrates how wealth creation also is facilitated by infrastructure
investment, public investment in research and education, favorable tax
policies, and social networking.

In chapters 9 and 10, I summarize the arguments about wealth-ifcation and
call for policies that help others move ahead. It is crucial to adopt
policies that promote transparency, accountability, governance, and
opportunity; accordingly, I outline a number of policy actions that can
improve the democratic process and extend social well-being to a broader
range of people.
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Monday, September 15, 2014

[tt] (c-punks) DOE quantum encryption & Google quantum computation research (fwd)

----- Forwarded message from Gregory Foster <gfoster@entersection.org> -----

Date: Thu, 11 Sep 2014 09:03:47 -0500
From: Gregory Foster <gfoster@entersection.org>
To: cypherpunks@cpunks.org
Subject: DOE quantum encryption & Google quantum computation research

GCN (Sep 10) - "DOE, Google [independently] back quantum computing
research":
http://gcn.com/blogs/pulse/2014/09/doe-google-quantum.aspx

> The Department of Energy is investing in a project to speed the
> development of unhackable quantum encryption technology that will
> protect the country's power grid from cyberattack.
>
> Under the DOE's Cybersecurity for Energy Delivery Systems program,
> the nation's top program for grid security, San Diego startup
> Qubitekk was awarded $3 million to work in partnership with Oak
> Ridge National Laboratory, Pacific Northwest National Laboratory,
> the University of Texas at Austin, Sandia National Laboratory and
> Pacific Gas & Electric to develop practical quantum security for the
> nation's power grid.
>
> Qubitekk, founded in 2012 to commercialize technology required to
> speed the adoption of quantum computing, recently announced the
> availability of the world's first plug-and-play entangled photon
> generator, the QES1. Like the transistors at the hearts of classical
> computers, the QES1 enables the flow of information through quantum
> computers and quantum encryption products – both of which the
> company is currently developing.
>
> Meanwhile, Google is planning to build its own quantum computer. The
> Quantum Artificial Intelligence team at Google is launching a
> hardware initiative to design and build new quantum information
> processors based on superconducting electronics, according to a
> Google+ post by the lab team. Google also announced that John
> Martinis and his team at UC Santa Barbara will join Google in the
> initiative.
>
> Google has been working with D-Wave Systems, maker of the quantum
> computer being tested by the Quantum Artificial Intelligence Lab at
> NASA's Ames Research Center. Martinis will try to make his own
> versions of the kind of chip inside a D-Wave machine.
>
> The Google Quantum AI team will test "new designs for quantum
> optimization and inference processors based on recent theoretical
> insights as well as our learnings from the D-Wave quantum annealing
> architecture," Google said. The company will continue to work with
> D-Wave scientists and to experiment with the 512-qubit "Vesuvius"
> machine at NASA Ames that will be upgraded to a 1000 qubit
> "Washington" processor.

gf

--
Gregory Foster || gfoster@entersection.org
@gregoryfoster <> http://entersection.com/

----- End forwarded message -----
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[tt] (cctalk) Re: Murphy's Law (was Re: fuse madness) (fwd)

----- Forwarded message from Tony Duell <ard@p850ug1.demon.co.uk> -----

Date: Sun, 14 Sep 2014 21:50:37 +0100 (BST)
From: Tony Duell <ard@p850ug1.demon.co.uk>
To: cctalk@classiccmp.org
Subject: Re: Murphy's Law (was Re: fuse madness)

>
> On Fri, Sep 12, 2014 at 4:52 PM, Tony Duell <ard@p850ug1.demon.co.uk> wrote:
> > My point is that this does not go far enough,. If you protect a
> > transsito with an expensive FF fuse, then not only will the
> > transistor fail first, it will do so i na wat to blow the fuse. It
> > will not protect the fuse. That owuld be contrary to Muprhy's
> > Law...
>
> Not necessarily. There's a meta-law "If Murphy's Law can go wrong,
> it will."

Along with O'Toole's law : 'Murphey was an optimist'
And XXX's law (I forget the usual name given) : 'O'Toole was an optimist'

And of course the law of Murphey the Elder : 'Things that can't go wrong
will'

-tony

----- End forwarded message -----
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Sunday, September 14, 2014

[tt] (ASU) ASU astrophysicists to probe how early universe made chemical elements

[

https://asunews.asu.edu/20140910-timmes-elements

]

(... links deleted ...)

September 10, 2014

(...)

ASU astrophysicists to probe how early universe made chemical elements

Posted: September 10, 2014
Eta Carinae shedding material into space
ASU astrophysicists have received an important research grant to study
how massive stars, such as Eta Carinae, depicted here, evolve and
eventually seed the universe with heavy elements created by nuclear
reactions inside them.
Photo by: Gemini Observatory artwork by Lynette Cook
[54]Download image

(...)

In the beginning, all was hydrogen – and helium, plus a bit of lithium.
Three elements in all. Today's universe, however, has nearly a hundred
naturally occurring elements, with thousands of variants (isotopes),
and more likely to come.

Figuring out how the universe got from its starting batch of three
elements to the menagerie found today is the focus of a new Physics
Frontiers Center research grant to Arizona State University's School of
Earth and Space Exploration (SESE). The grant is from the National
Science Foundation's Joint Institute for Nuclear Astrophysics – Center
for the Evolution of the Elements. Of the full $11.4 million NSF grant,
about $1 million will come to ASU over five years.

SESE astrophysicist Frank Timmes is the lead scientist for ASU's part
of the Physics Frontiers Center research project. Timmes, ASU's
director of advanced computing, focuses his astrophysical research on
supernovae, cosmic chemical evolution, their impacts on astrobiology
and high-performance computing. He is also a scientific editor of The
Astrophysical Journal.

The evolution of elements project also includes Michigan State
University in Lansing (the lead institution), the University of Notre
Dame in South Bend, Indiana, and the University of Washington in
Seattle.

Joining Timmes on the project will be astrophysicists Patrick Young,
Evan Scannapieco and Sumner Starrfield, also from the School of Earth
and Space Exploration In addition, the award will fund two postdoctoral
researchers to collaborate on the effort.

Take it from the top

Time started 13.7 billion years ago with the Big Bang, which produced
the basic three elements. Yet by the time the Bang was a billion years
old, essentially all the other chemical elements we know had formed.
How did this happen?

"It takes place inside stars," says Timmes. "They're the
element-factories of the universe. They take light stuff, such as
hydrogen and helium, process it in nuclear reactions, and then crank
out carbon, nitrogen, oxygen and all those good things that make you
and me."

While the broad outline is clear, details are a lot murkier, he says,
and that's where ASU's researchers enter the picture.

"ASU's contribution is to provide the glue between experimental
low-energy nuclear astrophysics measurements and astronomical
observations of stars," Timmes says.

Ancient stars were fundamentally different from those today, he notes,
because they started off with a different collection of initial
ingredients – no heavy elements. But those first-generation stars are
gone.

As Timmes explains, "The stars that began back then went through their
life cycles and died, so we naturally don't directly see them today.
But when they died, they exploded and threw out little bits of carbon,
oxygen and nitrogen, which ended up in the next generation of stars."

Round and round in cycles

In a process that still continues today, massive stars create more and
more complex elements, then explode as supernovas and scatter the newly
created elements into space for another generation of stars to use.
Cycle after stellar cycle, stars became steadily richer in heavier and
more complex elements.

The sun, its planets and moons all formed about 4.5 billion years ago.
Most of the elements they contain didn't exist when the universe was
young, so what generation does the sun belong to?

Timmes explains, "A typical massive star, in round numbers, lives about
a million years. The Big Bang occurred about 7 billion years before the
sun formed. I need a thousand generations of massive stars to get us to
a billion years, so I need on the order of 10,000 generations of
massive stars to get one with the sun's composition.

"We are the product of many, many, many previous generations of stars."

The researchers at the School of Earth and Space Exploration plan to
develop computer models of stars of all sizes, masses and chemical
compositions, then set them on their life courses. It's building stars
in computers and comparing them to observations of stars to see how the
universe builds them for real.

"The toughest theoretical problem we have to work on is how stars
explode," says Timmes. "In a loose, hand-waving sense, we know that
stars explode, of course, but exactly how it happens isn't well-known
or understood."

The new research project fits well with the expertise of the school's
astrophysicists. And there's another plus as well. With this project,
ASU is joining a small group of research centers that deal with
"Frontiers Physics." The entire country has only about ten such
centers, Timmes explains. Highly competitive and highly sought-after,
they cover subjects such as biological physics and theoretical physics.

But there's just one nuclear astrophysics center, he says. "And it's
great that ASU is going to play a key role in it."
Robert Burnham, [67]robert.burnham@asu.edu
(480) 458-8207
Mars Space Flight Facility

(... links deleted ...)

References

54. https://asunews.asu.edu/files/etacarstepsd6mr.jpg

67. mailto:robert.burnham@asu.edu
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[tt] WSJ: Lessons From Amazon's Sale on Its Fire Phone

Lessons From Amazon's Sale on Its Fire Phone
http://online.wsj.com/articles/lessons-from-amazons-sale-on-its-fire-phone-1410543518

Joe Queenan on the lessons from Amazon's sale on its Fire phone--for
movies, politicians and golf courses
Sept. 12, 2014 1:38 p.m. ET

Disappointed that its smartphone hasn't broken any sales records to date,
Amazon has slashed the price of its Fire smartphone from $199 to 99 cents
with a two-year contract. Some critics have complained that the Amazon
Fire has a short battery life and a tendency to heat up. Now the company,
which hasn't released official sales figures, is offering the 32-gigabyte
version of the phone for practically nothing.

Attention, theaters, politicians and the Mets: Amazon slashed its prices
and so should you. Nishant Choksi
Why don't more companies saddled with unappealing, uninspiring or
downright crummy products do this? Why not slash the cost of D.O.A.
Broadway musicals from $175 a ticket to 99 cents, giving them a chance to
build an audience? Some tightwads might bluster, "I wouldn't pay a nickel
to see a musical about Tupac Shakur or a show based on the film 'Rocky.'"
But this is balderdash. Of course they'd pay a nickel. Some would go as
high as a dime. The truth is, most avid theatergoers would be willing to
shell out 99 cents to see an otherwise doomed musical. Hey, it's still the
Great White Way!

In the rag trade, there is a famous saying: "The volume overcomes the
loss." That is, if you sell enough merchandise, it doesn't make any
difference how much of a bath you take on individual sales. Nobody has
ever run the numbers on this, but Amazon sure seems to be on board with
this philosophy. If you slash it, they will come. And if they come to buy
the Fire for 99 cents, they might come back to buy the Blaze for a
buck-fifty or the Conflagration for three-and-a-quarter or the Fire 6 for
a nice round sawbuck. Ninety-nine cents here, 99 cents there, and before
you know it, you're talking real money.

What other businesses might try this admittedly unconventional marketing
strategy? Nobody ever comes to see the New York Mets or the Miami Marlins.
The teams stink, and they charge too much money to watch them stink. Dud
teams, sure, but at 99 cents a pop--$3.96 for a family of four--who could
resist? Especially if they also slash the price of a beer from eight bucks
a bottle to less than a buck. The thing is, little kids don't need to see
good baseball teams. They can't tell a bad team from a good team. To
little kids, who have to sit there melting away in the boiling heat for
three hours while Dad gets sloshed, all baseball games are hell.

Other suggestions? Cut movie prices from $12 to 99 cents as soon as it
becomes obvious that no one wants to see the film about senescent CIA
contract killers, ambitious boys from Jersey or a million ways to die in
the West. Golf courses, where attendance has nose-dived, would be swamped
if it only cost 99 cents to play nine holes. Overpriced politicians could
slash the cost of buying access from $5,000 to 99 cents. Same price for
influence-peddling. Or hold "Buy Two Dixie Governors for the Price of
One!" sales.

Underperforming gastroenterologists would get a lot more traffic if they
reduced the cost of an endoscopy from $3,000 to 99 cents. Ditto oral
surgeons who haven't been hitting their monthly sales figures: Nobody
without dental insurance wants to shell out a couple of grand for a root
canal, so most people just grin and bear it. Slash the cost to 99 cents
and you'll be beating away patients with a stick.

One product that could really benefit from a massively reduced sticker
price is Obamacare. The way the system is now constructed, nobody can
figure out how much it costs for the basic policy: $250 a month? $300?
$40? So a lot of cash-strapped millennials are holding out. Slash the cost
to a measly 99 cents, and people will be lined up from here to Honolulu to
buy into the program.

Finally, Ivy League football teams should slash ticket prices from
whatever they charge now to 99 cents. That way, the gridiron-loving public
might say: I don't care how bad Dartmouth-Columbia games are. For 99
cents, I'm in. Actually, if you've seen Ivy League football, that might
still be a bit steep.
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Saturday, September 13, 2014

[tt] University of Nebraska-Lincoln: Scientists find growing consensus: Political attitudes derive from body and mind

Scientists find growing consensus: Political attitudes derive from body and
mind
http://newsroom.unl.edu/releases/2014/07/31/Scientists+find+growing+consensus%3A+Political+attitudes+derive+from+body+and+mind

Released on 07/31/2014, at 10:36 AM

Office of University Communications
University of Nebraska-Lincoln

Lincoln, Neb., July 31st, 2014

Do people make a rational choice to be liberal or
conservative? Do their mothers raise them that way? Is it a matter
of genetics?

Two political scientists from the University of
Nebraska-Lincoln and a colleague from Rice University say that
neither conscious decision-making nor parental upbringing fully
explain why some people lean left while others lean right.

A growing body of evidence shows that physiological
responses and deep-seated psychology are at the core of political
differences, the researchers say in the latest issue of the journal
Behavioral and Brain Sciences.

"Politics might not be in our souls, but it probably is
in our DNA," says the article written by political scientists John
Hibbing and Kevin Smith of UNL and John Alford of Rice University.

"These natural tendencies to perceive the physical world
in different ways may in turn be responsible for striking moments of
political and ideological conflict throughout history," Alford said.

Using eye-tracking equipment and skin conductance
detectors, the three researchers have observed that conservatives
tend to have more intense reactions to negative stimuli, such as
photos of people eating worms, burning houses or maggot-infested
wounds.

Combining their own results with similar findings from
other researchers around the world, the team proposes that this
so-called "negativity bias" may be a common factor that helps define
the difference between conservatives, with their emphasis on
stability and order, and liberals, with their emphasis on progress
and innovation.

"Across research methods, samples and countries,
conservatives have been found to be quicker to focus on the
negative, to spend longer looking at the negative, and to be more
distracted by the negative," the researchers wrote.

The researchers caution that they make no value
judgments about this finding. In fact, some studies show that
conservatives, despite their quickness to detect threats, are
happier overall than liberals. And all people, whether liberal,
conservative or somewhere in between, tend to be more alert to the
negative than to the positive--for good evolutionary reasons. The
harm caused by negative events, such as infection, injury and death,
often outweighs the benefits brought by positive events.

"We see the 'negativity bias' as a common finding that
emerges from a large body of empirical studies done not just by us,
but by many other research teams around the world," Smith explained.
"We make the case in this article that negativity bias clearly and
consistently separates liberals from conservatives."

The most notable feature about the negativity bias is
not that it exists, but that it varies so much from person to
person, the researchers said.

"Conservatives are fond of saying 'liberals just don't
get it,' and liberals are convinced that conservatives magnify
threats," Hibbing said. "Systematic evidence suggests both are
correct."

Many scientists appear to agree with the findings by
Hibbing, Smith and Alford. More than 50 scientists contributed 26
peer commentary articles discussing the Behavioral and Brain
Sciences article.

Only three or four of the articles seriously disputed
the negativity bias hypothesis. The remainder accepted the general
concept, while suggesting modifications such as better defining and
conceptualizing a negativity bias; more deeply exploring its nature
and origins; and more clearly defining liberalism and conservatism
across history and culture.

The article, "Differences in Negativity Bias Underlie
Variations in Political Ideology," was published in the June issue
of Behavioral and Brain Sciences, a bimonthly publication of
Cambridge University Press. It can be read
at http://journals.cambridge.org/hibbing.
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[tt] Economist: Apple's future: Reluctant reformation

Apple's future: Reluctant reformation
http://www.economist.com/news/business/21616967-apple-becoming-very-different-company-and-not-just-because-its-newly-unveiled?fsrc=nlw|hig|11-09-2014|5356c3f8899249e1ccb20a48|NA

Sep 13th 2014 | CUPERTINO, CALIFORNIA

APPLE prides itself on constantly re-imagining the future, but even
the world's leading gadget-maker likes to dwell on the past too.
Thirty years ago Steve Jobs commanded the stage at the Flint Centre
for the Performing Arts near Apple's headquarters in Cupertino to
show off the new Macintosh computer. On September 9th Mr Jobs's
successor, Tim Cook, held a similar performance in the same location
to thunderous applause. Those invited were given a chance to play
with the gadgets presented on stage: two new iPhones and a wearable
device, called the Apple Watch. "This is the next chapter in Apple's
story," he said, sounding much like the young Mr Jobs in 1984.

It may well be true--but not for the reasons most people might
think. Consumers, analysts and investors have been howling for proof
that Apple can still do the magic tricks of the Jobs era; iPad sales
have weakened in recent quarters and the iPhone, launched a tech
aeon ago in 2007, still generates more than half of the firm's
revenues. Yet lost in the maelstrom of snazzy new gadgets, applause
and photos was an important shift: this week's announcements showed
that Apple's future will be less about hardware and more about its
"ecosystem"--a combination of software, services, data and a
plethora of partners.

If Apple were simply a hardware-maker, there would be reason to
worry. It is losing market share to rivals such as Samsung of South
Korea and Xiaomi of China, which make cheaper devices, and to
Google's Android operating system, which runs on 71% of the world's
smartphones. Apple's average selling price is $609, compared with
$249 for smartphones worldwide, according to IDC, a market-research
firm. That is good for profits, but it makes Apple increasingly a
niche player, somewhat like a luxury-goods firm, says Colin Gillis
of BGC, a stockbroker.

As with Apple's existing products, much effort went into the watch's
design. Its backplate contains sensors that measure the user's vital
signs; and people can send their heartbeat to other
watch-wearers--as a new sort of expressive message. But starting at
$349, and only usable in conjunction with an iPhone, it looks
unlikely to be a serious competitor to other expensive watches (see
article).

Still, many are likely to stick with their iPhones and even plunk
down the money for an Apple Watch, because of the firm's ecosystem.
Apple is considered a laggard in online offerings, especially since
it bungled the launch of its map service. Its services and apps can
be maddening. But iTunes, Apple's media store, now boasts more than
800m active users, three times as many as Amazon's. Apple's software
and services category, which includes iTunes, its Apps Store,
revenue from warranties and other businesses, brought in sales of
more than $16 billion in 2013 and is growing steadily (see chart).

Apple's watch is supposed to help the firm expand into new areas.
One example is a mobile wallet. It aims to replace swiping credit
cards with the tap of an Apple watch (or an iPhone) on a device
connected to a retailer's cash register. Apple's new health and
fitness applications help people monitor their workouts. The firm's
new operating systems, due out soon, will allow its devices to work
together seamlessly: an e-mail started on an iPhone can be finished
on an iMac.

For Ben Wood of CCS Insight, another market-research firm, Apple's
plan is to be even more like the Hotel California (as in the Eagles'
song), "where you can check out any time you like, but you can never
leave". The more Apple-gadget owners store their data in them, from
photos to health information, the more they are locked in, and must
stick with Apple.

At the same time, Apple is trying to become more open to partners--a
big change for the firm. "There has always been a huge tension
between keeping control and opening up" at Apple, explains Michael
Cusumano of MIT's Sloan School of Management. Mr Jobs saw Apple
products as complete works of art and never wanted them unbundled.
Only after the executive team rebelled, for instance, did he relent
and in 2003 let iTunes become available on Windows--a move that
dramatically increased sales of the iPod.

Three years after Mr Jobs's death, Apple seems to be ready to go
further, hoping to entice other firms to contribute to its ecosystem
and make it more attractive. Earlier this year Apple announced a
partnership with IBM, as well as changes that make it easier for
outside developers to design apps for the iPhone. And Apple's watch
will have third-party apps from the start. The iPhone launched
without the app store; it opened only a year later, after many
outside developers had hacked the device, allowing them to write
apps for it.

The new openness does not only apply to technology. Mr Cook has let
outsiders join his inner circle, hiring executives from retail and
other industries to expand Apple's expertise. He has also overseen
the largest acquisition in Apple's history, the $3 billion purchase
in May of Beats, a headphones and music-streaming company. For its
new payment system it teamed up with big retailers, such as Whole
Foods and Walgreens, and credit-card firms, including MasterCard and
Visa.

This opening-up may need to go further, to keep up with Google's
ecosystem. The internet giant's services still beat Apple's. And it
not only lets device-makers modify Android, but also gives it away
(albeit with conditions, such as the requirement to carry Google's
services). "Apple v Android" could still end up a repeat of "Apple v
Windows": in personal computers Apple lost the battle against
Microsoft because it refused to license its operating system to
other hardware-makers.

Umberto Eco, an Italian novelist, once compared Apple's platform to
Catholicism and Microsoft's to Protestantism. The Macintosh, he
wrote, "tells the faithful how they must proceed, step by step". By
contrast, Windows "allows free interpretation of scripture...and
takes for granted the idea that not all can achieve salvation." This
still rings true today, but Apple is clearly going through a
Reformation.
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