Thursday, February 20, 2025

Black Swans and Swiss Cheese

Current events merit a quick refresher on perhaps two of the most commonly used metaphors about public policies and disasters over the past decade or so -- black swans and Swiss cheese. The terms merit review not because their usage has become hysterical as a means of attracting views and likes and generating ad revenue but because the applicability of the concepts at their core has never been more appropriate for events actually taking place.

Meet Your Metaphors

The black swan metaphor gained prominence via a book published in 2007 by Nassim Taleb which used it in describing flaws in human decision-making stemming from our tendency to confound the LIKELIHOOD of an event with its POSSIBILITY. This tendency poses two problems. First, it leads humans to assume something CANNOT happen simply out of ignorance and a lack of personal experience. Second, it leads humans to confound the PROBABILITY of an event with the MAGNITUDE of the event, resulting in disastrous possibilities not being properly weighted even if they are considered at all. The larger takeaway of Taleb's book was to point out that modern technology makes it easier for humans to create ever more complicated systems which entire collections of engineers are unable to comprehend, magnifying all of these black swan vulnerabilities.

The swiss cheese metaphor is used in nearly every post-mortem analysis of a catastrophic accident in transportation, manufacturing, banking or public health. Physical systems or processes in these sectors are said to have regulations written in blood based upon learnings from prior catastrophes that cost lives but were avoidable in hindsight. Despite reflecting decades of such learnings and stringent efforts at reducing single points of failure, it is still possible for individual oversights or abject failures of specific safety checks and preventative procedures to combine at one time to allow the collective protection of all of those systems to fail and result in disaster. Investigations into these events routinely find MULTIPLE warnings about MULTIPLE failures in MULTIPLE systems were ignored either because the existence of ALL of the failures was not visible to ALL of the participants responsible for operating the system or a single operator simply ignored them all, assuming this time would be no different. Most of the time, a SINGLE failure has no effect. But some percentage of the time, all of the holes in the swiss cheese line up and disaster enters the system at one end and makes its way to the other.


Swans, Cheese and Modern Life

In the modern world, the skies are crowded with thousands of big machines made up of millions of parts that fly at thirty thousand feet. People carry billions of small machines with tens of billions of microscopic parts that can perform billions of tasks per second. People can stare into those devices from a tent in the middle of a desert and order a product manufactured on the other side of the world that will be shipped to them and tracked like the Hope Diamond enroute to their front door. A wild animal can have a chance encounter with another animal destined for a wet market and transmit a new virus that can kill three million people across the globe in three years before public health measures can stop it.

It should already be apparent that the modern world is INCREDIBLY complicated. No single human is capable of predicting the exact response of even a tiny fraction of key systems in our economic, social and political systems to NORMAL fluctuations in inputs, much less a massive change. Given the reference to the two metaphors above, it should already be obvious where this analysis is headed. To avoid burying the lede, the point should be stated very clearly...

The optimal strategy for correcting whatever flaws might be present in an existing, galactically complicated system will NEVER involve turning off all of the monitoring gear, eliminating large numbers of the system's current operators en masse, throwing a tarp over the remaining controls visible from the outside, then leaving the system to free-run at full load and waiting to see what happens.

This is exactly what is happening in the United States. It's exactly what has been happening in other industrialized democracies over the past decade at a slightly slower pace. While the general pattern is not unique to the United States, are there specific factors unique to the United States that make the experience unique?

Bluntly, stated... HELL YES. As useful as randomly discussing some of those factors might be, it is more useful to discuss them in a more hierarchical order... In an order loosely reflecting how they compound on one another and produce a uniquely American problem.

Failure to Enforce Anti-Trust Restrictions - The last material monopoly that was successfully addressed via regulation and litigation was the breakup of AT&T that took effect in 1984. That breakup eliminated barriers to competition in long distance traffic, telecommunications equipment design and manufacturing and advertising that dropped service costs drastically and allowed new technologies to supplant old networks and support a more decentralized internet -- exactly as one would predict when looking at a monopoly in telecommunications.

The dismantling of the Telecom 1.0 technology monopoly directly drove the emergence of a more versatile general purpose technology for transmitting any arbitrary data via IP networks. At the same time, exponential performance improvements in semiconductor density fostered exponential growth in computing power and software languages to implement previously unimaginable capabilities. The combination of networking and compute/software capabilities have enabled the creation of vast distributed systems supporting millions of simultaneous users and the capture and mining of petabytes of resulting information. Companies operating in those sectors have undergone the equivalent financial evolution of Standard Oil from 1870 to 1911 or US Steel from 1901 to the mid 1960s. Consolidation in one business sector begets consolidation in other sectors as they evolve to support thier ever-growing clients so firms related to banking, auditing, insurance and other needs have consolidated in lock step with these goliaths. Despite over a century of evidence of the economic damage from such consolidation, today's goliaths have continued growing with virtually zero limitations and only an occasional speed bump of financial penalties for anti-competitive practices.

Flawed Educational Systems at All Levels - Educational systems at the primary, secondary and college levels have been crippled by dismal funding and poisoned with a careerist, jackpot-style mentality that emphasizes education solely as a means to win a career and progression through the system as a proxy for proving one's suitability to "win" one of those prestigious, well-paying jobs. Lost in that shift has been any focus on teaching history and civics as inherently related topics so citizens emerge with a clear understanding of HOW the American government works and WHY it was designed to operate that way.

Our system wasn't designed by the founders as a "set-it-and-forget-it" system that COULD work unchanged for centuries and SHOULD be left unchanged for centuries. The ability to alter the rules of the game were built into the rules of the game. The founders KNEW the system they devised was flawed but they adopted it as the best that could be done at that time with those actors. Ignorance about basic history and civics has yielded a population who not only fail to recognize the fallacy of Originalist arguments that the solution to problems is to go back to a 1789 blueprint for politics but fail to recognize those espousing this approach are actually attempting to ignore ANY laws that don't fit their goals and are attempting to dismantle the legal processes in place for changing those laws.

Religiosity as a Tool for Political Manipulation -- American business spent the first seventy years of the twentieth century watching the interaction between industrial scale manufacturing and mass media technologies learning first how to identify demands then design, build and sell products to match. The United States suffered virtually no damage to its industrial capacity during World War II and enjoyed a nearly twenty year head start from 1945 to 1965 over the rest of the world perfecting the manipulation of mass media to allow business to stimulate demand for products it chose to make, turning the official business school description of the purpose of marketing on its head. Why bother listening to customers to make what they want when you can just manipulate what they want to what you've already decided to make that's profitable for you?

By 1970, lessons learned by giant corporations were adopted in politics, starting with the Republican Party and Richard Nixon. Leading up to the 1972 election, strategists for Nixon identified that anti-abortion policies were INTENSELY popular with Catholics and a sliver of some Protestant voting blocs. Eager to capture every possible bloc of support to secure himself an ego-boosting blow-out win, Nixon adopted anti-abortion language into the Republican platform. Prior to that cynical decision, issues like birth control and funding for programs like Planned Parenthood had enjoyed bi-partisan support. After that moment, Republicans applied that lesson in future elections on a ever wider range of carefully researched, hot-button "moral issues" and evangelical groups eagerly joined in, hoping to increase their influence clout by appearing to lead powerful movements.

Today, this manipulation of hot-button "moral issues" that allow a party to capture a voter and turn off all other critical thinking brain cells has distorted public debate to the point where the only allowed policy recommendations are concentrated on yard-line stripes towards the end-zones while actual policies capable of solving problems are located all over the field and are completely ignored.

The Substitution of Money for Speech -- Corporations have grown in economic power to dwarf individuals. A majority of individual citizens lack an understanding of civics and the merits of limiting power both in business and government. Businesses have perfected the use of mass media to manipulate public demand for any product. Political parties have learned from business to use the same techniques to perfect the use of mass media to manipulate public perception of issues and policies. Then the United States Supreme Court issued a ruling that held that corporations have the same free speech rights as individual citizens. In the case Citizens United, the plaintiff Citizens United (an Orwellian name for a political action committee dedicated to fouling election campaign finance laws to benefit corpporations, not individual citizens) argued they should have been able to pay to have an anti-Clinton (Hillary) film aired on DirecTV and pay for ads promoting the film. Their request had been denied by the Federal Election Committee for dubious reasons and the case went up the appeals ladder, eventually reaching the Supreme Court.

In what is now recognized as a signature move by Chief Justice John Roberts and fellow conservative justices, the majority on the Court took the opportunity to use the case in front of them to not only reject a specific result in a specific case they did not like but to over-reach and establish a vastly wider "principal" of conservative dogma having zero prior intellectual or legal provenance in American law and Constitutional history. Their decision not only held Citizens United had a right to pay to air its film but further held that all limits on corporate spending on any political campaigns were unconstitutional and must be eliminated entirely. Spending money is intrinsically part of disseminating speech so any limit on spending by an individual or association of individuals is a limit on speech itself, a First Amendment violation.

What's transpired since? Arguably, the United States HAS "more political speech", if you measure by minutes of airtime and eyeball reach online. In reality, real citizens are flooded with advertisements crafted by phantom Astro-turf political action committees funded with untraceable "dark money" with Orwellian names like Citizens for Our Fracking Future or Americans for Justice. With unlimited wallets, these organizations bid up advertising costs during campaigns, making it more expensive or impossible for individual candidates trying to avoid PACs to run counter-ads. All of this extra Citizens United speech has an additional perverse benefit to those paying for the ads. While the VOLUME of the ads drowns out any competing ads attempting to convey viable policy ideas, the TONE of the ads turns off the vast majority of voters, helping fuel disgust with and apathy towards the process. This suppresses turnout and makes it easier for those manipulating the message to more carefully segment the remaining "market" and manipulate them into voting as desired.

Back to the Thesis

What is the point? Here it is again.

The optimal strategy for correcting whatever flaws might be present in an existing, galactically complicated system will NEVER involve turning off all of the monitoring gear, eliminating large numbers of the system's current operators en masse, throwing a tarp over the remaining controls visible from the outside, then leaving the system to free-run and see what happens.

The United States has a poorly functioning, understaffed commercial aviation system that has encountering skyrocketing numbers of on-ground and in-air near collisions (and now actual collisions) and jet designs with catastrophic flaws resulting from lax inspection and regulation of manufacturers and contractors.

What is the United States doing in response?

It is dangling an unconstrained retirement offer (with a subliminal threat behind it) to all federal employees, including air traffic controllers. It takes at least two years to become fully certified as an ATC and current ATCs are operating at workloads that no newbie could possibly handle on Day One. And ATC is not a career one can suddenly select as a mid-career shift to fill new vacancies. FAA regulations require new trainees to be no older than thirty years old.


Ukraine, an ally of the United States and of Europe, has been under attack for three years from Russia and has done an amazing job not only defending its territory but providing valuable insight into the effectiveness of modern weapons systems, demonstrating the value of many American systems and the futility of many of Russia. Such insights should be informing trillions in future defense spending over the coming years. It can be argued Ukraine has not only unmasked Russia as a paper tiger but has exhausted much of its remaining economic power, doing more to defeat an American enemy than any strategy devised by American politicians.

What is the United States doing in response?

The American President seems hell bent on aligning America with Russia and abandoning NATO. Trump is planning a meeting with the Russian President -- who just directed a bomb attack on the Chernobyl nuclear plant sarcophagus on February 14 via drone -- while leaving out the President of Ukraine. The President has not only taken to blaming Ukraine for being invaded but has begun referring to its President as a dictator. At the same time, the Vice President is attending NATO conferences and lecturing American allies on their supposed suppression of speech and censorship as the Trump Administration issued edicts banning the Associated Press from the White House until they adopt the term "Gulf of America". The Trump Administration has removed thousands of web pages from government web sites supplying a variety of scientific, financial and medical data paid for by taxpayers and used across industries lest it be used to contradict Trump positions on any issue. Trump's minions also cut staff within the National Nuclear Safety Administration (NNSA) which provides safety and security support in nuclear facilities (weapons and power related) throughout the world.


After leaving office in 2020, Trump was indicted on federal charges related to possession and leaking of highly classified national security information. Evidence brought forth with the charges showed Trump stockpiled dozens of boxes of such documents in public rooms within his Florida compound, instructed subordinates with zero clearance to see such documents to move them repeatedly away from FBI agents sent to confiscate them and even transported some of them to his compound in New Jersey where he showed some of them to friends and friendly reporters.

What has Trump done regarding the protection of sensitive government data since taking office?

He has allowed an unelected and unappointed outsider to bring in outside parties and give them completely unrestricted access to numerous federal computer systems, including the EPA, USAID, the IRS and the Treasury's entire payment system handling disbursement of payments for the entire federal government. Who are these outside parties? In some cases, they are TEENAGERS or early 20-somethings who have no college degree or experience in accounting, auditing or even formal software engineering. They just happen to have worked in roles at one of Musk's companies, he likes them so there they are, with access to petabytes of data that could likelly already be replicated to cloud data centers where it could immediately wind up under the control of hackers and foreign adversaries. Imagine if the CEO of a firm worth $30 billion dollars announced to his board of directors that he wasn't sure about the company's computer security so he unilaterally decided to hire his neighbor's college drop-out son to come in and poke around a bit. You know, kick the tires. Imagine if the CEO told his CIO that the kid should get root userid access to every system and the ability to create new users.

Well, what's this kid's name? Has HR at least run a background check on him? I don't know his name but he's supposed to be real smart with them there computers. Just get him credentialed and get out of the way.

Does anyone think that CEO would survive that board meeting? Does anyone think that CEO should survive that board meeting?


During Trump's time under federal indictment -- indictments brought in after months of review by a grand jury that voted to bring in every one of those indictments -- he claimed the Department of Justice had been weaponized to persecute him.

What has Trump done regarding use of the Justice Department since taking office?

Trump has explicitly directed Justice Department leaders to identify anyone within the DOJ who participated in any of the cases against Trump and summarize them up the chain. Trump has explicitly directed DOJ leadership to find SOMEONE in the Biden Administration to prosecute... ...to begin sending a message of retribution. Trump's acting Deputy Attorney General worked for nearly a month to negotiate a written quid pro quo deal with New York City Mayor Eric Adams to drop federal charges against Adams related to foreign corruption involving Turkey and rigging of fire safety inspections on Turkey's behalf. In exchange for dropping the charges, Adams would pledge to support Trump immigration policies within NYC, providing Trump with a partial illusion of "support" for his policies from big Blue cities. In arranging the deal, Trump's lead Emil Bove not only put the quid pro quo part in writing to Adams but to the US Attorney in the Southern District of New York office (SDNY) as well,. Bove stated there were no problems with the legal charges and evidence or the conduct of the agents but that Adams is needed in his role as Mayor to support Trump policies regarding immigration. Perhaps the coup de grace of the quid pro qo is that Bove directed the US Attorney to file to dismiss the charges WITHOUT prejudice, so it remained possible to refile the charges at a later date. Of course, the obvious motivation there is to hold the threat of future prosecution over Adams' head to ensure he continues voicing support for Trump to Trump's satisfaction. This move triggered the resignation of SEVEN United States Attorneys between the SDNY division and DC division.


During Democratic Administrations, Republicans continually threaten to or actually shut down the federal government as a means of attempting to limit increases in the debt ceiling to lower out of control spending on liberal policies.

What are Republicans now proposing with full control of all branches of government?

The hard-ass, "bad cop" Republicans in the House of Representatives are proposing a budget that would renew existing tax cuts benefitting the rich and add additional reductions, all forecasted to cost at least $3.3 trillion over ten years. Those House Republican fanatics DO have a plan to pay for that, by cutting Medicare and other health programs crucial to tens of millions of Americans. Of course, the "reasonable" Republicans in the Senate, the "good cops" in the charade, are joining Trump in claiming those programs will NOT be cut. What will happen? The tax cuts will be passed because they've been bought and paid for in the 2024 election. The Medicare cuts will NOT occur because even Republicans can read polls and realize the program is popular with the vast majority of the public. And thus, deficits will rise under Republican legislation by at least $3.3 trillion over ten years while the rich pocket their tax cuts and the wealth equality gap grows larger.


Predicting the Future

The real point behind the main point already repeated twice is this...

Anyone stating they can predict a black swan is already logically adrift. If they truly understood the concept of a black swan event, they would know a true "black swan event" cannot be predicted because, by definition, the event itself cannot even be articulated because it is so foreign to our understanding of reality and the possible. It can only be identified in hindsight. But when an event is raised as a black swan, it shouldn't be blown off as a logical impossibility based on esoteric abstractions about the knowable. An event first identified as a "black swan" should immediately be considered as a non-zero probability with some non-zero cost. Argue about the probability and the cost all day. But if that event involves a system depended on by hundreds of millions of people or has billion or trillion dollar costs, get that topic on the table where it can be considered.

Similarly, don't be tempted into discounting the concerns raised in the public about what is happening because those raising the concerns cannot predict to the month or the day exactly when a SPECIFIC change in a SPECIFIC area will result in a SPECIFIC catastrophe. If Team Trump was ONLY targeting one narrow area of policy, that might be possible. In reality, Team Trump is targeting ALL aspects of government -- in law enforcement, public health, science, workplace safety and finance -- simultaneously without even the pretense of limiting actions to those that are plausibly legal. That widens the range of uncontrolled inputs being applied to an already unknowable system, making exact predictions even more impossible.

Finally, don't get hung up on being provided exact estimates in terms of dollars or people who might be effected. The nature of the damage likely to occur is bad enough at the lowest likely magnitudes to warrant objection. At some level of abstraction, specifics won't really matter. Another few rounds of tariffs that trigger a collapse in manufacturing and job losses? Will it matter if the next possible pandemic kills twenty thousand versus five hundred thousand if better public health systems could have avoided all of those deaths? Superficial oversight of traditional banks and new cryptocurrency markets that temporarily prop up Trump's billion dollar stake in a meme coin that results in another global financial meltdown? A drug approved due to pressure from a donor that harms millions of patients? Lax safety standards triggering a massive chemical plant explosion or a power plant and electrical grid failure? Or maybe just another predictable fire or hurricane season followed by ZERO financial aid from the federal government (ask Republican Governor Brian Kemp of Georgia how his constituents feel about shouldering $3.3 billion in economic losses after Helene without FEMA aid rejected by Trump). Or maybe a collapse in markets for American crops as USAID programs buying those crops and giving them away abroad are cut and all that supply floods domestic markets and tanks prices?

Republicans have control of the White House, the Senate, the House of Representatives and the Supreme Court. There is NOTHING preventing them from proposing and enacting virtually ANY policy they like. Yet , for the most part, Republicans are not governing, they are willingly ceding their power to the rule of one person whose sole motivations involve enriching himself, enriching those willing to stroke his ego and settling petty grievances against anyone who has ever offended him in the past or dares to question his authority going forward.

Nothing pursued to date has any intent or actual likelihood of improving any aspect of life not only for citizens of the United States but citizens of the world. Everything pursued to date increases the likelihood of a catastrophe after a few hundred or few thousand critical people doing jobs few understand are either eliminated or become so overworked that a failure slips by undetected. And another. And another. And a couple more. Until all the holes line up in the Swiss cheese. And a black swan comes marching through those holes from one end to the other and emerges in your neighborhood.

The only thing Americans can be sure of over the coming months is that the harmful effects generated by current actions will not just rain down upon Trump supporters who would surely deserve it. They will rain down on all Americans. And there isn't a umbrella on the planet big enough to deflect the harm back where it belongs.

This is not a drill. This is the real deal.


WTH

Tuesday, January 21, 2025

Potterville

(Editorial note... This commentary was found while searching for completely unrelated documents. The operating system shows it was written on Febrary 23, 2019. It isn't clear what events at that time triggered this thought but the thoughts are even more apropos now than in 2019.)

Virtually everyone has seen the movie It's a Wonderful Life. For most, it's a quaint, now somewhat schmaltzy Christmas movie illustrating how the power of friendship can overcome nearly any difficulty in life.

For me, the scene that resonates with me -- and with events in America over the last two decades -- is the "what would have been" scene when George Bailey and Clarence the Angel stop by Martini's bar, the town's friendly watering hole in real-world Bedford Falls, which has now become something else entirely in alt-world. You recognize it immediately when Nick brushes off the first question about Martini's whereabouts and replies to George, "Look, I'm the boss, you wanna drink or doncha?" George and Clarence sit at the bar for a few more awkward moments, having awkward conversation about ancient wussy drinks which spawns another retort from Nick... "Hey look, mister. We serve hard drinks in here for men who wanna get drunk fast and we don't need any characters around to give the joint atmosphere. Is that clear or do I have to slip you my lip for a convincer?" A few seconds later, Mr. Gower, a man whose livelihood George saved in real-world, staggers into the bar in alt-world out of the snowy night, disheveled and incoherent and is instantly set upon by Nick who then throws out George and Clarence after realizing they know Gower.

At that point, it HAS become clear. The sleepy town of Bedford Falls -- the epitome of a Normal Rockwell-like small town America -- has truly been transformed into Potterville, a crass, cold, uncaring, mean-cuz-it's-fun hellhole that perfectly matches the morals and personality of Henry Potter, the warped, frustrated old man bent on dominating everything in the town.

The essence of this scene -- an entire town filled with miserable, mean people who just want to sit in a bar and drink hard liquor and get drunk fast to avoid the reality of their lives controlled by a man doing everything in his power to rig the town's entire economy to force that dependency -- has many parallels to current America.

  • tremendous income and wealth inequality
  • large numbers strung out on illicit drugs
  • even larger numbers strung out on drugs first obtained by prescription
  • millions who would be bankrupt in 6 months if they lost a paycheck but still insist on owning the latest $699 smartphone

As a thought exercise in pop/national psychology, one can probably make a defensible case for tracing much of the above back to one decade -- the 1980s -- and two figures -- Jack Welch and Robin Leach.

How so?

In the 1980s, Jack Welch became a household name in the business community and the larger American psyche as the CEO of General Electric, which began posting an amazing series of quarterly financial reports. Those reports not only reflected success in a complicated conglomerate operating businesses in everything from appliances to television to nuclear reactors but they did so with AMAZING precision. From 1981 to 2000, the firm hit earnings forecasts TO THE PENNY for nearly every quarter. Of course, that's virtually impossible to do for a small company in a single industry. That is absolutely impossible to do for a conglomerate operating in DOZENS of industries across the entire economy whose growth cannot be predicted within 2% for any given YEAR much less individual QUARTERS. Welch did it by manipulating earnings and hundreds of auditors paid handsomely to catch this type of trickery looked away. Welch became a celebrity CEO guru, touting his Six Sigma quality BS and "cull the bottom 10% of losers every year" Human Resources philosophy and polluting much of Corporate America with the same dodgy / criminal practices. Well after Welch retired with an obscene congratulatory golden parachute, GE wound up paying $50 million in fines for decades of financial rigging, a mere pittance compared to the hundreds of billions of fraudulent shareholder value built up then lost when the reality became apparent.

In the 1980s, Robin Leach became a household name hosting a tacky TV show featuring "Lifestyles of the Rich and Famous," filling 30 minutes of airtime reminding the little people in America how the rich rolled and, week after week, subliminally conveying the non-rich watching the show were suckers for holding real jobs and having realistic goals for their families. The show also put what had been a relatively harmless degree of celebrity worship (excepting Elvis and a few other early canaries in the celebrity coalmine) into hyperdrive, pitching anyone obscenely rich as worthy of respect, regardless of how that wealth was earned -- the ultimate perversion of a uniquely American "Prosperity Gospel." If you're successful, God wants you to be successful. If you're not, well, look in the mirror.

By the mid-1990s, those two social phenomena had reinforced each other to the point that the Internet boom created a period of 4-5 years where a much larger pool of people thought they were this --->||<--- close to scoring a jackpot with options at an Internet startup or IPO investments of firms with stock prices growing 10-20 percent every year. Wow, with 20 percent yearly growth, ANYONE can invest in their 401k, never lose money and retire in 10-15 years rather than working 40 years. For a while, no one begrudged Bill Gates or Marc Andreeson or John Chambers... Or Jack Welch or Bernie Ebbers or Ken Lay... as they made billions of dollars cuz many thought they were right behind them on the gravy train, only with $M figures instead of $B figures. Hey, when you're destined for millionaire status, who cares what the billionaires are doing?

In essence, these forces combined to create a rock hard faith in a meritocracy of both corporations and those that run them. Corporations growing by leaps and bounds in market share and revenue are a reflection upon America as a whole and if they succeed, America succeeds. If giant corporations need to pay zero taxes to foster "investment" and pay executives tens of millions for their brilliance at managing such large operations, it must be allowed. The alternative would cripple their success and weaken America.

These tropes fit the goals of those in control of those large corporations but they don't fit reality.

At any point in the history of the industrialized world, there have probably been 8-10 core areas of business that are virtually ASSURED of enormous growth and success based on the science and technology of the day. Human knowledge and creativity only grows so much per year to widen the pool much beyond that. At any given point in time, the people RUNNING and OWNING those businesses are virtually GUARANTEED to make -- well... -- robber baron money. Eventually, the nature of their business becomes more commonplace and "table stakes" in the economy and growth flattens out. At that point, someone else comes up with a bright idea based on advancements in science and a new growth area attracts attention and investors looking for the next three bagger.

The American public doesn't understand these dynamics. America's leaders are controlled lock, stock and barrel by the 0.1 percenters who are intent on insuring public policy continues to go their way. Those factors explain some of the modern day similarities of America to Potterville and why breaking the cycle will be difficult.

But we have problems that go way beyond Potterville. Way beyond tendencies to drug addictions and oblivious attitudes about economics and basic decency.

What about:

  • a team doctor sexually abusing HUNDREDS of female gymnasts under his care?
  • musicians with decades long histories of sexual abuse of minors?
  • producers with decades long histories of sexual assault of DOZENS of women?
  • actors with decades long histories of sexual assault of DOZENS of women?
  • multiple religions with hundreds of priests with thousands of cases of sexual assault of minors?
  • a sports executive worth billions patronizing prostitutes at seedy massage parlors who couldn't speak English and were trafficked from China?
  • a business executive who attempted to extort cities for tax breaks for his firm that makes billions and pays little state/federal taxes winding up getting extorted with lewd photos involving him and his mistress?

What lessons have we absorbed about the relationships between money, power, fairness and justice that enables these events to become commonplace? Those lessons need to be examined and deconstructed very quickly. The rich aren't orders of magnitude smarter or harder working than the rest of the population. Fame through sports or entertainment isn't so worthwhile to merit silence after being abused by insiders while pursuing it. Giant corporations don't have to control 40+ percent of a market to succeed at delivering goods and services needed by the public. And the public shouldn't feel obligated to give away billions in tax revenue needed for schools, roads, safety and infrastructure in order to attract jobs.

Unless Americans re-think their assumptions about money, power, fairness and justice, we're headed for a future in America that will make us yearn for mere Potterville levels of dysfunction.


WTH

Sunday, January 19, 2025

BOOK REVIEW: The Power Broker

The Power Broker - Robert Moses and the Fall of New York - Robert Caro, 1162 pages + notes and index

I received a copy of The Power Broker by Robert Caro as a gift and just finished reading it. The book was given to me under the assumption its analysis of how one person shaped so much of what Americans -- and indeed many westerners in general -- view as not only the way things are but the way things should be would be interesting. That assumption was correct but the larger perspective to be gained from reading the book -- all 1162 pages of it -- is more apropos for the present reality facing America than anyone reading the book -- or even the author who wrote it -- could imagine.

The book wasn't read in "potential blog content" mode so at completion, the book wasn't filled throughout with dozens (hundreds?) of individual Post-It note tags identifying crucial quotes and conclusions to weave into a new critique and narrative. Instead, it was read straight through. The thoughts that follow are what stick out after absorbing the entire narrative without trying to recap it in exhaustive detail. The wisdom of that approach became evident after getting through all 1162 pages for reasons explained shortly.


Quick Takeaways

First, if anyone is going to read this book, I would recommend an e-book edition over the dead-trees edition.

Second, if you insist on reading the dead-trees edition, there are potential orthopedic and cardiovascular issues to consider. There is no comfortable way to hold open a book with 1280 physical pages for the 33+ hours it will take to read it. Tendon damage to the hands, wrists and elbows from holding the book open or shifting positions cannot be ruled out. If you fall asleep reading it, the weight of the book could cut off circulation to a vital limb. Hyperbole, to be sure but it really isn't any fun physically trying to read a book this large.

Third, this book was written by Robert Caro whose career motto was / is "read every page", meaning his modus operandi was / is to exhaustively collect EVERY minor document, memo, letter, newspaper article etc. regarding his topic and come to some internal understanding of what ALL of it meant before writing a single word. This approach is useful for scenarios where the findings in the final book will buck conventional thinking about the topic and that level of detail is required to counteract such doubts and effectively land an alternate perspective. The downside of this exhaustive style is... It can be exhausting to read. This book is 1162 pages long in hardback but the NOTES of the book cover pages 1163 through 1246 and the index covers another 34 pages.

This book was Caro's first book in 1974 and he won a Pulitzer Price for it. But that means the book itself is FIFTY YEARS OLD. And it covers events taking place predominately between about 1918 and 1972. That means much of the exhaustive detail included, especially about people and events between about 1918 and 1950 are not top of mind to any modern reader. Reading those details produces much the same reaction that a story of 1970s politics with references to Spirow Agnew, Ed Koch, Gerry Brown might produce with modern twenty-something voters in 2025. Who?

The few names from that era that DO click in the current consciousness only do so because the topic involves New York City and State, which cast outsized cultural / political shadows across the rest of the country. You might recognize some of the players (LaGuardia, Al Smith, FDR, Rockefeller, Chase Manhattan Bank, etc.) only because those names are still present on infrastructure or in culture and modern business.

Fourth, as I read all 1162 pages (did I mention this was a long book?), it occurred to me there IS a potential use for an Artificial Intelligence application... Scan a book like this and boil out about 40% of the hyper-explicit contextual details and zoom out a bit to focus on the larger picture. The insights in the book are worth a read that might be 500 or 600 pages, maybe even 700. But such exhaustive, fifty year-old details don't click with a current reader and obscure the points being made, rather than cement them.

What are those points?

The book was written as a biography of Robert Moses but essentially functions as an autopsy on fifty years of corrupt political practices that one guy perfected in New York that were revered by locals oblivious to their consequences (in the short term) and were mirrored across the United States. These practices have resulted in a century of self-reinforcing problems stemming from catastrophically flawed urban planning for mass transit versus vehicular transportation and related generational issues of poverty and racism. All of these cumulative failures in turn stemmed from a collective failure on the part of citizens, politicians and judges who all opted for expediency and "getting things done", often for private gain, instead of allowing democratic processes -- messy as they usually are -- to drive public policy.


The Art of Gaining Power - Have It Surrendered

How did Moses acquire all of the power he exercised?

He started in the 1910s as a graduate from Yale, Oxford then Columbia as a government reformer, attempting to land a position in NYC government to modernize its management and accounting practices to thwart the cronyism that had already taken control of the city. For several years, he wrote papers that were ignored by the city politicians until similar concerns were addressed at the state level. He finally got a position of influence when Al Smith won the New York Governorship in 1918. At that time, Moses worked closely with an advisor of Smith's, Belle Moskowitz, a woman who was a Machiavellian level genius at understanding power and influence and reading people instantaneously. It wasn't totally clear from the book what HER motivations were in using her superpowers but, in only about six months of working with her, Moses completely reoriented his approach to his work. Much of his prior fixation upon "good government" practices for ensuring government accurately reflected input from the public and accurately accounted for public spending was replaced with a fixation on simply "getting things done."

Around 1918 to 1920, the State of New York DID undertake a litany of "reform" efforts and enacted dozens of reforms, all of which were written almost exclusively by Robert Moses acting as a political consultant to those in elected office. As a part of those efforts, the Legislature enacted laws creating a special authority to manage parks throughout the state. Ostensibly, that legislation was aimed at putting park policy (funding, placement, design, construction and management) above politics by creating a special park authority that essentially operated beyond the arm of elected officials.

The good thing was that structure put park decisions out of the reach of politicians.

The bad thing was that by putting park decisions beyond the reach of POLITICIANS, it also put park decisions out of the control of VOTERS as well.

Moses WROTE nearly ALL of this legislation and knew it inside and out to the letter. Then, as the whiz kid who wrote such inspired legislation to "help the kids" and "get things done" without political machines, Moses got himself appointed to be the commissioner of this untouchable "authority."


The Power to Ignore Everyone

One he grabbed this power, he was able to begin and complete construction on parks on Long Island, primarily because

  • he didn't have to honor any feedback from citizens,
  • as an independent authority his costs were not subject to public audit,
  • he could ignore normal red tape and bully his way from groundbreaking to opening day,
  • park fees were collected by the park authority and remained under its control

Since most citizens could not see how the sausage was being made and he was "getting things done" and surely EVERYONE agreed that "parks were good," this created a (false) feedback cycle of admiration for Moses and the "authority" process he invented to bypass "petty politics." Politicians didn't object because the unhappy citizens getting screwed over by his methodology could be told "it's out of my hands" while joining him on opening day to cut the ribbon and claim credit with the rest of the voters for "getting something done" and "creating jobs." Most voters didn't object because most only enjoyed the public benefit of the resulting park without having been subjected to the local community disruption and ham-handed administrative abuses that "got things done."


Expanding the Mandate for Power

The next public infrastructure problem to hit the city and state was the volume of auto traffic that began skyrocketing after WWI throughout the 1920s and 1930s. Since the "authority" concept worked so well for parks, why not use the same approach for roads? Initially, instead of creating a separate "authority" for roads (and later bridges), Moses simply widened the definition of the scope of his "authority" in charge of parks and declared that such authority included the construction of roads to GET people to the parks. This expansion of his original "parks" mandate into roads was immediately more damaging than anyone noticed at the time for the results spread into other areas of public policy.

The "parkways" Moses began building into his various parks around the state did not merely reflect his physical design preferences but his distorted social and economic philosophies as well. Parks were for the public, but only the good public. Not the poor public. For FIFTY YEARS, he never included mass transit access into any park or bridge he built. But he went further than that. Over the course of his fifty years in control, none of the "parkways" he built included bridges over them that exceeded 11 feet in height. NOT ONE. Why? Because he wanted to ensure no bus transportation company could use the parkways to support routes that would allow the poor to reach his parks via public transportation of any kind. Even if the buses could use the center lanes, they could not use the outer lanes and Moses knew no bus company would attempt to create routes over roads limiting them to one lane. This crippled the development of bus transit not only to the parks themselves but throughout the entire region, further limiting where the poor and working class could go.


Power Through Cashflow

The special legislation that created the initial parks "authority" that Moses controlled included language which gave the authority financial and legal independence in perpetuity. On paper, the legislation politicians THOUGHT they voted for authorized the authority to issue bonds to build infrastructure item W or park X for $Y million dollars to be paid off to bondholders in Z years, after which the object created W or X would revert to city control and the authority would cease to exist. Unfortunately, none of the politicians read the ENTIRE legislation and contemplated its true legal meaning.

What the legislation ALSO included was a clause that said the authority could refinance the bonds in agreement with bondholders at any time and that ONLY when the bonds had been "extinguished" would the authority cease to exist and control of the asset revert to the city. What this meant was that Moses could simply re-finance the bonds, renew the indebtedness and continue the authority without end. This was particularly easy to do with bridge projects because toll revenues were collected by the authority, easily allowed payback over periods typically LESS than the original requested loan interval, and the bondholders loved the re-financing because the existing toll revenue was easily documented and thus new loans carried virtually zero risk and paid attractive rates. Bondholders win. Moses wins. Toll payers lose, continuing to pay tolls far beyond the time needed to payoff the bridge. The city loses, never gaining control of the asset OR its revenues. OR the man running the operation.

This modus operandi was expanded into a parallel authority, the Triborough Bridge Authority (later the Triborough Bridge and Tunnel Authority) and was used to build every bit of NYC infrastructure you've ever heard of:

  • Triborough Bridge
  • Henry Hudson Bridge
  • Bronx-Whitestone Bridge
  • Verrazzano-Narrows Bridge
  • Tappan-Zee Bridge
  • Lincoln Tunnel
  • Cross-Bronx Expressway
  • Brooklyn-Queens Expressway

All of those bridges collected toll revenues sufficient to pay back their construction in five to eight years yet Moses continued re-financing the bonds rather than paying them off then used the surpluses to capture other project work the city and state could not afford to fund, while keeping control of those projects to himself.


Racism, Poverty and Housing

As early as the 1920s, Moses had used his authority over parks and road construction to purposely limit the ability of the poor and minorities to reach his new parks or obtain any benefit from the miles of parkways he was constructing via public transportation. By 1949, the federal government recognized a monstrous shortage of housing in the post-WWII years that was particularly acute for the poor. Federal legislation referred to as TITLE I was enacted in 1949 to provide federal funding to local communities to "catch up" on housing demand and build subsidized housing for the poor.

Moses had already learned that federal politicians were equally fixated on "getting things done" as local politicians for all of the same reasons... The ability to take credit for local construction jobs and take credit for the resulting improvements. Moses knew that communities arriving in Washington with "shovel ready" plans already rolled up under their arms would get funding nearly immediately while more timid communities would have to wait. Regional powers in New York recognized the opportunity provided by federal funding for TITLE I developments, created a new public housing authority to lead the work and put Moses -- the man who "got things done" -- in charge of it.

By this time, Moses had perfected his administration of these authorities to maximize the cashflow that remained under his control and use that cash flow to dole out dollars via contracts to local firms, local lawyers and local banks for doing very little while collecting IOUs that continued to send more dollars to Moses. In the 1950s, it became apparent that Moses was

  • handing no-bid contracts to construction firms with zero experience building housing
  • funneling loan business to ONE bank whose owner was under Moses' control
  • funneling required insurance policy business to a favored underwriter who was collecting premiums while covering zero risk
  • the selected firms were NOT actually building new TITLE I housing
  • the selected firms were actually continuing to collect rent from existing slum tenants while halting all sustaining maintenance, doubling down on their role as slum lords

Despite the discovery of this multi-million dollar fraud spanning 5-6 years, coverage of the fraud was only pushed by two of the smaller papers in the city and all of it was tagged to "the city" as the primary actor when in fact TITLE I housing was completely under Moses' control. None of that was mentioned so his public persona as "Mr Public Integrity" remained intact.


It Takes Power to Thwart Power

One key from the book is that aside from age (death, actually) which would have eventually eliminated Moses from power, the only factor that WAS able to remove him from power was conflict with Governor Nelson Rockefeller, a man from a family so wealthy that Nelson owed no favors to anyone. But the real reason Rockefeller was able to chase Moses out of his unappointed, unaccountable positions was that the Rockefeller family controlled Chase Manhattan bank which was led by his brother David Rockefeller. Chase Manhattan happened to be the trustee controlling the vast majority of bonds outstanding from the Triborough Bridge and Tunnel Authority. Besides the language that allowed the authority to operate in perpetuity as long as Moses (its sole negotiator) and the bondholders agreed to keep re-financing the bonds, the language governing the authority protected the authority from being merged with any other entity or authority, giving the bondholders veto rights over such re-orgs. However, Nelson and David knew that individual bond holders were unlikely to spend the time legally fighting reorganizations so if the TRUSTEE of those bonds, Chase Manhattan Bank, did not object in its role as trustee, a re-organization could be initiated and survive.

After fifty years of power, that language proved to be the crucial chink in the armor providing financial and political invincibility to Moses. GOVERNOR Nelson Rockefeller devised a merger between the Triborough authority led by Moses and another authority with several voting seats. GOVERNOR Nelson confirmed with BROTHER David that Chase Manhattan, acting as trustee for the Triborough authorities bonds, would NOT object to the change in structure, allowing a new combined authority with board seats not controlled by Moses to be formed. By this point in the latter 1960s, Moses was at the point where he was willing to let some of his positions go and he thought he had an agreement with Nelson Rockefeller to keep the positions he wanted so he didn't object either. The merger happened, the voting rights changed, then Nelson Rockefeller iced Moses out of all his prior positions and left him with a meaningless "consulting" job with no control of any subordinates or money.


Looking Back Over a Century

Moses' track record of bullying citizens dated back to 1920 on Long Island. His record of failure for solving any actual traffic problems with more road construction dated from the 1930s. His failure of solving any traffic problems with new bridges was often evident within WEEKS of a new bridge opening, as traffic adapted to the new available path then overwhelmed it. The corruption in his management of public housing was crystal clear by the mid 1950s. Yet the press and politicians were all willing to ignore the reality in front of them because he had perfected an entire system of reinforcing financial and political rewards amid a legal vacuum of his own design that kept enough of the powerful happy to be willing to screw over the twelve million living in his concrete dystopia.

His fixation on roads versus public transportation spread across the entire US after 1945, crippling US investment in trains and mass transit and creating the urban sprawl crippling the economy and ecology today. The combination of his fixation on cars versus mass transit combined with public housing ACCELERATED the destruction of neighborhoods into slums in NYC and, again, because those practices were followed in nearly every major city in the US, created the same reinforcing problems across the entire country.

After reading this history, it is easy to see that the same techniques to spread money around to grease the required palms to undertake massive projects that are NOT serving the majority of the public's needs are used throughout the country. It is also evident how deeply the hole has been dug using these techniques of public corruption in both public transit and the larger issues of racism and wealth inequality. No matter how enlightened one might try to be about history, economics and racism, the actual history and feedback loop is far worse and far more intentional than one could previously imagine.


WTH