How the Digital Economy Has Become the Savior of the General Economy?

Like most of you I am perplexed by stock market behavior, having been hit by a double whammy – the Covid19 pandemic and an economic free fall. I have always separated the stock market from the economy suggesting that decisions made in the stock market are predominantly emotional, while those same decisions made in our economy are made based upon facts and analysis. But even the stock market is affected by outcomes and estimates. So, what is going on, why is our economy more resilient than it was in the last great recession when over 20 million workers are unemployed, and a pandemic is wracking businesses and classic economic indicators continue to bounce?

My hypothesis is that the digital economy has come into its own and is the predominant factor keeping our general economy from total failure. But let me be clear, all of what I will define now does not explain or correct the misery that so many people find themselves in. And as usual the huge wealth gap continues, as misery for the middle class and those who have suffered under economic injustice only increases. But if the digital economy continues to increase, I believe that access by small business will level the playing field and result in benefits for all. Call me naive, but I believe that American ingenuity and desire for fair play will win out.

About 15 years ago there were three technological imperatives that came to be that transformed the technology infrastructure and began the digital economy and its growth to what it is now.

Three factors that altered tech infrastructure forever were – broadband, cloud (platforms and operating environment) and basic cyber-protection. They not only changed the architectural direction but changed the economics of IT, that then led to new commercial business models forever. These same factors also set in place the next part of the evolution – virtual robotics and AI.

After the last recession and the onset of Cloud, I noticed a major change in the relationship of technology and business. Till then, IT budgets were composed of a large fixed cost budget for hardware, software, networks, and services. When cloud technology came along with the upgrade of network speeds using broadband, a business could finally get out of the IT business and could subscribe to software, hardware, network and services and be billed based upon usage. The shift from fixed to variable costing resulted in a classical alignment often sought after by all businesses – align business costs closely to the ever-shifting market changes. More demand higher costs, lower volume, lower costs, instead of the same fixed cost cemented and increasing, regardless of market ups and downs.

The difference in costs, variable costs aggregated were substantially less, with data centers increasing dramatically for cloud providers and eliminated by businesses. Even more important single points of weakness and stress were eliminated by spreading the risk across private, hybrid and public clouds.

With so much data now physically outside of the business and in the cloud the issue of cyber security increased from basic protection (and introduction) to more sophisticated technologies.

So, what. Well, today we are seeing the benefit of have a cost buffer (fixed vs variable) that can sustain (albeit, at much lower levels of profit) the many large companies across the industries. The digital economy established a symbiotic relationship between technology and business. That is ‘on demand’ services keep the technology companies going, while pay as you use, keeps the businesses going.

Another aspect has been prevalent has businesses that purposely digitally transformed (at its basic level of paper and process elimination) resulting in greater dependence on clouds but benefitting each time from the economic gift of variable costs.

You can see the companies that had transformed prior to the pandemic now holding their own and even when all around them brick and mortar businesses declining or shut down.

Then the top ten technology companies now dominate the market caps of the stock market increasing in value every month and shifting the Fortune 500 dramatically towards companies driving the digital economy.

But the digital economy is not naturally inclusive. Until recently there were always barriers to entry for small business. The barrier was predominantly due to small scale or lower business volume. Additionally, small business was often operating on slim margins, low technology investments when cost for manual processing was competitive with automation. Nor did the volume justify large investments in technology. Nobody says economies digital or otherwise are fair, especially to those with little scale.

In the next post I will examine how the next phase, virtual work, could begin to impact small businesses in non-revenue generating roles or jobs.

“What have you got to lose ?” President Trump, speech to minorities.

In New York City, this line is usually used as a last resort when trying to close a deal. The idea is that it is an informal ultimatum, do the deal and you can only gain, do not do the deal and you will lose. Trumps’ transactions were always between losers and winners.

Today, we all, but especially the black and brown Americans have lost more than they we could have ever imagined when the deal was presented. We have 110,000k souls dead from the COVID19 virus, of which a disproportoinate came from communities of color. More adult African American males are killed by policeman than any other citizens. Trump, as result of mishandling the virus has wreaked havoc on the economy where again black and brown people are affected with a larger number of unemployed and longer timeline for recovery than any other group.

I could go on with healthcare, education and any other benefit from being a citizen of this country, but the number will always be worse. From a global perspective Trump has hollowed out the Climate Change regulations that, as the second largest polluter in the world would continue the misery of people in Africa, Latin America and Asia with an increased frequency and intensity of earthquakes, droughts, flooding and disease. If this continues than the droughts can transform areas of Sub Saharn Africa to a continent of hunger, of terrorism, and ultimately a threat to other continents.

Further more, he has only widened the wealth gap, has increased starvation, homelessness and sicknesses with again a dispoportionate impact on minorities. The virus was, or as call it, a species killer, had its greates success around the world in 3rd world countries. It will never be eradicated unless we remove vulenrability due to lack of wealth, lack of technology and poor health systems.

The realization of loss, daily, intentional exhaustive misery cannot be quantified. The increased enforcement of MAGA, which was intended to be the winner of this transaction has only resulted in America dropping a few notches on the world stage. I believe we were already great, but have now regressed to sit next to other countries that are ‘ghost’ democracies.

The protests are an overwhelming response to Trumps deal. We do not want it, we do not want to be winners in a world of inequality. We are watching people die on mass because of bad decisions and basic ingnorance from a very bad salesman,never a leader. The protesters are asking for the misery to end. For us to deal with our original sin, our weakest link, racism, once and for all, and to inject new energy into the words of our founding fathers.

We have cleaned up the White House more than once in our history. Each time we returned to our basic principles and values. Each time it was hard. With technology and the internet today it will be even harder, but we have no choice, we need to reject “what do you have to lose” or that our country wants to win over the basic principles of life, liberty, and the pursuit of happiness.

Trump – Taking the Measure of the Man

Before the internet, radio or television, we had to use all our senses including a  good deal of common sense to ‘take the measure of the man or women’./ It meant that we reverted to our survival instincts and used all of our senses to form a composite of the person we were trying to know. Thus we would not let one sense take over our analysis unless we had a bias from past meetings. In fact, our composite was an insight into the person so that we could not just listen to a speech but tried to understand the meaning of the words.

We would use our smell to understand if the person was nervous or anxious. We would use our sight to picture the face as it rolled from emotion to emotion. In fact, we could deduce an ‘evil’ or joyful’ face from the many expressions.

Today we rely of text or twitter, possibly a video, or picture to create a partial composite. We then validate that composite based upon our ideology, philosophy, class or background. We rarely look at the facts as that requires work and time. We are passive as images and sound our beamed at us. We fall into a non-questioning state, or non-interactive state as when we watch a movie, or listen to the radio.

As such Trump, know ing this from his days on reality TV, acts even when he tweets. The basis of our analysis is built on his moods and lies. In the old days, all of our senses combined could detect a lie. Today there are too many walls to climb.

Now when alike is repeated you limited senses slowly become inured to the lie and after the fourth time, it becomes true or factual.

We need to go back thousands of years to wake up instinctual senses in order to take a full measure of Trump. When we do, we need to capture that moment of understanding and use it for future comparison.

It follows that the cult of Trump is measured the same way. A seemingly large group of individuals who have long ago abandoned any thought of working hard to discern the measure of the man, from the digital profile of the same.

Next time you read a tweet, see a video, cut through the image and the words and see if you can ascertain the composite, lies, outlandish behavior and all in order to see the true Trump.

The only plus side of Trump’s behaviour is the fact that Twitter and speeches videos will be the basis of his history. Every day of his term has either been documented in a Tweet or a video. His behaviour is limited to those words and his speech to his form of entertainment. We will not need a long analysis to see his legacy, as this log of his term will give us sufficient evidence of his sick mind.

The Sabbath Massacre

Today, in a Pittsburg synagogue an indeterminate human killed 11 Jewish worshipers in the hallowed halls of this synagogue. Ironically, an eight-day  old baby was introduced to Judaism and to his new Jewish name. This while the shooter killed old and young Jews in the sanctuary.

Sanctuary, is meant to be a safe place for all, Jews and non-Jews. This incident has now burnt into the American Jewish history as the worst massacre of Jews in 200 years.

But behind the words and the actions there is a rise of nationalism and nativism. There is a concern of a portion of our population that does not want to give up their culture to a more diverse culture. Our President feels that this movement will make America Great Again. This country strength today and tomorrow will,in fact, be diversity.

Inclusiveness is a tradition in America. We have a President that wants to build a wall, not to increase legal immigration, but to keep out refugees and desperate families walking thousand of miles for only one reason-hope. Words matter, ignorance also matters. When you mix the two, others who are equally angry start believing hateful and dark leaders. Repeat the message and lies often enough and hate like a cancer grows. It thrives on increased hate of other humans, simply because the are ‘other’.

I have fought a war against hate for my people and my home, Israel. Like America, Israel is an idea, one that Jews have never had in their long history their own home. America and its democracy, it’s melting pot, is a much larger idea, this one for all humans under threat, or decimated from attempts of genocide.

If we are ever to achieve true humanism, we need to return to basic values such as ‘my brothers keeper’, golden rules and above all the fact that we are all equal, and the survival  of our species is in our hands.

 

 

 

Time to Reread The Declaration of Independence – Foundation is Shaking

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness” and “To prove this, let Facts be submitted to a candid world.”

 

The two statements above came from the same document, the Declaration of Independence. The first statement is the foundation of what our forefathers thought our government, our country, our American behavior should be based upon. In other words, Americas character.

The second statement is below the first and introduces everything that was wrong with the behavior of the King of England and England itself. In other words, England’s royal character.

 

I put this out because I believe the founders wanted to layout some behavioral norms that they wished America would adopt going forward. Overtime this foundation was tested by acceptance of other norms that came from outside and inside of our country. Somehow, we always came back to the foundation, and then adjusted for the times.

 

Every time I hear somebody say that when they elected Trump, they knew there was a lot of baggage and bad behavior that came with that. But since he was going to make America great, clean the swamp and ultimately put our country’s economy back in order, they were willing to overlook the bad. One can say, that the Republican Party acquiesced and even went further, so that they could stack the Supreme Court with conservatives and get wealthy and corporation Tax Cut.

What has happened is that Trumps bad, became the norm among his followers and his Party. The behavior of Trump goes against the foundational statement written by the Founders.

 

In fact, the norm that Trump drives can be taken out of any authoritarian script in history.

It all begins with identifying an immigrant scapegoat (there goes equality), it is then followed by either taking over the media (like Putin) or neutralizing the media(Fake News), so that the ‘truth’ comes from state media (except for some brave anchor men, Fox News). Can we all now say  and believe that ‘We hold these truths to be self-evident.”. I do not think so, at least not for the last year and half.  The third part of the script usually calls for the taking over of the military. There I am not sure, since like all of you I am not sure what Trump agreed to with Putin, but I am sure it did not undermine Putin’s plans for the Mid Terms.

 

So, to all of the Republicans that may be reading this, unlike your party and Trump, are you willing to finally say enough. Are you willing to look at what follows the second statement and see the character of the man sitting and tweeting in the White House? Are you willing to test his patriotism and his loyalty to the first statement? Are you ready to end the insanity of; child/mother separation, Charlottesville, private meetings with the man that wants to destroy our Democracy, to stop this reality show on steroids. There is nothing more purifying than going back to basics, and breathing that rarified air of our Democracy.

 

To all the other readers, take my advice, I have stopped reacting to the Tweets, nor listen the cable palaver around them. I am confident that leaving Trump to his Tweets and video mobs will only accelerate his karma.

 

 

Where have you gone Steve Jobs ? Senate Pushes Shameless Tax Bill 2017

Probably the closest hero I have had to Joe DiMaggio as the song goes, was Steve Jobs and his counter cultural approach to technology. After the Tax Bill was passed I started to look for America again. How could a majority in Congress, supported by a minority in America push through a bill that will not only hurt the economy, but widen the gap between those who have America’s wealth from those that simply want a fair share of it.

The Tax Bill will more than help the major technology companies, but it will ultimately hurt them too. Most of these companies are successful because their software and hardware is consumed by the 99%. But what if the salaries are not increased or possibly go away? What if the technology companies see a shrinking trained resource pool and immigration continues to go down? You begin to see the hole this Tax Bill will dig.

If Steve Jobs were here, he would know that when Congress was cooking the new tax plan they were overlooking an enormous trend that will change the workplace, beyond anything done before. Because the Tax Bill was done hurriedly and without any input from technologists, economists, corporations and the average worker, they were clueless to the logical end of digital transformation – enterprise robots or virtual workers (or whatever you want to call them).

The majority of our economy is now driven by services. Another way to look at this is the  human worker is in the middle of gathering, processing, decision-making and dissemination of information.  The technology companies are all ready there – they understand that physical workers will give way to virtual robots that provide the golden grail of any business – very cheap, unlimited capacity that can be modulated to volume. Essentially, the cost of labor is reduced and becomes a non-factor in the margin.

The estimates are starting to come in that range from 30-50% of the white-collar workforce will be impacted. The timeframe – ten years, just about when those middle class tax credits disappear, if they have not all ready from the increased health care premiums (same tax bill).

And thus, who will buy the devices, software and subscriptions when the middle class is hit so hard. Karma?

That Steve Jobs, and other technology leaders would have done is begun an ad campaign to shame Congress  to look beyond Washington and recognize the technology and work trends reshaping our society. They would echo what the majority is thinking – that instead of providing additional credits to the rich and to the corporations, pour the money into our national education systems (K-Post Doctoral) now, not in ten years. skill or retrain those workers effected and prepare new workers to apply the same disciplines (strategy, ideation, innovation, product development, analysis) utilizing the new technologies of AI, process automation and deep learning. And lest we forget, put a resilient and hardened communication infrastructure in place in parallel with new institutions for advanced technology training.

But the heroes are now gone, including Joe D. We must put away the philosophies of Ayan Rand (who could have written this Tax Bill) and bring back the true democratic and American belief – through hard work you can succeed in this free country. If you work hard, and save and pay your fair share, than the contract with the government is that they will provide you with the services to keep your family educated, safe, housed and healthy. That it will never limit your potential to achieve success. What a concept!

No Pivot Expected From Trump

The word ‘unprecedent’ has become a label for everything this President does. It used to have a good connotation, but given his actions to date, it has become a word that strikes fear in most. It is evidenti that Trump will continue to do and say bad things. He will continue to deconstruct his predecessor’s legacy. He will continue to live in his world of lies, but mistrust everybody else, even his closest friends and family.

The reason is that for the majority of his life Trump was never a member of society. He lived in his world constructed by his father in order to become his father successor. Not even his brothers and sisters were a part of his world. In living in your own world for so long you develop your own sense of reality. If you have the money, you can construct a tower which rises above others so that you literally feel the class difference every time you go up the elevator.

In this world, Trump read as little as possible and watched TV to understand the outside world. In his world everything was about the next deal. You did not prepare, you could count on force, physical presence to overcome objections and make a deal. You never took responsibility for anything, you always found a way to divert the blame on others.

Since Trump kept little if any records he could always depend on alibi that he was not there or not connected. The last bit is ever so true. Trump is not connected to anything except bright lights and TV. He reprises his role on The Apprentice even as he conducts himself as President. But he is not President. He is his fathers son, ruthless, bigoted and cruel.

He feels that business is war, yet has no idea of war. He feals his whole family is expandable in order to attain success. He alsways has an escape plan. He also has a reserve of hate and lacks any empathy. In short he is the anti-President. He feeds on rabble rousing and an air superiority, which his followers love.

To resist Trunp and remove him, you do not abandon your role as senator or congressman. Your 15 minutes of rebellion will end by the next morning newscast. So I ask those in Congress, complete the job, elminate this Frankenstein you created, bury the notes and lets hope he nver rises again.

Ethics, Morality, and Robots

Robot technology is entering the office or that segment of work that makes up more than 50% of the work we do. Call it the information or knowledge work, a service delivery of just basic support work.  The rapid introduction of workflow led to process automation and finally machine learning and artificial intelligence. Interestingly, not in the order. We have been working with some framework of artificial intelligence going back to the dawn of the computer. For some of us that arrived just when programming languages were developed to resemble spoken languages, we could see that ultimate replacement of basic and repetitive work that required little or no intelligence to mimic with a computer. Then large computers came on the scene we were ready to move to higher levels of processing and ultimately decision making.

So what does this mean. The business gains an ultimate tool in its competition with others. It now has a fully dynamic resource that needs no sleep, will not fall down on the job. More importantly, when volumes go up, you can dial up the speed of the robot or clone another one or two. When a business goes down, you can save money by never having to fire the robot. Over time robots not only become the permanent workforce but possible the ageless and the ‘forever worker’. It means that when new products are introduced, the working robot can compare old work to new work, create the steps and the adjoining quality assurance guidelines.

Now more than ever we need a moral and ethical core embedded in each robot. This is firmware that cannot be altered and removed. Every process step, every ‘thought’ filters through this core set of commands – digital ten commandments.

Having learned from the Bible, the first crime committed was by Cain and Abel. Thus ‘do no harm’ can be a foundational rule.Harm can be further defined beyond physical –  for example financial, do not pollute, respect all living things.

Imagine that quality control and testing is done on these robots in the form of scenarios presented with an ethical or moral dilemma.  Until the Robot passes all of the scenarios it cannot be released into society.

Stay tuned for more…

Why America First Will Never Work

The day of globalist vs nationalist is over.  That is to say, that there are no isolated countries on our planet. Even North Korea is connected to the internet and is not isolate. Similarly, every country’s GNP is tied to the world as a whole. It has not been generated within the borders of any in the country in at least 100 years. There is not one economy on earth that can say that is self-sufficient.

Whether as a country you need raw materials, weaponry, education, export your goods, get foreign investments, you are dependent on others outside your borders.

For the US, the global manufacturing companies have constructed a global supply chain where they source parts and resources from the least cost countries. They then do the actual assembly in the country which has the lowest cost labor. Thus Apple or Nike designs the product in the US, parts are manufactured all over the world on a precise on-demand basis then assembled in China. Even the auto manufacturing used to have its suppliers within a few miles of the factory. No more. They manufacture some of the cars in the US, even assemble it, but are dependent on other countries for other parts. The internet allows them to manage inventory and reduce waste in, often, real time.

Thus we can never step out of the global community and say we will go our own way. This idea of isolation when it comes to affecting air, earth, and water is bogus. Again, there is only one community we are part of – the global community. We have no choice anymore in that position. No country is an island due to the introduction of virtual vs physical.

Thus by not participating in the Paris Accord, our companies will be subjected to pollution requirements in all countries that are part of the accord, and thus not join in global standards set by all.

But how ridiculous to say America First for air and water when both do not have borders. Air and water flow freely across our globe thus it is foolish to say we will only focus on that part of the earth we call America. This is like being part of the problem or part of the solution. Really.