Monthly Archives: October 2008

No on 1; Yes on 3

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It's a Reckless Idea

“I like to pay taxes. With them, I buy civilization.”

–Oliver Wendell Holmes

Holmes’ view is not very popular today, but the reality is that a modern society cannot exist without a well-funded government. Nobody likes taxes, and we all believe we deserve the full fruits of our labor, but it is a common human foible to attribute all of the credit of our own labor to ourselves and not to the help of many others.

A business — big, small, or otherwise — could not possibly exist without the infrastructure of government — not merely the roads paved by our common funds, but the police who ensure public safety, the courts that ensure the enforcement of contracts, the regulations that instill public confidence in the business’s goods.

We are not a socialist collective, and we should not be. But Massachusetts is a Commonwealth, and I take that appellation seriously. As our on Constitution states in Article X:

Each individual of the society has a right to be protected by it in the enjoyment of his life, liberty and property, according to standing laws. He is obliged, consequently, to contribute his share to the expense of this protection; to give his personal service, or an equivalent, when necessary: but no part of the property of any individual can, with justice, be taken from him, or applied to public uses, without his own consent, or that of the representative body of the people.

Consent is, of course, key (we being of the tea-dumping crowd, after all), but the point here is that in pledging to support a Commonwealth, we accomplish what we cannot alone.

For those who live in Boston or Cambridge, walk over to the historic Longfellow Bridge sometime and take a good, hard look at the crumbling concrete and rusting steel. We have been starving our government for decades on the false belief that government is “wasteful” and that, magically, we can get MORE by giving LESS. This is the kind of wishful thinking that took us to to the very pinnacle of Wall Street illusion.

We’re all responsible to contribute to the costs of civilization. We’ll all pay the price if we don’t.

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Yes on Three

The greatness of a nation and its moral progress can be judged by the way its animals are treated

– Mahatma Gandhi

I leave it to my friend Matthew Pearl to express the importance of voting Yes on Three. You may notice a seemingly active debate in the comments that follow. If you look closely, though, you’ll find that there are only two handles, “SaveTheDogs” and “GreyhoundTrainer”, going at it. Follow their links and you’ll get a good, strong whiff of Astroturf. Like this fake blog with “BS” all over it.

The racetracks’ and casinos’ PR firms must be pretty worked up about this initiative to throw so many hooligans at the problem. Don’t believe a word.

Vote Yes on Three.

Extended primary WAS a boon to the Democrats

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Back in February I made this claim while most Obama supporters were chewing their fingernails over the showdown with Hillary Clinton. Results from the field are backing me up: a 50 state+ primary benefited both Obama and the Democrats tremendously, pushing up the Dems’ voter rolls and helping Obama build a veteran ground team that McCain just isn’t matching:

An observation we’ve heard repeated in Obama offices across America, Crandall emphasized how beneficial the contested primary had been for building the foundation for record turnout. “We had real hints of it in the primary,” Crandall said. The first-time voters the campaign energized for the May 6 vote foreshadowed what North Carolina is seeing today. Crandall remembers thinking “these are NOT your typical primary voters.”

- FiveThirtyEight.com

I’ve spoken to enough Hillary supporters in NH who felt, in fact, that the contest didn’t run long enough (many wanted a floor battle). Ending this contest any sooner would have been a disaster.

In any event, what Obama has now is the envy of any political operation anywhere: thousands of battle-hardened organizers spread throughout the 50 states. This is not just a benefit to Obama on Nov 4 — it benefits all of American democracy. It may even yet become a thorn in Obama’s side: a people who have stood up do not easily sit back down again. And that’s how democracy should be.

A network analysis of the Obama 08 campaign

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A fresh pair of articles is shining light back on to the Obama ground operations, which — presuming victory on November 4 — will be remembered as one of the deepest and most robust political startups in modern history. Zack Exley’s in-depth piece on “The New Organizers” in the Huffington Post goes into (excruciating) detail on Obama’s Ohio general election team, while the Washington Post finally brings some MSM coverage to Obama camp’s innovations. Common to both pieces is the role of Marshall Ganz, probably the leading theorist and practitioner of grassroots organizing in America, and the striking absence of any similar efforts by the Republicans and the McCain campaign.

Both articles describe the Obama campaign’s team structure, which marries tight grassroots networks to a more traditional campaign hierarchy. My colleague Aaron Shaw has been ruminating over the topologies of these networks take and, taking off from his thinking, I suggest that the campaign in its ideal type looks a bit like this:

The Obama campaign network

The superstructure of the campaign is traditional, top-down command-and-control (with information flowing upwards, of course). At the roots the campaign — as is typical for most volunteer efforts — comprises ad hoc mesh networks. It’s in inserting strong, tightly-knit teams that the campaign has made the greatest innovation. Each team, as a whole, functions like a paid staffer, with similar responsibilities and accountability. Exley quotes a paid field organizer, “This program allows [volunteer] Glenna’s team, with just two or three weeks of [database] training… to know how to pull lists and put canvass packets together. So all that type of work that eats up so much time for organizers can be handled at the local level—at her place.”

Neighborhood teams thereby function as force multipliers for paid staff. And they work because, with extra investment into training and fusing teams together, they allow busy people with school or full-time jobs to play as big of a role as they’re capable of taking on, rather than being stuck with one-size-fits-all phonebanking just because the campaign lacks the infrastructure to recognize their unique talents.

In my diagram above, I drew a circle around the team to indicate that they can function as the equivalent of a paid staffer. What’s I didn’t quite illustrate is the fact that, as local residents, the teams also have a deeper and wider network than a paid staff parachuting in. Outsiders are more prone to be captured by local elites who may or may not have the campaign’s best interests in mind. Furthermore, the total number of solid connections that paid staffer can make locally is probably much lower than the total number of contacts that the local team, in total, already has. It’s easy to see how — with enough time and money to invest in their recruitment, training, and support — strong teams become the natural junction between a national, top-down hierarchy and a local, dispersed field of volunteers.

The black magic of financial innovation

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Arthur C. Clarke’s third law reads: “Any sufficiently advanced technology is indistinguishable from magic.” What’s the difference between technology and magic? As this blog post points out, “magic” is the halting of inquiry. With that formulation, it’s possible that science can paradoxically plunge us into a second Dark Ages, when the world around us are controlled by forces beyond our ken.

It has become obvious that, among recent technological advances, no field has moved so far so quickly as the world of high finance, specifically, the world of complex derivatives. George Soros testified in 1994 to the House Committee on Banking, Finance, and Urban Affairs, “We use derivative instruments to a much lesser extent than generally believed, very largely because we don’t really understand how they work.” Both he and Warren Buffett restricted their dabbling in derivatives after being seriously burned.

In his 1994 quote Soros didn’t mean that he didn’t know the role derivatives play in the market. Rather, he was pointing out that — like an iPod, or a jet engine — it’s quite difficult to figure out what is going on under the hood of any particular derivative instrument. In other words, they are magic.

Which is not to say that widespread understanding can’t catch up to complex derivatives to make them safer as bona fide financial instruments. Many derivatives have genuine value: consider weather-based derivatives as a hedge for farmers. A heap of regulation to ensure transparency when useful and block abuse when it’s not would help close the gap between financial technology and magic.