Michael Phillips

Gods of Commerce

Dec. 2002 Archive


Reliable:A+ to D-

I love commerce.

The marriage of commerce and technology is by definition the "modern world".

Commerce and technology thrive on three values: Meritocracy, diversity and openness.

Daniel W. Drezner

Catherine Campbell

12/29/02 :11:48 Politics, Taxes and Smoking in Bars

It is illegal to smoke in a bar in California.

A few months after the law went into effect I phoned my bar-friendly friends around the state about the impact. In San Francisco, about half the bars never enforced the law, even after enforcement harassment. The reason was simple: the sounds of smokers outside a bar in dense, urban San Francisco, at midnight, caused neighbor problems worse than paying a fine.

The rest of California didn't have much of a problem with the law. In L.A. and the South, most bars had room to add outside seating. The Central Valley added space without too much difficulty. The majority of bars in California force patrons to smoke outside and there are a modest number that don't enforce the no-smoking-in-bars law.

So this is not a big problem. But it could be a source of revenue for a $35 billion deficit ridden State.

I have a modest suggestion: issue a license to bars that want to have inside smoking. The license could be similar to a liquor license; resaleable. The licenses would be sold by auction and administered by the same agency that handles booze (the ABC). A wild guess would put revenues at $70 million, with modest administrative costs. The guess is based on 8,000 bars paying $9,000 for licenses. A strong argument for the original universal ban was the health of bar workers. This would leave plenty of smoker bars for workers with smoking/health concerns.

Political Analysis: The State of California needs revenue, the public never feels an absolute prohibition is fair (total smoking prohibition in this case) and the anti-smoking lobby may not be strong enough to fight this.

12/29/02 :11:45 More on United: Punishing the innocent

This morning's New York Times (12/28/02) Business Section, finally confessed that airline passenger miles have been rising steadily for a year and a half while revenues have been falling for much of this year.

How does this relate to this punishing the innocent?

The reason miles increase while revenue falls is because the airline management, last year, decided to cut out travel agent fees as a way to lower airline costs. Since the important travel agents were directly tied to corporations, the high priced users of the airlines, this forced corporations to do more booking in-house. That meant more booking on the internet, which meant finding more low cost tickets.

Voila! More miles, lower revenue. Thanks to airline mis-management. Management doesn't get punished, employees do. Management makes the mistake, then demands that unions cut wages. Punish the innocent.

I love commerce, just like I love technology. In technology some inventions are stupid, many have undesirable side effects. Unfortunately the same is true of commerce.

We can find ways to punish the guilty in management for their mismanagement.

The most effective way would be to create specific Class Action Courts. Employees could sue as a class to punish the corporation for management stupidity. It will take very knowledgeable and experienced courts to develop skill in these matters.

Specialized Class Action Courts will come. I have been pushing for this for 20 years, and a few state bar associations have given serious attention to the issue.

12/29/02 :11:43 The 1990's boom. Not obvious.

I see much published speculation on the causes of the 1990's economic and financial boom. I think many of the significant forces have been ignored.

Technically the boom began about 1996, at the point where regular business cycle experience would have expected a recession. Instead, unemployment continued to fall, GNP continued to rise, inflation was non-existent and productivity grew rapidly. Technically we are still in the same boom. The current GNP is very strong, productivity is high and inflation is still non-existent.

As I see it, there are six reasons for this extraordinary history, in order of their importance.

* In 1959 or 1960 most manufacturers that sold retail products under state Fair Trade Laws found court decisions and discounters made their fair trade contracts unenforceable. Before 1960, nearly all products you bought at a hardware store, 5 & dime, department store or drug store were priced on the basis of the manufacturers' mandated price. For reasons I can't elaborate on here, it has taken forty years for the legacy of this retail monster to disappear, helped along mostly by Price Club, nea CostCo.

* Women entered the labor force in large numbers. This began in 1963 and continued unabated until it peaked, in proportion to the women who were not in the labor force, around 1990. The productive gains are not obvious because women were drawn into the labor force due to the change in the nature of work. From manual labor to something else, office work of many kinds. The most powerful reason the steady growth of women in the labor force added to GNP is because they generated two-income households and a dramatic increase in household wealth. (Look at the size of a mortgage today, $200,000 compared to $40,000 in constant dollars, just 15 years earlier.)

* Starting with the Volkswagen in 1957, but really getting underway with Marimeko Finnish fabrics in 1963 and Cost Plus Import stores in 1965, America began opening its markets to consumer imports. This trend was very slow to get moving and is still only part way as seen from the limitation on many imports from Japanese electronics manufacturers and in wholesale fabrics. Today the retail market is 80-90% subject to import competition compared to 2% in 1960. Beginning in the early 1980's there was a global decline in consumer product prices, as several Asian countries entered the world market. This pattern continues to this day with India, China and Thailand still gearing up. Our lack of inflation is solely attributable to this long term trend.

* Demographics count. The baby boom generation entered the labor force in the mid 1970's, a little later than was the customary age for entering the market as more boomers went on to post high school educations. Due to pot smoking and inexperience it took a while for this massive input of labor to become productive. By the time that the average boomer age was 35, productivity consequences began to be visible. That was in the mid 1980's. It continued for more than a decade. The productivity from baby boom demographics is probably gone by now, except for the benefits of their savings. Once people reach their early 50's they stop being active consumers and become valuable savers.

* The Cold War ended in 1990 and by 1996 (with the closing of bases) significant reductions had been made in the absolute and relative share of the military budget. This was a very powerful stimulant because military expenditures have a low multiplier in the GNP. Meaning $1.00 spent on military generates only a few dollars of GNP compared to $5.00 generated by an ordinary corporate expenditure. The military which provides housing, on-base PXs and military equipment is traditionally inefficient. That is why the relative decline in military expenditures is highly productive.

* A series of telephone innovations were very important. First there was the telephone answering machine. I watched what this did to hundreds of my small business clients. It increased business and reduced labor costs. It also created a whole new range of one-person businesses. Think of the carpenter or plumber who no longer needed a telephone receptionist. This happened in 1980, followed by the cheap reliable phone fax. The fax speeded up business in every imaginable way. Accurate information, fast, cheap and abundant. Then pagers. Think again about the plumbers, and then add managers and maintenance people. Next came cell phones in the early 1990's. Almost an order of magnitude increase in efficiency among sales and managerial workers. Then by the late '90s came email and the internet. Email, (I know about SPAM) was another order of magnitude increase in productivity for the largest segment of society, white collar workers. For internet productivity, see my 12/20/02 blog. Workers now have something to do at work. Each of these previous communications steps, created more asynchronous communication. Asynchronous is inherently an addition to efficiency: I can write at 4 AM and you can read a few minutes later at your convenience at 2 AM your time.

You notice I didn't discuss any of the many popularly mentioned technological innovations, robots, computers, FedEx or satellites. I frankly see most of them as just part of a steady improvement in the production line that is incremental. Large scale productivity is what I look for, changes in institutions that change daily work and consumption patterns.

12/28/02 Review of Jerry Z. Muller's: The Mind and the Market

The Mind and the Market, Capitalism and Modern European Thought; Jerry Z. Muller, Alfred Knopf, 2002.

There were three interesting friends of commerce whose support of commerce derived from experiences of their time. I had not seen the connection in their writing. Muller found it.

Adam Smith the first great lover of commerce was drawn to his insights in sharp contrast to the rampant and vicious wars of religion around him. As a Scot idealist, Smith was stunned at the internecine battle for righteousness among the Baptists, Anabaptists, Puritans, Quakers, Anglicans and Roman Catholics. Commerce seemed mild in comparison, offering a prospect of inter religious neutrality and even cooperation.

Georg Simmel's insight , 150 years later, came from the extraordinary cultural and intellectual vitality of his 1900 Vienna and the Austro-Hungarian empire before WWI. Commerce was the driving force for ethnic diversity in the capital, for entrepreneurial vigor that crossed class lines and Simmel saw the creation of liberal freedoms in a dying Catholic anachronism.

Joseph Schumpeter experienced the exuberance of the entrepreneurial spirit in post WWI Germany and recognized that commerce could uniquely utilize the talents and genius of the creative elites who drove society forward.

While these three intellectual friends and appreciators of commerce gained their insight from a variety of experiences, the intellectual enemies of commerce all had one thing in common. Their hatred of commerce paralleled their nearly universal hatred of Jews. Voltaire hated Jews and liked the free market only for the luxury goods it could produce. Marx was vituperative in his hatred of both commerce and Jews. His prominent disciples from Trotsky to Stalin explicitly hated commerce and Jews. The anti-commerce thinkers, Tonnies, Sombert and Heidigger, were similar in the vehemence of their anti-Semitism.

As Fredrich von Hayek put it in reference to the Roman Catholic Church in the 12th century, "It is the old story of the alien race's being admitted only to the less respected trades and then being hated still more for practicing them." . The Catholic Church hated the commercial challenges to landlords and to local markets from trade, money lending and the free floating prices of goods outside of guild control. So the Church let only outsiders into the world of commerce: Jews. Then the Church taught hatred of Jews because they were involved in commerce.

The significance of this issue is statistically evident from the index of Muller's book. The entries for Jews, Judaism and for anti-Semitism are much longer than for any other subject. On closer inspection, the entries are abbreviations. Under Jews, Vienna it says 341-356. On each page the issue of Jews is mentioned in nearly every paragraph. Separate entries for each mention of Jews and anti-Semitism would have consumed nearly a third of the index.

This thousand year old symbiosis of commerce hatred and Jew hatred is so deep most of us are blind to it. There is little new in the specific 21st Century hatred of business. Anti-globalization and anti-Starbucks were expressed by Justus Moser in 1770. "... the (local) artisan, Moser believed, was now being undermined by the international market and its local agent, the shopkeeper. The shopkeeper imported goods from... London, Paris and big cities... and so the (local) artisan was increasingly displaced by the shopkeeper." Moser is quoted: "Our ancestors did not tolerate ... shopkeepers; they were spare in dispensing market freedoms; they banned the Jew from our diocese ... in order that ... inhabitants not be daily stimulated, tempted, led astray and deceived ...."

Other anti-commerce assumptions, such as: equity markets are a haven for speculators and banks and lenders are parasites, is 500 years old. The idea that free marketplace competition destroys nationalism, destroys the elite status quo and destroys ethnic purity have long been widely expressed. And denounced.

Today's lefty liberal is in many ways a 12th century Roman Catholic monk in modern clothes. Many are unwitting anti-Semites at that.

Muller's book is an eye opening Goliath. His title The Mind and the Market represents a double entendre. My mind was altered by my encounter with the Market presented in Muller's brilliant insights.

2/22/02 Hugs, and the failure of democratic management

I just attended a picket march in front of Rainbow Grocery (San Francisco). About 600 people were there at the urging of the JCRC, Jewish Community Relations Council. I said goodbye to Rainbow, I think the building will be a Circuit City location this time next year.

The story isn't very interesting. The implications for students of management and business are.

Rainbow Grocery was started in 1975 by members of a Guru Maharaji ashram. It was a worker cooperative, and remains so. Rainbow joined the Briarpatch Network early-on, as a consequence they got my business advice on four occasions over a decade.

Rainbow has been in three locations and has grown over its lifetime. The first move was for expansion. The second was to get away from beggars, mostly, from the nearby public housing.

Rainbow got in trouble a year ago when members of two departments decided to boycott Israeli products. The worker-coop total membership looked on with general support and no distress.

The boycott issue became public just a few weeks ago when some Jewish shoppers were looking for their regular Hanukah candy, couldn't find it, and learned about the departmental boycotts. There followed a flurry of emails and an article by Debra Saunders in the S.F. Chronicle.

Then Rainbow got in real trouble. The collective met and voted to post a website statement that 'there is no Israeli boycott: a boycott requires a 51% vote of the worker members'. This obfuscation of the real boycott in two important departments (bulk and packaged goods) was inflammatory and the story picked up legs in the local Jewish Bulletin. Finally the Jewish Community Relations Council got involved. Rainbow stonewalled the JCRC which led to todays picket and rally. Plenty of political power there. The new Supervisor Bevan Dufty (see my 12/18 entry) and the new Assemblyman Mark Leno were speakers at the rally. I congratulated both on their wins. Dufty gave me a big hug. Photo of Dufty and Leno below:

Rainbow Grocery promptly capitulated in the face of impending pickets.

Why is Rainbow going to fail?

First, Rainbow is a worker coop. Such coops are rare in America. All workers get a vote in management. What management there is is usually very flat, run by a management committee that has to deal with the whole membership on important decisions (only a fraction of worker members will ever attend meetings). The reason Rainbow survived for 27 years is because the grocery business is one of the simplest business. Grocery sales from day to day, week to week and month to month rarely change. This means business skills dealing with finance, credit and marketing are almost non-existent. A grocery gets started by paying for supplies directly out of sales. As sales grow the grocery can buy more supplies and hire more workers. No capital is needed to weather volatility, nor does the number of employees have to be flexible. Management skills remain pre-pubescent.

This creates the second problem. A democratic work force usually has no effective provisions for firing people (they are each others friends after all) and certainly no provision for reducing staff in periods of declining sales. The exception for "firings" are flagrant violations of work rules.

Almost no group of people is good at kicking out their own members. The genius of commerce is that conventional hierarchical American management can do this vigorously.

The picketing of Rainbow, even with their capitulation, will mean a decline in sales. This is where Rainbow will get in a downward spiral of trouble. Worker membership will have a terrible time voting to reduce staff. They will continue a payroll that is too high for their revenue, boosted by democratic optimism. Potential firees will argue that "sales are about to turn-up". Suppliers will get wind of the problem and credit will be tightened from 30 days to cash on delivery, for many items. The demand for cash on delivery will spread to nearly all items except the highest mark-up goods and the most desperate suppliers. Aisles will look empty. Sales will drop still further.

It becomes a downward spiral ending with a sign on the door: "Closed".

Democracy in management is unfortunately a utopian dream. A dream that is possible only in good economic times and a mileu of hippy idealism

12/21/02 Split United vertically.

The creditor committee of the United Airlines bankruptcy case was appointed this week. Airlines, banks and unions made it onto the committee. I want to be on the committee.

Based on the entry in this blog 12/15 about United, I see the airline a little differently than other creditors. Yes, I am one of the creditors, you probably are too. United owes me tens of thousands of miles in their mileage plus program. I am therefore a creditor.

The only strong reorganization proposal on the table is to split United horizontally. Two nearly identical companies, each about half the size of the current United. I can't conceive of the benefits of this approach. Some competition in major airports,but mostly inefficient duplication.

I suggest that the company be split vertically. United Aircraft and United Flight Service. United Airlines with $14 to $19 billion in revenue has very little net worth, maybe a couple of billion dollars. I would guess that half of the net worth is repair facilities and the paid off lease portion on their 540 planes. The other half of the net worth is their gates and airport facilities at 130 U.S. airports and 27 foreign locations. I would put the pilots, planes, maintenance workers and facilities in the United Aircraft company. The gates, airport facilities, stewards, gate staff and customers in the United Flight Service company.

United Aircraft company would initially fly passengers for United Flight Service, but would soon fly for other airlines and charters. United Aircraft would start off with a contract from United Flight Service which initially has all the customer revenue. United Aircraft would optimize its flying efficiency, standardize its planes and deal with the risk and reward of variable fuel prices. It would negotiate with the two toughest unions: pilots and maintenance. United Aircraft would quickly become one of the most cost effective carriers,with revenue from many airlines. It would have a stable workflow and optimum plane utilization.

United Flight Service would focus entirely on passenger relations and satisfying the complex array of passenger needs, fees and schedules. After an initial period, United Flight Service would begin buying aircraft services from multiple suppliers and encourage competition in aircraft provisions. United Flight Services company would be a high cash-flow operation with plenty of opportunity for banking and credit functions. Its primary focus would be marketing and customer satisfaction.

I don't know how the 80,000+ employees would be distributed, nor the way overhead in administration would be distributed. The two companies would become models for the airline industry. They would separately be better managed, better focused and certainly more flexible, than others in the industry, in responding to changing market conditions.

12/20/02 Working or playing on the computer?

My experience in the working world for several decades has shaped my views of productivity.

Most of our paid labor force, 80-90 million salaried workers, may have the same experience I had. I worked a number of jobs, starting out with menial labor and working my way casually to top management. Aside from the physical work, washing pots & pans in college and running an industrial dishwashing machine, I could finish a 40 hour job in a few hours. The rest of the 40 hours I did what everyone else did .. slack. I even had a job where I tested my capacity. As production planner (age 18) for an electronics firm, I was assigned 20 assemblies to manage, each with dozens of parts and sub-assemblies. The same number were assigned to my eight co-working production planners.

As a test, I started adding other assemblies to my portfolio as they became available. Before I left the job, seven months later, I had 90 assemblies to manage and I still had plenty of leisure time to spent in the shops shooting the breeze. I told no peers what I had done lest they get me fired.

Cogitating on my fellow salaried workers out there, most of them, now, spending their time at desks with computers, I ponder what "productivity" means in their environment. Based on my experience, most people could produce four times what they do produce in the ordinary work day. Workers produce that much more in emergency periods, such as post earthquakes, after other disasters and office workers did four times their normal work during the final staggering days of San Francisco's great dot com boom when no additional employees could be found for the exploding work load.

The American rate of productivity has been high for the past decade (productivity = output divided by working hours). It is even higher and more astounding in the past three years during a down financial market and a weakened economy.

My explanation is that workers are happier and using their shoot-the-breeze time more productively because they have the internet available. Yes, just the access to the internet, which can be done while looking busy, has made salaried workers more productive.

My hypothetical workers do their existing jobs better because they find relevant information quickly and more reliably on the internet. They also stay in touch with friends and the outside world, via the internet, which makes them happier. In countless, unknown ways, they use the information sphere of the internet to work more intelligently. (This is a blog so you don't have to be rigorous in giving examples or proving your point).

I think the internet has been the driving force in the high U.S. productivity rates of the past three years.

12/18/02 Homeless, Jews and Lesbians.

I was fascinated by a local Supervisorial runoff election in my Castro/Noe Valley neighborhood (San Francisco). I made predictions. I only trust post-election analysis by people who made accurate predictions in advance.

In the 1960's, I ran political polls and organized a group called Research in Politics. That was after having been a campaign manager for local races and worked on presidential and gubernatorial campaigns. I also trained other campaign managers, nationally.

In the November 5th election, my district had 27,101 voters who cast 9,820 votes for Eileen Hansen, a proud lefty radical lesbian. Not enough to get the 50% needed to be elected. The second candidate, Bevan Dufty, got 8,795 votes and was her opponent in the December 10th run-off.

In the general election Hansen had big money, Dufty had almost none and the third candidate, Radulovich -- the choice of unpopular Mayor Willie Brown -- had some money. Not as much as Hansen. Radulovich got 5,221 votes.

The reason Dufty did so well, placing second with no money, and got into the run-off is because he was the only candidate who supported a local plebiscite against the homeless/street beggars. Hansen and Radulovich opposed the plebiscite, which won 3 to 2 citywide support.

In the run-off December 10th election I predicted the outcome, almost to the last digit, after talking to many campaign workers. Hansen ran an aggressive, expensive, dirty campaign and it didn't help her.

What I expected was a 20% drop off, a low drop-off rate due to high interest in the outcome which would determine the balance of power on the Board of Supervisors between the incumbent lefty-radical majority and the growing moderate group. The 20% drop-off meant the winner needed 10,500 votes to win.

The first consideration in my prediction was how the supporters of the plebiscite against the homeless would vote. I figured that 80% of the people who voted for Dufty would come to vote again on this issue for a total of +7,000. Hansen gratuitously tried to change her stripes on that issue.

I figured, similarly, some of the anti-Hansen vote that went to Radulovich would go to Dufty. This vote was probably encouraged by a dirty trick that Hansen used. Hansen's campaign funded one of her endorsement clubs to buy telephone pole signs that said "Willie Brown endorses Dufty." Dufty wisely didn't take the signs down, nor complain. Word about the dirty trick got out. The result was roughly 2,000 more votes for Dufty. For a total of 9,000. Not enough to win.

Both Hansen and Dufty (readers won't believe this) are Jews. She a lesbian, he gay. The local Jewish newspaper and a few lesser sources pointed out that Hansen had gone as a supporter to a number of recent pro-Palestine rallies. Hansen claimed she was "only an observer" and accused Dufty of spreading anti-Israel rumors about her. I guess there are roughly thirty-five hundred adult Jews in the district, with at least 1,500 willing to vote primarily anti-Hansen on this issue. For enough to win at 10,500.

But Dufty got an additional 596 votes. This relates to a surmise that I stated to some friends as: if Dufty wins by more than 1,000 votes it is because of: xxxxx. Well xxxxx is my observation that the convenient political coalition of gays and lesbians would break down in a direct run-off of the two. Gays outnumber lesbians by 7 to 1 and there is a latent sense among gays that lesbians will not be loyal allies when push comes to shove. There is too much anti-male talk among lesbians, and the talk doesn't make distinctions between gay and straight men. Some gays with this perspective voted ... and voted for the winner Dufty, who got 11,096 votes to Hansen's 9,995.

Hansen's campaign manager blamed the loss on being "outspent." Seems hypocritical since the Hansen coalition, two years earlier, had won most of the Board of Supervisor seats while being outspent by 10 to 1.

12/15/02 A sybiosis no one could have seen.

Your United Mileage Plus Visa card is bailing out United Airlines. It's historic.

The day United went into Chapter 11 it got a loan of $600 million from Bank One, the owner of the United Visa Mileage Plus card. Don't worry, it's a safe loan. A creditor to a company in bankruptcy is first in the line of creditors. United is rich with assets.

This means that your Mileage Plus miles are safe. At the worst, the number of miles needed for a flight might rise from 25,000 to 30,000.

It also confirms that airline mileage is a driving force in the credit card business.

Most of all, it tells us about a commercial symbiosis which I predicted in my book Gods of Commerce, Clear Glass 1996.

I conceive of three types of commerce: trade (a local garage sale), industry (Burger King) and clientry. A clientric business aims for a lifetime relationship with its customers. That fits the service side of an airline business (as opposed to the manufacturing side) and credit cards. A clientric business will do everything feasible to reinforce the lifetime nature of the commercial connection. Airline mileage and all of its detailed features are a good example of this for airlines. The same is true for a credit card; not for the $.01 per dollar value of the miles, but for the cumulative value of the card's relationship to the customer.

Two clientric business that need each other is a totally new form of business relationship. Businesses still have no idea of the forces that are driving them (like clientry) but what happened in the United bankruptcy is historic.

12/14/02 Answer: You are the only one.

My letter to the ACLU on Nov.18th was answered today by Rita Buland, Membership Liaison. This is the letter I sent to the ACLU:

" Your National ACLU campaign on TV just weeks before the election, left me outraged.

The $3.2 million TV campaign had the following flaws:

* It relied on a website with exaggerated and erroneous data about imprisoned aliens. This suggests frenzy or hysteria at your head office.

* It was 100% political in nature, supporting Democratic Party candidates. Didn't help anyone.

* Spent 501c3 tax exempt membership money, including mine, on a political campaign.

* Spent soft- money that will be illegal next year under McCain-Feingold campaign reform law. Soft money is immoral right now since the bill passed and was signed months ago.

* The ads relied on images of interned Japanese. This is inflamatory use of memory. ACLU National was on the wrong side of that shamefilled tragedy -- sixty years ago the ACLU National supported internment. You may be on the wrong side again, today.

* No letters, newsletters or other material has been mailed to us members in support of any of your wild and evasive claims about immediate American losses of civil liberties.

* The ads had an hysterical tone about impending civil liberty disasters. This form of desperation displays a weak organization. This is no way to encourage American support for the 1st Amendment of the Constitution.

All items listed above may be more inflamatory to me than to other members. What leads me to quit the organization, what leads to me wonder about my fellow members, is that I neither see nor hear any other outrage at your $3.2 million TV ads. The silence is frightening.

How can you justify what you did?"

Rita's reply to me was: "No other member, or non-member for that matter, has voiced any complaint about our ads."

How would you feel?

12/13/02 Am I morally responsible?

Grimes Poznikov was in the news. The San Francisco Chronicle reports that today Grimes will be among the homeless encamped on 3rd Street near the railroad tracks who will be forced to move. The Chronicle reports that Grimes was a celebrity and now lives under a piano.

I wrote about Grimes in the Spring 1975 issue of the Briarpatch Review. One page with about 200 words and my drawing of Grimes and his business. The article included Grimes' offer of a three page do-it-yourself guide to imitate him for $.50

Grimes Poznikov had developed his business in New York, where he found the original cardboard box. He moved to San Francisco and became a street performer, usually located in the tourist rich corner near the Hyde Street cable car turnaround. Grimes' box was taller than he and had a flap on the front. The box called itself the Automatic Human Jukebox. Putting money in a slot resulted in a hand-stained list of songs being handed out. Yelling out the name of the tune, "I left My Heart in San Francisco" resulted in the flap opening and Grimes playing a terrible rendition on his trumpet. After a year Grimes, nearly always stoned, sounded better. Grimes earned very good money and lived in a communal warehouse.

I wrote about Grimes for several reasons. The Briarpatch was a network of hippy businesses that grew very rapidly to over six hundred San Francisco Bay Area members. Briarpatch was about simple living, loving your business and leading the full, rich life that hippies were creating. Grimes was a solitary example of the Briarpatch.

What do I say today about Grimes? I interviewed him in 1975, but I haven't interviewed him since then. His story is interesting and problematic because he is not today the CEO of a successful corporation. The typical ending to such a story.

At the time I interviewed him, he was definitely a nut case. He apparently is even worse these days.

Today, I would say that he was a reasonable example of a Briarpatch business. He differed from most other briar businesses because he was merely a colorful beggar and had no business skills. Nevertheless, he did earn a good living and led an independent life. He didn't save any money but that is a matter separate from the business issue. The business generated more than enough to live well and save.

Simple living is another matter. My mother Alice (co-author of A practical guide to independent living for older people) and my Random House editor and close friend Charlotte insisted that my successful pamphlet Simple Living Investments for Old Age. have a large caution on the first page. It said: "Do not read this if you are mentally ill, lazy, considered stupid by your friends or could in any way be tempted to quit a good paying stable job by reading this pamphlet." That was the 1984 edition. In the 1988 second edition that warning was dropped.

I think Alice and Charlotte were right. My advice was for people who chose simple living. Grimes did not choose it. The fact that he seems to have spent all his earnings suggests that he didn't lead a simple living life. My moral hands are probably clean.

But there is another part that reflects my personal view. Grimes was never clean, to state the case mildly. He was lazy and mentally deranged. I think the skills of simple living were helpful to Grimes. I think further that living in San Francisco in a homeless encampment is not undesirable, particularly for someone who is crazy and is comfortable dirty. Mayor Willie Brown calls such people urban hobos. Someday when a great writer glamorizes the life of urban hobos many people will see that Grimes has turned out O.K., considering the life skills he had when I met him and wrote about him.

12/12/02 Why create a blog?

The Bloggosphere, as Alex calls it, is a new force in American society. A positive force.

Radio, as Marshall McLuhan pointed out, is a hot medium that rewards strong emotions. Talk radio is the happy world of people with strong opinions, usually backed up with strong emotions of anger, envy and resentment.

Blogging is a medium medium. It is hot enough to motivate readers and writers to persist in their mutual encounters, but cool enough that a meritocracy of clear thought and powerful writing skills prevail.

I join you with great hopes and warm regards.

12/26/02 C- The U.S. Ambassador in China has been telling China that North Korean nukes are China's problem. South Korea's second largest exports are to China.

!2/25/02 D A secret American unit is coordinating Afgan operations in Kabul with Beijing. Close military ties are in place.

12/17/02 D+ Missile Defense. Source: Foreign Office conversation in Japan last summer. The first deployment of the U.S. Missile Defense will be in the Sea of Japan against North Korea for the Japanese. The Japanese will pay about half the development costs equal to $15 billion. These are launch phase missiles only good against N. Korea. They can travel no more than 200 miles in a few minutes to hit a missile leaving a launch pad at very low liftoff speeds.

12/15/02 B The administration forced the CDC to accept the military small pox plan. It starts with with voluntary innoculation of core providers who are the ones who innoculate the first responders. Only a majority of the core is needed to have enough people to survive an attack. We would then have three days to innoculate. By then everyone would be ready to shut down the society for a true, but expensive, quarantine.

12/12/02 A- The Wall Street Journal reported that Iraq launched more Scuds at Saudi Arabia in the '91 Gulf War than were launched at Israel.

email: mp@well.com