Lowest Common Denominator

At the airport, there are two security lines. There is one where you have to take off your shoes, and another where you do not. Yes, you guessed it: for the second you need elite status.

It shouldn't be surprising that an airline, a corporation, would divide humanity into two classes. It is the invisible hand of the market at work.

In today's New York Times, Josh Barro, in Facing Elite Bloat, Airlines Move the Goal Posts, writes about his elite fall from grace. It seems that now plebes contend with not only the elite and the super-elite, but even higher orders. Remember how we used to speak of the 99% and the top 1%? And how now, more often, we refer to the top 0.1% or even the top 0.01%? Well, this elite thing has done so well for the airlines they are now facing elite bloat, where some plebes have invaded the bottom tier.

Their first response was to add classes to top the top elite, perhaps platinum, diamond, kryptonite, and unobtanium. But that didn't fix things. As Josh Barro writes, “But mostly, (the airlines) have dealt with the problem by devaluing the lowest tier.”

Does that feel familiar? It probably does if you have a job, or if your degree is not from an elite university, or if your annual income is less than $1M. It certainly does if you are a tradesperson, or a nurse, or a teacher. You know, one of those people who has to rely on union seniority or tenure to have a chance in the marketplace.

Yes, it is as true in politics as it is in marketing – we have discovered a common denominator lower than greed: feeling superior.

So before you vote next time, ask yourself a question: do I feel superior to anyone? If you do, chances are someone has been pulling your chain.

Passing the Squonk

The Dream

In the dream only the exact name of the term was unclear. There were equations, but the equality was in question. Did that term, whatever it is called, really cancel out? Situation followed upon situation with no logical relationship. Always, though, there was the missing term. What was it called? Was it really ever there at all?

As I emerged into semi-wakefulness the question remained, more urgent than ever. What is it? Why does it disappear? I lay quietly, trying not to breathe, not to think of anything else, to remain open to wherever I had been.

Johnny Jellybean

In the 1960's I worked at a television station as a studio assistant, the station's euphemism for stagehand. A local actor/comedian/magician had pitched them a solo show called Lunchtime Little Theatre. In those days television was black and white, and low budget was live to air with no camera men or sound men. Low budget was me and a video switcher and Johnny Jellybean. Johnny and I would set up and aim the three vidicon cameras. We would go live and Johnny would act his heart out, mostly improvising I'm sure because he never had any script or notes; the switcher would dance around between cameras, and Johnny would sometimes ride one of the vidicon dollies, pushing it around the ten by twelve studio space with one foot and grinning into the lens as the switcher focused alternately on Johnny and the moving background. It was a lot of fun. Then it would be over and I would strike the set.

Johnny was the first thing that came into my head as I lay there after the dream. I thought, my God, that's fifty years ago, where did that come from? Then I began thinking about dogs.


They greet you like no one else does. They take pleasure in the day, sticking their heads out of the car window. When the wind comes up they delight in it – they get a gale in the tail, as Grandpa used to say.

They shed. Their farts are silent but deadly. They eat grass and puke. They drink from the toilet.

It's a package. Sure, kennels advertise expensive Labradoodles, guaranteed hypo-allergenic, but really you've still got a dog. A dog is a dog, as somebody said.

The Squawk Box

By now I was awake. Dogs and Johnny Jellybean stayed with me, wandering around, trying to be relevant. And the term, too: squank? squonk? Wait – Johnny had the Squawk Box! It was like a little wooden bird house hanging from a rope, except that there was no perch or hole. Was there a grille? Sure – it was like those speakers high on the wall aboard navy ships. Now hear this!

My memory is fuzzy. What did the squawk box squawk? Was it random tapes the switcher chose? Was it stuff Johnny had prerecorded? But I do remember the progression.

At first the box would squawk perhaps twice during a show, interrupting whatever Johnny was doing. He would mime anger, grab his wooden mallet, and hit the box. The squawk would stop. That was then. But as the months (and years, I think) went on the play got more sophisticated. It became a game between Johnny and the switcher. The box would squawk again after Johnny turned away. Or Johnny would turn away and then turn back, raising his mallet, daring it to start up again. The play would go on, keeping us high-school students, home for lunch, in stitches.

But in high school I wasn't working at the TV station yet. Maybe in those days Johnny still had cameramen. That's when he rode the dollies. The cameramen pushed him around, changing focus. The vidicons had tripods, not dollies. Could the switcher even change the focus of the vidicons? Did they have zoom?

After the Dream

Still I tried to stay in the space, keeping dogs and Johnny in mind, trying to follow the scent. Even on those rare occasions where dreams stay close, that's hard. It is like flying at night, looking for traffic, when you have to scan the sky not looking at anything because if you look it will disappear into to the cone-rich fovea. Just so I stayed aware of the space without looking.

I began reliving the dream in consciousness. Scene after scene played in my head, and indeed they are still doing so today, weeks later. As in the dream each scene is seemingly unrelated but has a common term, the term we want to make disappear.

Our Human Nature

Memory of pain fades. We are natural optimists. Sometimes a little naiveté makes the day go more smoothly.

And why not? Should we be perpetually conscious of all the evil in the world? Should we feel pain all the time? Of course not. We would become cynics, insensible to the beauty around us. That's no way to live.

But neither do we, as independent thinkers, really want someone or something else to pull the wool over our eyes, and that's where it gets tricky. We are vulnerable, you see, to those who would for their own reasons present us with a pretty picture.


The Scenarios

There are many, limited only by the extent of human creativity and cunning.

Pension funds, desperate for the 8% returns of yore, snap up fancy financial products composed of slices of sub-par mortgages, themselves issued fraudulently. No risk! Eight percent return!

Hedge funds return 20% by trading illegally.

The football industry gives fans what they want – tough, violent conflict – and sweeps the bodies under the rug.

Airline industry management gives travelers what they want – cheap tickets – while gutting the pioneering companies and pocketing their shareholders' savings.

Too big to fail banks trade for their own accounts, seeing their mission as making money rather than as lending money to entrepreneurs.

What is the missing term?


CDO's are rated AA or AAA. Hedge funds will take your money if you have enough. You don't have to know how they make your 20% return. Football gives you spectacle. You can luxuriate in the vicious hit as the players relish their salaries and fame. Neither of you needs to watch the dementia and death that follows. Flying is safer than driving a car. Airplanes land themselves. The inherent risk of flying and crashes and death are irrelevant. You just bought a cheap ticket. And of course you own shares in MegaBank. It's nothing to you if they are not meeting their primary obligation or if the taxpayers have to bail them out. Or is it? Do you pay taxes?

The Pretty Picture, Bad News, and Drool

Dogs drool. Some breeds are olympic-caliber droolers. Chances are if you own one of these dogs you have come to terms with drool. It makes you laugh. After all, you've got the whole dog. Same with your life. You laugh, you cry. It's all there.

Near the end of the run of Lunchtime Little Theatre, the Squawk Box antics began to merge toward the manic. Increasingly, the box just would not shut up, and Johnny mimed more madness. One day the whole thing came to an end. As Johnny hit the box, it got louder. More and more voices emanated from the box as he hammered it with his mallet. He didn't stop. He beat the shit out of it. Beat it to a pulp. Beat it to splinters.

Mitt the Spider


Watching Landings


You’re at the local airport. You watch landings, because pilots always do. Today, because there is a lot of traffic and you're not pressed for time, you watch for awhile. Twenty, maybe thirty landings go by. What do you see? Fifty percent (this is a flight school strip) touch down halfway down the runway. One or two touch down in the last 1000 feet.

What do you take away from the experience?

Gossip, certainly – if you're standing there with fellow pilots. Comfort, possibly – if you feel you can do better than most of what you're watching. Or perhaps chagrin, if the reverse is true and a recent example of your own work sticks in your craw.

But there is a more important take-away: forming an opinion or evaluation by discerning and comparing.That is the dictionary definition of judgment. And the aviation version of judgment is more practical: if I find myself in this situation, can we do it?

The we in the last paragraph refers to you and your airplane. You learn skills and you memorize your airplane's limitations. You are a team.

The situation is whatever pickle you're going to get into on your next flight. Can I land on a 2000-foot runway?

You look up the Landing Distance Required in your Flight Manual or Pilot Operating Manual. For my N-Model Bonanza I find 1600-2000 feet (no wind, 75°F. or less, 2000 feet pressure altitude or less). So we can do it, right?

Not so fast. The runway at my local airport is just under 4000 feet long. I consistently turn off on the center taxiway, but not without some braking. I have a bit too much speed over the fence and I float too long. So I'm not quite ready for that 2000-foot strip. My airplane is, but I am not.

Here is another clue. My POM also lists Landing Distance Required for a Short Field Landing. Same configuration, but the over-the-fence speed is 5 knots less. Instead of 1600-2000 feet, the required distance is 1200-1400 feet. Add five knots and add five hundred feet! Nope: my energy management – hey, my hands and feet, if you get right down to it – are not good enough yet.

Why not, you may ask? After all, I have been a pilot for 45 years. Well, two things: first, I'm 68 years old; and second, after I retired from airline flying I didn't touch a yoke for six and a half years. So I had to write exams and do a lot of re-learning. Now I'm learning the hands and feet again.

In short, for the moment my airplane is better than I am.

Hours, Experience, and Judgment

How do we discern and compare on the road to developing pilot judgment? First, look at the one or two Bottom Guns who touched down in the last 1000 feet. “Good enough,” they say. I guess so, if their airplane can stop in that distance. Then the fifty percent who touched halfway down. “Plenty of runway left. No sweat.” These guys are like me. Their airplanes are better than they are. It's just a matter of how much better.

What's missing? A path to learning judgment.

Experience is measured in hours. Judgment, theoretically, comes from experience. But it is not automatic. Hours of flight or even hours of practice take you nowhere unless they are accompanied by some discernment and comparison. Neither the Bottom Guns nor the halfway-down-the-runway pilots are safe trying to land on a 2000-foot runway. But do they know that?
Spiders are kind to their own. Well, story except for the kinky Black Widow, who eats her husband after sex.

Spiders are very good at controlling the populations of lesser insects – gnats, for example.

Above all, spiders dine in style. Pheasant under glass has nothing on them. Have you noticed? A fine, strapping exoskeleton gets stuck in a beautiful, geometric web whose strands are stronger than steel. There is no rush, no baring of teeth or ripping of flesh. No blood on the floor.

The spider, epicure and medical professional, injects a magic potion under the shiny shell. The guts and muscle of the beautiful captive are reduced, sautéed and flambéed. Only then does the spider dine – elegantly and unhurriedly.

After the meal the prize remains. The beautiful prey is still there, intact and whole, framed in the skyscraper web. Its value seems undiminished.

But it will move no more, except when the wind pulls at the strands binding it. The soul is long gone.

So too does private equity provide for its own.

Work is Dead

Hello, Grandmas and Grandpas. Ever wonder why your kids are living at home? Or why, when they do make money, it's one-shot, scavenger deals that pick away at the edge of the economy? Our kids – gleaners, snatching the crumbs?

For an answer, take a look at the corporate executive. No, not the entrepreneur, still in charge of the company he founded twenty years ago. No, not even that new political god, the small business owner – he (or she) is so busy with cash flow that there is no time for vision. I am talking of the CEO of a publicly traded company, hired by the Board of Directors and responsible to the shareholders.

The job of this CEO is to systematically devalue work.

Why, you ask? Remember – the time horizon for a CEO is the next quarterly report, which is never more than three months away. He could spend his time dreaming a vision for the future. But – especially in these hard, competitive times – he doesn't dare. The bottom line has to look better three months hence and his only choice is to cut costs. So he merges, divests, moves work offshore, and fights unions. He cuts costs, because that seems to be the only way he can protect the shareholders.

But work, and workers, are more than just a cost to the company. They are also its most important asset. A generation ago workers were loyal, dedicating their life's work to the company that kept a roof over their heads and food on the family table. That loyalty is long gone. Today every worker is stressed as his salary and benefits suffer the Death of a Thousand Cuts. He can't quite voice it, but he knows his company thinks he is replaceable and essentially worthless.

So we have the Occupy movement and We are the 99%. We have to do something to stop this race to the bottom. But what?

We might start by asking Who are the Shareholders?

As I wrote March 18, the shareholder is most likely a hedge fund, which owns a stock, on average, for twenty-two seconds. The decision to buy and sell the stock is made by a computer algorithm.

So the Board exercises its fiduciary duty and hires a CEO, who in turn exercises his duty to the shareholder, who turns out to be no one, a chimera, a moving target.

Our work, our careers, are being devalued by an algorithm, for the profit of a very few. Sadly, no one else is in control.

Look Out, World

The city is Athens, not Lexington or Sarajevo. But this shot, too, will be heard around the world. Prime Minister Papandreou has called for a referendum on the bailout.

It is too bad – but the bailout is too little, too late. When lenders get greedy and make dubious loans because they pay 8% or 11% there is an obvious risk, and the risk is the lender's. Germany, France, and the European banks have been slow to recognize this.

The 50% haircut in this deal is a good start. But the deal burdens the Greeks with further austerity measures. Papandreou has seen what Merkel and Sarkozy have not: that an economy is not about money – rather it uses money as a means of exchange. Instead it is about the shared destiny of its people, and citizens have a say in the political process.

True, the Greek economy was and is corrupt. True, a large portion of it was under the table. The Greeks will have to work all that out.

But the world is going to be working out something else: that making high-risk loans can result in a 100% haircut. That privatizing profits and socializing risks is a shell game that can't last. That fancy financial products like Credit Default Swaps are dishonourable and lead to ruin.

Look out, world. We have been living in a fool's paradise. Reality is about to hit the fan.

Finance is Simple

document.write(" serif;">Money makes money. Money in motion makes more money. Money in the mattress molds.

If you have money, you lend it so it will work and make money for you, or you buy something. Either way you take a risk. When you invest your money you balance risk against return.

That’s it. It's not rocket science.

The Street will cry in outrage, and some will be sincere. But the truth is finance is complex only in invention and obfuscation.

All “financial instruments” are a combination of buying something or lending your money. If you lend the money you expect the principal to be protected and the interest to be paid as per the contract. If you buy something you want to enjoy it or watch it appreciate – perhaps both.

But there is always a risk. Your investment can be guaranteed or insured or blue chip. It can be conservative or rock solid. That changes nothing except the odds.

We are hopeful and therein gullible. If we are offered a “financial product” we would prefer to believe that the contract conditions (that 8% interest rate, for example) are guaranteed (or one of the other adjectives above). The reality is anything can happen. Ask the states and municipalities and pension funds about their mortgage-backed securities.

Investment banks and private equity funds and hedge funds have always been about making money for number one. Since September 15, 2008, when the Lehman Brothers bankruptcy ushered in the current downturn, the line between these institutions and regular banks and money managers has blurred. It is time we made our own risk assessments.