What Do I Stand For?

I got involved in a debate when a friend posted something roughly as articulate as “F Obama”. Ideologically, I don’t always agree with our current president, but I am extremely happy he is in office. His predecessor, George W. Bush, has to go down in history as the worst modern president. Backing up that statement; I believe that President Bush entangled us in a costly and largely ineffective two front war with no clear military objectives, radically increased government spending at the same time lowering taxes, AND established the notion of a culture war. Since I feel neither political party really appeals to me, I thought I would take a stab at writing down what I really believe in.

What the government isn’t...

Before I say what I want from my government, I would like to start by saying what I don’t want. The role of the government is NOT to redistribute wealth or to make things “fair”. I have a five year old who is absolutely obsessed with things being fair. I have told her many times that, “Life isn’t fair.” I never, ever told her to expect fairness in life. Based on this small sample size, I am starting to believe that there is an evolutionary hard wiring to want “fairness”, yet the pursuit of “fairness” only leaves everyone equally miserable.

Some of us are born taller. Some are born better looking. Some lucky bastards get to eat whatever they want and not gain weight. There is no way for government to come in and change any of that. When people point to income inequality or try to raise minimum wage, I really think it’s that whole fairness thing kicking in. If you are working a minimum wage job and want to make more money, start applying for other jobs. Embrace the fact that the free market works both ways. Your employer does not owe you a job, but at the same time, you are not bound to work for your employer. If someone is willing to pay you a few bucks an hour more, tell your current employer, “Thank you, but it’s time I moved on.” Keep doing that until you have achieved workplace nirvana or no one else is willing to pay you more. It works. Trust me.

With the recent fiftieth anniversary of Dr. Martin Luther King, Jr.’s seminal, “I have a dream…” speech, there has been talk that one of their points called for a federally mandated minimum wage of $2 per hour. Although that seems laughable now, that amount comes out to roughly $15 an hour after adjusting for inflation. I lived somewhere that had a $15 an hour minimum wage, I don’t think it is a good idea. Everything cost twice as much and didn’t make the minimum wage earner any better off. This is not the role of our government. When government interferes, the results are often worse than doing nothing.

Just as I believe that the role of the government is not to redistribute wealth or to make things “fair”, I also firmly believe that our military is not to be used as the world’s police. The purpose of the military is to protect American interests. Period. In the early nineteenth century, President James Monroe established the Monroe Doctrine essentially letting Europe know to stay the heck out of our hemisphere. I am not advocating complete isolationism, but just as President Monroe European countries should stay out of our part of the world, we need to stop interfering in other parts of the world. We have a proven, horrible track record of backing the wrong people. The United States has funded the Taliban. We have, at one time, backed Sadam Hussien. We have armed warlords in Somalia only to have to intervene there later.

Atrocities are happening all over the world at any moment. There is an ongoing genocide in Darfur. Syrians are getting killed. However, the wars in Afghanistan and Iraq should prove beyond a shadow of a doubt that the United States should not be in the business of nation building.

The federal government should not be taking tax dollars and redistributing it for “infrastructure”. Currently, there are plans to build a high speed train from Los Angeles to San Francisco. The federal funding for this project is expected to be between $12 and $16 billion. It is anticipated, upon completion, a passenger can make this journey in roughly three hours. Apparently, no one realized that there is already a viable and cheap alternative to the train which is being run by private businesses that can do the same trip in forty-five minutes. It’s called an airplane.

While I am all for more efficient transportation, this endeavor is best left to the State of California or private enterprise. Why should the federal government be subsidizing a train between LA and San Francisco and not between NYC and DC, Dallas and Houston, or Tampa and Miami? This seems like a waste of money considering that these cities are already connected via highways and air travel. Rail travel will take longer, cost more, and benefit few.This looks like a special interest boondoggle funded by the taxpayers of an entire nation that will provide no benefit to all but a tiny minority. This is not the role of the federal government.

What I do want

I want a smaller, leaner government. A government that gets back to the business of what it was meant to do by the framers of our constitution minus all the slavery stuff. Mainly provide for the common defense and ensure domestic tranquility. I would like it to stop overreaching and if the individual states want to experiment - let them. Stuff I’d like to see gone:

The United States Postal Service

While it made sense a couple of centuries ago, this institution is a huge money loser. Meanwhile UPS and FedEx seem to be able to do the same role, only profitably. Why are taxpayers subsidizing this organization? With the advent and mass adoption of email, the need of a postal service to unite a scattered population seems to be hanging onto a legacy that no longer exists. Lets stop the bleeding and completely privatize the mail.

DEA

The whole notion of the Drug Enforcement Agency, especially at the federal level seems nonsensical. We tried to ban alcohol in the 20’s. It didn’t work. The war on drugs has been lost - let’s stop this hypocritical crusade. Alcohol and pills - good. Marijuana - bad. Bullshit! My adopted home state of Washington has decided to legalize recreational marijuana. Nothing bad has happened. No increase in crime. No overall harm to society. Tax and regulate makes infinitely more sense than living in a police state meant to protect us from ourselves. We have the highest percentage of our adult population living in jail and it can all be traced back to our tyrannical prosecution of arbitrary drug laws. Meanwhile, the country of Portugal has thoroughly one upped the State of Washington by legalizing all drugs only to see drug usage and addiction go down.

IRS

Taxes are way too fucking complicated. On top of it, no one likes paying taxes, so we collectively overvalue the ability to write something off. The mortgage interest rate deduction must have seemed like a good idea, but in reality, all it does is inflate the cost of housing making no one better off except possibly realtors. I’m a bit torn as to what the right answer is but I think either a flat tax or a national sales tax would be infinitely better, simpler, and eliminate a lot of the IRS and the need for a ton of accountants. Those people could hopefully find jobs where they, I don’t know, do something productive.

The Federal Reserve

I’ve said it before, but it merits repeating. I think the purpose of the Federal Reserve is to cause asset bubbles. When I was a child, growing up in the height of the Cold War, I remember studying the Soviet “Planned Economy” and being taught the superiority of the American market economy. Planned economies give us bad cars, terrible service, and grocery stores look like miracles to those that escaped. No single person can predict the underlying demand of a population.

And yet, how different is our system from a planned economy? The Federal Reserve sets the interest rate. When interest rates are low, it is a message for people to buy. When interest rates are high, it is a message to save. Here is the thing, no one wants to save, we all want to consume. We are now going on year five of zero interest rates and the Federal Reserve is going to have to raise rates at some point, if only so they can cut them again. Not only that, going back to Greenspan, the Federal Reserve has done a horrible job in predicting trends. They are consistently too late in raising or lowering rates to have the desired outcome.

I don’t want to return our financial system to the Middle Ages and outlaw interest altogether, but… How can an unelected official have this much power in a democracy? Meanwhile, the big banks who are supposed to be risk averse had a field day giving out money to people who should never have received it. Instead of having to suck it up and deal with liquidation when the shit hit the fan, they cried, “Too big to fail!” which is a phrase I never want to hear again. It is a system that created privatized gains and socialized losses and is a recipe for disaster.

Banks have a purpose. Loans have a purpose. The interest rate should be determined by banks competing to attract the best customers or taking reasonable risks on less desirable ones. For those that love capitalism, the interest rates would be set by the market and not the Federal Reserve. Banks that loan prudently will see rewards. Banks that gamble will go out of business - that is the system we are supposed to have.

Other things, I would like to see changed…

A Radically Smaller, Focused Military

Right there in the Constitution, it says that our government is supposed to provide for the common defense. We absolutely do need a military. I am not sure whether we need new aircraft carriers or nuclear submarines. If the rogue state and terrorism are the main focus of our military in the twenty-first century, let’s make sure we have the right special forces, body armor, and deployment techniques to get strike teams in and out of dangerous situations. Let’s stay out of long, protracted civil wars where are men and women are sent to die for no clear military objective or US interest. It is worth repeating, we are not nor should we become the world’s police. Right now there is outrage that Syria has used chemical weapons against its own people. Somehow, this is more outrageous than when they shot their own people. It’s a tragedy, but US intervention is not going to solve the problem.

Former US President Dwight Eisenhower had warned about the rise of the “military-industrial” complex. He was very prescient with his speech. The cost of in lives and in a drain to our nation’s resources is staggering and it makes none of us any better off. Instead, let’s focus our attention and resources where strategic and military objectives can be met. The strike team that took out Osama Bin Laden in Pakistan is a good example. We got in, met the objective, gathered intelligence, and left. We need to do more of this.

Let’s talk about sex

I am about to move to a state where sodomy is outlawed. Not to get into too much detail but the laws against sodomy prevent oral sex. The only way I can see that a couple of guys got together to outlaw oral sex would be if it went like this.

“Hey, Billy-Bob, I really wish I got more oral sex.”

“Yeah, me too. But what can you do?”

“I know! We’ll ban it and via reverse psychology, the ladies will want to do it more!”

If that’s the way it happened, then I humbly apologize to the great state of Texas, but let’s face it the experiment in reverse psychology failed. The role of government in our sex lives should be strictly limited to the notion of age and consent. That’s it.

Sadly, Texas does not support marriage equality, yet I think this issue should be left to the individual states. Eventually, those that do not support marriage equality will eventually be shamed into it.

Once upon a time, my home state of Arizona repealed the holiday Martin Luther King Day. It was a dumb idea. The rest of the nation laughed at us. Boycotts were orchestrated. Money to the state was lost. The only thing good that came out of it was this hilarious bit from comedian Chris Rock:

http://www.imdb.com/video/hulu/vi3189218329/

We took a beating from every other state in the court of public opinion and eventually did the right thing. Texas may be the very last state in the Union to recognize gay marriage, but I guarantee it will happen. Leaving issues like this up to the states will allow some states to try the right thing, like recognizing the right of two consenting adults to make a commitment to each other, and for the other states to take a look and say, “Wow, nothing bad happened.” The decision should not be made at the federal level.

Empire Building

I have worked in the private sector my whole life. I have worked in a variety of businesses including telcom, technology, manufacturing, retail, professional services, and utilities. I often see conservatives and libertarians tout the efficiency of public companies. I wonder if they have ever worked in any of the companies that I have worked for, because I see inefficiency and waste all around. I have stated this before only to be told, “Yeah, but the public sector is way, way worse.”

In the private sector, I have witnessed first hand managers spending money on bogus projects because they did not want to be under budget and have less budget next year. This sort of thing is standard operating procedure in the public sector. There are certain things we need our governments to do and they should be on the federal, state, or municipal payroll. Other things can be outsourced.

Do we need roads? Yes! Are people needed to build and maintain roads? Yes! Should these people be employed by the city or state, be paid twice as much as the private sector, have better benefits, job guarantees, and a pension plan? No! We owe it to ourselves to outsource jobs that do not need to be executed by the state. Otherwise, we will build up an army of road builders who has the sole mission of growing itself. We are better off figuring out which roads need to be built or fixed and bidding the work out and managing the budget to prevent an ever growing machine we overpay for.

If this idea seems radical, it has been tried. The City of Sandy Springs, GA has a population of 100,000 citizens and has outsourced just about everything except the police and fire departments. However, the few remaining employees of the municipality are on 401(k) plans and are not threatening to bankrupt the city with an overly-generous, someone else will pay for it later pension plan. Further, they do not own any of their own buildings or equipment and depend on bids from the private sector to run things that are usually run by the public sector. The result? Everything works - only it’s better and costs 30% less. (http://www.mackinac.org/18713)

Tort Reform

I don’t think our founding fathers imagined a legal system like the one we have now. The judicial branch was supposed to interpret our laws and ensure that our rights are not violated as well as handle sentencing. Instead, we have too many lawyers playing a lottery type system. The system no longer cares about righting wrongs, in its place, is a system that is all about convincing twelve random people that some big company has done some vague sort of harm and hopefully award millions of dollars to a “victim”. The lawyers don’t care, they just want their substantial cut of the action.

Due to this practice we now have warning labels on everything. We have corporate lawyers who advise us to do things, but it doesn’t matter what they say, anyone can have a lawsuit filed against them by anybody at any time. If a blood sucking lawyer loses, they simply move on to the next case. This chaos is causing real world ramifications. Colossal douchebag John Edwards through a pity party for a “victim” in a courtroom claiming to channel the spirit of a disabled child in front of twelve semi-morons.

“'I have to tell you right now -- I didn't plan to talk about this -- right now I feel her (Jennifer), I feel her presence,' Edwards told the jury according to court records. "[Jennifer's] inside me and she's talking to you ... And this is what she says to you. She says, 'I don't ask for your pity. What I ask for is your strength. And I don't ask for your sympathy, but I do ask for your courage.'" - See more at: http://cnsnews.com/news/article/did-junk-science-make-john-edwards-rich#sthash.x65opS5f.dpuf

He proceeded to armchair quarterback an OB/GYN with an actual medical degree and declared that the doctor should have performed a cesarean. The court awarded the plaintiff millions of dollars and as a result c-sections are performed unnecessarily in the United States out of fear of a lawsuit.

Let’s stop and get this straight. Because of a meritless lawsuit by a bloodsucking lawyer and the non-medical expertise of twelve random rubes,  doctors are now performing cesarians not out of the best interest of the mother or child, but out of fear of lawsuits? The rate of c-sections has gone from 5% to over 30% (http://www.childbirthconnection.org/article.asp?ck=10456) in the span of a few decades and John Edwards and his ilk are directly responsible.

How about some common sense reforms like loser pays or limiting the fees lawyers can collect on punitive damages? The current system is damaged and turning us into a nations of victims and victimizers.

Conclusion

I am an American and I truly believe that I am lucky to live in the greatest country in the world. I would like to keep it that way by getting back to basics. Less government, less war, and more individual responsibility.

Results Oriented

“ In Confessions of a Winning Poker Player, Jack King said, ‘Few players recall big pots they have won -- strange as it seems -- but every player can remember with remarkable accuracy the outstanding tough beats of his career.’ Seems true to me, 'cause walking in here I can hardly remember how I built my bankroll, but I can't stop thinking how I lost it.”

“If you're too careful, your whole life can become a fuckin' grind.“ - Mike McD (played by Matt Damon “Rounders”)

I am no stranger to taking what looks like insane, crazy risks. I threw money into the stock market. I quit “safe” jobs for “riskier” ones that paid better. In the poker game of life, I have played it with an aggressive style. All it took was one bad beat to convince me to change. Hunker down. Don’t chase draws even with great pot odds. Grind it out.

I had a bad moment. One I’m not proud of where I wanted to dig my heels in and say, “I’m not moving!” I could throw out any excuse. Yes, I like Seattle. The summers here are gorgeous. I want to be a part of the Seahawks Super Bowl season (it’s going to happen - trust me on this). I love the mountains and lakes. I have friends here. But, as I learned at the Air Force Academy, excuses are like assholes, we all have them and they all stink. The real reason I didn’t want to move was fear. All it took was one bad beat and I was afraid.

The analogy worked, and it got me thinking about one of my former hobbies, poker. The beauty and difficult part of poker is that it is an incomplete information game. You may know what you have, but without cheating, you can only speculate what your opponents have. In the short term, a bad beat can crush you, but in the long run, getting your money in when the odds are in your favor is the only way to play - regardless of the outcome.

It’s funny thing as I see resumes all the time that contain the phrase “results oriented”. In poker, that phrase is an insult. All you can do is trust your read and get your money when you think you have the best of it. If the poker gods decide to crush your soul with a bad beat, so be it.

With that in mind, I decided to play an mspoker tournament on Friday. This group has been going strong for over a decade now. I have been gone awhile and there were a lot of new faces mixed in with the familiar. I played my game. I won some hands. I lost some hands. I won more hands than I lost and started to build up a decent stack as the blinds were getting higher. With the blinds at 30/60 and me sitting on about 4,000 in chips, a small stack decided to go all-in for 350 while I was on the dealer button. Now, strangely, an aggressive player makes a call. I say strangely as an aggressive player would usual raise to isolate and get a chance at busting the small stack by himself. At this point, I don’t know what I have since I refuse to look until it’s my turn to act but I’m thinking about how do I want to play this based on the action in front of me.

It’s folded to me and I have pocket 7’s. Not a bad hand, but not exactly a monster. I have a short stack that is acting a bit desperate and I put him on any random hand. The caller has been aggressive and I have position on him in the hand. I really don’t want to re-raise here and face the possibility of a re-re-raise and I decide to see a flop cheap and have the discipline to get away from it if I don’t like it.

The short stack makes a mistake and actually shows his hand - Q8. Since he doesn’t have more chips, the ruling is made that he doesn’t have to fold but now my opponent and I have a little more information - there is one queen and on eight that is not in the deck.

Ideally, I would have flopped quads, or at least a set, but barring that I got a beautiful six high flop. The aggressive player bets out 750. At this point, he has put roughly ⅓ of his stack in this pot and that was a pretty high bet. I have to ask myself given his action pre-flop and the big lead out bet, what does he have? I conclude that he has AK and that my 7’s are good. I don’t hesitate for a second, as he is putting the chips out in front of him, I say, “All-in.”

Now this guy takes forever trying to figure out what to do and I know that I have him. He’s mad at himself for betting that big and then having to lay it down, but he’s smart enough to know that he’s beat but doesn’t want to admit it yet. I don’t say anything, but I’m hoping he calls because I’m 100% positive that I’ve got him beat. He starts making his speech and eventually says fold but exposes his AQ - extremely close to what I thought he had. As he folds, he states that the fact that he knew the short stack had one of his queens factored into his decision. If he had called, he had two queens and three aces that could save him - roughly a 20% chance to win the hand.

He folds and I show my 7’s and the turn comes out a queen and now he is absolutely beside himself. I’m irritated that I don’t get the whole pot and barely eek out a profit after all the drama because all I get is the 750 from the side pot, but hey, that’s poker. The fact remains, my opponent played every street wrong. Pre-flop if he re-raised the original bettor, I might have not taken that much risk with a weakish pair. On the flop, the bet seemed out of line with the pot. If he had a hand, he would have made a smaller bet or even checked to me to entice a bet. Instead, he stuck a good chunk of his stack in there and got angry because I called his bluff with an 80% chance of winning all his chips.

Now if an 80% chance doesn’t sound good, even people with the most basic knowledge of Texas Hold ‘Em can tell you that the best pre-flop starting hand is AA. Yet, the very best hand in poker is usually only an 85% chance to win against any random hand. Those odds are as good as they get and one time in five I’m going home trying to explain to my wife that I really should have won because I made the right play. She then tells me if I was supposed to win, I would have and I give myself a face slap and vow to never tell her a bad beat story. Until the next time I get a bad beat.

In this case, my read was near perfect as AK would have had roughly the same odds as AQ here. Reads are funny because sometimes it’s hard to tell the difference between what you think an opponent has versus what you really want the opponent to have. I played a very good player who managed to cash in this year’s main event at the World Series of Poker in two back-to-back tournaments. The first time, he made an aggressive move at me and I swore up and down he was on the straight draw. Sure enough, I call, he shows, and it’s a straight draw. It was like I could see his cards and I just KNEW it. Very next tournament, I’m in a hand against the same player. I’m holding AQ and the flop comes with an ace along with three spades and the same player I had busted before bets into me. I get into my head and I wonder if he would bet into it if he had a flush. But then I know that he knows that I know he’s an aggressive player and is the type that would bet if he had the flush or if he wanted to represent the flush. Something is telling me to fold, but I don’t listen and I make a crying call telling myself that he’s on the flush draw and to think that he flopped the flush is paranoid. Sure enough, he has the flush and all I can do is say that I had the wrong read or I got greedy. I go home.

So what’s the point of walking down a couple of random hands in some low stakes tournaments? In poker, as in life, there are no certainties. You have to deal with incomplete information all the time. Sometimes you make the right move and lose. Sometimes you make the wrong move and win. In the long run, it comes down to making the right decision more often than not. You can’t lose what you don’t put in the middle, but you can’t win either. Oh, and we’re moving to Texas.

The Only Constant Is Change

“Dad, giraffes don’t make noise,” said my adorable little girl.

“Is that true, Zoe?”

“Yes, Google it,” she replied.

I laughed at my child who was not speaking in complete sentences a few years ago was now using “google” as a verb in perfect context. Just as my generation made fun of our parents’ generation, our children will make fun of us. They are an entire generation that will never use a land line, buy a compact disc or DVD, nor will they know a life that did not include the Internet or FaceBook, and more.

I am one-third to one half of my way through a career in Information Technology and now is as good a time as ever to reflect how much has changed in IT since I started my career. I graduated from college and started working professionally in 1995. I considered myself lucky to have a laptop instead of a desktop. It was an Intel 486 without a CD-ROM. It took several minutes to boot Windows for Workgroups 3.11 and log into a Novell Network.

Plenty of people I worked with had their Certified Netware Engineer certificates. Novell was absolutely huge. Logging into their servers enabled extremely crude file sharing, mapping network resources to local drives, and print services. In a span of a few years, Novell all but disappeared from the corporate landscape. It was replaced by NT Server and Active Directory by Microsoft.

Active Directory allowed IT departments to control what software was loaded on their employees PCs, run scripts, and update anti-virus software. It works great when a user had one device and was hooked directly into a corporate network. It works less than great when a user had multiple devices and tried to access corporate resources away from the office. It only works with Windows PCs.

In 1995, Apple Computer was as good as dead. A few people had Macbooks in college, but in the Enterprise, it was all about Windows PCs. A decade and a half later, Apple (no longer Apple Computer) is one of the most valuable companies in the world. While the Mac OSX operating system is far from dominating corporate IT departments and represents about 10% - 15% of the personal computing devices, it is now finally receiving limited enterprise support. Mac users love their Macs and are adamant about using them at work. Except which operating system is being used doesn’t matter nearly as much as it used to since a lot of corporate systems are now written as web interfaces accessed by a browser. So long as a user can access the resource, the OS they are using is of little consequence. Does Active Directory still matter in this environment? The days of a single user with a single computer are long gone. Most corporate users have a work laptop, a home computer, a smartphone, and possibly a tablet. They want their information on whichever device is closest.

As the phrase “World Wide Web” was repeated over and over again in the mid-nineties, Netscape shot to prominence with their Netscape Navigator browser. Without worrying about minor details like profitability, plans for profitability, or a product roadmap; Netscape went public launching the dot com bubble. They were the sexy Internet startup and the tech media darling.

Microsoft was worried that the OS would become irrelevant (rightfully so) and was determined to control the browser experience. Internet Explorer came from behind and in a period of a few short years, was being used by over 90% of PC users. Netscape eventually sold themselves to AOL for several billion dollars and was never heard from again.

Internet Explorer ruled the Internet, for a short period of time. Yet Apple wielded a subtle influence on the future of the web. Although Safari has a small market share, it was built on the webkit platform which was then open sourced. Google built the Chrome browser and a community of developers produced Firefox based on webkit. The default browser on the most dominant operating system (Windows) is now repeatedly swapped for Chrome or Firefox to the point where IE now represents only 30-40% of the browser market. Geeks being passionate about their browser is one thing, but at this point non-geeks are downloading Chrome or Firefox in droves.

Speaking of AOL, in the mid-nineties they had well over 20 million subscribers paying $20 per month for the privilege of accessing the Internet over a telephone with speeds up to 56.6 kbps. They completely dominated consumer access to the Internet. The phrase “you got mail” even spawned an awful movie starring Tom Hanks and Meg Ryan. The only problem was after the novelty of “being online” wore off, no one wanted to connect through their phone line at painfully slow speeds. Around the time AOL purchased Time Warner, in what is widely considered one of the most disastrous corporate mergers of all time, cable and DSL started offering always on Internet connections at orders of magnitude faster speeds and AOL became increasingly less important. Time Warner eventually spun themselves back out of AOL and the company is now worth considerably less than the paid to acquire Netscape over a decade ago.

During the dot com bubble days, companies talked about eyeballs. Acquiring eyeballs. Aggregating eyeballs. Eyeballs were going to lead to sweet advertising dollars. Yahoo! was the leading web portal. Except it turned out display advertising was not nearly as important as it was initially thought. An upstart, Google, produced great search results and had a minimalistic web site built around it. Google charged companies to be mentioned in their search results and made buckets of cash. Yahoo! stumbled and eventually decided not to sell themselves to Microsoft for $50 billion and now, a few years later, are valued at well less than half that amount.

In the early 2000’s corporate executives loved their Blackberries. They loved them so much they were referred to as “crackberries” as the execs who carried them were physically addicted to them. Then, in less than half a decade, the Blackberry market share went sharply in reverse - replaced by iPhones and Android smartphones.

In the last fifteen years, Microsoft’s Exchange became the de facto standard in most corporation replacing products by Novell and Lotus Notes. Upstarts like Yahoo! seemed unstoppable for a few years only to be replaced by an even newer company a few years later. Beloved products like the Blackberry have been discarded in just a few scant years. Complex corporate systems that used to run as executable programs on PCs have been replaced by browser based Intranet systems. It seems like every piece of technology is evolving at an increasingly rapid pace, and that is just the things you see...

Beneath the surface... Programs used to be written in procedural languages. Then along came object-oriented languages. In OO, C++ was dominant, but then Java came along and got rid of the worst of C++ - multi-inheritance, pointers, memory management, header files and more. Three tier architecture became the standard over the two-tier client/server model. New languages and frameworks like Django and Ruby on Rails were designed to make web development even faster.

On the front end, just when it seemed like Flash was the standard for client interactions with the browser, Apple’s steadfast refusal to support it on the iPad killed it. Seemingly minutes later, jQuery became the new standard.

On the database side, new concepts like eventual consistency and big data offered a departure from the traditional relational databases. Even with relational databases the Spring framework and other Object to Relational Mapping (ORM) technologies made the hours I had spent writing SQL semi-obsolete. Where the database world once had IBM, Oracle, and Microsoft slugging it out for corporate dollars; it now has open source alternatives such as MySQL, PostgreSQL, Cassandra, and Mongo that are every bit as good (if not better) than their expensive closed source brethren.

Yet amongst this sea of change, one thing has remained remarkably consistent. People create data. That data must be stored somewhere. Rules need to be established to define what data is accepted. The data must be secured. Solving problems in technology does not require being an expert in every new fangled technology. It requires an open mind and flexibility. It requires good design making intuitive interfaces for users, scalability, and configurability. The syntax of the language is less important than understanding how to setup the data, validate it, interface it, and secure it.

Everyone throws around the buzzwords “flexible” and “scalable” yet few actually define it. So I’m going to do it. Scalable means the ability to seamlessly add users and/or data with minimal impact to performance. Flexible means to anticipate future needs well enough that the system can be modified via configuration versus code changes into the foreseeable future. Neither of these critical design principles have anything to do with syntax and using the latest and greatest, but a deep understanding of the problem domain.

Too often the emphasis on the low level. “How many years of SQL Server do you have?” is the wrong question. “How do you model this problem?” is the right one. I am shocked by the number of people I have ran into who do not understand basic concepts of data normalization. Not understanding this leads to bad/inflexible design. These people are hired for their syntactical experience, not for their problem solving. Except the syntactical skills don’t really matter because, in this field, the only constant is change.

The Stars At Night...

Normally, I don’t filter my thoughts or chose my words with particular care. I tend to say what I am thinking without sugarcoating it. However, I spent a lot of time thinking about how I wanted to phrase a sentence. I wanted to be fair, honest, and hopefully not too offensive. So after a week or two of thinking very hard on the subject, here is what I came up with... Australians are fucking retarded when it comes to economics. Seriously, that is the very best that I can do and I think it is completely unfair. Unfair to the mentally handicapped. Mental retardation is the result of a serious genetic issue or severe brain trauma. Meanwhile, the belief that property doubles every seven to ten years is willful ignorance. It requires ignoring every lesson learned from the destruction of the US and European housing bubble and to cover one’s ears while screaming, “La, la, la!” when confronted with irrefutable evidence (http://www.prosper.org.au/wp-content/uploads/2011/07/PhilipSoosBubblingOver1.pdf, http://www.demographia.com/dhi.pdf, or plenty of more). It is dumber than believing in perpetual motion or cold fusion.

Even worse than the belief that property can continue to grow at an unsustainable rate forever is the belief that exorbitant home prices is a good thing. The average Aussie looks at home prices that cost roughly 2-3x what their American counterparts are paying and see this as some kind of vindication in the superiority of living in Australia. If trying to come up with a king’s ransom to every month just to cover the mortgage is vindication, then I will pass. It is not polite to say this, but when we lived in Australia, Julie and I were well within “the 1%”. And yet, there was no way we could afford to live there. I simply could not understand it. If we could not afford to live there, how could the other 99% afford it? The answer... They can’t. Instead, it is a constant cycle of indebtedness and borrowing more to dig themselves out of debt by borrowing against home equity, ironically putting themselves further into debt.

For those that bought roughly twenty years ago, they cannot stop patting themselves on the back for being so “smart”. They see their wealth as a virtue and proof positive that their sacrifice was worth it. To those who bought ages ago, not owning property is a sign of laziness or selfishness. If only we were as hard working and smart as them, we would be wealthy too. Except it ignores the fact that the price of homes of more than doubled in REAL (not nominal) terms while wages have remained stagnant. Buying at these levels is not only stupid, it is impossible. Yet, sadly, for those who do not own property, they do not see a problem. For, they believe, that property will always continue to appreciate at 7-10% annually and that when they finally buy, they will benefit.

And I sat there, on a different continent thousands of miles from home, for weeks and for months feeling like I was crazy. I kept on looking at this insanity and saying to myself, “This does not add up!” Yet everyone I talked to gave me blank stares as if I were the one who were crazy. Finally, as I was days away from going into a full melt down and rocking autistically in a corner trying to come up with a financial model that makes sense, I stumbled across http://www.macrobusiness.com.au. Although I stated previously that Australians are fucking retarded when it comes to economics, obviously that was a sweeping generalization. The reality is that 99.999% of Australians are fucking retarded when it comes to economics. That 1 in 100,000 Australian that is not a fucking retard goes to macrobusiness and contributes mightily.

Finding like minded individuals did wonders for me. It was like I had unplugged from the matrix that is the mainstream media in Australia and found a society of people capable of skepticism and rational thought. Through this community, I felt a sense of validation that something was not right, but I also began to learn about what was causing this distortion. It comes down to government control of the land. The crippling, unsustainable house prices in Australia comes down to a colossal failure by the government of epic proportions.

In Australia, to keep cities “livable”, the government has set up extremely restrictive land usage zones around their cities. Land is released extremely slowly and is grabbed by developers. The developers then do nothing with the land. They wait. And wait. And wait. Finally, when infrastructure is built the developers, ever so slowly, build homes. The homes are released for purchase at a snail’s pace which does not ease the pressure of supply and demand or help to lower the overall price of housing. It is in the developer’s best interest to keep home prices as high as possible to maximize profits.

Most participants at macrobusiness reference studies from the think tank Demographia. If the policy of land release I described above seems absurd and the affects of said policy seem unjust, then the next logical question is what is the right policy? If one wanted to see what happens if you do the exact opposite, then one could take a look at how the state of Texas handles land use. According to some of the smartest people I have ever debated with, the good people of the state of Texas have the best policies for land use IN THE WORLD.

As if my head was not hurting enough at this point; I had discovered I had moved halfway around the world to a country with a worse housing bubble than the US, that the mainstream media and the government was regularly lying to the citizens, and the growth story of Australia was about as real as Ireland’s pre-burst. Now I had to deal with the smartest people in the country almost worshipping the policy of... Texas.

It reminded me of the scene in “The Empire Strikes Back” where Darth Vader reveals to Luke that he is indeed his father. “No! That’s not true! That’s a lie! That’s impossible!”

I am far from an intellectual and do not consider myself to be a cultured person. I did not go to boarding schools on the East Coast nor am I the descendent of several generations of WASPs who can trace their ancestry back to the Mayflower. No, I am a second generation American raised in what was once a small backwater town of Phoenix, AZ. And even I have stereotypes of Texans being hicks stuck in my head. Yet, the more I looked into it, and the more I thought about it, the more I came to realize the truth - just like Luke Skywalker.

It has taken me a very long time to get to a point in my life where I can take a more nuanced view of the world. Things are seldom black and white. Often there is no right or wrong. I identify myself as being politically right of center. Yet although I often disagree with the American Civil Liberties Union (ACLU), I feel like we have a better democracy because of them. Even though I don’t like just about everything they do; I find their members to be passionate, intelligent, and their voice makes a meaningful contribution to society. However, on other issues my black/white, good/evil paradigm still holds. On the issue of gay rights, there is no compelling argument against equality. I have tried very hard to see the opposition’s viewpoint. I can’t. And when it comes to land usage, I find my old paradigm useful. Australia is wrong, parts of the United States are right. The evidence for this bold assertion? The only number that matters, the median multiple (the median sales price of a house divided by the median income).

From http://www.demographia.com/dhi.pdf (I put the link in earlier, seriously stop reading this crap and read this study in its entirety):

Rating	Median Multiple
Severely Unaffordable	5.1 & Over
Seriously Unaffordable	4.1 to 5.0
Moderately Unaffordable	3.1 to 4.0
Affordable	3.0 & Under

On the macro-level, looking at median multiples in major markets with populations over 1,000,000 people, Australia sports a “Severely Unaffordable” rating with a median multiple of 6.5 while the United States is ever so close to “Affordable” with a rating of 3.2. Of course, all real estate is local. So I will present more micro-level numbers:

City	Median Multiple
Austin, TX	3.6
Dallas-Ft. Worth, TX	2.9
Houston, TX	3.0
Seattle, WA	4.8
Los Angeles, CA	6.2
San Diego, CA	6.4
San Francisco, CA	7.8
Melbourne, Australia	7.5
Sydney, Australia	8.3

The central hypothesis of all of Demographia’s research is that the way local governments and municipalities release land affects the price of the homes. As much as I have complained about Australia, there are several California cities that are near or even worse than Melbourne and Sydney. Even my adopted home of Seattle is sporting a “Seriously Unaffordable” rating. Even worse, the people of Seattle have learned nothing from the collapse of home prices in 2006 and I believe that we have re-entered a bubble.

Based on my experience in Australia, high house prices crush the economy. Mortgage payments take away disposable income that could be spent on other things. As a homeowner, it might be fun to sit around congratulating myself on my new found wealth due to the irrational bubble, except I have no real access to said wealth unless I borrow from my house, restart my mortgage, and get further into debt. These bubbles lead to economic booms and busts which make my life as a consultant unstable. I always seem to muddle on through it, but it is difficult and stressful. So what to do?

Well, what if someone came in and said, “I will pay for all of your transaction costs - realtor fees, excise taxes, and moving expenses?” If my house is truly overvalued, I would really have to consider it. What if this person offered my wife a job in an area that is now world famous for NOT  exposing their citizens to housing bubbles by pursuing a sensible land release policy while being radically pro-business? We would have to consider it, wouldn’t we?

WE’RE MOVING TO TEXAS!

A few years ago, I would have never considered it, but now... I don’t know, my eyes have been opened and I think low house prices and a pro-business environment is the best thing for sustainable growth. My heart may long for California, but let’s face it - California is a mess. I am also quite comfortable with my adopted home of Seattle, but there are problems on the horizon here too. Although the natural beauty of the area from the trees, lakes, and mountains will be difficult to replace; this area is stuck in a boom and bust cycle. It’s not helping to live in an area where Microsoft is a large employer. I am not predicting that Microsoft will go out of business, but where I once was a tin-hat wearing conspiracist, I can now count amongst my friends senior level people who have left and publicly called for a 30% layoff which will have deep repercussions on the local economy. Then there is the magical offer that eliminates a lot of the transaction costs of selling and moving, thrown in with the opportunity to significantly lower our mortgage while simultaneously getting a better house... Well, it made us stop and think. Why not?

The Austin Factor

So, we told people slowly, here in our bluer than blue state. Most often we were met with disgusted faces and shocked outrage, “Texas? You’re going to leave this for Texas?”

Then we say, “Austin.”

And the disgust and outrage drains right out of them. “Oh, well Austin is pretty cool.”

Sustainable Growth

Back when I was a Boy Scout, some of the older kids taught us how to syphon gas out of our scout masters’ cars. And syphon we did. We would find a spot away from adult supervision, throw a couple of logs into a circle, douse it in gasoline, and watch it burn. The flames were high and spectacular and then just as quickly, they were gone. It required us to get more gasoline or to eventually give up and find something else to do. These fires were fun for us burgeoning pyromaniacs, but they were also useless. They did not provide heat nor were they useful for cooking.

At some point, we always wandered back to adult supervision and proceeded to build fires the “right” way. We would carefully place kindling in the bottom with smaller sticks around it. Then giant logs would eventually catch fire. We tendered and nurtured these fires for hours and they provided light, warmth, and a way to cook our food.

When it comes to economics and housing policy, I have seen first hand the effects of handing out first home owners grants, choking land supply, or whatever myopic and stupid policies are put in place to prevent the collapse of a bubble. All of this is tantamount to us boys throwing gasoline on fires. It’s fun, but useless, dangerous, and wasteful. I am happy to be going someplace that recognizes the necessity of sustainable growth.

My Last Warning on the Subject

I once stated at a dinner party amongst friends that I wanted to see the Northern Territory and Uluru. Someone I genuinely like responded by saying, “But the Northern Territory is full of Aboriginals.”

To which I said, “So?”

“And not the good kind,” she expanded.

Here I was at a quandary as I found her near blatant racism offensive. On the spot I came back with, “Do you know the difference between an Australian racist and an American racist? (Pause) An American racist knows they are a racist.”

This remark was very poorly received. No one wants to be called a racist. The United States elected a half black man to be our leader and that does not absolve us of our extremely racist history nor does it mean we no longer have a race problem, however, we as a country just might be the greatest mix of races and cultures the world has ever seen. Over a hundred years ago, we opened up our borders taking in just about anyone. My grandparents were kicked out of every nation in Europe before showing up in New York. We had the land and the desire to support growth, and grow we did becoming the world’s largest economy and the third largest nation by population. It has been immigration that is largely responsible for this growth with 40% of the Fortune 500 being founded by an immigrant or one generation removed.

In more recent times, the United States screwed up our economy and did so quite badly. In an effort to stabilize things; there were bank bailouts, zero percent interest rates, “quantitative easing”, and a return to more immigration. As a country, we know that an expanding population base is going to create growth.

Anecdotally, we left for a few years only to find that our area had gone under a rather obvious demographic shift. My son goes to school with children named Umong, Sushant, and Rajesh. The children may look different from my son, but they play Skylanders, root for the Seahawks, and watch Ben 10. They are little Americans just like my son.

Their parents may speak with accents and miss Cricket, but they know they have a better life here in the United States than they did in India. They know their children will have better lives as well. And yes, the parents do represent competition to me, but I do not believe I am entitled to a job. If we are up for the same position, let the best person win. Their presence here makes me work that much harder, makes me learn more on my own time, and it keeps me on top of my game. I have an advantage - I was raised here. I am used to American culture. I speak the language. If I am beat out by an immigrant, so be it. That immigrant is going to earn money here, pay taxes here, and contribute to the economy here. Their presence is going to bring more opportunities to me as the competition is not a negative sum game. I respect these immigrants who have left their extended families behind and put their faith in the United States. It’s not easy to be an immigrant and their presence is helping us out of the economic nightmare of our own making.

Australians need to learn this lesson. Australia should not be a country and continent for white people. It needs to be a country for all people who are willing to contribute. Australia needs to wake up to the fact that competition is good and more people leads to growth. There are people who are literally risking their lives to enter Australia - the least densely populated country in the world and the government and planners ring their hands and ask, “Where will all these people go?”

These people will become contributors - if you let them. They will build cities. They will enrich schools. They will earn incomes and pay taxes. Australia is on the verge of an economic collapse due to the unsustainable model and anti-growth policies that have been pursued for the last century. To ease the pressure of the housing crisis and continue economic development, the urban growth containment policy simply has to be abandoned. At the same time, this small country of 23 million or so people could easily double the population in twenty years through immigration. New cities can be created. People can start doing things instead of flipping real estate to each other in hopes to keep the Ponzi scheme alive.

Already in less than a year since we have left, the currency has fallen by 20%. Even the mainstream media is finally clueing in that the mining boom (which I claim never existed) is over. It is time for the country to grow up, shed its racist past, and acknowledge that decades of bad policy has enslaved its people in debt servitude - not driven true sustainable growth. Oh, and we are moving to Texas.