Thank you

I just wanted to say that I am going to be taking a break from blogging for several months; this may be the end of In A Future Age.  I started this blog one year ago, and it has been a great experience.  Thanks for all of my loyal readers.  My work at school is taking most of my time, and I am preparing for what comes next.

Prose meditations

The train is rumbling south as we head for New York City, and the America I see is a rusted hulk of its former glory.  Alongside the tracks, empty warehouses sit idle, as rust creeps up their backsides.  Graffiti is ubiquitous, marking the territory of boredom and decades of class warfare.  The angry howls of America reach out of the electronic media; USA! USA!  Remembering a time when that meant something, I wonder when it all went wrong.  I suppose we were always overconfident, but after several courageous fights we got soft, we expected things to be taken care of.

We built an empire of sand, which is now crumbling in front of us.  Our manifest destiny, the cry of Oklahoma!  Oregon!  Always pushing onward, for something more.  Once California was a paradise, but then we turned it into a concrete jungle.   Now our Manifest Destiny is consumption, consumption, always more consumption.  Corinthian leather, granite countertops, what does it all mean?  Meanwhile our communities are shit, we don’t know our neighbors anymore, we don’t trust each other anymore.  It has turned into a blame game, with our own vanity invested in impossible dreams, with few willing to confront the truth that USA may not be sustainable.

Exponential growth, that is what our economy is built for.  If we can only find that free energy, that impossible, magical, elixir that will drive us forward, then humanity will have no limits. Of course, what of the world outside of the good old USA?  Not the Continent, not Shanghai, not Australia, but what of the great unwashed in Bangladesh, Africa that will suffer only more under our changing climate?  What of the real danger that we might not have enough food, energy, to keep this going?  Well, the angry man cries, USA!  USA! Only alarmists need question our lifestyles.  There are no limits to what we can accomplish, right?

Mother always said you could become anything you wanted when you grew up.  Hedge fund manager with a Swiss chalet?  Now we’re talking.  There is no external cost that the world does not happily bear for the greatness of USA, the angry man says.  As we head south towards New York City, I wonder what my grandchildren will think?  What will our history books read?  Since the victors write history books, will their books be written in Mandarin?

Our President calls for America to win the future.  When people are skeptical of wind turbines and solar turbines because they are too expensive, but they happily allow energy companies to pollute their drinking water with hydrofracking chemicals, I wonder if we have it in us to win anything.  I think the future will be handed to us like a consolation prize, and our grandchildren will wonder how we could be so vain.  The angry man will cry out into the night, USA! USA! On and onward.


Blind spots

Apple Inc.

Nadav Savio, a Google engineer, wrote this insightful post about Apple, Google, and blind spots:

“It’s been said that Google doesn’t get ‘social’ and, though I think that is vastly overstated, there is truth there. Similarly, I’d say that Apple doesn’t understand the internet. Well I have a simple theory about it. There’s a cliché that everyone’s greatest strength is also their greatest weakness, and I believe that applies as well to organizations as to people.  Take Apple. They make amazing, holistic products and services and one of their primary tools is control. Fanatical, centralized control. Control over the design, over the hardware, over the experience. And that’s exactly the opposite of the internet, which is about decentralization and messy, unfiltered chaos. Google, on the other hand, gets the internet, but has trouble with humans. And I’d say it’s not so much because it’s an engineering-heavy organization or that Google doesn’t know how to have fun (both reasons I’ve seen stated publicly). I think it’s that one of Google’s biggest strengths is in search, which is largely about things like precision and recall, about stitching the chaos of the internet into some semblance of order. But social interactions happen in the variance, in the messy spaces that seem meaningless. Much social meaning is carried by phatic communication and that is exactly opposite to what Google does, which is to optimize signal vs. noise, looking for the meaning and discarding the meaningless.  Presumably, we can find the undoing of other organizations in their strengths. What, for example, is Microsoft really, really good at? Or Facebook?”

This is a brilliant analysis of two great companies, who are really good at certain things; somehow that greatness meets its limits.  This is a good lesson for all of us.  We know what we know, and we know what we know we don’t know.  However, what we don’t know we don’t know is what kills us.  This is our blind spot.  Unfortunately, unless you question your assumptions, you will bump into your blind spots, often when you least expect it.  It really pays to be open to the possibility that a colleague, a friend, an associate, a supplier, or a stranger might have the insight to open your eyes.  Sometimes, when we make mistakes, we wonder why we didn’t recognize it earlier; it may be that we actually could have recognized the error, if only we had been open enough to understand the insight.

Nordic dreams

The Nordic Jump in Brattleboro, VT, circa 1930s, from the New England Ski Museum collection.

Well, once again I am off to Vermont for the weekend, to Brattleboro, where snow and Nordic ski jumps are normal happenings.  Stay frosty, friends, I’ll be back next week.

Why I love USAA

The United Services Automobile Association (USAA) was founded in 1922 as the United States Army Automobile Association, by a group of 25 Army officers in San Antonio, TX.  Major William Henry Garrison called the group together to develop a solution to a major problem: because of their frequent moves and deployments, Army officers were having difficulty obtaining automobile insurance that was not expensive and prone to cancellation.  The new mutual company was modeled on the Army Cooperative Fire Insurance Company.  Despite quickly developing a membership of 124 officers, the young company did not effectively model its policy costs and faced a deficit of $3000; as a result, the Board voted to extend membership to active duty officers in both the Navy and the Marines, and to adopt both the USAA name as well as a policy of paying dividends to its members (Gale).

That first expansion would be repeated many times, and over the last eight decades it has grown into a Fortune-500 financial services company.  In 2010, USAA had a total of 7.7 Million member customers, $68 Billion in assets, over $17 Billion in sales, and a Net Income of over $3 Billion (LexisNexis).  However, USAA remains true to its core purpose – to serve its members, those who serve in the United States military.

USAA is a private mutual company, owned by its members; its core product, property and casualty, is available only to its member-owners.  Until 1961, USAA membership was limited to active duty military officers; after 1961, those officers could retain their membership after their military service concluded.  In 1973, membership was extended to reserve officers, and in 1996, membership was extended to enlisted military personnel.  In 2010, USAA doubled its pool of potential members by opening membership to anyone who has served in the military and received an honorable discharge (Corporate Overview).   By limiting its property and casualty insurance to military members, USAA is able to limit its risk by offering insurance only to people who bear military values of honor and integrity; the company can more or less take members with claims at their word. The 2010 expansion to all veterans with an honorable discharge allows USAA to expand its customer base, but could present risk by adding members long out of the military culture and values.

USAA expanded its business in 1963 by offering life insurance (USAA Life Company), and again in 1983 by offering investment (Investment Management Company, IMCO) and banking services (USAA Federal Savings Bank, USAA FSB).  USAA also started the Alliance Services Company (ASC), which provides discounts to services like rental cars, jewelry, and flowers (Corporate Overview).  All four of these companies are wholly owned subsidiaries of USAA, and their services available to the general public, unlike the property and casualty insurance.

USAA has only eight physical locations, and its members are deployed around the world.   USAA Federal Savings Bank President recently described USAA as “an internet company before the internet was created.” (VanderMay) That is an apt description, because from day one USAA conducted its business primarily via telegram and mail; in 1978 the company offered a toll-free phone line.   USAA pioneered internet banking in 1999, allowing its members to safely conduct business online.  That level of innovation and flexibility is mirrored to this day; last year USAA offered the first iPhone application that would allow members to deposit checks using their phone’s camera, and the company routinely sends text messages with account balances to members deployed to Iraq or Afghanistan .  New USAA employees are trained to understand their military members’ experience by eating MREs (meals ready to eat), trying on Kevlar vests; each new employee receives an actual deployment letter that one of their members might receive (with names removed) so they can understand what USAA customers confront with deployments (McGregor).

Because of all this, USAA is famous for its customer service; in 2009 it was ranked #1 on the MSN Money Customer Service Hall of Fame, and it also won a similar honor from Bloomberg BusinessWeek in 2007 and 2008, along with the JD Power & Associates Chairman’s Award in 2002.  JD Powers, who conducted the Bloomberg surveys, found that 87% of respondents “would definitely buy” from USAA again, well above the 36% average.  That support of emblematic of USAA’s market dominance: in 1972 5 of 6 active duty officers was a member, and by 2003, 96% of officers and 44% of enlisted military men and women were members (McGregor).

USAA is also famous for its outstanding workplace; the company routinely is listed on the Fortune Top 100 Companies to Work For list (No. 17 in 2010), and in 2001 was named as one of both Working Mother magazine’s “100 Best Companies for Working Mothers” and LATINA Style Magazine’s “50 Best Companies for Latinas to Work in the United States.”   These accolades were earned as a result of progressive policies and benefits, including a four day, 38-hour workweek, college tuition reimbursement, business casual dress, and childcare facilities (Gale).

USAA was not always considered an attractive place to work; in the 1960s USAA grew significantly to over 650,000 members as a result of the Vietnam War, but it was highly disorganized.  For example, a new insurance policy required 55 steps to be performed in 32 different locations spread across four different floors.   Personnel problems were systemic, and the company suffered from turnover rates above 40% (Gale).  In 1969, Robert McDermott, retired Air Force Brigadier General, assumed the presidency and embarked on a modernization of the company through investment in technology and expansion of business offerings that ultimately made USAA the company it is today.

USAA is successful because of its core business products, provided to its military members.  Its cooperative structure provides financial strength, and allowed it to avoid many of the problems suffered by larger banks in the recent financial crisis.  While USAA now offers some of its financial products to the general public, it remains predominantly a company devoted to its members; the members share in the company’s success, through annual payments to Subscriber Savings Accounts.


Works Cited

“Corporate Overview – History.”, 30 Jan. 2011, Web.

Gale Directory of Company Histories, “USAA.”, 30 Jan  2011, Web.

LexisNexis Academic Company Reports.  “USAA.”  30 Jan. 2011, Web.

McGregor, Jena. “USAA’S BATTLE PLAN.” BusinessWeek 4168 (2010): 40-43. Academic Search Premier. EBSCO. Web. 30 Jan. 2011.

VanderMey, Anne.  “USAA succeeds in retail banking.”  Fortune,, 28 Jan. 2011.  Web, 30 Jan. 2011.


Can we live up to Christina’s expectations?

Ross Douthat looks to the liberal blogosphere today and examines two perspectives on the source of overheated rhetoric.  He compares Paul Krugman’s opinion (“the truth is that we are a deeply divided nation and are likely to remain one for a long time”) to the more pragmatic view of Matt Yglesias (“that we have a kind of furious partisan debate despite the fact that we don’t see large disagreements about the basic principles of welfare state capitalism.”)  Douthat comes down on the side of Yglesias:

“All the sound and fury of partisan warfare is just a way to deceive ourselves into thinking there’s something more important at stake in each election than special interests jockeying for control of the fiscal commons. Our debates are so furious, in this reading, because our disagreements aren’t that significant: We rely on apocalyptic rhetoric about socialism and fascism, tyranny and freedom, to persuade ourselves that we’re actors in a world-historical drama, rather than just interest groups feuding over the spoils of governing a prosperous but somewhat decadent republic… most Americans don’t actually disagree strongly about whether we should have a stronger safety net or a more limited government. They think, in a vague and none-too-consistent fashion, that we should have both at once — low taxes and expensive entitlements, subsidies for me but not for thee, a go-go free market when G.D.P. is rising but a protective government ready to save us from our foolishness when the economy goes bad, and so on.”

Douthat goes on to say that the overheated rhetoric is merely an effort by the minorities of each party on the left and the right to convince moderates that much as at stake.  By Douthat’s logic, the Republican Party opposes the Affordable Care Act and the Dodd-Frank Wal Street Reform Act mainly because they don’t trust Democrats, but otherwise their policy of choice would be similar.  Douthat is right that many Americans want expensive entitlements yet don’t want to pay for them with taxes, but the Republican Party is losing its few remaining moderates minute-by minute.  The problem with his analysis is that the policy proposals of the Republican Party consistently call (since the time of Reagan) for the removal the Federal government’s power, in the words of Grover Norquist, “reduc[ing] it to the size where I can drag it into the bathroom and drown it in the bathtub.”  The Tea Party has taken over the Republican Party, and put in power people like Ron Paul who wants to End the Fed, and who now is in charge of oversight of the Fed.  Health care did not come down to distinctions about abortion and euthanasia: opponents made it clear from day one that they viewed the act as socialist tyranny.  The Republicans simply do not wish to govern from the center.

Which takes us back to the original point.  Douthat claims that the overheated rhetoric is simply political football, practiced equally by each side. George Packer makes clear today that in fact one side makes violent rhetoric an art form, a calling card:

“In fact, there is no balance—none whatsoever. Only one side has made the rhetoric of armed revolt against an oppressive tyranny the guiding spirit of its grassroots movement and its midterm campaign. Only one side routinely invokes the Second Amendment as a form of swagger and intimidation, not-so-coyly conflating rights with threats. Only one side’s activists bring guns to democratic political gatherings. Only one side has a popular national TV host who uses his platform to indoctrinate viewers in the conviction that the President is an alien, totalitarian menace to the country. Only one side fills the AM waves with rage and incendiary falsehoods. Only one side has an iconic leader, with a devoted grassroots following, who can’t stop using violent imagery and dividing her countrymen into us and them, real and fake. Any sentient American knows which side that is; to argue otherwise is disingenuous.”

There are distinct differences between the right and the left; the big problems we will face, including Climate Change, long-term entitlement reform, and resource scarcity, will require elected officials on all sides who are willing to work together.  Unfortunately, the political dynamite that George Packer describes will prevent much from being accomplished in the next two years.  The Republican Party and its Tea Party majority are happy to wait for 2012 and continue their cries of socialist tyranny all the way to Election Day.

A Presidential moment

I am in Vermont this weekend, but I wanted to leave you with this; if you haven’t seen it already, it is one of the finest speeches this President has given, and one worthy of those lost in Tucson.

Capitalism, Justice, and Inequality

In the United States, the concept of the American Dream is accepted as the natural state of order, in which citizens are not tied down by caste, class, or family background, but can go as far as their ambition, initiative, hard work, and discipline will take them.  The growth of the American economy throughout the 19th and 20th Centuries provided opportunities that inspired immigrants the world over to travel to Ellis Island, and nurtured the development and dominance of capitalist economies around the world.  John Rawls, philosopher and author of A Theory of Justice, wrote in 1971 that:

“No one knows his place in society, his class position or social status, nor does anyone know his fortune in the distribution of natural assets and abilities, his intelligence, strength, and the like. I shall even assume that the parties do not know their conceptions of the good or their special psychological propensities. The principles of justice are chosen behind a veil of ignorance. They are the principles that rational and free persons concerned to further their own interests would accept in an initial position of equality as defining the fundamentals of the terms of their association.” (Rawls)

Rawls echoes the idea of the American Dream, that in a free, capitalist society, justice is opportunity, through the effort put forth by individuals, to improve their station in life.  Rawls believed that each individual should have a right to the maximum amount of liberty, but that any economic inequality should be arranged so that they are the greatest benefit to the least advantaged members of society.  In short, Rawls was egalitarian, consistent with the concept of the American Dream.

After the fall of the Berlin Wall and the dissolution of the Soviet Union, economists like Francis Fukuyama, who wrote The End of History and the Last Man, argued that an unending era of prosperity and peace under capitalism was upon us.  However, despite the rapid growth of capitalism during the last 50 years, and despite the end of the Cold War, inequality continues to grow globally.  In the United States, the percentage of total income that went to the top 1% of Americans increased from 8.9% in 1976 to 23.5% in 2007.  In 2007, the combined net worth of the Forbes 400 Wealthiest Americans was $1.5 Trillion, while the combined net worth of the poorest 50% of American households was $1.6 Trillion (IPS). Globally, the Gini Index, which measures the degree of income inequality in countries, shows that the level of global inequality is very high, and has risen during the last four decades (Anand).    This global inequality brings into question the concept of justice espoused by Rawls, and embodied in the idea of the American Dream.  What is it about capitalism that precludes equality?

Successful countries have advantages over developing countries that include superior educational institutions, superior and patented technology, and greater capital that allows for economies of scale and efficiency of production.  These same advantages hold true when you look at income groups instead of countries; even in the United States, the ‘land of opportunity,’ the son of a Harvard educated investment banker has significant advantages over the daughter of a working class family.  A recent examination by the New York Times of the epidemic of law school graduates, unable to find work and saddled with debt, featured a telling quote:

“Many Thomas Jefferson [School of Law] students are either immigrants or, like [Michael] Wallerstein, the first person in their family to get a law degree; statistically those are both groups with generally little or modest means. When [Beth] Kransberger [Associate Dean of Students at Thomas Jefferson] meets applicants engaged in what she call ‘magical thinking’ about their finances, she advises them to defer for a year or two until they are on stronger footing. ‘But I don’t think you can act as a moral educator,’ she says. ‘Should we really be saying to students who don’t have family help, No, you shouldn’t have access to law school? That’s a tough argument to make.’” (Segal)

The problem experienced by Mr. Wallerstein and many other law school graduates is a lack of capital; he overleveraged himself, with the American dream that he would get a job in a high-powered law firm.  Unfortunately, he made a bad bet.  John Perkins, author of Confessions of an Economic Hit Man, has written about the systematic overleveraging of developing nations through massive loans from the International Monetary Fund and the World Bank; like Mr. Wallerstein, those developing nations, such as Panama and Indonesia, were not positioned to undergo the kind of economic development that took place in the United States.  They are inherently at a disadvantage, and stunted by the game that is capitalism.  Unfortunately, the equality that Rawls proposed is not fundamental in our global economic system.  The American Dream, and by extension our globalized economy, is inherently rigged towards those that are already successful.

Works Cited

Anand, Sudhir and Paul Segal.  “What Do We Know About Global Income Inequlity?”  University of Oxford, 2006.  PDF. January 12, 2011, Web.

The Institute for Policy Studies (IPS).  “Inequality By the Numbers”, November 2009, PDF.  January 12, 2011, Web.

Rawls, John.  A Theory of Justice. Cambridge: Belknap, 1999.

Segal, David.  “Is Law School a Losing Game?” New York Times, Jan. 8 2011., Jan. 12 2011, Web.

Ross Douthat misses the point

Ross Douthat, in his column today in the New York Times, makes it clear that the “rush to declare this tragedy a teachable moment” is a liberal, partisan position, one whose validity should be linked directly to the sanity and motive of the shooter.  It should not require an assassination attempt to criticize the intense partisanship and violent rhetoric that dominates our political scene, especially on the Right, with recent calls for “Second Amendment remedies.”  In light of the tragedy in Tuscon, Americans of all political stripes should strive to cool down the shrill, vitriolic rhetoric that populates talk radio, cable television, and political campaigns.  The status quo is simply not acceptable, nor sustainable.

George Packer captures the problem astutely here:

“But even so, the tragedy wouldn’t change this basic fact: for the past two years, many conservative leaders, activists, and media figures have made a habit of trying to delegitimize their political opponents. Not just arguing against their opponents, but doing everything possible to turn them into enemies of the country and cast them out beyond the pale. Instead of “soft on defense,” one routinely hears the words “treason” and “traitor.” The President isn’t a big-government liberal—he’s a socialist who wants to impose tyranny. He’s also, according to a minority of Republicans, including elected officials, an impostor. Even the reading of the Constitution on the first day of the 112th Congress was conceived as an assault on the legitimacy of the Democratic Administration and Congress. This relentlessly hostile rhetoric has become standard issue on the right. (On the left it appears in anonymous comment threads, not congressional speeches and national T.V. programs.) And it has gone almost entirely uncriticized by Republican leaders. Partisan media encourages it, while the mainstream media finds it titillating and airs it, often without comment, so that the gradual effect is to desensitize even people to whom the rhetoric is repellent. We’ve all grown so used to it over the past couple of years that it took the shock of an assassination attempt to show us the ugliness to which our politics has sunk. The massacre in Tucson is, in a sense, irrelevant to the important point. Whatever drove Jared Lee Loughner, America’s political frequencies are full of violent static.”


BMJ slams Dr. Wakefield, and America gains a cricket fan

My wife will be relieved to read to hear this: the British Medical Journal concluded that the 1998 study by Dr. Andrew Wakefield, which linked autism to the measles, mumps and rubella vaccine—a mainstay of public health disease prevention efforts around the world – was in fact an “elaborate fraud.”  Apparently, important details of the cases of each of 12 children reported in the original study  misrepresented the actual experiences of the children, and some of the children showed symtoms of autism prior to being vaccinated.   The distrust exhibited towards doctors recommending vaccines reminds me of the distrust of skeptics towards climate scientists.

On a more positive note, as someone who just recently joined the Twitter-verse (@NavyGreenMBA), the adventures of one Ashley Kerekes, a babysitter from Massachusetts, delighted me.  Her screen name (@theashes) led to a flood of cricket fans writing her with all sorts of requests.  Apparently, a campaign started on Twitter (gettheashestotheashes) led Kerekes to receive an all-expenses paid trip to the final match of The Ashes in Sydney, Australia, where she met the Prime Minister of Australia.  It is a small world indeed!  Andy Zaltzman (@hellobuglers) is undoubtedly hoping this will lead to a cricket revival here in the U.S.A.