One of the most basic problems with a market economy is that it values goods and services essentially on their cost of procurement and not upon their importance to society, or even to survival.  For survival, for example, two of the most basic goods are air and water.  Without air, we would die within minutes, without water, within days.  Yet in any market economy, there is no charge for air, and an ounce of gold, which has no intrinsic value at all, will cost somewhere over $1,500, while an ounce of the most expensive bottled water might cost five cents [fifteen cents in New York], and tap water, in my area, costs about a tenth of a cent a gallon.

The same discrepancies occur in paying for services.  Both society and individuals can exist without hedge fund managers, who are, as a category, about the highest-paid individuals in U.S. society, and who collect salaries/bonuses in the million dollar plus category.  On the other hand, firefighters, police officers, and teachers, who are vital to an organized society, have among the lowest salaries of skilled professionals because they are public employees and considered easily replaceable.  What essentially determines those relative salaries are two factors – how much income an employee generates and what it will cost to replace him or her.  This is the bottom line of the business model so often touted these days by politicians and business people.  And from a profit and economic basis, it makes sense – but only from those bases, and often, only in the short-run and only to the specific organization.

What market economics ignores is the value provided by those “cheap” and “replaceable” people. Without teachers, those high-paid hedge fund managers would be even harder to find, because there wouldn’t be enough educated people to spare any for complicated financial dealings.  Without firefighters, sanitation workers, police officers, and other public infrastructure employees, cities as we know them in the Europe and the western hemisphere would become uninhabitable… or at the very least, warrens of filth, squalor, and crime.

Even within the business community, the heads of companies often do not know the return on their investment in their employees.  A year or so ago, I ran across a study on retail stores that concluded most large retail establishments would be more profitable if they hired more staff, rather than less.  It’s anecdotal, but my wife and I came up with five separate occasions in the last month or two when we went somewhere to purchase a specific item… and left without purchasing it because we couldn’t get service, not even a polite, “I’ll be with you in a minute.”  I’ve watched people walk out of restaurants because they sat there for five or ten minutes without seeing a server.

Now… the latest “buzz” in education is the need for more professionals in the STEM [Science, Technology, Engineering, Mathematics] areas, and politicians have even proposed charging students more for university courses in curricular areas where there are fewer jobs, such as the performing arts, history, and philosophy.  But, of course, I haven’t seen any move to raise tuition or cut faculty salaries in law and business, where we now suddenly have far more graduates than jobs for them.  The fact is that a society needs a wide range of abilities and skills, and the scarcity of skill or a job shouldn’t be the only factor in determining what it pays.

But then, to pay more for people who provide vital functions, in order to get better individuals in those fields…. how shocking… how… uneconomic… how at odds with the business model.

Maybe I’m old-fashioned, but when people talk about rich, I get an image of someone who has a 10,000 square foot mansion or an enormous penthouse in Manhattan, or their own private jet, who drives a car that costs more than our house and whose vacations are often on private islands or on yachts the size of a Navy destroyer.  That’s what it means to be rich.  And I think most people have similar ideas.

That may be why more than a few people I know were incredulous when President Obama declared that couples who make more than $250,000 a year were “rich.”  The general consensus among them was that families that made $250,000 were comfortable, even in some cases fairly well off, and possibly upper-middle class… maybe.  But rich?  No way.

One couple pointed out that while their house was paid for, it had taken 20 years, and that it wasn’t exactly a mansion, but a raised ranch of 3500 square feet with a modest two-car garage on a half-acre lot in a nice neighborhood, but certainly not one filled with mansions or even McMansions… and that she and her husband had only taken one vacation in the past ten years, and that their cars, a four year old GM Denali and a twelve year old RAV, while also paid for, were not exactly luxury vehicles… and that the rest of their possessions were similar… and that what they had saved for retirement might provide them with a comfortable but even more modest lifestyle than what they now enjoy.

Another couple just laughed. They both work in Manhattan, and their combined income, I’d estimate, is probably a little over $200,000. They can’t afford to live in New York itself, not in anything other than a shoebox, and instead own an 1800 square foot co-op apartment – definitely not a luxury one — in the suburbs north of the city and commute to work by train.  Again, they’re certainly not starving or impoverished, but any reasonable person might find it difficult to insist that they are on the borderline of being rich.

I could give example after example of similar instances, of couples making $200,000 – $300,000, who may be well-off, but are anything but rich.  They don’t own a Mercedes or a Rolls-Royce.  They don’t travel first class on the Queen Mary, or have luxury skyboxes at the Superbowl, or millions – or even tens of thousands of dollars – stashed away in Switzerland.  And they don’t squander money on anything.

Now, I know that the IRS statistics say that only something like two percent of the population makes more than $250,000, and only one percent makes more than $450,000, but those numbers can be misleading.  To begin with, there’s a significant difference between income and wealth, and between sources of income.  For example, compare a businessman or a doctor, or a two income family that makes $250,000 a year to an heir or heiress getting the same income from sitting on $20 million in tax-free municipal bonds.  A couple that averages $200,000 in income for 40 years would have to save 25 % of their pre-tax income every year [and closer to a third of their after-tax income] to put away two million dollars… and even with compounding of those assets, they’d likely only provide a retirement income of $50,000- $75,000. That’s certainly comfortable, but rich?  And even with Social Security on top of that, it’s barely middle-class in places like New York, San Francisco, and other high-cost cities.

Rich at $250,000 a year?  I don’t think so, not unless someone can explain how you can have a mansion, a Mercedes, and a private jet on that… and not end up in jail for theft or tax evasion.

Several weeks ago, and perhaps it was longer, one commenter made the astute observation that technology magnifies everything, both the good and the bad. I think that’s definitely true, but, based on reflection and more recent observation, I have the definite feeling that it magnifies some things more than others – and incompetence is one of them.

What’s the basis for this conclusion?  Human nature… and the fact that incompetent actions have a multiplier effect, and when that multiplier effect is magnified by technology, incompetence has a disturbing tendency to spiral into ever greater incompetence because, at least at present, most computer systems are designed to carry out instructions with great efficiency and speed, and if the instructions or the programming are flawed, the magnification of difficulties or ineptness can quickly result in enormous problems.

The great financial meltdown and the ensuing recession from which we still may not have emerged is one very good example. Without computerization and sophisticated software, the development and management [such as it was] of securitized derivatives, CDOs and the like, simply would not have been possible.  Add to that the consolidation of the banking and mortgage industries, and their centralization with decisions being made by a few, again a situation not possible without high technology.  Follow up with sophisticated and high tech profit models, and top off with nano-second securities trading technology.  At that point, we had a highly concentrated and centralized structure where bad decision-making, a lack of competence in understanding what those computer models meant, and a poor understanding, if any understanding, of some basic economics could combine to bring down the entire economy.  And that is exactly what happened.

The lithium-ion battery fiasco with Boeing’s 787 Dreamliner, which could easily have become a disaster, is another example of how technology misused, I venture, can multiply incompetence. Several aviation battery specialists have made the observation that lithium-based batteries have a tendency to overheat if, first, the individual batteries are too large, and, second, if their architecture [i.e., the way in which they are arranged and interconnected] is not well-designed, and, third, if they are overcharged, although so far the third condition does not appear to be a factor.

There are also innumerable simpler forms of technologically multiplied incompetence with often disastrous results, such as the simple combination of cell-phone texting with the operation of an automobile, particularly when the operator’s skills are marginal, in the case of teenage drivers or of tired or distracted drivers.  Or the 80 to 100 car pile-ups that seemly happen routinely anymore because of the combination of incompetent driving [driving too fast for the conditions] in fog or snow. Somehow, I doubt that there were ever hundred-carriage pile-ups.  And how many product recalls have we experienced because of manufacturing or design failures multiplied by the technology of mass production?

Incompetence in data-processing/computer systems is another area where a small incompetence can be multiplied a million-fold.  As I noted in an earlier blog, Delta failed to renew its online website security system, and for two days thousands, if not hundreds of thousands of customers could not make reservations. A software error in the Utah Medicaid system allowed hackers access to personal information of over 700,000 thousand people and the Social Security numbers of more than 280,000 individuals.

Now, the optimists will say, “But look what good technology does.”  I’d agree, but technology’s greatest asset, these days, seems to its efficiency in replacing people, and cutting costs, far more than multiplying benefits.  Yet those people, especially good competent people, are, for lack of a better term, often the circuit-breakers who stop the magnification of incompetence.  So, at present, technological systems are optimized for, if you will, magnification of whatever they do.  That means doing more with fewer people and less oversight and supervision, since one of the areas of employment that’s taken the biggest hit is middle management… and that includes people who can actually solve problems.

Just look at computerized telephone answering systems. If your inquiry doesn’t fit in the proper “box,” it may take what seems like forever to get an answer – if you can at all… and that’s another form of incompetence, magnified by technology.  Now… I may be overcritical, but, all in all, I’m seeing incompetence and outright criminality magnified far more than benefits.

What about you?

Why are so many, if not most, of the news stories about things going wrong, about murders, serial killers, earthquakes, child molesters, kidnappings, and the ugly side of life?  Why does most television/satellite entertainment focus on crime and other forms of ugly sensationalism?  Why do reporters and so-called journalists attempt to get the dirt on anyone and everyone?  Why does almost every public figure have to worry about photographers with telephoto lenses catching them or their children in a private or embarrassing moment?

The simple answer is, of course, that these things sell better, and better ratings mean higher advertising dollars, and because the United States, in general, values more dollars above everything else, the entire media spectrum is looking for the most sensational stories and views. And almost invariably, ugly is more sensational than beautiful – with the one exception of beautiful people, usually women, and usually depicted in ways that are close to pornographic.

But there are a few other reasons, I think.  One is that “ugly” is easy.  Doing something well is difficult.  Creating something inspiring and beautiful is anything but easy. There are ugly stories everywhere, and capturing them doesn’t take that much effort.   Just look at the news  — ugly, violent, ugly, and, oh, yes, one feel-good story for dessert. As far as dramas and comedies go, writing shock-value, in-your-face episodes takes far less talent than does writing something sophisticated or nuanced.

Obviously, that’s not anywhere near the entire reason, because writers and producers wouldn’t produce such well-packaged and expensive productions based on the ugliness in life and human nature if they didn’t sell.  So… why do they sell?

Because people want to feel good about themselves, and in this dumbed-down mass media world in which we live, writing and producing anything that requires thought on the part of the audience limits that audience because people who truly think are in the minority, and when one requires the majority to think, they either get unhappy or bored because they can’t understand it, or angry because it’s not what they like.  Yes, there are some shows and movies that do exalt and display excellence, but all too many of those get poor ratings or are slotted for niche times and markets.

Then, too, there’s the problem of identification.  Characters in mass entertainment can’t show too much excellence – except in the area of sex and mayhem – because people can’t identify with excellence, except, again, in sex, athletics, and violence.  Most people know they aren’t excellent and don’t want to be reminded of that fact.

Now… these are facts and traits that have existed with people for tens of thousands of years, and certainly for the last few thousand. So why are things so bad now?

In some respects… they aren’t any different from what they always were.  Even in the western hemisphere, we’re not all that far removed from torture and executions as public spectacles, and certainly, we’re no strangers to the violence of war.  What has changed, however, is that the media have depersonalized the ugliness that occurs while simultaneously removing it from life.  As someone who has seen people die in front of me, and, in other cases, almost die, I can say that such personally experienced violence and death hits one with a far greater impact than anything that can be depicted on a screen, large or small, as witness the amount of PTSD cases created by war or sustained violence.  By depicting such violence and ugliness as entertainment, presenting it as a step removed from personal experience, if you will, even while calling it real, or a reality show, the media have diluted the impact.  So… in order to increase the impact, they compensate by increasing the ugliness or in-your-face components… until people get used to that, and then they do it again.  And this bleeds over, literally, into other areas.  Baseball was once America’s pastime and favorite sport. Now, the favorite sports are the ones that are far more dangerous and violent, and some sports that were largely about skill and technique, such as basketball, have become often violent contact sports.

In any case, for whatever the reasons, ugly is easy… and profitable, and that’s something I find disturbing and sad.

Apparently, at least eleven U.S. senators and a number of news organizations are concerned about the U.S. use of drone aircraft to kill individuals or small groups whom the Administration determines are a threat to U.S. security. Like most thinking individuals, I believe in checks and balances and Constitutional limitations on the power of any one branch of government, having witnessed and lived through periods of both Congressional and Administration abuse of power, not to mention having concerns about that potential from the Judicial Branch.

Two particular concerns raised by these individuals, however, concern me just as much as the possibility of Executive Branch abuse of power does. The first concern is the idea that an American citizen abroad plotting terrorist activities is somehow different from any other individual plotting terrorist activities. A related concern that has been expressed by some is that the memos being sought allow the president the “power to kill” any American anywhere with no oversight and no legal process. The second major concern is the idea that somehow drone attacks away from the battlefield are in themselves wrong.

What has led to these concerns is that the nature of war and conflict have changed, or rather war has changed, perhaps regressed, from an almost formal pattern of conflict that prevailed for centuries to a wide range of the use of force, including the possible use of everything from terrorism and counter-terrorism to the possible employment of nuclear weapons on a civilization-destroying basis. And neither tactics, strategies, nor legalities have totally kept pace.

All that said, I’m sorry, but a terrorist is a terrorist, regardless of nationality.  There may be very good reasons to limit drone attacks on individuals, but whether the target is an American or a foreign national is not one of them. At the same time, allowing the precedent of targeting an American citizen without due process raises another question.  When and where does an American citizen become an enemy combatant?  Saying that the president or the armed forces cannot attack or kill an American citizen plotting terrorist acts against Americans and others without a warrant is ludicrous, but allowing the president or the government authority to kill expatriate citizens, or other citizen, or for that matter foreign nationals, without defining the conditions that justify such actions could easily allow the “legal” transition to a type of police state.

The question of allowing drone attacks is, at least to me, somewhat less problematic.  There certainly are areas and places and individuals against which drones should not be used, for any number of good and legal, not to mention moral, reasons, but in a world where terror can and has struck anywhere, where terrorists and those supporting them do not limit themselves to a defined battlefield and never will, the idea of limiting the use of drones to a defined battlefield is not only absurd, but also runs the considerable risk of resulting in the killing of not only more soldiers but more civilians.  If one cannot use drones away from the battlefield, then what are the options left to the government?  Terrorists do not respond to negotiations, if indeed, they could even be found for such negotiations; they just want their demands for power met, and virtually every terrorist group ends up killing and oppressing others when it obtains power.  If drones cannot be used, then governments must either do nothing or use other means of force, and that usually means either economic sanctions or boots on the ground, both of which fall disproportionately upon the innocent.

Both of these concerns, if carried to extremes, reflect a certain naiveté, if I’m being kind, or a willful blindness in the service of ideology, if I’m being more honest.

Is there that much difference between someone who shoots someone in a gang war or a robbery and someone who shoots innocents in pursuit of political power?  In either case, people are dead because someone wants something and believes they can get it in no other way.  And in the United States, we have plenty of American citizens, unfortunately, who kill to get something, whether that something is fame, glory, material goods, revenge, or to take their anger out on others. While we do have means to deal with such individuals, assuming we can discover and apprehend them, those mechanisms do not operate overseas, and many countries, especially in parts of Asia and the Middle East, are either actively or passively endorsing terrorists.

The Senate is right to look into the policies adopted and employed by the military and intelligence agencies, but to insist on pre-conditions that exempt all Americans from actions to preclude terrorism or those which may effectively leave our government with no effective way to deal with terrorists in certain countries is anything but wise.