Category Archives: Economics

The Insurrection…

Posted on by

It isn’t over yet. The insurrection will not be over until we’ve address the source of the wound and eliminated it. This was a violent planned assault against our democracy. One that attempted to destroyed the results of 50 legally certified elections. They planned to hang Mike Pence they were hunting Nancy Pelosi and we were lucky this didn’t turn into a mass casualty event.

So, let’s take a step back. How is this different than the Black Lives Matter protests. Those had violence too. There was a police precinct burned down. In Portland, they were assaulting the Federal Building! These are all true. However, the goal of the protest was mostly to work within the system to change the system. If you look at Portland, the courts deemed that the city was being overly violent and starting much of the violence rather than the protesters. They were ruled to avoid using tear gas, then it was turned into law. The protest were actually dying down until Trump inflamed them by sending in unmarked vehicles into the city.

Sure, you might be saying, but that doesn’t excuse the violence. You’re right, Straw person. Violence isn’t excusable and the city of Portland is experiencing some serious tension between the people of the city, the businesses in downtown, and the city officials. One thing we need to look at, is that many of these larger businesses are part of the larger system that drives the prison pipeline.

In Minneapolis, the Target that was burned down, was trialing a specific AI based tool to determine if someone was shop lifting. It was often wrong. So Target itself was a source of an increase in false arrests and increase of interaction with police.

Furthermore, the BLM protest was a protest against state violence against a specific set of people. Which didn’t stop during the Pandemic. The data indicates there is a racial bias against people of color, specifically black men, in police stops. See the YouTube video below.

So, in the case of BLM protests, it is the protest of the oppressed against the oppressors. The state has a bias against a group of people and those people are trying to make it clear to everyone involved they are being oppressed. The violence against them is an effort to keep that power over them. That’s why the state rejects these efforts so violently.

What we saw at the Capitol is something different. It is the dominant group, losing their position of dominance or at least perceiving the loss of Donald Trump as the loss of that dominance. The system was working as intended. Republicans, in general, turned out in massive numbers. The Democrats, just came out in larger numbers in many areas. Trump lost by a landslide, but has been lying about his loss. He’s made a decision that he wants to stay in power and a group of white supremacists have decided they want to keep him in power.

Furthermore, many elected leaders, like Josh Hawley and Ted Cruz (among 120+ members of the house) have decided to keep Trump in office or use this as a chance to win election in 2024. These leaders primed the mob to actually do something about the election results. If you have any doubt about that, please read this twitter thread, digging into the propaganda of Trump’s speach.

So, now that we know this was a planned event to illegally overturn the election results through an insurrection, what do we do next? We need to learn from our failure during the Civil War reconstruction (see my blog on White Rage) where we, as a country, completely failed to prevent a long slow cold Civil War. The other places we should look are at other countries that had mixed success dealing with their coups, like Japan.

Given that we’ve already had reports of additional events, supposedly today (1/10/21) in NYC, events on 1/19/21, and likely 1/20/21 to disrupt the inauguration, this insurrection isn’t over until it’s either successful or we put it down for good. That may require structural change to how we think about the United States including meeting some of the demands of BLM protesters.

Book Review: Race After Technology: Abolitionist Tools for the New Jim Code by Ruha Benjamin

Posted on by

Race After Technology: Abolitionist Tools for the New Jim Code by Ruha Benjamin

My rating: 5 of 5 stars


This book builds on the research in Algorithms of Oppression: How Search Engines Reinforce Racism and Dark Matters: On the Surveillance of Blackness, so I definitely recommend reading those two books first. I’m not alone in that, in one of the talks I’ve watched Benjamin give, she explicitly mentions those books as influencing her. I really enjoyed this book, it brought together ideas from my own master’s degree, including the complexity of how technology is used. In one class we specifically discussed the Moses’s bridges in New York (despite this being taught in the Netherlands), which were designed to exclude the poor by preventing buses from crossing the bridge. In this book she discusses this bridge and how it can pull in the very people that were expected to benefit the bridge design (basically a bus full of rich white kids went across after they came back from a trip to Europe, the driver hit the top of the bridge which resulted in 6 people getting seriously injured).

She modernizes these examples by describing how algorithms are created to approximate details about people, such as determining their ethnicity to provide “targeted services.” Due to historical redlining, the practice of creating white people only enclaves in suburbs and portions of the city (a Jim Crow era set of laws), the zip code has become a reliable indicator of ethnicity and race. She gives the example of Diversity, Inc., which creates ethnicity or racial classifications for potentially hiring companies. They will look at the names of people and assess their ethnicity, however due to the history of slavery, many African Americans have white sounding surnames, like Sarah Johnson, to “correctly” identify the ethnicity of Sarah, the company uses her zipcode to assign her race.

Overall, I found a lot of examples in this book very illuminating. Benjamin finds the approach to Design favored in Silicon Valley wanting and excluding, primarily focused on empathizing for making money, which in many cases is empathizing with whiteness. Furthermore, Benjamin argues that empathy can lead skewed results, such as body camera video providing empathy for police officers even when they are killing Black people for crimes which aren’t capital offenses or no crime at all.

As an engineer, I took this book as a warning. That we need to understand how data is impacting those around us. That we need to understand how data that might seem harmless to me, could cause serious harm to someone else. That algorithms that seem to be doing good, could instead be quickly turned into something bad. Facial recognition is a great example. Facebook tags people in photos without consent and this can be exploited by law enforcement. Furthermore, since facial recognition software is so inaccurate, it can misclassify a person as the wrong sex, the wrong person, or in extremely bad past cases, as an animal.

Furthermore, engineers have the responsibility to ensure our work is used to create more equity in the world. Benjamin offers a few different organizations that are working to ensure justice and equity for everyone. Maybe it’s time that software engineers/developers have a responsibility for this the same way a civil engineer must ensure a bridge is safe.

I recommend that anyone that works at a social media company read this. Anyone doing work for algorithms in banks, insurance, hiring, and housing really understand the fact that algorithms aren’t objective. They are as objective as our history. Our history hasn’t been objective nor equitable. We must change that.



View all my reviews

Banning TikTok Will Blow Up in US Politicians’ Faces

Posted on by

Leaving aside the various reasons why Trump would want to ban TikTok, which are almost entirely self serving, we need to take a step back and look at how banning an app from China could negatively impact US companies and if that’s a good thing or a bad thing.

First, TikTok is a short video app that allows people to make both simple and sophisticated videos. Some are edited to present an entire scene others are just short videos of live action. They can be used for political commentary or just for humor. This isn’t the first App like this, Vine was the original TikTok and was widely popular, but Twitter was unable to monetize it, so they shut it down. Instagram has Instagram Live, Facebook has an app like this too.

However, the big difference between those apps and TikTok is that TikTok may have influenced the Tulsa rally and made Tump look back. The OTHER difference is that it’s owned by a Chinese company. There some fears that this means it will be used by China to collect information on American citizens and shared with the Chinese Government to do something back to our citizens. There’s “fear” that TikTok will influence the election in some fashion and will be, ultimately, influenced by the Chinese government.

To be clear, just about every social media company has to share information with their government. There’s currently an ongoing law suit in the EU about US social media companies and if they properly shield EU data. With that ruling, there are serious question if social media companies can send any data back to the US, since the US government routinely gets access to the data. That the US Government is a huge problem when it comes to social media companies.

Given that the US is looking to ban TikTok for something very much like what the EU just ruled that the US is doing, should give lawmakers pause before banning any other country’s social media platforms. If the US does something like this unilaterally, without going through any third party organization, like the WTO, then other countries may take that the opportunity to do the same for any company from a country they don’t like. If it’s good enough for the US, it’s good enough for us!

Furthermore, this flies in the face of the Neo-liberal economic framework the conservative movement in the US purports to support. Rather than government regulation, they should be pushing for Facebook, Twitter, and other platforms, to compete against TikTok and defeat it in the market place. Given that they are instead resorting to regulations, indicates the fact that they are being opportunist here and simply doing this for political reasons. As it is something of a political platform for young people.

Additionally, since there are at least two known cases of Facebook actually influencing elections through external meddling, the US 2016 election and Brexit vote, it is likely that Facebook represents more of a threat to any given government than TikTok. Though, all platforms can be turned into a disinformation platform if enough actors decide it should be turned into a disinformation platform.

It should be viewed as likely that other governments would move to ban US based social media companies and services, like Google and Amazon because of their closeness with the US government. Amazon provides an AWS platform for the CIA and other three letter organizations.

Of course, this might all be moot, because it’s not obvious that the US government can even ban TikTok, as it IS such a huge platform for free speech. Regardless, keep an eye out for other countries taking a lead from the US government after TikTok is banned. It is likely that dictatorships will leap at this chance.

We should not ban TikTok. We should create laws and a framework that requires businesses to strongly protect user data on any social media platform regardless of if it is US based or foreign. We should expect to see more innovation from othe countries over the next few years and that Facebook, Amazon, Google, Twitter, and Microsoft will all experience strong competition.

A Post Crisis, Economic Recovery and Crisis Mitigation Proposal

Posted on by

In my last post, I argued that Supply Chains increased the spread of the COVID-19 Pandemic. I proposed the idea of regional centers for manufacturing to minimize sprawling supply chains and to encourage local innovation to meet different needs based on those regions. I think I need to take this to the next step. Localizing ability to respond to crises. Obviously there are huge benefits to scaling manufacturing capability during times of stability and crisis alike. The cost of making a single N95 mask is much lower whenever you know you’re going to crank out another 100,000 masks over the next few weeks. Because the cost of all that capital equipment is spread across all the masks.

However, because of the centralization of these manufacturing centers, in many cases in China or South East Asia, this creates a supply issue if the entire world needs the exact same thing. This requires a strong central buyer to compete on the market to buy additional supplies. In the US that should be the Federal Government. Sadly, this hasn’t happened and in fact, the President is playing favorites with states and providing medical supplies. This is hugely problematic. However, there’s an opportunity here to protect states in the future from an outbreak and to rebuild the economy.

I propose that states, let’s go with Oregon, cause I live there, creates regional innovation and manufacturing centers (OIMC – Oregon Innovation and Manufacturing Center). These OIMC should be positioned at least one per country, but carefully to ensure that if there’s a critical event, such as a Cascade Subduction Event, the region will have an OIMC on each side of the event. In the Portland Metro Area we’d want one in Easter Portland and one in Beaverton or Hillsboro. Furthermore, these should be located in such a way that if a tsunami hits the coast, an OIMC can double as a shelter and emergency production center.

The goal of the OIMC at the surface would be to manufacture critical items during a crisis. For example an OIMC would have the inventory to build ventilators, N95 masks, disease test kits, materials to stop flooding, fight fires, or whatever major crisis emergency items that might impact that specific region. For example, Roseburg might have more items to fight forest fires than the Portland region, because of the types of crises that impact that region. The list of items should be defined by a combination of FEMA and that state’s emergency and health agency.

However, we can’t just have an OIMC doing this sort of work. There aren’t enough crises (thankfully), to warrant establishing a dozen or more of these locations. That’s why these aren’t just Crisis Manufacturing Centers, these are innovation centers. They become a low cost rental space for businesses to start. For example, you want to open a welding shop but can’t afford the cost of equipment, hiring people, managing books, and the cost of a place to rent? No problem, the OIMC will offer business loans and services to manage HR, your books, sales, and provide a no cost then low cost rental location. You have trouble hiring people with the right skills? No problem the OIMC will offer year round training sessions on a variety of tools. It will have to because it will need to have all the skills to make those critical items.

Wait a minute, won’t the OIMC be competing with other companies? Yes. However, whenever we are not in crisis the OIMC can become flex capacity that companies can rent out until they have the capital they need to expand their business. So, during normal time the State of Oregon is not competing with medical suppliers. They are place that offers services instead. This will allow the OIMC to essentially pay for itself.

Furthermore, these centers offer an opportunity for the region to develop and build technologies they need to support themselves. Given the cost of some farming equipment, the OIMC could elect to manufacture some lower cost farming equipment in really hard hit regions. There are some blueprints at Open Source Ecology which can provide an idea of what we could build, if we need these OIMC to provide a lot of capability during a short time.

Holistically, I think this approach can provide flexible manufacturing capability during a major crisis that will allow states and counties to meet their need when the entire country is stressed at once. It will provide regional support during times of emergencies, which seem to occur more and more frequently, and it can provide an opportunity to rebuild communities by offering skills and spaces to start new businesses. Everyone is going to be hit hard by this pandemic. We need a serious plan for addressing this.

Supply Chains Increase the Likelihood of Pandemics

Posted on by

I think in general the way we respond to this COVID-19 (Coronavirus) pandemic will position us to manage the next pandemic. I know that isn’t something anyone wants to be thinking about as we’re barely into this pandemic. Deaths are rising. We have political leaders making choices around managing the stock market which isn’t the economy. If you want proof of that look at the stock markets response to 3.3 million unemployed in a single week in the US. The Dow Jones Industrial Average increase by 17%.

By having ample supply for treating patients and building strong robust processes we can manage the current pandemic. We can minimize the impact to the overall economy and come back stronger than before. Especially if we make some structural changes that make the direct impact of getting sick survivable. This article isn’t about what those should be.

Instead I’m looking at the forces that increased the likelihood of spreading this disease. Shareholder Value, or more precisely the impact that focusing on shareholder value had on business decisions. Since the Friedman Doctrine was introduced in 1970, we have a steady movement for outsourcing and offshoring. Both of these helped reduce the direct labor costs and environmental regulatory burden on manufacturing companies. It’s helped economies like South Korea, China, Taiwan, portions of Eastern Europe, and most of South East Asia move dramatically from a more agrarian and textile economy – similar to what we see in Africa today – to a modern economy. We can see this through trade, Cesar Hidalgo has dome some amazing research on this and I highly recommend reading his book Why Information Grows, because he outlines some of the reasons why economies mature over time from agrarian to producing semiconductors.

To summarize it, it all starts with trade patterns. You are able to see the knowledge gain in specific sectors in how the trade patterns evolve over time. For example dye making eventually leads into manufacturing pharmaceuticals and other chemical businesses. Eventually this leads to the capability to manufacture semiconductors as all of these use the same sort of fundamental sciences. Hidalgo argues this capability has to mature over time and local expertise must mature. Through the types of items a given country exports we can see how that knowledge is growing and changing over time. Eventually, these countries will create their own businesses to compete with mature companies.

This last part isn’t much of a surprise for anyone that’s read any of the Innovator’s Dilemma books. This is a common practices of dropping “value” functions to lower cost countries and companies from those countries. AsusTEK is an example of this. They started as a supplier to Dell and eventually pushed Dell (for a time) out of a number of markets. In some markets Dell hasn’t been able to reestablish itself and likely never will.

So what does all this have to do with a pandemic? Well as we increase the amount of trade with countries outside of our own region we increase the amount of connections between our country and that country. Those connections must be maintained by people. Since China is a significant trade partner and has manufacturing capability spread out all over the country, it was inevitable that a virus in one part of the country spread quickly through out. In fact the highspeed rail made it incredibly likely. Furthermore, with all the manufacturing in Wuhan, that increase the likelihood of people outside of China coming in contact with the disease.

Since our business leaders have decided to invest so heavily in China, we have something of a weakspot in our supply chain for any future pandemic that starts there. However, for other countries the US or portions of Europe would equally be as likely as source of pandemic source. There’s just a lot of business being done in these countries.

The larger problem will be that because there are zones of high concentration for specific industries in specific countries, that people will be traveling very frequently to those areas. How do we address this, since this is basically what trade is all about.

Well, I think that there’s a solution in the idea of regional production capability. For example, Zara has a lot of regional locations for manufacturing. This can help with supply across both that region and other regions for when there’s a crisis. This minimize the economic impact on Zara as the the crisis moves across the world. Furthermore, this is a good business strategy because regionally disparate countries have different fashion tastes and desires for a given time of the year.

In other cases, the idea of Reverse Innovation can play a key role in this. Reverse innovation is where creating a product that’s profitable in, say, rural India, could be brought back to a place like the United States and sold for an even larger profit. This allows for continually lowering costs, as the product itself would naturally be cheaper, and probably lower total cost of ownership, as the Indians using the equipment may have different skills or tools available and may not be able repair the high tech stuff we can in the US.

An example of where this approach would be highly beneficial to the entire world is with Ventilators. In the US a new one can cost upwards of $25,000, which is obviously out the of the price range of most hospitals in Rural India. If you make on cost effectively in India (which MIT just released plans for a $100 ventilator) you could make it very affordable and would easily allow governments to create stockpiles. It would also allow businesses to quickly tool up and make them, since it looks like they use off the shelf parts.

If business leaders and governments focus on regionalizing supply chains and encouraging reverse innovation, we can work to slow the effects of the next Pandemic. We’d be more positioned to flex supply to meet the increase of demand during the crisis. We’d reduce the amount of travel to potential hotspots, as fewer people would need to travel internationally to meet with suppliers. No more long haul trips to Asia for most people.

In the end, we’d end up creating more share holder value doing this, because we’re meeting customer demand while continually improving products and responsiveness to changes. We will have another pandemic. We will have other market crashes. Planning for them during this one will reduce the impact of the next one.