Month: May 2022

Since the Reagan era there has been a large move away from the federal government. As he so eloquently said “Government is not the solution to your problems, government is the problem”. Though I am personally not a big Reagan fan, I have to give credit where credit is due as his influence on our country was immense. Not all of it good. His ideas officially ended when Donald Trump was elected. But the conservative movement without him would have been nothing. A big part of Reagan was shrinking federal government, but to be realistic though the attempt was made to shrink the federal government, the problems that governments deal with were not destroyed. They were just transferred to the states, which in many ways made sense. States are not like Federal government they have to balance the books, they do not have the Federal Reserve, they cannot print dollars and issue T-Bills. They can issue bonds, but these are passed by state voters. As I write the sidewalks I voted on several years ago are finally being made, through bonds the city of Shoreline issued. Is doing things at the state level a good thing, it all depends on the issue.

People in the country are always moving, in fact since 1492 people in the US have been moving as the country expanded. Before independence we had pioneers. People moving west, before and after independence. Seeking new opportunities, seeking new lives it was the spirit of the frontier (it also was in the spirit of genocide of native Americans). It was romanticized in print and later in film. In current times that spirit still exists as people exit cities like Detroit and Cleveland going to where opportunity is available, cities like Seattle and Austin. We are a entrepreneurial country, Ford is now replaced by Amazon and Microsoft. As Ford exported its economy so a new one was needed to be built, but that is something America excels at. In many ways the spirit of the pioneer lives on in America, to be honest it is just part of the American DNA.

Early on in COVID-19 the idea put forth by the Trump administration was to put the onus on the states. Let them battle out for supplies and the Federal government can play back up. Quickly we discovered since it was a new virus and we were not prepared. Early on it was ventilators, some states were ahead of the curve when it came to the spread early on of COVID-19. New York needed ventilators and requested help form other states, the ugly side of this being New York could only count on blue sates to help. Other states needed to rely on contacts. to get necessary supplies. Maryland’s Governor Larry Hogan leveraged his wife’s South Korean roots to get COVID tests as the Trump admin was unreliable. As they went to market states competed against each other for supplies. While people were suffering and dying the federal government turned a blind eye. There are certain problems that come about the that only the weight of the federal government can solve as they have the resources. They have access to money that states do not, states by definition have to be fiscally conservative. They have a military that understands supply lines and how to quickly create and facilitate. They can coordinate at a national level and focus on areas with urgent needs. All things that a state just does not have access or visibility to.

Now we come to another divide as it looks like the Supreme Court will overturn Roe v Wade and pass responsibility to the states. Some of the arguments I have to admit are head scratching, I guess I am not inline with the “originalist” views of the constitution. Yes abortion is not covered in the original document. Nor were women or black people (refer to Dred Scott). But what really concerns me is how differently woman will be treated depending on what state you live in. Those who are hurt the most are the most vulnerable, the poor and the uneducated. Neighboring states will also be affected. Idaho will trigger one of the most extreme abortion laws if and when Roe v Wade is overturned. Idaho accounts for 5% of abortions in Washington State, that number is expected to increase by 385% should the new abortion law be triggered. There will be a corporate effect as companies opt to move out of states they view as less supportive of their female workforce. Roe v Wade usually comes in at 65% for and 35% against, but in hi-tech companies with educated and a growing population of female employees I would think the number is even higher (Microsoft has already announced it will fly woman who need an abortion at companies expense) .

When I look at this I am not sure we have thought through the long term ramifications of pushing more and more responsibility to the states. But once Roe v Wade is overturned, given we have a very right leaning Supreme Court what is next? I think a likely target will be same sex marriage. People think we can push more and more down to the states. Like it or not what we are promoting is division as a nation. You will have states where you are not welcome based on your political views. The issue wit States determining personal freedoms is you are going to have a patchwork of freedoms across the country, no uniformity. Literally as you drive across states you could have gay marriage in one, none in the other , no interracial marriage in one, transgender rights in one etc…Then how those laws are enforced and severity of punishment will differ. In the end it will be utterly confusing and unsustainable. The only winners will be attorney’s. If I had a law degree I would focus on confusing issues as that is where the money is.

Increasingly we are becoming narrow minded and isolated in our residence of choice. People move to places where the state government and people are inline with their views. Today’s America sees its citizen retreating to what they view as safe havens. In the long run this will not make for a stable democracy. We are transitioning from blue states and red states to ice blue states and blood red states. We are becoming extreme. Where depending on your political outlook you will either be received with open arms or thrown back to whence you came. The cost will be freedom, ironic for a country that was built on those word, but at the same time hopefully we can appreciate the meaning. Right now I am not so confident. As former Secretary of State Madeleine Albright said “In the long run democracy is the most stable form of government, in the short run it is the most fragile”.

Good Night and Good Luck,

Hans Henrik Hoffmann May 11, 2022

We have seen tremendous technological change in the past 30 years. With every year new possibilities emerge, new opportunities. The buzz words fly by faster than we can take hold of: AI, Quantum Computing, Machine Learning, the Metaverse, Robotics etc.. Things that seemed impossible yesterday now are within the realm of reality. So much of today was what was once only a twinkle in the eye of the latest science fiction movie or novel. Now the idea or creating human forms with Artificial Intelligence is within grasp. Our ability to do gene editing with tools like CRIPR and accelerate the development of cures for diseases like cancer are within reach. The Quantum realm is in play and companies race ahead looking for answers to algorithms that usually take decades to solve into minutes . The Metaverse is about creating human connections without having to physically connect. And yet with all these new breakthroughs come huge responsibilities. Can we control what we create? Are we disconnecting from what it means to be human? Some view the question as ridiculous, some view it as real. And yet the question must be asked – is humanity safe?

Throughout history change has caused human angst. A belief that new technology will displace jobs, displace a way of life. As we moved from an agrarian economy to an industrial economy the view was there would be great job displacement. As we learned many new jobs were created as people moved from the fields to industrial warehouses. In the process they were creating huge cities and the associated economies that came with it . Even as we moved from the industrial age to the information age jobs were being created but the skill sets required to fill those jobs had evolved. We required a more educated white collar work force Technology has evolved so very fast it is not surprising that human development has not kept pace, which is why the tech industry cannot fill the jobs they have, which makes the market extremely competitive for hiring talent.

We also viewed this change to job security and job displacement as immediate, but it is more like a slow drip. Today in America we have a homeless crisis. Go to any city New York, Phoenix, Las Vegas, Seattle, Portland, San Francisco, Los Angeles etc..You will see tents and litter strewn everywhere and anywhere. Like a plague slowly crossing the cities. We blame government, we blame people and in the intense crossfire of these arguments offer no solutions. Technology has played its role as well as good paying jobs were increasingly automated, reducing opportunity for many as we transitioned from a manufacturing economy to a service a economy. Those that had stopped their education at high school could not compete in the new knowledge economy. Jobs that came with good pay and benefits in the manufacturing world do not exist for the most part in the service economy. With the advent and advancement of robotics there will be disruption in the service economy and more displacement. To be clear tech played a part but we cannot lay everything at its feet, there is a lot more to this problem, but that would be another blog.

The difference this time around is human replication. We have grown accustomed to tech taking away manual labor. Discussion today around returning the manufacturing base from abroad to the US is usually met with skepticism, as most people realize those jobs have been replaced with robotics and the idea of shops floors filled with hundreds of happy line workers is pure fantasy and not within the realm of reality. Capitalism is not here for happiness it is here for profits (do not argue with me on this, argue with Milton Friedman). Thus the move to offshore and automate was met with great Wall Street enthusiasm, profits now, consequences not my problem. If Wall Street could profit on human suffering they would do it. They live a shallow existence.

The tech sector is hyper competitive. A continuous race against time and the competition. We like to say we have a moral compass, but when push comes to shove we lack perspective and ideals fall by the wayside. From a historical standpoint we only need to look back to the cold war and the development of the atom bomb. After the United States detonated two bombs in Japan we ended WWII and set the globe on the path to potential nuclear holocaust. The Soviet Union following the second world war immediately set put on a path to catch the United States, there could be no world where there was only one nuclear power. The lead scientist was nuclear physicist Andrei Sakharov. who ultimately in 1949 succeeded in detonating a atom bomb. But as time went by he saw what he had created and became a leading member of the nuclear disarmament movement and would be placed under house arrest in the Soviet Union. The race for global supremacy was underway, frankly we are lucky to still be alive. That race continues but more and more it has moved to the private sector. Luckily the private sector is not building atom bombs, but in the explosive times we live in it often feels like we are sitting on one.

As I said tech is a hyper competitive space where the fear of being left behind drives everyone in the industry. It fuels the day. If you make a mistake or are caught napping the results are disastrous. IBM was the king of tech until in a meeting with Microsoft discussing the licensing of MS-DOS for IBM PC’s, Bill Gates said, “We get to keep the software licensing rights?”. IBM said “ok” and the rest was history. Since that time the carnage the industry has left behind is legendary. The Lotus 123, WordPerfect, IBM OS/2, Real Networks, MySpace, a half dozed search vendors who never envisioned an economic model until Google destroyed them all, Microsoft Zune too little too late, the launch of the iPhone destroyed mobile phone providers overnight etc..The list is long and the cost to those who did not see is in the trillions. The industry cannot stop, it cannot pause, only delivering empty promises to “realize your potential”, for many that is a life of hopelessness. Because at the end of the day tech speaks to the highly educated, not the masses.

The race for the future is non-stop, governments can try and slow down, but given the snails pace they move at, by the time they decide the industry has moved on. We measure success by growth (simple view is growth = $$$). We are constantly pushing the envelope to find that new greenfield opportunity. Technology has expanded its footprint into all walks if life, into all industries, everyone looking to use for some level of advantage. Some things will provide great benefits to humanity like health care from cancer search to gene editing tools like CRISPR (though there will be moral consequences). Let’s just hope we do not put a huge cost to these breakthroughs .

Tech visionaries always see a glorious future. They are the Willy Wonka’s of our times, living a life of fantasy. They really are the last people we should trust. Many live life styles in the clouds not seeing what people in the gutter must suffer through. When you live life on the mountain top its easy to see the vast beauty of the world, but these are broad strokes that hide the gritty details and the cruel reality of what is on the ground. As we move ahead in this ever quickening environment more people will be displaced, as we move to AGI (Artificial General Intelligence), maybe even replaced. Once momentum reaches a certain velocity it becomes impossible to turn on the break, to slow down the train. It will seek more advancement, more profit, and more returns. The advancements we will see in the next 25yrs will be breathtaking, though the consequences of those changes may be damning.

Good Night and Good Luck

Hans Henrik Hoffmann May 2, 2022