At the PopTech conference this week in Camden Maine. A small gathering of people conspiring to generate positive world change. The format is TED-like, but the demographic seems about 15 years younger, which is a welcome difference. You might enjoy a couple of videos filmed this week at Poptech. The first is a very funny guy named Reggie Watts. The second is from our sail around Camden Harbor with adventurer David de Rothschild, leader of the Plastiki Expedition. David talks briefly about Plastiki and the essential power of storytelling. Enjoy. Reggie Watts: Part 1 from PopTech on
Whenever you are in doubt or when the self becomes too much with you, try the following expedient:?? recall the face of the poorest and most helpless man you have ever seen and ask yourself if the step you contemplate is going to be of any use to him.?? Will he be able to gain anything by it? Will it restore to him control over his own life and destiny? In other words, will it lead to?self-rule for the hungry and spiritually starved millions?? Then you will find your doubts and your self melting away.
Coincidence? Over the last 48 hours, I have read or heard the phrase “double-dip recession” no fewer than four times. In each instance, the phrase was used via a major media outlet. Robert Reich said point-blank “we’re falling into a double-dip recession.” CNN repeated the phrase. British PM Cameron said yesterday that Britain’s peacetime record budget deficit could anchor us for decades. Fed Chairman Bernanke used the phrase yesterday in a speech, as a foil. The meme is spreading. Since the economic meltdown of 4Q08 (and subsequent bailout) I have been skeptical of a theory that seeks to build prosperity on a foundation of massive debt and worthless paper. Is Reich right? Does this growing loss of confidence portend a downturn? I want to briefly explore what are arguably the three key markers of economic health. 1. Employment As a former Secretary of Labor, Reich makes his central point: “the labor market continues to deteriorate… the median wage continues to drop.” He argues, and I would tend to agree, that we have artificially prolonged an inevitable reckoning by (1) increasing liquidity via massive debt, (2) coaxing a temporary boost with near-zero interest rates (which cannot be sustained), and (3) deferring replacement of aging hard goods (cars, capital, etc.). Of course, Reich has the solution: raise taxes so government can fix it with more redistribution programs (!) An outrageous contradiction. 2. Real Estate Interest rates are at near-historical lows, yet new mortgages are at a 13-year low. IMF economists are predicting a dramatic continued downturn in real estate values – in some markets as much as 40%. The taxpayer-funded housing credit has expired, there are over 1 million bank-owned homes not yet on market, another 5 million mortgages are expected to end in foreclosure, another 6.3 million homes sit vacant (not to mention a growing amount of distressed commercial property), April year-over-year real estate values are down 4.1%, and interest rates cannot remain at record lows much longer. According to WSJ, post-tax-credit home activity (May) is down 25-30% – a trend they say will continue. 3. Debt Ratios & Unfunded Liabilities U.S. national debt has just surpassed 90% of GDP ($13 trillion – adding $1 million every 30 seconds) – a peacetime record. Click on the link and compare the external Debt-to-GDP ratios of USA and China (hint: it’s 94% vs. 8%). Total U.S. unfunded liabilities are $109 trillion, and growing without any sign of turning back. This is nearly twice the GDP of the entire world ($58 trillion). And with an aging population, the growth of these unfunded liabilities (medicare, social security, etc.) are showing no sign of slowing. They are, in fact, accelerating. We lifted ourselves out of a wartime debt (125% of GDP) because our 1940’s economy was roughly 60% primary productivity (industrial, agricultural, manufacturing). Today, 80% of U.S. GDP is based on secondary activity (services, tax funded, etc.). The economic engine has shifted to the Far East, which holds dramatically increasing amounts of U.S. debt. We have a serious and worsening Debt-to-GDP problem. I would call it a National Emergency. The Federal Government is not the solution. It is, to a large extent, the problem. We are moving steadily away from producing what we need in this country. We are also moving away from producing on a scale that enables us to trade for what we do need. Rather than do without, we are increasingly importing things with a promise to pay later. This cannot go on. When our trading partners, especially China, no longer want to loan us hundreds of billions of dollars a year to be paid later, we will have little productive capacity left and we will be a poor nation. We need successful industries and we need to innovate within them to keep them thriving. However, when your trading partner is thinking about GDP rather than profit, and has adopted mercantilist tactics, subsidizing industries, and mispricing its currency, while loaning you the money to buy the underpriced goods, this may simply not be possible.“ – Ralph Gomory, President Emeritus at Alfred P. Sloan Foundation; Former Head R&D IBM; Research Professor at NYU With a nod to King Crimson, I repeat myself when under stress: we can’t build (let alone sustain) a free, buoyant society on a foundation of massive debt. When seen in the light of increasingly scarce natural resources, the U.S. is heading for a national train wreck, effectively becoming a debt slave to a new world financial order. From the New York Times, It was too much debt that caused the problem in the first place: a new report by the International Monetary Fund warns that â€œhigh levels of public indebtedness could weigh on economic growth for years.â€ The worldâ€™s budget deficit as a percentage of gross domestic product now stands at 6 percent, up from just 0.3 percent before the financial crisis. If public debt is not lowered back to pre-crisis levels, the I.M.F. report said, growth in advanced economies could decline by half a percentage point annually. Furthermore, financial policy makers find themselves running out of weapons in their arsenal. After borrowing trillions to stimulate their economies and ease credit concerns during the last wave of fear in late 2008 and early 2009, governments cannot borrow trillions more without risking higher inflation and shoving aside other borrowers like individuals and companies. Short-term interest rates, already near zero in the United States, cannot be lowered any further. And vital steps like raising taxes or cutting spending increases could snuff out the beginnings of a recovery in northern Europe and worsen the pain in recession-battered economies like Spain, where unemployment recently passed 20 percent. With the exception of wartime, the public finances in the majority of advanced industrial countries are in a worse state today than at any time since the industrial revolution. A little group called Consumer Metrics Institute has been remarkably accurate at predicting economic trends roughly six months before they happen, including the 2008 crash. As their model predicted, 2010 U.S. GDP has been growing at a 3% annual rate. But CMI now predicts a 3Q drop into 2% contraction. At best, they call for an “extended mild slowdown” in the recovery — at worst they are predicting the early stages of a deep, prolonged structural economic shift, also known as a double-dip recession.
Great to see Bill Gates taking global energy seriously. In fact, he publicly stated from the TED stage last week what I’ve been saying since 2003:Â energy is this century’s greatest structural issue. Fellow TED’ster Richard Branson went public this week with a similar clarion call. Worldchanging founder Alex Steffan, whom I spoke with at length, calls this “the most important climate speech of the year.” Sir Ken Robinson defined once again the highest art of public speaking. TED curator, Chris Anderson, noted after Ken’s talk that he may be the only person who can break all the TEDTalk rules – and we love him for it. Robinson focused on why education needs to change from an industrial model to an agricultural model. I think the same can be said of religion. Echoes of Wendell Berry. Mathematician Benoit Mandelbrot took us through a stunning visualization of design simplicity, in the form of fractals. I had a chance to spend some time with Benoit at TED, discussing emergence theory in light of fractal geometry and the Mandelbrot set. The music at TED this year was stunning: David Byrne (who also gave a TEDTalk), Thomas Dolby, and Natalie Merchant melted us with a brand new suite of songs based on romantic poets from the last 100 years. Cheryl Crow showed up, but probably shouldn’t have. Not much there musically. Peter Gabriel, Paul Simon and family, and other musicians were soaking up the TED experience, but not there to perform. Oh, and ukulele virtuoso Jake Shimabukuro captivated everyone. I’ve never heard a uke played with such subtlety – a true master of the instrument. I understand he gave impromptu concerts back in the lobby of the TED hotel. Anyone who takes the stage at TED is unpaid, including the invited musicians. Drawing from the field of Behavioral Economics, Nobel prize winner Daniel Kahneman presented what amounted to an intellectual foundation for our activist social-media site Compathos.com. Dan asks, “when we return from a vacation, do the memories we bring back have intrinsic value?” Compathos (still in beta) seeks to realign the concept of “vacation” as a proactive event in which we aid or assist our destination with skills we possess (medical, engineering, skilled labor, crafts, etc..) and in doing so, we become deeply changed – bringing back to our own communities a new perspective, a new heart, and transformed motivations – far more than a traditional vacation memory. Sam Harris gave a surprisingly engaging talk. Rather than rehashing his views on atheism, Harris focused on finding an objective framework for morality and ethics. I’m reminded of Arthur C. Clarke, who said “one of the great tragedies of mankind is that morality has been hijacked by religion.” Kevin Bales presented a detailed, moving account of global slavery. It’s Kevin’s academic work that gave us the estimate of 27 million slaves worldwide. His work in slavery has effectively paved the way for most of today’s anti-slave efforts. I was honored to have lunch with Kevin after TED ended on Saturday – what a truly amazing man. Game designer Jane McGonigal sees video gaming as a core solution to many of today’s social problems. Don’t laugh – her TEDTalk is a must-watch. Brilliant. Cell biologist Mark Roth is onto something big. He’s discovered a way to put biological systems into suspended animation. Using his techniques, people who would otherwise die from serious trauma on the battlefield, in car accidents, etc.. can be placed into suspension (heart and breathing stopped – effectively dead) for hours without tissue damage while they are transported to a trauma center. Jaw dropping. Entertainer Sarah Silverman reminded me of those shallow and bawdy Las Vegas night club comedians from my parent’s era (Redd Foxx, etc..). With kids sharing the live TED experience both in Long Beach and virtual associates worldwide, this was not a wise choice. Live and learn. But many of the best talks were those that happened between sessions, in the halls, in the social spaces, at the lunches, and dinners, and parties, and spontaneous gatherings that define the TED experience. To elaborate on all the amazing, emotive, high-energy, a-ha! conversations I had this year might sound like name-dropping, so I’ll spare you the details. I go to TED to get energized, inspired, challenged, and awestruck by and with amazing people doing amazing things. I spend a week of my life here to renew a sense of childlike wonder and remind myself that I’m not crazy – that there are others who dare to dream big. ADDED:Â Eighteen-year TED veteran Jack Meyers captures the scope and nuance of a TED Conference in his Huffington Post essay ADDED: Scoble’s excellent summary of attending TED ADDED: Overview of Bill Gates’ energy talk, at
John Rooks offers a timely essay on unthinking consumerism. I’m seeing endless parallels and metaphor here to religious consumerism, but I simply don’t have time to write today. Substitute multi-site-video-mega-church for “shopping mall” and you’ll get the idea. Please read John’s excellent essay. Here are some highlights. When we buy without thinking, motivated perhaps by a super-low price, lust, or naked appetite, we are guilty of Zombie Consumerism. In Dawn, a band of heroes hide out in a mall, gorging themselves on free food as the Zombies pound at the doors. [Fran and Stephen are observing from the roof of the mall] Francine: “What are they doing? Why do they come here?” Stephen: “Some kind of instinct. Memory, of what they used to do. This was an important place in their lives.” Later, Peter says “They’re after the place. They don’t know why, they just remember. Remember that they want to be in here.” In the movie, the mall serves cross-purposes “to feed the consumptive hunger of the unthinking Zombie and as a haven for the living.” The irony is easily spotted as the survivors go binge looting and consume nearly everything in the mall and must find a new place and new source of food (or become a food source). To the survivors, it is at once the luxury of a shopping spree and a prison. In the original, as men are filling wheelbarrows with appliances, Francine says of the mall, “Stephen, I’m afraid. You’re hypnotized by this place. All of you! You don’t see that it’s not a sanctuary, it’s a