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President Trump: Whom Will He Appoint? Time to panic?
By Shlomo Maital
President-elect Trump. Never thought I would write those words. A great many people I know are stunned, shocked, and almost in panic.
No need to panic. The White House has ways of changing the DNA of its occupants fairly quickly.
Who will Trump appoint? The Financial Times has some ideas, and they are at least a bit reassuring…
* Steve Mnuchin, a former Goldman Sachs executive frequently mentioned as a possible Treasury secretary, and Wilbur Ross, a distressed asset investor. OK, the Trump administration will be pro-wealthy, even though the blue-collar guys elected him. But what did you expect?
* ….conservative columnist Lawrence Kudlow, a former official in the Reagan White House who once worked as chief economist at Bear Stearns, is another senior member of the campaign team, as is Steve Moore, an economist at the conservative Heritage Foundation who helped draw up Mr Trump’s tax plans.
* Trump has said: “Guys like [former General Electric chief executive] Jack Welch. I like guys like Henry Kravis [the co-founder of KKR, the private equity group]. I’d love to bring my friend [billionaire investor] Carl Icahn. I mean, we have people that are great.”
* National security: Michael Flynn, a former head of the Defence Intelligence Agency, who has been a regular analyst on Russia Today, the Russian-backed television network, as well as Keith Kellogg, who has worked in the private sector since helping run the Coalition Provisional Authority in Baghdad after the 2003 invasion of Iraq. Among his other advisers are Walid Phares, a Middle East analyst who has come in for criticism for his ties to a Christian armed faction in Lebanon’s civil war in the 1980s.
* ….attorney-general: Rudy Giuliani, the former New York City mayor who has been a vocal backer and close Trump adviser since the summer.
* “ economic platform: Peter Navarro of the University of California’s Paul Merage School of Business, an economist who produced the film Death by China, a documentary featuring animated Chinese aircraft bombing the US.
On second thought, after writing the above: Not reassuring.
It’s time to panic. All together now… Yikes!
Dalai Lama: Find Meaning
By Shlomo Maital
The Dalai Lama is the 14th such Dalai Lama. And he may be the last, according to his own words. Dalai Lamas are important monks of the Gelug school, the newest school of Tibetan Buddhism. He was born on July 6, 1935 and despite his age, 81, he travels the world with his message of peace and harmony. His full name: Lhamo Dondrub, but it is rarely used. He now lives in McLeod Ganj, India, near Tibet, because Chinese authorities do not permit him to return to Tibet, from which he fled at an early age.
I once heard the Dalai Lama speak in person, to 5,000 persons in Tel Aviv. His presence is spellbinding and radiates the serenity that he preaches.
In the International New York Times, Nov 5-6, there is an unusual Op-Ed piece written by the Dalai Lama together with Arthur C. Brooks, president of the American Enterprise Institute, a conservative pro-free market think tank based in Washington. In it, the authors ask, if things are so good all over the world, why do people feel so bad?
Good??? All over the world? “Fewer among us are poor, fewer are hungry, fewer children are dying and more men and women can read than ever before”, they note. How strange, they note, then to see anger and discontent in the world’s richest nations.
So why is there such tremendous angst, dissatisfaction, unhappiness, social unrest and violence in so many parts of the world? They note research that shows that senior citizens (that old euphemism for old people) who did not feel useful to others were three times as likely to die prematurely, as those who did feel useful. Apparently, to stay alive, you need a reason, and helping others is the primary one.
People are unhappy, says the Dalai Lama, because they do not have meaning in their lives. Remedy? “We should start each day by conciously asking ourselves, ‘What can I do today to appreciate the gifts that others offer me?” We need personal commitments “that we mindfully put into practice”.
I love this message. I try to practice it. But I don’t accept the premise. People are unhappy, because they struggle every day to provide food, shelter and clothing for themselves and their families, and have a very very hard time doing it, including those in wealthy countries. The odds are stacked against them. The old “trickle down” fallacy has been refuted ages ago, but politicians still preach it. Wealth does not trickle down, it trickles up…to the ever-richer 1 per cent or 0.1 per cent.
Arthur Brooks and the American Enterprise Institute are among those who espouse trickle down, and provide grist for the Republican Party. (“Trump will lose, but Americans will make a fatal error if they do not recognize what Trump got right”, says the AEI website. Hmmm what DID Trump get right?). I regret that a person as wonderful as the Dalai Lama seems to have thrown in with an ideology that is so flawed.
On Turning 74: How to Age
By Shlomo Maital
On Nov. 10 I will be 74 years old. I celebrated by doing a 74-km. (44 mile) walk during 3 days, from the Mediterranean to the Sea of Galilee, with grandchildren and sons and daughter, and Sharona, who joined for at least part of it.
Here are some insights about growing old, for what they are worth.
- Try to do one difficult thing every day… it’s easy to pamper yourself, when you’re a senior citizen, and lots of kind people around you are willing to help. Keep in practice doing things that stretch your mental and physical abilities. That way, at least you won’t slide backward… or will do so more slowly.
- Resist becoming a child. Seniors are forgiven behaviors that adults are not. Resist it. It’s easy to become grumpy and spoiled like a child.
- Treat your body like a faithful old car. You don’t expect a 15-year-old car to run perfectly. You do good maintenance, but not all repairs are worth the pain, time and effort. Same with your body. Fix what you can, live with what you can’t… and don’t spend infinite hours running to doctors, if you can avoid it.
- Remain relevant. That means, make your life meaningful by helping other people whom you love. Do this daily. In little ways, or in big ways. If you do, it means that your life has meaning, and that others care. The key is to be part of a loving community, including family and friends.
- New beginnings – seek them. Seniors tend to be risk averse. Take some chances. Dare. What do you have to lose? Learn new skills, try new things. Try new foods.
- Think positive. Think happy. A happy mind definitely helps create a healthy body. It’s been proven physiologically. Find the bright side. Be an incurable optimist.
- Enjoy every hour, every minute, every day. Find things of beauty, find small (and big) ways to enjoy. Find interesting people, find ways to be with them. Make sure that when you wake, you have strong reasons to get out of bed. If not, well, find some.
- Doing what you love? Keep doing it. Never retire. Bored with what you’re doing? Find something else to do. But — keep doing!!
AT&T + Time Warner:
Good for the people? Or Bad?
By Shlomo Maital
AT&T has just announced it is acquiring Time Warner for $85 b. The deal must be approved by the FCC Federal Communications Commission and antitrust authorities.
What is going on here?
Frank Biondi, former head of media giant Viacom, describes it succinctly. AT&T has 125 cell phone customers and a large number of cable TV customers. It is essentially a US ‘media and communications’ distribution company, one of the biggest. AT&T was once huge, was broken up by an aggressive anti-trust judge, and is now reforming and again becoming a giant player.
Time Warner, including HBS and CNN, is a ‘content’ company. It creates the content, like the hit series Game of Thrones, that AT&T distributes.
So, Biondi says, AT&T is buying, for $85 b. (14 times the value of Manchester United, for instance) “access to creative talent”. Because today the value in communications is not in the infrastructure and distribution, but in what you put onto this infrastructure. AT&T is buying a seat at the creativity table.
Will AT&T favor, like a monopoly, content its own companies create? Probably not. If AT&T customers want to watch something else, and AT&T fails to provide it, they will lose millions of customers in the blink of an eye.
I think that what is interesting about this mega-deal is this: Ideas have become hugely valuable and creative talent is now the focus of competitive strategy. If you are creative, if you have ideas, the AT&T+Time Warner deal says: The future is yours.
Nobel Prizes 2016
By Shlomo Maital
This year’s Nobel Prize winners:
Medicine/Physiology: Yoshinori Ohsumi, Japanese cell biologist. He discovered how cells recycle their wastes – an amazing and complex process that keeps cells from choking on garbage. Ohsumi asked a question that intrigued him, but that interested few others…
Economics: Oliver Hart (Harvard) and Bengt Holmstrom (MIT): contract theory. Especially “incomplete contracts”. See Hart’s American Economic Review 2001 article on financial contracting — enlightening, especially for Venture Capital.
Physics: David Thouless, F. Duncan Haldane, J. Michael Kosterlitz. Their mathematics (based on topology) revealed insights into ‘extreme state’ matter (e.g. very low temperatures, super-cooled, etc.), and may lead to important new products, perhaps in semiconductors and computing.
Chemistry: Jean-Pierre Sauvage, J. Fraser Stoddart, Bernard Feringa: synthesis of molecular machines. These tiny machines, the size of a single molecule, can do actual mechanical work. Also may lead to important innovations one day.
Note the common denominator: Willingness to ask really good questions, questions others aren’t asking, ability to take risks in research, tackle very challenging hard problems, and in some cases, defy the establishment by choosing a research direction others think is a dead end.
And the Peace Prize? To Colombian President Santos, and the peace agreement that ended 50 years of senseless civil war. We learn from Colombia what we already know, from Britain’s Brexit vote – beware of referendums, you cannot be sure what they will yield. Colombia will revote its peace agreement, narrowly defeated in a referendum, and gain approval. But Britain? Britain will leave the EU, for certain, a result very few expected, with major consequences for Europe and the world.
Hope for Alzheimer’s Cure?
By Shlomo Maital
Prof. Dan Michaelson
My family physician recently told me that about half of the elderly aged 85 and over have Alzheimer’s. That should make Alzheimer’s a top priority for research money. But it is far from it.
Today’s Hebrew daily Maariv reports on a major breakthrough. Tel Aviv U. Prof. Dan Michaelson, along with his doctoral student Anat Bam-Cogan, have found a drug that can combat Alzheimer’s in mice. Here is the story:
There are apparently quite a few ‘varieties’ of Alzheimer’s, just as there are types of cancer. Michaelson notes that 413 clinical trials, that tested 244 anti-Alzheimer’s drugs over the past 13 years, all failed! Why? Maybe because Alzheimer’s is many diseases, not just one, he reasoned.
Michaelson decided to tackle one type, related to specific genes ApoE3 and ApoE4. Lab mice that have this defective gene develop Alzheimer’s. Michaelson tested the theory that the key protein that the defective ApoE4 gene makes fails to attach itself to fat cells properly, leading to the Alzheimer “plaque”. He contacted a biotech company Artery, and got from it a protein (peptide) that helps ‘stick’ fat cells to the protein. And it worked. The peptide fixed the Alzheimer’s mice’s cognitive problems and repaired the plaque in their brains.
This is still a very long way from a drug that will help, or even cure, Alzheimer’s in humans. But it is a big step in the right direction. We await more news from Dr. Michaelson, with hope.
Govt. Pays Taxes to Corporations: Why??
By Shlomo Maital
Once corporations paid taxes to governments. It made sense. Companies benefit from services and infrastructure, so they should pay taxes, like everyone.
But then, countries discovered they could play a win-lose game by offering corporations tax breaks (like Ireland’s 12.5% corporation tax) to lure them to come. We win, you (other countries, e.g. U.S.) lose. Soon many countries were offering such tax breaks. And corporations grabbed every one. Legally. It is almost true that governments now pay taxes to corporations.
Writing in the Oct. 5 New York Times (“Dealbook”), Russ Sorkin cites a study just released, that found that “73 per cent of Fortune 500 companies” (that is, 365 of them!) maintained “subsidiaries in offshore tax havens”. Apple alone holds $214.9 billion abroad and would owe $65.4 billion in taxes if it brought that money back to the U.S.
The study shows how companies set up small subsidiaries, small enough to avoid reporting offshore profits; “27 companies reported 16,389 total subsidiaries (!) and 2,836 tax haven subsidiaries to the Federal Reserve – but only a small fraction of those were reported to the Securities Exchange Commission”.
A furor arose over Donald Trump’s failure to pay income tax. But compared to the legal tax avoidance of companies sending money offshore, it’s a drop in the bucket.
America could use a big dose of capital investment. But the money that could pay for it is sheltered abroad. How much? 58 Fortune 500 companies alone would owe $212 b. in federal taxes, if they were taxed properly.
My questions: Who created these loopholes in America’s tax law? And why can’t legislators fix them? Are Republicans so enamored by wealth that they approve this? Are Democrats so helpless they can’t take on tax reform?
The Europe Union is trying to collect $14.5 b. in taxes from Apple. Apple CEO Tim Cook calls this effort “total political crap”.
The place to start is simply to require transparency. Nobody really knows how much money is sheltered abroad. Start by making companies report offshore holdings. And then – figure out how to make them pay taxes on them, no matter where they are.
Life After Silicon:
The Age of the Cup-holder
By Shlomo Maital
Most of us are blithely unaware of how much we owe to a law – Moore’s Law, named after Intel co-founder Gordon Moore, which says in simple language that every 12 months or so, the number of transistors in a given area doubles. In a 1965 paper, Moore used 4 or 5 data points to show that this had happened up to 1965, and he said it would continue for the foreseeable future.
And it did..and how! We now carry more computer power in a chip barely 3 sq. mm. than the 1976 room-size supercomputer designed and built by a genius, Seymour Cray.
But what if Moore’s Law is about to be repealed? What if the future ends? As Francis Fukuyama wrote, in 1992, we are at “the end of history”; are we at the end of the history of silicon?
Yesterday I heard a brilliant lecture on this subject by Prof. Mark Horowitz, on Innovation in a Post-Moore’s Law World. Horowitz is a former Chair of Electrical Engineering at Stanford and is visiting my university, Technion. He delivered the annual Hershel Rich Lecture.
Here are some of his key points:
* As we move down from IBM’s path-breaking one micron chip in 1974, to today’s 20 nanometer chips, 50 times smaller, we have reached the limit of Moore’s Law, mainly because the heat generated by these tiny powerful microprocessors is very hard to dissipate. Cooling limits further transistor doublings. Mathematically: “computing power” = energy per operation x operations per second. If we want to boost ‘operations per second’, we need to lower ‘energy per operation’..and we’re reaching the limit on that one.
* Result? “In future, success will no longer be about technology development. It will be about finding the right applications of the existing technology”.
In other words: We have loads of computing power. Now we need to find ways to adapt it to create value. The so-called Internet of Things is misleading. There is no “internet of things”. It is in fact a broad collection of devices, and each device needs its own application, its own software, its own microprocessors, to enhance its value.
Horowitz noted that ITRS (International Technology Roadmap for Semiconductors) has for years done roadmap predictions of future technology, based on Moore’s Law. They have now stopped. No more roadmaps. The end of history.
What does this mean for entrepreneurs and innovators? In future, there will be a huge premium for IT engineers who understand the technology, but who also have deep sensitive knowledge of business, customers, preferences and markets. Only this will enable us to have life after silicon. I think every engineering school should have a required course on Startup Entrepreneurship. Silicon will no longer be a rapid-growth industry, it will become like steel and plastics, notes Prof. Horowitz — big, but stable.
Sure, there may be a huge technological breakthrough. But Horowitz notes, it is unlikely, because developing it will take enormous resources, more than governments can afford, and more than private investors are willing to risk.
Prof. Horowitz has a powerful metaphor. In future, he noted, successful products will include many “cup-holders”. A cup-holder is a place to put your coffee or soda, in a minivan or car. German carmakers started the idea. Today some vans have 16 or 17 such cup-holders. They are low-cost, and are highly appreciated, because they show the car-maker is aware of, concerned about, the lifestyle of drivers.
Innovator: Can you use existing computer power, to create small low-cost add-ons (incremental innovation) that create great value? Apparently, this will be our innovation lives – after Moore’s Law expires.
Middle Class Blues: A Different Narrative
By Shlomo Maital
We are hearing endlessly about the struggling blue collar workers and the oppressed middle class, sinking into debt, losing jobs, struggling to stay afloat. We hear Donald Trump play on their fears and grudges.
There is another narrative, one given in today’s New York Times by David Brooks. It is about resilient workers and middle class people, who adapt, shift jobs, lose one and gain another, learn new skills – and stay afloat, endure and even prevail. And there are lot of them.
Here is how Brooks describes one such case:
A few weeks ago I met a guy in Kentucky who’d lived through every trend of deindustrializing America. He grew up about 65 years ago on a tobacco and cattle farm, but he always liked engines, so even while in high school he worked 40 hours a week in a garage. Then he went to work in a series of factories — making airplane parts, car seats, sheet metal and casings for those big air-conditioning fans you see on the top of buildings. Every few years as the economy would shift, or jobs would go to Mexico, he’d get hit with a layoff. But the periods of unemployment were never longer than six months and he pieced together a career.
So, how did he piece together a career?
His best job came in the middle of his career, when he was a supervisor at the sheet metal plant. But when the technology changed, he was no longer qualified to supervise the new workers, so they let him go. He thought he’d just come in quietly on his final day, clean out his desk and sneak away. But word got out, and when he emerged from his office, box in hand, there was a double line of guys stretching all the way from his office in back, across the factory floor and out to his car in the lot. He walked down that whole double line with tears flowing, with the guys clapping and cheering as he went. We hear a lot about angry white men, but there is an honorable dignity to this guy. Some of that dignity comes from the fact that he knows how to fix things. One of the undermining conditions of the modern factory is that the workers no longer directly build the products, they just service the machines and software that do. The bakers now no longer actually know how to bake bread.” But this guy in Kentucky can take care of himself — redo the plumbing at home or replace the brake pads.
And what was his ‘narrative’, his story, told to himself? One of betrayal, exploitation, deprival, social inequality? None of that.
It’s more of a reactive, coping narrative: A lot of the big forces were outside my control, but I adjusted, made the best of what was possible within my constraints and lived up to my responsibilities. ….
I adjusted. Made the best of what was possible. Lived up to my responsibilities. This is a narrative that I believe is far far more representative of the working middle class, than the Trump “I’m-a-victim” narrative: “Washington screwed me, so I will vote for a scoundrel, because he expressed my anger, even though he hasn’t a clue about what middle class life is about.”
People are basically resilient. They bounce back. And the ones with integrity do not cast ballots for those who cynically exploit the worst qualities among us – avoiding personal responsibility for our own fate.
How to be Passionate..and Compassionate
By Shlomo Maital
I once surveyed a group of 50 Israeli chip designers, gave them a list of key qualities that were important for innovators – and asked them to rank them. To my surprise, “resilience” came up first, by far. Resilience is the ability to bounce back from failure, adversity, disasters, and continue on to your goal. It requires a great deal of mental toughness.
Today’s New York Times column by David Brooks (Aug. 30) has many useful insights into this subject. “Making Modern Toughness” begins by quoting a common perception: “Today’s students are more accomplished than past generations, but they are also more emotionally fragile.” Kids in earlier days were tougher, many of us in the older generation say.
Brooks has second thoughts. “….let’s not be too nostalgic for the past. A lot of what we take to be the toughness of the past was really just callousness. There was a greater tendency in years gone by to wall off emotions, to put on a thick skin — for some men to be stone-like and uncommunicative and for some women to be brittle, brassy and untouchable.” The result, Brooks claims, was in some cases alcoholism or depression.
So, if we rethink toughness, for the modern age, for the Fourth Industrial Revolution, what do we get? What does Brooks suggest?
“The people we admire for being resilient are not hard; they are ardent. They have a fervent commitment to some cause, some ideal or some relationship. That higher yearning enables them to withstand setbacks, pain and betrayal. Such people are, as they say in the martial arts world, strong like water. A blow might sink into them, and when it does they are profoundly affected by it. But they can absorb the blow because it’s short term while their natural shape is long term. There are moments when they feel swallowed up by fear. They feel and live in the pain. But they work through it and their ardent yearning is still there, and they return to an altered wholeness.”
In short: “True mental toughness that entrepreneurs and innovators need desperately come from the passion of believing fervently in a goal or mission. That that passion, too, is driven by compassion, by caring for others, and by the desire to change the world for them. In this way of thinking, grit, resilience and toughness are not traits that people possess intrinsically. They are not tools you can possess independently for the sake of themselves. They are means inspired by an end. …. We are all fragile when we don’t know what our purpose is, when we haven’t thrown ourselves with abandon into a social role, when we haven’t committed ourselves to certain people, when we feel like a swimmer in an ocean with no edge.”
I begin all my classes by asking students what their true passion in life is. Many do not know. They have not been asked that question, nor have they tried many different things to find out experientially. But often parents push their kids to ‘get on with it’, rather than try things.
When are people really tough? Brooks writes, “People are really tough only after they have taken a leap of faith for some truth or mission or love. Once they’ve done that they can withstand a lot.”
Have you taken that leap of faith? Changed your job, your profession, your destiny?
“We live in an age when it’s considered sophisticated to be disenchanted,” Brooks notes. “But people who are enchanted are the real tough cookies.”
Innovator! Be enchanted. Find your enchantment. If you do you will be able to undergo an almost unlimited amount of adversity. That’s toughness, of the right kind.
TIMnovate 