Burgess Essays ... Drafts
November 2016

Drafts of some essayes being prepared for Linkedin Pulse

Burgess COMMENTARY

Peter Burgess

1966 to 2016 ... an interesting 50 years So ... what to make of the last few years, few months, few weeks, few days? Mostly, it confirms my long held view that we have a global crisis, a serious system dysfunction, and that few, if any, in leadership positions around the world are making big decisions is the interest of society as a whole, but rather for some special interest they support in the system. I was in my 20s in the 1960s when there was a period of social tumult in the United States. I was a recent arrival in the country and did not yet understand all the historic currents of discrimination that were a part of the tumult. In the 1970s a very different set of issues dominated the news, with the OPEC driven oil shock and the resulting inflation one of the biggest, together with Watergate and the resignation of President NIxon. . The 1980s were dominated by Ronald Reagan ... a great communicator who set in motion a process that diminished the power of the labor unions, gave us the massive Savings and Loan crisis and a realization in the country that the future was going to belong to Japan and not the United States. David Stockman who warned the President about 'Voodoo Economics' was sacked. President Bush (41) was able to celebrate the end of the cold war, but the international advice given to the countries of the former Soviet Union (FSU) by Western consultants was a disaster ... in most cases self serving and essentially wrong. As a result we got the modern Russian oligarchy and eventually the return to a very authoritarian regime. Iraq took the opportunity to invade Kuwait, and a very impressive international coalition led by the United States eventually pushed them out in a very efficient way. The Bush economy was weak and this opened an opportunity for Bill Clinton to win the Presidential election. President Clinton sat on top of an improving economy, largely driven by technological innovation that enabled improvement in productivity ... that is more product for less labor ... and also enabled global outsourcing that permitted less money for labor. not to mention less money to comply with important workplace safety rules and environmental responsibility. President Clinton embraced the North American Free Trade Agreement (NAFTA) and a loosening of the rules and regulations that applied to the banking sector ... two policy choices that were very good for some and very bad for others. After 8 years the Republicans won the Presidential election courtesy of the Supreme Court and hanging chads in Florida. We will never know how President Bush (43) would have fared without the events of 9/11 and his subsequent decision to depose Saddam Hussein in Iraq. In my view the team of Bush, Cheney, Rumsfeld and Rice got everything wrong in the run up to the 2003 invasion of Iraq and the early days of the occupation. Part of this huge policy failure was the complete lack of understanding of why the perpetrators of the 9/11 attack wanted to do this. I had strong views about this but friends warned me that I would probably not be safe in the United States in the weeks and months after 9/11 if I expressed my views candidly. So much for 1st amendment freedom. Fifteen years later we still don't seem to understand why organizations like ISIS have a relatively easy time recruiting people to engage in Jihad against the West.

The challenge: keeping BREXIT from morphing into WREXIT ... a vicious cycle of unintended consequences. Last modified on Nov 23, 2016 There is important socio-enviro-economic system dysfunction in Britain, in the European Union and in the United States and it is not at all clear that the 'establishment' of investors, bankers, corporate executives and politicians has the capacity to fix the system in ways that will make the majority of ordinary people somewhat happier than they are at the moment. In the first day after the results of the Brexit referendum were announced the Pound Sterling dropped to its lowest price (relative to the US dollar) in 30 years and the Dow Index for the New York Stock Exchange dropped by 630 points or 3.7%. After the weekend, on Monday, the Dow dropped another 260 points. There has been an enormous The image in the heading is Shipwreck-by-Ivan-Aivazovsky available at this URL: http://www.wikiart.org/en/ivan-aivazovsky/shipwreck-1854

Where the World? What in the World? Planet earth knows exactly where it is and what it is doing ... and will go on doing its thing for the next billion years. But the same cannot be said for the people on the planet. It is highly likely that there will be life on planet earth in the relatively distant future ... but whether or not this will include human life as we know it is unknown ... and perhaps unlikely. From the human perspective, the last few hundred years have been the most interesting with huge changes that have enabled a quality of life that is so much better than anything that was possible before. Human intellect ... a combination of curiosity and capability ... has made it possible to develop and deploy technology so that we can have all sorts of things that make life easier, longer and perhaps better. I was born in 1940, and we lived in England in the suburbs of London. I was too young to remember the 'blitz' but I do remember the V1 flying bombs or ''doodle-bugs' which were launched against London in 1944 and, not surprisingly, I have a deep dislike of war, and especially war that has mass civilian casualties, as there are today in Aleppo. There has been amazing progress in technology over the last seven decades. The destructive power of modern weaponry compared what was available during WWII is huge. ... but I am unclear why increasing the destructive capacity of military equipment has to be a priority. Surely we should be using human intellect to figure out how to use technology so that there is better and improving quality of life for everyone, and use our brains to make friends rather than be bullies. In the late 1960s I was responsible for a team that was installing a main-frame computer ... and IBM 1401 with 4K of memory ... glass walls ... raised floor ... air-conditioning .... and using a tractor-trailer of punched cards every week. A modern smart phone has maybe a million ... or 10 million ... or 100 million times the computing power of that computer. Amazing ... but why isn't the world a million times better than it was 60 years ago. For some years I was a corporate CFO. I used cost accounting (combined with some understanding of the underlying engineering of the products and the factories) to help the companies make more money. I learned how the use of numbers was a powerful way of motivating everyone to work towards a more profitable company. Nobody in the companies, except the CEO and a few Board Level people were interested in the profit performance per se, but everyone was interested in how well they were doing and how they were getting better. Everyone contributed and as a team, the companies progressed and produced more profit. That was a good experience ... up to a point. Part of my corporate work took me to developing countries and emerging markets. Prior to this I had only lived and worked in Europe and North America. I had some understanding of the history of the industrial revolution and working conditions in the factories of the 19th century, in these places, but that was history and by the 1960s and 1970s the working class had climbed into the middle class and there was affluence, growing suburban communities, cars, washing machines and so on. But in the developing countries, I learned something of deep poverty and how little of the natural wealth was able to improve the lives and living conditions of the general population. After my corporate career I spend many years doing assignments for the World Bank, the United Nations and others ... over several decades and in more than 50 countries. I credit Robert McNamara with introducing numbering into the work of the World Bank which was good ... but what he did not appreciate (in my view) was that when he was the President of the Ford Motor Company, the numbers produced by the company's accounting department were pretty reliable, whereas when he was President of the World Bank the numbers produced by governments and by economists were more or less what they wanted them to be. On my very first assignment for the World Bank I was briefed by a World Bank staff member and told what the results of my financial analysis had to be ... and there was surprise when I asserted that the results would actually depend on the facts! Again, in my view, the quality of the numbers flowing through the World Bank, the UN and others for the past 40 years has been totally inadequate and explains to some extent the rather weak performance of much of the world's economy, But there is something else. We only have a very crude way of measuring progress and performance. Money is not a good measure, and the derivatives of money like business profit, capital market stock prices, investor wealth and GDP (Gross Domestic Product) only serve to distort the economy in ways that serve those that grow these measures. Technology has improved

The idea of acceleration from Tom Friedman Last week I listened to a very thought provoking conversation between Charlie Rose and Tom Friedman. At the center of the conversation were ideas that will appear next November when an upcoming Friedman book is published. They talked about a new 'Age of Acceleration', global flows driven by markets, mother nature and Moore's Law, global flows that have been accelerating for quite a long time and now exhibiting the 'hockey stick' characteristic of all exponential arithmetic. I was delighted to listen to the conversation, but frustrated that it was taking place now rather than several decades ago. There has been evidence of these accelerations and the problems that were emerging. It is a sad commentary on the media and the broader intellectual community that it has taken until now for Tom Friedman and Charlie Rose to get around to talking about this. It is not as if there is no evidence of problem, but there are very big constraints on communicating important issues to the public at large. The misinformation industry is now big business, and the world is a more dangerous place because of it. Heavyweights in politics are engaged in misinformation, as are big companies and big nations. This is not good as the foundation for a modern free democracy. Rule of law should be something to be proud of ... but not when the laws are riddled with loopholes designed to serve the self interest of some powerful group.