SUPREME COURT ADOPTS DATA IN-DATA OUT PATENT TEST

In these times of super-partisanship, all major decisions of the U.S. Supreme Court are along the lines of five-to-four, right? Conservatives on one side, liberals on the other, a swing vote or two determining the outcome?

Well, it is certainly easy to have this impression. But even in this period of extreme dogmatism, all nine justices occasionally find themselves in agreement on a case, and not merely a case of little import. One such instance occurred this past spring. In a unanimous decision, the Court just might have taken a positive step toward easing a significant economic conflict. That conflict is between an Industrial Age patent system on one hand and the realities of the Information Age on the other.

On March 20, 2012, the Court decided the case of Mayo Collaborative Services v. Prometheus Laboratories, Inc. Justice Breyer delivered the Opinion of the Court. There were no dissenting opinions. There were not even any concurring opinions, those ramblings in which a Justice or Justices say in effect, “We sorta agree with you, but. . . .” In short, everybody was on board.

In the decision, the Court held that a process of applying researchers’ findings about the proper dosage of specific drugs was not entitled to a patent. The drugs were thiopurine drugs to treat autoimmune diseases. The process involved three steps: (1) an “administering” step in which a doctor administered a drug to a patient, (2) a “determining” step in which the doctor measured the resulting metabolite levels in the patient’s blood, and (3) a “wherein” step in which the doctor was to increase or decrease the drug dosage if the metabolite level was outside a specified range.

This three-step process, in the Court’s view, was nothing more than stating an unpatentable law of nature—the researchers’ findings—and adding the words “apply it.” Something more was needed before the application of a law of nature qualified as a patentable invention.

An observer’s first reaction might be, “So what’s the big deal?” The big deal is that the process patent in the Mayo case is an example of what a sizeable portion of the patent system has become in the Information Age: words, sometimes precise but more often vague, describing how to do something that involves a substantial degree of intangibility. Business methods patents are one variant of the group. Another common term is software patent, which at an unpatentable level is just a computer program. But add a little hardware, and U.S. Patent Office Examiners, striving to meet performance goals, are often persuaded.

Included in Information Age patents are financial arrangements and manipulations that result in exotic financial products, business and managerial analysis procedures that purport to optimize operations, and scoring and ranking exercises that lend an aura of certainty to murky decision-making.

U.S. patent law authorizes patents for processes, machines, manufactures, and compositions of matter. In an outburst of exuberance, a Congressional Committee report in 1980 stated that “anything under the sun” was patentable. Realizing this was not quite the extent of the patent concept, the Supreme Court over the years has narrowed patentability to exclude laws of nature, natural phenomena, and abstract ideas. But the boundary between what is and what is not patentable remains ill-defined. Indeed, as the predominantly tangible Industrial Age has given way to the intangibles of the Information Age, the boundary has become more and more opaque.

In 2010, the Supreme Court, in Bilski v. Kappos, 561 U.S. __, 2010, grappled with the boundary’s location. The Court affirmed a lower court decision that a process involving a form of financial derivative, specifically a hedging transaction in the energy markets, was not patentable. All nine Justices agreed on the ultimate result, but they took several paths to that result.

Four Justices—Kennedy, who wrote the opinion of the Court, Roberts, Thomas, and Alito—said as little as possible. They defined the proposed patent as an abstract concept and rejected it for abstractness. But they did not hold that business methods in general were unpatentable. Business methods presented special Information Age challenges—the opinion specifically recognized the existence of the Information Age—but the four Justices found no general prohibition on the granting of patents for business methods.

Four other Justices—Stevens, who wrote a concurring opinion, Breyer, who joined in that opinion and also wrote another concurring opinion, Ginsburg, and Sotomayor—took a more expansive view. They would have prohibited business methods patents outright. Justice Scalia joined a portion of Kennedy’s opinion and a portion of Breyer’s opinion. The portions of Kennedy’s opinion and Breyer’s opinion that Scalia joined were portions that did not raise questions or concerns about patents for business methods. Interestingly, the portions of Kennedy’s opinion Scalia did not join were also the only portions of the opinion that referred to the Information Age. Perhaps a Constitutional Originalist and the Information Age don’t mix well.

Thus, although everyone agreed on the ultimate outcome, the varying rationales made for a rather messy situation. The one point of agreement in the rationales seemed to be that a machine-or-transformation test provided a useful and important clue for determining whether some claimed processes were patentable, but it was not the sole deciding factor. The machine-or-transformation test for an invention that involves a process is if (1) the process is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. But to emphasize, the machine-or-transformation test only provided a clue regarding patentability.

So Bilski left much uncertainty in its wake.

One approach to bringing a little more clarity to the question of what is and what is not patentable might be the application of a data in-data out test. Data, incidentally, is a fundamental pillar of the Information Age. In a data in-data out test, if the subject matter of a patent application consists primarily of introducing data into a system—system being broadly defined—applying or otherwise manipulating the data, and then extracting a largely intangible result of predominantly data, then the threshold of patentability has not been achieved.

And without saying expressly that was what it did, that indeed was what the Supreme Court appears to have done in Mayo. The Court’s explicit analysis was centered on whether the process in Mayo was a patently permissible application of a law of nature, or merely a statement of the law of nature with the directive to “apply it.” But the Court’s analysis also lends itself to a data in-data out interpretation. For example, on pages 10-11 of the slip opinion, the Court says: “The upshot is that the three steps simply tell doctors to gather data from which they may draw an inference in light of the correlations.” The process’ data in? “gather evidence.” The process’ data out? “an inference.”

The Court discussed two precedents in depth: Diamond v. Diehr, 450 U.S. 175 (1981), and Parker v. Flook, 437 U.S. 584 (1978). Each precedent involved a process of three steps. And each three-step process involved a basic mathematical equation that, like the law of nature in Mayo, was itself not patentable. In Diehr, the process was determined to be patentable. In Flook, the process was determined to be not patentable. The Court’s analysis in each case can be viewed in data in-data out terms, with the difference in the results being attributed to a greater tangibility component in Diehr.

Diehr’s process was a method for molding raw, uncured rubber into various cured, molded products. The three-step process used a known mathematical equation, called the Arrhenius equation, to determine when to open the mold’s press. The three steps were: (1) continuously monitoring the temperature on the inside of the mold; (2) feeding the resulting numbers into a computer, which would use the Arrhenius equation to continuously recalculate the mold-opening time; and (3) configuring the computer so that at the appropriate moment it would signal a device to open the press. The Mayo Court appeared to attach great significance to the output in Diehr being not just data but the automatic opening of the press at the proper time.

Flook’s process was a method for adjusting “alarm limits” in the catalytic conversion of hydrocarbons. Operating conditions such as temperature, pressure, and flow rates were continuously monitored in the conversion process. When the operating conditions exceeded certain alarm limits, inefficiency or dangers were indicated. The three-step process amounted to an improved system for updating the alarm limits. The three steps were: (1) measuring the current level of the variable, temperature for example; (2) using an apparently novel mathematical algorithm to calculate the current alarm limits; and (3) adjusting the system to reflect the new alarm-limit values. Unlike in Diehr, the output of the process in Flook was somewhat removed from anything tangible. The output was simply adjusted alarm limits. The connection to hardware, to a means for setting off an alarm, was unclear.

So one can argue that another way to describe the state of the law regarding patentability is that a pure data in-data out process does not appear to be patent-eligible. But if a bit of hardware is added for the data out to interact with, then perhaps a patent is warranted. The caveat to this perhaps idealistic view concerns the field of business methods patents. Here, the data out may be an intangible such as a financial instrument, a customer rating, a fraud score, or an optimization selection. One can argue from Flook, Diehr, Bilski, and Mayo that a predominately intangible output in a process should not result in a patent. Unfortunately, each week the Patent Office awards a number of patents for data in-data out processes that have little tangible output and involve not much more than general purpose computers running particular software.

A saying one sometimes hears around the Patent Office is that a patent is an invention and words describing the invention. But in many patent applications in the Information Age, the words predominate. The invention is an intangible, an idea, a series of steps, an abstraction. Maybe some legal protections are desirable for these types of inventions. Perhaps a copyright. Perhaps an entirely new concept. But ramming the intangible innovations of the Information Age into the largely tangible-oriented patent system of the Industrial Age is not a particularly pretty sight.

EATIN' DOG

If you were one of the several million or so Americans who passed through Southeast Asia back in, oh, ’60 to ’73, you might’a eaten a little dog meat. Of course, present-day anti-Obamaists who are trying to make an issue of the President eating dog meat in his youth in Indonesia would probably not have been so adventuresome. No, many of these present-day anti-Obamaists would likely have been part of the Dick Cheney crowd of pudgy boy tough guys who talked a helluva war but when it came to their own service, preferred the deferment approach. Or if they did happen to end up in Southeast Asia, never made it out of a U.S. military mess hall.

Yes, dog meat was a staple in Southeast Asia during those years. And if you found yourself in a rural area, you might even have gorged on field rat from time to time. Vietnamese troops would often catch and roast the rodents while on operations, and any Americans who happened to be accompanying them (the Vietnamese troops) were often invited to participate. Hey, it tasted like chicken.

So if anti-Obamaist followers of a certain stuff-shirt, pressed-jeans, slick-haired 2012 Presidential candidate want to make an issue of eating dog, go for it. As for this child, he’s branching out. Here, kitty, kitty, kitty.

“Ask not what your country can do for you—ask what you can do for your country.” How Quaint.

A half-century ago these words of John F. Kennedy inspired much of a generation. The words would seem to be timeless. But until recently, his classic defense of the separation of church and state would also seem to have been timeless. Then a serious conservative candidate for the Presidency of the United States, Rick Santorum, characterized Mr. Kennedy’s defense of the separation of church and state as a cause for vomiting. So how might present-day conservatives feel about John F. Kennedy’s exhortation to ask what you can do for your country?

In a recent column in The Wall Street Journal, Lawrence B. Lindsey chastised Treasury Secretary Timothy Geithner for using the phrase "privilege of being an American" (February 29). Mr. Lindsey, a former Federal Reserve governor and a member of George W. Bush’s administration, argued at length that what Americans have are not privileges but rights. Moreover, the principal right of Mr. Lindsey’s focus seemed to be the right to not be taxed. Absent from Mr. Lindsey’s civics lesson was any mention of responsibilities and obligations that might be part of the citizenship equation.

Perhaps in this age of it's-all-the government's fault, the absence is understandable. Still, one can occasionally feel a bit of nostalgia for those long ago times when high school civics classes and youth organizations left the young and impressionable with the thought that citizenship and obligations were not mutually exclusive concepts.

The responses to Mr. Lindsey’s column ran the gamut from, yeah, we’re taxed too much, to yeah, we’re taxed way too much. But then, the editorial pages of the Journal are not a place where one is likely to find much support for collective action by the citizenry, which is another way to describing what government and taxation actually are.

So what opinion might Misters Santorum and Lindsey, and other present-day conservatives, express about “Ask not what your country can do for you—ask what you can do for your country”? Well, let’s just say that altruism, a sense of collective responsibility, and civic obligations do not seem to rank very high among the virtues admired by 21st Century American conservatives. Now if President's Kennedy's exhortation came with tax cuts. . . .

TAKING GRANNY HOME FOR CHRISTMAS

TIME TO HANG IT UP

Cranky has been running marathons and ultramarathons for thirty-five years. Actually, the running faded away about fifteen years ago. What he’s been doing since then is more like shuffling. Anyway, after his latest effort—this year’s Marine Corps Marathon—he’s decided it’s time to call a halt, unless someone is willing to pay him big bucks. A la Dave Letterman, here are the ten reasons why.

1. He’s being passed by old men and obese women.

2. His times from his prime days have more than doubled, for a marathon from a little over three hours to well over six hours.

3. The hurt doesn’t start building after ten, fifteen, or twenty miles. The hurt starts right away.

4. His knees have no cartilage left; it’s bone on bone.

5. The water points are invariably out of water by the time Cranky arrives.

6. He’s tired of reading about some seventy or eighty year-old still running marathons. Good genes are something you are born with, not something that necessarily warrants effusive praise.

7. He’s too tired to oogle the young lady spectators.

8. The young lady spectators are preoccupied with young men spectators and young men runners.

9. He snaps at people who ask what his time was.

10. Finishing at the back of the pack and still being a basket case just ain’t much fun.

PATENT REFORM? A LONG WAY TO GO

On September 16, President Obama signed into law the Leahy-Smith America Invents Act, which made various amendments to the nation’s Patent Act (codified at 35 U.S.C §1-376). Ballyhooed as a patent reform measure, the America Invents Act really only touches the surface of patent reform. The fundamental challenge that the Information Age has thrown at the patent system was largely unaddressed. That challenge is where to draw the line between what is and what is not patentable.

For much of the Industrial Age, the line required a significant degree of tangibility for an “invention” to be patent-eligible. The requirement was not an explicitly written legal provision; it just flowed naturally from the primary focus of Industrial Age innovation, that focus being physical things.

Then in the latter half of the 20th Century came the Information Age. Tangibility gave way—not completely, but significantly—to bits and bytes, to different combinations of those bits and bytes, to software instructions for computers, to many “inventions” that consisted mostly of descriptions about how to do something rather than descriptions of a something itself. Indeed, in a number of cases, the descriptions, which after all were just words, were pretty much the whole “invention.”

This change in focus from the tangible to the intangible presented difficulties for a patent system that had long viewed patents as having two components: an “invention” and words describing the invention. In the intangible world of the Information Age, the words describing the invention often became the invention itself.

Section 101 of the Patent Act lists four categories of patentable objects: “any new and useful process, machine, manufacture, or composition of matter.” The process, also called the method, category is where many Information Age, intangible innovations fall on the patent spectrum. Business method patents is a non-legal term frequently applied to many patents in the process category. Another informal term often encountered is software patents. The term, which has no precise generally accepted definition, refers to innovations that consisted solely or mostly of computer instructions.

In July 2010, the U.S. Supreme Court handed down a decision, Bilski v. Kappos, that dealt with the patentability question, the question of what might fall beyond the bounds of process, machine, manufacture, or composition of matter. The “invention” involved was a method of hedging against risk in the energy market. The key claims as identified in Justice Kennedy’s opinion of the Court were 1 and 4. Claim 1 contained a series of steps describing how to hedge risk. Claim 4 put the concept articulated in claim 1 into a mathematical formula.

All nine of the Supreme Court Justices agreed that no patent should be granted for the described hedging process. The point all nine justices apparently agreed upon was that the process was abstract and therefore not patentable. But there was no single rationale that could provide much-needed guidance to the Patent Office and the patent and business communities. Four Justices—Kennedy, who wrote the opinion of the Court, Roberts, Thomas, and Alito—said as little as possible. They defined the proposed patent as an abstract concept and rejected it solely for abstractness. But they did not hold that business methods were unpatentable. They conceded that business methods presented special Information Age challenges—the opinion explicitly recognized the existence of the Information Age—but the four Justices found no general prohibition on the granting of patents for business methods.

Four other Justices—Stevens, who wrote a concurring opinion, Breyer, who joined in that opinion and also wrote another concurring opinion, Ginsburg, and Sotomayor—took a more expansive view. They would have prohibited business methods patents. Justice Scalia joined a portion of Kennedy’s opinion and a portion of Breyer’s opinion. The portions of Kennedy’s opinion and Breyer’s opinion that Scalia did not join were portions that cast degrees of doubt on patents for business methods. Interestingly, the portions of Kennedy’s opinion that Scalia did not join were also the only portions of the opinion that referred to the Information Age. Being a firm Constitutional Originalist, perhaps Justice Scalia objects to the Information Age.

The bottom line was that the Court in Bilski provided only minimal guidance on the question of where the patentability line should be drawn. The Court did condone a machine-or-transformation test for process or method patent claims: was a process tied to a particular machine or apparatus, or did the process transform a particular article into a different state or thing? But the Court emphasized that the machine-or-transformation test was not the sole test for determining patentability under §101of the Patent Act; the test was simply a useful and important clue or investigative tool.

So, the Supreme Court punted in 2010 when presented with an opportunity to clarify the bounds of patentability. Would Congress do better in the first comprehensive patent reform act in almost sixty years? Well, no.

Perhaps the most talked about provision of the America Invents Act is the change from a first-to-invent system to a first-to-file system for determining who is entitled to a patent. The United States had been alone among industrialized nations in having a first-to-invent system. By moving to a first-to-file system, the United States will, proponents hope, reduce administrative and litigation costs patent applicants and holders can incur in a first-to-invent system, and in a world of disparate systems. Adoption of the first-to-file system was accompanied by a number of conforming changes to other provisions of the Patent Act, including §102 on novelty and §103 on non-obvious subject matter. These changes, and the change to a first-to-file system in general, are of interest to patent practitioners down in the weeds of the patent world, but they have little significance to the broad question of what types of innovations should or should not be granted patent protection, protection that in essence amounts to a limited-term monopoly.

Another much discussed aspect of the America Invents Act is the broadening of post-grant reviews. A rationale for the expansion of post-grant reviews is that the complexity of technology and the large increase in the number of patent applications has resulted in the granting of many patents that on one grounds or another should not have been granted. Under the America Invents Act (section 6), post-grant reviews may be sought on any invalidity ground during the first twelve months after a patent is issued or reissued.

A narrower provision of the America Invents Act (section 18) allows post-grant review of the validity of certain business method patents. The covered patents include ones that claim a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that patents for technological inventions are not covered. Interestingly, the provision includes the admonition that amending or interpreting the categories of patent-eligible subject matter set forth in §101 of the Patent Act are not a permitted result of a post-grant review of a financial product or service patent.

The only direct narrowing of patentability under the American Invents Act concerns tax strategies. A small subset of business method patents, tax strategy patents are, as the moniker suggests, patents on tax strategies, or more accurately, on ways to avoid or reduce taxes.

Protecting tax strategies through the patent laws had aroused enough politically powerfully opposition that Congress was willing to curtail the practice. But Congress was apparently leery of opening a can of worms, which would have been the case if it began tinkering with the categories of patent-eligible subject matter in §101 of the Patent Act: processes, machines, manufactures, and compositions of matter. Consequently, Congress took the approach of saying that any future tax strategy patent applications would be deemed insufficient to differentiate them from prior art. In other words, future tax strategies would not be considered novel or non-obvious inventions warranting patent protection.

So Congress has joined the Supreme Court in punting on the fundamental question that the Information Age poses for an Industrial Age patent system: as predominately intangible innovations proliferate and become the mainstay of economic activity, where is the line to be drawn between what is patentable and what is not patentable? For the time being, drawing that line will be the province of, principally, two entities: the Patent Office and the Court of Appeals for the Federal Circuit, which is the federal appeals court that deals with patent matters at the appellate level.

The Patent Office itself does not speak with one voice. Policies and guidance are issued at a centralized level, but patent examiners can be all over the board in interpreting the policies and guidance, particularly in the fuzzy field of business method patents. The internal Patent Office appeals body—the Board of Patent Appeals and Interferences, which the America Invents Act renamed the Patent Trial and Appeal Board—attempts to bring a modicum of consistency to examiner decisions, but the effort is never-ending and only partly successful.

Thus for those seeking patent protection for innovations with a significant degree of intangibleness, the years ahead will likely be a time of considerable uncertainty. The principal beneficiaries of the uncertainty? The patent bar, of course.

CNN-TEA PARTY PRESIDENTIAL DEBATE: THOUGHTS ABOUT

) When did CNN foreswear substance for entertainment?

) The National Anthem!?

) OK then, why not an F-16 flyover?

) And scantily clad cheerleaders?

) Was CNN making a case for being the Monday night football provider?

) Michele Bachmann’s children number 3, 5, 7, or what?

) If CNN allies with the Tea Party to sponsor a Republican Presidential debate, would it also join forces with the Democratic Party to sponsor a Republican Presidential debate?

) Texas Ranger Recon Unit: can it operate nationwide, maybe even in Afghanistan?

) Which is an indication of greater idealism: cheering for the uninsured thirty-year old dying because of no medical care, or cheering, as in the last debate, about Texas executing two hundred plus people during the Rick Perry years?

) Do those who support individual retirement accounts based on stock market investments recall that the stock market tanked recently?

) If old people’s benefits are not going to be tampered with and reforms will make things right for young people, does that mean those in their forties are in deep do-do?

) Who keeps returning Ron Paul to the U.S. Congress?

) For that matter, where did these Tea Partiers come from?

) Is pretty much anything treasonous?

) Newt Gingrich, Rick Santorum, Herman Cain: somebody is paying you guys to embarrass yourselves, right?

) And Wolf, it’s been a long slow decline from those heady days in 1991 when you were a young stud dodging incoming Scuds in Saudi Arabia, hasn’t it?

ONE MONTH WORK, NINE MONTHS VACATION?

The Congressional Budget Office issued a sobering budget and economic report on August 24. Among other predictions, the CBO estimated that unemployment would remain above 8 percent until 2014. That’s more than two full years away. A major reason for the pessimistic forecast is that the CBO anticipates only modest economic growth.

And why is economic growth only expected to be modest? Republicans will tell you that too much taxation and too many regulations are the problem. Democrats will tell you that not enough government stimulus is the problem. Some economists will tell you that a financial crisis caused by too much debt—such as the current one—does not permit a quick rebound. The economic system has to go through a painful period of deleveraging; that is, debt reduction. Carmen M. Reinhart and Kenneth S. Rogoff are two such economists (This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press, 2009).

The too-much-debt economists are probably in the ballpark. But their explanation might not be the whole story. A few months ago, Barack Obama his own self stumbled onto a fundamental problem. He noted that using an ATM meant you were not interacting with a real live bank teller. In other words, ATMs have substantially reduced the number of tellers need in the world.

Of course, the President’s observation was greeted with derision by his adversaries, and even many of his supporters snickered. But he did touch upon a serious obstacle to a full-employment economy: the rapidly changing nature of work. Over the centuries, technological change has in turn produced changes in the nature of work. Existing jobs and occupations have disappeared or been degraded. New jobs and occupations have evolved. The process has rarely been smooth. Change is messy.

The onset of the Information Age, brought about by the computer, has continued—indeed accelerated—this disruptive evolutionary process. The relative, and in some cases absolute, numbers of bank tellers, secretaries, administrative assistants, production line workers, and many other similar types of employees have contracted. New jobs and occupations are emerging, but slowly. In fact, national economies may be entering an environment in which full employment is not achievable. Put another way, the problem might not just be the lack of jobs but the lack of need for a fully employed workforce.

If, say, 100 workers and managers can, with computers and computerized machinery, produce enough food, clothes, housing, other necessities, and leisure goods for 1,000, 10,000, even 100,000 people, what then? Well, you respond, those thousand or whatever need money to buy the food, clothes, housing, other necessities, and leisure goods, so they have to work. But all the necessary work is being done. Is massive income redistribution the answer? Is rotating the 100 necessary worker and manager positions through the 1,000 total supported people the answer? Work a month and get nine off? Are we ready for that future?

THE BOOGER, OUR LITTLE FRIEND

Boogers get a bad rap. They are consistently portrayed in an unflattering manner. Their extraction through nose-picking is not presented as a natural human activity but as something uncouth, even filthy. An entire Seinfeld episode was built around the disgust with which society views a pick.

Yet who among us has not participated? And we should not be ashamed of having done so. Boogers are not vile things. They are actually quite useful.

One use: food. Yes, boogers can be a tasty little snack. They are naturally salty, some more so than others. And if survival is at stake—say you are trapped in a cave and becoming malnourished—boogers are certainly more palatable than other human waste alternatives. So, find yourself hungry but with no food readily available? Pick your nose.

Another use: glue. Some, admittedly not all but some, boogers are excellent adhesives, at least as good as epoxy, J-B Weld, Gorilla Glue, or other alternatives available from such stores as Home Depot and Ace Hardware. Have a repair job requiring an industrial strength adhesive? Pick your nose.

A third use: beauty spot. Accustomed to applying a beauty spot as part of your preparations to face the world each day but don’t have the necessary material one fine morning? Pick your nose.

Not yet persuaded about the value of boogers? Well, their use as a hygiene sensor should remove all doubts. Most of us have worked in offices at some point in our lives. And offices mean communal lavatories. And keeping communal lavatories clean is a challenge of the first order. Some employers commit the resources necessary to maintain a minimally acceptable level of cleanliness. Most don’t. But as an employee, how can you judge?

You can certainly judge the extreme. Unflushable toilets and urinals (do female bathrooms have urinals? Seriously, most guys don’t know) are certainly not acceptable. But how do you evaluate the rest?

Well, one method involves the much maligned booger. Simply place a booger on a wall. If you’re a guy standing at a urinal and no one is around, reach into the old nose, get one of your bad boys, and deposit it at eye level or a little below. And then see how many days it remains in place. Or if you’re in a stall rather than at a urinal, deposit the little rascal on the side wall, maybe a bit to the side of the paper dispenser so you’ll have a reference point to locate it on later visits.

Among Cranky’s former employers was an agency of the federal government. This particular agency was a bit lax in the hygiene department. Hygiene sensors frequently remained unremoved for weeks. The last one Cranky deposited set a record. Seven months after installation, it was still in place. In fact, Cranky left the agency before the sensor did. Some years have passed so surely it’s gone by now. But maybe, just maybe. Second floor men’s room. Urinal furthest from the door. Eye level. Check it out.

THE GLORIOUS REPUBLICAN OATH CRUSADE

Where is Major – de Coverley when we need him?

A little rusty on your Catch-22? Major – de Coverley (yes, there was no first name, only a dash) was a minor character in Joseph Heller’s 1961 classic comedic, some would say subversive, novel set in a U.S. Army Air Corps unit in the Mediterranean during World War II. An imposing figure, with an eye patch, the Major’s reaction to a particular situation might be just the sort of thing needed to extract today’s Republican Party from a sticky mess it has gotten itself into.

What Major – de Coverley did was to bring an abrupt end to the Glorious Loyalty Oath Crusade. The Crusade was the brainchild of Captain Black, a rear echelon intelligence officer who fancied greater things for himself and was constantly plotting to achieve those things. After his failure to become the squadron commander—the job went to Major Major—Captain Black was upset in the extreme. He decided that Major Major was a Communist and announced to his fellow rear echelon officers: “They’re taking over everything. . . .I’m going to do something about it. From now on I’m going to make every son of a bitch who comes to my intelligence tent sign a loyalty oath.”

So the Glorious Loyalty Oath Crusade was born. It became an immediate success. The plane crews had to sign loyalty oaths to get their map cases, more oaths to get their gear, including flak suits, and still more oaths for transportation to the airfield. An unofficial competition sprang up among the rear echelon administrators as each sought to outdo the others in requiring loyalty oaths. Requirements for the pledge of allegiance and the singing of The Star-Spangled Banner soon appeared.

Major – de Coverley had been away from the unit when the Oath Crusade began. Shortly after returning, he attempted to enter the mess hall. A loyalty oath was thrust at him to sign. He looked at it. He looked at a group pledging allegiance before sitting and another group singing The Star-Spangled Banner before using the salt, pepper, and ketchup.

With “fiery disdain” and “mountainous wrath,” Major – de Coverley swept the oath away. Harshly and loudly he thundered, “Gimme eat.” Looking around the room at the various groups at one stage or another in the oath taking process, he added with a roar, “Give everybody eat.” And so the Glorious Loyalty Oath Crusade came to an end.

Captain Black remind you of anyone? Yes, Grover Norquist. Mr. Norquist’s no tax pledge has not only become almost a requirement for success in today’s Grand Old Party but has also spawned pledges and oaths on other matters, abortion for example. As many observers have suggested, should not the oath to support the Constitution that every office holder takes be all the oath-taking that is necessary?

Yes, what today’s Republican Party needs is a Major – de Coverley, someone who, when Mr. Norquist thrusts a no-tax pledge at him or her, sweeps it away and thunders, “Gimme eat. Give everybody eat.”

DESERT STORM, THE FORGOTTEN LESSON

The twentieth anniversary of the Gulf War of 1991 is passing with little notice. Yet the war was one of those pivot points in the history of the United States when the perceptions of the past give way to a different focus. Perhaps the small number of backward looks is due to the intervening chaos of the Twenty-First Century’s inauspicious beginning. Perhaps the lack of attention is a result of the extraordinary degree of success that was enjoyed by the United States and its Coalition partners in 1991. Whatever the reason, the Gulf War and Operation Desert Storm—the name of the military operation under which the war was prosecuted—are now little more than historical footnotes.

How was the war an historic pivot point for the United States? Most notably, the event erased the last vestiges of the international funk into which the nation had fallen after Vietnam. For almost two decades, the U.S. had been afraid of its own shadow. Every foreign policy issue had been considered in the context of, we can’t have another Vietnam. The attitude surely discouraged involvement in a number of ill-defined messes around the globe. But it also hindered action in more clear-cut situations.

The Iraqi invasion of Kuwait on August 2, 1990, was just such a situation. In response, President George H.W. Bush on August 5, 1990, set a tone not heard much in the preceding twenty years: “This will not stand.” Thus commenced months of both diplomatic activity to bring other nations on board and military preparations for a possible armed intervention. Something else that commenced were months of, we’re getting ourselves into another Vietnam. But George H.W. Bush was not to be dissuaded. The diplomatic efforts to build a coalition succeeded, and when Iraq failed to leave Kuwait, the armed intervention—war—followed.

Air attacks began on January 17, 1991, and a ground invasion of Kuwait and southeastern Iraq started on February 24. By March 3 the fighting was over. The enemy, Iraq, was vanquished, papers were signed, and the victors came home to parades and celebrations. It was a classic military victory. So much for that disagreeable little episode a few years back in Southeast Asia.

But righting a wrong and erasing the funk of Vietnam had downsides. For one thing, at least a few individuals in Islamic nations were disturbed by the intrusion of the West, particularly the United States. Cultural and religious norms had been violated. Perhaps feelings of belligerent inferiority had been stoked. The simmering hatred for the West and the United States became apparent to all on September 11, 2001.

Another downside seems to have been the creation of a false impression in the minds of some in the victorious nation, the United States. That false impression concerned the apparent ease of applying military might. The leading U.S. military men in the Gulf War, General Colin Powell, Chairman of the Joint Chiefs of Staff, and General Norman Schwarzkopf Jr., Commander of U.S. Central Command, had insisted on adequate—no, more than adequate, overwhelming—forces. A veteran of World War II, George H.W. Bush agreed with the need.

And the force that was put together for the Gulf War was indeed overwhelming: in excess of 520,000 members of the U.S. military alone. Other nations added at least another 100,000.

But the lesson of victory resulting from the application of this overwhelming force was not learned by all, including apparently the Secretary of Defense at the time, Richard B. Cheney. When the United States embarked on the Afghanistan and Iraq wars in 2001 and 2003, respectively, the numbers of troops involved were much below the 1991 Gulf War levels. There is no evidence that Mr. Cheney, now the Vice President, expressed any concerns about the relatively small force the nation was committing.

The maximum number of U.S. troops in Afghanistan and Iraq combined has never exceeded 200,000. The combined areas of the two countries total over 400,000 square miles. The operational area of the 1991 Gulf War—Kuwait and the southeastern corner of Iraq—was 20,000 square miles at the most. So the math is more than 500,000 troops for 20,000 square miles in 1991 versus less than 200,000 troops for more than 400,000 square miles in the wars of this century, a 25-to-1 versus a 0.5-to-1 ratio. Perhaps those numbers explain the elusiveness of a clear cut victory in Iraq and Afghanistan. Incidentally, the troops-to-square mile ratio in South Vietnam at the height of the U.S. involvement was approximately 1.3-to-1. As older readers may recall, that ratio proved inadequate to establish physical control over the entire country.

Thus a largely forgotten lesson of the Gulf War and Desert Storm—and Vietnam—is that seeking an outright military victory requires a massive commitment of manpower. If the committed forces are less than massive, the nation should lower its expectations and increase its time horizons. Simply keeping hostile forces off-balance for a lengthy period might be the best achievable outcome. But pursuing a classical military victory when the manpower commitment has not been made has proved a fool’s errand.

TEAR DOWN THOSE PYRAMIDS

Was Ronald Reagan a great President? Well, following Vietnam, the oil shortages, Richard Nixon, Gerald Ford, and Jimmy Carter, how good did you have to be? The nation was in a funk, economically and attitudinally. Just maintaining an even keel might be enough, in the eyes of many, to make you a great President. So yeah, Ronald Reagan might qualify as a great President.

But there were some negatives. On Ronald Reagan’s watch, the federal debt almost tripled, from $789 billion in 1981 to $2,191 billion in 1989, and in no year was there a budget surplus. The nation moved from being the world’s largest international creditor to being the largest international debtor. Unemployment reached 10.8 percent in the last months of 1982, almost two years into Reagan’s first term. The highest unemployment rate under Barrack Obama has been 10.6 percent, which basically was an inheritance from his predecessor.

Two hundred forty-one members of the U.S military died by Islamic suicide bomber in 1983 in Lebanon. Reagan responded by withdrawing the U.S. military from Lebanon, a wise move say some, cutting and running say others. In any event, the home-front political repercussions were few because Reagan promptly had the military beat the snot out of Grenada, a Caribbean powerhouse. Internationally, the withdrawal had a more detrimental result, helping to persuade a certain up-and-coming Islamic radical that the United States was something of a paper tiger.

In 1986, a murky arms for hostages deal involving Iran and aid to Central American anti-communist rebels raised questions about the extent to which Reagan was actually in control of his Administration.

But let’s be generous and say Reagan was a great President. He was certainly better than some who have gotten to the Oval Office. He made many of us feel good. He said pithy things. The problem is his present-day worshipers. They are prone to see the Reagan years as the nation’s apogee, a time when all was right with the world. They see the fall of Communism as a direct result of a Reagan pithy exhortation: “Tear Down This Wall.” They want current problems to be so easily solved.

The attitude was on display this weekend, the centennial of Reagan’s birth. The boys and girls at conservative media central, Fox News, could not just extol Reagan’s virtues. They had to go a step further and bash current political adversaries by contending that Ronnie would know how to solve current problems. The economy? The deficit? Ronnie would know what to do about them, never mind the mixed economic record of his eight years.

But perhaps the most ludicrous statements concerned the current turmoil in Egypt. Ronnie would know precisely what the nation’s policy should be. More important, he would be able to articulate that policy with rousing words of inspiration. The Fox News folks didn’t get around to speculating what those words might be, just that Ronnie would find them.

Ronnie not being here, however, perhaps he and his friends at Fox need some help. How about this: “Mr. Mubarak, Tear Down Those Pyramids.”

TIGER MOM OR DAD WOULD'A HELPED

Talk about explosive impact. The Tiger Mom Amy Chua has become close to a national obsession. Her espousals of a child-raising theory centered around browbeating one’s urchins until they excel have roused vehement debate. Most seem to think her approach is over the line.

Well, Cranky begs to differ. He thinks that the lack of a Tiger Mom, or Dad, in his youth condemned him to mediocrity. Cranky’s dream in his adolescent years was to be a high school basketball star. Despite a year-round commitment, however, and hours and hours of practice, he never made it past mediocre. Even in his senior year, he was mostly the sixth man on the team.

For a long time Cranky attributed his lack of success to being a slow 5’10” Caucasian with a vertical leap of about six inches. But now he realizes what the real problem was. He didn’t have a Tiger Dad, an Ol’ Man who devoted hours to screaming the Young Cranky to perfection.

So thanks a lot, Dad. It wasn’t me that was the loser. It was you. You were content to accept my obvious physical limitations. You did not demand that I overcome nature and achieve stardom. I could’a been a contender, Dad, but you let me down.

But there is still time for Cranky to be a Tiger Dad. I’ve got two grown daughters who are athletic enough but, to my regret, have never shown much interest in basketball. All I want them to do is to make a jump shot, a bona fide jump shot. Start with the ball about chest high, rise in the air bringing the ball over the head and situating one hand on the ball’s underside, then in that millisecond pause at the top of the jump, simultaneously flick the wrist and push with the arm.

C’MON GIRLS, STOP LOLLYGAGGING. YOU SHOOT LIKE GIRLS. IF YOU CARED FOR YOUR OL’ MAN, YOU’D DO THIS.

MAN UP, JUAN

The NPR-Juan Williams thing is why the Great Spirit made television: pure entertainment. NPR, of course, comes across as ideologically rigid, unfair, and not very bright.

But Juan Williams and his cohorts at Fox News are using the occasion to take both umbrage and gloating to new levels. The umbrage was at the seeming injustice of firing poor Juan for expressing in measured, non-inflammatory language a queasiness about getting on a plane with individuals in Muslim garb, a queasiness shared by perhaps 90 percent of his fellow citizens. The gloating was, “see, this proves our point about how hypocritical those pinhead leftwing liberals are.”

Juan-Fox, however, are in danger of overplaying their hand. In the day or so after his firing—which was immediately followed by a lucrative new contract for Juan with Fox—Juan was the guest host of Bill O’Reilly’s Factor. Instead of exercising a little low-keyed humor that would have made NPR even more the Ogre, Juan whined. And whined. And whined.

Whining is what Fox and conservatives accuse liberals of doing. But it appears that liberals haven’t cornered the market in whining. Juan and the other Fox conservatives have shown an ability to whine with the best of them.

One is tempted to resort to a favorite new phrase among distaff conservatives: Man Up.

Man Up, Juan. Stop your whining, enjoy your monetary largess, and get on with your life.

Incidentally, the perfect, though undoubtedly political incorrect, response of a Harry Reid or other target of a “Man Up” would be, “Hey Sweetheart, grow a pair.”

GOBI MARATHON

Hey Runners, tired of those multi-thousand person races in which you're rubbing elbows, butts, and whatever with your buddies for miles? Well, there are alternatives. One of Cranky's daughters sent some pictures of the 2010 Gobi Marathon in Mongolia. Here they are.

Nothing like a pre-race squirt of camel's milk:



And we're off:



Anybody seen a Porta Potty?



A tree would be nice:



Where are the cheering multitudes?



Wish you were here:

C&O CANAL ENCOUNTER

Recently—actually it was the hottest freakin’ four days of the year—Cranky and his oldest daughter did a little bike ride from Meyersdale in southern Pennsylvania to Washington, D.C., about 220 miles. The first 35 or so were on the Great Alleghany Passage trail from Pittsburgh to Cumberland, Maryland. The last 185 were on the C&O Canal trail.

All-in-all it was good time, but seriously hot. Also, after the first 25 or so miles each day, pretty brutal: tender crotch, pained back and neck. Cranky’s theory is that bikes are meant to be ridden no more than 30 miles at a time. At 30 miles, the body says, “enough of this.”

But still a good time. The Great Alleghany Passage and the C&O trails are kinda neat; not crowded, in places even empty. The C&O parallels the Potomac, so there’s always a flowing river close by. The C&O is also mostly shaded, a nice thing when the temperature is pushing 100.

An encounter, however, moved the trip from the just-good-time category to the memorable category. Cranky and his daughter encountered a nudist, a well-endowed nudist who was obviously proud of his equipment.

A number of campsites are along the C&O. They usually consist of a small clearing, sometimes a picnic table or two, and a pump that produces water from a well. On day two of the trip, a few miles east of the Paw Paw Tunnel, the travelers—Cranky and his daughter—stopped at one such campsite to replenish water. Just before the campsite was a small stone bridge. A couple—a man and a woman—were sitting on one of the bridge’s knee-high walls. The water pump was just beyond the end of the bridge. As Cranky and daughter pedaled past, Cranky got the distinct impression that the man was not clothed. He seemed to have a towel or tee shirt in his lap, but that was all.

But water was needed, so with a cheerful “we’re just gettin’ some water,” the travelers pulled up to the pump and proceeded with the task. After a few moments, the couple rose and began walking past the travelers to the grassy campsite. The woman had on a shirt and shorts. The man had on nothing and made little effort to cover himself with the towel or tee shirt he was carrying. Other than the man’s nudity, the couple weren’t threatening in any way.

The man appeared to be of South Asian, perhaps Indian, ethnicity. As he ambled down into the campsite, his ample brown buttocks bounced and rippled.

But the encounter had not reached its high point. The travelers finished replenishing their water and prepared to depart. As the travelers were mounting their bikes, the couple began returning to the bridge. The man was providing full frontal nudity. Cranky’s daughter, a modest young married lass, claims not to have gotten a full look, although someone distinctly exclaimed “WOW!” Cranky admits getting a full look and can make two definitive statements. The gentleman was not circumcised. And the gentleman was, well, hung like a horse. We’re talking a world-class Johnson.

If he were a younger man, Cranky could well have left the encounter feeling extremely inadequate. But at his advanced age, his predominant response has been to marvel at what nature occasionally accomplishes.

So, if you’re ever biking or hiking the C&O to the east of the Paw Paw Tunnel, keep alert. There’s more to be seen than deer, turtles, and the occasional bear. One of nature’s wonders might be in the area.

ALVIN GREENE FOR SENATOR

The people of South Carolina should set aside Alvin Greene's inexperience and elect him to the United States. Why? Because he is not Jim DeMint.

SUPREME COURT MEETS INFORMATION AGE, PUNTS

Guns were the subject of the most prominent decision issued by the Supreme Court on June 28, the last day of its 2009-2010 term. But another decision issued that day might ultimately have the most far-reaching impact, at least for the nation’s economic life.

The decision was Bilski v. Kappos, and the subject was patents. Yes, patents; for most, a mind-numbing topic.

In Bilski, the Court affirmed a lower court decision that a process involving a form of financial derivative, specifically a hedging transaction in the energy markets, was not patentable. But the Supremes declined to enunciate a hard rule. Essentially, they left the matter to a case-by-case determination.

Hedging? Sound a little familiar, doesn’t it? Yes, hedging, and other financial exotica were central to the financial crisis that descended upon the nation in 2007. And although the U.S. Patent Office had not granted a patent in the Bilski matter, it has granted quite a number of patents for similar processes and products.

The patent system began at a time when inventions were primarily tangible things. But largely as a result of the computer and the Information Age it brought about, the nature of innovation has changed. Both the importance and ease of innovation in various realms that are not quite tangible—concepts, processes, systems, methods, software, and the like—have increased significantly. Distinguishing mundane from meaningful innovation in these realms of the not-quite-tangible poses many difficulties.

The U.S. patent system has struggled with these difficulties. Following a decision by the Court of Appeals for the Federal Circuit in 1998—the State Street decision—the Patent Office, attempting to adhere to the court’s ruling, swung toward the extreme of no limits on what processes and other not-quite-tangibles could be patented. The resulting patents are often referred to as business methods patents.

Many business methods patents issued by the Patent Office in the years after 1998 were controversial. Briefly described processes and other not-quite-tangibles were criticized as attempts to patent the long-standing or obvious. Detailed described processes were subject to the same criticism and in many cases to another criticism: as described, the alleged innovations were simply beyond comprehension, the convoluted wording amounting to little more than gobbledygook.

Prominent among those business methods was the output of a new Information Age profession, financial engineering. Remember Lehman Brothers? Its failure in September 2008 brought the growing financial problems front and center. Like many organizations in contemporary high finance, Lehman Brothers had been assigned patents for financial “inventions.” One of Lehman’s patents, issued in August 2007, was entitled “Methods and Systems for Analyzing and Predicting Market Winners and Losers.” The patent involved massaging, with a computer program, performance and volume data for securities. Perhaps this particular computer program wasn’t quite up to snuff, eh Lehman?

In December 2007, JPMorgan Chase Bank, N.A., whose parent would rescue Bear Stearns a few months later, received a patent for a computer-implemented financial model involving asset-backed commercial paper. The model produced lower estimates of the liquidity—backup cash—allegedly needed to support a portfolio of assets financed in the commercial paper market. But insufficient liquidity turned out to be a major problem in the early months of the financial crisis. Some patent, huh JP?

Other notable Wall Street denizens that hold patents on alleged computerized improvements to high finance include Goldman Sachs, Morgan Stanley, Barclays Bank, Citicorp, Bank of America, and Credit Suisse First Boston. Big name Wall Street firms are not the only players. Fannie Mae and Freddie Mac, for example, have patents. IBM has a patent for a method to analyze financial derivatives. The Trustees of Columbia University have a patent for providing “Robust” investment portfolios. Indeed, with business methods patents in the financial field as sources, a decent history of the current financial predicament could be attempted.

The point is not to blame the world’s financial difficulties on patents. The patents are just evidence of how the computer and the Information Age have produced a financial system that we mere mortals are having difficulty controlling.

But back to Bilski. The Supreme Court upheld the Patent Office’s denial of the particular hedging process at issue. All of the Justices agreed that no patent should be granted for the described hedging process in the energy markets. But there was no single rationale that could provide much-needed guidance to the Patent Office and the patent and business communities. Four Justices—Kennedy, who wrote the opinion of the Court, Roberts, Thomas, and Alito—said as little as possible. They defined the proposed patent as an abstract concept and rejected it for abstractness. But they did not hold that business methods were unpatentable. Business methods present special Information Age challenges—the opinion specifically recognizes the existence of the Information Age—but the four Justices found no general prohibition on the granting of patents for business methods.

Four other Justices—Stevens, who wrote a concurring opinion, Breyer, who joined in that opinion and also wrote another concurring opinion, Ginsburg, and Sotomayor—took a more expansive view. They would have prohibited business methods patents. Justice Scalia joined a portion of Kennedy’s opinion and a portion of Breyer’s opinion. The portions of Kennedy’s opinion and Breyer’s opinion that Scalia joined were portions that did not question patents for business methods. Interestingly, the portions of Kennedy’s opinion Scalia did not join were also the only portions of the opinion that referred to the Information Age. Perhaps a Constitutional Originalist and the Information Age don’t mix well.

So the outcome is a very messy situation. Business methods patents did not cause the financial crisis and the Great Recession, but they do reflect the thinking that produced those events. And business methods patents are posing significant difficulties for the patent system. The Supreme Court could have provided a little clarity to a very confusing area of the law. By only addressing the factual decision before it and not taking a broader look at an Information Age challenge, however, the Court punted. Now it’s someone else’s problem.

GENERAL McCHRYSTAL'S RELIEF

“The Joint Chiefs have ordered everyone to stay in their homes. Do not leave your homes until permitted to do so.”

It’s been 35 years since Cranky heard those words. They were spoken in jest but Cranky, a young Army Reserve Officer on a two-week active duty tour at a headquarters in Japan, of all places, still found them somewhat chilling. The time was early August 1974, and the Watergate Scandal had reached its climax: Richard Nixon was resigning as President of the United States.

Cranky was with a small group of Army officers, most of them colonels, lieutenant colonels, and majors—and thus senior to him—in a conference room. The group was waiting for a meeting on a long forgotten subject to begin. A television monitor was replaying a stateside news report on Nixon’s resignation, and a few of those watching were providing largely humorous commentary. One such comment was the above implication that martial law had been declared.

The comment elicited no more noticeable reaction than the other comments. The television was soon switched off, the meeting called to order, and those present returned to mundane things.

But the words stuck with Cranky all these years and came quickly to mind when the Rolling Stone article on General Stanley McChrystal appeared. The comments and banter reported in the article are most likely not unfamiliar to those who have spent time in or around the military. The thing difficult to comprehend is their utterance in the presence of an outsider, particularly a member of the media.

Here are two thoughts. First, General McChrystal and at least some members of his staff are of the special operations community. Members of this community are a unique breed. Very well-trained and capable. But also very isolated. Macho to a fault. And for the most part contemptuous of outsiders, including even members of the regular military community.

The special ops community has limited contact with members of the media, and what contact that does occur is usually with very supportive reporters and under very controlled conditions. Then comes a high profile regular assignment such as Commander of all forces in Afghanistan. The media is no longer as dependably friendly and the conditions no longer as controllable. General McChrystal may have recognized the changed environment but at least some of his staff apparently did not. They still felt free to utter politically incorrect things and to bad mouth any outsiders. They didn’t get the change from secret base Zulu One to front and center in Kabul.

Thought number two concerns a compounding of the situation. The United States military, particularly the Army, is no longer a self-supporting outfit. All sorts of administrative and logistical functions once done by soldiers are now done by civilian employees and contractors. This may save some money, but it means less control by the military chain of command.

One field that has seen growth in nonmilitary personnel is public affairs. Part of this is the general outsourcing of military jobs. But part of it has been the result of efforts to ensure that military spokespersons, particularly at a high level, are saying things compatible with the desires of the Administration in power. And still a third part is a feeling that in this media dominated world, an “expert” in all things media is needed.

Ponder the contrast in spokespersons between the Gulf War in 1990-91 and the Iraq War that commenced in 2003. The spokespersons at General Norman Schwarzkoph’s headquarters during the Gulf War were occasionally the General his own self and at most other times a high ranking military officer performing public affairs duties. For the Iraq War, the military spokespersons enjoyed no such solitude. The uncertainties about why the Iraq War was being fought, what it was achieving, and how success was being measured apparently meant that public affairs could not be left to the military. Civilian spokespersons from the Bush Administration were prominent at military briefings and played leading roles in public affairs efforts.

According to media reports, including one in the Washington Post on June 22, civilian media advisors for high ranking military officers have become common. General McChrystal had one such advisor, Duncan Boothby. He resigned when the Rolling Stone interview first came to public attention. In the words of the Washington Post article, “Military officials say civilians are often better suited to provide constructive criticism and unconventional ideas than military public affairs professionals.”

Maybe so, but here’s an assertion from a former military public affairs professional: if a military public affairs professional with explicit responsibility for public affairs had been on General McChrystal’s staff, there’s no way the General and his subordinates would have been blabbing like the stereotype of gossipy, back-biting teenage girls. Outsourcing has its limits.

SOUTH CAROLINA

The next time South Carolinians want to secede from the United States, let ‘em. In fact, maybe we ought to throw them out. Whoever said the state was too small to be a republic but too large to be an insane asylum was certainly on point.

Mark Sanford, his Argentine Honey, and the Appalachian Trail; two alleged Southern Gentlemen publicly claiming sex with a female politician; another alleged Southern Gentleman calling that female politician a “raghead”; Lee Atwater; allegations that John McCain fathered in interracial child out of wedlock; Democratic Senatorial Primary winner Alvin Greene; Senator Jim DeMint. Is it the water, the mosquitoes, or what?

A successful democracy requires a modicum of maturity on the part of the electorate. South Carolina, you don’t make the cut.

ADULT ENTERTAINMENT TIPPING DEVICE

Want a look at the latest contribution to the national welfare by the U.S. Patent Office? It is patent number 7,716,081, entitled Tipping Device and issued May 11, 2010. Below is the drawing and the patent abstract.



A tipping device for dispensing a tip from a patron to a performer, such as in an adult dance venue, generally comprises a transaction apparatus including a money receiver at a first location for receiving money for the tip from the patron and a tip dispenser at a second location for dispensing the tip into the air so as to create an entertaining effect. The tip dispenser may be suspended by a winch above the performer. Preferably, the tip is dispensed out of reach of the patron at the first location and such that a patron at the first location may see the performer while the tip is being dispensed. The tipping device may include a spotlight or flashing lights for highlighting the patron during dispensing of the tip.

TAXES, THE OLD-FASHION WAY

Tax season is here and that means a host of articles and columns about computerized tax packages, online filing, commercial tax preparers, and the like. What you won’t find is much about the way a sizeable number of taxpayers still prepare tax returns: on their own with pencil, pen, paper forms, and a printed edition of this year’s IRS instruction book. That’s right, in the digital age some folks are still doing taxes the old-fashion, pre-computer way.

What’s wrong with these people? Who are these Neanderthals? Yes, many of them cannot be described as “young.” Their ranks probably contain proportionally fewer facebookers, twitterers, and app addicts than do the ranks of electronic filers. But that does not mean they are computer illiterate. Indeed, some of them are actually pretty good on the keyboard and can click a mean mouse.

Familiarity is one explanation for staying with paper. When you’ve prepared taxes by hand for two, three, four or more decades, the task is not as formidable as it must appear to a newbie. No contesting the fact that the forms and instructions are humongous. But the humongousness didn’t suddenly appear. It’s been a creeping thing, a little more each year. If you were able to get over the hurdle ten or so years ago when the IRS made a major thing of having taxpayers do preliminary calculations on worksheets in the instruction book—for example, the Unrecaptured Section 1250 Gain Worksheet or the (and this one’s a killer) Schedule D Tax Worksheet—you’re probably hooked. You will be doing taxes by hand until the Grim Reaper calls or your children conclude you’ve become too addled for driving a car, feeding yourself, or keeping track of finances.

Another reason for the old-fashion approach is Black Box Fear. What is actually happening inside those computerized tax packages? Why do different packages come up with different, although usually close, bottom lines? Computers certainly have many beneficial aspects. But they have also given us cars that mysteriously accelerate or suddenly lose the ability to stop. And they have given us financial engineers who in turn gave the financial system a brutal knee to the groin. The financial system is still doubled over from that little gift.

So Black Box Fear keeps some taxpayers attached to those tangible forms and instructions. If a calculation produces something odd, at least an individual with a little—or maybe a lot of—patience can work his or her way back through the procedure and the numbers.

There are other reasons for doing taxes oneself. Cheapness—damned if I’m paying money to have my taxes done. Cantankerousness—think you’ve made it too tough for me, eh? Inquisitiveness—how complex has Congress and the IRS made things this year?

Whatever, the reason, a tax underground exists, an underground of cheap masochists fighting a rear-guard action against the advance of the digital age. Form 1040, prepare to meet thy master.

TOYOTA, RUN-AMUCK FINANCE, AND THE COMPUTER

What do Toyota’s difficulties and the financial debacle of 2007-2009 have in common? Each is a negative consequence of the Information Age, more specifically of the computer. And each serves as a warning about what might lie ahead if humankind does not come to grips with the increasing complexity that the computer is foisting on the world.

The modern car has evolved into a very complicated computer system. Sensors, microprocessors, algorithms, as much as 100 million lines of computer code—this isn’t the mechanical machine of thirty or forty years ago, something maintained with just wrenches, pliers, and screwdrivers. No, the modern car is the province of computer and electrical engineers. And just as the case with other computer systems that have become fundamental to life in the 21st Century, a lot of things can go wrong, unexpected things difficult to isolate and identify.

Of course, simple physical problems are one explanation for the difficulties drivers have encountered with Toyota vehicles. Sticky pedals and interfering floor mats do not require an engineering or computer science degree to comprehend. But other explanations have been advanced. An article in The Washington Post on February 20, 2010, (“Suspicions Linger Over Acceleration in Camrys”) noted that one study found the portion of complaints to federal regulators about Toyotas and “speed control” tripled after electronic throttles were introduced in 2002. Electronic throttles are a form of computer system.

The same article highlighted a Camry owner’s manual that cautioned about two-way radio systems affecting the electronic throttle system. And it’s not just Toyota and Camrys. All modern cars are four-wheel mobile computers, some just more buggy than others.

And the connection between the computer and the run-amuck financial system? Can’t the financial difficulties that exploded on the world’s economies in 2007-2009, that in the United States produced the Great Recession, the worst economic downturn since the Great Depression of the 1930s, be explained in traditional economic boom-bust terms? Well, providing mortgages to unqualified borrowers certainly played a role. So did lax supervision, unfocused regulation, greed on Wall Street, greed on Main Street, accounting rules, maybe laissez faire government, maybe over-reaching government, probably some ideological hostility to government oversight in general, and much more.

But at a fundamental level were complex financial assets and strategies that few understood, weird financial insurance products with names like credit default swaps, and a new profession of financial engineering, all made possible by the computer.

Information is both the raw material and the product of the computer—kilobytes, megabytes, gigabytes, terabytes, petabytes and more of information. The ease with which information is now stored, manipulated, and created has been a special benefit to finance, a field that is all about information, information in the form of money. Ultimately, money is nothing more than information: information about supply and demand, information about wants and desires. So a tool—the computer—that produces an endless supply of information was married in the last quarter of the 20th Century to an industry—finance—that uses and, more importantly, creates a particular type of information, that type being money. The result was a money-producing phenomenon for which the world’s economic system, geared toward money as a scarce commodity, was not, and still is not, prepared.

Ponder these statistics. From 1945 to the early 1980s, the relationship between total financial assets in the United States and the nation’s Gross Domestic Product (GDP) was stable. For those years, financial assets ranged between 4 and 5 times GDP. Beginning in the early 1980s, the relationship changed. As a multiple of GDP, financial assets began to increase, reaching over 10 times GDP in 2007. Similarly, between 1945 and the early 1980s, total debt in the United States was fairly stable at approximately 1.5 times GDP. Over the next twenty-five years the multiple more than doubled. In 2007, total U.S. debt was 3.5 times GDP. Stated another way, since the early 1980s the increases in both financial assets and debt have outpaced the growth in GDP.

And the significance of the early 1980s? That is when the Information Age blossomed, when the computer became ubiquitous, when humankind entered a brave new world.

The computer is a powerful tool, perhaps the most powerful tool that has ever been invented. But it is a morally neutral tool. Just because the computer provides a way to do something—accelerate a car, securitize a mortgage—does not mean the result is wholly beneficial. Humankind’s problem is twofold: realizing that this most powerful tool has a negative side, and learning to control that negative side. The words of Albert Einstein in reaction to the first nuclear weapon come to mind: “Everything has changed, save the way we think.”

SARAH'S CRIB NOTES

The last time Cranky saw someone do such an obvious job of checking the crib notes on her hand was back in high school, many decades ago. Even the teacher—a nun actually; it was a Catholic school to which the young Cranky, who was not a Catholic, had been banished to get straightened out; didn’t work—saw the infraction. The teacher just rolled her eyes. The school year was almost over, the class had been a trying time for both teacher and students, and no amount of unauthorized help was going to improve the abysmal record of the crib-noter.

What was wrong with Sarah’s crib notes? Few are the politicians who don’t need a little help: teleprompters, note cards, written speeches. So help itself wasn’t the problem. It was just the medium by which it was delivered. The palm of the hand in the Information Age? It was a throwback to a simpler time, a bit of nostalgia in a world of blackberries, ipods, and gadgets run amuck.

So here’s to Sarah Barracuda for reminding us of days long ago, of nuns in full habit, of pretty girls bending the rules, of boys wondering what other rules the girls might bend. And as for claiming to see Russia from her house, writing words on your hand is one thing; drawing a map is quite something else. Wonder what she got in geography?

BALTIMORE MOMENT

Did you catch it? It didn’t last long, maybe an hour or so. And it will likely turn out to be an aberration, just a blip in the meandering morass that has been political discourse in the Nation for the last half century.

Still, maybe, just maybe, it could be the beginning of something, . . .just maybe.

On January 29, 2010, the President of the United States appeared before a gathering in Baltimore, Maryland. The gathering was of members of the House of Representatives from the opposition party. That’s right, members of the Congress of the United States, Republican members. He appeared without teleprompter, without a prepared script, without the accouterments that have become barriers between the Nation’s presidents and the Nation.

He was asked hard, contentious questions. He responded not with sound bites but with facts, arguments, and logic. His facts, arguments, and logic were certainly not accepted by all, either in the room or watching on television. But they were an attempt at communication with political opponents, an attempt to find common ground, an attempt to rouse the Nation from the polarized stupor into which it had sunk.

The stupor was a product of the Information Age, or maybe more narrowly, the Television Age. The Television Age had not improved the public discussion of issues as some had predicted in the early years. Rather, by extracting a high penalty for statements indicating uncertainty, for statements not in conformity with one or another group’s accepted wisdom, for statements containing even the smallest of errors, the Television Age had stifled real exchanges of views. Political practitioners had retreated to the safety of broad blandness.

On January 29, 2010, before a hostile audience, the President of the United States admitted error about himself and his supporters, pointed out errors of his opponents, argued policies and programs on a factual rather than an adversarial basis, and acknowledged the uncertainty surrounding many public policy issues. In short, he treated his audience and the people of the Nation as intelligent, thinking, rational individuals. Maybe, just maybe, . . . .

WOLF HUNT

Cranky's daughter and son-in-law are currently residing in Mongolia. Here is a recent communication from the son-in-law.

To some, hunting is a part of life. To others, it is life. For me, I enjoy taking a week off from work or school every fall for a little jaunt in the woods and mountains. The usual excursion is for Mule Deer in central Idaho where the temperature at that time of year rarely falls below 20º Fahrenheit at night and is about 40º during the day. Every year in early October my hunting buddies and I pack two or three trailers with tents, ATVs, and weapons and head up the mountains to an elevation of about 6700 feet. Our back-up heating system is rum.

So when I joined my wife, who is Cranky’s daughter, in Mongolia last month, I brought along a hobby. One of my priorities was to find a way to participate in that hobby almost six thousand miles from Idaho. And in less than a month I found me a hunting partner. He is a local surgeon whose wife works with my wife. He is Mongolian and an avid hunter. You know he has to be alright when his favorite hunting store is Cabela’s. It did not take long for me to convince him that I was a Great American Hunter. He invited me to go along with him and a few other buddies on a day-long Mongolian wolf hunt.

We set out at 0800 hours on the first Saturday in December. It was my host, me, and two of his buddies. I made sure I had everything I would need in my day pack. Dehydrated bananas and pineapple that my mother-in-law had sent, my shooting sticks, which unfold to stick in the ground and make a bipod to shoot from, binoculars, camera, GPS, hand warmers, water, and most important, a roll of extra soft toilet paper. The thermometer stood at -7º Fahrenheit outside. I was hoping my thick wool socks, 800-gram insulated hunting boots, long johns, hunting pants, under shirt, long johns top, long sleeved shirt with turtle neck, grey hooded sweatshirt, insulated vest, big insulated hunting coat, gloves, stocking cap, and fleece face mask would keep me warm in the sub zero temperatures. If nothing else, I sweated just getting dressed.

On our way out of Ulaanbaatar in my host’s Toyota Land Cruiser, we stopped at a local market for the essentials. We got water, bread, gum, cookies, and vodka, and resumed the journey. We made another short stop to rendezvous with other members of the group. Getting out of UB required a meandering course through a maze of gers, the local dwellings. I was truly confused by the time we got to the open road.

With the temps rising, but not past 15º degrees, and sunny I figured I would be okay warmth-wise. We started up the surrounding mountains and stopped at the top of one, at a pile of rocks with blue fabric tied to sticks jammed in the rocks. This was a prayer spot. All hunters piled out of the vehicles, and I was able to get a count. There were fourteen men: ten Mongolians, three Chinese, and one Idahoan. The first bottle of vodka came out. I was expecting us to pass the bottle around and finish it off before continuing on. But the man with the bottle got a cup and filled it about a fourth full. He passed the cup to one of the others, who dipped in his ring finger, pulled it out, and flicked drops of vodka to his right and left. He then took just a sip and passed the cup back to the gentleman who was pouring. The cup was refilled a fourth of the way and passed to the next hunter, who performed the same ritual. And so it went for all those present, including me. My host talked me through taking a sip and passing the cup back. The purpose of the ceremony was to bring good luck and safety to the hunt.

The prayer meeting over, we drove until we came to the ger of the leader of the Mongolian nomads in a valley. He had arranged with one of the hunters for the group to thin out the wolves that had been killing about one hundred sheep and cows a week.

After collecting a few of the local nomads (calling them local because they were in the valley at this time), we had the complete hunting party. A shot of vodka all around, and we were ready to start. The fourteen hunters were spread out in a line in the open along the base of a mountain. My host’s brother loaded up the five locals and took them to the other side of the mountain. We were all armed. I had one of my host’s rifles, a Czech made .308. Others had Russian made AKs and SKSs. The locals had 12-gauge single shot shotguns, and sticks. Their job was to walk up the far side of the mountain and down our side to flush out the wolves.

I had thus far stayed warm. But an hour and a half of sitting in the snow changed that. I could feel the moisture penetrating my clothes as I waited. I froze my posterior. Then, excitement! As the locals made their way down our side I spotted the first wolf. It came out into the open and bolted. My adrenaline shot up but drastically dropped when I saw I didn’t have a shot because a couple of gers were behind the wild dog. Later, a second wolf ran across the same spot. That was the final wolf of the day. With no shot and me with a wet frozen rear end, we made our way back to meet up with the group and exchanged stories. A total of seven wolves had been seen. Three shots had been fired but all were misses. I felt a little better about not getting a shot off.

We had time for one more chance at a different location. After the required vodka shot, we set out. The hunters set up, the locals flushed. The second spot where I waited was on a hillside opposite where the locals were flushing. I shared the hillside with a number of cows and goats. But no wolves. We soon got the signal to end the hunt.

Now came the part that distinguished this hunt from my Idaho experiences. We met at the ger of the local leader, who provided hot drinks and a huge feast. I had trouble with the milk tea, only downing about a fourth of it. Huge pots of boiled meat appeared. I could tell by looking in the pots that no part of the animal had been wasted. My host informed me that the menu was horse, which was sometimes eaten in the cold months because of its fat content. Although my grandpa had been a butcher and way back when had prepared a few horses for human consumption, I don’t believe I had ever had the pleasure. Even in Idaho, horse is not commonly found on the dinner table.

Knives were set out for us to take turns cutting bite-size pieces to eat. I was cutting off pieces small enough to swallow whole. Now, I am one to try just about anything once, but when I hear in my head “A horse is a horse of course of course…” (Theme song from Mr. Ed) I have problems. My host sensed that I was being bashful and cut a huge chunk of Mongolian sausage. A thing to understand is that the nomads do not process meat as is done in, say, Idaho. In other words, even an exotic weenie party in the States might not be exotic enough to include true Mongolian sausage. But in four bites I did a job on the intestine filled with horse meat, only to have my host give me an even chewier part to try. I was having trouble stomaching the stomach. But I did handle the final rounds of vodka with no difficulty.

I learned three things on my first Mongolian hunt:

1. It takes about 1 hour and 20 minutes to go 20.3 miles from UB (according to my GPS).
2. Mongolia is cold.
3. A horse is a horse of course…unless boiled then a horse is a meal.

HOW THEY HANGIN'?

Are you one of those computer know-it-alls who actually have a handle on shortcuts such as F9 and Control Z? If so, do you keep that knowledge to yourself? Because if you don’t, if you are prone to freely and frequently give gratuitous advice about hitting F something-or-other or Control this-or-that, you are a member of a most obnoxious group. Especially if you do so in a condescending manner, which you probably do.

Yes, the computer has created a stratification of society and culture. There are so many things to know about the blinking, grinding monster. If your approach to the creature is to know only what you need to know to get by, then you are likely in frequent collision with those who view even the simplest word processing effort as a competitive endeavor, as an opportunity to play one-upmanship. “Just hit Control F,” with an unstated but implied “Dummy” hanging in the air.

Cranky is part of the generation that grew up without computers but in adulthood had them become an integral part of home and workplace. A few of Cranky’s generation have had trouble adapting. Many others have taken to the technology—not just basic computers but also all the offspring gadgets—with alacrity. Cranky believes that he has become fairly fluent in computerize, but it’s still a second language.

In fact, second language is a good analogy. Someone who grows up in one language and learns a second as an adult very often remains just a tad off beat with the second. Maybe they think partly in the first language and need to do a little mental translating from time to time. Maybe they are not completely comfortable with slang, with quaint idioms, with unusual juxtapositions of words.

Cranky remembers a co-worker from job long ago in a place outside the continental United Sates. A popular greeting among young American males at the time was, “How they hangin’?” Well, this greeting fascinated the co-worker, whose name was John and for whom English was a second language. John’s English was very good, but it was not his native tongue. As much as he tried, John just could not capture the cadence of this new greeting. “Hey Gene, How...Are...They...Hanging?” he would ask, pronouncing each word slowly, properly, and emphatically. He realized his effort did not sound natural, which only spurred him to new efforts of precision.

Computerize to Cranky is like English was to John. Most of the time, Cranky can get the job done. A member of a younger generation, however, one that has been enveloped in the Information Age since birth, probably can recognize that Cranky’s facility with computerize is sometimes a little off-rhythm. And if something like computer shortcuts are thrown at Cranky—the F9s and the Control Zs—it’s, well, it’s like “Hey Gene, How...Are...They...Hanging?”

UB HELP DESK

Cranky recently had a computer problem that required a consultation with a help desk. While at work one day, Cranky wrote a short paper that he forwarded by email to his home email account for later revision. The problem was that the paper was composed in Microsoft Vista on Word 2007, which made it a .docx thingy. Cranky’s home computer uses the ancient Word 2003, or just the .doc thingy.

So when he tried to open the paper the next day at home, all Cranky got were paragraphs of little squares with occasional round things and other oddities. Having experienced this problem a number of times, Cranky quickly realized what was wrong. But correcting it was no easy matter. Perhaps some computer guru has a better solution, but all Cranky knows is that the original .docx has to be saved as a just plain .doc, and this requires a computer that has Word 2007.

The only immediately accessible computer Cranky knew of that had Word 2007 belonged to Cranky’s daughter. So he forwarded the .docx paper to her by email. And because he was anxious to have the paper right away, he gave his daughter a call.

“Hey, I just sent you a paper in .docx that I need converted to .doc and sent back to me.”

“Dad! It’s midnight here! I’m asleep and have to go to work at O Dark Thirty!”

“Hey, I’m sorry. I forgot about the time difference. But maybe as long as you’re awake, could you just convert it and send it back?”

“Look, I’ll do it this time, but don’t pull this again. I’m not your own personal Help Desk. I’ve got a job, you know.”

“I’m really sorry. But thanks for doing your ol’ man a favor. How’s my son-in-law Steven doing?”

“He’s asleep too. Now let me do this and get back to bed.”

“Okay. And I’ll try to keep the time difference in mind.”

“Yeah, right.”

So a few minutes later, Cranky got his .docx paper in proper .doc form. Take that, Bill Gates. Modern technology is amazing.

Incidentally, Cranky’s daughter resides in Ulaanbaatar, called UB by the expatriates. UB is the capital of Mongolia, which is somewheres north of China and south of Siberia.

[In the interests of full disclosure, and honestry, Cranky needs to admit that the preceding tale is only partly true. It's true that Cranky sent a .docx paper to the far side of the planet for conversion by his daughter to .doc. But the phone call was a bit of fiction, added for plot development purposes. You can, however, phone UB anytime you want. Small world, eh?]

FACEBOOKING

Recently, Cranky was a member of a small group on a work project. The group had five members. One was old. That was Cranky. The other four were in their late twenties or early to mid thirties. So Cranky was the odd man out in several ways, one of them being that he was the only non-Facebooker in the crowd.

Now, Cranky is not ignorant of technological developments. He knows there is such a thing as Facebook. He has heard about, and actually seen people engage in, twittering. But an occasion blog has been as far as Cranky’s participation in 21st Century stuff has gone.

One day a member of Cranky’s group, a young woman, let out with an “Uh oh.” One of the others asked the problem. The problem was that the boyfriend of a female friend of the young woman had posted an intriguing photo on his Facebook page. In the photo, the young woman’s friend was reclining, and smiling. Her top was pulled up well above her midriff. And the boyfriend’s head was embedded in the location where her torso joined her legs.

On her own Facebook, the young woman’s friend also had a photo of herself and the boyfriend. The two were standing beside each other, chastely holding hands, and looking into the camera.

The situation produced considerable discussion. Was a question of etiquette involved? Or of ethics? Or something else. Not having much experience in Facebooking, Cranky mostly listened.

But something about this Facebooking thing appealed to him. That night at home he broached the subject with the Mrs. “I think I would like to Facebook.”

The Mrs. looked skeptical. Cranky went on. “Yes, Facebook. And I saw this neat picture today that I would like to have on my Facebook. It would be the two of us.”

Not getting a response, Cranky described the picture.

“Are you out of your freakin’ mind!?”

“But Sweatheart, it would be fun. And who knows, it might bring back fond memories.”

“I’ll fond memories you, you idiot!” At which point she whacked Cranky with her cane; she has bad arthritis.

Fortunately, Cranky had not told his young co-workers of his Facebook plan. Consequently, the plan’s demise did not result in any loss of face.

WALL STREET COMPENSATION

In the current controversy over compensation for Wall Streeters and the Obama Administration’s efforts to curtail the greed somewhat, one thing is puzzling. How does Wall Street have what appears to be excess money when Main Street is hurting?

Here’s one possible answer: Wall Street has the ability to create money, not just manipulate it, reroute it, hoard it, but to actually create it. And this is something new, at least to the extent it has been done for the last few years.

How can Wall Street create money? The computer. One consequence of the Information Age, a consequence that is little realized, is that the financial system is no longer just a lubricant for economic activity involving tangible things. The financial system and its intangible products have become ends in themselves, not just means to permit the “real” economy to function.

The Information Age is about the dominance of information, and an important form of information is money. How is money a form of information? Stripped to its essence, money is just information about supply and demand. Money has provided this information since bartering receded as the major way goods exchanged hands.

But the computer and the Information Age have provided those with the capability—the Wall Streeters of the world—to create information, and thus create money. Some might say that creation is too strong a term, that information can’t be created because it was already there, just not recognizable. Okay, but the difference between creating information and recognizing previously unrecognizable information is a minor point. Much more important is that the computer has resulted in a tsunami of information with which those with the training can do extraordinary things.

Wall Street’s creation of money takes two complementary, and often overlapping, forms: securitization and derivatives. In securitization, individual loans such as mortgages are combined, through legal paperwork, into a single financial asset. Some of the interests in the financial asset are sold to investors. But some of the interests may be combined with interests in other financial assets to create what might be called a second layer financial asset. This layering process can be repeated. The effect of the layering process is to expand the total amount of financial assets in existence. Since financial assets are in essence money, the effect of financial asset layering is to create money.

Derivatives are financial instruments whose values depend on the values of other financial instruments. Futures and options are common types of derivatives. Much more exotic derivatives, such as credit default swaps, have appeared in recent years. Just as securitization results in more financial assets and thus more money, the creation of derivatives results in more assets and consequently more money.

What does the computer have to do with securitization and derivatives? The manipulation of data and the mathematical calculations that are required in securitization and the creation of derivatives would be pretty close to impossible without the processing and computational powers of the computer.

The arrival of the Information Age can be dated to the very late 1970s and early 1980s, a period when the computer started its conquest of just about everything. Those years also saw the start of a growth period for financial assets in relation to the rest of the economy. From 1945 to the early 1980s, the relationship between total financial assets in the United States and the nation’s Gross Domestic Product (GDP) was stable, ranging between 4 and 5 times GDP. Beginning in the early 1980s, the relationship changed. As a multiple of GDP, financial assets began to increase, reaching over 10 times GDP in 2007. (Data is from the Federal Reserve’s Flow of Funds.)

In the same period, a shift also occurred among holders of financial assets. The nation’s financial sector increased its share of financial assets from between 30 and 35 percent to between 40 and 45 percent. In other words, as financial assets were growing faster than GDP, a larger share of the financial assets was falling into the hands of the financial sector.

Okay, so the financial sector of the economy has become proportionately larger and a likely cause of the growth has been the computer. So what? The so what is the volatile nature of finance, a volatility very much evident over the last couple of years. The money created by financial sector is fuzzy money, easily evaporated if conditions turn mildly arid.

The so what is also the quandary about how to get a handle on the economics of the Information Age, to understand this unknown. A few years ago, those trying to explain changes talked about new paradigms. Well, a new paradigm seems called for. Reform proposals for the financial system are being put forth, but most seem to deal with peripheral matters: oversight structure, regulatory authority, and the like. The core issue is the change the computer has brought to the financial, and ultimately the economic, system. Some examination of the fundamentals is called for. Otherwise, the events of the last couple of years might just be a prelude.

MONGOLIAN RUN

In an effort to get as far away from dad as possible, cranky’s daughter has taken a job in Mongolia. After going for her first run in her new home, she filed the following report.

WOW its cold out...made sure to bring an ID, little bit of money, apartment key, and of course the little card that says in Mongolian "Please take me to the US Embassy" just in case I managed to get really lost!!

Sidewalks are not that bad to run on, just watch for the unstable manhole covers—or lack thereof—and random bumps, stakes, and whatall in the sidewalk. Managed to find a great bakery then managed to track back around the area to get an awesome view of the mountains just south of the city. They look fantastic and are now covered in snow. There’s a great flat white stone statute on the mountainside just outside the city. The statute is of Changis Khan (not Genghis as us westerns call him, learned that pretty quick).

Managed to find a food store and Millie's espresso store, where supposedly you can get boneless skinless chicken breast and ground beef. And it has good sandwiches. Then I found the Choijin Lama Temple. Bummer, it was closed. Turns out it is only a block from the house, kind of neat place, will have to check it out later when it is open.

And finally turned to come home, crossing the street to avoid passing close to two locals relieving themselves on the side of the road (reminded me of you, Dad). Fun times, and not too bad. Will have to venture out again. Pretty quiet in the morning; didn't see any other runners.