Category: Political Science & Economics

Why I Won’t (might not) Vote For Russ Feingold in November

Category : Political Science & Economics
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Update 1: May 2010: Shortly after I wrote this post, I got a follow up email from a member of Sen. Feingold’s staff with the correct email response.  The next day, I got a phone call from a different member of the staff apologizing and asking if they could do anything else to help me and yesterday, I received an snail mail copy of the email response with Sen. Feingold’s signature.  This morning, I got an update from one of his staffers about new changes to the Banking Bill that seem to help change the original problems.  While it did take a negative blog post to get the correct response, I am impressed that Feingold’s staff has been this diligent about my blog post.  I changed the title to add “(might not)” because I don’t think it’s fair that when people Google “vote Russ Feingold” my post comes up 5th.

Update 2: October 2016: After six years of Sen. Ron Johnson and Russ Feingold’s seeming rejuvenation, I’m supporting Russ for Senate in 2016. We need a Senator who will bring a different perspective than the vast majority of senators and isn’t afraid to stand up for things he believes in. We need the only Senator to vote against the Patriot Act back in government.

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A few weeks ago, I wrote about how the new banking bill would screw up angel investing in the US.  The bill plans to raise accredited investor levels by over 2x and institutes new regulation on angel investment.  It treats angels like hedge funds, which is wrong.  In the comments, someone asked how we could fight the bill.  I answered that I didn’t really know, but would email both of my Senators, Russ Feingold and Herb Kohl.

I sent them both a shortened version of my blog post with a little background about me through their official Washington senate emails.  I have yet to hear back from Senator Kohl, which is what I expected.  Aside from making sure that the Milwaukee Bucks stay in Milwaukee and donating $25m to get his name on the Kohl Center, Kohl really hasn’t done anything for as long as I can remember.

I figured that I would get a response from Senator Feingold, since generally more involved and he’s up for re-election in November and some are predicting it will be a close race.  He (or more likely someone from his staff) emailed me back today, 3 full weeks later, which isn’t too bad.  I assume he gets hundreds, if not thousands of emails every day.

So here’s why I won’t vote for Feingold in November.  I wrote to him about the angel investment changes in the tax bill, but here’s what I got back (emphasis added):

Dear Mr. Lustig,

Thank you for contacting me regarding your support for having private student loans be regulated by a consumer financial protection agency. I appreciate hearing from you, and strongly agree with you.  In fact, I am a cosponsor of an amendment to the financial regulatory bill which would extend consumer financial protection agency regulations to student loans.

Access to high quality public education should be available to all children, and access to higher education should be based on a student’s desire to gain knowledge and skills, not financial resources. As I travel throughout Wisconsin, I hear from many individuals who cannot attend college or other post secondary training programs without financial aid. I also hear from students who are extremely concerned about their growing debt as they try to finance their education. I support efforts to make education beyond high school available and affordable to qualified individuals who wish to pursue it.

Thank you again for contacting me. For more information about my work on behalf of Wisconsin, you can subscribe to my monthly e-newsletter by visiting http://feingold.senate.gov/newsletter.cfm. I look forward to hearing from you in the future.

Feingold (or his staff) couldn’t be bothered to actually respond to my email.  I took the time to write him an email, the least he could do is make sure he wrote me back about the issue I wrote about!  I understand it is most likely a mistake, but it’s a mistake that shouldn’t happen.  It shows that he (or his staff) don’t really care about the people who write him emails.  I know I’m not the only person who’s had a similar experience, as I’ve talked to two other people who have written to Feingold and never gotten any response.  To be honest, I’d have rather not gotten any response than the one above.

Thomas Friedman’s Advice to President Obama is Spot On

Category : Entrepreneurship, Entrustet, Political Science & Economics
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From time to time, Thomas Friedman writes something that has the power to change lives.  So far, Friedman’s The World Is Flat has had the greatest impact on me, as it inspired my business partner, Jesse Davis, to start work on our startup, Entruset.  The ideas in his book are still reverberating through our company today, as we got our first mention in the press in today’s Washington Post and continue to work to solve the problem he identified in the book.  You can read the entire story over on our company blog in a post called How Thomas Friedman and The World Is Flat Helped Spawn Entrustet.

I think his latest piece titled More (Steve) Jobs, Jobs, Jobs, Jobs has the potential to impact the lives of even more people.  Friedman says:

The most striking feature of Barack Obama’s campaign for the presidency was the amazing, young, Internet-enabled, grass-roots movement he mobilized to get elected. The most striking feature of Obama’s presidency a year later is how thoroughly that movement has disappeared.

I remember getting inundated by posts from my friends on Facebook in the weeks leading up to the election urging me to support Obama, attend rallies or make sure to go out and vote.  The movement continued for the next few weeks, but has completely lost steam.  Even the most ardent Obama supporters among my friends aren’t engaged via social media anymore.  This in itself is pretty amazing, but not Friedman’s main point. He wants President Obama to re-engage America’s youth and doesn’t believe that going after Wall Street or other negative methods will work.  He continues:

Obama should launch his own moon shot. What the country needs most now is not more government stimulus, but more stimulation. We need to get millions of American kids, not just the geniuses, excited about innovation and entrepreneurship again. We need to make 2010 what Obama should have made 2009: the year of innovation, the year of making our pie bigger, the year of “Start-Up America.”

Obama should make the centerpiece of his presidency mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge. The best way to counter the Tea Party movement, which is all about stopping things, is with an Innovation Movement, which is all about starting things. Without inventing more new products and services that make people more productive, healthier or entertained — that we can sell around the world — we’ll never be able to afford the health care our people need, let alone pay off our debts.

I am 100% behind this idea.  It makes perfect sense and would appeal to both sides of the aisle at at time when partisanship is at a seemingly all time high because of the fight over health care.  It would harken back to the Obama that many young people voted for, rather than the less than inspirational version of the President who we have gotten to know since his election.

I believe that entrepreneurship is our best hope for saving the US from its mammoth debt obligations.  We need to find ways to “grow the pie” rather than trying to raise taxes on a stagnant (or shrinking) pie.  I believe that all kinds of entrepreneurship are going to be necessary to solve our problems.  We are going to need traditional entrepreneurs like Steve Jobs and Bill Gates, but we will also need social entrepreneurs like Muhammad Yunus and the social entrepreneurs featured in Business Week.

I think that if President Obama were to make entrepreneurship a central portion of his presidency, he will find a huge groundswell of willing entrepreneurs who will be willing to help.  Friedman mentions National Lab Day and the Network for Teaching Entrepreneurship as examples of organization that are helping young people get interested in innovation.  Both programs would not be able to survive without older, successful mentors.  I think that entrepreneurs are willing to help out as mentors and young people are waiting to be entrepreneurs, but some are just waiting to be pushed.  Inc. Magazine contributor and author of Upstarts!, Donna Fenn says:

Over 75% of the entrepreneurs I interviewed for my book, Upstarts! said that they were very or highly likely to start another company; most had already founded two or more.”  She continues, “70% said their companies had a social mission. But make no mistake: they’re laser-focused on the bottom line as well and they understand why growing a profitable, sustainable company that creates jobs is a social good in and of itself. It’s pretty clear to me: this is a generation worth investing in.

Fenn‘s point is important because many startups are not only creating jobs and coming up with new solutions to problems, but they are also trying to make the world a better place.  If we can get more people to think with this mindset, the US and the world will be a better place.  So President Obama, please follow Friedman’s advice.  This is a no lose issue for you and the country.  You should be able to get support from both sides of the aisle.  You should be able to reconnect with an electorate that wants to support you, but has not because you have abandoned what got you into office.  Go back to the politics of hope, propose real solutions that everyone can get behind and see what happens.  I bet it will change lives.

Will Millennials Put an End to “Gotcha Journalism” or Perpetuate It?

Category : Political Science & Economics, Technology
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I think one of the most interesting stories of the 2010s will be whether my generation puts an end to “gotcha journalism” or makes the problem even worse than it is today.

The classic definition of gotcha journalism usually refers to an interview style where the interviewer tries to trap the interviewee into saying something that would be damaging to themselves or their cause.  It has been around since the early 80s and became firmly rooted into our political and popular culture since then.

With the rise of the Internet, journalists, bloggers and citizens have taken gotcha journalism to new levels.  The barrier to entry is much lower:  instead of having to secure an interview with someone in order to trap the interviewee, the new breed of gotcha journalism uses the Internet to sift through all of the statements that a person has made in their entire life to try to paint them in a bad light.

Now, bloggers go through politicians’ every public statement for any misspeak or inaccuracy and then try to crucify them.  It started with John Kerry being labeled a “flip-flopper,” moved to George Bush‘s butchering of the English language and more recently, led President Obama’s Green Energy Czar to quit because of statements he made almost ten years ago.  When President Obama misspoke on the campaign trail, saying that he had visited all 57 states, right wing bloggers tried to make it seem like Obama was stupid.  When Sarah Palin burst onto the national scene, left wing bloggers and some in the media sifted through her previous public statements to search for any inaccuracy.

It seems like 75% of the news stories I read about each day have to do with some politician getting raked over the coals for some statement he just made that is different from a statement he made a long time ago.  Many times, the person leveling the charge is a fellow politician, along with the media and the blogosphere.

My generation is the first generation to be online from an early age.  We first interacted with email, then instant messaging, then social networks and now blogs.  We created (and are still creating) vast amounts of data about ourselves, much of which is stored online.  We have archived AIM conversations from when we were in 6th grade,  digital pictures from high school and college that are online and we all have our dumb Facebook wall posts that we made throughout our college years.

Many of us have blogs on wordpress or blogger and many more have microblogging accounts on services like Twitter where we make observations and pithy comments about our daily lives.  I know I’ve changed alot since I was in 6th grade and I assume I will change almost as much between now and the end of the 2010s.  During the next decade, as people in my generation get older and become leaders in business, politics and culture, will we still be subjected to gotcha journalism like our public figures are today?

One argument is that since everyone has all of this content online, we will become desensitized to people’s dumb or incorrect statements from when they were young.  Everyone has pictures of themselves on Facebook that they wished never made it online.  Everyone is going to have a poorly thought out wall post that could be taken out of context, or a pithy remark on Twitter that does not stand the test of time.  Anyone who blogs about anything interesting will be majorly wrong about something.  Will millennials become bored by the new gotcha journalism because everyone has something online that could make them look bad?

On the other hand, millennials may just make gotcha journalism even worse than it is today.  Since everyone has created gigabytes of online content, bloggers and the media will have an easier time digging up dirt on anyone who enters the public eye.  Imagine being able to see the new candidate for Governor at a boozy college party or getting a transcript of his AIM conversations with his best friend or girlfriend from high school.  The media, bloggers and most of all, the citizens will eat this stuff up.  Ratings will go up and everyone will be happy, execpt for the public feature.

I hope that my generation helps start the shift away from gotcha journalism.  I can’t imagine being shocked by the vast majority of the dirt that someone would dig up about a public figure online.  I hope that millennials are willing to allow people to change their opinion and not be called a flip-flopper.  I hope we will cut public figures some slack when their college photos get published to the major blogs and their old blog posts come back to haunt them.  I’m not optimistic, but I am hopeful.  If not, we will have some really boring politicians, business leaders and public figures!

Do you think millenials will help stop gotcha journalism or do you think the problem will get worse?

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The Slow Death of the Reserve Currency

Category : Political Science & Economics
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It stared with leaders like Hugo Chavez, Mahmood Ahamdinejad and Saddam Hussein who wear their anti-Americanism as a badge of honor.  Next, it was the developing countries who generally liked the US but felt they were not getting a fair shake.  Next was Russia and India.  Then came China, America’s largest trading partner and largest foreign holder of US dollar denominated securities.  Yesterday, it was the oil producing countries in the Middle East.  Even Germany has quietly started to complain.  What issue has managed to unite most of the world?  The US Dollar’s viability as the world’s reserve currency.

Back in April, I questioned whether the US Dollar is America’s Achilles Heel.  Each day, I am more and more convinced that it is.  Back when leaders like Chavez were the only ones questioning dollar hegemony, most of the rest of the would could safely ignore his statements as the ramblings of a dictator blinded by anti-Americanism.  Most people did.  When developing countries complained about the devaluation of the dollar, people could brush the complaints off as jealousy.  When Russia started rumbling about moving away from the US dollar, some people started to take notice, but were not concerned, as they viewed Russian statements as posturing to reassert itself on the global stage.

Finally, when China’s central bank head made statements that he was not happy with the huge increase of the money supply, people began to take notice, but were still not convinced that there was a problem.  Next, China signed currency swaps with countries like Argentina, Brazil, Thailand and others that allowed businesses to do deals in Yuan, rather than relying on the US dollar.  This was a clear shot across the bow at US dollar hegemony.  China has also stopped buying longer term US securities, prefering short term notes that they can roll over more quickly, while stockpiling raw materials, rare earth metals and precious metals.

Yesterday, the world had to take notice when the Middle East oil states held secret meetings with China, Russia, Brazil, France, Japan and others to discuss selling oil against a basket of currencies and gold, rather than US dollars.  The US was left on the sidelines.  Pretty much everyone is denying that these meetings took place, but where there is smoke, there is fire.  It is the logical progression for the rest of the world.

They cannot attack the US militarily and win, so they have to attack the US’s biggest asset and its biggest weakness: the reserve status of the dollar.   It is America’s soft underbelly.  I don’t believe that these countries are moving away from the dollar because they do not like the US or want to see the US fail.  They are moving away from the dollar because they are scared.  They are scared that the US will continue to print huge amounts of money to inflate away its massive $90T+ unfunded liabilities (yes, T=trillion) and national debt, making their dollar denominated securities go down in value.  I have seen people say that America’s unfunded liabilities between the debt, medicare and social security is over $120T, or about 10 years of GDP.  You can see their fear in skyrocketing gold, which hit a record high of $1,045 per ounce today.  The oil producing nations are tired of pumping their tangible, natural resources in exchange for dollars that are not backed by anything.  They are simply looking out for themselves.

Taken together, these country’s actions are a frontal assault.  They are saying “enough is enough.”  They do not want to accept our paper, which is backed by nothing, in exchange for their manufactured goods or natural resources.   Unless the US takes decisive action to stop the erosion of the dollar, I fear that the US will lose its biggest competitive advantage: the reserve status of the dollar.  If this happens, our standard of living is fated to go down.