It is discouraging to see how impossible it remains to have an honest political dialog on trade. Clinton and Obama are now beating the anti-NAFTA drums because they are in Ohio. Obama criticizes Clinton for supporting NAFTA; she says she was always "critical" of it. Both candidates are intelligent, highly-educated people who probably understand the complexity of the issues--but you can't equivocate in front of a bunch of people who lost their jobs to China. You can't lecture steelworkers about how maybe their careers are obsolete and they should go become web developers or something.

People want change...but they don't want difficult change. Difficult change is recognizing that if you want to be able to go buy a car for $15,000 and drive everywhere, then:

• We need cheap labor to build cheap cars. You can't pay people union wages and expect to produce inexpensive cars. And really, you can't have our super-expensive health care system either--a greater cost to auto manufacturers than the raw materials in the vehicles. If you want that cheap car, then you need what developing nations provide: cheap, disposable labor.
• We need cheap oil to let us drive those cars. So we need to control the Middle East as best we can. It's easier to let thousands of our young people volunteer to go die in Iraq than to alter our lifestyles fundamentally so that oil is less relevant.

Now those sentiments above are what gets you <1% of the vote. And they are simplistic, liberal, cynical quips that really don't solve anything. So in the political debate, it really does come down to a contest of trying to convince voters you do care about them without appearing to pander too much.

The reason I like Obama is that I see something different in his whole approach that gives me faith he can help us through the changes. We can't expect a perfect answer because the answer is something we need to navigate towards incrementally. Voters are right to think that talk of "retraining" or whatever is just BS. But how the candidates talk about these issues gives insight into their values and ultimately, that is what matters, not specific positions or a grand plan for the future...

Work begins soon to demolish parts of the the massive Bethlehem Steel plants and replace it with a casino. The plant has been idle for years; there is no "going back" to the glory days of heavy industry, and the city is working hard to plan its future. However, I believe it is sad to see a symbol of America's industrial greatness being repurposed as a casino.

It could be worse. In Dortmund, Germany, the Thyssen Krupp mills were disassembled and shipped to China. In Bethlehem, the site is being somewhat preserved as a historical landmark and essentially turned into part of a package, tourist destination.

From a purely economic perspective, if the demand exists for people to go blow their money in a Casino in Bethlehem and tour the old mills, then somebody must be doing something right. Unemployed former steelworkers don't have the money to spend. So there must be new people with new jobs that support a new "industry." But the social question is whether or not these are the same people. I don't have time to research all the details, but I'm sure it's a question that vexed local people and created a lot of tension over the project.

I'm experimenting with trying to keep the blog going by writing a short entry from work at lunch and limiting myself to just 15 minutes...

Im reading (on the train to work) a fascinating book now about India: In Spite of the Gods: The Strange Rise of Modern India, by Edward Luce.

I've recently read several books talking about the rising economies of India and China--and the success of the software engineering, IT, and call center operations in Bangalore. And I experienced, working in Silicon Valley, the impressive presence of many Indian engineers and entrepreneurs. But that part of the economy represents a very small fraction of the population. Most Indians are living in conditions that have not changed greatly.

The political and social context there is really so much more complex than I ever imagined. This morning, I was reading about the Muslim-Hindu 2002 riots in Gujarat. You can begin to understand the degree of rage that must be pent up--and subsequently unleashed to devastating results--when you read these accounts of how mobs of people dragged Muslim women and girls from their homes, raped them, poured kerosene down their (and their children's) throats, and burned them alive while their husbands and fathers were forced to watch.

How can this happen in a country where people are going to offices and writing computer code? How can it happen anywhere in this century? I think I would like to believe that modernization, globalization, and rising standards of living and education will combat this insanity, but the forces of globalization also produce a backlash in that we are perceived as forcing our capitalistic values on poor people. How can we overcome such evil?

15 minutes up for today!

The unfolding saga of the pet food recall here in the US illustrates several connected threads of the dark side of globalization and the reality of how bizarre our industrial food supply has become.

To summarize, it appears that Chinese producers of various protein-enhancing products like wheat gluten, corn gluten, and rice protein concentrate "spiked" their inferior products with melamine, the plastic chemical used to make cheap furniture to cause the products to test higher for protein. Melamine is very bad to ingest; an estimated 39,000 dogs and cats have been made sick and hundreds have died. The latest twist is that some of the bad pet food was subsequently fed to hogs, raising the question of whether it could ultimately end up in the human food chain.

So many questions, so little time to write! American producers of wheat gluten are upset because the Chinese products are cheaper and undercutting their domestic sales. So, apart from the moral outrage that shoddy practices are killing our pets, it's also hurting our competitiveness.

This whole saga exposes how "scientific" our food production has become. Michael Pollan's book, The Omnivore's Dilemma gave me a great insight into how food has become so processed these days. We are taking apart the natural food, extracting the components, and reassembling them into new products. It makes perfect sense to take a wheat grain, refine it into constituent parts, then resell it. You end up with container ships full of extracted materials being shipped all over the world to wherever they can be reassembled into something some person or animal will eat.

I say "or animal" because the most disturbing parts of the industrial food process are how we feed cows corn--a food they won't naturally eat, then dose them up with antibiotics to combat how the corn messes up their digestive system. Then, to boost their protein, we feed them chicken or beef byproducts. The animals are just living machines that convert "food" we won't eat into a "tasty" form: steak.

Now pet food is apparently the bottom of the food chain here. Whatever stuff is left over can be dumped into pet food, produced anonymously by large companies no one has ever heard of, then branded as whatever name is likely to appeal to consumers. The idea that all your Purina pet food comes from some Purina plant is as naive as the idea that any meat you eat came from an animal that was on a farm.

After reading Pollan's book, I wanted to live and eat differently. I was really impressed by his story of Polyface farm in Virginia--a farm that uses intensive management of natural resources to create a food-producing "ecosystem" that is sustainable. But you can't mail order food from them--that's kind of the whole point. Local food for local people, produced in an environmentally-friendly, sustainable, respectful manner. A chicken is really a chicken. Cows eat grass, not other cows.

So if you live near Polyface farm, great. But what if you live in New York City? What if you can't afford to buy premium food? In the US, you can make an argument to "eat better but less" so that the cost is not a determining factor. But what about the rest of the world?

China is growing at an incredible pace...billions of people need to be fed. The same story in India and Africa. The farms they have have been improved by the Green Revolution in the 1970s and many of the prescriptions for sustainability there call for starting down the path of food industrialization--at least by using fertilizer, etc. We need the science of food production to meet the massive needs of world population growth and to allow for economic development. We need food trade as a part of economic development as well. We don't need China poisoning our pet food, but it is a predictable economic, captialistic consequence. I'm not condoning it, I'm just saying that when you put food on the free market, people will figure out how to make money from it and some will be unscrupulous. Who cares if a few American pets die when thousands of villagers are starving?

It would be healthful if Americans would change their eating habits and strive for greater sustainability. But as former Harvard president Larry Summers said in a recent trip to India, it is really up to the developing world to deal with these sustainability issues. The industrial world has created much of the problem, but if our actions are hurting the environment and ultimately ourselves, imagine what will happen as all the rising Chinese and Indians begin to live and work like Americans. Time to look for another planet?

The title of this post is Soylent Green because I think that movie--and the horror of discovery that to meet future food needs, we were recycling people into food--is not that crazy a scenario. We already do so much processing of food it would be a small step to add people into the mix. But I think, rather than just be disgusted or angry, we need to think about why all of this is happening and try to find solutions to the food supply challenge. We have plenty of food. The problem is making food production profitable. To that end we have Chicken McNuggets instead of fresh chickens that used to run around a farmyard.

A study to be released tomorrow by Duke University researchers will describe how immigrants are responsible for 25% of startups. Indian-born entrepreneurs in particular, have been instrumental in forming the technology companies in Silicon Valley and other tech regions of the US over the past decade.

This does not surprise me; I worked in Silicon Valley for a decade and I worked for, by, and with many Indians--not to mention a sizable number of Eastern Europeans and Asians. Even moving back to Boston, a relatively diverse city, was a slight culture shock compared to the melting pot of the Valley.

The "point" of the study; the obvious counter argument to people who rail against the evils of outsourcing and illegal immigrants, etc. is to provide evidence of how foreign born entrepreneurs and leaders are doing work that creates jobs. But it is an imperfect analogy.

To lapse into talk of "creating jobs" is using the wrong language. In creative/knowledge industries, it is not that simple, and the formulation of the economic development model in that manner is almost insulting. It's not like a big company coming to town with a factory to provide jobs for people. The whole notion of "providing jobs" is an idea that fits with a time that is rapidly passing us by. The entrepreneur creates a business...and that business creates opportunities for talented and creative people to be paid for their contributions. The business facilitates raising capital which facilitates hiring people with creative skill sets to attempt to take things to the next level.

Don't expect the startup company to say: OK, here we are. We have 100 jobs for software engineers now. Apply. You can't break it down as though the jobs were just commodities or benefits to be doled out to deserving people. Startups create opportunities, but the process of developing a creative, knowledge worker base is much more organic and dynamic in nature.

The great contribution of these immigrants is not that they can hire X number of new workers, but that they create conditions under which creative, motivated, adaptive people can find challenging work and move from one opportunity to another. They can transform an environment where there is no fluidity into a dynamic environment where there is risk, but also reward.

I was recently a bit critical of Penelope Trunk's post about creative and nimble workers, because I think that kind of advice is easy to give when conditions are fluid--as they are in Silicon Valley and other dynamic high tech regions. Under conditions like I worked under in Silicon Valley, when things were booming, it really was no big deal if your company tanked or you needed to change jobs. But when the bubble burst, it was another story. Still, it was better than it would be in a "one-horse town"--for example where there is only one technology employer. Then, when you lose your job, you are kind of SOL.

The danger, I think, in isolationism and failing to recognize the value of opening our country up to globalization, is that we could be left with many of those "one-horse" towns. What do you do when Cisco leaves? Or when IBM closes their office? Well, you hope you can find another company to work for. But if we drive away these foreign entrepreneurs, we are undercutting the critical mass necessary to sustain the whole creative ecosystem.

We could wake up and find ourselves playing the old game of hoping to lure a new big employer to our little town to provide jobs for the depressed, unemployed, unmotivated, angry, and dissatisfied people who can't find any other work. Guess what? High wage, creative companies don't want to hire those people. So you end up with paper mills and cement factories. (not that there's anything wrong with that, but when it is the ONLY game in town...it kind of sucks if you were a programmer before!) So the people who used to have good jobs will move to creative centers and those who remain will remain un or underemployed, worsening the income and cultural disparities that threaten our communities.

So I am glad to see a study that highlights the value of immigrants, but I think the true value is even greater and more subtle than a simple calculation of jobs.

Wendy's has jumped on the drive-through + call center bandwagon I blogged about here earlier. I first learned of this in the Thomas Friedman book, The World is Flat, but this article in the Boston Globe today does a better job of explaining the rationale...and it really is a win-win situation for everyone involved. Would you rather sit in a house in New Hampshire, talking to drive through people 3,000 miles away and get paid $8.50/hour...or actually have to work in that restaurant, taking orders while cooking and making change for customers?

Anti-outsourcing folks are always quick to find some negative spin--for example, the call operators are on a very tight leash, with software that monitors their efficiency, etc. Frankly, if I have to have my efficiency monitored though...and I'm working in fast food...I expect the physical workplace is full of enough indignities to make that seem like a cakewalk.

To me, this is more an example of one of the completely unpredictible things that has been made possible by high bandwidth and ubiquitious internet connectivity. People are thinking about tech support guys in India, but it also means somebody can set up a call center in their house and make some extra cash.

Meanwhile, at the other end of the world, far from the realm of the creative class...60 Minutes tonight ran a story about Bangladesh shipbreakers. Bangledesh is dirt poor and they have no resources. However, as luck would have it, a few years ago a big ship grounded on the beach after a typhoon and was abandonned. Local scavenged the ship. Since then, it has become an industry that employs something like 30,000 people (some of them as young as 12 years old) at the synergistic task of tearing ships apart by hand and blow torch to salvege whatever they can, principally the steel, which is badly needed.
But it's an environmental nightmare, and not the kind of working conditions anyone here would want. My reaction...seeing all those poor people trudge barefoot through a sea of petrochemical sludge...then sleeping at night on steel plates they salvaged...it's just one more motivation for them to envy and hate us. Envy us because just by being born in this country, unless you are insane, even if you end up homeless, you are probably not going to be working under those conditions. Hate use because we (the West) are dumping this crap on them.

But they probably don't see it that way. What did they have before the ships came? These folks are a long way from benefitting in an appreciable way from globalization.

While folks in Kansas are worrying that in 20 years they might have a strip mall near their home, Taipei is going wireless. As Thomas Friedman described in "The World is Flat," the emerging economies on the othe other side of the world are moving quickly to catch up to not only the US standard of living, but also our level of creative entrepreneurship. People here who fear the loss of a few software jobs to India or lament the fact that pretty much all bicycles are made in a few factories in China are missing two points:

First, the momentum of these economic engines is not something we can resist. It is inevitable and fighting against globalization is futile. Instead of trying to erect barriers, we need to understand how we can adapt and take advantage of the explosion of talent and economic energy that is happening.

Secondly, they don't just work harder and want to take our jobs. They want to be us. They are planning to build their own economy, taking the best ideas they can from us and forging their own identity to make something even better. Again, instead of having a negative, knee-jerk reaction, we need to step back and realize this kind of thing is what we would expect from equals. We need to get over any prejudices, sense of entitlement, and fixed ideas of how things ought to be. The world is changing and if we look for the positive aspects of it, we will adapt and find opportunities we never dreamed of before.

The bike manufacturing story helps put things in persepctive...Taiwan used to be the leader in bicycle manufacturing (most US manufacturers offshored a long time ago). But now China makes most of the bikes cheaper. Taiwan lost their competitive edge due to lower labor costs and the rising quality of Chinese manufacturing, so now Taiwan specializes in high end bikes.

Technically, the story is more complicated. If you want a "US-made" bike, you can go to this website, but the reality is that the components come from everywhere. The most sophisticated components are from China or Taiwan. There might still be a market for a new US based bike company, but if there is, it will be because they develop something new, focus on that, and get all the other parts from places that already make them. Not only would a 100% US bike be super-expensive...it would probably be junk.

People who worried about the loss of jobs and complained about foreign quality...probably don't work in that field anymore. People who said, OK, let's see how we can work with this...succeeded.

So, as we are complaining about the little things that we feel threated by, let's take a moment to step back and ask ourselves what good we can find instead. I'm not saying people should just shut up and accept it; perhaps what some town planners are calling "new urbanism" is, in fact, nothing but a big strip mall in the suburbs and we should fight it. But we need to understand what we are truly fighting and if it is a fight worth winning.

This topic could fill a library. But a couple of events this past weekend got me to thinking.

First, MIT released a report recommending a number of fundamental changes to the core curriculum. The headline grabber was recommending that all students engage in some form of international experience. That's a huge leap for the MIT community for the reasons I'll describe below, and it represents the potential to lead the way towards an acknowledgement of the realities of global competitiveness.

Second, I attended a "Family Fun Fair" at the Charles River School, an "independent pre-K - 8th grade school" here in the Boston Suburbs. It was quite a production--they even had carnival rides set up for the kids. It's all a fundraising and community event for a private school that charges 16-20+K/year tuition. My kids are not even 3 years old yet, but I am starting to think about what their education should be like. Schools like this one make me very ambivalent.

When I was a student at MIT, one of the biggest issues was an effort to abolish or change the first year pass/fail grading system. As students, we had a lot of passionate ideas about the value of going through the first year without the pressure of grades. The common experience is a great leveler--especially for someone like me who came from a tiny school in rural Virginia. Getting in to MIT was the greatest accomplishment of my life at that time, and I really looked to MIT to set the standard and give me a roadmap for success in the future.

But you have to adapt and grow. The education is like taking a drink from a firehose. It is all you can do to figure out how to survive. The idea of leaving school to go somewhere else for a year is a radical, scary idea. I can understand how many students will not be receptive to it. I did an "alternate major"--I was a management + political science major and that was weird then and now. Student follow certain paths to their majors and if you are out of sequence, it means it is harder to find people to work on problem set with and you can easily feel "behind." The same is true of moving around from living group to living group--most students choose a dorm during their first week and live there for 4 years.

Interjecting an international component to the education is radical in two dimensions--first, it will involve going outside MIT to learn something. But potentially more radically, it requires making the education more flexible to accomodate the "disruption" of leaving the campus. In both dimensions, it will force growth and change. That's good, even without the specific value of the content.

My high school was a private school, but it was no Charles River. The principal advantage of my school was a lack of discipline problems. The public school, in the 1970s, had a reputation for problems. My school was one of those post-massive resistence inspired academies that were all-white in a county where the majority population was black. Someday, when I run for public office, I'm sure I'll be called to explain that background, but it's not really what the school was about. What it was about was that teachers inspired their students and helped us develop a love of learning or at least not a hatred of it.

So I have mixed feelings now when I look at these modern day private schools. Aren't our public schools here in the Boston suburbs good enough? Are these schools just elitist snob factories? What matters to me is whether the school will provide the comprehensive foundation--not that they have to teach the kids advanced calculus, but will my kids learn to love or hate education? How do we figure that out? I'll let you know in a couple years.

How does it all fit in? Well, people like me have to figure these issues out as we raise our kids who face a complex future. It's not about taking a class in international relations or getting the most advanced math classes possible. It is about teaching our children to be more adaptable and more skilled at the same time. Helping them develop ways of seeing the world that will allow them to contribute more creatively. Helping them learn, from an early age, that there is no one roadmap to success. The MIT degree or the Charles River School ring are not magic talismans that concur weatlh, prosperity, and happiness...but what does? Where do we find that stuff so we can give it to our kids? The search for that answer is what drives parents to spend 20K/year to send their kids to nursery school. But not everyone can or should afford that.

Thomas Friedman's book, The World is Flat, is 600 pages of fascinating anecdotes about what real people are doing in a rapidly changing world. The book describes the forces that have come together in the last few years to radically alter how people live and work.

The "flat world," roughly summarized, is the idea that many factors, mostly technological, are rapidly transforming our world into a place where intelligent, creative, ambitious people are able to work together across boundaries. Wild stuff is going on...Did you know that McDonalds is outsourcing their drive through windows in some parts of the US to a remote call center in Colorado?

Did you know that you can hire a tutor in India to help your kid with math; the tutor connects via broadband and helps the kid through an online interaction that costs much less and is more convenient that hiring a tutor here in the US.

Did you know that JetBlue has all of its phone reservation work done by part time moms in Utah ("homesourcing") who are happy to work a few extra hours per week, from home, handling the phone reservations.

Did you know that when you have an MRI done at a hospital, the digitized image may be sent to India for analysis? They might also do your tax returns.

These things are either very fascinating or very threatening to people. While the outsourcing of MRIs to India might mean some jobs are done there, it is also creating an industry for my friend's company here in the US and providing work for US-based radiologists as well as, of course, the whole company. He live in San Francisco and manages an engineering team that is spread out across the country for the Minnesota-based company.

A key theme of the book is that we really need to get beyond negative, knee-jerk reactions (Those jobs are being lost to India!) to recognize that this world creates amazing new opportunties for people here in the US. My father-in-law related this story of an award-winning, high-tech sled that was developed by a small company in Vermont and brought to market with the assistance of a Minnesota company. There is no factory in Vermont...check out the team. Does that look like a typical manufacturing team? It looks a bunch of folks who like to have fun. They didn't have to build a factory, they could focus on their idea and their passion to create something really cool. They figured out how to put the pieces together to create something new and cool and high value.

It is a long book. It took me a week and a half, sometimes standing on the train reading it, to get through it. And I am a fast, highly retaining reader. I think most people skim books like that or get the gist of it secondhand. But the book is full of true stories/vignettes of real people doing stuff that is really interesting. Did you know that Colin Powell had all the emails of foreign secretaries of state, corresponded regularly that way, and engaged in an ongoing instant messenger chat with his British counterpart while he was in meetings with other senior officials in the US? It's just another indicator of how everything is changing and smart people adapt to what works.