Artificial Intelligence: Interview with Yuval Noah Harari!

 

Dear Commons Community,

David Kaufman interviewed the Israeli author, Yuval Noah Harari, and recorded it for the New York Times. Harari has three recent best-sellers:  in Sapiens…, he explored the past;  in Homo Deus…, he looked to the future; and in his most recent book, 21 Lessons for the 21st Century, he looks at the present. I have read all three and I highly recommend Sapiens… and Homo Deus….  While good, 21 Lessons…was not on a par with the other two. In this interview, Harari responds to questions about the potential benefits and dangers of artificial intelligence.  Here is an excerpt regarding A.I. and education.

“A.I. is forcing people to reinvent themselves. Can it also make the reinvention process less scary?

A.I. can make the process both better and worse. Worse, because A.I. itself is compelling us to adapt; as A.I. develops, jobs disappear and people need to adapt professionally. On the other hand, A.I. can help revolutionize and customize education.

How might this work?

Instead of students being part of a big education cohort processed in the industrial way, you could work with an A.I. mentor who not just teaches you, but studies you, as well. The mentor gets to know your particular strengths and weaknesses — can learn if, say, you learn better with words or with images; through spatial metaphors or temporal metaphors. And then customizes education for you. Learning new skills can be very difficult after the age of 40. But even as A.I. forces people to reinvent themselves, it can help them get through this process far better than any human teacher.”

I agree with Harari.  In the next several decades, A.I. has the potential to revolutionize education particularly at the secondary and postsecondary levels.

The entire interview is below.

Tony

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Watch Out Workers, Algorithms Are Coming to Replace You — Maybe?

By David Kaufman

Oct. 18, 2018

 

Over the past five years, the Israeli author and historian Yuval Noah Harari has quietly emerged as a bona fide pop-intellectual. His 2014 book “Sapiens: A Brief History of Humankind” is a sprawling account of human history from the Stone Age to the 21st century; Ridley Scott, who directed “Alien,” is co-leading its screen adaptation. Mr. Harari’s latest book, “21 Lessons for the 21st Century,” is an equally ambitious look at key issues shaping contemporary global conversations — from immigration to nationalism, climate change to artificial intelligence. Mr. Harari recently spoke about the benefits and dangers of A.I. and its potential to upend the ways we live, learn and work. The conversation has been edited and condensed.

A.I. is still so new that it remains relatively unregulated. Does that worry you?

There is no lack of dystopian scenarios in which A.I. emerges as a hero, but it can actually go wrong in so many ways. And this is why the only really effective form of A.I. regulation is global regulation. If the world gets into an A.I. arms race, it will almost certainly guarantee the worst possible outcome.

A.I. is still so new, is there a country already winning the A.I. race?

China was really the first country to tackle A.I. on a national level in terms of focused, governmental thinking; they were the first to say “we need to win this thing” and they certainly are ahead of the United States and Europeans by a few years.

Have the Chinese been able to weaponize A.I. yet?

Everyone is weaponizing A.I. Some countries are building autonomous weapons systems based on A.I., while others are focused on disinformation or propaganda or bots. It takes different forms in different countries. In Israel, for instance, we have one of the largest laboratories for A.I. surveillances in the world — it’s called the Occupied Territories. In fact, one of the reasons Israel is such a leader in A.I. surveillance is because of the Israeli-Palestinian conflict.

Explain this a bit further.

Part of why the occupation is so successful is because of A.I. surveillance technology and big data algorithms. You have major investment in A.I. (in Israel) because there are real-time stakes in the outcomes — it’s not just some future scenario.

A.I. was supposed to make decision-making a whole lot easier. Has this happened?

A.I. allows you to analyze more data more efficiently and far more quickly, so it should be able to help make better decisions. But it depends on the decision. If you want to get to a major bus station, A.I. can help you find the easiest route. But then you have cases where someone, perhaps a rival, is trying to undermine that decision-making. For instance, when the decision is about choosing a government, there may be players who want to disrupt this process and make it more complicated than ever before.

Is there a limit to this shift?

Well, A.I. is only as powerful as the metrics behind it.

And who controls the metrics?

Humans do; metrics come from people, not machines. You define the metrics — who to marry or what college to attend — and then you let A.I. make the best decision possible. This works because A.I. has a far more realistic understanding of the world than you do. It works because humans tend to make terrible decisions.

But what if A.I. makes mistakes?

The goal of A.I. isn’t to be perfect, because you can always adjust the metrics. A.I. simply needs to do better than humans can do — which is usually not very hard.

What remains the biggest misconception about A.I.?

People confuse intelligence with consciousness; they expect A.I. to have consciousness, which is a total mistake. Intelligence is the ability to solve problems; consciousness is the ability to feel things — pain, hate, love, pleasure.

Can machines develop consciousness?

Well, there are “experts” in science-fiction films who think you can, but no — there’s no indication that computers are anywhere on the path to developing consciousness.

Do we even want computers with feelings?

Generally, we don’t want a computer to feel, we want the computer to understand what we feel. Take medicine. People like to think they’d always prefer a human doctor rather than an A.I. doctor. But an A.I. doctor could be perfectly tailored to your exact personality and understand your emotions, maybe even better than your own mother. All without consciousness. You don’t need to have emotions to recognize the emotions of others.

 

So what’s left that A.I. hasn’t touched?

In the short term, there’s still quite a bit. For now, most of the skills that demand a combination between the cognitive and the manual are beyond A.I.’s reach. Take medicine once again; if you compare a doctor with a nurse, it’s far easier for A.I. to replace a doctor — who basically just analyzes data for diagnoses and suggests treatments. But replacing a nurse, who injects medications and changes bandages, is far more difficult. But this will change; we are really at the beginning of A.I.’s full potential.

So is the A.I. revolution almost upon us?

Not exactly. We won’t see this massive disruption in say, five or 10 years — it will be more of a cascade of ever-bigger disruptions.

 

And how will this affect the work force?

The economy is having to face ever-greater disruptions in the work force because of A.I. And in the long run, no element of the job market will be 100 percent safe from A.I. and automation. People will need to continually reinvent themselves. This may take 50 years, but ultimately nothing is safe.

A.I. is forcing people to reinvent themselves. Can it also make the reinvention process less scary?

A.I. can make the process both better and worse. Worse, because A.I. itself is compelling us to adapt; as A.I. develops, jobs disappear and people need to adapt professionally. On the other hand, A.I. can help revolutionize and customize education.

How might this work?

Instead of students being part of a big education cohort processed in the industrial way, you could work with an A.I. mentor who not just teaches you, but studies you, as well. The mentor gets to know your particular strengths and weaknesses — can learn if, say, you learn better with words or with images; through spatial metaphors or temporal metaphors. And then customizes education for you. Learning new skills can be very difficult after the age of 40. But even as A.I. forces people to reinvent themselves, it can help them get through this process far better than any human teacher.

So has A.I. forced you to reinvent yourself?

Well, writing about A.I. certainly has. A decade ago I was an anonymous professor writing about medieval history; today I am meeting with journalists and politicians and heads of state talking about cyborgs and A.I. I certainly had to reinvent myself along the way.

 

Ross Douthat: Elizabeth Warren Should Stay Out of the Trump Freak Show!

Dear Commons Community,

Last week, Senator Elizabeth Warren released a biographical video featuring her Oklahoman roots and answering Donald Trump’s “Pocahontas” gibe with a DNA test proving that she does have Native American ancestry.  She has been criticized by a number of people on the left and the right as well as by the Cherokee Nation.  Ross Douthat, the New York Times columnist, has advice for Senator Warren  to stay out of the Trump “freak show.”  Here is an excerpt from his column:

“…Running for president in the age of Donald Trump requires an ability to handle what John Heileman and Mark Halperin once called “the freak show” (back when it was considerably less freaky). It requires a deftness dealing with scandals and gaffes and accidental blunders, an ability to know when you have a wrestling move that justifies getting down in the mud and when you’re better off sitting on a top rail and acting superior to the pigs.

So far Warren’s main encounter with the freak show has involved her claim to Cherokee ancestry, which was an issue in her last Senate campaign, in 2012, before Trump started in with his nicknaming. And from her initial response to the story through the new DNA test “rebuttal” to the president, she has demonstrated a conspicuous lack of political common sense…

…When Donald Trump started up his Pocahontas gibes, she should have simply ignored him and talked about the many issues where he’s on the wrong side of public opinion.”

 I agree.  Any serious Democratic candidate for president has to be careful about how s/he responds to Trump’s insults and character assassinations.  He is very good at it and unless the candidate is very savvy and up to the task, will quite possibly end up in the gutter as part of the Trump freak show.

Tony

 

New York Condo Owners Vote to Remove Donald Trump’s Name from their Building!

The building at 200 Riverside Boulevard bought the right to use the Trump name in 2000.

Last week, the majority of tenants voted to “remove the signage.”

 

Dear Commons Community,

Last week, the majority of tenants at 200 Riverside Boulevard on the West Side of Manhattan voted to have the name “Trump Place” removed from its entrance.  They join the owners of several other buildings who want Trump’s name removed from their premises.  The New York Times this morning reviewed the details of the change at 200 Riverside.  See excerpt below.

Tony


Liberal Upper West Siders Get Their Revenge: Trump Place Sign Is Coming Down

By Charles V. Bagli

Oct. 17, 2018

Few places in the United States are more staunchly liberal than the Upper West Side of Manhattan. And so few things are more galling to many residents of a residential complex there than the big letters that greet them at their building: T-R-U-M-P P-L-A-C-E.

On Thursday, condo owners will join three neighboring buildings in finally getting their relief.

Workers will pry the letters off the front and back of 200 Riverside Boulevard, a 46-story building between 69th and 70th Streets. The building will simply be called: 200 Riverside Boulevard.

Residents at other Trump-branded condominiums in New York, Stamford, Conn., and Chicago have considered taking similar actions since Donald J. Trump plunged into the presidential race, but they’ve been stymied by a lack of support and fears of costly litigation or a drop in the value of their homes. The challenge of untangling the licensing agreements signed with the Trump Organization has also been an obstacle.

The condominium at 200 Riverside Boulevard, however, figured out a way.

The building bought the right to use the Trump name in 2000, paying $1 under a four-page licensing agreement signed by Mr. Trump. But the sentiment about having his name over the front door changed during Mr. Trump’s campaign. Many residents sought to distance themselves from his politics.

For some, the once ubiquitous Trump brand, which adorned apartment buildings, hotels, casinos, golf courses, steaks, suits and water, does not have the same appeal it used to have before Mr. Trump’s political career.

Eric Chung, a longtime resident of 200 Riverside Boulevard whose family owns two units in the building, said that he had been concerned about the cost of litigation and the fate of the building’s “great employees.” But after a court decision and a recent survey of the owners in the building, the majority of whom wanted the name taken off, he said that removing the Trump letters “makes a very powerful statement.”

Eric Trump, who has assumed a leading role at the Trump businesses, declined to comment on Wednesday.

In Manhattan, there were 15 residential buildings that bore the Trump name in 2015. The next year, a trio of neighboring rental apartment buildings just to the south of 200 Riverside Boulevard pulled the name off their facades, the lobby rain mats and employees’ uniforms after 300 people signed an online petition titled, “Dump the TRUMP Name.”

“We were driven by our intense feelings about Trump himself,” Linda Gottlieb, a resident at one of the Trump-branded apartment buildings, said in a recent interview. “We would not have stayed in the building we felt so strongly about it. We just renewed our lease for two years.”

Ailing hotels in Toronto and New York paid the Trumps millions of dollars to remove the Trump name from their properties. The owner of a Trump hotel in Panama used a crowbar to remove the Trump letters.

Business has remained steady or declined at some Trump-branded hotels, as well as at the city-owned golf course, carousel and ice skating rinks operated by the Trump Organization in New York City.

The push to remove the Trump branding from 200 Riverside Boulevard began in 2017. In response to concerns raised by some of the 377 condo owners, the condo board began discussions of possibly removing the Trump name from the building’s facade.

That February, 63 percent of the unit holders who responded to an informal poll favored removing the “Trump Place” letters on the building.

But a month later, Alan Garten, chief legal officer of the Trump Organization, sent a letter to the board promising a lawsuit if it did, saying the company would seek “significant amounts of damages, costs and attorney’s fees.”

The prospect of expensive litigation with the Trump Organization scared many residents, and a small group vigorously opposed excising the Trump name.

An internal message board for residents showed that division.

“I am adamant that the sign should remain on the building,” a resident wrote. “We bought in the building with it. There is no reason to take it down.”

Another wrote: “Arguably, at one time the Trump name may have contributed something to the value of our apartments. That is clearly not the case today.”

After overcoming some internal divisions, the condo board devised a low-key strategy with its lawyer Harry W. Lipman: It would ask the State Supreme Court for a declaratory judgment that it was not required to retain the Trump name under the building’s licensing agreement. The agreement required that the condo maintain the building on par with “superluxury condominiums,” but it did not mention any requirement that the Trump name remain in perpetuity.

In May, the judge ruled in favor of the condo owners, saying that the agreement does not require owners “to use the identification ‘Trump’ on the facade of the premises.” She firmly rejected claims by Trump lawyers that the building is required to use the name “in perpetuity.”

 

Charlottesville Schools Revisited!

African-American students studying at home while Charlottesville schools were closed in 1958.

Dear Commons Community,

The New York Times has a featured article today examining the Charlottesville, Virginia schools.  Charlottesville’s racial inequities mirror many school districts across the country in areas such as gifted programs and school discipline that can undercut the effort to prepare equitably students for college.

Today, white students make up 40 percent of Charlottesville’s enrollment, and African-American students about a third. But white children are about four times as likely to be in Charlottesville’s gifted program, while black students are more than four times as likely to be held back a grade and almost five times as likely to be suspended from school, according to a ProPublica/New York Times examination of newly available district and federal data.  The article covers well its Conferate past:

“Charlottesville’s history of school segregation weighs heavily on the present day…

Charlottesville greeted the Supreme Court’s 1954 Brown v. Board of Education desegregation decision with a firm no. In 1958, Gov. J. Lindsay Almond of Virginia ordered the city to shut down two white-serving public schools rather than integrate.

Many white families opted for private schools, which were able to secure public funding through voucherlike tuition grants. Under pressure from the Supreme Court of Virginia, Charlottesville reopened its schools in 1959, allowing a dozen black students to attend its historically white schools.

But the city’s resistance to integration persisted. Instead of outright segregation, the white-led district established testing requirements solely for black students who tried to enroll in historically white schools. It also allowed white students who lived in attendance zones of historically black schools to transfer back to predominantly white schools. Black students who lived near mostly white schools were assigned to black schools.

After a federal appeals court invalidated the district’s attendance policies, the city relied more closely on residential zones to sort students. In 1984, Charlottesville High School ignited after its student newspaper published derogatory remarks about black students. The high school was shut down for a day. “Seniors for White Supremacy” was painted in its parking lot.

Two years later, the board considered redrawing school zones to bolster racial and economic equity, but worried about white flight. In the end, elementary school boundaries were largely left alone. The district pooled the city’s middle school students into two schools, one serving all fifth and sixth graders, and the other serving all seventh and eighth graders. The number of white students declined about 20 percent within a decade.

Venable has the highest reading proficiency of all of the elementary schools in the city. The black families lived several blocks from Venable, and they had grown frustrated by their children’s long commutes to their zoned school. But when the school board proposed reassigning the 20 children, white parents from Venable “freaked,” said Dede Smith, then a board member.

“We will NOT accept redistricting when it is done, as in this situation, sloppily and hurriedly and in a way which negatively impacts the quality of education for all students involved,” read a letter from the Venable parent-teacher organization. It took a year for the board to rezone the children to Venable, according to Ms. Smith. Today, some black families are able to send their children there, but residents of a mostly black public housing complex nearby are not among them.

“We only put our toe in the water,” she said.

The next year, in 2004, the school board hired Scottie Griffin as superintendent. She tapped a respected education association to review inequities across the district. The report, by five academics, revealed a deeply fractured school system.

“While some members of the community might wish for an elongated period of time to ponder and debate changes, the children are in school only once and then they are gone,” the audit concluded. “No city can survive by only serving one-half its constituents well. The future of such a legacy is dire.”

The auditors pushed for increasing black students’ access to high-level academic programs, including gifted and advanced-placement courses.

Kathy Galvin, a parent who is now a City Council member, responded to the audit in an internal memo to the school board, urging the board to reject the racial bias findings, which she called “unnecessary and in fact harmful,” and implored members to focus on improving “our educational system for the benefit of all children.”

Today, Ms. Galvin largely stands by that position. “A ‘too narrow and racially biased’ focus on the schools does a disservice to the dedicated educators who have made a difference and risks misdiagnosing a complex problem, leading to ineffective solutions,” she said.

In 2005, within a year of her hiring, Dr. Griffin was pushed out. She did not respond to questions from The Times and ProPublica.

Dr. Atkins said she has incorporated some of the audit’s recommendations, such as data-driven decision-making and a reorganization of central office staff, into the district’s strategic plan.

One of the audit’s central focuses was the city’s gifted program, known as Quest. As white enrollment in the city’s schools contracted over the years, the program tripled in size, according to an analysis by a University of Virginia researcher, largely benefiting the white families who remained.

To black families, segregation had returned by another name.

“Everyone wants the best for their kid, but this has been the thing that has helped drive the segregation engine,” said Lisa Woolfork, an associate professor at UVA and a member of Black Lives Matter Charlottesville, whose children attend Charlottesville schools. “I have always been of the opinion that this type of internal segregation is the way to keep white people in the public schools. This is a way that white supremacy undergirds the public school system.”

In 1984, only 11 percent of Charlottesville’s white students qualified as gifted, according to federal data from the UVA analysis. By 2003, according to the audit, about a third of white students qualified, the same proportion as today. White students make up more than 70 percent of the district’s gifted students.”

The article goes on to comment on other disparities in the school system and concludes with a quote from , a black high school student:

Zyahna’s [black student] achievements make her a prime candidate for an elite university, so she was taken aback when, as she was beginning her search, her principal encouraged her to explore community college. The principal says the context was a broad discussion with black student leaders about community college as an affordable option.

That is not how Zyahna heard it.

“No matter how high your scores are or how many hours you put into your work, you are still black,” Zyahna said. “There’s a whole system you’re up against. Every small victory just cuts a hole into that system reminding you how fragile it is. But it’s still there.”

An important article worth a read to understand where we have come in this country regarding school segregation and how far we have to go in many districts including here in New York City.

Tony

 

M.I.T. to Create New College for Artificial Intelligence with a Start-Up Investment of $1 Billion!

Dear Commons Community,

The Massachusetts Institute of Technology announced yesterday that it is creating a new college dedicated to developing and considering the implications of artificial intelligence. It is planning to raise $1 billion for the initial start-up.  As reported in the New York Times:

“Every major university is wrestling with how to adapt to the technology wave of artificial intelligence — how to prepare students not only to harness the powerful tools of A.I., but also to thoughtfully weigh its ethical and social implications. A.I. courses, conferences and joint majors have proliferated in the last few years.

But the Massachusetts Institute of Technology is taking a particularly ambitious step, creating a new college backed by a planned investment of $1 billion. Two-thirds of the funds have already been raised, M.I.T. said, in announcing the initiative on Monday.

The linchpin gift of $350 million came from Stephen A. Schwarzman, chief executive of the Blackstone Group, the big private equity firm. The college, called the M.I.T. Stephen A. Schwarzman College of Computing, will create 50 new faculty positions and many more fellowships for graduate students.

It is scheduled to begin in the fall semester next year, housed in other buildings before moving into its own new space in 2022.”

Incredible move and investment by M.I.T.

Tony

Federal Budget Deficit Jumped 17 Percent Last Year Due to Corporate Tax Cut!

Dear Commons Community,

CNN reported yesterday that the 2018 federal deficit hit its highest level in the last six years.

The deficit jumped 17 percent (or by $113 billion) to $779 billion at the end of Trump’s first year in office according to final figures released Monday by the Treasury Department. The deficit is mostly due to the corporate tax cut that slashed rates from 35 percent to 21 percent, choking revenue for spending, which climbed 3 percent according to CNN.

The U.S. government’s $523 billion in interest payments to service its debt in 2018 — the highest ever — was more than the entire economic output of Belgium this year, Bloomberg reported.

Corporate tax collections in the U.S. fell 22 percent, or $76 billion, in the fiscal year, which ended Sept. 30.

The total federal debt — which combines annual deficits — was 78 percent of the nation’s entire gross domestic product in June. It hasn’t been that large a percentage since World War II.

Trump promised the tax cuts would pay for themselves by boosting business, which would produce more taxes. But that hasn’t yet happened. The Trump administration estimates that the deficit will increase to $1.09 trillion in the next fiscal year.

The federal government usually increases spending — and deficits — to boost a faltering economy — such as during the 2008 recession triggered by the subprime mortgage and banking crisis. But the economy was already in a strong recovery when Trump moved into the White House, and he still boosted the deficit.

“By cutting taxes in 2017 when the economy was already quite strong, Congress and the administration not only missed a golden opportunity to begin to address the fiscal problem, they actually made the problem worse,” William Gale, a senior fellow at the Brookings Institution, told CBS News.

The GOP had traditionally been the party that battled for a balanced federal budget.

Our children and grandchildren will be paying for Trump’s tax cut for decades to come.

Tony

Robert Kuttner:  Sears Didn’t Die.  Vulture Capitalists Killed It!

 

Dear Commons Community,

This morning it was announced that Sears was filing for bankruptcy. It is a sad ending for a venerable American enterprise.  Robert Kuttner, co-editor of The American Prospect and a professor at Brandeis University’s Heller School, analyzes the Sears story and puts the blame on a vulture hedge fund. Below is Kuttner’s sad analysis.

Tony

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Sears Didn’t Die.  Vulture Capitalists Killed It!

by Robert Kuttner

If you’ve been following the impending bankruptcy of America’s iconic retailer as covered by print, broadcast and digital media, you’ve probably encountered lots of nostalgia and sad clucking about how dinosaurs like Sears can’t compete in the age of Amazon and specialty retail.

But most of the coverage has failed to stress the deeper story. Namely, Sears is a prime example of how hedge funds and private equity companies take over retailers, encumber them with debt in order to pay themselves massive windfall profits, and then leave the retailer without adequate operating capital to compete.

Part of the strategy is to sell off valuable real estate, the better to enrich the hedge fund, and stick the retail company with costly rental payments to occupy the space that it once owned.

In the case of Sears, the culprit is a hedge-fund operator named Edward Lampert, once a senior merger guy at Goldman Sachs. In 2005, Lampert merged Sears with Kmart, loaded both up with debt, and used some of the debt on stock buybacks to pump up the share price and enrich shareholders, notably himself and his hedge fund.

In a decade, 175,000 people at Sears/Kmart lost their jobs and revenue was cut in half. Various pieces of Sears were sold off. Lampert did just fine.

Lampert’s hedge fund also became a prime a lender to Sears, making money off of commissions and interest charges as well as being a prime shareholder. The strategy ensures that the fund and its beneficiaries (including Lampert himself) get rich, even if they run Sears into the ground. For the most part, the nostalgia coverage of the demise of Sears has missed this.

If you look hard, you can find an excellent 2017 piece from The New York Times by Julie Creswell, “The Incredible Shrinking Sears,” on Lampert’s role.  Another writer who regularly covers how hedge funds and private equity have pillaged American retailing is David Dayen.

The story goes far beyond Sears. Last year, about 20 retail chains went into bankruptcy. In most cases, the culprit was a hedge fund or private equity owner. (These two business models were once rather different, but are increasingly converging.)

This entire business model is one of the most extreme examples of how financial engineering is destroying potentially viable parts of the real economy.

I’ve written about how private equity and hedge funds are destroying independent daily newspapers, using the same acquire, strip and flip strategy. A book that tells the larger story in vivid detail is “Private Equity at Work,” by Eileen Appelbaum and Rosemary Batt. But in general, this backstory is missing from the news coverage whenever another retailer bites the dust.

This entire business model is one of the most extreme examples of how financial engineering is destroying potentially viable parts of the real economy.

The tactic of loading up a company with debt and then paying yourself exorbitant fees and dividends and manipulating the share price at the expense of the company ought to be illegal. It’s a plain conflict of interest. Likewise being both creditor and shareholder.

Ditto the use of Chapter 11 bankruptcy in order to profit yet again by picking over the remains. A hedge fund operator who drives a company into the ground by stripping assets for his own profit should not be permitted by bankruptcy court to keep control of the company. But that practice is the norm. Lampert will step down as CEO but remain chairman with a controlling ownership stake of what’s left of Sears.

It’s astonishing how little attention this maneuver has gotten, and how scarce are the demands for fundamental reform. One reason may be that Wall Street Democrats as well as Wall Street Republicans are leading players in this parasitic industry, and few politicians of either party have taken them on.

It was insider conflicts of interest at the expense of consumers, workers and investors that inspired the Glass-Steagall Act, separating investment banking from commercial banking. If we ever resume the task of draining the true financial swamp, we need a Glass-Steagall for hedge funds, private equity operators and bona fide businesses.

There are many things wrong with American capitalism. One of the most flagrant, and least appreciated, is the perverse role of hedge funds.

Sears, in its glory days, was the opposite of financial engineering. It was run by real people, and it sold real stuff, to real people. To make the American economy great again, get rid of the financial engineers and make America real again.

 

Six Takeaways from Donald Trump’s ‘60 Minutes’ Interview!

trumpot3.jpg

Dear Commons Community,

Last night on CBS’s 60 Minutes, President Donald Trump gave an interview to Lesley Stahl and commented on a number of issues. It was interesting and at times tense.   Below are six interesting exchanges during the interview courtesy of The Huffington Report.  A video and full transcript of the interview are available here.

Tony

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  1. He denied mocking Christine Blasey Ford at one of his rallies: “I didn’t really make fun of her.”

Earlier this month, Trump openly mocked Christine Blasey Ford’s Senate testimony and the broader #MeToo movement against sexual assault during his rally in Southaven, Mississippi. 

Blasey, 51, gave an emotional testimony in September, recalling the details of the night she claims now-Supreme Court Justice Brett Kavanaugh drunkenly held her down and tried to forcibly remove her clothes at a gathering in the 1980s. She is one of three women who have publicly accused Kavanaugh of sexual misconduct.

“Had I not made that speech, we would not have won,” Trump said when Stahl said he mimicked Ford during the rally. “I was just saying she didn’t seem to know anything.”

“I didn’t really make fun of her,” he added, saying he believes that Ford was “treated with great respect” in the aftermath of the hearing.

Later, when pressed more by Stahl about whether he believes he treated Ford with respect, Trump said: “W―you know what? I’m not gonna get into it because we won. It doesn’t matter. We won.”

 

  1. Trump refused to say humans were causing climate change and said scientists had a “political agenda.”

Stahl specifically asked the president if he still believed climate change was a hoax (he said no), but Trump refused to agree with a majority of scientists who say humans are directly causing the phenomenon.

“I think something’s happening. Something’s changing and it’ll change back again. I don’t think it’s a hoax,” he said. “I don’t know that it’s manmade. I will say this. I don’t wanna give trillions and trillions of dollars. I don’t wanna lose millions and millions of jobs. I don’t wanna be put at a disadvantage.”

The president’s comments come on the heels of the devastating Hurricane Michael and a new report from the United Nations’ climate change body that predicted dire consequences unless the planet dramatically scaled back greenhouse emissions.

Trump, firing back at Stahl’s question if he had listened to his own climate researchers, said that scientists were politically motivated.

“You’d have to show me the scientists because they have a very big political agenda,” he said.

 

  1. Trump has ‘trust’ in Kim Jong Un.

Trump said he gets along well with North Korea’s Kim Jong Un.

“I trust him,” Trump said. “That doesn’t mean I can’t be proven wrong.”

Trump and North Korean leader Kim Jong Un met in Singapore in June. After the summit, the White House said the North had made firm pledges to rid itself of its nuclear weapons. The joint statement released after the event, however, was vague at best and provided no clear pathway for Kim to do so.

The president has previously tweeted that he was “confident” the North Korean leader would “honor the contract we signed &, even more importantly, our handshake,” referring to North Korea’s process of denuclearization.

Stahl told Trump: “Well, remember what Reagan said. ‘Trust, but verify.’”

“Sure. I know. It’s― it’s very true. “Trump replied, “but the fact is, I do trust him. But we’ll see what happens.”

  1. Trump said there could potentially be a “severe punishment” for Saudi Arabia in the aftermath of Khashoggi’s disappearance 

Although Trump often calls the media the “enemy of the people,” he didn’t shy away from noting the severity of the disappearance and possible death of journalist and U.S. resident Jamal Khashoggi.

The Saudi reporter and columnist for The Washington Post has not been seen since entering the Saudi consulate in Turkey earlier this month. He was a known critic of Saudi policies, and Turkish authorities claim he was killed inside the building.

“There’s a lot at stake, there’s a lot at stake and maybe especially so because this man was a reporter,” Trump said. “We’re going to get to the bottom of it, and there will be severe punishment.”

Trump said “nobody knows yet” if Khashoggi was murdered on the instruction of Saudi authorities, adding that the incident was “being investigated” and “being looked at very, very strongly.”

“As of this moment, they deny it, and they deny it vehemently,” he said. “Could it be them? Yes.”

  1. A potential Mattis departure.

Trump said Secretary of Defense Jim Mattis is “sort of a Democrat” who could be leaving his post relatively soon.

Mattis, a former Marine Corps general, hasn’t told Trump he plans to leave the administration. However, Trump said it “could be that he is.”

“I have a very good relationship with him,” Trump said. “I think he’s sort of a Democrat if you want to know the truth. But Gen. Mattis is a good guy. We get along very well. He may leave. I mean, at some point, everybody leaves. People leave. That’s Washington.”

  1. He refused to pledge that he would not shut down special counsel Robert Mueller’s probe.

Stahl pressed Trump repeatedly about his stance on the ongoing investigation by special counsel Robert Mueller into the last presidential election, asking if he would “pledge” not to shut it down. Trump refused several times to answer.

“I don’t pledge anything,” he said. “But I will tell you, I have no intention of doing that. I think it’s a very unfair investigation because there was no collusion of any kind.”

When the host asked once more, Trump again fired back, saying: “There is no collusion. I don’t wanna pledge. Why should I pledge to you? If I pledge, I’ll pledge. I don’t have to pledge to you.”

He later cast doubt on any claims that he had colluded with Russia during the election, calling the idea “ridiculous.”

32 people have been indicted in Mueller’s probe so far, including several high-profile members of the Trump campaign.

 

Jared Kushner, Trump’s Son-in-law, Paid Little to No Taxes from 2009 through 2016!

Dear Commons Community,

Confidential documents reviewed by the New York Times indicate that Jared Kushner, President Trump’s son-in-law and adviser, probably paid little or no income tax from 2009 to 2016.  As reported:

“Over the past decade, Jared Kushner’s family company has spent billions of dollars buying real estate. His personal stock investments have soared. His net worth has quintupled to almost $324 million.

And yet, for several years running, Mr. Kushner — President Trump’s son-in-law and a senior White House adviser — appears to have paid almost no federal income taxes, according to confidential financial documents reviewed by The New York Times.

His low tax bills are the result of a common tax-minimizing maneuver that, year after year, generated millions of dollars in losses for Mr. Kushner, according to the documents. But the losses were only on paper — Mr. Kushner and his company did not appear to actually lose any money. The losses were driven by depreciation, a tax benefit that lets real estate investors deduct a portion of the cost of their buildings from their taxable income every year.

In 2015, for example, Mr. Kushner took home $1.7 million in salary and investment gains. But those earnings were swamped by $8.3 million of losses, largely because of “significant depreciation” that Mr. Kushner and his company took on their real estate, according to the documents reviewed by The Times.

Nothing in the documents suggests Mr. Kushner or his company broke the law. A spokesman for Mr. Kushner’s lawyer said that Mr. Kushner “paid all taxes due.”

In theory, the depreciation provision is supposed to shield real estate developers from having their investments whittled away by wear and tear on their buildings.

In practice, though, the allowance often represents a lucrative giveaway to developers like Mr. Trump and Mr. Kushner.”

Like son-in-law like father-in-law – maybe?

Tony

 

Affirmative Action Trial Against Harvard Begins Tomorrow!

Dear Commons Community,

A lawsuit accusing Harvard University of discriminating against Asian-American applicants goes to trial tomorrow. The case is widely seen as a referendum on affirmative action in college admissions. The New York Times has a review of the issues in an article this morning (see full text below).  The case accuses Harvard of setting a quota on Asian-American students accepted to the university and holding them to a higher standard than applicants of other races. It flips the strategy used in past challenges to race-conscious admissions: Instead of arguing that the school disadvantages whites, the plaintiffs say that Harvard is admitting minority groups and white students over another minority, Asian-Americans.

This case will be watched closely by the entire higher education community especially at highly selective colleges and will likely end up in the U.S. Supreme Court.

Tony

—————————————————————-

 

What’s at Stake in the Harvard Lawsuit?

By Anemona Hartocollis

Oct. 13, 2018

At a time of deepening racial and political divisions among Americans, a trial widely perceived to be a referendum on affirmative action will begin on Monday in Boston, bringing into a courtroom decades of fierce disputes over whether Harvard University and other elite institutions use racial balancing to shape their classes.

The case accuses Harvard of setting a quota on Asian-American students accepted to the university and holding them to a higher standard than applicants of other races. It flips the strategy used in past challenges to race-conscious admissions: Instead of arguing that the school disadvantages whites, the plaintiffs say that Harvard is admitting minority groups and white students over another minority, Asian-Americans.

Asian-Americans are divided on the case, with some saying they are being unfairly used as a wedge in a brazen attempt to abolish affirmative action. But it is not yet clear whether the case will make new law — perhaps banning the consideration of race in college admissions — or will narrowly affect only Harvard. Legal experts say at the very least, the case will expose the sometimes arcane admissions practices of one of the most selective institutions in the world.

At most, it could make its way to a newly more conservative Supreme Court and change the face of college admissions.

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“I definitely think that this will affect the fate of affirmative action and therefore racial diversity in universities across the country,” said Nicole Gon Ochi, a lawyer for Asian Americans Advancing Justice in Los Angeles. “It’s about much more than a few elite universities like Harvard.”

The case is particularly resonant, experts say, because Harvard’s “holistic” admissions policy, which considers race as one factor among many, has been held up as a model by the Supreme Court since a landmark affirmative action case in 1978, and is effectively the law of the land. Harvard says that it does not discriminate, but considers each student individually to build a class of diverse backgrounds, races, talents and ideas.

The trial will unfold as millions of high school students are figuring out how to define themselves in their college applications. It comes as heated political campaigns fought over racial and economic fault lines culminate in midterm elections.

And it comes as the Trump administration continues to tip its hand toward the plaintiffs. The Justice Department has filed a statement of interest in the case. It has opened its own inquiries into complaints of discrimination against Asian-Americans, at Harvard and at Yale. And in July, the Education and Justice Departments withdrew Obama-era guidelines that encouraged the consideration of race in college admissions.

The rest of the Ivy League has closed ranks behind Harvard, filing a joint amicus brief, and universities across the nation are watching intently for a ruling with wide-ranging impacts.

The lawsuit says that Harvard holds the proportions of each race in its classes roughly constant and manipulates a vague “personal” admissions rating to downgrade applications from Asian-Americans. By doing this, the suit says, Harvard is violating federal civil rights law, which prohibits discrimination by universities that receive federal funds

Harvard says there is no evidence that the 40-member admissions committee has engaged in any orchestrated scheme to limit the admission of Asian-Americans. But it says that eliminating the consideration of race would cut the number of African-American, Hispanic and other underrepresented minorities by nearly half.

The lawsuit was filed in 2014 but has been generations in the making.

Suspicions that Harvard and other top colleges were imposing informal quotas on Asian-Americans to combat their quickly growing presence among the academic elite date back to at least the 1980s. In 1988, the Office for Civil Rights of the federal Education Department opened an investigation but cleared Harvard of racial discrimination.

Many remained wary. The Education Department looked into a new admissions complaint about Asian-Americans in 2012, ultimately deciding not to investigate, according to court documents. The same year, Ron Unz, a conservative activist and Harvard graduate, published a lengthy dissection of Harvard admissions, suggesting that the university was keeping down the number of Asian-American students. The essay helped rekindle public debate on the issue.

Harvard appears to have taken the criticism seriously. Around that time, an internal research group at the university conducted a study of admissions, asking, “Does the admissions process disadvantage Asians?” It found that being Asian-American decreased the chances of admission.

Much of the plaintiffs’ case echoes the findings.

Harvard says the internal study was preliminary and incomplete, and that the plaintiffs have cherry-picked data, used innuendo and taken documents out of context to arrive at their conclusions.

Past Supreme Court decisions on affirmative action limited the use of race in college admissions without banning it outright. The court has said that an applicant’s race can be used as a “plus factor” or “a factor of a factor of a factor,” terms that are purposefully ambiguous.

“The Supreme Court has been vague about what is O.K.,” William Baude, a law professor at the University of Chicago, said. “It seems like they say it’s O.K. as long as it’s not too much or too blatant. And then the other problem is that the schools have been very secretive about exactly what they do. Which means we don’t know what the law exactly is, and we don’t know whether anybody is obeying.”

Legal experts say the Harvard case could be a fact-based trial, specific to one university. But if it is appealed, the Supreme Court could have a chance to revisit the law on affirmative action. That is the game plan of the plaintiffs, Students for Fair Admissions, a group formed by a conservative activist against affirmative action, Edward Blum. Mr. Blum has recruited for the group nearly two-dozen Asian-American students who were rejected by Harvard.

“It’s important to recognize that the fate of affirmative action doctrine and Harvard don’t necessarily go in the same direction,” Professor Baude said. “Affirmative action could stay the same even if Harvard loses. The challengers have both goals. They both think that what’s happening at Harvard is wrong, and they think the whole regime is wrong, and they’d like to use this case to prove it.”

S.F.F.A. has other irons in the fire. It has also filed a complaint challenging race-conscious admissions, but not focusing on Asian-Americans, at the University of North Carolina at Chapel Hill. It is scheduled for trial in the spring, and is also intended to land in higher courts.

Mr. Blum was the architect of Fisher v. University of Texas at Austin, the last major affirmative action case to go to the Supreme Court, which he lost in 2016. But Justice Samuel A. Alito Jr.’s dissent in the case, in which a white woman said she was denied admission because of her race, hinted that discrimination against Asian-American students could be fertile ground for litigation.

Ilya Shapiro, a senior fellow at the libertarian Cato Institute, said affirmative action could be vulnerable if the lawsuit goes to the Supreme Court and the newly appointed Justice Brett M. Kavanaugh follows the lead of the chief justice, John G. Roberts Jr..

“On this issue, John Roberts has written that the only way to stop discriminating on race is to stop discriminating on race,” Mr. Shapiro said. “So he has made up his mind that racial preferences are improper in any way.”

Harvard’s newly installed president, Lawrence Bacow, issued an email this past week saying he was confident the university would prevail, and pleaded for civility and the long view.

“Reasonable people may have different views,” Mr. Bacow said. “I would hope all of us recognize, however, that we are members of one community — and will continue to be so long after this trial is in the rearview mirror.”