Budgeting for Fraud-A China Hustle Review- Scott Dennis April 2018
“Greed is the lack of confidence of one’s own ability to create.” V. Bonta
The documentary China Hustle is asking an important question: is fraud an essential part of capitalism and if not who will enforce the rules? Normal working people continue to ask this question in the light of the 2008 recession, stories of offshore accounts for the wealthy and almost monthly fines issued to bad actors within the American financial system such as Wells Fargo who may in fact consider fines for fraudulent behavior as the cost of business. It is a story that needs to be told because American workers presently have pension funds investing in Chinese assets that may well be fraudulent and ultimately worthless, hurting Main Street as well as Wall Street.
The film begins at the intersection of catastrophic losses during the great recession and the allure of China as a savior for investors looking to rebound. All of the key figures in the film are from the financial sector and the viewer can imagine how much doubt they must have had about the financial system as the great recession unfolded and how eager everyone was to look the other way at the panacea of earnings from Chinese companies. The way this manifested itself is through reverse mergers, the film gives a good overview of this legal loophole that was used to merge small Chinese companies with American shell companies with the intent of avoiding scrutiny on their way to being traded on U.S. exchanges. China Hustle claims that nearly 80% of Chinese companies being invested in by everyday people are reverse mergers and viewers will credit the filmmakers to alert us to this fact, it’s helpful for regular investors to look into these types of mergers as part of their own due diligence.
The filmmakers make an argument that Chinese and U.S. markets have a inherit problem working together that is cultural at its core. The Chinese business climate they claim is relationship based to the point of being feudal a reflection of a weak legal system. Although the viewer may be aghast at the willingness of Chinese companies to defraud American investors, it should be noted that China’s foray into the free market is still in its infancy. That said the ire should be saved for the lack of government oversight of these types of investments by SEC and the Congress. The most effective cinematic device is when director Jed Rothstein lingers on the faces in the interviews, they all look a little lost and disgusted by the situation. One of the investors that raised the alarm on China was Dan David; we see his frustration cataloged in the film as he attempts to get Washington’s attention regarding the dangerous exposure the American economy has to Chinese investments. The film is worth seeing for average people in order to remind them to do some homework when it comes to foreign investment, because the more opaque the opportunity is the more serious the risk.
How to get a billion people to work for you for free-Technology and private property.
Scott Dennis March 13, 2018
We have all heard the axiom that “knowledge is power”, when a clear view of how power is being wielded today emerges it is perhaps far more accurate to say that “data is power”. There are multi-million dollar businesses that provide data protection services, but what about the data that we freely hand over or that we are unaware that we are providing? An informed citizen needs to understand how this data is being retrieved, by whom and for what purposes. Let me start to lay out the concept of how data is retrieved with a personal story. In 2007 I was part of a group of managers who had the responsibility of hardening the security of a port facility. At regular intervals we would invite stakeholders such as the fire department, police and the local military representatives to stage a drill that introduced possible scenarios that could affect the port and we responded based on our particular role. One year we had a special group of guests from the labs at the Defense Advanced Research Projects Agency (DARPA) to observe the exercises. They explained that they were there to monitor our decisions in response to the ever worsening artificial scenarios playing out during the exercises. These Naval Intelligence researchers were early adopters to the theory that artificial intelligence was never going to reach its potential without useful data sets.
AI is dumb unless we teach it about ourselves
The kind of work that DARPA was doing that afternoon falls under a thirty year old application of technology called a decision support system (DSS). Over the decades government and the corporate world has applied these technological structures more for the facilitation of organizational processes than actual decision making. However the revolutionary scaling of how organizations can now collect data into so called knowledge warehouses has made actual decision making possible. Look at it this way, if you wanted your Artificial Intelligence to help you make decisions ten years ago then you were doing field work or surveys and keying in the data. Now imagine that information pipeline scaled to the level of the global internet with billions of people offering information about themselves and their behaviors.
What We Share
Recently January 28th has been named data privacy day; this is an effort to raise awareness on how to protect your private data. In my opinion it is a holiday similar to Valentine’s Day, asking you to think about security but actually a commercial for the vendors supplying protection measures. It is far more important for individuals to have a sense that their information is private property and act accordingly when interacting with their own data cloud. Even when we interact with our social media we are doing some of our most vigorous sharing of data.
Researchers have been suggesting that every Facebook user (now numbering one billion people) can be seen as digital workers inputting an estimated 20 minutes a day of their own private information, liking, commenting and clicking on ads. That is more than 300 million working hours of free digital labor per day.
The take away here is that free data sets are flowing to private AI, which will compete directly with workers in the near future. Some improved measures of protection will be enacted on May 25, 2018 with the enactment of the GDPR in Europe which mission is according to their website.
“The aim of the GDPR is to protect all EU citizens from privacy and data breaches in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established.”
So far there are no equivalent measures being considered in the U.S. as of yet, but it is important to get the word out on digital privacy so that we can move toward protecting citizens from zealous technological applications.
Scott Dennis Writes for Blue Collar Think Tank
Workers Identity in a robotic world
By Scott Dennis Jan 18, 2017
“If a man is called to be a street sweeper, he should sweep streets even as a Michelangelo painted, or Beethoven composed music or Shakespeare wrote poetry. He should sweep streets so well that all the hosts of heaven and earth will pause to say, ‘Here lived a great street sweeper who did his job well.”
“No work is insignificant. All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.” – Dr. Martin Luther King Jr.
Dr. King brought to light our nations struggle with racial inequality, in his many brilliant speeches he carved a narrative that helped to solidify an identity for the oppressed. If you listen closely to the logic of his discourse you find an economic model at the heart of racism. In the American south land owners intentionally created enmity between the races to frighten poor whites into accepting lower wages. The equation was simple to understand, work for pennies or we will get slaves to replace you. For the millions of workers facing obsolesce due to technology this may sound familiar.
Years later Dr. King would point out anecdotally that the southern white policemen that locked him in jail were bringing home the same pay as a black rail car operator in Chicago, the racial advantage was an illusion held onto by racists who could not face the reality of belonging to the larger multi-racial group called the working poor. As a society we have to ask ourselves if anything has changed and if the wonders of our technological advances are lifting all people up or creating a new procariat, or class of people as economically “precarious” as King faced in his time.
What is the identity of a worker?
It is important to note that a workers identity is looked at in a very different way by government and policy makers versus an individual’s own thoughts on how they relate to work. Everyone reading this has their own opinion on what work means to them ranging from a disgruntled factory worker, to a middle manager looking for inspirational leadership as well as contented academics nestled in the ivory tower. Policy and corporate decision makers see things in a different context. With the economic downturn in 2009 concerns about workers could be summed up from a passage taken from Dennis Snower’s Keil Institute study (May 2013).
“..workers can adopt either an elite or underclass identity. An elite worker has a pro-work ethic, with a low disutility of work and a high disutility from being unemployed. This gives the worker a strong incentive to take up work and thereby raises her job finding rate. Conversely, the underclass worker has an anti-work ethic, with a high disutility of work and a low disutility from being unemployed, leading to a lower job finding rate.”
Studies like these are most common when the system is seen to be broken as was the case in 2009. In the simplest terms work has always needed labor and industry makes it their business to drive the narrative to understand where the attitudes of the people are and to control them when possible. Groups like Blue Collar Think Tank are taking action by thinking through strategies for workers with changing identities in the face of technology.
All labor that uplifts humanity
As you toil in your cubicle you might not think that your work helps to uplift humanity, but it does in the practical sense of your taxes being used to improve infrastructure, provide a social safety net for those in need or your contributions to schools and the institutions of your faith. Community bonds are strengthened through friendships at the workplace and when you understand the inherit dignity of work a creative zeal can spark inspiration in even the most mundane occupation. This is why we are at a cross roads in the face of uncontrolled automation, we could suffer the erasure of the workers identity unless we take a determined and holistic approach. In 1879 Henry George anticipated this state of affairs when he wrote in Progress and Poverty:
“The fact is that the work which improves the condition of mankind, the work which extends knowledge and increases power and enriches literature and elevates thought, is not done to secure a living. It is not the work of slaves driven to their tasks either by the task, by the taskmaster, or by animal necessity. It is the work of men who somehow find a form of work that brings a security for its own sake and a state of society where want is abolished.”
So as Dr. King famously asked where do we go from here? It starts as it did then with understanding who we are in these changing times so that the interests of humanity can be heard above the churning of technological progress. Asking not always can we do this thing but should we and what are the consequences? The new identity of the worker should echo George’s quotation to bring security for its own sake. Workers will need to be more organized in the future to get to that point and will also need to unmask those who want to divide them for their own interests so that the mistakes of the past will not be repeated.
Scott Dennis writes for www.bluecollarthinktank.com @bcthinktank
How Technology Is Destroying Jobs
Robots at my door
Scott Dennis-New York
“The factory of the future will have two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.” -Warren G. Bennis
Having been in the position to hire and fire employees, I have always wanted to judge my own career by the amount of new jobs created to help people support their families. A loss of a job through firing, lay off or just the churn of employees finding new opportunities are disruptive to a person’s life but are part of the normal cycle of the capitalist market place. What happens when this equilibrium between labor and employer comes out of balance? This is what the world is facing in the form of ever-more sophisticated technology. The reality of this Pandora’s Box is affecting your families and friends and employers themselves are now realizing that they cannot control it.
“How can median incomes decrease in countries with gross domestic product and over-all productivity sky rocketing?”
Robots are not waking up with the goal of taking your job, at least not yet. The transition of workers lives in the late 19th and 20th century has seen the standard of living increase in countries embracing technology, labor has generally been made far more productive with income levels creating a healthy middle class in the modernized world. However the relentless drive toward optimization in the private sector today are using robots to move the cost of labor into the profit margin on a dramatic scale. Even in environments with strong unionized workers, such as the auto industry and longshoremen on the waterfront in America, new technology that has already been seen displacing workers globally is on pace to cut down the need for human assets in blue collar sectors in American cities with ports and heavy industry. In my career I have witnessed the future of a dock workers life as I compared the amount of longshoremen working the Port of Newark or Oakland compared to the relative quiet of a new container terminal in Amsterdam where robots move cargo without the need for their human counterparts, doing away with their wages, pensions and liabilities.
If you do not know anyone in heavy industry perhaps you believe that this wave of technology is someone else’s problem. The World Economic Forum suggests that in the short term over five million jobs in the administration field such as accountants, sales people and an array of positions in healthcare will be affected. This challenge that labor is facing differs greatly from globalization in that when a country loses a factory to an overseas competitor, people somewhere are getting the work albeit at a lower relative wage. Jobs lost to robotics force labor not to just another job but another occupation since the function of their position is eliminated completely from the market. These shifts due to technology have a number of secondary effects such as income inequality which has become more acute as economic growth continues in an upwards trend with a perverse downward trend in employment. How can median incomes decrease in countries with gross domestic product and over-all productivity sky rocketing? These paradoxes are being created by a third force wedged between labor and employer, robotics and technology and its applications will soon be out of the control of white collar managers. There is a great need for creative strategies from sectors spanning from technology to faith leaders to offer some positive options for workers that policy makers can carve into legislation.
Scott Dennis has had a twenty year career in transportation and labor negotiation and is also the founder of Blue Collar Think Tank. email@example.com @bcthinktank
Robot Image courtesy of ShutterStock
The Impact of the Global Economy on Cities
by Michael Cohen
Senior Advisor-The World Bank