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March 2016

Pirates With a Periscope: Big Tech & The FUTURE OF THE FREE PRESS

3/21/2021

0 Comments

 
Big Tech Piracy
“Journalism is dead in America…”
---Sean Hannity 2009
 
 
Journalism may not be completely dead yet. However, the industry in aggregate seems to be dying. Newspapers are in steep decline; and the cornerstones of the craft (magazines & periodicals) are locked in a death spiral. Similarly, local television news programs have experienced dramatic declines in viewership for more than a decade; and revenues for radio stations with all-news formats have flatlined.

The explosion of social media in recent years has undoubtedly disrupted the news and publishing industries.  These days, online news sources are a staple for a vast majority of adults in the United States. In fact, 43% of U.S. adults turned to social media, news websites and news apps for political news this past election cycle. In parallel, online media subscriptions grew at an astonishing 300% rate last year.

So why are so many industry bellwethers floundering in an era where content is supposedly “King”? The sad truth of the matter is that publishers have largely abandoned their tradecraft. Most bought in to the assertion that “the broad opportunities…involve supplying information or entertainment“ while largely neglecting the other two pillars of their art: educating & enlightening their audiences. Additionally, many unwittingly bought into the assertion that their audiences “must be rewarded with deep and extremely up-to-date information that they can explore at will.” Quantity over quality seems to be the manta; and publishers are paying a hefty price for their shoddy craftsmanship.

Make no mistake, the digital publishing realm is a world within itself. Cyberspace happens to be real estate; and publishers failed to fortify their online kingdoms when they colonized their territories. Metaphorically speaking, they entrusted pirates to patrol their waters at the outset. Gradually, the pirates established strongholds within the publishing castles and extorted their naivety. Today, these pirates hold the publishing world hostage; charging those they deem fit a king’s ransom to publicize and distribute their wares.

By pirates, we are referring to search engines, social media companies and content aggregators (specifically: the likes of Facebook, Twitter, Google and YouTube). Perniciously, they have a stranglehold on the distribution and circulation of Web content. In parallel, these same companies also control a lion’s share of the advertising market within the online publishing world. Like robber barons of the 19th Century, the tech giants have created monopolistic empires of their own, decimating the publishing industry and leaving behind a wake of public discord in the process.

We will examine the genesis of the present situation in this article. We will also explain why the status quo has become a threat to democracies around the world as well as our own Constitutional Republic here at home. Lastly, we will offer our thoughts on how to best balance the playing field and hopefully restore public trust in our media institutions.  
 

Just the Facts, Ma’am
A freefall within the publishing industry has been evident for years. In 2013, U.S. newspaper circulation fell below the lowest level in recorded history as digital consumption became more mainstream.  According to PEW Research, the shrinkage has continued at an astounding rate since then. In 2018 for example, the combined circulation for print & digital daily newspapers in the U.S. fell 8% for weekdays and 9% for Sundays. Sadly, the future looks even bleaker for publishers if present trends continue.
​
Revenue for magazine and periodical publishers was expected to decline 13.8% in 2020 according to IBISWorld. As revenues from print advertising dry up, digital revenue streams simply are not accounting for the difference. This isn’t surprising given that the bulk of revenues generated through digital advertising (52%) now go to Facebook and Google rather than to the publishers themselves.
​But why? Prior to the digital revolution, publishing houses typically had in-house sales teams that aggressively pursued advertisers themselves. It was as much an art as it was a science; and it served both the publisher and the advertiser quite well. For instance, publishers could command premiums for the most visible advertising spaces; and repeat advertisers could (and would) often tell stories to their audiences within their real estate from issue to issue. Absolut Vodka’s advertising campaign of the 80’s & 90’s is one of the best examples.
​
As a whole, publishers and the media failed to fully assess the governing dynamics of the World Wide Web when they launched their digital ventures. They did not have to make each & every article, story, news piece, opinion column and publication under their license visible for the entire world to see. However, for some inexplicable reason, this is precisely what most publishers and news organizations chose to do. Instead of protecting and nurturing their intellectual properties as treasured assets, both industries effectively treated their intellectual property like trash and dumped them onto the World Wide Web. 
Dragnet quote Just the facts, ma'am
Picture cyberspace as a solar system and the World Wide Web as a planet within that system. Now imagine you were a publishing mogul looking to set up shop on that planet. You probably would not dump your wares onto the surface of that planet without understanding and testing the terrain first. Yet, this is essentially what a vast majority of publishers and news outlets did when they launched their online publishing ventures.

The surface of the Web itself happens to be fluid and transparent. Adroit travelers within cyberspace are able to see everything on the surface web at quick glance; meaning that it’s ripe for piracy and theft. Much like the surface of the Earth; most of the solid ground on the Web lies well below the planetary surface.

In aggregate, the Web’s subterranean layers are known the deep web which is often ignorantly conflated with the dark web - the Web’s murky undersurface that is permeated with illegal content. That said, the deep Web is where the bedrock lies. In fact, around 90% of the world’s websites exist within the deep web rather than the surface web. Sites within the deep web are not indexed by the search engines and oftentimes aren’t made visible to the public in general. Additionally, websites within the deep web are frequently encrypted to ward off pirating operations as well as hackers.

When publishers first launched into cyberspace and claimed their domains on the Web, hackers were a clear predatory threat. Consequently, protocols were quickly established within the surface web to deter hackers. Savvy tech pirates on the other hand, were lying in wait. Many of them appeared innocuous on the surface. They had a native understanding of the Web’s subterrain and were often collegial toward publishers. However, business ventures are a combination of war and sport and pirate captains soon prepared their vessels to perform stealth forms of grand larceny within the publishing world.

Houston, We Have a Problem
The original champions of the World Wide Web were long on dreams and big on aspirations. In a 1994 speech to the International Telecommunications Union, then Vice-President Al Gore remarked:
​“In this decade, at this conference, we now have at hand the technological breakthroughs and economic means to bring all the communities of the world together. We now can at last create a planetary information network that transmits messages and images with the speed of light from the largest city to the smallest village on every continent.”
He went on to say that “to accomplish this purpose, legislators, regulators, and business people must do this: build and operate a Global Information Infrastructure. This GII will circle the globe with information superhighways on which all people can travel.” That said, he emphasized that the National Information Infrastructure as he called it, would be “built and maintained” by the private sector. He envisioned an architecture consisting of hundreds of different networks, varying technologies and run by a multitude of companies.

Like many tech visionaries of the period, Mr. Gore envisioned a utopian “marketplace of ideas, experiences, and products” available to everyone within free society. Effectively, they equated the distribution of data and access to information with knowledge transference. In general, he and many others tended to view the emerging cyber world with rose colored glasses. They seemingly imagined that collaboration and friendly competition would prevail in perpetuity for the greater good.
​
Time has proven these visionaries shortsighted and unpragmatic. They either ignored, were oblivious to, or had forgotten that immense political and social upheavals inevitably followed every major technological advancement throughout all prior human history. In his 1996 essay Content Is King, Bill Gates alluded to what was to come:
​“I expect societies will see intense competition-and ample failure as well as success-in all categories of popular content-not just software and news, but also games, entertainment, sports programming, directories, classified advertising, and on-line communities devoted to major interests.”
Apollo 13 movie line Houston, we have a problem
Here, Mr. Gates fully recognized the viability of the emerging markets as well as their enormous potential for scale. He also implied that social upheaval of some sort would be inevitable as macroeconomic principles played out over time. In those days, cyberspace was much like the North American continent during the 17th century. In effect, the World Wide Web would be an ethereal fountain for new raw materials with computer code comprising the basic elements.

Navigational maps would be required to conquer the terrain. They would be required to link people and institutions together; and to effectively promote trade. Also, library systems would have to be built to warehouse the perpetually renewing supply of maps. Inevitably, something along the lines of the Great Library of Alexandria would need to be built for the public at large to catch on and colonize the Web.

Intuitively, one would think that visionaries and architects devising the National Information Infrastructure would have realized this at the outset and built one into their rollout plan. Yet, it was left entirely up to the private sector to develop, build, and maintain them instead. Consequently, rudimentary libraries sprouted up throughout the 1990s. They are of course known as search engines today.

The first of these search engines was named Archie. Archie made its debut in 1990. That said, it was more of a simple card catalog than an exploratory tool for Web. Archie was followed by W3Catalog and JumpStation in 1993. Jumpstation was the first search engine to combine crawling, indexing and searching all into one package; features which are now industry standards. This innovation was followed in 1994 by Webcrawler; the first tool that enabled visitors to search for any word on any webpage, which is also of course an industry standard today.

During the latter part of the decade, competition within this category heated up as Web usage became more mainstream. Several search engines debuted during this period vying for popularity. Among the better known: Magellan, Excite, Infoseek, Inktomi, Northern Light, and AltaVista.

Then in 2000, Google gained traction. The brainchild of entrepreneurs Sergey Brin and Larry Page quickly rose to the forefront of the market largely due to their sophisticated PageRank system as well as their novel paid-search capabilities. Both were game-changing features as far as e-commerce was concerned, especially for publishers, entertainment companies and media outlets. For that matter, an argument can be made for the whole of western civilization as well.
 

The Booty Call
Mr. Brin & Mr. Page met as undergrads at Stanford University. Mathematical geniuses armed with computer science backgrounds; they set out to change our world by effectively organizing and cataloging the World Wide Web. A sophisticated mathematical gear system was at the heart of their solution, better known today as algorithms. The machinery they developed was groundbreaking to say the least.

From the outset, Google’s product had an intuitive end-user interface and an engaging demeanor. It was also fast and efficient. Beyond that, Brin & Page’s search engine was generations ahead of their competition mechanically. Both factors were enormous competitive advantages and they quickly leaped to the top of the market. The company has remained there ever since; driving the most of their competitors into the graveyard.
​
Being one of the greatest free-market success stories of all-time, stories about the Google’s origin, founding and history are widely known. Most point to their earnest desire to change the world for the better during the company's nascency. Journalist Steven Levy provides such an example in his book: In the Plex, recounting the origin of the Google’s infamous slogan ‘Don’t Be Evil’:
Paul Buchheit was thinking, This is lame. Jawboning about citizenship and values seemed like the kind of thing you do at a big company. He’d seen enough of that at his previous job at Intel. At one point the chipmaker had given employees little cards with a list of values you could attach to your badge. If something objectionable came up you were to look at your little corporate values card and say, “This violates value number five.” Lame. “That whole thing rubbed me the wrong way,” Buchheit later recalled. “So I suggested something that would make people feel uncomfortable but also be interesting. It popped into my mind that ‘Don’t be evil’ would be a catchy and interesting statement. And people laughed. But l said, ‘No, reaIIy.”’

The slogan made Stacy Sullivan uncomfortable. It was so negative. “Can’t we phrase it as ‘Do the right thing’ or something more positive?” she asked. Marissa and Salar agreed with her. But the geeks—Buchheit and Patel—wouldn’t budge. “Don’t be evil” pretty much said it all, as far as they were concerned. They fought off every attempt to drop it from the list.
​

“They liked it the way it was,” Sullivan would later say with a sigh. “It was very important to engineering that they were not going to be like Microsoft, they were not going to be an evil company.”
Today, the Google brand is synonymous with Web search in much the same way that the term Mafia is synonymous with organized crime. An accurarate analogy because, Google’s business model had dubious underpinnings from the outset no matter how noble their founding origins may have been.
​
For starters, Google’s PageRank methodology was rife for corruption. Instead of assessing the overall value of a particular website on a given topic or Search term, their Web Crawler scours every visible published page to monetize the value. Like a submarine with a periscope, Google’s algorithmic machinery then targets and prioritizes pages based on their potential yield – for their preferred partners as well as for themselves instead of for their patrons.
Monopoly board game Rich Uncle Pennybags
And while Google’s founders insist that they were not moved by money, they were entrepreneurs at heart and ingrained their passion for success within the corporate culture. Regardless of their profit motives, competing to win has always been a strategic imperative for the company. As Mr. Brin once remarked: “We want Google to be the third half of your brain.”

The company understood from the outset that the World Wide Web happens to be a world of real estate. A world comprised of the elements visible to the naked eye and measured by occupancy. Over time, the search industry’s 800-pound gorilla has effectively built locks on both.

Google’s domain is arguably the most valuable piece of cyber real estate ever created as far as occupancy is concerned. More people visit Google every single day than other site on the web. They also spend a great deal of time there. An average of 16 minutes per day; taking in over 17 pageviews during their stays.

Early in the game, publishers and the media seemingly thought allowing Search Engines like Google to freely crawl, catalog, and index everything they created was a wise idea. Time has proven them wrong. At least for the ones that consistently fail to appear above the fold on the first page of Google’s search results that is. Google has controlled over 86% of the global Search market for well over a decade. On top of  that, they presently have a stranglehold on the industry’s advertising market – estimated at over 80% for 2019. In short, they’ve effectively monopolized both industries.

Make no mistake, free press in America is no longer free. In effect, the media and the press have acquiesced to a sophisticated band of pirates who pilfer their profits and arbitrarily doll out their creative assets to the public. Online publicity has essentially become a pay-for-play racket over the years. Arguably, along the same lines as the Payola schemes that have scandalized the music industry off and on again since the 1950s. Like a mafioso godfather, Google demands tribute. And the publishing world willingly lines up to kiss their ring.
​
Mr. Brin & Mr. Page no doubt had a sense of humor about them when they christened the first pirate vessel. They originally dubbed Google’s new technology BackRub – a tongue-in-cheek phrase used within underworld establishments known to supply Happy Endings to their clientele. God knows if they had this in mind when they set out to conquer the Internet. That said, the monopoly they spawned within their dorm rooms has since grown to become the most powerful member of an oligarchical information technology syndicate. A syndicate that has grown so powerful that it now threatens the very fabric of free society.
 
​
What We’ve Got Here Is Failure to Communicate
It is little wonder that Western civilization began to fragment almost in parallel with Mr. Gore’s 1994 speech. Competition within the news and entertainment industries went into hyperdrive with the advent of the Web. With the internet, fringe publications were no longer hidden behind the counter of a local newsstand. Instead, they were right out in the open for all the world to see. Everything from hardcore pornography and violent videotaped crimes; to exploitative human tragedy exposes and even narcissistic rantings of deranged sycophants. The public gobbled this garbage up like kids in a candy store.
As a result, the mainstream media began to lose a substantial share of their market to boundary-pushing upstarts. The explosion of online social media beginning in the mid-2000’s furthered the exodus. In the United Kingdom for example, broadcast television experienced a 25% decline in viewership during the 2010’s. Similarly, U.S. television viewership has dropped an astounding 36% over the last eight years as more and more Americans continue to turn to online sources for their news & entertainment.

​
Consider these figures and their implications:
  • 33% of American adults have no trust at all in mass media according to a recent Gallup poll.
  • An additional 27% of those surveyed reported having very little trust.
  • Only 9% of those surveyed have full confidence in America’s media establishments.

Last year, the media’s trust factor sank to the second-lowest level in half a century per Gallup. Even more alarming, the 33% of Americans who completely distrust the media is an all-time high in the 48 years Gallup has conducted the poll.
​
And why wouldn’t they? The marketplace for news and information is hypercompetitive today. An oligopoly controls the produce; and they have nearly eliminated scale. Media monkeys frantically compete with one another to get their share of bananas from the 800-pound gorilla and return them to their organ grinders. This analogy applies to media executives that bow before Big Tech’s moguls as if they were an Emperor; as well as frontline authors and reporters tasked with spewing out garbage 24/7.
​
Cool Hand Luke movie line What we've got here is failure to communicate
Another Fine Mess
Because an overwhelming majority of American adults (82%) now obtain all or some of their news online, Google and their brethren within the Social Networking industry wield ungodly power. Power to shape and form public opinion well-beyond any other media conglomerate that has ever existed; as well power to bend political decisions around the world in a direction of their choosing. Case in point, the 2020 U.S. election campaigns.
​
From an unbiased standpoint, it is nearly impossible to argue that Big Tech did not lean heavily in favor one political party over another in 2020. The rampant reports of online censorship and corporate collusion are damning because the facts ring true; particularly in relation to the Presidential election campaign. Time Magazine’s National Political Correspondent Molly Ball even boasted about it in an article shortly after the election. She writes in The Secret History of the Shadow Campaign That Saved the 2020 Election that:
Laurel and Hardy Movie Poster Another Fine Mess
Quinn’s research gave ammunition to advocates pushing social media platforms to take a harder line. In November 2019, Mark Zuckerberg invited nine civil rights leaders to dinner at his home, where they warned him about the danger of the election-related falsehoods that were already spreading unchecked. “It took pushing, urging, conversations, brainstorming, all of that to get to a place where we ended up with more rigorous rules and enforcement,” says Vanita Gupta, president and CEO of the Leadership Conference on Civil and Human Rights, who attended the dinner and also met with Twitter CEO Jack Dorsey and others. (Gupta has been nominated for Associate Attorney General by President Biden.) “It was a struggle, but we got to the point where they understood the problem. Was it enough? Probably not. Was it later than we wanted? Yes. But it was really important, given the level of official disinformation, that they had those rules in place and were tagging things and taking them down.”
​In other words, Big Tech assumed the role of moral arbiters on behalf of the Democrat Party and their organized affiliates. If you happen to be a student of 20th century history, this should send shivers up your spine. This is exactly what fascist and communist regimes of that period did with big industry. Both deemed themselves moral arbiters and distorted the truth. The atrocities committed by both regimes speak for themselves.

We are seeing more of the same today out of big tech. This time however, minerals are not the coveted commodity. Like the Nazi and Soviet regimes of Europe, Silicon Valley pirate captains have settled into an unholy alliance with China’s fascist regime. They tilted the 2020 elections here in the United States toward the left; and the country is headed toward communism. Free market be damned for all eternity if this were to happen.
 
​
All that Glitters Isn’t Gold
Vice President Gore delivered a second speech on the UCLA campus in 1994 where he remarked that: “the future of language is in our hands. Or put more broadly, the future of communications.” He went on to share a parable by author Toni Morrison:
“It was about a blind old woman renowned for her wisdom, and a boy who decided to try to play a trick on her. He captured a small bird, cupped it in his hands, and said to her, "Old woman, is this bird alive or dead?"

If she said "Dead," he planned to set it free and prove her wrong. If she said "Alive," he planned to quickly crush its life away and prove her wrong.
​

She thought a moment and said, "The answer is in your hands."”
Ironically, mass communications have not been nurtured. The buckshot approach taken by the Clinton Administration to catalog and index the Internet backfired on the public. Foolishly, politicians allowed carnivores into Publisher’s hen houses. Obliviously or corruptly, they have taken handouts from Big Tech fat cats and overlooked the best interests of their constituency.  Our inalienable rights are now being crushed or smothered by capitalist wolves in the hands of greedy communist pigs largely in consequence.
Marie-Antoinette was infamously quoted for saying: Let them eat cake. That’s effectively what the unholy have been feeding news consumers for years: sugar mixed with poison. And the public has developed a large addiction problem.

According to PEW research, there were 37 digital-native news outlets as of 2018 that averaged 22.4 million unique viewers each month. The typical viewer only consumed two minutes-worth of news each jaunt. Imagine you only had two-minutes to prepare your meal each morning. That leaves little time to discern what is good for you let alone digest a meal.
​
In closing, the Big Tech consortium has produced little in return for the good faith entrusted upon them. The American literacy rate for instance, has not improved over the past 25 years according to The Read Center. They report that 1 in 6 adults cannot read above a 4th grade level. More remarkable, The World Literacy Foundation recently estimated that 2/3 of Americans could not pass a basic financial literacy test covering credit, interest, investing diversification and inflation. In other words, Leonard Cohen’s song Everybody Knows seems prophetic: “the poor stay poor and the rich get rich” if the pendulum doesn’t adjust soon. This isn’t an economic metaphor either.
All That Glitters Isn't Gold Big Tech Oligarchy
Rise Up
The time has come to break up the Big Tech’s four horsemen for the good of the nation and all of humanity for the good of the nation and all of humanity. For starters, Congress must recognize what Amazon, Facebook, Google & Twitter broker: information capital. Beyond your personal liberties and guaranteed freedoms, this poses a genuine threat to our national security interests.

Besides Amazon, Big Tech’s horsemen effectively serves as public utilities in the digital age. Facebook being akin to Bell Telephone and National Public Radio; and Twitter being a worldwide “town square" so to speak. Similarly, in the cyberworld, Google has arguably become America’s mass transit system. Like robber barons of the industrial era, their top brass control the vital flow of information from town to town and city to city across the country.

Re-envisioning America will take a team effort. That said, the National Library system seems the natural place to start.
 
 
For this very reason, Christ died and returned to life so that he might be the Lord of both the dead and the living.  You, then, why do you judge your brother? For we will all stand before God’s judgement seat.  It is written:
   “ ‘As surely as I live,’ says the Lord,
   ‘every knee will bow before me;
     Every tongue will confess to God.’ “
 
 So then, each of us will give an account of himself to God.
Therefore let us stop passing judgement on one an-other. Instead, make up your mind not to put any stumbling block or obstacle in your brother’s way.  As one who is in the Lord Jesus, I am fully convinced that no food is unclean in itself. But if anyone regards something as unclean, then for him it is unclean.  your brother is distressed because of what you eat, you are no longer acting in love. Do not by your eating destroy your brother for whom Christ died.  Do not allow what you consider good to be spoken of as evil.   For the kingdom of God is not a matter of eating or drinking, but of righteousness, peace and joy in the Holy Sprit, because anyone who serves Christ in this way is pleasing to God and approved by men.
Let us therefore make every effort to do what leads to peace and mutual edification.  Do not destroy the work of God for the sake of food. All food is clean, But it is wrong for a man to eat anything that causes someone else to stumble.
 
 
ROMANS 14:9-21 :>Xp
Therefore let us stop passing judgement on one another. Instead, make up your mind not to put any stumbling block or obstacle in your brother’s way.  As one who is in the Lord Jesus, I am fully convinced that no food is unclean in itself. But if anyone regards something as unclean, then for him it is unclean.  your brother is distressed because of what you eat, you are no longer acting in love. Do not by your eating destroy your brother for whom Christ died.  Do not allow what you consider good to be spoken of as evil.   For the kingdom of God is not a matter of eating or drinking, but of righteousness, peace and joy in the Holy Sprit, because anyone who serves Christ in this way is pleasing to God and approved by men.
​
Let us therefore make every effort to do what leads to peace and mutual edification.  Do not destroy the work of God for the sake of food. All food is clean, But it is wrong for a man to eat anything that causes someone else to stumble.
 
ROMANS 14:9-21 :>Xp
Rise Up (Lazarus) - Cain and Zach Williams Christian Music LP

​​Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
0 Comments

Thoughts On The Kavanaugh Hearings, Due Process, The Court Of Public Opinion, and What It All Means For America

10/8/2018

2 Comments

 
Protestors Abandon Due Process Under The Notion That All Claims of Sexual Assult Should Be Believed Without Question



​"Those who do not remember the past are condemned to repeat it."
---George Santayana (American Philosopher 1906) 


So far, 2018 has been a very busy and productive year for our consulting firm. So much so, that we decided to put our blog articles on hiatus while we focused our attention on our clientele's priorities.  We’ve also gone dark on our social media pages for much the same reason.

However, this past Saturday a client of ours posted a statement on his personal Facebook page which I happened to catch.  His statement related to the allegations of sexual assault made against Supreme Court Justice Brett during his confirmation hearings.  Frankly, the sentiments our client chose to share disturbed me greatly. So much so, that I felt they warranted a response.

Sadly, much of social media has become a thought ghetto in recent years.  Rational debates and logical discussions have largely been silenced and replaced with emotional outbursts by angry mobs.  Their comments are largely rooted in animus and in fear; and are oftentimes agenda driven. Consequently, I decided to write a personal letter to him expressing my concerns instead of posting my thoughts to his feed or sending him an instant message.

As I said, our client’s statements on this matter were deeply disconcerting on many levels. The responses he received troubled me even more. As a result, I've chosen to share my response letter publicly. His original comment is included near the opening of my very lengthy response which follows below:
​

​OUR LETTER IN RESPONSE TO THE KAVANAUGH CONFIRMATION HEARINGS AND THE QUESTION OF DUE PROCESS
Dear (Name Withheld),
​
Yesterday I sat down to finish the content for your website. I logged in to Facebook to check my feed before I began. The very first post in my feed was from you and it related to the Kavanaugh hearings. It read:
"I always believe the women! Always! To all women everywhere...I'm in awe of you [sic] courage and restraint for not burning it all down right fuckin' now! Today marks a dark day in the history of our country but I know a change is coming! And you can count on me to support you."
Your first statement, “I always believe women! Always!” really struck me sideways. It seems to run contradictory to the FB post by Dan Rather that you shared today which discusses both the “Rule of Law” and evidence “Based on Fact”. It is also counter-intuitive to other principles that Rather remarked on in his post. Specifically, the principles of Justice and Equality. In short, It’s an absolutist's statement.

Knowing you personally, I don’t believe that you made this statement wittingly. Why? Because absolutists are bullies. They ignore objective truths and are oftentimes willing to disregard the rule of law. They also rely on subjective facts to justify their opinions and render judgement. In other words, their end goals always justify their means - even to the extreme.

The media and news outlets that chose to convict Justice Kavanaugh in the court of public opinion are nothing more than propaganda outlets. If you didn't watch the full body of the Congressional hearings and if you haven't read the entire body of written evidence submitted during the hearings, then your judgement has likely been colored by propaganda.

No rational person would argue that a victim of any heinous felony does not deserve to have their voice heard by the legal authorities that serve to protect the rights, liberties and freedoms guaranteed to all of us under the Constitution and our Bill of Rights. That said, the accused also deserves the presumption of innocence before being proven guilty in a court of law. The rights of the accuser do not outweigh the rights of the accused; no matter how egregious the claims of the accuser may be.

The fact of the matter is that sometimes people are falsely or wrongly accused of crimes they did not commit. In some cases, claims are brought forward by accusers with ulterior motives. Other times, there are cases of mistaken identity. Also, there are proven examples of displacement and transference: cases where an accuser unconsciously redirects emotional trauma from one person to another.

Claiming that you “Always believe the women! Always!” is in fact prejudicial. It suggests that you hold animus toward other people based on their immutable characteristics. Specifically, in this case, a person’s birth sex. Given that we live at a time in our nation where our most basic founding principle, “All Men Are Created Equal” now extends to every single person (regardless of their race, creed, color, sex, handicap or national origin), I found your moral absolutism very disconcerting. I also found your comments elitist and dangerously extreme.

Absolutists fuel extremism, and extremism propels zealotry. Zealotry gives rise to authoritarians who enable totalitarian regimes
. There are indisputable examples of this throughout world history, most notably throughout Europe in the 19th and 20th centuries. I don’t know if your aware of this, but my mother emigrated from Latvia to America with her parents and her sister in the 1950's. I chose to study the European socialist/communist/fascist phenomenon at Princeton largely due to first-hand accounts of the atrocities that were committed within these regimes, told to me by family members and a close knit community of Latvian, Russian, German and Polish survivors with whom they associated.

Most Americans are ignorant of (or choose to ignore) the fact that some of the totalitarian regimes that rose to power in Europe during the 1900's did so through democratic processes. The leaders of those movements preyed upon animus, fear and prejudice to sow societal division. If you examine the facts closely, there are eerie parallels between the grievances over racial, gender and income disparity that we’re witnessing in America today from the far-left and the demagoguery espoused by the leaders of Europe’s 20th century totalitarian movements during their nascency.

Statements like the one you made only serve to further our societal division. They do not heal our wounds. Our nation may not be a perfect representation of the ideal society outlined within the Constitution and the Bill of Rights. Nevertheless, abandoning basic core principles like Due Process will only produce an extreme dystopia in the end. Consequently, I’m left to question the type of “change” you alluded to in your post? Also, pertaining to the fate of our nation, what good can you possibly envision if the rights of one immutable subset of our population supersede the rights of others?

I am not disputing that very real inequities still exist within our society today. That said, our nation continues to make enormous strides from generation to generation in advancing equality of opportunity. Therefore, I have to ask you: are you advocating for "equality of outcome" - an arbitrary measure which (by consequence) imposes substantial restrictions on our individual liberties and ultimately suppresses the creativity, freedom, innovation and prosperity of all but the very top-echelon?

If so, I can assure you that you will wake one day and find that you live in a society that has abandoned democratic principles all together for dictatorial rule, or rule by an unelected collectivist elite. If that ever happens, Martin Luther King’s dream for America will have been completely extinguished.

​For the record, I don’t really care whether you believe Kavanaugh or Ford. For what it's worth, I watched most of the live testimony myself and have also taken time to read a well-rounded body of media reports from reporters and pundits on both sides of the aisle who covered the hearings. Having done so, it is my perspective that the entire confirmation process was a national disgrace. I also believe that there have been deliberate and calculated attempts by radical elements within our society to obfuscate the facts of this case in hopes of furthering societal division and undermining the public’s trust in our judicial system.

Having said all this, I ask that you pause to reconsider your statement. If it was an emotional response made in a moment of anger and frustration, please set the record straight on your beliefs. 

Respectfully,
Erik
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THE INEVITABLY DIRE CONSEQUENCES IF WE DEMOCRATICALLY FORGO OUR CONSTITUTIONAL RIGHTS
I have yet to receive a response to my letter from our client. That said, I am hopeful that he will take the time to reflect on my arguments, recognize the extreme nature of his original statement and recant his position.  That said, we are witnessing a rapid spread of absolutist rhetoric within our society today. It is a very real danger to anyone who disagrees with agenda-driven propaganda based on subjective truths and partial facts. That's why I felt compelled to come forward and speak out on this matter.

Radical leftist ideologues repeatedly ignore objective truths in order to push forward agendas premised on "equality of outcome". They fail to grasp the fundamentals of Natural Law. Additionally, they willfully or blissfully ignore the repeated failures of Marxist and Socialist ideology all throughout history.  The fact of the matter is that "equality of outcome" is an impossible Utopian ideal. Humans are inherently flawed; and there are individuals among us who crave absolute and unlimited power over others. There always have been and always will be such individuals. All throughout history, they have risen within socialist regimes to impose authoritarian or totalitarian forms of rule. 

Based on the circus we have witnessed on Capitol Hill in recent days, my hope is that more and more Americans are waking up to the fact that leftist rhetoric is becoming increasingly radical in our society. It's no wonder this is occurring when you take into account that authoritarian extremists permeate our educational institutions and our media outlets. In fact, journalistic standards have been all but been abandoned by a majority of prominent American media outlets that lean left of center. 

To loosely paraphrase the Santayana quote I cited above: we will one day find ourselves in shackles if we forget the aggregate lessons world history teaches. Make no mistake, sowing distrust in our judicial system and chipping away at our Constitutional protections are but a means to an end. Evil in fact exists. There are individuals walking the planet today who would like nothing more than than to see an erosion of America's founding principles and the complete destruction of our Constitutional Republic.  Doing so would open the gates for tyranny, injustice and oppression around the world.
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CONCLUSIONS
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No matter how righteous they believe their causes to be, the social justice "warriors" that disrupt our democratic establishments with protests, harass public officials in their private lives and riot in the streets, are mere pawns in a much greater and dangerous game. Ultimately, they serve the vile interests of global power brokers who will gladly discard them when it serves their interests. You only need to look back at  Germany's Night of Long Knives that took place in 1934 to understand that.

The Washington Post has recently adopted the slogan "Democracy Dies In Darkness" to promote their newspaper. While their slogan rings true, it's also true that our Constitutional Republic will be murdered in
Ronald Reagan Quote If Fascism Ever Comes to America It Will Be In the Name of Liberalism Turning Point USA
the shadows of ignorance if more Americans who believe in MLK's Dream don't soon wake up to the fact that we are forgetting a fundamental chapter of world history. Indeed, we are starting to repeat mistakes that led to the the death of countless millions during the political upheavals of the 20th century. May God help us all.


​NOTES
For anyone interested:
  • A complete archive of Justice Kavanaugh's confirmation hearings is available for view fee of charge on the RealClearPolitics website.
  • The complete list of written questions submitted by Justice Kavanaugh to the Senate Judiciary Committee is  available Here.
  • The documents submitted to the Senate Judiciary Committee by Christine Blasey-Ford's attorneys can be found Here. 

​Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
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Why Entrepreneurs Are Rejoicing Over The New Tax Act (And One Big Reason For Concern)

12/24/2017

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2017 Tax Reform and Jobs Act Explained

"It is business that generates the jobs, income and taxes that keep a country going."

 ---Mark Skousen (American economist)
 
If you keep up with current events, I'm sure you're aware that the Republican-controlled Congress passed a sweeping tax reform bill last week.  We’re not going to address the full minutia of the 2017 Tax Cuts and Jobs Act in this article. However, here are a few of the salient highlights for American businesses:
  • The new Tax Act lowers the corporate income tax rate permanently to 21%, starting in 2018
  • The new Tax Act establishes a 20 percent deduction of qualified business income from certain pass-through businesses. Specific service industries, such as health, law, and professional services are excluded. However, joint filers with income below $315,000 and other filers with income below $157,500 can claim the deduction fully on income from service industries.
  • The new Tax Act allows full and immediate expensing of short-lived capital investments for five years. It also Increases the section 179 expensing cap from $500,000 to $1 million.  

The substantial cut in U.S. corporate tax rates is undoubtedly the single greatest change in our federal tax laws in the last 30 years. It also seems to be the most controversial portion of the new legislation.  Indeed, left-wing politicians and left-leaning media outlets have been quick to condemn the new Tax Act as a gift to the wealthy at the expense of the middle-class.

Before and after the House and Senate votes were taken last week, the pollical hyperbole was in full effect.  According to Senate minority leader Chuck Schumer (D, NY), the tax bill seemed to “stuff even more money into the pockets of the wealthy and the biggest corporations while raising taxes on millions in the middle class.”  House Minority leader Nancy Pelosi (D, CA) went even further stating, “This GOP tax scam is simply theft, monumental, brazen theft from the American middle class and from every person who aspires to reach it. The GOP tax scam is not a vote for an investment in growth or jobs.”

It’s interesting to note that the final votes in both the House and Senate fell squarely along partisan lines.  While a handful of Republicans opposed the bill in the House, not one single Democrat representative voted in favor of the legislation. The same was true in the Senate where all but one Republican (Bob Corker (R, TN)) voted yea and the entire Democrat Senate voted nay.
Democrat Reaction to 2017 Corporate Tax Plan
The apocalyptic reactions to the bill's passing from Democrat leadership and the left-wing media are deeply disturbing, particularly when you take into account that most nonpartisan economic think tanks project sizable economic gains under the new tax plan.  For example, the Tax Foundation (a non-partisan Washington D.C.-based think tank) conservatively estimated in their preliminary analysis  that the new Tax Act will generate:
  • An increase in the GDP of 1.7%
  • An increase in capital stock of 4.8%
  • Growth in wage rates of 1.5%
  • Change in long-run full-time equivalent jobs 339,000

Keep in mind that the Tax Foundation used very conservative assumptions for their forecast model and did not take into account any real compounding effects. In contrast, several other noted economists are predicting far, far greater returns over the long run.  For example, Forbes contributor Bill Conerly recently remarked, “The biggest impact will be the gradual improvement in economic growth year after year. A small increment added to our recent growth rates would be inconsequential in any one year, but the increments will cumulate and even compound. Twenty years from now, the difference will be significant.” In other words, it's very feasible that the new Tax Act will create economic boon conditions and actually increase tax revenues over the long run.  

While the true long-term economic impact of the new tax legislation remains open for debate, a sizable number of high-profile American corporations are already beginning to return immediate dividends to their workers.  Several companies (including Boeing Comcast, Fifth Third Bankcorp and Wells Fargo) announced new investments, minimum wage hikes and employee bonuses the day after the tax reform bill was passed by Congress. More major companies are expected to quickly follow suit, thereby negating much of the original hyperbole surrounding the bill.
It’s doubtful that left-wing politicians and their media minions will abandon their talking points anytime soon.  They’ll have you believe that the only business enterprises that stand to benefit from a substantially lower corporate tax rate are companies listed on the Fortune 500 or the S&P Index. In truth however, startups and nascent stage companies bore substantial penalties and burdens under our nation's old federal tax structure.  Smaller businesses couldn’t take
Thomas Sowell Greed Quote
advantage of many of the loopholes and special deductions that major corporations could. Additionally, the draconian 35% corporate tax structure discouraged venture capitalists from taking sizable risks on startups in the U.S. market for years.

Smaller businesses are the backbone of the American economy. In 2017, over 60% of American private sector jobs are with companies with less than 1000 workers.  For a good number of these companies, the new Tax Act dramatically changes their scalability dynamics. Although not every small to medium size business owner wants to grow the size of their enterprise, a good number in fact do.  It doesn’t take a rocket scientist to realize that the newly enacted tax legislation frees up financial capital for growth, research and expansion that was previously earmarked for the coffers of the federal government.  

In parallel, it’s very likely that Venture Capitalists will begin to invest more and more in startup opportunities in relatively dormant American industries.  Again, we're not going to get into Tax Act's minutia in this article (i.e. tax implications for VC investments). However, a basic understanding of economics leads to a realization that a sizable reduction in corporate tax rates makes American investments more attractive to VCs.  Therefore, the likely influx of investment capital will undoubtedly lead to greater innovation. These investments will also increase demand for skilled American labor in a number of industrial sectors as competition increases. Consequently, real sustainable wage growth for American workers appears within reach for the first time in nearly two decades.
Conclusions
Left-wing pundits would have you believe that the new Tax Act is simply "organized theft" orchestrated by a handful of wealthy elites for their own personal gain.  They say that taking funds away from the federal government ultimately harms the American worker and will be bad for the country over the long run.  We say, don’t believe this hyperbole. In fact, we argue that the 2017 Tax Reform and Jobs Act will greatly benefit most every American who still believes in the American Dream.
Democrats and the American Tax Payer
We'd be remiss if we didn't mention that an estimated 40-45% of all Americans pay no federal income taxes whatsoever today.  There are many factors behind this astounding figure. However, an economic stimulus package of this magnitude will most certainly reduce welfare and unemployment figures in the years to come. In addition, the average American worker who pays taxes is expected to realize a sizable tax reduction under the new plan.

More important to our nation's future, American industry will once again have competitive advantages in the global arena. The truth of the matter is that our nation benefits wholly when job creators have more capital available to create, execute and innovate.  Unleash the financial handcuffs from the John Galts of American enterprise and the free market will flourish.  The positive effects will certainly ripple though society much as Mr. Conerly stated in his recent Forbes column.

​
In closing, a sad truth was revealed in the final Tax Cuts and Jobs Act debates and voting tallies last week. The leadership of the Democrat Party, as a whole, has now moved as far to the left on the political spectrum as the self-proclaimed “Democratic Socialist” Bernie Sanders (I, VT). They seem to have completely abandoned the virtuous, free market principles that have guided our Constitutional Republic for the last 241 years. Their "progressive" label appears to be a thinly veiled euphemism for neo-Marxist ideology. If John F. Kennedy were alive today, I imagine that he'd be aghast at what's become of his Democrat party.
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Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
Progressive Economics 101
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Why Growing Social Unrest Suggests Economic Uncertainty For Entrepreneurs

8/15/2017

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Tanking Economy

​"Those who cannot remember the past are condemned to repeat it."
---George Santayana (1906)

Earlier today, President Trump held a press conference in New York City announcing his new infrastructure plan. One of the key tenants of the plan is an emphasis on leveraging private sector capital and expertise to rebuild our nation's crumbling buildings, roads, transportation and waste disposal systems. In his prepared remarks, President Trump asserted that the trillion dollar public / private spending plan will efficiently stimulate the economy - leading to at least one million news jobs, wage growth, and new business opportunities in a number of key industries.

When the President concluded his short speech, he opened the floor for questions from the press. Immediately, the line of questions turned to the violent events that occurred in Charlottesville, VA over the weekend. We watched the live press conference and only counted one legitimate question related to the President's infrastructure proposal.  The rest of the questions the President fielded from the press pertained to race relations and placing culpability on the individuals and groups behind the violent incidents in Charlottesville. Needless to say, we were disappointed that the questions strayed away from economics.


Why the New Infrastructure Plan Isn't Today's Top Story
The fact that most of the mainstream news media outlets aren't focusing their spotlights on the new administration's policy initiative roll-out isn't at all surprising.  Let's face it, they're in the ratings game. Sensationalism and emotionalism outdraw straight reporting. Couple that with the fact that more and more people are turning to online sources for their news (9 out 10 people according to Pew Research), and you begin to understand why partisan story lines are now superseding objective journalism en masse. News consumption is at an all-time high, attention spans are low and competition within the market has exploded exponentially.

Partisanship isn't a new phenomenon in American journalism. As James L. Baughman noted in a 2011 article, partisan reporting was a standard operating practice for newspapers in the years preceding the Civil War.  He sites, "Editors... unabashedly shaped the news and their editorial comment to partisan purposes.  They sought to convert the doubters, recover the wavering, and hold the committed."

So what has the renewed trend toward hyper-partisanship meant for entrepreneurs in recent years? While the financial viability of new news media startups remains in question, the shift has presented a number of opportunities for quick buck artists to reach niche markets online through targeted digital advertising. That said, news media hyper-partisanship should ring alarm bells for any entrepreneur with a long term  vision in most any industry category. Free market venture capitalists should be concerned as well.  Here's why:


News Media Partisanship Feeds Social Unrest
As we mentioned earlier, President Trump spent a good deal of his time during today's Q&A session fielding questions about the extremists behind the violence in Charlottesville. He defended his original statements that fringe elements on "both sides" [sic] shared blame for the inflaming the incident.  The media picked this up and ran with it.  
We have an AP news feed in our office.  The very first AP news report we received relating to the infrastructure announcement made little mention of the plan.  The headline spoke only to the President's comments on the weekend's events in Charlottesville.  The article was, in our opinion, a pseudo op-ed designed to further fuel a specific partisan political narrative.

Let's be clear here.  The President didn't handle the onslaught of questions very well. That said, his defense was truthful. Multiple fringe groups were indeed in attendance at the rally in Charlottesville this past weekend.  They included several white supremacist groups such as the KKK, Nationalist Front, and Rebel Yell.  They also included a loose collective of leftists he termed the "Alt-Left" [sic]: presumably referring to Antifa members, Black Lives Matter, and others that stood in opposition of the rally organizers and participated in the violence.

If you're relatively familiar with 20th century European history, the scene that played out in the streets of Charlottesville were eerily reminiscent of events in Germany in the early 1930s. Take a look at raw film footage captured by independent journalists covering the event during the melees. You'll see armed, similarly clad combatants engaging in a battle over ideologies. There were indeed two fringe camps fueling violence at the rally on Saturday.  However, we'd argue that they both represent the same side of the political spectrum: the far far left. Let us explain:


The Risk of History Repeating Itself
Fringe groups with disparate agendas but common core principles did indeed engage in battle on the streets of Chalottesville this past Saturday. Like most Americans, he fell into a trap and placed the fringe into two separate political camps labeled "left" and "right." By failing to point their similarities, we believe that President Trump missed a clear opportunity to rally consensus support for his message and unify the the nation.

If you visit the websites of the radical fringe groups that encouraged member participation at Saturday's rally, you'll find remarkable commonalities in their platforms.  Better yet, follow their blogs and read their social media postings ("left" and "right") and you'll realize a similarity in their end objectives.  They're both interested in dismantling many (if not all) of our founding principles including freedom of religion, speech, press, assembly, and markets — as well as limited government.

While we hear much ado about the neo-fascist "Alt Right", the media has given little or no scrutiny to the platforms of the egalitarian collective President Trump labeled the "Alt Left." The mainstream media has largely been sympathetic to the BLM and Occupy movements despite their overt hostility to core American principles. More disturbing perhaps, a handful of news outlets (including the Yahoo News and the Washington Post) have even run articles glorifying the anarchist activity of the the Antifa collective.
The Real Political Spectrum
​
​What we're witnessing today seems to be a nascent rise of Communist / Fascist ideology right here on American soil.  Historians and political scientists like Vladimir Tismaneanu are quick to point out that the ideologies often go hand in hand and feed off one another. The cancerous ideologies spread across European continent during the early 20th century, most notably in the Soviet Union and Nazi Germany "where the final destination was the deplorable Gulags and the gas chambers of Auschwitz." 

Communism and Fascism share some remarkable similarities: 
  • They are both anti-democratic
  • They both oppose the establishment / freedom of religion
  • They both demand conformity
  • They are both anti-free market

The core difference between the two ideologies is their organizational structures. Fascism is a class-based system while Communism is egalitarian. What that means is that you get a Fascist dictatorship or a Communist oligarchy - both are oppressive / conformist forms of rule.


What This All Means For Entrepreneurs and VCs 
We are definitely encouraged by the five tenants of the Trump Administration's infrastructure plan and their potential macroeconomic benefits. For entrepreneurs and free market venture capitalists there appears to be a lot of upside if this plan, or a similar plan with bi-partisan support, is passed through Congress.

As the president left the Press conference, he was asked by a reporter what it will take to begin to heal our nation's deep cultural divide? Mr. Trump offered a short response that emphasized two things lacking in this day and age: "jobs" and "wage growth."  Given recent studies showing that being healthy and having a good job are two of the most important ingredients associated with subjective well-being, he may be on to something.

The U.S. hasn't seen real wage growth since the late 1990's and our true unemployment rate remains a question. More significantly, the Millennial unemployment rate is more than double the national average. Opportunities to find gainful employment and begin to live the American Dream, would no doubt quell sympathy for the far far left agitators and the lose collective of anarchists who fuel them on.  

Conversely, a stalled plan poses serious concerns. A stagnant economy will only fuel more social unrest and further polarize our nation.  There are reports out that more rallies similar to the one in Charlottesville are being planned across the country in the upcoming months. You can be certain that leaders of both factions of the far far left (communist and fascist) see them as marketing opportunities and are actively engaging in on-line recruitment campaigns to attract new members (and sympathizers)  to their causes.

That said, there are glimmers of hope that responsible community organizers from the left and the right are starting to come together. Case in point, leaders on both sides of the Civil War statue debate held a joint press conference in Charleston S.C. today condemning violence and announcing their commitment to engage in objective discussion to reach a compromise. Although the platforms of the two group's spokespersons are well outside the mainstream, it does demonstrate that Americans with opposing views, who share our basic common values and principles, can reach agreement when they rise above  identity politics.

​
Our Conclusion
We won't speculate on how future events will unfold.  We'll leave that to the talking heads in our polarized free press. That said, every American who values our basic founding principles ought to take stock of our mainstream news outlets and begin to hold them to account. Journalistic standards are dying before our very eyes.

It's important to realize we're not dealing with "Fake News" in a true sense. Rather, we're flooded with agenda-driven partisan propaganda (left and right) that threatens the very fabric of our Constitutional Republic. Obviously, free market capitalists around the globe have reasons to be concerned.
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Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
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