For those who have never heard of Hampton, Virginia, it is at the mouth of the James River in South Eastern Virginia. I was born in Hampton (or actually in Fort Monroe Army Hospital, which is within the Hampton border.)

My father was in the US Army, and I lived for several years in Germany, but we returned to Hampton where I attended primary school. I will not try to enthrall the reader with tales of Arcadian bliss. The fact is that Hampton was a mostly pleasant place to grow up. The waterfront culture still appeals to me. The heat, humidity and mosquitos in Hampton prevent me from recommending it however.

The Hampton I remember seemed like a real place. My Mother told me it was real. But, by all evidence I can find, a Neutron bomb took it out sometime in the 1980s. I have heard many accounts of what happened, but the redux seems to involve an economy totally dependent upon Military infrastructure for employment. I grew up near Fort Monroe, the former Strategic Army Command, Fort Eustis, Oceana Naval Air Station (across Hampton Roads harbor in Norfolk) and Langley Air Force Base. I worked for a summer at the Newport News Shipbuilding and Drydock Company (now Northrop Grumman).

As these outdated institutions declined, the US Government defunded them one by one. I assume some of the military bases are still active, but the net effect was shrinkage. And apparently there was no other economic center from which to grow.

According to the US Census, the population grew in Hampton from 1980 onward.

If the population is growing, then why my Neutron bomb theory?

Because virtually no one with whom I went to High School seems to live or work anywhere near Hampton, Virginia. I have no numeric comparisons with other people, but it appears to me that my entire generation of Hamptonians migrated elsewhere – and primarily because there were no middle class or professional jobs.

I made a road trip to Hampton a few years back. I visited my childhood home. It was a modest bungalow. People lived in more simple housing in the 1960s. By we had physicians, dentists, architects, senior military officers and many other professional people living in our neighborhood. I grew up with their children. I know they were there.

But a return visit was like an episode from the Twilight Zone:

• My childhood home looked identical to 40 year old photos. Nothing was changed. No additions, updates, remodeling. (Here is the Google Street view from February 2011 – there is now a small car port to the left)
• The small strip mall was exactly where I remember, but every store had been either shuttered or taken over by some bottom economy ersatz replacement. (For example, the former 7-11 was now a replacement with, I Swear, the same counters as in my childhood. And the name of the replacement is “M-T Market” – I could not make that up.)
• Not one new building seemed to have been built in decades.

Was it just my neighborhood?   No. The entire city looks like a time capsule.

There are people for whom this sounds like bliss, but just try to find your childhood friends – they are all dispersed far and wide. I am the kind of person who really left home. I have never desired to stick close to my roots. But I really wonder at a place as apparently real as Hampton that could not retain its middle class high school graduates.

As of August 2009, the DOW has recovered to 9,000.  The new media is reporting that the DOW is now “back to the levels of 1998″.

Not true.  According the the US Gov’t CPI tables, a 1998 dollar is worth $1.32 today (25% inflation erosion).  Therefore, today’s DOW of 9,000 is REALLY equal to a 1998 DOW of 6,900.  That places the ‘recovered’ DOW at the same level as 1997, when the DJIA crossed the 6,900 level.

The fact is that we have lost 12 years of gains.  See prior posts for “You need a Plan B”.

- Grover Righter

Regarding the Supreme Court’s Ruling on the 2nd Amendment

Personally, I am squarely in the middle on this issue. I was raised around responsible and rational firearms ownership and use. I spent 6 years in the military and have had significant training in their use, safety and security. I also acknowledge that the ‘every citizen’ standard for gun ownership is laughable. But the problem is not in the constitution, it is in our unwillingness to clarify and modernize it.

On the front page of the New York Times for 26 June 2008, Justice Stevens is quoted as saying that “over 200 years ago, the framers made a choice to limit the tools available to elected officials …” Well, yes they did. And my entire life, I have lived, along with every other American, while the ambiguity of the 2nd amendment has stood.

Don’t like it? Fix it. If the US does not want the current 2nd amendment, then let’s modernize it and restate the rights.

The 2nd amendment must be one of the most awkwardly worded statements in the US Constitution. I have little doubt that at the time it was written, that the authors actually did mean ‘every citizen’ could and should own a weapon. It was the norm in their society and they could not, or did not visualize a future where gun ownership would be a problem.  In every known militia record of  18th Century America, the militia’s guns were kept at home and owned by individuals, not a body politic.

So now the Supreme Court has ruled that the 2nd amendment actually means what it (awkwardly) says. And we also live in a world where we are quite aware that allowing every citizen to own a gun is probably not a very good idea. Guns need to be regulated. Gun safety training needs to be regulated at least to the level of automobile licensing, and I would advocate far beyond that level.  Anyone who owns a gun should have to requalify with a written test, a firing range test, and a brief police interview every 2 years or so.  The cost of this should be born by the gun owners, not the tax payers.

But people who wish to abolish gun ownership in the USA need to step back and realize that it is unlikely to happen in their lifetimes. The body politic in the USA has proven many times that we are against absolute prohibition of gun ownership by law abiding responsible citizens. So we should focus on regulations that make guns safer, not prohibition.

— G Righter, San Francisco, CA

(The link above is the PDF version of this blog, with easier to see graphics)

Here is a comparison I made in January 2008, prior to the recent oil price increases.

Preamble: Thought Experiments ( credit to Walker Percy)
Walker Percy was a noted semiotics experts and author.  Semiotics is a branch of mathematics that inter‐relates symbols, language and topology.  It is, in effect, a 3D calculus for language.  For an applied use case of semiotics, see www.kartoo.com and type in Grover Righter.
Percy’s Opus Magnum was “Lost in the Cosmos”, which will change your life.  I own a signed limited edition of this book, and it goes with me if the house catches on fire. In the book, Percy introduces the powerful idea of a ‘thought experiment’, essentially a syllogism in reverse designed to challenge assumptions.

Now, onto the Dow and the CPI and some basic assumptions I was taught 20 years ago by financial experts.

(The following is easier to follow if you simply look at the attached PDF, but here is the HTML/blog version.)

The DJIA Stayed within a small range  around roughly 800 for almost 20 years.

There is no guarantee of stock market growth

1965 CPI = 31.7  1985 CPI = 108.6
($1 in 1985 = 29 cents in 1965, but the market was flat, so the actual market value declined 70% in 20 years due to inflation.)
($1 in 1985 = 29 cents in 1965, but the market was flat, so the actual market value declined 70% in 20 years due to inflation.)

The Last Ten Years May be a Half Way Point

1997 CPI = 158.2  and DJIA ~= 10,000
2007 CPI = 197.2 and DJIA ~= 12,000
($1.25 in 2007 = $1 in 1997.  The market “grew” by 20%, but inflation was 25%, therefore, the market underperformed inflation. )

2017 CPI ~= 265 and DJIA = ?????
Long bets on inflation are 3% at a minimum.  In order to keep up with basic inflation (i.e., not lose money), the DJIA must grow 50% to 17,000 by 2017.  In order to give a real 5% return on money aeer inflation, the DJIA must grow to 31,000 by 2017.  Most 401K plan workbooks ask us to “Plan On” long term growth of
about 5% to 6% for mixed stock/bond funds.
Question  (This is the Thought Experiment)

Do you believe both of these things?
1)  Inflation (including food, oil and currency) will be less than or equal to 3% for the next ten years.

AND

2)  The DJIA will grow to 31,000 over the next ten years.

Moral of the Story
•  Plan “A” is not going to work
• We ALL NEED A PLAN B

But it does give one pause.  How can the iPhone clones ever get anywhere?  Sure, they can LOOK and maybe even FEEL like the iPhone, but where are the applications?  There have been 250,000 developer downloads of the iPhone SDK.

If it is the apps that matter, then Apple has a lock.  (And I don’t even believe in locks   How they pulled this off is astonishing.  Compare the buzz around iPhone with the Windows Mobile phones.  MS has had a Windows Mobile product since 1997.  There are 70 million Google hits for Windows Mobile.  Apple released the iPhone less than 1 year ago – there are 220 million Google hits on iPhone.  (iPhone has twice as many Google hits as BlackBerry at 108 Million – I think a very fair test given the unique names of both products.)

http://www.apple.com/iphone/webapps/

There are now 600 WebApps for iPhone.  There will be more than 3,000 by the end of the year.  Sure, most are stupid, but most BlackBerry apps at Handango are stupid (Wine Info, etc.).  And the “install” is trivial.  I tried to install Opera on my BlackBerry 4 times before I gave up.  But every iPhone WebApp I install works right away.

Is it perfect?  Hell no.  It needs 3G.  I’m not sure I like the size.  But they will sell millions.

Now there is a $199 iPhone.

BTW, the Zero key on my BlackBerry broke about 6 weeks ago and I switched 100% over to my iPhone.  And I mean cold turkey switched over.  I turned off my BB service at T-Mobile.  My two major issues are 100% solved: (1) IMAP mail solves the problem of mail being all unread; (2) New software feature locks the keyboard during calls.  Can wear in pocket while talking.  – Zero problems left.

Only 1 issue left to tackle – International Roaming.  I got very used to easy BlackBerry email while out of the country.  T-Mobile has a great plan.  Apparently, the iPhone uses a lot of data BW and the bills are high.  But that is not a phone issue, it is a plan issue. 

Amazing.

Steve Jobs has created a pop culture icon out of a mobile phone.

If I worked at RIM, I would be very concerned that no amount of product finesse can overcome this kind of completely free PR. 

Assumption 1: Internet service delivery is a little cheaper every year

Assumption 2: People are using more Internet data transfer every year

Conclusion 1: “Fair” service packages from NSP/ISPs will need to provide more data every year for roughly the same price.  Think of this as Internet inflation indexing, as in a pension adjustment.

Question 1: Who will decide what the “base level” of data transfer represents an “average user” so that the ISPs can charge a premium for heavy users?

Question 2: How transparent will this process be?  Will ISPs use a neutral third party to calibrate the “normal growth” of Internet usage?

Question 3: As users consume the Internet in new ways, who will decide what is normal and what is premium?

Question 4: Have the architects of the new plans any understanding of the long (very long) history surrounding the commodity-dollar concept and how the basket of goods used for the CPI is a problem area?
NSPs and ISPs need to introduce new packages having already thought through all of the above.  They are in danger of misreading the market and causing their own demise.  How?  By creating attrition of heavy users to other providers and therefore creating a declining market for themselves.  At first they will have a margin increase because heavy users will have left and service will be cheaper to provide.  But attrition grows rapidly and alternative ISPs who welcome heavy users will become the new vanguard of the market.
I have heard proposals from MSOs (Cable ISPs) that propose a cap at 20GB per month and then charging $1 per GB thereafter.

Let’s see … I can burn a 4.77 GB DVD for about $0.25 and mail it to a friend for about $0.75.  Therefore, the physical world costs $1 for slow delivery of about 5 GB.  Tell me again why it costs $5 to download a 5 GB movie?  The idea isn’t broken, but the numbers are.  For an HD movie (about 10 GB), they will want to charge $10, plus the cost of the movie of course.

Grover Righter

My main profile in the business world can be found on LinkedIn at

http://www.linkedin.com/in/groverrighter