Month: January 2024

The Book “Red Notice” by Bill Browder Brought up Memories

January 28, 2024

Published in 2015, Red Notice is a memoir spanning the period of Russia’s privatization of state assets during President Yeltsin’s time (1991 to 1999) and the rise of the oligarchs during President Putin’s time (from 2000). Browder noticed business opportunities spawned by privatization and took advantage of them but then ran afoul of the Russian political system, and the government deported him from Russia in 2005.

He returned home to London, but upon learning that his lawyer and friend Sergei Magnitsky died of a beating in Moscow on November 16, 2009, he became a human rights activist. The book describes his advocacy that resulted in the Magnitsky Act in the US, signed by President Obama in 2012.

Born into an intellectual and leftist Jewish family where science and mathematics were the only career choices, Bill rebelled and decided to become a capitalist.

Bill’s grandfather, Earl Browder, was a union organizer in the US. Russia invited him to live in Moscow, where he married and had three sons. When Earl came back to the US with his family, he became the head of the US Communist Party and ran for President in 1936 and 1940, becoming subject to the McCarthy witchhunts of real and perceived communists and jailed for sixteen months.

All of Earl’s sons became noted mathematicians in the US. Bill’s father, Felix, a child prodigy in maths, earned his Ph.D. from Princeton at age 20. He had trouble landing a job because of his father’s communist background. However, Eleanor Roosevelt, then Chair of the Board of Governors at Brandeis University, overruled the Board and hired Felix in 1955. Subsequently, Felix taught at the University of Chicago, Yale, and Princeton

Bill studied economics at the University of Chicago and earned an MBA from Stanford to pursue his career goals. The typical career ladder for MBAs led Bill to join investment banks, but he was not happy until he found an opportunity to go to Eastern Europe. He describes in his book that he longed for some experience that reminded him of his grandfather’s stay in Russia.

Bill describes in his book how the Yeltsin regime privatized state assets. Each Russian citizen received one share to buy any company’s share. Some people realized that accumulating shares cheaply was advantageous; most had no idea what the shares meant and sold them cheaply or for a drink.

Bill had the business training to value Russian companies, and by comparing them to similar companies in the West, he quickly realized that the Russian companies were way undervalued. And he thought he could make a fortune buying into the Russian oil and other companies.

But he needed money to invest, and the first part of the memoir describes his talent in raising capital by cold-calling, networking, and directly asking rich people to trust him to invest their money in Russia. The book reads like the who is who of people with millions of dollars in Europe, the Middle East, and the US.

Studying Russian companies, Bill discovered that the oligarchs, who controlled the enormous Russian companies with their accumulated shares, stole from their companies by splitting off parts of them and selling them to their friends and family at discounted prices. When President Putin came into power in 2000, he took advantage of Bill’s work exposing the corrupt oligarchs. Putin put some of them in jail – the prime example was Khodorkovsky of GasProm – and others agreed to Putin taking a portion of their profits to avoid prison. But when Putin took control of the oligarchs, he had no use for Bill anymore and kicked him out of Russia.

Bill moved back to London and published material on the corrupt business practices of the oligarchs, irritating Putin. In response to the bad publicity, the Russian police arrested Bill’s lawyer, Magnitsky, while other members of Bill’s Moscow staff escaped to London. Attempts to free Magnitsky failed despite newspaper articles and YouTube videos exposing the corruption in Russia. The bad publicity caused international condemnation, and Magnitsky’s jail conditions worsened, culminating in a deadly beating.

Learning of Magnitsky’s death, Bill had become depressed and swore revenge. Instead of focusing on his company, he spent most of this time trying to avenge his friend’s death. As a first step, he collected information on those who contributed to Magnitsky’s death.

Armed with this information, Bill lobbied Senators Durbin and McCain to sponsor a bill to sanction all those responsible for Magnitsky’s death. There is a detailed description of how Bill lobbied, working with the US government and Congress to advocate for the bill. The ultimate result was that Senators Durbin and McCain pushed the Magnitsky Act through Congress, subsequently signed by President Obama in 2012.

Browder has an eye for detail, and I found it fascinating to learn of the people Bill has known. For example, Bill worked with Crysthia Freeland in Moscow when she was the bureau head for the Financial Times. Freeland is the Deputy Prime Minister and Finance Minister in Canada today. He also talks about lunches in specific locations with dates. Maybe he journaled, or he has a fantastic memory.

The book reminded me of my early life living in Hungary under Russian rule in the 1950s. At that time, the state owned most of the property in Hungary, and there was no tax since the government employed all the people and provided all services. There was no private industry. And the secret police were all over. People disappeared overnight, and nobody asked any questions for fear of being the next one to disappear. The socialist system resulted in poverty, much like the situation Browder describes in Russia.

Further enhancing my interest in the book, Felix Browder, Bill’s father, was my brother Peter’s advisor at Yale University for his doctoral dissertation in mathematics in 1964.

Is Touching Wrong?

January 16, 2024

The service at our favorite Sunday breakfast place was disappointing today. Usually, the hostess welcomes us, leads us to a table of our choice, and in a minute a waitress appears with coffee, ready to take our order.  Not today. We sat down and waited and waited.

Getting impatient to get our morning caffeine fix, Kathy asked a waiter walking by if we could get some service. In another five minutes, a waitress appeared and asked us if would like some coffee and said she would be back in a minute to take our orders. After a rather long time, coffee materialized on our table, but no order was taken.

In the past, the waitress asked if we were ready to order when delivering the coffee, but not this time. Since we have been coming here for years, we know what we like and order when the waitress appears. This sportsbar with multi-TVs on the walls showing hockey and other games, is doing phenomenal breakfast business on Sundays, and ordering early gets our food on the table before finishing our first cup of coffee.

Other customers came in and sat across from us and our waitress came with coffee and asked if they were ready to order while we were still waiting. That was upsetting; we were there long before the new customers and several others in “our zone” had even come and had waited patiently for service, assuming that the waitress was busy with other customers.

To get the waitress’s attention in the loud buzz, instead of shouting, which would have been impossible anyway because of the din, Kathy tapped the waitress’s arm. That did get her attention, and she turned around and told Kathy in an abrasive tone: “Do not touch me”!

Her reaction and tone of voice surprised me, but we asked her if she would take our order before filling the others. I also told her that the service today was inferior to what we were used to at the restaurant.  Offended, she claimed that she had other tables to serve as if we did not know that and as if that were an excuse for the poor service, without so much as an apology for overlooking us, which would have been understandable.   But then she hustled off to place our order in the kitchen without going back to the other customers to take their orders.

She never came back after this incident to fill up our coffee cups but hustled around a few times filling the cups of the other customers all around us. She studiously avoided making eye contact with us.

Another waitress came to fill up our coffee and delivered our orders to our table.  The second time she came to refill our cups, I asked her if she was now our waitress waitress. She seemed surprised that we did not know but confirmed that she was, and offered to fetch the manager if we had some issues with the service today. I had the impression that there was more to the story from the waitress’s comment.

We said “Sure”, and the manager appeared in a minute and profusely apologized for the service today, explaining that our first waitress “felt uncomfortable” by Kathy touching her arm and asking for another waitress. A friendly discussion ensued, and we assured her that we had always enjoyed our breakfast experience at the restaurant up until today. On leaving, the manager touched both Kathy and me a few times on the arm in a friendly, reassuring manner.

Although possible, I cannot believe that a young woman, a waitress doing her job, touched by someone who could be her grandmother, would feel uncomfortable by the physical contact. In a busy restaurant, there are ample opportunities for physical contact, intentional or not. I rather think that she took offense at us for having the temerity to ask a waiter to get service, implying that she was not doing her job.

Although we enjoyed our breakfast after the second waitress took over, what bothered me was the expressions used in this incident: “Do not touch me” and “The touching made her uncomfortable”. I have heard many stories recently taken up by human rights commissions about physical, psychological, and sexual abuse, bullying, discrimination, and similar accusations. I could see this young waitress following up on an incident like this and creating a huge hew-haw for nothing. Where do these young people today acquire this attitude of righteousness, to give expression to their dislike of being told to do their job? She was slow in providing service and wrong in not serving clients in the order they came in. Surely one can make mistakes, we all do, and the simple solution is to apologize.

My Rant for Today: Immigration Overload?

January 13, 2024

Driving to have coffee with my friend at Timmies, I listened to the daily talk show with a panel on immigration. One said the Canadian public is sympathetic to (and has an enviable record), welcoming immigrants. Based on that attitude and arguing that the economy needs immigrants for its continued growth, the government doubled immigration targets to the 500,000 range. In addition, another million people arrive in Canada annually as foreign students and temporary workers, many of these becoming permanent residents over time.

The combination of immigration and temporary workers and foreign students have coalesced into a momentous problem in Canada, resulting in an acute shortage of housing and a precipitous decline in healthcare (lack of nurses, doctors, unacceptable emergency department waiting times). Without question, the huge number of recent immigrants, foreign students and temporary workers are a major contributing factor to these problems. 

Up until a few years ago, with half the number of arrivals into Canada compared to the recent year, assimilation into Canadian society had occurred seamlessly without impacting housing and healthcare. Services provided paralleled demand. (In fact, it has just been revealed that the Canadian cabinet minister responsible for immigration was warned two years ago that we were facing a housing crunch, even before immigration levels were increased this past year!  This warning was ignored for political purposes!)

Now, Canadians are becoming aware of what the massively increased number of newcomers has wrought, and anecdotal evidence points to a shrinking welcome mat.

One panelist on the talk show said that we need immigrants for our economy to grow. OK. How many do we need? I’m not too fond of loose talk. Provide some metrics. Arguments with no evidence to back them up are useless. The bottom line is: how many immigrants, foreign students and temporary workers do we need for the economy?

People with skills required in Canada would be a great addition to the economy, but how many immigrants are skilled in occupations we need?  We are told that we need them for house construction; however, we are also told that only about 5% of immigrants work in the housing industry….

I’d like to know how many of the half million immigrants we allow to enter Canada qualify for the needed skilled categories. Equally importantly, how many of these needed people would be allowed to practice their trade in Canada without certification (medical licensing, trade licensing)? And how long would it take to get their licenses to be productive in Canada?

Without data to back up the justifications for even more immigrants, we, the Canadian public, are left with only anecdotal information and our own experiences of worsening health care access, inability to find family doctors, long wait times for emergency care and rapidly increasing housing and rents which all will translate into reversing Canadians’ goodwill towards immigration.

A Futile Assault on the Automobile

January 8, 2024

The Ottawa City Council approved a 4-storey, 18-unit residential building on a quarter-acre lot, in the middle of a residential area, without requiring parking. Yes, that is what they did, and I scratched my head, who is going to rent these units with no parking where there are no commercial facilities nearby? Oh yes, there is a bus, I think every half hour, that goes by the proposed development. But unless you are a hermit, happy to read books, and stay home, living without a car in this development will be a challenge.

What further upset me was that our local Councilor voted for the project and said in his newsletter that ‘we need more of this”. Does he not know that cars are part of the Canadian DNA? That cars are an integral part of our cities?

A key element of the official plan for the city is “densification” to permit population growth. Otherwise, the plan claims that “urban sprawl” will result. I guess, the planners never heard of “smart growth” or “planned growth” to alleviate the undesirable effects of urban sprawl (reduction of agricultural land, expensive infrastructure build, loss of wildlife, and pollution by increased car traffic).

A key justification for the approval was its location on a future “major transportation corridor”. The trouble is that the “corridor” has not been funded and the future may be decades away. These projects take decades to materialize while the construction of the building may take a year or two so the units would be rented without parking. Improved public transportation may be years away.

I cannot help thinking that the Council is also “social engineering” by encouraging the use of public transit.

But people have cars: statistics show that every 1000 people own 750 cars in Canada. And a building with 19 units will have at least 19 people living there or more likely, double, or triple that number. That translates into 14 or more cars. Since there is no parking on the major road fronting the proposed development, people renting there with cars will have to park on the side streets. I am sure neighbors will not like that and with the snowfall during the harsh Ottawa winters, it will create headaches for the snowplows. 

Canadians like their cars for the freedom they provide to go anywhere, anytime. Yes, mobility via the automobile does encourage urban sprawl. And yes, there are costs for this freedom (the public costs of infrastructure and private costs for fuel, insurance, etc.). However, Canadians decided that the costs are worth the freedom the car provides to get around (there are thirty million cars in Canada with a population of forty million).

As a result, the ubiquitous use of cars has left a huge imprint on the Canadian landscape. On a recent drive from Ottawa to Collingwood, we traveled on four-lane highways, the 401, and then north on the 400, crowded during the holiday travel season. We slowed down driving through Toronto, on six-lane highways in each direction. We saw a tremendous amount of pavement.

The number of highway construction projects indicates the huge public investments to improve the highway system. As well, governments attracted a fifteen-billion-dollar investment by Stellantis in Windsor and a similar investment by Volkswagen in St. Thomas, both in the EV battery business. Let’s face it, cars are not going away much as the Ottawa City Council would like to pretend.

The long drive allowed me to think that besides highways, the car industry includes innumerable gas stations and repair shops. And one cannot forget the outsized number of jobs the industry provides. Even with Amazon today, the retail industry thrives on huge shopping centers surrounded by mammoth parking lots for cars.

To my way of thinking, to assume that not providing parking will reduce the use of cars is illogical. Ottawa and other Canadian cities rely on cars for transportation. But the Ottawa City Council decided to not require any parking in a 19-unit residential building, rationalizing their decision on the availability of public transit—some system. OCTranspo, the Ottawa public transportation agency decided to cut service and increase fares given the financial losses suffered last year.