Current Affairs

Snubbing the Media — Strategy or Revenge?

Much of this post was orginally a comment on "Snubbing the Media — Strategy or Revenge?" at Bulldog reporter.  I'm working on a larger post about what a universe run by Apple would look like.

The manufacture of the gadgets that have become part of our lives, and made Apple a hugely profitable company in the meantime, has transformed Apple's operations into a lightning rod for outrage over worker conditions.  Listeners to This American Life were let in on the sad story even before the Times article was released. 

What was damning about the NYT story was that it went further in context and further in exploring corruption.  In context, it was better able to show the matrix of conditions costs and imperatives that are involved with being an apple supplier and a worker at such a supplier.  But in corruption, the NYT was able to get former Apple employees to discuss the company's internal perspective on the problem, without being official mouthpieces.  Culpability seemed to be at the heart of these admissions.  What are we to say about that? Apple ruthlessly prevents outside access to its inner deliberations, and in some ways this culture of secrecy is good business practice, but in others, it allows sensational news items to define the company's story.

So now Apple is using its main currency, (thirst for details about the company), to attempt to control the story and diver the narrative away from the labor issue.  It's an authoritarian move, and we shouldn't expect Apple to change that approach overnight any more than it can change Foxconn's practices overnight; in many ways that approach might continue to work.  

Apple isn't just freezing out the NYT: it is freezing the citizens of the world and the community of its users from being stakeholders in Apple's governance.  

As the goods we purchase transition to digital rather than physical, the tangible devices and experiences we do purchase become increasingly important expressions of their lose their tangibly, the opportunity we have to participate in the industrial decisions surrounding their production is real and a true test of the world's appetite for respecting craftsmanship, effort, sacrifice, and pride.  Will it become harder to exploit citizens of other low-wage countries, or easier?  That much is up to us.

A great wide warzone full of nuclear brothers?

Watched Things to Do in Denver When You're Dead a 1995 classic, and was particulalry struck by this quote (which is more or less humourous in context) and its relevance to technology. By the year 2000...I don't know.\

Rather than a racially-polarized warzone, Urban america has had a more commerically driven fate, with a transformation that made it hip to live in Bushwick or in an industrial building converted to condos.  in the last few years, with the impact of wireless communications and the destruction/revival of cities like Detroit, or the reinvestment in Downtown LA that has gentrified parts the "innner city"- all these cities represent technology consumption enabled by population density, rather than a warzone devoid of it.

Baby Sinister: The fact of the matter is by the year 2000 every city will be black. Thanks to the fax, the modem, conference call, federal-f**king express, the beast will be able to conduct his business from his home in the white suburb leaving the city a great wide warzone full of nuclear brothers.
Rooster: That's what I'm saying man, the fax, modem, FTD...
Baby Sinister: What the f**k you talking about, FTD? Rooster: You got to have flowers in the warzone, Baby.


Options Tax Treatment Reminds us of Broken Incentives

From today's "But NObody Pays That" post on tax treatment for corporattuibs and the wealthy, those who can afford to manage their income for strategic tax avoidance:

“These options gave executives a highly leveraged bet that stock prices would rebound from their 2008 and 2009 lows, and are now rewarding them for rising tides rather than performance,” said Robert J. Jackson Jr., an associate professor of law at Columbia who worked as an adviser to the office that oversaw compensation of executives at companies receiving federal bailout money. “The tax code does nothing to ensure that these rewards go only to executives who have created sustainable long-term value.”

Yes, a highly leveraged bet.  Yes, paid off on the rise in stock prices  and yes rewarding execs who may or may nor have creted susainable long term value.  Thjose are all true.  I think the article unfarily targets Mel Karmazin, whose tenure with the embattled SiriusXM represents management of significant risks.  The mechanics of rising tides - which governemtns world-wide have been instrumental in rising -  do lift all boats, and it is troubling that we need the tides to rise in order to have the appearance of investor confidence.  As the markets freak out time and time again, what goal are we amanaging toward? Are we managing for value?  For whom?

The (mis)alignment of US Tax policy, compensation incentives, and the martket should not be an indictment of Karmazin or others like him.  The critique of the market and the way the few are able to profit from its gyrations remains. But let's examine our need for the apprarance of stability and confidence, for the appearance of growth?  Stroing products, made over the long term, producing customer value, are the way out, not the feckless consumption of lattes and Barbie dolls on credit.  It's a sad and despareate fact that we all need the market to appear to rise- and bailed out the global financial system to ensure it.

According to the Senate Joint Committee on Taxation there is $25 billion in revenue for the treasury at stake with these deductions - and the implicit subsidy from US Taxapayers to employers who use options for compensation is no fun at all. Balancing the budget probably won't happen a nickel here, a dime there - let's face it, $25 billion over 10 years is a drop in the bucket of trillions - but aligning the tax code in more productive ways could certainly help.

The future of NOT free

David Carr writes in today's NYT that "We need an iTunes for news" and I'm finding myself thinking very hard about what actually might help the struggling newspaper biz (bad news from Fitch ratings came out the other day, and it looks like the Seattle P-I is on the brink). 

Is it just "variable pricing" which Carr argues has allowed the music business to stick around, though perhaps not to thrive?  What the music business still hasn't really learned, is how to combat piracy by adding value in the distribution part of the business.  Apple figured the out- the device and the store are, for many many people, a top notch experience (I know there are people who prefer eMusic or other services) but the emphasis Apple placed on delivering value rather than delivering "content" is what gave Apple's iPod such dominance.

So can newspapers just turn around and create an iTunes-like store, charging for the convenience of reading the paper on an enormous iPod touch or the Kindle?  I think the issue is not exclusively supply-side.  That is, newspapers don't have to deal with precisely the same intransigence as the music business with respect to digital- they already (largely) give the product away for free online. When the NYTimes pulled the plug on TimesSelect, it looked like they were screwed.

I posted these thoughts to the nextNY list in December:

The BHAG here is to make enough of your content consumers want to buy your content even if there is some proportion of people who believe it should be free, wants to be free, or that they are entitled to consume it for free.  We are at the point where creators pass up the opportunity to extract some optional $ from many of their consumers while restricting the content to non-optional payers of $$$. 

Maybe we are at the point where optional $ from only some of your customers would make it profitable.  Suppose 20% of the people who visited the NYTimes online in October 2008 paid $1 for the privilege, that would be about $10 million in incremental revenue.  Would another $100 million every year be worth it? We can play with the numbers like this forever, but I think it's one direction creators should move.

I say all of this as a (GASP) paid daily subscriber to the print NYTimes. 

People need to get okay with not-free news.   The reporting of news organizations is indispensable, and high in value.  While the music business has the advantage of live performance and merchandise revenue- which do not suffer from the free copying problem- news has no such cash cow. 

We'll need news to recover from this serious free-rider problem.  A tip jar?  Maybe tying to distribution on a device, or just making the pricing more flexible, or making it just a whole lot cheaper and also easier to pay would be a step in the right direction.  I'm not convinced- just getting people back to paying for distribution seems weak.  They will somehow need to be non-free even if not subscription only, either.

One of Fred Wilson's recent posts mentions Time Oreilly's three rules:

1) Work on something that matters to you more than money
2)Create more value than you capture
3)Take the long view

I believe that in a similar way, newspapers  "create more value than [they] extract" but this has created a mis-pricing problem: users believe they were paying for distribution, distribution became "free" via the web,  but the value created only grew; we have not figured out how to recapture that. Wish I knew the answer to that one.

McCain Is a Ford, Obama Is a BMW

This story from Ad Age says a new study of Presidential power found that  McCain Is a Ford, Obama Is a BMW. Other associations?

Voters associated Mr. Obama with BMW, Google and Target, while Mr. McCain was compared to Ford, Wal-Mart and AOL.

So, when Obama wins, McCain will have to sign off his dial-up connection, get in his Ford Escort, and buy Efferdent at Wal-Mart.

The Choice:The New Yorker Endorses Obama

The New Yorker Endorses Obama.

At a moment of economic calamity, international perplexity, political failure, and battered morale, America needs both uplift and realism, both change and steadiness. It needs a leader temperamentally, intellectually, and emotionally attuned to the complexities of our troubled globe. That leader’s name is Barack Obama.

Agree.  Beards for Bama!

McCain really did say that

New dueling Obama McCain ads on CNN reveal McCain sayoing he wants to deregulate health care just like Banking.  Really?

So I went and looked. The Obama ad I saw on CNN says McCain JUST PUBLISHED an article in Contingencies magazine that praises financial industry deregulation. The relevant except which you can't toatlly see in the ad is:

Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would
provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

Uh, yeah, let's innovative products like we have in banking, because those worked out real well. Better Care at lower Cost for Every American (pdf)

Our financial crisis, this bailout, and Bush

This post kind of got away from me, but here goes.

I'm following up on a tweet I sent last night:

Mark my words: this treasury-led bailout authorization will be the patriot act of finance. Approved quickly and largely regretted.

A lot of great stuff came my way as I thought about this post.

via @mpakid, this gem in Huffing ton Post by Sen. Bernie Sanders (D-VT)    -  The Middle Class Must Not Be Forced to Bail Out Wall Street Greed.

These are the last days of the Bush administration, the most dishonest and incompetent in modern American history. It is imperative that, at this important moment, Congress stand up for the middle class and for fiscal integrity. The future of our country is at stake.

I watched Friday's episode of Real Time with Bill Maher, and Nation columnist Naomi Klein's book, Disaster Capitalism seems to speak directly to my point of the politicization of our disaster (dot-com bubble, 9/11, Katrina, others she points out, I still need to read the book and I'm not sure I'll 100% agree with it) recovery policies  to consolidate executive power and secure privilege and wealth for friends of the administration. 

The political friends of the Bush Administration over the last 7 years who supported the deregulatory policies which to some degree created this mess, have benefited enormously.  Could it be that the very people who benefit most from these bailouts were at the table helping to decide government policy?  Thanks but no thanks.

This is no less than raid on America. Taking advantage of the opportunity of the moment to rob us of measured, reasoned, policy discussions. The media don't help- Al Gore's Assault on Reason was an excellent treatise on that front.

NYU's jay rosen  via twitter referred to this episode of This American Life

NPR's Adam Davidson, reporter on "The Giant Pool of Money," agrees with me: the bailout is a huge transfer of power to the executive branch.

Mr. Davidson's piece yielded this (de)construction about the us vs. them reality:

Now, until this moment we had a theory that these two groups--the homeowners
and the people at the top of the chain, the investors--had no idea about each other. 
We actually learned they know quite a lot about each other. They just see each other
through a computer screen.

This conflict is the matrix, an artifice which has been pulled over our eyes to blind us to the truth.  We shouldn't be focusing on whether the homeowners or the lenders are the bad guys.  The "bad guys" are the ones who exploit the rules they asked for, and now require a bailout that they help to negotiate??

We're bailing out the people who claimed we needed to give them more room to operate.  To create impossible-to-value derivatives, who took out insurance policies on the uninsurable investments they made?  I'm not saying regulation is always the answer, but sometimes markets fail.  Anyone remember the blackouts in California in 2001?  Deregulation at its level best.

The NPR work makes it evident that there was just SO. MUCH. MONEY. $70 trillion. How much is that?

Think about all the money that people spend everywhere in the world. Everything you bought in the last year, all of it. Then add everything Bill Gates bought. And all the rice sold in China and that fleet of planes Boeing just sold to South Korea. All the money spent and earned in every country on earth in a year: that is LESS than 70 trillion, less than this global pool of money. 

It came from pension funds and all manner of private investment, and especially from nations with oil, and huge trade surpluses, and rapidly growing economies.  The search for where to put this money, to earn more than the absurdly low risk-free return (US Treasury notes, at 1-2% ish)  gave rise to opportunities to invest in the mortgage backed securities, and incentives to do crazier and crazier things.

I think a lot of people, particularly people like me who, "have never known a US economy that wasn't growing," might be grasping for what this is all supposed to mean, and how this all happened. 

There was a time when I thought I was pretty far ahead of the curve for even understanding what a CDO was, in 2006.  Probably only a few of my friends (which includes a few who tried lead generation and mortgage brokering, and a lawyer who puts together the contracts for the securitization of these mortgage pools) really knew about this anytime before 2007.  Or they knew parts of it.

I'm no expert, but I'm sure a citizen.  And this whole thing is a mess, requiring every bit of vigilance we can muster.  This $700 billion bailout is Disaster Capitalism.  It's crisis policymaking, especially given the proximity to the end of the congressional session.  The impossibility of disagreeing with this bailout is the same way we were blinded with the Patriot Act, which was then and is now an unreasonable incursion on the territory of essential liberty.

No Comparison -

Some really great stuff in the WSJ's weekend edition special report on the 2008 Beijing Olympics.  While I do like the stories about urban/rural divides and the presence/creation of heroes in a centrally managed culture, my favorite is about the very premise of holding the 2008 Games (I'm also learnign that "________ Games" is a really popular way to title your book about the olympics.)  in such a restrictive regime- that this would be a way to apply a liberalizing pressure to the government on the world stage.  The article- called  No Comparison goes into the parallels between the '88 Seoul Olympics - which

Chertoff can obliterate opposition to Border Fence Project

How is the the first time I'm hearing about this?  From today's "Sidebar" column by Adam Liptak

The secretary of homeland security was granted the power in 2005 to void any federal law that might interfere with fence building on the border. For good measure, Congress forbade the courts to second-guess the secretary’s determinations. So long as Mr. Chertoff is willing to say it is necessary to void a given law, his word is final.

For students of American government, yet another frightening reminder of how far this administration will go to ensure that no institution, even the Constitution, can get in its way.  I am not hopeful that SCOTUS will help out here, but this is plain and simple tyranny.  Sigh.

Link: Challenges Arise to Border Fence Project

Gothamist: Meatpacking District's Hog Pit Out, Ralph Lauren In

This is just sad.   Gothamist: Meatpacking District's Hog Pit Out, Ralph Lauren In.  Hog Pit owner  Felisa Dell adds:

It's very sneaky, but in 5 years the 4AM liquor license will be a thing of the past, without any community input.

I only went to the hog pit once or twice, but the wussification of the city appears to be sneaking in.

Disgrace Alert- Shady 22year old supplies defective ammo to DoD for use by Afghanis

Terrible, horrible news, but great investigative reporting by the New York Times.  Whhat piosses me off most is that the massive expansion of private cpontracting combined with a completely useless DoD munitions policy is behind this mess.  Every defective round )(and there are literally millions of them that have been supplied to Afghanistan by this guy) takes our reputation as a nation down a notch.  Why would we do that?  Why wouldn't we have guidelines specifying the quality of the ammunition to be used by our proxies allies in the fight against terrorists?  Well, at least we have an answer:

“There is no specific testing request, and there is no age limit,” said Michael Hutchison, the command’s deputy director for acquisition. “As the ammunition is not standard to the U.S. inventory, the Army doesn’t possess packaging or quality standards for that ammo.”

ARE YOU KIDDING ME!!!!!!????????

This whole thing is fascinating and horrifying and has me kind of worked up.  Check it out for yourselves. Supplier Under Scrutiny on Aging Arms for Afghans.

A Rare political rumination

My dad sent me Jenna Bush's A Young Teacher’s Year of Mop-Ups and Cinderella from yesterday's New York Times.  After reading it, I decided that that was not the worst thing I have ever read, but it's sad those kids know more countries than the President. ZING! It's really just a shame her father is such a stain on our collective consciousness.

I think  an important lesson my father taught me was that I should seek an identity independent of my parents- I think this is a normal process of growing up.  My dad offered part time and summer employment at various times (which paid well) to students from my high school but never to me, and at one point in my life I was kind of hurt by that.   Notwithstanding the accounting issue (that is, how separate were my finances  from my father's when I was 17) I came to understand that this broadened both my resume and my perspective.  Instead of, say, one company on my resume, by the time I graduated from college I had at least four.  Bonus question: how many of those are still in business? One.  But I digress.

So it is kind of a shame that I can't read this piece of let's all join TFA fluff by Jenna Bush and not think about the fact that her father is the president, and I am not too fond of the president. 

However, my thoughts soon returned to being mean.   I was trying to point out that no one (ok, maybe, no prudent layperson??) will be able to treat Jenna Bush as an independent person because our awareness of her is stained by her father's legacy (for those of you playing at home, the precise nature of the stain is like Piña Colada on a pool table, which you can never really get rid of, except that you can re-felt the table)

Maybe the indelible nature of the parent-child contamination association should be understood both ways.  Does this mean Jenna is able to exact revenge for when she was boozing it up in Texas?  (Wait, is she the one who went to Texas or Yale?  I just looked it up: Texas. ) Her photo in Wikipedia is captioned "Jenna "Borrachia" Bush".  I shit you not. UPDATE that wikip-edia entry was apparently a victim of vandalism, and then corrected(see here).  I didn't think that was her actual middle name but it was entertaining for sure.

Why I love the NY Times

I've said to a couple of people in the last week or so that I am the kind of person who reads the NY Times in the morning.  I would use this as a contrrast from the Journal (which I grab online) or the barely human Post or Daily News.

This habit stems from receiving the paper nearly feree for a couple years, and reading it on the way to work.  I don;t think I want to read a paper that is just business, or just NY gossip-level stories, or the police blotter.  For right now, the times is the right balance, and I thoroughly enjoyed the following from today's paper:

The secret war in Laos has consequernces- considering my passion for expionage stories, this nwas a great mix of human interest, espionage war story, and timely warning about what happens when we leave Afghanistan and Iraq: Old U.S. Allies, Still Hiding Deep in Laos

Considering how much I loved Lord of War and Boiler Room, and The Sopranos (specifically the "Webistics pump-and-dump scheme that  Matthew Bevalaqua was involved in), this story was just awesome.  Apparently there is a book somewhere in this tangled mess. Real Estate Executive With Hand in Trump Projects Rose From Tangled Past.

Bush Says Iran Still a Danger Despite Report on Weapons - New York Times

Link: Bush Says Iran Still a Danger Despite Report on Weapons - New York Times.

Oh, well excuuuuuuuuuuse meeeeeeeeeee   for reading the English language and thinking, um, THE EXACT OPPOSITE.  Sigh.  Bush might as well be saying that after lengthy and not very timely study of South Park, he has concluded that Imaginationland is sending "warning signals."

I think my co-worker AC has it right:

In other words, despite the fact that they are incapable of being a threat, they are still a threat.  They are about as big a threat as...Cuba.  Or Rhode Island.

Well said.

Report Depicts Recklessness at Blackwater - New York Times

I think when the full extent is known, the use of private contractors in this war will be embarrassing to the Bush administration.  I think this captures it nicely- something I remember hearing about on 60 minutes.  Private contractors are scarily expensive and tens of thousands of them operate with little to no oversight. 

The report also raised questions about the cost-effectiveness of using Blackwater forces instead of United States troops. Blackwater charges the government $1,222 per day per guard, “equivalent to $445,000 per year, or six times more than the cost of an equivalent U.S. soldier,” the report said.

Link: Report Depicts Recklessness at Blackwater - New York Times.  No draft, but being a contracting company is pretty lucrative, it seems.

Flying around my mind this morning...

Can we call it "Don't tase me bro"-gate at CSU Fort Collins? [NYTimes]

"Um, yeah the thing about our news show is, it's like, not news." Thanks, CW 11! The Best TV News, All About Us

14 year old pop/TV star not pregnant. Phew. Viral marketing taking lessons from F/X's Dirt? It’s Pimples, Not Pregnancy, for the Teenage Star Miley Cyrus 

Last but not least, Tell Me you Love Me is entertaining only if you like to heckle.  Are we heckling because the content is so overtly sexual?  Maybe, but with writing this awful and some very weak and annoying characters, I think I'm in good shape.