RatcliffeBlog - Mitch Thinking Out Loud

This was not the way I wanted to get a G5

Well, having messed with the server interminably, I've gone to a new system. Ordered a new motherboard for the old server, so now I'll be able to swap if one goes down. Never did I think I'd be my own one-man IT department.

UPDATE: I've found a way to trick the old system into staying up longer, though not permanently. It'll be a while before we return to normal operation around here, as I have several projects on deadline this week. If you are reading this, I am still being tricky enough to keep the system up -- it seems to involve keeping Ethernet and at least one application active.

Power outage, server outage

Seven hours without power today, because of windstorm damage. The only system that didn't come back up was my OS X server. It seems the power management chip is fouled up, as any power-related function, like sleeping the display, puts the system into sleep. I've reset the PMU -- anyone have any other ideas?

Light Blogging

It's one of those three-deadlines-in-one-week weeks....

Bouy, Those Are Some Economic Numbers

Headlines trumpet the "best economic growth in 20 years," hearkening back to the Reagan recovery well before there is any actual sign of improvements for ordinary Americans. Just as the press wants to be patriotic during a war, they tend to be parochial about the economy. Thus, you get statements like "The U.S. economy, hitting on all cylinders for the first time in several years..." from the Washington Post when there is absolutely no sign of employment improvements, setting the stage for a dismal Christmas retail season as consumers save for hard times (less job security) and the profits generated by the recent wave of tax refunds is absorbed and spirited away to the bank accounts of the richest one percent of the nation.

If you look at the chart the Post provides, you can see that there are two factors that account for the spurts of jobless growth in recent years -- every quarter in which a tax refund was delivered to Americans (Q4, 2001, Q3 2002 and last quarter, Q3 2003), they spent more; otherwise, if you look at the quarters after the invasion of Afghanistan and Iraq (Q1 2002 and Q2 2003, when we had to build and buy more bullets, uniforms, bombs and missiles), defense spending pumped things up. But the purpose of the tax cuts was to stimulate job growth, which still hasn't materialized and I'll take economy's slower growth without the expense of American lives any day.

But the really painful medicine in the "stellar" economy reports is that every time we've had a great quarter, the following unstimulated quarter--that is, when money wasn't being pumped directly into the economy in the forms of checks from Treasury or the DoD--growth has fallen back to a dismal 1.3 percent to 1.4 percent.

Secretary of Commerce Don Evans took the occasion of today's economic numbers to reiterate the promise that "We're growing the American economy and soon we'll be growing more jobs." We won't be seeing any new jobs if, as the market seems to think, stocks are currently priced for perfection and that the Fed will soon have to raise rates, which will choke off consumer spending built in recent years on the extraction of equity from homes. This is not an environment of renewed investment, but one of economic sleight of hand, trading current spending for massive federal deficits, not to mention ever-growing consumer debt. Much of the current job "growth"--which is still 250,000 jobs lower each month than promised by the Bush Administration--is in pre-holiday temporary hiring. It happens every year, so the gain of 57,000 jobs in September should be discounted more aggressively to account for seasonal jobs. The key sentence in that employment report was: "Since November 2001, the proportion of long-term unemployed has increased by about 9 percentage points."

The problem with tracking unemployment on the Department of Commerce site is that they replace the previous month's current unemployment with the previous month's report without changing the URL, making it hard to create comparisons between months. But, these charts clearly show the lack of progress in the economy:

One hopes that Republican voters hold the President and his administration to the promise they keep repeating but on which they never deliver.

Bushies -- Who Do You People Think You Are?

What Sony Tells Us

The news that Sony is laying off 20,000 workers and redirecting its effort both to increase revenues in China and lower costs to compete with Chinese consumer electronics has only one message for U.S. technology and consumer electronics companies: China is the main competitor and main market where they must succeed in the next 20 years. Ignoring the China market will lead to corporate fatality.

Sony's president, Nobuyuki Idei says he wants to gain five percent of the Chinese consumer electronics market for Sony, which currently holds about a one percent market share. Those gains have to come while domestic Chinese companies and competitors from other countries, particularly Samsung and LG in Korea, compete for a share of the exploding Chinese market. So, Sony doesn't just have to increase its Chinese sales by 500%, it has to increase it by 5,000% over the next decade to achieve that market share target.

The layoffs, while not unprecedented in Japan, are massive. And the suggestion that the company will compete in China by outsourcing manufacturing to China is a clear sign of what happened to that headcount, half of which were "administrative" positions overseeing an already deeply automated production system. Sony will never be rehiring that 13 percent of its workforce --those jobs have gone permanently to the floating market for outsourced manufacturing and middle management associated with those product lines has been wiped out.

Rich Media Ads Increasing Market Share

Mediapost reports that DoubleClick is seeing continuing and impressive gains in the use of rich media ads. Here are the numbers:

Rich Media's Share Of Online Ads Served

Share Of Ads Served*
Q1 2002 17.3%
Q2 2002 19.3%
Q3 2002 23.2%
Q4 2002 24.9%
Q1 2003 27.8%
Q2 2003 31.7%
Q3 2003 38.6%

Source: DoubleClick Q3 2003 Ad Serving Trends Report. *By DoubleClick. Q3 2003 Base = 172 billion impressions.

How Do You Spell "Capital Flight"

I guess I am beginning to understand George Bush's statement that he looked into Vladimir Putin and believed he saw a man with whom he can do business. Mr. Bush clearly has a skewed view of reality, because Putin is a guy who only does business on his terms.

President Putin, who runs his country as a quasi-dictatorship at this point, has jailed one of "the oligarchs," the cadre of super-rich quasi-mobster businessmen who dictate most of the economic activity in Russia because he threatened to contest Putin's political power. In one of those trumped-up sounding charges of corruption, Putin has had Mikhail Khodorovsky imprisoned on corruption charges as Khodorovsky's company, Yukos, the world's fourth largest oil company, was in the midst of negotiations with foreign investors to sell part of the firm. The sale would have freed Yukos from the strict control exerted by Putin.

Russians, who have had to endure the concentration of wealth and power in the hands of a very few people in the wake of the collapse of the Soviet Union, another centralized regime, are going to pay for this kind of conceit on Putin's part with an even longer economic winter. It also suggests that, should the U.S. and Russia come to some geopolitical loggerhead, the only option will be a catastrophic showdown between Bush and Putin, neither of whom seem to understand anything other than blunt force.

The Benefit of IT Quantified Or Rationalized?

According to the Economist, a team at Harvard led by Dale Jorgenson has determined that the benefits of IT investment we have seen in the United States aren't evident in Japan and Europe because they are being mismeasured:

Mr Jorgenson uses data for Europe and Japan which are adjusted to incorporate price deflators and measures of software expenditure similar to those used in America. Unfortunately, the detailed information needed to make these adjustments is available for most economies only up to 2000. Even so, the results are striking. For instance, they suggest that Japan's GDP grew by an annual average of 2.1% in the second half of the 1990s, compared with only 1.4% according to official statistics.

Employing these revised data, Mr Jorgenson finds that in all G7 economies, not just America, a boom in IT investment helped to boost growth in the second half of the 1990s. Indeed, the contribution to GDP growth from IT capital spending was almost as big in Japan as in America—although it was offset by a fall in investment of other sorts. All of the European economies also saw a marked increase in their IT capital stock, albeit smaller than in America. As in Japan, in many European countries this was partly countered by weaker non-IT investment.

I'd say that the different perceived value of the returns on IT investment are a combination of overstatement of the value to the U.S. economy and an understatement of the European and Japanese returns.

The article goes on to talk about "deficient demand" in Japan and Europe, "The snag is that elsewhere it has been partly disguised by the poor performance of investment in other things," which is a fancy way of saying -- in my opinion -- that the benefits of IT aren't being recognized. But I'd say that is actually a failure of IT marketing and product follow-through, not some kind of fault in the populations of other countries.

This same researcher said in 1991 that IT investment would "ease the economic slowdown," which was patently wrong. It seems he expects perfect responses by the market to imperfect technology or technology marketing.

I think we have a ways to go on the understanding the economic benefits of technology front.

Time-Shifting Chat

I was on the WebTalk Guys this weekend talking about time-shifted audio content. You can listen here (it's a free MP3).

Also, I received a comment about one of my postings recently on the same topic, which bears repeating here and a full response:

This sort of Time Shifting is already available for streamed Internet radio. Check out Replay Radio here:

www.replay-radio.com

Replay Radio lets you schedule shows to record, and then it saves them as MP3 files or burns them to an audio CD automatically. The software costs $29.95, and you can try a free demo from the site to see how it works before you buy it.

Posted by: Bill Dettering at October 26, 2003 09:25 PM

Actually, no, that's not what I am describing. I'd like something far more radical than the time-shifting feature. I want to shift attention away from the mass media to the many media. Audible has had time-shifting for years, now, but the whole industry needs to go further!

Replay Radio requires there be a stream from an existing radio programming source to record in the first place, which means it is only a half-step away from today's media -- it's predicated on today's media. It's, as the site says, a VCR for the radio -- what we need isn't just TiVo, but a completely new channel for content offered outside of the streaming environment, which is still incredibly inefficient. I want to be able to subscribe to a program and have it delivered on my schedule without having to have to set a system to record from a stream.

For instance, I was on WebTalk Guys this week and the show was pre-empted on the local radio station because of a football game. I'd have missed the show using Replay Radio to record that stream.

Now, as for finding individual shows, Replay Radio does let you do that, but it doesn't provide the kind of marketing channel I think is needed to promote a show, since it funnels the entire experience through a single interface. If Replay Radio decides to be a marketer of programming the cost of getting exposure in the application interface will probably rise; if not, Replay hasn't got the incentives/resources to stretch a wide net to find new content and categorize it -- unless it embraces RSS with enclosures.

Replay Radio's Quick Capture feature is pretty nifty and probably would get the company sued if users recorded secured music from the sound card after it was decrypted. Not that I object to that, but from a pragmatist's viewpoint, it is something to consider.

Finally, the big thing is that Replay Radio isn't providing an economic model for the programmer to invest in time-shifting, whether that programmer is a ClearChannel or a single producer of content. Simply capturing audio doesn't enable any new business model to support content creation.

Clearly, I am far more concerned about how the small content player can get off the the ground. The fact that Audible, with whom I've worked for years, is embedded in most MP3 players and has a working secure delivery regime that is rational and fair to the consumer, allowing multiple copies and flexible playback options, makes it my platform of choice for the self-publishing audio efforts. They just don't do it yet and if anyone wants to see them do it, let me know and I'll pass it along to Audible as feedback.

Ballmer: Unclued

Steve Ballmer, chief executive officer of the Redmond Horde (that would be Microsoft), is saying some really stupid things about open source software. Here is the highest achievement in nonsense I've read in a while:

Why should code written randomly by some hacker in China and contributed to some open-source project, why is its pedigree by definition somehow better than the pedigree of something that is written in a controlled fashion?" he asked. "I don't buy that."

What Steve Ballmer doesn't realize is that his own company takes virtually the same approach, hiring some young coder from Kentucky or Bangalore to write a bit of code that gets appended to Word or Windows, but without the feedback of coders and users that are incorporated into the collective decision-making that produces open source software. The market decides in open source whether the code written by the hacker gets incorporated into the product or shaved off and discarded because there are better solutions available.

At the same time, Ballmer says Microsoft will pursue more consulting and services business, which is the core of the open source financial model -- but he is going to try to do it with a closed system that embeds people who don't know the source code of the tools they use as intimately as an open source service provider who might actually have written the code in question.

Bushies -- Getting a little Rummy

One cross-posting of the Bushies from Correspondences.org this week:

UPDATE: For the many of you who have asked, this is satire, not a record of actual statements.

The margin of victory is already angry

Michael Cudahy writes that the Bush coalition is already in tatters. I agree that the challenge is to get Bush out of office and stop the deconstruction of the United States, yet that is only the first step. He goes on to provide a pragmatic description of the primary process that has, in recent years, torn the Democratic party to shreds and counsels patience.

One of the changes that I think is essential in the midst of the "you are with us or against" line drawn by the Bush Administration is the end of having to hate other Americans with whom you don't agree in order to be a Good American. That needs to start with people in the various candidates' camps, as well as the candidates themselves, recognizing that the worst thing to do is attack other candidates for the opportunity to challenge Bush in 2004. A substantive discussion of policy without the abrasiveness would be a big step in the right direction.

Then, we can deal in an organized way with the potential for an unprecedented theft of the election using electronic voting machines.

Google's Web-based IPO

I've been thinking about the Google IPO, rather than joining the chorus of celebration, both of the fact it is going public and that it will do so over the web using an auction format (sorry, it's an Financial Times page).

Here is what is significant: The Net auction will distribute the shares as widely as can be achieved in this world, rather than allowing large pools of shares to be held by major institutional investors. As an anonymous source told the FT: ""They could get a $100bn" stock market value, said one person involved. "However, all the shares would end up with Aunt Agatha in Des Moines and Uncle Milt in Pittsburgh and there would be no real public market at all."

This reduces the liquidity of the stock, which will keep the share prices higher in the short- to medium-term, because there will be a shortage of Google shares for people who want to buy large quantities. In the long term, it is a promise to shareholders that they will receive value directly from the company, which is already profitable -- that is, old fashioned dividends. This is a significant change in the value proposition in stock offerings. It suggests that the Bush suspension of the dividend tax could actually make IPOs by unprofitable companies less attractive, reducing the ability of younger companies to raise money.

It also raises significant issues relating to the sale of stock by insiders, who will obviously hold the vast majority of shares when the IPO is over. By tracking the sales of stock by insiders we should be able to get a very clear idea of how they are feeling about the company's performance -- and there may need to be a more explicit disclosure of reasons for sales of stock in advance. At least this is what my sojourn in investment banking tells me as I contemplate the Google IPO story.

UPDATE: Tristan Louis adds some interesting thoughts about what Google might do with the money it raises.

Tristan's point about "what would they buy?" is an interesting one. I think Google could come out of this with a $30 billion to $40 billion valuation and about $8.5 billion in cash. Of course, it is profitable, so it will keep tossing off cash to pay for more acquisitions or to pay off an acquisition of the size of Yahoo. But I think that Tristans latter thought is more likely where they will go -- the assemblage of a variety of network services that can be exposed by extending their APIs into new functionality anchored and tied together by comprehensive search functionality.

Wall Street and Bush

Why should we not be surprised about the fact Wall Street is now the largest contributor to the Bush Reelection campaign, despite the "tough new enforcement initiatives" announced to reform the financial services industry by President Bush in April 2003? Because, true to form, the Bush reforms are without teeth and the actual implementation has been lax. President Bush tells individual investors, who gave up about $2.1 trillion in market value after the corporate scandals of 2001 - 2002.

Contrast this language, offered by President Bush in April:

The misdeeds now being uncovered in some quarters of corporate America are threatening the financial well-being of many workers and many investors. At this moment, America's greatest economic need is higher ethical standards -- standards enforced by strict laws and upheld by responsible business leaders....

We've learned of some business leaders obstructing justice, and misleading clients, falsifying records, business executives breaching the trust and abusing power. We've learned of CEOs earning tens of millions of dollars in bonuses just before their companies go bankrupt, leaving employees and retirees and investors to suffer. The business pages of American newspapers should not read like a scandal sheet.....

With these campaign contributions, from a financial industry that is experiencing double- and triple-digit growth in compensation (which is scandalous, given the continuing layoffs across the economy, not to mention continued paring on Wall Street):

A study to be released today shows that the financial community has surpassed all other groups, including lawyers and lobbyists, as the top industry among Mr. Bush's elite fund-raisers. The list of those generating $100,000 and $200,000 now includes chief executives like Henry M. Paulson of Goldman Sachs, John J. Mack of Credit Suisse First Boston and Stanley O'Neal of Merrill Lynch , whose firm has already raised twice the amount for Mr. Bush's re-election that it did during the entire 2000 campaign cycle....

The 2004 election is still more than a year away, but employees of securities and investment firms and their political action committees have contributed $3.8 million to the Bush campaign through September, just $159,000 less than they gave during the entire campaign cycle in 2000, according to the Center for Responsive Politics, which tracks campaign finance.

The president has raised more from the industry than all nine candidates in the Democratic field combined. While Senator John Kerry of Massachusetts counts the industry as his second-largest contributor, at about $1 million through September, others have not done as well. Howard Dean, the top fund-raiser in the field, raised about $302,000, and Senator Joseph I. Lieberman of Connecticut raised about $639,00

While Wall Street executives say they are contributing because "President Bush is doing the right thing for the American people," the evidence of economic performance and increasing distrust and anger toward the United States internationally doesn't support the argument. The tangible results of the president's economic and foreign policy don't bear any improvements for Americans -- yes, we're more scared, but we are less prosperous and less secure than we might have been if President Bush had not lied repeatedly about the justifications for the war in Iraq.

All things being equal, the simplest explanation is that, having lined the pockets of Wall Streeters, President Bush is harvesting the resulting contributions.

And we thought banners worked

X-10 Wireless Technology, the company that pelted the Net with billions of ads for its cheap webcams, filed for Chapter 11 bankruptcy protection after losing a $4.3 million suit by three brothers who say they were gipped out of $564,000 in commissions and that X-10 stole their advertising "technology."

Two things about this: 1.) A $4 million suit wouldn't ruin a solid business, especially before the appeals process, so it appears this is yet another case of a Net company succeeding only by misleading investors and business partners -- though privately held, we now know it owns at least $10 million to creditors, and; 2.) X-10's email, pop-up and pop-under ads spawned an industry of banner and spam protection, for which some software developers must salute it as those bawdy little ads featuring "chicks with webcams" go over the horizon and into that dark night of insolvency. Good riddance, and thanks for the years of annoyance.

State budget reality: Pain

The Center on Budget and Policy Priorities says state budgets will face shortfalls through 2005. The problem is that we really don't know what will happen beyond 2005, since the Bush Administration has unglued most of the components of the federal government and has invested a ten-year deficit of at least $3.8 trillion in an economic strategy that isn't paying off in increased employment and clearly intends to continue the dismantling the social infrastructure.

The only rational thing for a citizen to conclude, faced with these facts and growing uncertainty about the future, is that the states will be running in the red and cutting programs for as long as we can imagine.

In 21 states where shortfalls have been identified, the amounts total about $32 billion to $33 billion or about 9 percent of those states’ expenditures.  As more states issue new budget and revenue forecasts over the coming weeks and months, the aggregate total likely will increase to more than $40 billion.

The new deficit amounts are on top of the estimated $78 billion shortfalls that states faced when they enacted their fiscal year 2004 budgets, as well as large deficits that were addressed in fiscal years 2002 and 2003.  The National Conference of State Legislatures estimates that over the last three years, states have had to close a cumulative budget gap approaching $200 billion.

This is no way to run a country. If George W. Bush is the "CEO of the United States" as he originally styled himself, before he became "St. George the Osama/Saddam Misplacer," he's destroyed the system he was elected to manage. He has destroyed the U.S. and now claims that the recipients of giveaways (the ultra-wealthy) will feel such gratitude that they will rebuild the entire system for a reasonable profit. At the same time, Bush's father works with The Carlysle Group, which specializes in buying companies at a low price and selling the parts at a high price, rather than starting new businesses that create American jobs.

So, can we ask the current president why his father, a former president, isn't responding to the massive incentives for investment by starting companies rather than tearing them apart? If the plan doesn't even work in one American family, why should it be applied to the nation? The comments section is open, Mr. President -- this is one citizen asking you to explain how the Bush family is responding to your tax strategy.

The Broadcast Flag in a Nutshell: Consumers are the enemy

Broadcast flag bad! Just read this statement by the FCC's Kenneth Ferree, explaining to Reuters why the broadcast flag is benign: "It will simply prevent consumers from illegal piracy, from mass distribution over the Internet, which is the problem with music file sharing."

Okay, the consumer is the enemy. The FCC is in the position of protecting the industries it is supposed to regulate, protecting their existing business models when they need to change. Somebody should remind Mr. Ferree that the FCC works for the consumers, who are also called citizens, not the companies, although companies are made up of citizens.

Here's the problem of music filesharing: Pricing and use restrictions made legal use irrational. That's not to say that acting lawfully is irrational, but that the sellers of music made a lousy offer, so people used their previous copies of music and ignored the "new" system because it was the same as the old one, to borrow a phrase from The Who. And we shouldn't get fooled again.

Broadcast flag bad.

China Ch-ch-changing

Three news items that are interesting vis-a-vis the rise of the Chinese economy:

China is changing its value-added tax system to focus on collecting revenues for consumption rather than production. The Financial Times reports (sorry, it's a subscription-only page) that:

While details remain scarce, the change of VAT to a "consumption-oriented" system could prove a boon for capital- and technology-intensive industries. Currently, they pay up to 17 per cent on fixed assets such as production equipment, but the new system should clear the way for exemptions and reductions.

The policy blueprint also called for general simplification of the tax code, a harmonisation of rural and income taxes, unification of enterprise tax and greater transparency on government budgets a measure that could help rein in rampant corruption and waste. It amplified earlier support for private involvement in the economy, but also stressed the leading role of state ownership.

A shift away from taxes on production is a radical change from the communist policy of extracting revenue from companies doing business in the country. It will ease concerns about direct investment and, concurrently, will increase the tax burdens on expats who expect to live high on the hog in China.

One of the outcomes of the Asia Pacific Economic Partnership meeting this week is that the 21 countries attending agreed to increase regulatory efforts to ensure transparency in government and business activity. A coordinated effort to fight corruption is much needed, as it is virtually impossible to establish meaningful country-to-country benchmarks when assessing business opportunities because so many costs are hidden in the top drawers of corrupt officials and businesspeople.

Finally, China's minister of land and natural resources was tossed out of office for participating in real estate scandals. According to Agence France Presse: "'Tian Fengshan is no longer the minister, we don't no why he was removed,' the ministry official told AFP. 'It is not convenient to talk about this issue at the moment.'"

I would not want to be Tian Fengshan.

Meaning and Mahathir

About a week back, I pointed to a quote from outgoing Malaysian Prime Minister Mahathir and suggested this was a clear opening to a diplomatic strategy to address moderate Islamic countries. All we had to do was take the statement seriously. We also had to ignore a lot of the distasteful aspects of Mahathir's regime, which imprisons political enemies. Here are the relevant quotes from an interview with the BBC:

"A lot of people think the teachings of Islam make them confrontative (sic), but in fact, if you go to the fundamentals of Islam, we are urged to live in peace," he said.

He said that in this "true sense", he considers himself a "fundamentalist" Muslim....

He appealed to Muslims worldwide to go back to the "original, true teachings of Islam" and embrace values such as "peace, friendship, brotherhood, and tolerance of people".

Malaysia, he said, did not have a problem with Islamic militants because it had acted to stop the "teaching of the politics of hatred" in religious schools....

"It is a lack of understanding of Islam that has led to this present situation," he said.

But he admitted that there was a problem within Islam with "wrong" interpretations of Islamic teachings.

"The result is that Islam appears to be an obstruction to progress," he said, adding that he believed there was a need for better unity within the Muslim world.

Then, a few days ago, "Dr. M," as he is known in the pages of his state-controlled newspapers, went and said that "Jews rule the world" by proxy. And he refused to recant when criticized. Now, this is bad in several ways: It's anti-semitic; it's not true, and; it's incendiary. All reasons, very good reasons, to condemn such nonsense, which President Bush, among others, has done.

The president has been congratulated for his response and rightly so. Dan Gillmor also points out a Washington Post editorial that suggests Bush's own failure to respond adequately to stridently pro-Christian and anti-Islamic remark made by an American general about a Somali warlord makes his criticism of Mahathir hypocritical. This is also correct -- President Bush has demonstrated repeatedly that he oversimplifies statements by other nations' leaders in order to paint black-and-white pictures in which the United States, but more particularly, he himself, is the man in white.

The general, William Boykin, told an audience of the Somali: "I knew that my God was bigger than his. I knew that my God was a real God and his was an idol." Boykin's explanation is that he meant the Somali warlord worshipped Mammon, that he idolized money. But at another event, also taped, he told a church in Oregon:

"Ladies and gentlemen, this is your enemy," he tells the Good Shepherd audience. "It is not Osama bin Laden, it is the principalities of darkness. It is a spiritual enemy that will only be defeated if we come against them in the name of Jesus and pray for this nation and for our leaders."

And, according to Cybercast News Service, he went on to say:

"And we ask ourselves this question, 'Why do they (radical Muslims) hate us? Why do they hate us so much?' Ladies and gentlemen, the answer to that is because we're a Christian nation, because our foundation and our roots are Judeo-Christian," Boykin was quoted as saying before the Good Shepherd Church in Sandy, Ore., June 21. "Ladies and gentlemen, we will never abandon Israel, we will never walk away from our commitment to Israel, because our roots are there. Our religion came from Judaism, and therefore these radicals will hate us forever."

In other words, our fight is with Islam. And as a fundamentalist, Boykin apparently shares the belief that we have help Israel fulfill its role in Christian prophecy, which requires the rebuilding of the Temple to bring on the End Times.

However, a lot of us live in the real world, one full of greys between various views, where global famine and death aren't high on our list of things to experience in life. We have to address Islam realistically, too.

Having had the surprising experience of seeing Mahathir up close, coming to the event with an American's view of his Islamic views that were characterized as "extremist" (this was pre-9/11), I am absolutely convinced that, despite his incendiary anti-semitic remarks, U.S. foreign policy has to take this guy seriously. When he says these things about Jews, he's playing to his fundamentalist audience, just as the Bush Administration does in its public pronouncements about our "crusade" against terror.

It would be convenient to blow off Mahathir as another Islamic crank, as much of the American media does, but this is the Muslim center talking, like it or not. I've read several of Mr. Mahathir's didactic books on Islam and the state, and it is clear that he is trying to balance a variety of forces to ensure the survival of his regime, which President Bush has lauded as a force for good in the War on Terror, as well as his -- Mahathir's -- historical legacy.

Mahathir may be stepping down as Malaysia's prime minister, but he is the de facto elder statesman of the quasi-democratic middle in Islamic society and we have to deal with him. Now, we can damn him for the things he says to keep his fundamentalist constituents in the Mahathir big tent or we can take that for what it is and challenge him to live up to the statements he makes about the peaceful nature of Islam. Doing the latter requires we swallow our tendency to announce our moral superiority (it's fine to do this at home, say when an idiot like Rush Limbaugh shoots off his mouth about black quarterbacks) and acknowledging that Christianity, Judiasm and Islamism all have a right to exist and a responsibility to their peoples to co-exist.

So, instead of writing off this transaction between President Bush and Prime Minister Mahathir as a clash of extremists, it is time for Americans to call on the President to exercise some of that humility he promised us during the 2000 campaign and challenge Mahathir to use his position as elder statesman to bring about the peace he says he wants.

Give Microsoft credit

Microsoft does things thoroughly and in the case of blogging, it has gone much further than most companies. This Internetnews.com article looks into Microsoft's support of blogging by employees and among developers and customers.

I particularly like the sanitized account of Chris Pirillo's discovery that Outlook 2003 is Exchange-centric. He blogged: "It annoys me to the point where I believe I'm going to have to switch back to Office 2000. Outlook is not designed for POP3 users. It's only for Exchange users, especially in the new version. This sucks."

Actually, his posting headline is "Outlook 2003 Sucks Ass, Bigtime."

He was heard in Redmond. That's better than a lot of other companies' track record, for what it's worth.

Whatever you may think of Microsoft, however you might feel about their software, this is a company that is listening to customers in interesting ways. It produces bloatware as a result, but someday they may fix that, too. I'm sticking with my Macintosh, though.

When financial metrics turn down, change them?

FindWhat.com said yesterday it will stop announcing per-customer revenues and click-through revenues, according to MediaPost. Amazingly, the CEO had the temerity to say We are not discontinuing the reporting of key metrics because we fared poorly in 2003." In fact, the revenue-per-click is falling as click-through inventories increase across the Web (thank you, Google AdWords).

This isn't bad for advertisers or Net users, but it does spell trouble for the companies that, having valued inventories at unrealistic levels are confronted now with the reality of lower-than-projected revenues and the need to radically increase inventories to meet revenue goals -- it's a vicious cycle that will drive inventory values lower. Deciding not to announce one's financial performance based on the value of individual customers and the revenue-per-click is not dealing with the challenges FindWhat.com faces, it is telling investors that management isn't confident about what they measure, nothing more or less.

Sure, revenues are up 62 percent in the most recent quarter, and FindWhat says it will hit 2003 revenues of $70 million. It's easy to say revenues are up and not focus on the increasing costs that you paid to achieve those revenues. If the cost of serving those ads and acquiring inventory are rising faster than revenues (which would produce a lower revenue-per-customer and per-click), the prognosis is not good, as Google and Overture can hammer the cost-per-click down to strangle their competitors.

Unemployment unchanged

Keep in mind that the Bush Administration has been projecting vast improvements in unemployment for more than a year, based on previous tax cuts. But today's regional and state employment and unemployment release shows absolutely no change in unemployment nationally, in fact non-farm payrolls actually fell in 26 states.

So, instead of the 300,000 new jobs each month President Bush has promised (for a year), we're down about 3.2 million jobs since this man took office -- and unemployment is holding firm. Given that we have already accepted three tax cuts, which produced a $374.2 billion deficit in 2003 and will produce a deficit of $480 billion in fiscal 2004. Now, putting aside the trillions in long-term deficit spending the Bush Administration has set us up for, the cost of the deficit in the last two years -- just the deficit, not the loss of revenues -- adds up to $854.2 billion. That means taxpayers, promised economic stimulus in return for these idiotic changes in the progressive tax system that produced America's 20th century prosperity (under Democrats and Republicans), have paid $2,669 per job *lost* under Bush.

Now, if this presidency is America's CEO administration, that's a lousy return on capital invested.

Socialtext Workspace 1.0

In the shameless plug department, the first full release of Socialtext's Workspace was released today. As a user and advisor, I can say they've built something everyone at the company can be proud of and that many organizations will find extremely useful. At the Chaordic Commons, where we built a project collaboration site using Socialtext, Living Directory and Golightly Online's email management and community system, the combined tools produced an immediate result: a 30 percent increase in members of the Commons. This is more than a wiki, blending a number of working styles to create a place where people can work on ideas.

Bennett's back against the wall now....

My old debate partner, Richard "I'm no wife swapper" Bennett is back in the comments section again:

I see why you're so aggressive now - you hope you can prevent people from seeing through your lack of understanding by lashing out so violently. The table you linked yourself says that California's top bracket is 9.3%. You couldn't even type that in accurately. You also lie about he sales tax, higher in California than in Washington, and in your analysis of property tax you ignore the higher median house prices in California and what that has to do with the size of the tax bill.

Initially, I thought you were a demagogue, but looking at the desperate arguments you raise about things like cigarette taxes, while dodging the car tax, it's apparent that you're simply ignorant.

But don't be sad because I made you look so bad in the course of this lesson - I've mopped the floor with better men than you'll ever be, so you're in good company.

Happy Emergence.
Posted by Richard Bennett at October 20, 2003 07:14 PM

Happy Emergence, indeed? And you've been a real feinting flower throughout this and other debates? Aggressive? Thou dost protest too much. Actually, Richard, I'm just taking the tone you've established in every exchange between you and I or that you've had with others that has come to my attention. You are consistently abusive and insulting, totally unable to take the kind of factual arguments you think you dish out. If you were the tough guy you talk like, you'd be able to take what you serve, but what you are is an inveterate exaggerator of fact, at the least.Here, again, you try to dodge the reality that every fact I cited was backed up by government or corporate sites that can be checked. I don't make up things to fit my argument like you do, and I don't need to be polite to someone who established the tenor of our exchange when you called me a wife-swapping liberal. Now, if you'd ever met or talked to me prior to that statement, I'd have given you the benefit of the doubt, however that was the first thing you wrote in retaliation to a response to one of your innumerable attacks on Joi Ito. You never dealt with the substance of a difference of opinion in that exchange, nor have you here. Damn, though, you are an accomplished name-caller.You're still the one who has been wrong on every "fact" you bandied about in this tax discussion. I've pointed to state documents -- if you are too thick to understand the finer points of taxation, such as the cumulative marginal sales tax in two different states, it's not my fault. Calling me stupid only points out where the real blame lies: you don't ask a clarifying question or answer any of the questions I put to you in asking you to prove your point, instead you defame other people's intelligence.

I'll be glad to mop the floor intellectually with you whenever you choose, just as I've done with abusive far-right Y2K zombies who deployed the same kind of "rhetoric" to discredit well-reasoned arguments that their advocacy of a doomsday scenario was completely off base. I always found your lot are really quite docile in person, usually full of the sound of their own voice and scared of every other voice, so scared you try to drown it out. Since you live in Camas, why don't you drop by one of these days and we'll see how your name-calling works in person? I live in Lakewood. I'll buy you a beer and we'll see if you can be polite for more than two minutes.

Yes, Richard, I have baited you. I don't like your style, but I am playing according to it, since you've inverted the Golden Rule so perfectly that I rather enjoy mocking you with some of the shit-talking you do. I don't like your politics, but I'll accept your beliefs if you take even one step to support them with actual facts instead of accusations of lying absent any proof I am wrong. So far, you haven't made a single statement supported by fact -- you've got plenty of opinions, but they are unsupportable in the real world.

Your argument about Californians not being overtaxed is so broad that it betrays complete ignorance or intolerance of the fact that different states use widely divergent tax strategies that distribute the burden of taxation quite differently. If anything, Washington and California are on the same track, moving the burden onto the backs of the middle class and poor to create some voodoo economic stimulus.

Yet, as you would know if you read the papers in Washington state, the only thing that these moves have got taxpayers is Boeing and other companies taking jobs out of the state.

Your comic reference to the "Microsoft tax" in one of your postings is so startlingly uninformed as to betray your ignorance of how tax revenues actually are collected: In a state with no income tax and a business and occupations tax that maxes out at 1.5 percent for manufacturers (before specific deductions for business services and high technology companies), we're not living on Microsoft alone. Far, far from it.

This Seattle Times article explains the Washington B&O tax and the difference in revenues compared to Oregon, which does have an income tax:

Had Bill Gates located his company in Oregon instead of Washington, Microsoft would owe that state's 6.6 percent corporate income tax; last year, that would have amounted to $588.7 million. Instead, the company pays Washington B&O taxes, which work out to about $313.5 million.

By contrast, Seattle-based Amazon has racked up billions of dollars in sales since it went public in 1997 but has had only one profitable quarter. Last year, spokesman Bill Curry said, Amazon paid $4 million in state B&O taxes. Had Jeff Bezos chosen to start the company 170 miles to the south, in Portland, the company would have paid a $10 licensing fee.

Now, note, Richard, that Microsoft's contribution to Washington state tax revenues was only 16.9 percent of the B&O tax and only 1.52 percent of total tax revenues. Since Washington collects only 58 percent of its revenues from taxes, Microsoft, which had sales of $32.1 billion last fiscal year, accounts for less than eight-tenths of one percent of the state's revenues.Yet, at the same time, the tax burdern in Washington falls harder on the middle class and poor, through the very taxes I described and others, like the lottery, making the calls for a more business-friendly California by Arnold Schwarzenegger all the more patheticly similar to George W. Bush's claim that he is compassionate.

What you also refuse to see in California or here in Washington is that what we pay for as taxpayers -- what we invest in together -- has been decimated by the neocon attack on government as an instrument of social decision-making, beginning with Reagan and continuing with the same venal ferocity you bring to an argument. I think the people have had it with under-investment in our young, continuing education, and innumerable other programs that must be cut to support a healthy profit margin for companies. Remember, Richard, people work at those companies and they have to live in these communities, even if they are falling apart. They aren't blind to this, but you clearly are blind to the diminution of public services and attendant disproportionate increase in privately provided services, such as medical care, over the past 20 years throughout the United States.

What I am arguing in not liberal, it is simple economics. Californians' future were choked off by the Wilson administration's misguided energy deregulation policy, which promoted the looting of the state and consumers' wallets, siphoning off much need capital and a massive revenue surplus at exactly the moment it was needed to sustain public investment in education, infrastructure and other assets that have made California an attractive place to live and do business for several generations. If a people don't invest in themselves, they create a disincentive to invest in their region.

I'm tired of the accusations of treason and heresy leveled by neocons with anyone who has even a slight disagreement with them. You see taxation and state budgets through an ideological lens that distorts reality, plain and simple. If you can't understand that California got into this crisis because of a combination of factors that were amplified by the Wilson administration's energy deregulation policy, you're just willfully indifferent to reality, which is worse than being stupid.But, you made that point yourself in your latest reply: "Initially, I thought you were a demagogue, but looking at the desperate arguments you raise about things like cigarette taxes, while dodging the car tax, it's apparent that you're simply ignorant." You're a demagogue and refuse to see when you are beaten.

For a person purported, albeit only by himself, to be such a good engineer, you are remarkably inept with facts and numbers. I wonder how much of the rest of the Richard Bennett story is exaggerated? Are you like Bill O'Reilly, who claims he won journalism awards on his tabloid show that a.) he didn't win and, b.) the award the show did win -- a different award -- was given more than a year after he left, to the new staff? It'd be par for the course, based on my experience of people like you.

Friendster on steroids or just another Monster?

Ross Mayfield on the introduction of a social networking service by employment site Monster.com. The Monster execs are talking dating and alumni services as a comparison to their efforts, which I think is misguided. Finding employment is a process of introductions that can't be facilitated by semi-anonymous or anonymous connections -- yes, you can do that with dating, because dating is a process of discovery with a particularly compelling pot of gold at the end -- because when you need a job or want a job, you tend to move fast and find the most immediate source of connections, not begin a dialogue to get someone's endorsement. Jerry Michalski's piece on social networking was dead-on about this point: We guard our personal networks, rather than be promiscuous with them.

By contrast, we should be promiscuous with links precisely in order to foment discussions that lead to strong ties with other people and businesses.

Hello, sweetheart, get me re-encode

ABC Radio news reporters are using Wi-Fi to submit finished digitally recorded content from the field. If this isn't proof that the advent of time-shifted broadcasting is upon us I don't know what is. After all, in every other industry where the aggregator of content has been disenfranchised, big changes follow. The fact that ABC reporters can use Wi-Fi is merely an artifact of how simple the tools for producing audio have become -- this is the thematic equivalent of desktop publishing in radio. Dan Gillmor is experimenting with this tool for audio on his site.

Uncomfortable in ourselves?

I come down on David Weinberger's side of Virginia Postrel's comments at PopTech about our living in the Age of Aesthetics. It seems to me that mankind has always been concerned about aesthetics -- you can't explain much of any civilization without delving into its arts and crafts, the little things done to make life more comfortable, more appreciable, more special. Look at Lascaux. Look at the Parthenon. Look at Chartres Cathedral.

So, today's sales of hair color may be an indication that we are less comfortable with our human form than our predecessors, not an indication that we are more aware of aesthetics. And why are we uncomfortable in our own skins, one is compelled to ask? Yes, we've always modified and decorated our bodies, but in the context of specific cultural milieu and not in response to the need to be different, especially "different together." Maybe this is what happens when there is no frontier left? One simply begins staking out parts of their own body for aesthetic purposes.

The libertarian celebration of consumerism Postrel espouses as "choice" rings hollow, especially as a parent, because the impact of the constant need to choose is clearly visible in the eyes of our children. I'm all for appreciating change, but meaningful change takes far more patience than dying one's hair.

Fast Company on Dean Campaign

Heath Row at Fast Company has some thoughtful comments on my posting about the FC article, "Joe Trippi's Killer App."

I'm with Ratcliffe in that it's not externally explicit to supporters or the public who Trippi is, but I don't think that's wholly the point. Sure, grassroots support would have emerged around Dean regardless of the campaign's recognition of such support, but it was a conscious leadership decision to harness such activity early and often. My take is that had the Dean campaign not embraced and in some ways centralized and blessed this grassroots support, the campaign -- or the fruits of the grassroots support -- would certainly not be where it is today.

Comments ensue, including my response. ">Go see and add your two cents.

EMC's Documentum buy is no surprise

Internetnews.com says "EMC's bid to purchase Documentum earlier this week raised more than a few eyebrows, particularly among rivals in the enterprise content management (ECM) space such as Interwoven, Open Text and FileNet."

Clay Shirky may not agree with me, but this is a literal no-brainer because content is what makes channels of communication useful and valuable. EMC is prepping a strategy for beginning to extract the value from massive amounts of data stored by its corporate customers. The mistake made by many people talking about "content as king" is thinking that content is just what we think of as a creative product that is a cost center and potential revenue source. Here's what Clay Shirky wrote recently:

People want to believe in things like micropayments because without a magic bullet to believe in, they would be left with the uncomfortable conclusion that what seems to be happening -- free content is growing in both amount and quality -- is what's actually happening.

The economics of content creation are in fact fairly simple. The two critical questions are "Does the support come from the reader, or from an advertiser, patron, or the creator?" and "Is the support mandatory or voluntary?"

The internet adds no new possibilities. Instead, it simply shifts both answers strongly to the right. It makes all user-supported schemes harder, and all subsidized schemes easier. It likewise makes collecting fees harder, and soliciting donations easier. And these effects are multiplicative. The internet makes collecting mandatory user fees much harder, and makes voluntarily subsidy much easier.

Actually, the question is not who pays for the content, but what the creator intends to do with it; today, a lot of people are giving away their stuff because there is no way to find a new business model without some experimentation. But there are many enterprise examples that can provide the framework for a content-based strategy for conducting business. For example, an open source strategy in biopharma or at a software company could become self-supporting by integrating outside innovation with internal discoveries to create revenue-producing products more quickly. The open source intellectual assets of companies can also lower customer support costs and sales and marketing burdens by creating a legion of evangelists. In this case, the question of who pays isn't relevant at all -- it's who receives the ultimate value and even if the open source company has to share revenue with outside contributors, its investment in a content management system to extend its massive database of unstructured information is a logical step to turning those assets from sunk costs into revenue.

Not all the data will be profitable, but that is the nature of publishing itself, and that "hit-driven" environment will continue, albeit more robustly -- ultimately in publishing, you have to have a lot of dogs ("mistakes," if you must focus on the negative) to find the few pure breed winners. You let the content out and see what works and focus additional resources on increasing that business. Who needs micropayments? We need contractual relationships and long-term partnerships to extract value from corporate data.

In IT, most big things start with the corporate market. I've seen a little revenue from blogging, but it is the ability of a publishing company to package and sell "stuff" that turns into a living. The company actually adds value, but the creator's share of value is rising because they can do so much more than in the day when they had to work for a large company to have access to the data and distribution capabilities they do today. Once companies that have decided to approach the layers of data in their massive storage systems as assets to be mined for profit, the larger question of how the "content market" will change will come into focus, because the cost of the tools will fall over generations of enterprise tools and straightforward business models for collecting revenues will become more apparent.

Power investing

Not many markets are going to need to raise a trillion dollars in the next 30 years, but the power industry will in order to build the infrastructure of the 21st century. If I were going to build something today, it would be high-efficiency power components for tomorrow. See the Financial Times for the story (sorry, subscription required). Here are several key excerpts:

Private investors and governments will have to invest $10,000bn in the world's power sector in the next 30 years, according to a study from the International Energy Agency to be released early next month....

Fatih Birol, the agency's chief economist and author of the report, said: "The myths were destroyed. When you talk about investment you think of oil and natural gas. But in the next three decades the most investment will have to go to electricity."

Indeed, electricity makes up more than 50 per cent of the overall investment needed in energy, with oil and gas making up the second largest need and coal occupying a small slice.

Now, one of the findings in the report is that seven companies currently own more than 60 percent of electricity production capacity. That's a market ripe for entrepreneurial activity, tearing off local production and creating self-supporting micro-grids that have the larger grid as a fall back and normally sell power to the grid because of over production in the "local loop."

About 12 years ago....

When I was an editor at MacWEEK, Bruce Schneier, then a research guy at Bell Labs, called and asked how to become a writer. I gave him his first assignment, and second. His excellent new book is reviewed by the Economist this week.

Why Biotech will stumble, then rise

The movement to allow cross-border prescription deliveries is going to break the pharmaceuticals market in the United States. States are lining up to begin a protracted fight against the arbitrarily high prices paid by Americans for their prescriptions.

This is going to hurt Big Pharma in the short-run, as price pressure will redefine the life cycle of the "blockbuster drug," taking some of the early high margins out of the equation but replacing it with a much larger initial customer base. Why? Because if you can price for U.S. use at a lower price, the relative price around the world will fall, as well, bringing new drugs and therapies into the reach of many more people.

But Big Pharma won't go easily. It will be like the record industry, fighting this change every step along the way. American drug retailers, too, are going to fight this. So, it all comes down to: Are we going to legislate reimport of American-made drugs at lower prices or is the pharmaceutical channel going to recognize the inevitable and change its strategy? Since drug companies are run by humans, my bet is that they will fight change. That's why I would not want to be a short-term investor in pharmaceutical development; long-term, though, this is potentially the biggest wave of global technology adoption yet to come along.

Audible's pragmatic strategy

I've worked with Audible for years, since it was a business plan in Don Katz's head, and it is good to see the company getting the coverage it deserves for having been the first to deliver digital audio content, always at a lower price than physical media and with the ability to make multiple uses of the programming. Lisa Napoli of The New York Times, says:

Reasonably priced secure downloads. Compensation for writers and artists. Peaceful alliances between publishers and online distributors.

A utopian vision for the music industry? Perhaps. But that approach, which appears to be the goal of Apple Computer's iTunes music store and others like it, is already a reality for delivering audio books and other spoken word offerings over the Internet, as created by Audible, a small company in Wayne, N.J.

Audible pioneered all this and can still teach the music industry a lot -- it may finally show up radio, as well, since most of the schlock on the dial today could be programmed out of existence by individuals choosing their own listening schedule. This would open the door to many micro-production efforts -- not audioblogs, necessarily, though I would not rule them out, but also productions out of the 200,000 or so home studios in the U.S. Time-shifted opinion, talk and news programming will eventually wipe away the distinction that makes radio valuable: urgency. With so much more information to take in and having the content available when driving through Wi-Fi hotspots, the few extra minutes it takes to produce and upload a file for Audible's audience will also force the producer to reflect more on what they are going to say. Likewise, broadcast, which will be carrying data, will be able to flag important stories and interrupt recorded content with news alerts, like traffic reports or breaking news.

Think what some journalists could do with their audio if they had a direct channel to an audience. What about delivering sermons or educational material, already huge physical media businesses that are time- and resource-intensive to deliver on CD or tape? With Audible's new-found support from Apple, its recent funding from Bertelsmann and Apax Partners, as well as its long relationship with Microsoft, this is a serious channel development opportunity for a number of audio-intensive industries.

While a lot of new companies, like Simple Devices, are trying to solve this problem, Audible has the edge. Just one fact to point to in conclusion: Audible is embedded in iTunes for Windows, which has been downloaded more than a million times since Thursday.

Dance, monkeyboy, dance

Well, this is about the end of the dialogue, because Bennett is contradicting himself now and I have to prepare for a trip out of town (to California, in fact). Bennett writes (indicated by block quotes):

This is hilarious:

As for the structural issues, the long-term attack on taxation that started with Prop 13 in California has resulted in these problems. So, while we may disagree with the optimal structure of a tax system -- which we haven't even touched on, so it isn't relevant to the conversation at hand -- the issue is that in California the cumulative impact of the electricity crisis and following debacle and the mismanagement of domestic and foreign policy by the Bush Administration is the source of immediate problem, a deep decline in state tax revenues.

In the first place, there hasn't been a decline in state tax revenues in California to speak of. There was a sharp rise in 2000, but after that things leveled off to the same regular rate of revenue growth as before. That's myth number one.

Well, get ready to laugh, because Richard Bennett's really dissembling now. According to the state of California's Department of Finance: "As the economy slowed over the last year, the decline in the StateХs revenues was even more pronounced than what was expected at the time the 2001 May Revision was prepared. Since enactment of the 2001 Budget Act (Chapter 106, Statutes 2001), the General Fund revenue forecast for major taxes and licenses has decreased by $5.4 billion for the past and current years combined. Revenue growth should resume in 2002-03 and be up $6.3 billion, or 9.3 percent, from 2001-02, reaching $74 billion. However, this is still $1.6 billion below the 2000-01 level."

That is clearly not what Mr. Bennett suggests the facts to be. In fact, let's break it down:

Year Sales/Use Tax Personal Income Tax Corporation Tax
1999 $21 billion $30.8 billion $5.7 billion
2000 $23.4 billion $39.5 billion $6.6 billion
2001 $24.2 billion $44.6 billion $6.9 billion
2002 $23.6 billion $38.4 billion $5.2 billion
2003 $25.4 billion $42.6 billion $5.9 billion

The key is not just that in 2002 the government of California collected $9.3 billion less in tax revenues from sales tax, personal income tax and corporate taxes in than in 2001. In 2003 (the fiscal year ended on June 31), the state collected $1.8 billion less than in 2001.

More importantly, however the cost of everything government does had risen for all the usual reasons (inflation and pre-negotatiated contracts or bonds that are often built on lower early costs and balloon payments) while the state simultaneously faced substantially increased costs for borrowing due to the lowered bond ratings issued by credit rating agencies, not to mention the direct cost of floating a $12 billion bond offering (approximately $80 million, or about 2.1 percent of the current deficit) to bail out energy retailers and a host of other increased costs relating to the budgets established years earlier (in both the Wilson and Davis administrations) that projected increased revenues and were then confronted with lower or slower-growing revenues.

It's the lack of growth, the fact the states bought into the bubble mentality in their budgeting that built much of the $38 billion shortfall into California's budget and the deficits in other states. Bennett talks about the revenue side dishonestly, while completely ignoring the realities of budgeting processes. Unlike a company, a state can't lay off citizens to whom it has promised services. Many of those promises are the furthest thing from extravagant; they are basic services that have to be delivered regardless of the cost -- and the Wilson-era privatization movement contributed to these costs rising, as well.

Finally, what Bennett refuses to acknowledge is that the state took on $10,675.4 million for the Deficit Financing Bond in 2003 that has to be paid back. Last year, by issuing bonds, California increased its revenues, but that is actually is a cost the people of California will bear long into the future.

Second, I didn't say other states weren't in a bind - I said they're not nearly in the same kind of a bind as California, where 15% of the nation's population has incurred 51% of the nations state deficits.

Actually, what Bennett said was: "I haven't noticed any states going bankrupt. California's budget deficit exceeded the total deficits of all other states, and you clearly can't blame that on Bush."

According to CBS News, since they summarize this nicely, the majority of states are in the same kind of trouble as California: "According to the National Association of State Budget Officers, 37 states reduced the budgets they enacted last year by a total of $14.5 billion, the biggest combined cut in 24 years. Governors in 29 states asked for tax increases totaling $17.5 billion, to offset plummeting tax revenues: sales taxes were down 2.5 percent, income taxes off 8.6 percent, and corporate taxes lower by 8.3 percent. Thirty states missed their revenue targets, NASBO reported."

While the scale of the California budget deficit is huge, it is largely due to the forces I have described in this series of postings and the impact of a deficit where it is unconstitutional is the same, regardless of the magnitude of the deficit.

Third, Californians are not under-taxed. Their state sales tax is higher than Washington's, their state income tax is higher than Oregon's, and the property taxes are comparable to most states.

Well, gee, but remember what California used to have? The worlds best educational system, for example? Californians used to get something for their money, not just the opportunity to pay for the scams of power companies. But, let's look at Bennett's false claims.

According to taxadmin.org, the people of California pay a rate of between 1.0 percent and 6.5 percent in state income tax, depending on their tax bracket. Oregon, by contrast, pays between 5.0 percent and 9.0 percent, higher than California by factors of between two and five -- as substantial difference, I'd say. You can also see here how Oregon taxes much more of a person's income.

Regarding Washington, which does not have an income tax, we (I write as a resident of Washington) pay for government in many different ways, not just sales tax. For example, as of 2001 California's fuel tax was $0.18 a gallon (33rd in the nation) compared to Washington's $0.23 per gallon (13th in the nation). Here are the statistics.

How about cigarette taxes, which Washington uses to bolster revenues. As of January 1, 2002, our cigarette tax was $1.425 per pack while Californians paid $0.87 -- we recently increased the cigarette tax.

Sales taxes? They are roughly even, but Bennett's statement that California's sales tax is higher than Washington's is only true when you don't account for the wider use of local sales taxes in Washington. California's sales taxes is 7.25 percent plus local taxes of between 0.125 and 0.5 percent for a total of up to 8 percent, while Washington's was 6.5 percent, plus an average of about 1.9 percent additional local sales tax, or 8.4 percent. Oregon doesn't have a sales tax.

Both Oregon and Washington's property tax rates are higher than California's by about a nickel per thousand dollars of value. A $200,000 home in California would cost the owner $206 a year in property taxes; in Washington, a home of the same value would cost $220 a year and in Oregon it would cost $264 a year.

Fourth, the de-reg split wholesalers from retailers and capped retail prices on power. The retailers went backrupt when the couldn't pass costs on to consumers, and the legislature squelched the plan. To assert that the power crisis was the cause of the deflation of the Internet bubble, as you've done, is to engage in some very creative activity.

I didn't say the Internet bubble burst because of the the energy crisis, and suggesting I did is an act of intentional distortion. I said the rising cost of energy increased costs for all California business at a time when prices for technology and other products were falling globally. That has impacted many industries, as evidenced by the fact that California's 2003 corporate tax revenues were 15 percent below 2001 revenues. Companies are selling less and laying off workers, which has consequences up and down the California economy and for state revenues.

Why don't you try writing about something you actually understand?

Ah, Richard. Let me call you Dick, okay? Dick, you ought to be careful about bandying around those kinds of accusations. You got every point in this message wrong... game, set and match, you intellectual dwarf.

Mock That Ideologue

Woo-hoo, I've got him going now. Look at him wiggle:

Richard Bennett writes: If you're going to insist, against all the evidence, that the "Pete Wilson energy policy" that worked fine until Davis and the PUC screwed it up in 2000, how about letting me in on how much of the $38B was due to energy costs?

Enquiring minds and all that.

Then tell me why California's deficit is larger than that of all other states combined. I really want to know, and I'm clearly not as well-informed as you.

But, if you really want me to say this in public supported by the evidence, I will: It's simple why the Wilson energy policy is at fault -- it set the stage for the market manipulation and criminal behavior that, so far, no one has been punished for except the citizens of California. Ken Lay should share a cell with the architects of the California energy deregulation, but there since it isn't a crime to be criminally stupid, they won't.

Why is the budget deficit in California bigger than all others combined? Because of the electricity crisis' costs to local business and the deep connection Silicon Valley has to global markets squashed by Bush policy, combined with the fact the California state budget is larger than the combined budgets of other states, as it is the eighth largest economy in the world.

Well, you've answered one of my questions about being blind, deaf or stupid....

It goes on!

In the comments on the earlier posting, Richard Bennett continues his amphetamine dissimulations....

Multiple errors and inconsistencies in this post. Here'a few that really stand out:

Contrary to popular belief, the state fiscal crisis is not caused by state overspending. Rather, it is caused by structural problems in the states’ tax systems...

Structural problems=taxing the rich and middle class at excessive rates. When the business cycle swings, higher incomes swing more severely than moderate incomes, both upward and downward. Note that this has nothing to do with electricity contracts.

Richard, are you blind, deaf and stupid? A little less attack mentality would do you a world of good...

Hmmmm.

Notice who was against this plan: The very companies that were the cause of the whole mess to begin with.

The retailers were behind the power crisis? A moment ago it was the wholesalers and President Bush. Please get your story straight, then tell me how much of the $38B deficit was there on account of electricity prices in 2001. While the interest rates on the bonds may affect the interest rate on carrying the state deficit over to next year, they don't really have much to do with the deficit itself.

Math can be hard, but in the end, numbers are your friend, Mitch.

My reply (and, yes, this is getting tedious, yet sickly entertaining):

First, I didn't say that the other states' problems were caused by electricity contracts. I said other states were in trouble, which you said wasn't true. Faced with the facts are you prepared to acknowledge your error?

As for the structural issues, the long-term attack on taxation that started with Prop 13 in California has resulted in these problems. So, while we may disagree with the optimal structure of a tax system -- which we haven't even touched on, so it isn't relevant to the conversation at hand -- the issue is that in California the cumulative impact of the electricity crisis and following debacle and the mismanagement of domestic and foreign policy by the Bush Administration is the source of immediate problem, a deep decline in state tax revenues.

As for attack mentality, if you can't take it, don't dish it. I'm convinced you're mean-spirited, I was only asking about your vision, hearing and intelligence.

As for the wholesaler vs. retailers, let me clarify, the companies that received the bonds and that participated with the wholesalers in the market manipulations are, indeed, behind the electricity crisis. President Bush aggravated the California fiscal crisis by abbetting the market manipulations and creating a global climate of anti-Americanism that has severely impacted sales by California companies, along with the rest of the companies in the United States.

I can't believe you don't understand the impact of increased borrowing costs on the current budget deficity, since you claim to understand math. You're asking a purposefully misleading question, since the costs of the electricity crisis brought on by Wilson-era policies and Bush incompetence cannot be completely accounted for, as many of the costs are indirect, such as the lowered tax revenues received by the state because of the increased cost of goods produced during the blackout era (when energy costs soared, increasing the cost of finished goods) and the longer term costs of a world that mistrusts the U.S. administration -- especially in light of the global outpouring of support after 9./11; Bush squandered an extraordinary opportunity.

The cost of financing the deficit will account for approximately eight (8) percent of the deficit for the coming year and many years after. In addition to that, part of the deficit itself is due to direct costs of the sale of those bonds, which the state appears to have eaten to bail out the energy retailers -- that's why the state had to do the offering, so that it could absorb the cost, which appears to have been deferred into the current budget.

Likewise, the increased cost of doing business in California due to the state's overall economic condition raised the risk associated with investment in the state, reducing business expansion and limiting startup capital.

The list goes on and on, Richard, but you refuse to see the numbers. I'd suggest an accounting course, maybe you could take the time to study the offering of municipal bonds. It's a complex situation that you are over-simplifying for purely ideological reasons.

Further Bennett backflips

Oh, the things we will see if we look long enough at the illogical machinations of far-right nut-jobs. I've received the following from Richard Bennett, who dodges any acknowledgment that his claim that no other states are in fiscal trouble was trounced and who prevaricates when confronted with proof that the cause of the California energy crisis and budget crisis are deeply related:

You made the specific claim that the California budget deficit was caused, in large part, by the energy contracts, a claim that I've seen in many far-left quarters. As the energy contracts weren't part of the calculations of the $38B deficit, I felt it was worthwhile to refute it. As to whether your repetition of a false charge that was apparently minted on the far left makes you one of them, I'll leave that exercise to the reader.

As to your "everything's fine" strawman, I don't think that voting for radical change in the state government is generally consistent with that point of view; and unlike you, I'm for change, not for the status quo. Do the math.

RB

My reply:

You're a funny little man...

I actually claimed the California budget crisis was the result of the combination of the energy crisis, which as I've explained did contribute to lower revenues and higher costs in state borrowing, and the mismanagement of U.S. domestic and foreign policy by the Bush Administration, for which I have offered evidence. You, on the other hand, said no other states were in trouble and have been soundly rebuked by the evidence.

As for the recall being "radical change" when its result has been a return to the very administration that caused this economic disaster, I think you need to recognize this isn't about math, but political choices. You choose backwards, a return to the "status quo" while both California and the nation need to step firmly forward. It's idiotic to reward the political party that caused the California disaster with another chance to pillage the public weal.

Mitch Ratcliffe

Yes, I love baiting an ideologue, because they end up doing backflips like a chihuahua on speed when they dodge the truth. Dance, little man, dance! Ah, I am a sadistic son of a bitch, even if I am not, as Bennett has claimed, a "Marin County-esque hot-tubbing, partner-swapping left-wing Democrat who thrives on self-deception." Do I think Californians are idiotic for electing Arnold Schwarzenegger? Not all of them, nor even all that voted for Arnold, because many voted for Schwarzenegger out of sheer desperation. But that does not excuse them from having made a bad decision? I'll leave that for the reader, Californians and history to decide.

The vast radical middle in this country is going to wake up and recognize that the polarized debate spawned by the extreme right versus everyone else has taken us to the brink of self-destruction. Our liberty, our economic security and our national security are severely imperiled and when the center wakes to that fully, sanity will return. I have every confidence that the American people will act well over the long run. It's precisely the fact that we have tried so many experiments that makes America great and that has forged a vast center that recognizes all Americans are in for the long run together rather than counting on elite cliques to make our decisions for us.

Until the great reawakening (in about four months, if I read the economic tea leaves correctly), the only option is to poke the skunks until they meltdown like Bill O'Reilly on Fresh Air. All you have to do is ask questions that call on them to prove what they are saying and they lie worse than Bill Clinton caught with his pants around his ankles. Unfortunately, when the far right lies, they kill hundreds of American soldiers, betray CIA operatives in the field and massacre thousands of innocent citizens in other countries while failing to catch or kill the leaders of those nations.

Not the brains, the instigator

Fast Company misses the point about the Dean campaign phenomenon by emphasizing the management of Joe Trippi rather than the collective efforts of tens of thousands of people that have produced the results the magazine celebrates as a triumph of management.

If Howard Dean Inc. is a dotcom, then Trippi, 47, is its COO. Growing up in Los Angeles, Trippi says he was a "hopeless early adopter" and technophile. He en-rolled at San Jose State University, planning to study aerospace engineering. Although politics intervened, Trippi has still managed to sample the Silicon Valley thing, consulting for a couple of tech companies and serving on the board of a startup.

So while he's frustrated when people focus on the "phoney baloney dotcom thing," he readily acknowledges the parallels. "Every presidential campaign is a startup," he says, "and every one becomes, essentially, one of the fastest- growing corporations in America." But, he says, those who think that this is simply the next Pets.com are missing the point: "We're actually trying to get people to participate in democracy again. And we're using the Internet to get the message out faster and earlier and asking supporters to help spread the word. If you want to call that a dotcom, go ahead. We simply call it a bunch of Americans." ...

The campaign's strategy is one that nimble companies have been using for years: give staffers on the ground the authority to make decisions tailored to their markets without having to check back constantly with the home office. But it's a radical, and some would say risky, way to organize a campaign, where control is usually fanatically guarded.

Staffers were allowed to make all sorts of decisions and that's good, but the real grassroots efforts evolved despite resource limitations that prevented even empowered staffers to make things happen. Instead, the staffers literally said, "We can't do this" as a campaign and passed responsibility to citizens, who went with their ideas on their own, often carefully isolated from the campaign. I doubt the majority of Dean supporters have the slightest idea who Joe Trippi is, as they went ahead and created tools and connections with their own energy. Trippi let go in a much bigger way than Fast Company suggests, and to his credit, but only because it worked. Without an active citizenry activated by the campaign there would be no article. So, I think this article, which talks about the Abercrombie & Fitch 20-somethings at headquarters is profoundly off the mark.

Sorry, Joe, but that's the truth. Don't listen to Fast Company. Never listen to your rave reviews and the campaign will continue to thrive. If you start believing this crap, you'll shoot the campaign in the foot.

Don't blame me -- my car's much older than my PC

According to the Technology User Profile 2003 Annual Edition from MetaFacts, consumers are keeping and using their old PCs longer. I drive a 1995 Ford with 48,000 miles on it -- I work at home and only drive the airport -- and have three computers that are less than a year old, so don't blame me....

Far-Right and sick with hallucinations of prosperity

Richard Bennett is on the attack again. I'm so far left I can't see reality. Below is the whole posting followed by a more general response, but do go follow the comments on his site.

Emergent Mythology

Emergent Democracy advocate Mitch Ratcliffe explains his objection to the Davis recall in an effort to deal with my claim that the recall was in fact a model of democratic action:

There's nothing wrong with recalls or the initiative process in a widely informed society. When there are very few sources of news and they militate with political groups to elect someone who reads scripts but doesn't speak extemporaneously, they leave something to be desired.

So Arnie is another moron, like that Bush fellow who stole the 2000 election from that smart Gore fellow, and the voters are uninformed owing to our paucity of news sources, which today include just about every news outlet on the planet, and the blogs, etc. Fine. Now what would we ignorant citizens know if we were as well-informed as the Emergent Davis boosters? This:

...the budget crisis is the result of Pete Wilson's misguided energy deregulation policies and collusion by the Bush Administration with the energy industy, not to mention the Bush Administration's general failure in domestic policy leading to the bankrupting of the states

Now to Ratcliffe's credit, he didn't make this up; rather, he's citing a well-traveled meme that you can find on any number of far-left blogs, news organs, and talk radio shows. The only trouble with it is that it's complete crap. The State of California did sign $8B in long-term electricity contracts after Davis finally stepped in and tried to deal with the rolling blackouts of 2001. But these contracts were financed by bonds to be paid off my utility rate-payers. So when the legislature dealt with a $38B budget deficit, these bonds weren't part of it - they're off the books.

So yeah, if Ratcliffe were "informed" he probably wouldn't have voted for Davis as he did, and if everyone were informed, it would have passed by acclamation.

On his other point, I haven't noticed any states going bankrupt. California's budget deficit exceeded the total deficits of all other states, and you clearly can't blame that on Bush. Unless you're "uninformed", of course.

Richard -- Forget it, I'm not even going to try to deal with the irreality field you live in. I'm not on the far left; I am a centrist and only look like I am at the far left because you live in a far-right hallucinatory state.

According to the National Association of Nonprofit Associations, the "states are suffering their worst fiscal crisis since World War II. Contrary to popular belief, the state fiscal crisis is not caused by state overspending. Rather, it is caused by structural problems in the states’ tax systems, and those problems are exacerbated by the slowing economy. Unfortunately, the crisis is not expected to diminish for another few years." Here's the link to the complete report, so you can read it for yourself. And, remember, Republicans hold the majority of gubernatorial offices in the country, so is this a "far-left" perspective? I don't think so.

In my state, Washington, we're looking at a record $2.65 billion deficit that, in terms of a proportiion of the state budget outstrips that of California. No less a figure that Bill Gates Sr. is calling for massive reform of the tax system to make it less regressive.

Here's the governor of Arizona on the situation there:

"I see both sides of Arizona, and my goal is simple: We must ensure that prosperity wins over desperation and becomes the norm for all Arizonans. And to do this, we must come back together as one, united in the knowledge that we need each other, and bound by our commitment to each other.

"My friends, we are all in this together.

"We must lift this state out of its budget crisis without sacrificing education and the long-term future of Arizona."

If you search the National Governors Association site, you will find that 17 governors mentioned their state's "budget crisis" in their 2003 state of the state speeches. Or read the NGA's Fiscal Survey of the States from Spring 2003, which describes "dreary" economic conditions that are impacting tax revenues and resulting in massive spending cuts. The NGA also says that the nationwide state budget crisis is impacting everything from prisons to education and health care.

Richard, are you blind, deaf and stupid? A little less attack mentality would do you a world of good, but as long as you're dishing it out, take what you serve up. Back to reality, where we have some real problems to deal with that the election of an actor or the mangled logic of the Bush Administration are never going to solve...

First, the question of whose culpable for the electricity crisis. Power & Gas Marketing magazine says:

At the core, however, the same issue that plagued the governor, legislators and regulators in mid-2000 -- the ultimate burden of paying for the vagaries of a dysfunctional wholesale power market falls squarely on the shoulders of retail utility customers.

Would Power & Gas Marketing be one of those far-left organs of disinformation you're talking about Richard?

As for the bonds you say are off the books, it appears you need to do your homework. The governor of California, in order to ensure continued service to the state from companies that were actively manipulated the market, signed long-term deals at highly inflated prices which those same companies refused to modify when their market manipulation was exposed. The bonds you refer to were floated by the state on behalf of those companies so they could stay in business, and the fiscal impact of those bonds does have a significant effect on overall state tax revenues. Why? Because the cost of borrowing by the state increased across the board.

Here's what the Sacramento Bee had to say about the bonds:

The bond sales are needed to repay the state general fund for the billions spent to buy wholesale power for customers of Pacific Gas and Electric Co., Southern California Edison and San Diego Gas & Electric Co.

But utilities have bristled at terms of the package the Legislature, DWR [Department of Water Resources] and [State Treasurer} Angelides have urged the PUC to approve.

They have attacked a state law that says the PUC has no ability to review state spending to ensure it is reasonable. They are pushing DWR to explain its spending in much more detail. And they are battling about how the state's bill for wholesale power will be divided.

Notice who was against this plan: The very companies that were the cause of the whole mess to begin with. And what did they do? They backed the recall effort and Arnold Schwarzenegger.

Now, finally, back to the emergent democracy idea Richard Bennett vomits all over. What he keeps assuring us is that the system works fine, even though we know the political world is heavily influenced by money and the media is easily manipulated, especially when a celebrity runs for governor (or, for that matter, when a former president's son runs). Bennett says I am attacking "The Politicians" as though I am raising a bogey that doesn't exist.

Here is what I believe: We've handed over governor to professionals. Active citizenship is essential to a successful democracy and it is a mistake to count on others, our elected officials, to be citizens for us. We need to be more involved, fact-checking the ass of ideologues like Richard Bennett among other things, if we're going to reclaim what this country can be -- not what it was, but the future we have been building together for more than 200 years.

Bill Gates: "Why don't we come up with specific Web service definitions that are just open?"

Falling into the "Duh" category, Bill Gates tells the Financial Times he's all about open Web standards. Everyone knows open standards are the foundation of a robust market, but what he is talking about isn't precisely open, as this statement from the press release confirms: "By using mobile Web services, developers can create more compelling user experiences that allow PC-based applications to take advantage of services formerly reserved for mobile devices, such as mobile messaging, location, billing and authentication. (Emphasis added)"

Translation: We're going to drive a lot of .NET server cycles with this stuff.

It's actually very important to note and an important turning point for Microsoft to see the Chairman saying positive things about open standards. The truth, though, is that standards are highly politicized and there is a long semantic path between talking about "open" standards and implementing them in such a way that vendors can swap out layers of technology from different vendors interchangeably, which is the practical meaning of "open" in the standards world. Here are some key quotes come from the FT interview (with my editorial comments in bold brackets):

The announcement with Vodafone today is actually about standards. Its not a particular design win for Microsoft [ Only true if you discount the value of a leading carrier adopting .NET-based Web services -- pretty disingenuous.]. ...

So we sat and talked and said well why don't we come up with specific web service definitions, that are just open, so it's clear to application people like say your AA service provider, who wants to do what we saw on the screen demonstration there. To write what we saw - there's a day's work, literally - because you're connecting up to standard web services and so there'll be what we announced today. Any wireless ( news -web sites ) operator can be a part of it, including Vodafone's competitors.

Any software firm can be part of it, including people who compete with Microsoft. So IBM could build toolkits for this stuff on top of their web services platform that they call websphere (sic) ["On top" is the operative phrase -- it's .NET underneath].

So we have a great relationship with Vodafone, but the news today is about a standards initiative, not about us, MS service or MS device or even a MS backend [It is about MS data formats]. The fact is they're so committed to using web services and we've bet our lives on them. It will facilitate a lot of the joint work we're doing.

Note, however that the situation he is describing is "open" in terms of Microsoft's partner, Vodaphone, being open to letting other carriers access the .NET-based services they are creating. Bill Gates went on to say "There are one or two companies that are building that mobile software stack for the future and we expect to get a significant share of that." Only one or two? Good god, what a narrow view of what's going on. That's got to be news to 30 companies I can think of off the top of my head.

What kind of coverage would you expect from these guys?

Disgusting behavior by an American TV crew in Baghdad reported by Justin Alexander, an American working in Iraq:

I went out onto my hotel balcony (overlooking the Palastine hotel next door where a Salsa class, of all things, was happening) lastnight, and began chatting to the American film crew on the nextdoor balcony. They told me with great glee how much fun they'd had earlier that evening lobbing bananas at the homeless kids on the street seven floors below... I had to dig my nails into my palms to prevent sending one of them sailing after the fruit.

Now, if they delight in tormenting hungry children, what kind of "objectivity" can we count on in the coverage we get from these yahoos?

Thanks to Riverbend for the link.

Richard Bennett and I agree, a little tiny bit, for once

Following on his original "Emergent Hypocrisy" posting, Richard Bennett responds to me:

UPDATE: Ratcliffe says I've got him all wrong . What he really wants is:

...citizens should be able to organize to address specific issues without having to embrace the top-down plans of government. That means organizing to have their own representatives on specific issues, figuring out ways to pay them (enough money flows in politics--it's an industry) to hive off some portion of a living from being involved in one's community.

It appears to me he's just described the Recall. Citizens organized to address the problem of Gray Davis' lack of honesty and leadership, and rather than relying on his top-down leadership style ("the legislature is here to implement my vision") they replaced him with a man who represented their values. They figured out how to pay for the recall by putting their own money up, and they hired campaign consultants and attorneys to remove the barriers erected by the ACLU, the Casinos, the labor unions, and the other anti-democratic forces in California.

If you like democracy, of any kind, you have to love the recall.

Finally, one shred of agreement. Huzzah, Richard, you see past the ideology to the process, though you go right back to the nonsense that was spouted by the Issa camp to justify the recall. There's nothing wrong with recalls or the initiative process in a widely informed society. When there are very few sources of news and they militate with political groups to elect someone who reads scripts but doesn't speak extemporaneously, they leave something to be desired. The recall was great -- I'd have liked to have seen it go the other way (which I am sure Bennett would declare a perversion of justice, even though it was democratically decided), since the budget crisis is the result of Pete Wilson's misguided energy deregulation policies and collusion by the Bush Administration with the energy industy, not to mention the Bush Administration's general failure in domestic policy leading to the bankrupting of the states -- but I don't contest the right of citizens to organize to get a recall on the ballot.

Dave Winer's Court of Last Resort

A year ago, Dave Winer called me with this idea, which he relates today:

Another insidious Internet problem, random people who challenge your integrity. I just tried a new method and it seems to have worked. Mr X wanted to start a round of flames challenging my integrity over a format I designed and promote. Somehow I have been doing something evil there, he claims. So I passed the challenge back through a reputable person, Mr Y, who knows both of us, asking that he look into X's claims, and let me know if there's any substance to them. I don't think Y would bother me with something that's not important, where X has done that many many times. The idea is that a public figure would have a committee of three people who vouch for his or her integrity, kind of the role the editor and publisher of a magazine or newspaper plays. If you have an issue with me, take it up with one of my committee members. If they think there's an issue, then I have to take a look at it. This would up the level of discourse in the weblog world substantially. So many of the challenges don't provide any data at all. I am tired of getting these hits. There's almost always two or three people trying to end my career in humiliation. Let them take some risks when they do that. No I don't think it's funny that you think I'm an asshole. Find someone else to pick on.

I don't agree that this is like the function of an editor or publisher, but a kind of court of fact, which, given the narrow range of perspectives that might be represented would be far from an ideal source of objective judgment, even about a single person's reputation.

Dave rubs a lot of people the wrong way, and they do the same to him. We're a prickly species. But what Dave is experiencing is the ongoing impact of living partly in public. It's a writerly problem, since we're talking about a textual medium, at this point. Basically, though, people need to recognize that a part of public participation is growing a thick skin. Why do politicians survive the constant lambasting they get? They've grown inured to the criticism, especially the idiotically blunt criticisms of people who are doing nothing more than objecting to a specific issue (like a political idea or, in Dave's case, the definition of RSS or blogging).

Thick skin is good for public debate, because it allows us to pass over the dumbth in a discussion and stay focused on the nut of the issue. It also has a downside (doesn't everything?), since in many political cases another stimuli, money, takes the place of civil discourse in grabbing the attention of a politician seeking reelection. It also hurts the debate in the nerdosphere, since the tenor of many discussions devolves rapidly toward name-calling.

When all is said and done, a cadre of reputation judges becomes just another locus of contention and not a solution. Dave, do what I do: blow them off and deal with the issues you care about. Sorry, don't mean to sound like I think I am in a position to give advice, but it's worked well for many years of my writing career, especially when the Y2K doomers were accusing me of all sorts of badness and threatening, in some cases, to kill me. Keep arguing, don't turn to anyone for an acquittal. In the end, if you are right, you'll win. If you need to bend, bend, but don't think that means bending over. The best decisions come from a wide-ranging debate.

Pay-for-email: No

There is a lot of talk about the spam problem. Tim Bray suggests a system of paid email that depends on a passworded SMTP server that forwards email anonymously in order to eliminate the spam problem.

There are three reasons this doesn't need to happen:

1. Most of the spam problem resides with sys admins who either allow spam to be delivered through their servers or that leave their SMTP relays open. The former should be dealt with through blacklisting -- they already are. The latter need to be taught through some kind of negative reinforcement (how about... blacklisting?) to close down open relays.

2. Virtually any server should be able to screen for spamming where it starts. Today, we leave it to the recipient to screen out spam and a few ISPs claim they block the stuff. However, email servers, everything from Microsoft to the SMTP MTAs that ship in Linux and UNIX (including the Mac OS), should include a default setting that prevents large numbers of email with the same or similar subject lines from being sent -- this way, the admin would have to "choose" to be or enable a spammer.

3. Dozens of routing protocols can be used to screen spam near the source and the technology exists to screen every packet for the fingerprints of spam using Bayesian and adaptive filters. If the people who pay for the bandwidth being used by spam want to stop the wasting of their network capacity, the cost of adding this capability can be recouped quickly.

Push the responsibility back onto the sources of spam, not the end-user who generally doesn't spam one iota. Frankly, I don't mind the spam I get, because, like Tim Bray says, only a few dozen get through a day and I can delete them, adding the addresses and subjects to my spam filter. It's a small price to pay relative to the potential cost of the 12,000 to 15,000 email messages I send in a year (don't laugh, that's just an average of 33 messsages a day), which under a one-cent plan would cost me an additional $120 a year.

Thanks to for the links.

UPDATE: I neglected to note this yesterday -- Don Park's approach, based on using spam filters on SMTP servers with fixed IP addresses, is a good start, especially because it creates a feedback mechanism that improves server-side filtering.

See inside Ashcroft's inner sanctum

It is true star chamber stuff, this article from Law.com, which compares the Ashcroft DoJ to previous administrations' management by Attorneys General. Some may say it is a change in management style, but it sounds more like a cult or an aristocracy to me. Well worth a read; some key excerpts:

Unlike other attorneys general who held daily or weekly meetings with the heads of DOJ units and agencies, Ashcroft only rarely sits down face to face with members of the department's senior management. Instead, most matters coming to his attention are filtered through longtime Chief of Staff David Ayres and Deputy Chief of Staff David Israelite -- known at Main Justice simply as "the Davids."

"Frequently, when senior people would go in and ask to speak with the attorney general one-on-one about an issue, they would be shut down. You can never talk to this attorney general one-on-one," says a former Justice Department official. "Unfortunately what that does is discourage a frank and open discussion of issues that would lead to better decisions."

Brobeck bitten by its own history

The former chairman of Brobeck, Phleger & Harrison seems to have hijacked the core of the now-failed law firm's practice and taken it to a new firm, where he is also the chairman. The failed Brobeck partners are suing, but lost a case exactly like this when they raided another firm the same way in the early 90s.

What goes around comes aroung, eh?

$800 million in broadband video advertising

I'm not confident about the numbers cited here, which come from Feedroom, an aggregator of streaming content, but nevertheless, the broadband video market is growing faster than most people believe. Pay attention to this.

Transparency coming of age

The notion that being outfront and open with information leads to better decisions and fairer government has been pioneered by Transparency International. The Financial Times has a fine interview with the founder of TI, Peter Eigen (it's hosted on TI's site, so access is free).

What we can learn is that while it may take a while to pry open closed systems, the result is productive and improves the performance of companies and governments.

Making noise about Cuba

Another cross-posting of my Bushies strip at Correspondences.org, since the Bush Administration seems to be beating the war drums softly about Cuba. I suppose you could argue that we're already running a concentration camp at Gitmo, according to the Red Cross, so why not "liberate" the rest of the island.

Spamming the public perception

The U.S. Army is bombarding U.S. newspapers with form letters presented to soldiers in Iraq for their signature to shape public opinion at home, as Dan Gillmor points out.

As the Olympian of Olympia, Washington, points out, all the letters are identical and have turned up in 11 Gannett papers. One soldier whose letter was published in West Virginia told his father he didn't write sign any letters.

If signatures were not authentic, it's plain fraud. If soldiers signed it willingly, it's just propaganda. So comforting to see our military spending propaganda efforts on the home front; it's just like living in the Soviet Union.

Ignorance at the U.S. border

This tragic story about Trevor Hughes and his fiancee, who was arrested and deported when entering the United States from Germany, reprises what happened to a friend of ours, our former nanny, who was arrested and deported on arrival in the United States for a six-week visit.

Even in the mid-90s the Immigration & Naturalization Service was out of control and answerable to no one. The government held our friend incommunicado and offering her only two options: get on the next plane out of the country or wait in jail for up to two weeks for a hearing, which they assured her she would lose since the INS was prepared to say she was trying to immigrate to the United States. Two weeks was about a third of the total time she planned to visit, so she got on the plane and never came back. Why was she detained? Too much luggage. The INS guy who decided she had too much luggage never answered to anyone and laughed when I asked for his name and badge number.

It's only become worse. We've got bullies guarding the border and the nation swells with fear.

Thanks to Cory Doctorow at BoingBoing for the link.

Where's the political chasm?

David Weinberger posts on the Technology and Politics session at FooCamp:

Doc says that the Dean campaign is the implemention of the Cluetrain Manifesto in politics. Here's a relatively random run through the thread...

Do we see the top listening to the grassroots on policy? Not so much. At the Dean campaign it's more about enabling the grassroots to connect and self-organize. Should it be more like the Open Source community in how it evolves positions?

Is the Dean campaign a real phenomenon or are we still first adopters who are miles from crossing the chasm? It may depend on how you look at it.

David goes on to raise a number of questions about the technical and social development of this phenomenon. He discusses whether everyone gets their own blog, what happens when there are tens of thousands of comments on a candidate's site each day and reputation systems. All very interesting questions, but I think David touched on the real issue right off: Is the campaign listening? The answer is, as David acknowledges, not really, though through the efforts of the Web team the campaign is hearing ideas from the grassroots -- the chasm is the decision to listen and, once the election cycle is over, to keep the channel open and to keep listening. Not just to blogs but to people, however they express themselves. Granted, there will be a lot of noise to signal, but reducing that noise to meaningful input from constituents has always been the function of various approaches to representation. We just don't know yet how to make representation meaningful.

Reputation systems strike me as the antithesis of representative communication, since early participants will, if their comments are rated on their volume or the number of replies from others without allowing people to "vote" their agreement or disagreement. But just voting on postings is simply a remix of pundit politics, too.

The challenge is how to do what wiki people refer to as "gardening" of information to bring people with common ideas and interests together, to engage them in what they particularly care about so that their contributions to the debate are heard and the "top," since we seem set on having a "top," can listen to a coherent metalogue. That's not to say wikis or blogs are the solution -- people and political process are where the change has to happen, albeit supported by a lot of technology, most of which hasn't yet been invented or reduced to a useful design.

In short, the Dean campaign is awfully clued, but not anywhere fully clued. One thing that I'd like to hear from the campaign is what role the network of participants coalescing today will play in a Dean administration; will they dedicate some White House staff and budget to staying in close contact with the people talking through the campaign's systems? Can they do that without moving everyone to a government-funded system? What would that do to campaign finance issues? Should every candidate be able to tap a common system (yes) if a government system is put in place?

Lots of questions, still lots of time, but we'll cross the chasm when we come to a deep connection between the grassroots and the administration of government, not before.

Who says Europe is old and dilapidated

Whatever you want to say about the "chocolate-making countries," in the words of Donald Rumsfeld, their monetary union is starting to be a formidable challenge to the U.S. dollar's global dominance. Russia is reportedly converting its oil pricing to Euro-denominated pricing.

For a good long time now, I've been warning that the Bush Administration's foreign policy would lead to the emergence of economic and, maybe, military factions that will stand against us. This is a serious warning shot across the U.S. bow. Even if it doesn't happen, these reports are clear trial balloons from Germany and Russian leaders testing the response of the United States and other countries.

Pynchon on The Simpsons

When I was in graduate school, I was obsessed with finding Thomas Pynchon to discuss writing. I thought for a while that one of the profs at San Francisco State might be him -- they'd been at Princeton at the same time and their work, though the prof was a poet, had a lot of similar imagery. Pynchon was also rumored to be living in Northern California at the time. Then, in one of those weird moments a few years later, I was sitting with a movie producer at the House of Blues during Digital World who told me where Pynchon lived -- his address. I've never gone to bother him, but he is, as writers of fiction go, my god.

Now, Pynchon is going to be on The Simpsons with a bag on his head, and the producer thinks it is a bigger deal that J.K. Rowling is going to be on. Silly producer.

Thanks to Cory Doctorow at BoingBoing for the link.

Showbiz Transition

I don't get the Schwarzenegger transition team. It includes talk show hosts, movie directors, and a Florida economist with discredited ideas about accounting.

The "billions in waste" that Schwarzenegger talks about went right into the pockets of the energy companies; it certainly didn't get flushed down the pockets of any Californians. So, if by "business friendly" Governor-elect Schwarzenegger means that he'll cut public spending to facilitate private profit, it seems like politics as usual and not the something new he never really described during the recall election.

Mahathir: Peace in Islam

One of the more surprising experiences of my life was visiting Malaysia, which has been governed by a strong man who, generally, is demonized in the American press. Because I was a guest of the State Department, I got to attend a speech by Prime Minister Mohamed Mahathir, who turned out to be one of the more reasonable leaders I've ever encountered. He was blunt, but also practical and capable of being funny in a relaxed, Clintonian way, as compared to stilted Bushian attempts at humor. However, he does do Bushian things, like destroying political opponents (see the quote in the story: "You cannot go around sodomising people" about his political rival Anwar Ibrahim, who everyone in Malaysia knows was tossed in jail on trumped up charges).

Mahathir is stepping down and even though he is a guy with a secret police force who frames and jails his political opponents, he has some very good things to say about the constructive role of Islam in the world. Hopefully, some of Islam is listening. Hopefully, America can see past the simple Us/Them distinctions we're encouraged to apply to the world and see that, if we pull together with the moderate Islamic world, there is a real chance for peace.

Mahathir's is a very mixed record, but, frankly, he represents a position of independence vis-a-vis the West that we have to at least understand in order to make a credible foreign policy.

The Organization is the Polity

Network-Centric Advocacy has a very solid, very pragmatic assessment of the realities of, strangely, network-centric advocacy. "...we are all very excited about the possibilites and not building the 'nuts and bolt' strategiges and support structures groups need to influence policy." Much more, read the piece.

Yes -- and the challenge is how to make a social effort self-sustaining, not in a holistic new-agey way, but in terms of providing rewards for participating that ultimately contribute to the livelihood of people who give over their lives to the community. Public services have been delivered by professionals, and many of those people should continue to work in government, but what about creating organizations that deliver healthcare or roads or daycare to a community? That is political work as much as advocating a particular position on a bill before Congress. The structure of organizations for tax purposes are stuck in a past that is very easy to sustain simply because the tax code is millions of words that are hard to change.

This is the very idea I've been drawing out, albeit slowly and not entirely successfully, in the idea of the emergent polity.

The social hack I am suggesting is a simple inversion of contract law to empower the individual to join many different polities while preserving their ability to write off the cost of investing in social services. These corporations, which I describe as emergent polities, are narrowly focused entities that address a specific social need, such as healthcare or even military defense. A group of people with genetic markers for a particular form of cancer would contract with one another to cure that cancer. A hundred thousand people identified by making an open call for contributions would put $1,000 into the polity, and the organizers would provide that to a company wishing to commercialize a cure in exchange for free treatment of members of the polity. The cure, once developed would be available in one of two ways, by joining the polity—an investment of more than $1,000 would be required because the risk of the project would be eliminated, but because one would join prior to developing the disease and could, therefore, never get the disease, not pay a huge premium on the cost of the drug—or by purchasing the drug from the company that develops it, part of the profits of which would go back to the polity to offset the cost of future treatment. In the military arena, which has been presumed to be the domain of government, more than 3,000 companies provide some kind of military service to the U.S. Department of Defense and the global private military industry is a $100 billion business. A polity for mutual defense could span geographies, because other relationships, such as a major customer relationship, could require a contribution to defense if it were needed. Because the “insurance” provided by the mutual defense polity lowers the chance of war (in most tribal and failing state wars a few hundred or so military security professionals on the ground have stopped most violence, since thugs operate effectively only when unchallenged), the cost of the insurance would be subject to actuarial and market pricing that reduced the upfront cost of gaining future protection. A global agreement to sanction offensive action, presumably through the United Nations and enforced by nation-states intent on continuing their role as global military powers, would create a disincentive for most wars of aggression. Nothing in this essay suggests that the nation-state should or must be eliminated. The point is to distribute most governance as close to the "edge" of society as possible to engage the political energy, knowledge and skill of individual citizens.

These market-connected polities are just one example of the way that the cost of providing the services typically delivered through fixed channels of political power or bureaucracy can be distributed across populations that transcend the geography of the nation-state. Food provision, elder care, education, and general healthcare are open to these kinds of polities founded on a mutual recognition of need. Moreover, when a polity is established, it will have negotiating leverage with other polities and organizations to use in purchasing other benefits or providing its services to other polities. Over time, polities would become enmeshed and the monopoly of the nation-state as provider of last resort within a region will be overcome. This may not happen in our lifetimes, but it is my contention that this is an elegant solution to the question of how to catalyze a transition from today’s alienating political hierarchy to something different.

Reed Hundt gets the China phenomenon

Naval Ravikant reports on former Chairman of the Federal Communications Commission Reed Hundt's speech at Unleashed. Very interesting theory, which I agree with, proposed by Mr. Hundt, that is that the fall of the Soviet Union spurred the sudden modernization of China, which has created a long economic stimulus that began in the mid-90s and will continue for decades. Hundt doesn't go into the challenges this represents to the U.S. economy as much as the opportunity. I think that, played well, the U.S. economy could be the design and development, logistical and financial center of a much larger global economy while many new jobs in manufacturing, engineering and other industries are created in Asia and elsewhere.

Bennett Exaggerations

Richard Bennett suggests my comments on the difference between direct and emergent democracy are "awfully pure and austere." He then, quite typically, proceeds to put words in my mouth to condemn any idea he doesn't agree with as "liberal." Too bad Americans love to crucify other Americans for their ideas instead of actually debate those ideas, as that seems to be deeply unAmerican to me.

If he'd read carefully any of the postings on emergent polities, democracy's challenges or even the posting he criticized, at no time or place have I suggested "the people have to each and every one take time out of their busy days to study each and every issue for themselves in order to govern without representatives, or at least without paid ones." This is exactly what I've have been saying we don't need -- citizens should be able to organize to address specific issues without having to embrace the top-down plans of government. That means organizing to have their own representatives on specific issues, figuring out ways to pay them (enough money flows in politics--it's an industry) to hive off some portion of a living from being involved in one's community.

And I certainly don't think blogs solve problems. Anyone paying any attention knows that.

If he'd stop and think, he'd see that a large part of what I am writing about is exactly the kind of do-it-yourself program old-line conservatives (as compared to the radicals holding the White House today) have advocated for years. But, Bennett loves to prod people and caricature them rather than actually address their ideas. Do I think Bush should go? Yes. But that doesn't mean my ideas about organization cannot be discussed in the context of how everyone, right, left and center, might use them to improve the quality of government and society.

Compare and Contrast

President Bush said today to a military audience (he has appeared before military audiences far more frequently than any President in memory and seems a little intimidated by the public and the press, if you ask me): The situation in is Iraq is "a lot better than you probably think."

Compare and contrast to these stories and postings, which make me think the President is probably not thinking like a sane person:

8 killed as suicide bomber attacks Baghdad police station

Spanish diplomat shot dead in Baghdad

Press Outrage

Jewelry and Raids

Now, that's just today. Yet, the President, out of fear of being in the slightest bit wrong about anything, is insisting we suspend our disbelief. That's just plain crazy.

Confess that you didn't leak

MoveOn.org is collecting signed affidavits from Americans who attest that they did not leak the name of CIA operative Victoria Plame, the wife of a political opponent of President Bush's Iraq war stance. Don't be the last in your neighborhood to attest that you are not the leaker. Confess your innocence now to help the White House narrow the list and actually find the person(s) responsible for blowing a number of Americans' cover, as well as undermining the CIA search for weapons of mass destruction.

The Mayfield Distinction

Ross Mayfield, a Californian, has a very good piece on the difference between emergent democracy and direct democracy. Humans have never had the latter and the former is still a nascent effort that may never bear fruit in the context of existing institutions. Key ideas from Ross' piece, which you should read in full:

Emergent Democracy should differ from Direct Democracy. Self-organization, deliberation, and citizen driven initiatives -- where the constraint is equal interest of the people -- is in stark contrast to modern direct democracy. Dean's decentralized organization is in contrast to professional pertitioners. Dean's local deliberation and socialization of issues is counter to debate within media and binary referendum decisions. Dean's ability to leverage McCain-Feingold's matching contributions to raise funds at the grassroots level crushes even the specialist interest.

I am gravely concerned that the present abberation of direct democracy will compound the underlying divide of trust between politicians and polity. Trust is earned. It is not fostered by citizens with direct control over politicians, as sometimes we need them to save us from ourselves. It is when each has control over the other, a careful balance is struck, extremes are reprimanded, iterations are built upon.

It's this last part, about the divide between politicians and polity, that is key. The question in emergent democracy is how to make everyone a politician, again. In early democracies, every citizen--a narrowly defined group of patricians, in most cases--was expected to be involved. The problem we have today is that most citizens leave politics "to the professionals" and then complain that they feel alienated from the system. Moreover, the professionals do erect barriers to easy participation by citizens; everything from the recision of Sunshine Laws to the machinations of money politics that measures access in terms of raw dollars or number of voters in a bloc contributes to a real alienation.

Self organization, then, is not about uncoordinated actions adding up to something democratic. Rather, it is about many small acts of leadership that add up to a functioning democracy.

Joi Ito adds to this metalogue: "Emergent democracy IS NOT the same as using technology to scale direct democracy. Emergent democracy is about leadership through giving up control, activating the people to engage through deliberation and action, and allowing emergent order to grow from the grass roots. It's the difference between a couch potato clicking the vote button and a group of people starting their own Dean coalition group."

The Law of Links: Get Used To It

Dana Blankenhorn has a blunt and pragmatic response to a correspondent who says it is wrong to link to images on someone else's site: "if the content you're linking to is not in and of itself illegal, link all you want."

Not allowing things to be linked from your site is an option, but if your interest is in reaching people, which is why most companies and people put up sites in the first place, closing off links is foolish. Make your graphics compact to minimize bandwidth usage, if you have a metered server, but the commons is enhanced and everyone benefits when links are freely made.

If you have content you don't want anyone to see or that you only want to be paid for, put it behind a password. There are plenty of business cases for doing this, but when it comes to expanding your potential reach, be promiscuous with your server cycles and bandwidth.

Terry Semel Is Doing The Job

Since taking over at Yahoo, Terry Semel has more than doubled revenues. I'm not always sanguine about the direction they take, such as recently shutting out non-Yahoo clients on the company's IM service, but Semel looks golden at the moment. Yahoo shares are up 400 percent over the past year compared to the NASDAQ's 56 percent gain in the same period.

Directory sites in trouble? Only in some regions

Masha Geller of MediaPost has an interesting piece on the regional use of directory sites, like SmartPages.com and SuperPages.com. Seems some parts of the country still think of the yellow pages as a definition of access to business while others don't. This ComScore report, released yesterday, is the source of the data.

One nit: I would not agree with the characterization of the price Yahoo! is paying for Overture an indication of the actual shift to search engines by users. Companies are buying growth, but they tend to overvalue growth in the form of a premium on current revenues, which exaggerates the size of trends in the market.

Another topic ComScore dealt with was the regional use of newspaper sites, which also shows consistent differences in the way people in various regions get their news. There are key hub papers around which entire regions or entire industries revolve, such as the Inside-the-Beltway political industry's reliance on the WashingtonPost.com site.

Good, but mixed export-import price stats

The price of imports was down one-half percent overall, largely due to a 5.2 percent decrease in the cost of oil (which will likely be a short-lived trend as OPEC readjusts its production strategy) and the price of U.S. exports was up 0.4 percent overall, mostly because agricultural products are in demand now -- it is harvest season. Troubling is the 0.1 percent fall in the price of non-agricultural exports, because it is another indication that core U.S. value-added functions are facing falling prices globally. That means us, management and producing people. See the September 2003 press release from the Bureau of Labor Statistics.

Putting this discussion out in front

Russell Beattie thinks I don't understand his comments about Andrew Orlowski. I misread something (actually, I confused two ideas, because I was talking on the phone and writing at the same time) and I am sorry for having misrepresented his opinion. But, if I read his comments on my posting correctly, Russell also sees exactly the same phenomenon -- increased links -- that he said Orlowski eschews, whenever Orlowski links to him. Orlowski is in the game for traffic, for readers. He has to be to keep his job.

Russell says Orlowski is a "good guy" and I am sure he is, but that doesn't mean he isn't self-interested or that his enthusiasm for deflating hype isn't sometimes taken to extremes for rhetorical reasons that undermine the value of his critique. Everyone, including me, is a mixed source of fact, thought and opinion, sometimes making good points and sometimes bad. This is true in journalism (been there, do that) and blogging (been there, do that, too). If Orlowski is a "good guy" because he drives traffic to Russell's site and that suffices as a measure of his reliability, then Russell reads unreflectively. This "new medium" isn't a whole lot of good if readers are simply looking at it as a benign channel for finding stuff to read -- ferchrissake, learn to read blogs critically or we'll all be as cowed by the waves of additional information flowing through blogs and wikis and the Net in general as we are by the "mass" media.

Anyhow, here's the exchange about this posting, in which I apply precisely the idea I was introducing into the discussion, that people who show up and crap all over a site are best replied to (I don't like comment postings that denounce other people's work or my own with a single expletive and no thoughtful discussion -- I'm free not to like it and to, when it appears on my site, take it on as completely, intelligently and entertainingly as possible, which is also what Orlowski tries to do with his work, too):

Russell writes: What self serving crap. I don't link to Scoble because he doesn't ever have an original content worth linking to. If he said something interesting, maybe, otherwise I can get my M$-oriented BS from lots of places.

-Russ
Posted by Russ at October 9, 2003 01:06 AM

I replyRussell, you use the word "crap" rather than dissecting and providing a critique that can be responded to. Who is self-serving? Me? Scoble? You? Also, "self-serving" is hyphenated. Get your crap right, at least.

You look for content in links, not the thoughts about content from the bloggers you count on? How then, do you judge the value of blogger as a filter? Purely on what they point to? Fine, if that's the case, read a newspaper. My consumption of blogs is predicated on a very different standard: What the blogger adds to my perspective, by challenging my assumptions and by supporting my assumptions mindlessly, which allows me to reflect on my thinking rather than see them as crap dealers.

I'll follow up on your other posting here, too -- I think it is you that didn't make yourself clear about Orlowski, because you seemed to be making the point I was agreeing with rather than my having intentionally misrepresented your point.

Regardless of your feelings about Orlowski, whom I've lambasted and praised more than a couple times, do you have something to say besides "this is crap?" in regards to things you don't agree with? I mean, seriously, how about actually discussing the point I made instead of using my site to hurl shit? I've always thought your blog quite good, usually well-reasoned.

Mitch
Posted by Mitch Ratcliffe at October 9, 2003 06:47 AM

Now, does Russell get his back all up and lash back, does he stop reading me because I'm an "asshole"? Well, after having been a journalist and writer for a couple decades, frankly, I don't give a damn. He's one reader out of many thousands and I'll pick up five who just enjoy this posting (just as Orlowski does, ultimately competing for a share of the Regiter's traffic). However, when he shows up here or refers to this blog, he can expect a ration of debate rather than someone who sits by and lets him express his disgust without contributing any ideas or clarity to the discussion. That's the essence of the debate about a "new kind of democracy" that, regardless of their wealth, privilege or lack thereof, people recognize in the Net -- everyone can be heard here, even if you don't work for a major Web site. People see that and do hope too much for change; to effect change, we actually have to work at it, beginning with a full civil discourse and not falling back on "that is crap" as a meaningful critique of other people's ideas. It's handy as a filter, but it assumes some people and their ideas are never worth shit, and that way lies prejudice and totalitarianism, because pretty soon you've got armies lined up on one side or the other of the crap line.

Would I delete the comments? No, because people are free to say what they have to say about the topic at hand. If you post ads for Viagra, however, expect your comments to be deleted. Now, I think I'll get some coffee, as I'm already in a bad mood.

In India, the fun is going out of flash mobs

Already having been declared passé by its instigators in the United States, the flash mob fad has faded in India, as well. The reason, though, isn't that flash mobbing has lost its appeal, but that the police won't let five people gather without a permit.

Here is an interesting example of two phenomena: 1.) the flash mob fad circled the globe in weeks and is dying at an equally breakneck pace, suggesting that social change, while it is accelerated, is still a process of accretion which may or may not lead to sudden large-scale changes, and; 2.) the conflict of culture and context with social action. According to the organizer of the first Indian flash mob:  "One of the major inherent disadvantages this project has is that it's called a flash mob," he said, emphasising mob . "That dreaded mob word makes the police and other agencies stand up and notice this project. While it feels good to bring smiles to so many people's faces and it feels good to see the growing popularity of this concept, we were not hoping for that kind of attention from the legal authorities."

Eolas tries to enjoin Microsoft from distributing IE

After Microsoft filed a motion to set aside the $521 million judgment against it won by Eolas Technologies, the smaller company has filed a motion to enjoin Microsoft from distributing its Internet Explorer browser.

In a nutshell, this is getting ridiculous. The patent, which describes a technique for calling external code from within the browser (a "plug-in"), is remarkably broad, seeming to cover any use of external resources by a browser. Eolas says they will be happy to grant Microsoft a license for somewhere north of $640 million, the combined value of the judgment and the interest it claims it is owed. But no other company has licensed Eolas' patent, so just what justifies its efforts to enforce this patent only against Microsoft? When it comes down to it, anyone celebrating Microsoft's woes should recognize that a payment by Microsoft will finance further attacks on browser and plug-in developers.

Eolas develops media technologies, but it spends most of its time trying to protect its work when others seem to have done the same thing Eolas patented before or at about the same time Eolas did -- one could argue, for example, that plug-ins were widely documented in papers and presentations before Eolas filed its claim on the technology. The company also says it "'invented' (designed, actually) the now-ubiquitous stylized "e" logo. IBM purchased rights to use it from us in 1997." Well, let me see, in Digital Media, my newsletter, we were the first to describe various "e" services, so shouldn't I get some of those IBM dollars as the holder of the intellectual property of Digital Media?

There's a point where, even if you hate Microsoft (which I don't, though I don't use its software very much), this kind of attack based on technologies that were invented by the entire community, even if they were patented by one group, should be put to a stop.

Smart corporate blogging

Robert Scoble makes an excellent point about how to deal with people: link to them, even if they disagree with you and loathe your company:

Sean Gallagher: "Blogging, is, at some level, the greatest ego-satisfaction engine created by modern technology."

He also asks whether gateway bloggers have an obligation to be balanced. I don't think they do, but I think the ones that are balanced will get more readers than ones who only stick on one side, or the other.

That's why I link to competitors and "ABM" (Anything But Microsoft) sites and weblogs. You'll notice that the ABM sites don't link to me. That means you can learn more here than over there.

Over at Howard Dean's blog, they use the appearance of anti-Dean trolls to spark contributions.

Undermining Your Best Laid Plans: What Customers Do

Imagine you launched a loyalty program and everyone came, then swapped cards. See what Rob's Giant BonusCard Swap Meet is doing to corrupt the records of purchases by club-card holders.

While allowing people to mix up their cards does eliminate tracking of individual purchasing, it does not break the general buying trend information a company can collect. So the question for marketers is how to find a middle way that customers feel comfortable with while helping retailers deal with planning and merchandizing. Listen to the customer, damn it. But, most marketers will probably just try to come up with a "more secure" way of tracking purchases, spending lavish amounts on unnecessary technology that puts them into competition with their customers, who are smarter than they are (because there are a hell of a lot more of them).

Thanks to Cory Doctorow at Boing-Boing for the link.

Brilliant, Mate!

Ashley Highfield, the director of new media & technology at the BBC, gave a great speech about the evolution of media. Key ideas:

As broadcasters and programme makers, we should help bring forward this world where the viewer is in control. It will help sustain interest in TV which otherwise runs the risk of being seen as increasingly flat and inflexible not least by the PlayStation generation. We should create more programmes that come with the meta-data, the tags in the programme that allow it to be chopped up and consumed piece meal by the viewer. We should perhaps even create shorter programmes!

It's also becoming obvious to us that what we think of us as quality programming might need to be refined in the light of audience experience. For example, audiences might be willing to sacrifice full screen, high picture quality TV for a more highly localized, personalisable, timely service: the news, events and local gossip in your town, delivered through digital TV. We are currently working on just such a digital TV pilot to see if we can use our 50 local radio stations to bring digital TV news, focused not just on large regions like 'BBC South,' but on your specific county 'Hampshire', then your town, 'Eastleigh', then even more personal -- your local community. The point is you choose the focus. Could this ultra local TV be the shape of local newsprogrammes to come?

And this is where the Creative Archive , which Greg [Dyke] announced in Edinburgh , comes in. As it is both part of our charter obligation to make our archive available where possible and practicable, and part of our online consent to act as an essential resource offering wide ranging, unique content, it is through iMP, that pieces of our content could be retrieved from our archive, downloaded, and used for personal use.

We are exploring legitimate peer-to-peer models to get our users to share our content, on our behalf, amongst themselves, transparently. [This is very much in keeping with what I've been on the phone about this morning]

Some of his ideas, such as the notion of "ambient TV" stretch the notion of useful media to the extreme. We may watch and do other things simultaneously, but the idea that TV can be designed as a sort of subtext opens all sorts of nefarious mental pathways that we went down with the arguments about subliminal advertising in the 1960s. We needn't repeat all the mistakes made in the past just because they have a new context.

Also, don't think of a digital Britain, think of a digital world. Make the dialog larger than your local nation-state.

Thanks for the link to Kevin Werbach.

Why Would Someone Bash Blogging?

Andrew Orlowski clearly does it to boost his linkage, as Russell Beattie points out at Joi Ito's site. Jim Moore's analysis is dead-on, both in terms of recognizing that Andrew Orlowski's flames are valuable to one's ranking in the eyes of readers and its essential emptiness, to the degree that through his flaming Orlowski is "major distributor of my [Jim Moore] memes." He's the National Enquirer that makes bloggers infamous.

Orlowski is the paparazzi to the blogosphere, but he shoots at his subjects rather than shooting pics of them with their shirts off. Patterns repeat themselves in every medium.

For those of you who think we're welcome in the Middle East

Princess Reem Al-Faisal of the Saudi Royal family has her say about the United States' invasion of Iraq, here are some excerpts:

"How dare America look the rest of the world in the face, when it refuses even to admit or ask forgiveness from just these people it has so wronged.

"It is time for the American nation to acknowledge its crimes and apologize and ask forgiveness from the many people it has harmed. Beginning with the Native Americans, followed by the Africans and South Americans, right through to the Japanese, who have suffered such horror by being the only race to know the true meaning of weapons of mass destruction.

Our foreign policy is not winning any admirers, and this comes from a member of the ruling family (which should be anathema to us) of an alleged ally. The rhetoric about apologizing to everyone on Earth is a bit much, as there are plenty of apologies owed by many nations to many other nations, minorities and women as a group. Nevertheless, Americans should be wide awake to the fact that even our "friends" have an escalated sense of distrust of us, which hurts geopolitically and economically.

Microsoft Share Grows

Amazingly, Microsoft's server market share continues to grow, according to IDC. CNET reports that the growth in Linux server sales does represent a significant challenge to Microsoft's servers over the long term, but because other proprietary vendors, like Sun, are stumbling, Microsoft's dominance is increasing for the time being.

Even Windows desktop OSes grew in total share, reaching 93.8 percent of desktop OSes shipped. I'd like to know what proportion of those Windows shipments were replaced by Linux once the customer received them -- it would be an interesting statistic to know.

Using the Network For Organizing

As you look over the range of relationships individuals have with institutions these days, it is clear from the dependence that people have on their employer for benefits that were once a social obligation (even Machiavelli's prince was urged to provide full stomachs and what passed for healthcare to keep the populace happy) that the scope of social relationships is transforming. Companies are like governments and governments are like companies, both investing in outcomes; both require participants in a successful effort to be invested themselves, so citizenship and employment begin to look more alike, and partnering starts to resemble the way NGOs and affected populations deal with local industries that pollute or extract raw materials. As the world is networked, we see more clearly that we are all in this together, public and private distinctions blurring, because the impact of private investment can be as powerful as a social program announced by a Lyndon Johnson (who, by the way, shoveled vast funding to private enterprise to provide rural electrification during the Roosevelt years).

The distinctions between citizen, who has rights, and the employee, who has obligations, were probably a passing phenomenon. We seem to be returning to a life-view that sees one's labors in the world as of a piece rather than sometimes public and sometimes private.

Network-Advocacy points to a list of ideas that are appearing in Deanspace, all pointing at a different approach to organizing and motivating action. These ideas are clueful and applicable for any company that wants to marshall support in a community, too.

Some of the most significant ideas on the list are:

3. "Bugzilla" for issue identification, policy drafting and ranking [why? because people should tell you whether your policy or product is any good or if it is built on dumb assumptions]

7. Reminder system to step-by-step participation focus on little things to help ("write your grandma") [why? because the Web needs to be a repository for things that need to be remembered, even trivial-seeming things, because communities can work together to fill in the chinks in the organizational effort]

17. Use of guest host, speakers and bloggers [why? because you need to have your customers or your constituents talking among themselves, not just to you or just listening to you]

21. The continued random acts of associated kindness [why? make your organization a framework for many actions, while remaining focused on your core concerns, and you will find many people contributing to build your infrastructure]

Story Mixer and Community Media

Spending the morning in an interesting conversation with people on two continents about the potential for an open video network, funded by public contributions, that opens the video news production systems to citizens around the world. Brad de Graf is spearheading a social media venture collective and the folks at the University of San Francisco are describing their Story Mixer tool, which they describe as a tool for people to communicate with one another rather than just an online video editing tool.

On another note, Correspondences.org added its 80th contributor this morning.

Bushies - Playing for the California Vote

I can't help cross-posting this one, my daily manipulation of Bushian reality:

Blog or Regurgitation?

The Bush campaign blog is simply a restatement of the daily schedules of Administration staff and pointers to articles that "support" the Bush positions. It's not spontaneous and the word "Blog" in the title looks like it is written in Elmer's Glue, suggesting the designer wants to make it look more edgy than lifelike, betraying a faulty instinct for what the Dean campaign has achieved.

There are a lot of crappy blogs, and the design of a blog isn't a reflection on the whole campaign, but this site isn't going to catalyze much excitement on the Web. The Bush team has enough money to get this wrong without worrying about hurting their fund-raising, but as a way of connecting with the grass roots, they have a long, long way to go.

Consumers still wracking up debt

The Federal Reserve reports that consumer credit balances are rising by 10.25 percent a year, largely because of growing nonrevolving--that is, mortgage and automobile--debt. Credit card debt was down a bit in June, suggesting that consumers did allocate a goodly chunk of tax refunds to paying down or keeping down their revolving debt. With unemployment staying steady (remember, according to the Bush budget, all this deficit spending is supposed to be producing 300,000 new jobs a month): "The expectation was that this revision would be positive, that we would be looking at a number in excess of 300,000," said Anthony Chan, chief economist at Banc One Investment Advisors.

Christmas spending doesn't look good if the jobs growth doesn't dramatically accelerate. As Brad de Graf points out, when the defense industry grows the rest of the economy tanks.

Financial Times -- Subscriptions must not be working

The Financial Times and Yahoo Finance have expanded their relationship, meaning a lot more FT content, currently protected by a subscription barrier, is going to be available free on Yahoo!. Now, if I had to guess, based on negotiating with Yahoo! at other times, the FT might be getting something like $8,000 to $10,000 a month for the feed -- archival access would still require an FT subscription (which, by the way, I happily pay for already). But, the underlying message here is that subscription barriers don't a profitable site make. If the recent expansion of the FT presence on MSNBC and Yahoo are an indication, the benefits to online presence are in syndication, not subscription models.

Two, two cats in one

Scientists have come up with a theoretical method for realizing Erwin Schrödinger's quantum paradox in which a cat can be both dead and alive at the same time. Granted, these scientists aren't working at the cat-scale yet, but seem to be prepared to demonstrate the ability for something to be in two places at once at the molecular level, well beyond the quantum particle levels of the past, which would mean we'd be a little closer to understand what "reality" really means.

Consensus says Heath Row's are the best notes on Bloggercon

Jeez, this guy types fast. All the sessions he sat in on, all the words.

BSkyB Reaches 7 Million Subscribers

After giving away settop boxes and dishes to subscribers (translating to a customer acquisition cost north of $800, including marketing), BSkyB Television has reached the seven million subscriber mark slightly ahead of schedule. It took five years. Contrast that with XM and Sirius satellite radio that have a combined total of 1.1 million subscribers and which charge for hardware and subscriptions, then you can see what a slog these radio companies have ahead of them.

China's Potentially Vast Consumer Credit Market Opens A Crack

Although it is a nation of net savers, China's people have never really had the opportunity get competitive loans for commercial goods, like cars. The Chinese government has opened the door, keeping a promise made when it joined the WTO, making auto financing from non-Chinese companies available for the first time. Next steps will certainly include appliances and other durable goods, not to mention computer and information appliance purchases.

What happened to competition for spectrum?

It's troubling to see the U.S. repeating the mistakes of the past in Iraq, especially with regards something as widely understood as mobile communications spectrum. The U.S.-led Coalition Provisional Authority is handling the deal with the help of the U.S. Department of Commerce.

The awards for licenses in each of three regions of Iraq -- north, south and central sections of the country -- are expected this week, and depending on the source, vendors will either have a monopoly in the region they win or they will be required to cover two regions. The most recent version of events < href = "http://biz.yahoo.com/djus/031005/1459000312_2.html">suggests that the monopoly approach will win out. So much for choice by free Iraqi consumers.

UPDATE: The BBC reports that the licenses were awarded this morning to Orascom Telecom of Egypt, Asia Cell and Atheer Tel. All are monopoly licenses and have two-year lifespans.

Republicans -- Life's Perfect

My brother sends along this very funny piece from A Prairie Home Companion. Read here or listen here. An excerpt, but the whole is greater than the sum of the parts:

Why become a Republican? Because the best way to rid oneself of anger and frustration at what is happening in this country is to get on the side of the people who are doing it. And also you save a lot of money on gifts for same-sex weddings.

But I'm a Republican to find peace. I don't even read the news anymore. It doesn't concern me: I've got a president who is taking care of that stuff. And once you don't read the news, it's even easier to be a Republican.

We're all Republicans now,
We've all come around somehow
We're all wearing flight suits
With big parachutes.
We're all Republicans now.
We'll defend this land everywhere
From the comfort of our armchair.
We're proud to be patriots, glad to be hawks.
We salivate whenever Rush talks.
We're smarter and nicer and better than you.
We're chosen to lead, and God says so too.
He's a Republican
He's a Republican
He's a Republican now.

This summer was a good time to become a Republican because nobody else was doing it, and when you're the only one, they appreciate it more.

Peters: No New Ideas About Ownership

I've been reading Tom Peters' new book, the Wired-design influenced Re-imagine! It's a blast of ideas, which I've always found useful from Peters, whose ideas I've used in a number of situations to motivate people. But, in the end I find nothing new about what matters to the sense of power and participation in people -- Peters ignores the fact that management is about motivating people who are not true stakeholders. The "employee" is non-owner.

Look through the index of Re-imagine! and you will not find the words "ownership" or "equity." Yes, Peters does talk about paying people well:

"Do I think that Great Pay will win the Great War for Talent?

ABSOLUTELY NOT!

I believe the sine qua non is ... OPPORTUNITY. That is, the chance to shine ... to "Make a Dent in the Universe" ... quickly .... if one is given a Great Opportunity, and one does respond with Exceptional Vigor, then one should be ... Rewarded Accordingly. [Interesting to note that Peters does not capitalize pronouns representing the people in his sentences; only the challenges they face are capitalized]

....

I'm not arguing that every housekeeper [in a hotel chain] ought to be paid $100,000 a year. I am contending that Housekeepers have more Guest Contact than any other set of human beings in the facility--and are, therefore, invaluable. And if they are "invaluable" ... and if "high turnover" is a problem ... well .. PAY THEM! If not that $100,000 a year, at least start them at $15.50 an hour.

So, for Peters, the challenge comes down to motivating people within a framework for labor that prevents them from having much of a say in the real direction of the company is taking, because they are not owners. I'm not suggesting some form of communism, but a radical capitalism where, instead of giving those housekeepers $15.50 an hour you give them a fair salary and an ownership incentive plan comparable to that of the CEO of the company.

Because, you see, paying great but without a real share in the success of a company is nothing more than wage slavery: "Here's your check, now get the hell out of here." Without ownership, you are working toward a day when you will be let go and the value you created for the company will be separated from you permanently -- if letting you go really is better for the company, then in a work arrangement where an employee is a significant owner of the company (significant as their role makes them -- something to be negotiated based on transparency and a sense of fairness) the fired employee will, at least, see the continuing value in their share of the company. But if you simply hand them a check and send them on their way -- if the employee has worked all those years knowing that is how their relationship with the company will end -- then you'll spend all your time re-imagining how to motivate people who know in their heart of hearts that they are chattel.

I'd love to see Peters saying something new, which is what he says this book is. But my take away is that Peters' advice is still firmly embedded in a capitalism in which the value of money far exceeds the value of people. A capitalism in which people's contribution is valued equally to the capital that enables them to do their work destroys the sense of powerlessness that Peters and other management gurus are battling against on the wrong front. I think Peters is fighting the wrong fight. The challenge today is to imagine new modes of ownership, partnership and participation, not motivation -- we've motivated the crap out of people and left them exhausted and unemployed. Want to encourage real risk-taking? Take the risk out of taking a job -- hedge it away with clever financial instruments and reward failure on the shop floor (whether that shop is a factory or coders' workspace) with, at minimum, an ongoing stake in the success of the company.

Email is broken, but according to what standard?

Ray Ozzie has chimed into the debate about the broken state of email, which he considers doomed because "there is NO possibility of sustainable restraints on email -- a fundamentally unaccountable medium." While I agree with his general conclusion that shared workspaces are a key to transcending the woeful state of email in terms of the signal-to-noise ratio (today, I received approximately 120 emails that I'd wanted or expected and 483 -- so far -- that were spam), I do not see why email should be accountable.

Ozzie says "workspaces work" but that's also a flagrant promo for his Groove software, and, frankly, email is just one way to communicate and it is still useful. I'm more in the camp of Naval Ravikant, at VentureBlog, who says, "Sure, a few, tech-savvy people will get frustrated and try and use a different mechanism." Writing off email when so many people do use it is foolish. There is a huge opportunity in finding better ways to filtering mail, just as there has been much value created in monitoring network packets and performance; workspaces work, but so does email when used for the right purposes.

Lack of communication and the failure organizations

Let's assume, just for a minute, that the reason bad decisions are made is a lack of discussion. Amartya Sen has a great piece in the current issue of The New Republic, Democracy and Its Global Roots, about the historic importance of "public reasoning." Basically, if leaders aren't listening, if they think they know better, they are doomed to stupid decisions.

Frank Patrick points to a piece in The McKinsey Quarterly, The Psychology of Change Management, summarizing the article in the Six Layers of Resistance to Buy-in:

Layer One - Lack of agreement on the problem.
Layer Two - Lack of agreement on a direction for a solution.
Layer Three - Lack of agreement that the solution addresses the full problem.
Layer Four - Concerns regarding side effects of the solution.
Layer Five - Concerns regarding obstacles to implementation of the solution.
Layer Six - Unspoken fears.

Defining and implementing a solution requires not just the technical aspects of the problem, but also the ability to bring stakeholders and necessary participants through the Six Layers. In the McKinsey article, the first condition of seeing the point of the change and agreeing with it sufficiently to give it a shot is clearly the broadest, requiring getting through the first four layers. Without agreement on a problem, there's no point talking about a change. Even if everyone recognizes the problem, it may be so ingrained that it's seen as the nature of doing what we do, with no real way of dealing with it. A direction is one thing, but if people are going to be brought to agree with it, a whole lot of dotted i's and crossed t's are needed....

Finally, one of the toughest layers of resistance, if it appears, is number six -- unspoken fear, often fear of "going it alone." Especially for changes that involve considerable culture change -- major changes in behavior -- being the first out of the trenches and out into no-man's-land can be a daunting experience.

Okay -- back to Sen's piece:

To ignore the centrality of public reasoning in the idea of democracy not only distorts and diminishes the history of democratic ideas, it also detracts attention from the interactive processes through which a democracy functions and on which its success depends. The neglect of the global roots of public reasoning, which is a big loss in itself, goes with the undermining of an adequate understanding of the place and the role of democracy in the contemporary world. Even with the expansion of adult franchise and fair elections, free and uncensored deliberation is important for people to be able to determine what they must demand, what they should criticize, and how they ought to vote. 

The underlying feature of both articles is how hierarchy and exclusivity that minimizes debate in public and private decision-making undermines good decisions. Leaders can make a huge difference when they make a decision that, at the time it is made appears wrong but that turns out to be the right one (I am not talking about you, Mr. Bush), but generally, because there are many more good minds to apply to a problem than any organization can contain, debate and transparency that facilitates informed discussion are essential to improving most decisions.

The confluence of network theory, management strategies, the demand for increasing transparency in organizations and, especially, accounting and governance, have created many new competitive opportunities for companies large and small. By opening its books, its strategic options and employee contracts to scrutiny, companies can tap the same positive forces that have made open source software more reliable than proprietary operating systems and applications as investors and part-time workers identify “bugs” in the company’s structure and apply their resources (time and money) and intelligence to creating greater efficiency.

An open information environment provides for better informed decisions by all players in the economy, if society can organize itself to begin to make sense of all the data describing business, employment, value, social capital, network effects and specific markets or business. These analytical roles are the future of the Western economies currently seeing their manufacturing bases removed to lower-cost, lower-regulation locales. As more information becomes available, the highest value work will remain inside networks of analysts that increase the value of logistical planning, manufacturing, marketing, and product development. These networks will be at the heart of value systems that span the globe while driving local physical economies (food, services and light manufacturing near the customer) to sustain the Western lead in economic performance, if companies make the change to adopt the dynamic workstyles that allow these systems to come into a being and change constantly without completely unraveling. I see a very real risk that in a desire to protect current working patterns, the West will sabotage its transition to success in an information-dependent world.

Self-organizing Activism

Very interesting new blog, Network-centric Advocacy, launched.

Thanks to Howard Rheingold for this link.

How much is that webcast in the window?

Eli Noam wrote a piece in the Financial Times (subscription required, sorry). Vin Crosbie at Digital Deliverance excerpts and adds his own thoughts:

Columbia University Professor of Economics & Finance Eli Noam writes at FT.com:

"For electronic media, transmission technology is destiny: it defines cost, content and business models. The costs of TV distribution over the internet are more than 40 times greater than the distribution cost of a cable TV channel. This is because the individualisation of the internet requires significantly larger transmission resources than simultaneous broadcast-style transmission. Hence internet TV can function economically only as a premium medium."

Noam, who's also director of his university's Institute for Tele-Information , thinks the following are the most likely streaming video applications:
1. Video on demand (VOD) delivery of films, at the very top of the distribution chain, right after movie theatre distribution and maybe even ahead.
2.Thin and specialised audiences that would not be served by synchronous TV.
3.Office viewing.
4. Interactive and multimedia applications that use the medium in ways that cannot be done over regular, one-way TV.

We believe that Noam is right. And, because Webcasting is limited neither by distance nor by national borders, his FT article also predicts American cultural hegemony over these four applications worldwide.

I guess I am surprised anyone thought streaming webcasts was viable foundation for mass audiences. The applications described are probably what we will be using webcasting to do, but I would extend the second, "thin and specialized auidiences" to include many consumer markets. While the cost of delivery of content over the Net is "40 times greater" than TV, it was 4,000 times greater a few years ago and I am quite sure that the extra value in a well-targeted audience, whether the freight is paid by advertising or subscribers, is sufficient to produce very narrowly focused services -- many of them -- that will serve a massive audience without the massification of the content (the dumbing down to make it more palatable to a larger audience).

The problem, as I see it after producing more than 76,000 streaming programs over the years, is that the streaming business is predicated on a high-cost server or services (server rental) model that preserves the highest margin in webcasting for the least valuable layer of the necessary technology and content. Delivery is the least important layer from the perspective of pricing content, as the channels on cable TV prove. The cost of any single basic cable is a small fraction of the cost of a premium channel and, likewise, one-time or pay-per-view events are priced at a hundred or thousands of times the cost of a premium channel on a cost-per-minute of viewing.

So, Saddam "tricked" us into overthrowing him?

Damn, that was clever of that double-dealing Saddam. The illogical machinations of the Bush administration become more awe-inspiring daily. Today, it turns out that President George W. Bush admits we went to war when there was no imminent threat to the nation, have paid for and continue to pay for that decision in young American's lives, not to mention waves of newly enlisted terrorists who are flocking to Iraq, where they were not operating before. Way to go, Mr. President. No WMDs, no justification -- we could have saved thousands of lives and choked off Saddam's regime by actually enforcing humanitarian payments to Iraq for oil rather than allowing him to build palaces -- the U.N. would have gone for that.

From ABC News (I'd link to the NPR audio, but the plaintive sound of the man's voice is so grating as to merit immediate recall):

"So he's no longer in power and the world is better for it," the president said.

Bush seized on possible evidence of covert programs to make illegal weapons and said that extensive work remains to be done.

"But these findings already make clear that Saddam Hussein actively deceived the international community, that Saddam Hussein, was in clear violation of United Nations Security Council resolution 1441 and that Saddam Hussein was a danger to the world," he said.

The president brushed aside a poll that said public confidence in his ability to deal wisely with an international crisis had dropped sharply. "Sometimes the American people like the decisions I make, sometimes they don't," he said. "But they need to know I'll make tough decisions based upon what I think is right."

Hu-ah, George. Hu-ah. You fucked up, big time.

The Al Gore Network

I am sure that the resulting broadcasts will have more verve than the former Vice President, but it is interesting to see Al Gore in negotiations with Vivendi to buy Newsworld International, a small cable network that delivers international news programming to about 20 million American homes. I get the channel and it is very good to get the view of other nations, not just the strained and pureed version we get from U.S. networks.

Further thoughts on the value of editing

Doc Searls, Dave Winer, Rick Klau and others chime in on my posting about the value of editing vs. filtering (see Bill Brandon's comments on my posting, too).

I particularly appreciate Dave's adding my piece to the Bloggercon reading list. Among the pieces I recommend there are Scott Rosenberg's See no evil, hear no evil, report no evil?, which lays out a key debate about the value-loading of political perspective that we must be aware of when we read, read anything.

On a related note, Correspondences.org has become a hotbed of teen journalism, with students from Redwood High School flocking to the site not just to post but to comment. It's exciting to see ideas being debated, the facts as each of these young writers understand them being laid out and discussed. Even the criticism is respectively, which fills me with hope for the future. If you are a high school journalism teacher who wants your classes to participate or a student who wants to join the Corresponendences "staff," just mail me.

This is a bubble

According to Briefing.com's Market Update: "It's been nothing but green for the stock market as the September employment report delivered something the economic bulls have been anticipating for some time now -- payroll growth." And, indeed, employment was up by 57,000 in September, though the overall unemployment rate remained pegged at 6.1 percent. Remember that last month job growth went the other way by a very unexpected 93,000 and the Bureau of Labor Statistics (BLS) and the market made much of the fact this was a blip, that unemployment was "essentially unchanged." So, today the Dow is up almost 150 points at 1 PM Eastern, indicating that traders are seizing on this as good news amidst a sea of mixed economic figures. (Unfortunately, the BLS does not provide static URLs for its monthly reports, but just swaps them out, so it is harder to get an objective view of events.)

All the signs that the market has no particular directions, from recent volatility to the tendency to grasp at any good news, gives me great pause -- remember what happens to Mr. Market in so many Octobers.

A VC blogs, again

Fred Wilson, who backed some of the more interesting media plays of the 1990s, Fred Wilson, is blogging. He is a founder of Flatiron Partners in New York, which was backed by SoftBank and Chase, but didn't invest in ON24. That should have cued me to something fundamentally wrong.

But now, the startup wave is emerging again and it is good to see venture capital guys participating in the blogging movement, since it will result in better investments, more reflection among entrepreneurs and greater transparency in companies.

Nice use of corporate blogging strategy....

Jason Calcanis points to the first actual posting by WeblogsInc.com, about itself. Clever use of autocatalytic public relations in action, as he points to all the coverage. Jason has always understood marketing. Still don't know about the business model, but the company has put itself on the map. It's all about follow-through now.

What is good about unedited?

Dave Winer's Bloggercon starts Friday morning. The Bloggercon Weblog has this statement (not a definition) about what a blog is:

Weblogs. The unedited voice of a person! Will easy and inexpensive publishing technology change the face of politics, business, journalism, the law, medicine, engineering and education? Is a revolution underway, or are weblogs just the latest Internet craze? We'll show how artists create new experiences and inspire with weblogs. New technology will be showcased at BloggerCon 2003. Educators are using blogs to help students express themselves and learn from each other.

Meanwhile questions linger. Are today's bloggers the modern-day Emersons and Thoreaus or Charlie Chaplin, PT Barnum or Erma Bombeck? Is blogspace a Second Superpower, a ride on the Cluetrain, the venue for the next election or is it even worse than it appears, just good enough to make a difference, or the revolution so many say it is?

I think these are great questions to address. I think it overstates the role of the tools that enable blogging generally, but not the importance of the inexpensive and easy publishing platform represented by blog clients and RSS syndication.

But I want to focus on just that first sentence: "The unedited voice of a person!" Dave has caused a stir on more than a couple occasions by saying that something isn't a blog if it is edited. And, reading this statement I finally realized why there is a controversy between "journalists" and bloggers about whether blogs are journalism, which I think they decided can be, but aren't necessarily journalism.

Editing is not the same as filtering, which is what publishers do. Publishers decide what they are going to put in print, distribute and market. They may accept all manner of writing as long as it finds an audience, and that is what we describe as the "voice" of the publication. In that sense, a blog can have a voice. The voice can be coherent or uneven or incoherent. But a great deal of editing goes into the establishment and preservation of that voice; when we talk about a "New Yorker story" or a "Lad magazine story" or a "Cosmo story" we have a good idea of what that means because the editors of the publications are working to select stories that fit into the voice of the publication. They may sometimes stretch the voice with a piece that is more or less daring (think of the way Esquire has morphed ceaselessly for the last 15 years, since it first went downhill), but basically the content of the magazine is carefully filtered to deliver what readers have come to expect from the publication--marketing told them to expect it or tradition has led them to expect.

So, does Dave Winer mean "unedited," which would mean to publish without first correcting, revising and adapting the material or an "uncut" first draft? I think he means "unfiltered," not "unedited," since the Bloggercon statement goes on to ask if bloggers are "modern-day Emersons and Thoreaus or Charlie Chaplin, PT Barnum or Erma Bombeck," each of whom relied on their own editing and the editing of friends or professionals to prepare their work for publication.

When Dave says "unedited" and journalists hear that, they think "unsourced," "unprofessional" and "unreliable" because the content has not been rigorously edited, as Emerson, Thoreau, Chaplin, Barnum and Bombeck all demanded of themselves or their work before it appeared in publication.

Unfiltered, on the other hand, means that every would-be writer has a voice that can be heard without the intervention of a publisher -- they become their own publishers. Out of the myriad voices may come some great stuff, but I'd think that great stuff would be the result of extensive editing, preparation and consideration.

So, as I consider how to use blog technology in business, I should not be thinking the product cannot be edited if it will have a unique value in the market. I should think about editing, if a coherent voice is what I am aiming to provide--I might even make a little money doing it, but there is an urgency in blogging that many people expect as a characteristic of a blog. So, I might use blog tools and not call the result a blog; I'd probably be better off calling it something else, because then people will say the product is "like a blog, but [different/worse/better/informative/thought-provoking]" and will explain how it is interesting in the comments section of the site.

Blogs are a lot of things, but not the be all and end all of publishing history. Indeed, they are just the beginning.

The Comment Monster

I noted that Howard Rheingold was asking the other day about closing off comments on his site because of spamming. Tonight, a Bush booster, who goes by the name "slyskunk," posted "George Bush is the GREATEST!!!!!" on a number of articles. The guy's site is not without some creativity, sort of a Bush troglodyte Onion, but without the wit -- it just looks funny if you want to grunt in agreement, as one would if they were listening to Rush Limbaugh.

Anyhow, I am not thinking about closing comments. I could delete them, but I won't. Here's the message I sent to Slyskunk:

Slyskunk....

George Bush is the greatest what? Disaster at president? Over-achiever silver-spoon frat boy?

I'm not going to delete your postings, because their lack of interest in discussing any issues speak for themselves.

Thing is, you have to be willing to take even the densest feedback in stride if you want to write in public. A fierce reply is often the best medicine, for the writer and the source of the idiotic commenter. I will delete viagra or other spam, but, for now, I will not delete this think-less crap.

RSS - Simpler still?

Jeremy Allaire has a comprehensive analysis of where he thinks RSS, RDF and SOAP should go next: A common language for parsing the content of a syndication stream, based on what he calls "RSS-Data." A key excerpt

RSS-Data would require no changes or revisions to RSS 2.0, though developers wishing to support RSS-Data would obvioulsy need to write RSS parsers that recognized and deserialized RSS-data in the "sdl:data" namespace.  But, rather than writing custom parsers for every new namespace extension to RSS, developers could confidently work with just one RSS/Data parser that handled 99% of their application meta-data needs.   Here's what I think is necessary for RSS-Data, which is almost literally the XML-RPC data serialization model. Same data model, including all elements... Unicode-based, fixing a known problem with XML-RPC Time-zone aware, also fixing a known problem a variety of serialization approaches

RSS-Data could be used inside any RSS 2.0 element that can contain namespace extensions, including "item," "channel," and inside other custom namespaces.  Likewise, other XML applications in need of a simple object data exchange format could use the "sdl" namespace to extend their applications.

Dave Winer seems to think it's a good idea and Marc Canter thinks it rocks -- two typically argumentative characters agreeing about something like this is significant. If this were to take shape rapidly, without the requisite wrangling between competing providers of syndication tools, it should provide a foundation for organizing a wide range of data types (text, audio, video, Flash, voice connections) into a syndication feed for coherent consumption by users who would not need to manage multiple applications to access all "the stuff" in the feed.

It isn't the end, just the beginning of email

David Hornik of August Capital is buying into the idea that email is being obliterated by spam on VentureBlog. Long, unattributed revelation from a "senior scientist who is intimately familiar with the plumbing of the Web and is currently in command of a key piece of that infrastructure" that "it is the end of the Web as we know it" because spam is overwhelming the email system.

Spam filters work and, like most of the traffic that our network interface card ignores on a busy network, spam is just spurious traffic. I hope David isn't investing in postal services and FedEx as alternatives to email.

I get roughly 550 emails a day, 350+ are spam that I never see. I've reviewed my filtered messages and they seldom include anything I actually wanted to see. Moreover, I think the shakiness of mail servers these days is largely a function of capacity management--if a company is going to promise to filter spam, as AOL does (and which David suggests is staggering under the challenge, which it may well be) it needs to invest to do so, or leave individuals at the edge of the network to do so. AOL could, for example, push all messages to the client and, instead of managing it on their servers and let the client system filter. Hell, build the filter into the client and let the customer's PC take care of it.

Huawei wins, gradually and consistently

Chinese networking equipment manufacturer Huawei Technologies is settling Cisco's patent infringement suit, promising to play nice. Basically, I think this is a major loss for Cisco, which can count on severe competition in Asia.

See, Huawei is also partnering with 3Com, partnering with Siemens as well as with other companies and can use everything it is learning from these partnerships to improve its products. It won't be long until the competition spreads globally, with Huawei bringing products to market everywhere.

Howard Rheingold calls us to battle

Howard Rheingold has a good piece in CIO Magazine, The War Over Innovation. Some key excerpts:

"...if today's PC and Net users aren't vigilant, the future might not be as user-centric as the past. It all depends on what kinds of laws and restrictions will be burned into next-generation hardware and operating systems."

"Today, collective action can involve devices as well as social contracts."

"A future of smart mobs and self-organized media is plausible as long as the owners of tomorrow's communications devices remain free to use the emerging media in any way they choose. However, a war over control of innovation might change all that, and the attack is already gathering force."

"Fortunately, the war isn't over—and what we know, say and do now counts. Hundreds of millions of people have tasted the freedom, power and opportunity that personal computing and the Internet have made possible. Once they understand what's at stake, they can use the very media that is the spoil of the battle to self-organize collective action. Politicians won't try to get away with quite as much if enough people know about it, innovators will be motivated to make yesterday's centralized media obsolete as quickly as possible, and entire populations will reshape our media environment the way we did when we built the Web by posting webpages and listing our favorite links."

On the China telecommunications front

TCL, among the largest Chinese consumer electronics manufacturing concerns, is launching a domestic IPO to fund expansion. The state-owned company has a huge domestic market for mobile handsets and consumer electronics, but needs to expand overseas to continue its breakneck growth.

The company said: "Because of the armies of multinational companies pressing on our borders, the opportunities are surpassed by the severity of the challenges." Not your standard forward-looking statement. (From the Financial Times, subscription required).

This could be a boon for Motorola, which provides components for several TCL-made products.

The Asian Investment Opportunity

Marc Faber writes in AMEInfo.com out of the United Arab Emirates that China and India are better destinations for capital, across the board from commodities to high tech, than the United States. He says that rather than allocate one or two percent of investment portfolios to China and India, as much as 50 percent of investors' money should be in those countries, as their improving infrastructures and local markets promise much greater growth.

While not endorsing that kind of overweighting in Asia, I do think that the United States and Europe have to recognize the deflationary pressure on global prices for everything from wheat and textiles to high tech gadgets that they will face as these emerging economies tool to deliver products to consumers with lower per capita incomes than in the West. This means, for many Western companies, that they need to prepare to move their manufacturing and some design offshore while raising their investment in research and development and logistical hubs in the Americas and Europe in order to compete at retail globally while focusing on ever greater intellectual and social capital management at home.

Taiwan Opening Bourse To Foreigners

More capital will be flowing into Taiwan (Financial Times subscription required). The island is lowering barriers to trading, making it as easy to trade on the Taiwan Stock Exchange as it is for foreign investors can trade U.S. stocks. Using a registration system not unlike the one any online trader has signed up for, investors will be assigned a identification number for their use -- this can be integrated into trading systems or implemented by brokerages who want to serve foreign investors in Taiwan.

The prospect of increased capital flow for Taiwan improves the prospects for companies launching or entering in the market.

XM Satellite radio about a third of the way there

XM Satellite Radio said Wednesday it has 929,000 listeners. While this Reuters report suggests analysts believe the company needs about two million customers to break even, I believe it will take three million, as competition with Sirius will drive prices lower while content costs will rise as the two companies try to distinguish their services with exclusives. Since they use different technologies -- Sirius' satellite system is augmented with a terrestrial network to improve coverage -- they could be consolidated into one company, which would need about 3.5 million customers to break even, compared to the six million to seven million needed if both competitors are going to survive. Given that XM, which has a huge 8.5X lead in subscribers added only about a quarter million customers last quarter, it will be a slog for either XM or Sirius.

Discounts in Numbers: European carriers band together for discounts

Nine European carriers got together this week to combine their handset buying power (requires Financial Times subscription) in order to get prices competitive with Vodaphone and Orange. This presents an interesting question, whether this is pragmatism or collusion? I'd say pragmatics in action, as the cost of the handset is the largest single part of the the cost of acquiring a customer -- rather, the subsidy on the handset provided to the customer is the biggest cost.

Does it make sense, then, to start exploring a buying club model for competing companies in any industry where an enabling technology is the gating factor in adoption of a service? VoIP? Streaming entertainment?

It's not even clear that if you get a device into a customer's hands it will produce significant revenue, as this article explains, in part: "Exclusive Internet and mobile rights haven’t yet attracted huge amounts of interest and money, but carriers can look to European TV companies for a recent, vivid, history lesson. The downfall of two companies in particular – ITV Digital in the UK and Kirch in Germany – essentially came down to an overestimation of the interest in sporting events and the amount consumers were willing to pay for them, resulting in these companies overbidding for rights with little hope of ever earning their money back."

Surely, the margins of wireless carriers have done nothing but decline and this consortium of companies buying handsets will face price competition amongst themselves, since a phone that works in one country can work in any country and the overall price of airtime can be arbitraged by simply getting a phone from a carrier with lower prices in another local market.

Nature & Media

I've been reading the TRIZ Journal for a couple of years. It's can be pretty eccentric, but the basic idea that there is an algorithm of innovation is always engaging. In the most recent issue, Kalevi Rantanen writes about segmentation in nature and journalism (it's a PDF):

Before Christmas 2002 I wrote with my wife a serial newspaper story consisting of 24 microstories. My wife has used riddles for teaching mother tongue to children. We got an idea: why not to make riddles on Christmas? ... Further we thought that it would be not bad to "segment" the story. One riddle should be published every day from December 1 to 24. ... A newspaper liked the idea. An array of micro-stories occurred to be more saleable and attractive than a conventional "big" story.

In summer I observed daisies and dandelions. They attract insects very same way as we attracted readers.