Against the crash - why I'm optimistic

Just a few months ago Paul Krugman thought 2010 looked pretty good...

Krugman - Life Without Bubbles - Dec 2008

... Late next year the economy should begin to stabilize, and I’m fairly optimistic about 2010....

Not so much recently ...

Failing the test - Paul Krugman Blog - Mar 2 2009

It’s a depressing spectacle: on both sides of the Atlantic, policy-makers just keep falling short — and the odds that this slump really will turn into Great Depression II keep rising.

In Europe, leaders rejected pleas for a comprehensive rescue plan for troubled East European economies..

... Oh, and Jean-Claude Trichet says that there is no deflation threat in Europe...

... On this side of the Atlantic, Tim Geithner seems committed to the view that banks should stay private even if they’re bankrupt, because — well, just because...

Personally, I'm strangely optimistic. I even suspect Krugman is more optimistic than he seems -- he has to keep the heat on because he can. I don't have to worry about misusing influence.

So where does the optimism come from?

Quickly ...

• Yes, the big banks and most of Wall Street was crazed and stupid, and we're funneling money from the worst to the almost as bad. On the other hand, although much value was illusory, some people won real things. So at the end of the day who's far ahead, in real terms, of where they were in 1994? China, Russia and India. That's a lot of poverty alleviated, and a lot of creativity engaged.
• Based on share price we're more or less back in 1997. Does anyone think our productive and global capacity is the same as 1997? No bloody way. Shares were a bit out of line in 1997, but they didn't go crackers until 1999. Today shares are underpriced.
• There's a huge amount of technological innovation in the pipeline, and we're going to need it to survive climate changes and population explosion. So there's innovation supply, huge innovation demand, and work to do.
• We've only begun to exploit the power of computing and communications technology. We're roughly at the same stage as early electrification or the early telephone. The big gains are ahead.
• The world is more or less at peace these days.
• Obama. Damn, we didn't deserve that piece of luck.
• The causes of the crash are fixable: My best take is that there were at least 10 reinforcing contributing factors. In other words, the crash of 2008, like murder and abortion rates and mega-terrorism, was a non-linear (chaotic system) outcome. It's not fully predictable, but, given the reinforcing causes it was highly likely. That means, like murder rates, it can reverse course dramatically.
• Marketarianism: Sure, I mock the Marketarians and their mystical belief in the power of markets to solve problems. On the other hand, we're in the territory where self-preservation and markets tend to line up. Krugman isn't in a position to say "we don't understand the economic system we exist in", but since I know far less about economics (but perhaps more about humility?) I can say that. We don't understand the vastly complex world economic system. That leaves some room for Marketarian optimism.
• The X-Factor: I really don't see how a swarming nest of violent primates survived the development of fusion weapons. There's clearly something going on here I don't get.
• Limbaugh and the Party of Limbaugh are outraged by Obama's fixes. So they must be good.
  

So color me optimistic.

Dow 9000 by November 2009.

Hydrotouring via Lunocet

Why not?

Dolphin-Inspired Man-Made Fin Works Swimmingly: Scientific American

.... Using the Lunocet, some swimmers are close to being able to breach completely out of the water, like whales. Ciamillo envisions a new high-speed, free-diving community of swimmers united around 'hydrotouring': long-distance swimming expeditions using Lunocets to cover dozens of miles a day, with participants carrying streamlined, waterproof packs containing only a global positioning system (GPS), satellite phone, and enough food and water for a few nights on shore...

What did the GOP lose besides the election?

Talking Points Memo | Non-Custodial Visits?

Dems gloat after Rush awards himself sole custody of Steele's testicles.

Ok, so maybe Olympia Snowe still has a testicle or two. The rest of the party sings soprano now.

St Paul Pioneer Press listed on the next 10 to die list

My home town paper slips onto the list next to biggies like the SF Chronicle and the LA Times ...

The Next 9 Newspapers To Die

...St. Paul Pioneer Press – Circulation: 184,973 (3% decrease since 2007)...

Minneapolis, our sister city, has the Star Tribune. It's bankrupt of course, but for the moment it only has to outlive the Pioneer Press.

Both papers are a shadow of their former selves.

In my Canadian childhood we had record players, tape recorders, carbon paper, broadcast ad-supported television, VCRs, pay phones, pay toilets (!) and I delivered 3 different varieties of heavy newspaper by bicycle (I must have been stronger than I remember).

All anachronisms (nobody misses the pay toilets).

It's absurd to schlep newsprint from printer to doorstep. I personally won't miss the end of the newspaper.

The trick will be to kill the newspaper but, somehow, preserve the business of written news.

When giants walked the earth ...

Scott, Amundsen, Shackleton, Nobile ... not the same breed as me ...

Looking for Amundsen - NYTimes.com

... In March 1912, before it was clear that Amundsen had beat Scott to the South Pole (and that Scott had died after reaching it), the explorer Ernest Shackleton sent a cable to The Times, wondering whether Amundsen had marched to the pole “in northern furs or in the light, windproof burberry that we found successful.” The answer was northern furs. In the end, the most important equipment for all these explorers was their indomitability.

What will we learn if Amundsen’s plane is found? Where things went wrong and perhaps also what. The tribute we pay to great explorers is to send other explorers out in search of them. That’s how it is for Amundsen. As for Nobile, he was eventually rescued and died at the age of 93 in 1978.

Pages for the scrapbook - NYT Business page this morning

A few clippings for the digital scrapbook from Business and Financial News - Mar 2nd 2009 - The New York Times...

 

I like to read history, but I prefer not to live history.

Redoing automobile distribution - the very old is new again

My parents live in the old country - Quebec. GrandCentral means frequent free cell phone calls to my mother, but Dad's not keen on phone conversation. I catch up with him every few months. This weekend that means learning lessons from the early 20th century.

That's how I learned that cars were once sold without the back seats -- in order to save costs. More importantly, after WW II, while factories were converting to consumer production, consumers ordered automobiles and waited for delivery.

Hmm. I recall there was some interest in the 90s in just-in-time custom auto manufacturing and online ordering, but it died with the .com crash. That doesn't mean it won't return -- most big changes have several false starts.

Maybe the way we sell automobiles, like the the way we've sold written news, is an anachronism due for an ending.

Maybe after the wreckage is done, and most of big auto is gone, we'll start selling, manufacturing and distributing cars in a new old way. Or perhaps a need to rapidly upgrade to low carbon technology will favor leased vehicles with reusable components...

What does the rise of Limbaugh's party mean for the religious right?

I've never heard Rush (big fat idiot) Limbaugh directly. Heck, I've barely listened to any AM talk radio hosts* -- I don't even like NPR's talk radio. The only talk radio I can tolerate is the BBC's "In Our Time", and I gather Limbaugh is not Melvyn Bragg.

It's a failing. I don't mind listening to religious rantings; from what I've seen of the world any affiliated deity could be quite vengeful, irrational and nasty. The sheer stupidity of talk radio though -- it's too much.

And I'm an aging white male! These guys are talking to my (seeming) tribe.

Which is to say that I really don't know what Rush Limbaugh's ownership of the GOP means for the Party of Limbaugh's political strategy. It seems to fit with the "Southern Strategy" (white racism), but I don't think Limbaugh is a great fit for the religious right. I rarely hear him mentioned in that context, and my quick googles found mostly awkward defenses of Limbaugh's religious credentials from right side bloggers.

So does this mean the Party of Limbaugh is separating from the religious right? I'd like to see some commentary on that ...

* Lifelong consumption < 7 minutes.

Jindal - the GOP's gift to the nation

I don't thank the GOP for much, but I do have to credit them for an unsuspected sense of humor.

How did they know Jindal was just the comic relief we needed?

Inventing stories of personal faux heroism (remember how the GOP savaged John Kerry for relatively minor discrepancies in true stories of military action?), alienating the entire Coast Guard by claiming government did nothing for victims of Katrina (they were heroic), mocking federally funded research on (wait for it ...) volcanic eruption prediction ...

Phew! Pardon me while I wipe a tear from my eyes. That was a comic tour de force. But Frank Rich tells us there was even more...

Frank Rich - The Ecstasy and the Agony - NYTimes.com

... Listening to Jindal talk Tuesday night about his immigrant father’s inability to pay for an obstetrician, you’d never guess that at the time his father was an engineer and his mother an L.S.U. doctoral candidate in nuclear physics. Sanford’s first political ad in 2002 told of how growing up on his “family’s farm” taught him “about hard work and responsibility.” That “farm,” the Charlotte Observer reported, was a historic plantation appraised at $1.5 million in the early 1980s. From that hardscrabble background, he struggled on to an internship at Goldman Sachs...

Really, it's too much!

Thank you Party of Limbaugh! You sure know how to make me forget my minor woes ...

Economist obituary: Christopher Nolan

The photograph accompanying Christopher Nelson's obituary shows a young Nolan with his mother by his side, his father smiling in the background.

I wonder how the heck they got that photograph.

Nolan asphyxiated when eating, a complication of his severe cerebral palsy.

The Economist tells the story of an author and poet with a terrible disability and remarkable parents (and, I suspect, friends and family too). The obituary doesn't mention that he inspired a U2 song.

It's a memorable story, remarkably written. The Economist saves its best writing for the last page, and some nameless wordsmith wrote their heart out to get this one done.

Economic recovery test -- the pencil sharpener

I've recently proposed the toaster test as a measure of economic recovery. We'll know the economy is healthy when it's again to buy a toaster that works well for ten years.

Personally I like the toaster test, but it takes a lot of toast to show that the toaster works. Not everyone likes toast as much as I do. Fortunately there's a cheaper alternative, one that I mentioned in a rant last year...

... This morning our last modern pencil sharpener broke. We have only one that works now. It's twelve years old, I remember coming across it in the campus bookstore ... It was made in Germany. We're going to mention it in our will, it may be worth a fortune thirty years from now...

... How to explain this emergent conspiracy of globalized incompetence and occult inflation? Clearly the answer is related to Krugman and Hilton [1] and the reelection of George Bush... Consumers are ... consistently making very poor choices, and the market is responding to the frailty of the consumer...

When we buy pencil sharpeners now they look like this:



When we can buy pencil sharpeners that work as well as this one ...



the economy will be on the mend.

The iChat abandonware problem - a sign Apple is in trouble

There's a feature in iChat, Apple's videoconferencing software, that's supposed to allow users to auto-accept chats.

It looked promising for what I want to do -- set my mother up for videoconferencing in the simplest possible way.

Problem is, when you activate it, you get this message:

AppleScript Event Handler Error
... Event: When I Log In
File: Auto Accept.applescript
Error: Error -1708

It's not a new bug, it was recognized at least two years ago. Apple hasn't fixed it in 10.5.6.

It's not the only sign that iChat is abandonware.

Apple didn't used to be this bad. My recollection was that with 10.3 they tried to fix egregious bugs and they incrementally improved their bundled apps.

Something changed after 10.3. Maybe it was losing Avie Tevanian, or maybe it was when Apple decided that they would stop adding significant new features with OS point releases, possibly related to their interpretation of Sarbanes-Oxley revenue recognition (aka technical accounting) ...

Gordon's Notes: Sarbanes-Oxley means no features in future software updates from publicly traded companies?

... Update 3/10/07: I'd read some coverage that claimed Apple was interpreting Sarbanes-Oxley incorrectly. I'd written our representative to ask about this, and Betty McCollum's office replied "Apple has to account for the separate value of a software upgrade that allows for additional capabilities from the hardware.... a nominal fee ... establishes a reportable value for the upgrade." So Apple has interpreted the law as congress understands it. At least when it comes to enabling new hardware capabilities, SO means Apple must account for the value delivered. A nominal fee is one way to do that.

Of course here we're talking bug fixes, not new features, but I wonder if there's an indirect connection.

I see similar problems across OS X applications, such as iCal, Address Book, etc. They're pretty competitive when the OS is first released, but they're very buggy. After a point release or two the biggest bugs get more or less worked out, but then they slowly fall behind the competition.

Apple doesn't improve them, so over time they're less used. They become abandonware. Unfortunately, their bundled existence also prevents vendors from easily filling the gaps with aftermarket products.

Then a new OS release comes along and the cycle begins anew. Of course the new release often requires purchasing new hardware ...

This has become a kind of sickness for Apple. They desperately need better quality in their non-core OS applications, but they also need to find a way to stay competitive with these apps. They could change their interpretation of Sarbanes-Oxley, they could change the way they recognize revenue, or they could separate these core apps from the OS (the way they did with iLife -- some of those apps used to be bundled with the OS).

I'm not a representative Apple customer, so I can't say this sickness is all that harmful to them. I think though, if they wait for signs of retail trouble, that they'll find they've waited too long. Maybe Apple should consider customers like me to be the "canary in the coal mine".

This canary is looking for a new mine.

A beautiful opportunity for an OS X app – front end to GVC

I’ve recently raised the grade on Google Video Chat.

Gordon's Tech: Google Video Chat - a status report - Grade B-

Update 2/24/09: Grade A-: The OS X client now seems comparable to the Windows client. Both drop sessions every hour or so. The quality can be astounding. Usability is astoundingly bad however. Still, beats Skype and iChat easily.

Really, it’s amazing technology. Congratulations Vidyo.

Alas, usability sucks. There’s no way my mother could operate this monster.

Which means there’s a beautiful opportunity for an OS X shop when Google finally publishes an API for GVC.

Someone can put together an app with five huge buttons.

My mother opens the app, clicks a button, and I’m called.

I’d pay $50 for that alone.

The Empire Strikes Back – Microsoft launches IP war on the netbook

A day after officially announcing that a slimmed down version of Windows 7 will be targeted at the netbook (no surprise), Microsoft dropped the other anvil…

Microsoft (MSFT) has gone and done it, they've filed suit in U.S. District Court claiming Linux violates their patents…

No word yet on the finer points of the dispute, all we know so far is Microsoft claims eight patents were infringed…

The suit was launched against a GPS vendor, but nobody thinks they’re the real target. Microsoft has targeted Linux via proxies, but this is the first time they've worn their own face.

Microsoft fully understands the threat they face …

Gordon's Notes: Squeezed 2009: Netbooks, Android and Microsoft

… what's a netbook running Chrome and Linux but a calculator in drag? It's fundamentally complete. It's built entirely of plastic, silicon (sand) and a tiny amount of rare metals. All the technology development costs have been fully realized, and there's no vendor with true monopoly control. IP attacks won't work if China and India decide not to cooperate…

Well, maybe the IP attacks won’t “work”, but they can buy time – time that’s worth hundreds of billions of dollars of revenue. Time to execute on a strategy Microsoft can win with …

They can do this:

1. Buy the pipes, which at this time probably means building cheap to free wireless broadband networks in key markets.
2. Give away XP. Charge $5 a copy for netbook manufacturers.
3. Buy a slice of Dell and start making Microsoft brand netbooks.
4. Create a version of Windows 7 for the netbook (they've probably already done this) that's tied to Windows Live.
5. Become a bank.
6. Build a retail/transaction service across 1-5.

It's a low margin business, but they'll own it end-to-end. They ought to be able to soak up an average of $100/year/user from 2 billion users.

The patent attacks will slow things down. I’m sure this strategy has its own risks. The EU won’t like it for one thing. On the other hand, Microsoft is facing disruptive annihilation. They’ve decided they don’t have a choice.

Now things get ugly.

Look for IBM and Google to move next.

The $50 server platform to come

There are so many things, for better or for worse, people will do with this ...

SheevaPlug: A $99 Linux PC Crammed Inside a Wall Plug

Think about it—an inexpensive Linux PC crammed inside a wall-wart plug. Something like this SheevaPlug ...

Inside the SheevaPlug you will find a 1.2GHz, ARM-based Sheeva embedded processor, 512Mbytes of FLASH, 512Mbytes of DRAM, gigabit ethernet and a USB 2.0 port.... operates on only 5-watts of power..

... Marvell expects the price for these devices to dip below $50. [Marvell and WSJ via Tech Report via Slashgear]

It's of a piece with the netbook tsunami; intensely disruptive in the Christiansen sense. What makes it so disruptive, beyond price, is that it's a standard component based platform - low power consumption (so no fans, cooling, etc), Linux (so software), USB 2 (peripheral) and GB ethernet (I/O).

There's no display of course, but there will be a slightly more expensive version with monitor connector -- or the video will route through a future USB 3.0 peripheral connector.

The next two years will be very ... interesting. I wonder when this kind of device will become contraband.

I remember when I first saw "the web" -- except it was Gopher then. Same idea though, the web was just a prettier version. I knew then the world was turning upside down.

Same feeling the first day I used Google and called my fellow geeks over to let 'em know Alta Vista was dead.

This is blood in the water for geeks. We can smell it ...