Why doesn't the world's richest company make better software?

People who make their money on selling shares claim Apple stock will rise ...

Apple expected to become world's first trillion-dollar company by 2014 

... Shares of Apple have been projected to reach $1,000 in calendar year 2014, which would give the company a market capitalization of about a trillion dollars...

Maybe they're right, though similar things were once said of Microsoft -- and probably Hughes in its heyday. Certainly I cannot remember a company like Steve Jobs' Apple.

Which brings me to a puzzle. With all of its vast wealth, why isn't Apple's product quality better?

Over the past few weeks, for example, I've spent far too many hours managing quality problems in OS X Lion, iMovie, Aperture, iCloud and Time Capsule. Not to mention iWork.

Apple's software quality isn't necessarily worse than Microsoft or Adobe's quality, but it's not much better. So why don't they produce better quality products? It's clearly not a matter of money. Perhaps more importantly, will they ever pay a price for their poor quality?

I remember when Dell's product quality fell. It was a few years before their share price declined ...

Weird moments in tech - what's happening to home video and photography?

In the past few weeks I've been fighting a two front software war. On the one hand, iPhoto 8 and Aperture 3, on the other hand digitizing and managing our videos of our family.

It's been a tough slog. I expected trouble with the video editing, but I didn't realize how much trouble I'd have following Apple's advice to "prosumer" photographers. The migration from Aperture to iPhoto is fraught with bugs and bizarre pitfalls. (For example, a cryptic import option mysteriously determines the fate of iPhoto image titles.)

These problems aren't hard to find, nor are they hard to fix. In some cases simple documentation would do the trick. So why aren't these problems fixed? Why aren't Apple's Discussion forums full of complaints? (They don't seem to delete those as aggressively as they once did.)

I have begun to suspect things are quiet because all but a few hard core geeks have given up. Perhaps the software doesn't get fixed because hardly anyone uses it.

So if Aperture and iPhoto are so troublesome, what's happening to those millions of photographs and videos shared every day?

I suspect they simply vanish from memory. My generation had photo albums. Generations to come may have nothing ...

The world has people like this: Ngozi Okonjo-Iweala and the World Bank

Salmon was pissed that Summers, an ultra-wealthy beneficiary of government service, was considered a candidate for the World Bank. He preferred another intellectual superstar, Nigeria's Ngozi Okonjo-Iweala. In the end Obama nominated the well regarded Kim John Kim of Dartmouth College.

Kim seems a great choice, but I want to share Ngozi's story as quoted by Samon. I remember Biafra ...

Larry Summers, the revolving door, and the World Bank | Felix Salmon

... From 1967 to ’70, Nigeria fought a war: the Nigeria-Biafra war. And in the middle of that war, I was 14 years old… We were on the Biafran side. And we were down to eating one meal a day, running from place to place, but wherever we could help we did. At a certain point in time, in 1969, things were really bad. We were down to almost nothing in terms of a meal a day. People, children were dying of kwashiorkor. I’m sure some of you who are not so young will remember those pictures. Well, I was in the middle of it. In the midst of all this, my mother fell ill with a stomach ailment for two or three days. We thought she was going to die. My father was not there. He was in the army. So I was the oldest person in the house. My sister fell very ill with malaria. She was three years old and I was 15. And she had such a high fever. We tried everything. It didn’t look like it was going to work.

Until we heard that 10 kilometers away there was a doctor, who was able … who was giving … looking at people and giving them meds. Now I put my sister on my back, burning, and I walked 10 kilometers with her strapped on my back. It was really hot. I was very hungry. I was scared because I knew her life depended on my getting to this woman. We heard there was a woman doctor who was treating people. I walked 10 kilometers, putting one foot in front of the other. I got there and I saw huge crowds. Almost a thousand people were there, trying to break down the door. She was doing this in a church. How was I going to get in? I had to crawl in between the legs of these people with my sister strapped on my back, find a way to a window. And while they were trying to break down the door, I climbed in through the window, and jumped in. This woman told me it was in the nick of time. By the time we jumped into that hall, she was barely moving. She gave a shot of her chloroquine, what I learned was the chloroquine, then gave her some, it must have been a re-hydration, and some other therapies, and put us in a corner. In about two to three hours, she started to move. And then, they toweled her down because she started sweating, which was a good sign. And then my sister woke up. And about five or six hours later, she said we could go home. I strapped her on my back. I walked the 10 kilometers back and it was the shortest walk I ever had. I was so happy that my sister was alive. Today, she’s 41 years old, a mother of three, and she’s a physician saving other lives...

The world has people like this.

Liberals and conservatives - it's in our programming

It helps if you think of humans as biological robots with varying programming ...

Politics, Odors and Soap - Kristof - NYTimes.com

... “The Righteous Mind,” by Jonathan Haidt, a University of Virginia psychology professor, argues that, for liberals, morality is largely a matter of three values: caring for the weak, fairness and liberty. Conservatives share those concerns (although they think of fairness and liberty differently) and add three others: loyalty, respect for authority and sanctity...

It has some face validity; it certainly fits my own values (hint - 'respect for authority' is not one of them, which is a bit of a disadvantage in corporate and military settings). I don't think it captures the full difference however; conservatives [1] and liberals have very different attitudes towards the (non-genetically related) weak. Perhaps in conservatives of all colors, cultures, times, and places loyalty is tied to notions of tribe (race) and family. The unrelated weak are a distant abstraction.

It also doesn't fully explain the historical paranoia of the American right (peaking again) in a whitewater world. For that we need to look at responses to novelty as well as to threats to power, tribe, and authority.

The model isn't complete then, but it's useful. It's easier to live with America's conservatives if we understand it's not their fault. Liberals and conservatives just have different operating systems; politics is our essential interface.

[1] So are libertarians a form of conservative or a third branch? They are less interested in caring for the weak than many conservatives.

Macintosh technology 2000-2003

Just for fun. It turned this up while sorting through some old photos. I took the picture when I was discarding some obsolete gear. Note the SCSI to ethernet adapter!

SCSI was terrible.

Note how compact the MacBook 165 was. It was roughly the size of the plastic white MacBook, though heavier and with a lower resolution gray scale screen. The PowerBook Duo was comparable to the modern MacBook Air.

Victims of a mass murderer

A US Army sergeant murders16 men, women and children -- and all we hear about is his personal hardship.

This would be enlightened progress -- if Americans were routinely sympathetic to the stresses of adult mass murderers. Alas, I haven't noticed that. In Texas, for example, even mentally retarded or psychotic people are executed for murder.

It's getting so bad that even American journalists are starting to notice. Helpfully, Al Jazeera provides a corrective ...

No one asked their names | Al Jazeera Blogs 

...The dead:
Mohamed Dawood son of Abdullah
Khudaydad son of Mohamed Juma
Nazar Mohamed
Payendo
Robeena
Shatarina daughter of Sultan Mohamed
Zahra daughter of Abdul Hamid
Nazia daughter of Dost Mohamed
Masooma daughter of Mohamed Wazir
Farida daughter of Mohamed Wazir
Palwasha daughter of Mohamed Wazir
Nabia daughter of Mohamed Wazir
Esmatullah daughter of Mohamed Wazir
Faizullah son of Mohamed Wazir
Essa Mohamed son of Mohamed Hussain
Akhtar Mohamed son of Murrad Ali

The wounded:
Haji Mohamed Naim son of Haji Sakhawat
Mohamed Sediq son of Mohamed Naim
Parween
Rafiullah
Zardana
Zulheja

Medicine 2020: Integrative Personal Omics (iPOP) identifies RSV triggered onset of Type II Diabetes

Speaking as a physician, and as someone who was involved in a genomics project two years ago, I find this astounding. It's a snapshot of Medicine 2020, or perhaps Medicine 2030 - with a slice of Big (BIG) Data on the side. Notice the project had one subject (the lead researcher) and 40 collaborators ...

Examining His Own Body, Stanford Geneticist Stops Diabetes in Its Tracks - ScienceNOW  

... Over a 14-month period, the molecular geneticist at Stanford University in Palo Alto, California, analyzed his blood 20 different times to pluck out a wide variety of biochemical data depicting the status of his body's immune system, metabolism, and gene activity. In today's issue of Cell, Snyder and a team of 40 other researchers present the results ... an integrative personal omics profile (iPOP) ... genomics (study of one's DNA), metabolomics (study of metabolism), and proteomics (study of proteins)... 

... Snyder, now 56, says he began the study 2 years ago because of a slew of technological advances that make it feasible to view the working of the body more intimately than ever before. "The way we're practicing medicine now seems woefully inadequate," he says. "When you go to the doctor's office and they do a blood test, they typically measure no more than 20 things. With the technology out there now, we feel you should be able to measure thousands if not tens of thousands if not ultimately millions of things. That would be a much clearer picture of what's going on." 

... Snyder had a cold at the first blood draw, which allowed the researchers to track how a rhinovirus infection alters the human body in perhaps more detail than ever before. The initial sequencing of his genome had also showed that he had an increased risk for type 2 diabetes ... later became infected with respiratory syncytial virus, and his group saw that a sharp rise in glucose levels followed almost immediately... 

A physician later diagnosed Snyder with type 2 diabetes, leading him to change his diet and increase his exercise. It took 6 months for his glucose levels to return to normal...

The serendipity of capturing the evolution of type II DM resembles many 'happy accidents' in medical history. This will energize an already very active research program on RSV and DM II. Vaccine development for DM II susceptible adults will become much more interesting, and of course there will be a need to closely follow children who develop RSV infection.

There will be a lot more like this. It's potentially Nobel class work.

Whatever happened to the Fuel Cell?

In November of 2001 British Telecomunications published a white paper prepared by two futurists - Ian Pearson and Ian Neild. It's a bit hard to find online now, but there's an html version on ariska.org and the original PDF here. I came across it while running one of my custom google searches across my identity archives.

The two Ians are still in business, but I hope they're a bit more cautious these days. Their 2001 forecasts were a bit ... aggressive. The ones they got right were mostly prosaic - mostly gene sequencing, basic demographics, and internet growth.  They missed the rise of China and were oddly too optimistic about mobile internet access.

Otherwise they were way off. In particular, they were absurdly optimistic about the rise of the AI. It's interesting to look at how far off. For example:

Chat show hosted by robot  2003 
Confessions to AI priest   2004 
AI teachers in school      2004 
Computers that write most of their own software  2005 
Domestic appliances with personality and talking head interface 2007 
AI students 2007 
Highest earning celebrity is synthetic 2010 
AI houses which react to occupants 2010 
25 % of TV celebrities synthetic 2010 
Computer agents start being thought of as colleagues instead of 
tools 2013 
Direct electronic pleasure production 2010 
Online surgeries dominate first line medical care 2010 
Orgasm by email 2010 
Quiz shows screen for implant technologies 2010 
Artificial senses, sensors directly stimulating nerves 2012 
Some implants seen as status symbols 2012...

It's a long list. I kept it because in 2001 it was fun but preposterous. I like to think it was prepared at the local pub with a dartboard and a stack of science fiction novels; I hope British Telecomm published it to confuse their enemies. (It makes my own list of failed predictions seems absurdly prescient. Maybe BT should be paying me.)

One of their big misses is, however, interesting for other reasons ...

... Home fuel cell based 7kW generator 2001...

I remember fuel cells. It wasn't only that we were supposed to have them in our homes. They were supposed to power our hydrogen cars; pop magazines had major articles about Canada's BC Based fuel cell industry. Toshiba was a year away, once upon a time, from methanol fuel cells for laptops.

Obviously, none of that happened. Instead fuel cells are showing up in data centers -- and that's supposed to be news.

So why did the Fuel Cell future fail? Ben Wiens, who worked at that BC based fuel cell company, has a good technical description...

A few years ago it looked like micro fuel cells would soon be powering many portable electronic products. But this has not come to pass. One issue is that batteries have become much more powerful, and electronic devices smaller. Also, it has been hard to fit the fuel cell into the same thin profile of the battery. Another issue is that there is a problem with certain fuels being transported by passengers on aircraft. There are still some technical issues to be solved. The present price of fuel cells is higher than batteries. In my opinion the reason why micro fuel cells haven't penetrated the market however has nothing to do with the above factors....

... Fuel cells produce electricity. This is not the desired form of energy for transportation. The electricity must be converted into mechanical power using an electric motor. The Otto or Diesel cycle produces the required mechanical power directly. This gives them an advantage compared to fuel cell powered automobiles.

Presently Otto and Diesel cycle engines seem to be able to comply with extremely stringent pollution regulations, are inexpensive to produce, produce reasonable fuel economy, and use readily available liquid fuels. Fuel cell vehicles have a much greater chance of being accepted however in the future when fuel prices are higher and liquid fossil fuels are in short supply. However fuel cell vehicles will then be competing with electric vehicles which will be cheaper to operate but have problems with recharging...

Wiens article is the best I can find. Which brings up the real point of this post. Why hasn't there been more journalism on what happened to the fuel cell? Doesn't a failed revolution deserve a bit of an obituary? The rise and fall the Fuel Cell, and associated (extreme) hype and post-collapse silence, would make a great cautionary tale. Reading Wiens' summary, it seems as though a few wee issues in thermodynamics and hydrogen production were overlooked. Isn't it worth understanding why these things were missed? Aren't their lessons there that would serve us well now, as the rationalists among us consider our carbon-constrained energy options?

Journalists, where are you?

Escape from North Korea's Camp 14

Life in the empire of the Kims:

How one man escaped from a North Korean prison camp | Books | The Guardian

... The South Korean government estimates there are about 154,000 prisoners in North Korea's labour camps, while the US state department puts the number as high as 200,000. The biggest is 31 miles long and 25 miles wide, an area larger than the city of Los Angeles. Numbers 15 and 18 have re-education zones where detainees receive remedial instruction in the teachings of Kim Jong-il and Kim Il-sung, and are sometimes released. The remaining camps are "complete control districts" where "irredeemables" are worked to death...

... One day, Shin joined his mother at work, planting rice. When she fell behind, a guard made her kneel in the hot sun with her arms in the air until she passed out...

.. in June 1989, Shin's teacher, a guard who wore a uniform and a pistol on his hip, sprang a surprise search of the six-year-olds. When it was over, he held five kernels of corn. They all belonged to a slight girl Shin remembers as exceptionally pretty. The teacher ordered the girl to the front of the class and told her to kneel. Swinging his wooden pointer, he struck her on the head again and again. As Shin and his classmates watched in silence, lumps puffed up on her skull, blood leaked from her nose and she toppled over on to the concrete floor. Shin and his classmates carried her home. Later that night, she died...

... Trust among friends was poisoned by constant competition. Trying to win extra food rations, children told guards what their neighbours were eating, wearing and saying...

... On the morning after he betrayed his mother and brother, uniformed men came to the schoolyard for Shin. He was handcuffed, blindfolded and driven in silence to an underground prison...

... chief's lieutenants pulled off Shin's clothes and trussed him up. When they were finished, his body formed a U, his face and feet toward the ceiling, his bare back toward the floor. The chief interrogator shouted more questions. A tub of burning charcoal was dragged beneath Shin, then the winch lowered towards the flames. Crazed with pain and smelling his burning flesh, Shin twisted away. One of the guards grabbed a hook and pierced the boy in the abdomen, holding him over the fire until he lost consciousness....

... Uncle nursed Shin, rubbing salty cabbage soup into his wounds as a disinfectant and massaging Shin's arms and legs so his muscles would not atrophy. "Kid, you have a lot of days to live," Uncle said. "They say the sun shines even on mouse holes."...

... The new teacher sometimes sneaked food to Shin. He also assigned him less arduous work and stopped the bullying. Shin put on some weight. The burns healed. Why the new teacher made the effort, Shin never knew...

... In the summer of 2004, while he was carrying one of these cast-iron machines, it slipped and broke beyond repair. Sewing machines were considered more valuable than prisoners: the chief foreman grabbed Shin's right hand and hacked off his middle finger just above the first knuckle...

... In December 2004, Shin began thinking about escape. Park's spirit, his dignity and his incendiary information gave Shin a way to dream about the future. He suddenly understood where he was and what he was missing. Camp 14 was no longer home; it was a cage. And Shin now had a well-travelled friend to help him get out...

... Without hesitation, Shin crawled over his friend's body. He was nearly through when his legs slipped off Park's torso and came into contact with the wire....

... Shallow and frozen, the river here was about a hundred yards wide. He began to walk. Halfway across, he broke through and icy water soaked his shoes. He crawled the rest of the way to China.

Within two years, he was in South Korea. Within four, he was living in southern California, an ambassador for Liberty in North Korea (LiNK), an American human rights group.

His name is now Shin Dong-hyuk. His overall physical health is excellent. His body, though, is a roadmap of the hardships of growing up in a labour camp that the North Korean government insists does not exist. Stunted by malnutrition, he is short and slight – 5ft 6in and about 120lb (8.5 stone). His arms are bowed from childhood labour. His lower back and buttocks are covered with scars. His ankles are disfigured by shackles. His right middle finger is missing. His shins are mutilated by burns from the fence that failed to keep him inside Camp 14.

I don't generally think that Hell is a good idea, but it is tempting to make an exception for the Kims.

North Korea is China's great shame. In a just world, for the sin of North Korea alone, China's leaders would join Dick Cheney in prison.

See also:

• You too can visit North Korea 1/2010
• The harshness of mortal life - hidden refugees from North Korea 3/2005
• North Korea 2/2011

Toothpaste

As I scrape rubbery solids from the nozzle of my Colgate toothpaste I remember that the meme of daily toothpaste use was one of the great achievements of early 20th century advertising.

That ought to make anyone nervous.

So what does that rubbery gunk to my gums [1]? Who tests toothpaste anyway?

Not the FDA ...

Toothpaste - American Dental Association - ADA.org: "

... the U.S. Food and Drug Administration insists that manufacturers of fluoride-containing toothpaste meet certain requirements for the product’s active ingredients, product indications, claims and other qualifications. However, the FDA does not test toothpastes to verify compliance. The ADA conducts extensive laboratory tests on toothpastes to determine whether they meet specific criteria for safety and effectiveness. The ADA determines the product’s fluoride content, how it is released and its effectiveness on tooth enamel...

"Certain requirements" and "specific criteria" are weasel words, but "does not test" is pretty clear.

So the ADA, which makes money from its "seal of approval" [2], is the only group that tests toothpaste, and they really only look at Fluoride content. The indexed literature doesn't seem any better, all I could find were poor quality studies of fluoride content.

Perhaps that's good enough. Maybe the ADA is more virtuous than, say, the AMA. Maybe we shouldn't pay too much attention to what we've learned about the marketing and utility of FDA tested medical products over the past sixty years. Maybe we should trust the libertarian world of toothpaste regulation and the goodness of manufacturers.

Or, more likely, most toothpaste, fluoride aside, is at best harmless. Probably quite a bit of it is mildly harmful; or good for whiteness but bad for plaque. If I were running the NIH, I'd fund some high quality randomized toothpaste trials.

For now I'm going to switch to a simpler brand with an easier to clean nozzle.

[1] Forget X, R and PG. We need a rating for posts that reveal too much of what lies ahead. There is no need for under 35 to know that for most of one's life gum-teeth borders are more important than teeth color.
[2] Has that seal ever been denied anyone willing to pay for it?

iCloud, iOS, and identity: The end of app sharing

I don't think we'll actually get to DRM RetinaLock (retinal enhancements enforce video DRM), but we are pretty much at the "Palladium" future I'd written about 8 years ago.

That's what I concluded after migrating a friend's iTunes and iOS content, and navigating the chaotic intersection of Digital Rights Management (FairPlay), identity management, ownership identity, and Cloud vs. multi-device iTunes vs. multi-user OS X. Not to mention the MobileMe vs. iCloud migration.

Really, has anyone figured this out? I mean, I think I'm pretty good at this stuff, but we're talking combinatorial explosion here. Different rules for email, calendar, music, video, apps, across multiple identifies and platforms -- with no way to merge or reconcile multiple identities...

Apple IDs and iCloud

... Enter the Apple ID you want to use for iCloud in Apple () menu > System Preferences > iCloud. Enter the Apple ID you want to use for store purchases (including iTunes in the Cloud and iTunes Match) in iTunes > iTunes Store... [1]

... You cannot merge two or more Apple IDs into a single one...

... You can switch the Apple ID you use for store purchases at any time. However, you can only change the account you use for any iTunes in the Cloud features once every 90 days...

and (emphases mine)

iTunes Store: Associating a device or computer to your Apple ID

... Your Apple ID can have up to 10 devices and computers (combined) associated with it. Each computer must also be authorized using the same Apple ID. Once a device or computer is associated with your Apple ID, you cannot associate that device or computer with another Apple ID for 90 days...

... : Removing a device from your Apple ID does not override the 90 day timer. The timer must complete 90 days from the day the device was associated before it can be associated to another Apple ID....

Only a post-singular AI could truly visualize all the options here.

It's fairly clear, however, where Apple wants us to go.

Today my family's five devices sync to one iTunes instance. Each devices has the same AppleID for store purchases, but different MobileMe identities. The family can share movies, apps, music and so on. [2] Mail and Calendars for each device go to the Cloud.

The future is quite different. There will be no more iTunes, no more shared media libraries, no more shared app libraries. Each iOS device will be associated with a single identity for both purchasing and iCloud services. (Though a child's identity may be associated with a parent's credit card, or purchases will be iTunes credit only.) OS X will become only a way to access Cloud media, and that access will be tied to identity as well.

My sympathy for piracy grows.

- fn -

[1] In reality, when I reviewed my friend's devices, it was not possible to set a different Apple ID for iCloud.
[2] Heaven knows what the licensing says we can do. Only some older music is DRMd.

See also:

• Apple IDs and iCloud
• iTunes Store: Associating a device or computer to your Apple ID
• Apple Scrambles To Merge Apple IDs To Stave Off iCloud Sync Mess | Epicenter | Wired.com 9/2011 -- they didn't manage the merge but there's a transitional role where the Apple ID and the MobileMe ID can live together for MobileMe users and perhaps even into iCloud. I'm going very slowly with my family's iCloud migration.
• Gordon's Notes: The sharing challenge: access, topic and identity. Why G+ fails. 11/2011 - a different sort of sharing problem
• Gordon's Tech: The multi-iPhone family - two approaches 7/2010 - the good old days.
• Gordon's Tech: Apple's identity and account system is screwed up. Again. 10/2008 - the .mac to .me transition stunk

Update:

More on the peculiar 90 day limit here. It seems to pertain to 'downloading past purchases' or iTunes Match. It applies to the entire computer rather than a user account. What a friggin' mess.

Update 2: More thoughts as I replay this post

• I wonder if the 90 day limit will eventually be a standard for transferring ownership of digital purchases. I can't find any information on how that duration was established.
• I suspect in a few years there will be a lot of digital material in the family repository that only I will be able to use. Ownership transfer would be "nice". Hacking FairPlay is more likely (eventually 2012 FairPlay should be pretty hackable).
• With Apple's new regime there are significant advantages to combining Apple hardware with Google and Amazon products. After all, they can't fit into Apple's model. In the new world we can't share our iBooks, but everyone can share Kindle books. A shared Apple identity may prevent use of iCloud, but it won't prevent use of gCloud.
• Curiously, this may mean the return of family night at the movies! Instead of sharing across multiple devices, we'll be back to sharing on a single device with a large screen.

What is Iran really afraid of?

Saddam Hussein, we are told, knew that his weapons of mass destruction were no longer effective. He might not have understood how completely historical they were, but he knew Iraq could pass a weapons inspection.

So why did he decline inspection, and give Bush the leverage he needed to launch a terrible war?

We are told he feared Iran. He was afraid that if Iran knew his WMDs were only a bluff, they'd destroy him.

Now we are told that Iran is working towards a nuclear WMD -- though it's not clear they've committed to building one.

Nuclear weapons are not usually considered useful offensive weapons. They are strategic deterrents. That's why India and Pakistan and Israel have them; they all face credible threats of significant military power.

So what is Iran so afraid of that they want a major strategic deterrent? [1]

iran - Google Maps

Clearly, it's not Israel they're afraid of. That's good for stirring up the electoral base, but Israel is not going to invade Iran. They may attack Iran's nuclear facilities, but that's not a reason to build nuclear weapons. Of course Israel is in a constant state of low-grade terrorist combat with Iranian proxies, but then so is Iraq, the US, Saudi Arabia and... really ... a lot of nations.

Historically Iran has feared Iraq. But Iraq is Shia now, and years from being ready to invade anyone.

Saudi Arabia - sure, but Saudi is on the verge of collapse. No invasion or military threat there. Turkey? I don't think so. And so it goes around the borders. Turkmenistan, Afghanistan ... no real threats there. Certainly nothing that would suggest a WMD strategic deterrent.

The US? No.

What's left? Pakistan? Well, Pakistan is Sunni dominated, and the leadership is at least as crazy as Iran's, and they have a WMD ... Still, relations are supposed to be good.

So what's Iran afraid of?

[1] Iran's leadership is unbalanced even by the standards of tyranny, and Iranians are no less crazy than Americans, but I think the reality is somewhere between Gwynne Dyer and Jeffery Goldberg. In other words, nasty, vicious, half-barking leadership, but not suicidal.

Teacher rankings - relearning the lessons of adverse selection

William Johnson is one of those teachers we prize, the best of the best, teachers who choose to work with difficult children.

Unsurprisingly, his students don't perform as well as the average class, so he's officially a ‘Bad’ Teacher (NYTimes.com). He's a conscientious person, so of course he feels lousy. Other special education teachers simply move to less challenging environments.

It's sad. We've had decades of experience with these things in healthcare. The key concept is "adverse selection". Two simple health are examples show how this works.

Imagine I'm a health care system and I'm paid a flat rate for each patient I care for. In this case, the commercial thing to do is to recruit healthy patients. Instead of investing in phone service, invest in a high class web portal that sick elderly patients will avoid. Instead of investing in a diabetes clinic, offer services for the worried well like acupuncture, homeopathy, massage services and the like. Let the expensive patients go down the road. You'll get great ratings, full payment, and bear low costs.

Now imagine you're a primary care physician. You're being rated on patient satisfaction and on good outcomes for diabetes care. The smart thing to do is get rid of all the difficult patients who don't have phones, perhaps don't have homes, probably have bigger immediate problems than their blood sugar. Instead improve the office parking, setup office hours that fit patients who are employed but not those looking for work, etc. It's not hard to do, and soon your patient panel looks great and feels happy.

We don't know how to manage adverse selection, though there are lots of workarounds and modifiers. The RomneyCare Mandate is a prime example of an adverse selection modifier - and we know how popular that is.

These teacher ratings will produce the same behavior in teachers that they've produced everywhere else. The smart teachers and schools will get rid of the "loser" students, and, after a few years and a lot of waste and sorrow, we'll realize we're repeating history as farce.

Maybe a few blog posts like this will shorten the cycle. I have to hope ...

Why quality collapsed in the bubble years: Akerlof and the last good toaster

Six years ago, I mourned for the demise of the last good toaster. I could find lots of cheap toasters, but they didn't last long.

It wasn't just toasters. Between about 1999 and 2009 the quality of a lot of goods seemed to collapse -- even as consumer prices fell. I wrote cranky posts about the "occult inflation of shrinking quality", but I seemed to be a chorus of one. It wasn't just toasters that disappointed, we couldn't buy a decent DVD/VCR or pencil sharpener or window unit air conditioner. Similar quality problems emerged with drywall and heparin [1] and, notoriously, just about every computer manufacturer on earth save one.

For us it felt like a market failure. We were willing to pay more money for higher quality, but there didn't seem to be a relationship between price and quality. Brands like SONY and Panasonic didn't mean much any more.

A few brands kept their reputation. Canon and Nikon held on, and a phone maker led by a difficult genius made a reliable battery charger and eventually became the world's most valued corporation.

I wonder if it was Apple's example that changed the picture. Because reading John Roberts [3], it seems we fell into Akerlof's quality trap (emphases mine) ...

... Trade may break down almost completely (Akerlof, 1970). If eliminating the asymmetry of information is not possible, then buyers will refuse to pay more than the expected value of goods, averaged across the different quality levels they expect to be offered. Then the best quality goods may not be offered at all, because they command only a middling price that does not reflect their true value. Consequently the distribution of qualities that are actually offered is worse than what is potentially available. Since the selection of products on offer is not representative of the underlying distribution of quality, but is instead an adverse selection, buyers will rationally lower their willingness to pay even further. Then, even more potential sellers of relatively high-quality items may no longer be willing to sell at the lower price. The overall result may be that nothing but very low quality items are available -- only lemons are on offer -- and markets fail to exist for high-quality products, although buyers are anxious to have such goods and would willingly pay enough for them to compensate the sellers if they were sure to get what they paid for. [3]

In a world where quality seemed to be unobtainable at any price, Apple offered relatively higher quality [4] products at a relatively higher price. I think they broke the cycle [5]. It probably helped that after the debt/real estate bubble burst consumers paid more attention to the costs of unreliable goods.

It's quite a story - a textbook illustration of research that earned Askerlof a share of the 2001 Nobel Prize in Economics. So why haven't we read about this from anyone but a crankish blogger? Where are the economists?

[1] The investigation continues incidentally - More Suppliers Linked to Heparin Contamination - WSJ.com.
[2] I've been told that it's now very hard to buy a reliable dish washer 
[3] Roberts, J. The Modern Firm. Oxford University Press 2004. p 82-83
[4] Apple, with a few exceptions, doesn't make very high quality products. Their software is notoriously buggy, and they made generations of laptops with flaky hinges. Compared to the competition though, they were sterling. 
[5] The cycle-breaking alone brought them success, but the mind-blowing innovation of the iPhone and iPad took them to the top.

Update: Shortly after posting this, I discovered that in 2007 I made the same connection to asymmetric information theory that Roberts detailed in his text. Maybe I should have been an economist.

Apple's FairPlay DRM, subscriptions, and the cost of MLB At Bat

Last year I bought MLB.com's At Bat for something like $10 or $15. Then it was an "App". That meant, based on Apple's FairPlay DRM, I could install it on multiple devices as long as each device was synchronized to an iTunes instance that was associated with my App Store/iTunes ID (and credit card). In our home that can be up to five devices, though in practice only my son used it.

No consumer loves DRM, but FairPlay was well named. It struck a Jobsian balance between buyer and seller, like those .99 songs we used to have. It didn't get in my way very often.

It's too badFairPlay doesn't work that way any more. This year MLB.com At Bat 12 is just a shell for a $15 subscription -- and Apple's subscription/In-App purchase policies are an inelegant mess ...

iTunes Store: About In-App Purchases

... Non-replenishable In-App Purchases are items that only require you to purchase them once, and can be transferred to multiple devices authorized with the same iTunes Store account.

• Bonus game levels
• City guide maps

Replenishable In-App Purchases are items that have to be purchased every time and cannot be downloaded again for free.

• Extra health
• Extra experience points

Subscriptions are one-time services that must be purchased again once the subscription period expires. 

• One-month subscriptions
• Location service subscriptions

Auto-Renewing Subscriptions are services that can be purchased with different renewing subscription durations.

• Weekly newspaper subscriptions
• Weekly magazine subscriptions...

... Subscriptions and replenishable In-App Purchase cannot be transferred or synced to another iOS device. Non-replenishable In-App Purchases  and auto-renewing subscriptions can be transferred to another iOS device authorized with your iTunes Store account. For example, if you transfer a game from an iPhone to an iPod touch, only the game levels will sync over, the extra ammo and experience points will not be transferred...

Four different classes of In-App purchase, each with different policies on renewal, transfer, and multiple device use.

So which rule applies to MLB.com's At Bat 2012? Is it a non-replenishable In-App purchase that can be transferred between devices? Or is it Subscription that cannot be transferred? I couldn't tell from the description, but the answer is in a customer review [1] ...

... if you make the in-app purchase it is available on another device ... regardless of whether you make an in-app purchase or not banner ads are still displayed ...

So, for this year at least, the effective cost of MLB At Bat is still $15; it behaves like an In-App Purchase if you pay the $15 up front. On the other hand, I wonder how it behaves if you pay the subscription fee ...

FairPlay was a Jobs-class compromise. Apple's subscription plans are post-Jobs; I hope they'll take a second look at the mess.

[1] This is unrelated to my post, but I have to say it's rude behavior to show ads in a paid app. It's worse than rude really -- banner ads typically include clickable links that break Apple's feeble parental controls.