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Posted Friday, September 27, 2002 Reprieve for Net Radio?Net Radio, one of Doc's favorite causes, could get a reprieve from odious fees, according to this story.
Can the music industry's political clout really be overcome? . . . . . .
Progress and DisplacementWhat do the fight over copyright and the fight against runaway health care spending have in common? I argue that both represent an attempt to impede progress.
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Posted Thursday, September 26, 2002 Wi-Fi: Show Frank the MoneyConsultant Frank Catalano is skeptical about the profit potential from wireless networking.
I recommend looking at the college student market for ideas. My guess is that many universities and colleges are experimenting with wireless networks for the campus and immediate vicinity. Moreover, students tend to be early adopters. Think like a college student...A mobile fast-food restaurant that drives around campus--sort of like a "drive-through" except that the students order from wherever they are using wireless and the restaurant does the driving? ...devices whose primary user interface is a headset? ...games that combine computer communication with live motion (role-playing fused with laser tag)? Hmmm... . . . . . .
Stock Options for Ordinary Employeesare not a good idea. As Zimran says,
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Posted Tuesday, September 24, 2002 A Painless Way to Solve Social SecurityI have always thought that the best way to solve the future social security crisis is to raise the retirement age. But I had never calculated how much of an increase is needed. David Levine has done the arithmetic.
So, if we gradually raise the retirement age to 70 over the next 25 years, the problem goes away. Now I have no patience for politicians arguing over "lockboxes" or "partial privatization" or other irrelevancies. Just schedule a minimal increase in the retirement age, and you all can stop your silly arguments and rest assured that social security will be solvent. . . . . . .
Back to 1995Financial journalists are reporting that major stock indexes are back to levels seen in 1998 or 1997. However, this does not adjust for the growth in GDP since then. If you take the ratio of the S&P 500 to nominal GDP, then with the S&P 500 at 825 or so, we are back to 1995 levels for stock prices. I think that the people who are selling now will live to regret their pessimism. . . . . . .
Save my Horse-Buggy Business!Stan Bernstein's record store went out of business. So he writes an op-ed that says,
The creative industries have a future. But stores like Stan Bernstein's probably are on the way out. Asking the government to force people to purchase CD's is backward, in the same way that asking the government to force people to patronize local drug stores instead of Wal-Mart is backward. . . . . . .
Posted Saturday, September 21, 2002 Wireless Tracking...of EverythingWhen wireless access is everywhere, "like electricity," one use for it may be to track anything. As Simson Garfinkel points out in MIT Technology Review,
I certainly hope that there are security agencies out there putting these sorts of tags on materials that can be used for explosives, biological weapons, and so forth. In my view, which owes much to David Brin, we should be encouraging the use of radio-frequency ID's, while making sure that no single agency or elite has a monopoly on the ability to engage in tracking. Brin's view is that tracking ability needs to be symmetric. We need to be able to keep track of politicians, government officials, and corporate executives. The danger is living in a society where one side can track but not be tracked. . . . . . .
The Wireless Last MileThe view that the last mile will be wireless is endorsed by Nicholas Negroponte. He also says that so-called "third generation" cell phone technology has been by-passed.
He says that
He says that Wi-Fi will grow virally, which will solve the coverage problem quickly. In the same issue with Negroponte's column, Wired interviews Sky Dayton of Boingo, a venture that is trying to profit from the wireless boom.
I tend to agree. Entrepreneurs should be trying to anticipate a world of a wireless packet express, and coming up with Thingies to take advantage of it. . . . . . .
Posted Thursday, September 19, 2002 How Political Influence Really WorksOne of the best economic columns to read regularly is in the New York Times. I am referring to the Thursday column called "Economic Scene" that rotates among several economists. Today's column describes an analysis that shows that direct campaign contributions are not the way that special interest groups influence elections. Instead,
For example, in Maryland where I live, probably the most influential special interest group is the teachers' union. The other night on a local news program, the newscaster reported without criticism or explanation that the teachers' union gives one prominent candidate an "F" on education policy. For a split-second, the report flashed on the screen the criteria by which the candidate was graded. Support for vouchers was listed as the top reason for his bad grade. Opposition to school vouchers is the top educational priority for the teachers' union. It is certainly not the top priority for most parents, or even for most teachers. But by clever public relations, the teachers' union is able to exert political power more efficiently than by making campaign contributions. . . . . . .
Posted Tuesday, September 17, 2002 Dan Gillmor is Wrong
Ah, conspiracy! If you don't watch out, The Little Green Men are going to take away your Internet! And if you're worried about that, then you probably were convinced that AOL Time-Warner was going to create a media powerhouse.
Concentration is increasing! The big guys are taking over! That's why there are only half a dozen web sites, and the important web logs all belong to major corporations. Come, on Dan. Are your choices really narrowing? Which viewpoints are you unable to find out there because they have been censored?
David Brin, who wrote The Transparent Society, effectively debunked the assertions that privacy protections and anonymity are crucial to preserving liberty. I am tired of populist-poseurs who assure us that They are taking over, our freedom is going away, our choices are disappearing, and so forth. It's just not true. I am opposed to some of the same legal proposals to which Gillmor objects. But I don't try to distort reality to try to appeal to some adolescent fantasy that we are the anointed underground revolutionaries who are freedom's last hope. . . . . . .
The Attention Deficit Disorder SocietyThe email newsletter Potomac Techwire points to this story.
The company that did the study cited above sees this as a "wake-up call" for advertisers. I guess. If people need to have a TV going while they use the Internet, then obviously what we need are ads that are more distracting than pop-ups. Jeez! I joke about my almost-13-year-old, who likes to sit with the laptop in front of the television and would gladly talk on the phone as well. Now it turns out that she's the normal person--I'm the odd man out that can only deal with one input source at a time. . . . . . .
Posted Saturday, September 14, 2002 Too Much Productivity?It is an elementary fallacy of non-economists that higher productivity means fewer jobs. The fallacy is from the implicit assumption that output is constant. In fact, with higher productivity, businesses will want to increase output by so much that they will hire even more workers. Except in 2002.
As an economist, I still believe that you can never have too much productivity growth. What the current situation cries out for is expansionary macroeconomic policy. It particularly cries out for more deficit spending. The Federal budget is swinging toward deficit, but state and local governments are trying to restore their fiscal positions by raising taxes and cutting spending. The net effect is too little stimulus. What I would like to see is a large, temporary revenue-sharing program from the Federal government to the states. In fact, I argued in January of 2000 that if the Internet Bubble were to pop then we might suffer a macroeconomic slump, aggravated by the budget-balancing efforts of state and local governments. And in December of 2000 I proposed a large revenue-sharing program to ameliorate the problem. Too bad that budget surpluses are so politically correct these days. . . . . . .
Posted Friday, September 13, 2002 Et tu, Jeff?I was close to Paul Krugman (temporally, not personally) when we were in graduate school at MIT. I was even closer to Jeff Frankel (temporally and personally), as an undergraduate also. So it pains me to see Jeff turning into a partisan hack. Brad DeLong found this screed.
I would point out that Republican Ronald Reagan's deregulation of energy rescued our country from the biggest self-induced economic disaster that I can think of over the past fifty years--President Carter's energy policy. I would also point out that Republicans in Congress saved the country from what could have been an even larger self-induced economic disaster--the Hillary Clinton/Ira Magaziner health care plan. Jeff's criticisms of Republican economic mistakes are valid. However, I think that it hurts one's credibility to suggest that any political party is always wrong and the other is always right. I once wrote about Krugman that I wish that he thought it were his duty to represent the views of economists, even if this occasionally embarrasses the Democratic Party. Instead, he does it the other way around. Et tu, Jeff? . . . . . .
Will Microsoft be next to Re-org?If AOL's re-organization shows that is floundering in a world that is moving toward broadband and wireless, then is Microsoft next? In the personal computer era, from 1982 - 1994, Microsoft was able to create an "ecosystem" in which third-party software developers and peripheral manufacturers were encouraged to develop products that increased the value of the Windows operating system. In the Internet era, the competitive advantage of this ecosystem has eroded, but only slightly to this point. In the future that I envision of Packet Express and Thingies, I see the relative importance of the personal computer declining. Instead, the centerpiece for the future could be what Intel calls RoC (radio-on-chip). There may be nothing that Microsoft can do to maintain its current market position as this technological shift takes place. Like AOL, it may find itself trying to re-organize its way out of a problem caused by forces of change that are outside of its control. . . . . . .
AOL re-arranges the Deck ChairsFor what seems like the umpteenth time this year, AOL is rearranging its executive deck chairs. I don't think that it will save the ship. AOL's mantra, as I once heard it delivered by Barry Schuler, is that Convenience is King. For millions of people, getting a disk in the mail that could put you on the Internet was very convenient. Hence, the success of AOL's "carpet-bombing" campaign. But this is 2002. The leading edge of the Internet is in broadband and wireless. What can AOL do in this environment--send out a mass mailing of cable modems? AOL just does not have a compelling value proposition outside of the dialup market. AOL has survived many forecasts of its demise that were made by Internet veterans who dismissed its product as "the Internet with training wheels." So maybe the company will find a way to thrive in the broadband and wireless world. But I don't see how.
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Backward-looking Telecom RegulationIn my latest TechCentralStation essay, I write,
However, I go on to suggest that the biggest impediment to adoption of a more elegant communication architecture is likely to be the cost of getting consumers to switch to a newer generation of devices. . . . . . .
Posted Thursday, September 12, 2002 The Case for VouchersA letter to the editor of the Washington Post makes a strong case for school vouchers. A couple years ago, I made the case from a different perspective.
Since I can't start a school, I am doing volunteer teaching at two local private high schools. That satisfies my urge to educate young people. It has not satisfied my urge to educate left-wing defenders of the public-school monopoly. . . . . . .
Posted Wednesday, September 11, 2002 9-11, A Culture of Passivity, and the Cult of the CEO
The old doctrine of not confronting hijackers fits with a culture of passivity. For many years, we told ourselves that the solution to violence was disarmament, and the solution to conflict was appeasement. In the latest issue of FastCompany, Dan Pink has an article called "Just Like the Rest of Us" which suggests that CEO's should be paid according to performance, rather than given huge compensation regardless of outcome. The article is not yet on their web site. In it, Pink says, "We got exactly the CEO's we deserved." He wants to end the culture of passivity with regard to CEO's. Pink suggests how easy it could be to end the cult of the CEO. He is saying that if they were paid like the rest of us, then they would be perceived as being like the rest of us. Another easy way to end the cult would be to have women be CEO's. It seems to me that only men develop the I-can-walk-on-water mindset that enables them to become cult CEO's. Let me return to David Brin.
What I am saying here is that in business, returning to the older notion of self-reliance would mean altering our concept of the CEO. Change the position description from "must be so charismatic as to appear infallible," to instead read "must work within a system of checks and balances and be subject to skepticism and challenge." . . . . . .
Posted Tuesday, September 10, 2002 A Vision for TelecomSome people call it "pure connectivity." Some people call it the "stupid network." I call it packet express.
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Posted Thursday, September 5, 2002 Speaking of the FCCShould the FCC get into regulating what types of contracts Internet Service Providers can sign with businesses and consumers? As this story indicates, some folks are upset by the possibility that cable companies might engage in shakedowns of e-commerce businesses. The story quotes Paul Misener, Amazon.com's vice president for public policy.
Or, as Bob Frankston put it more succinctly,
I disagree with Misener and with Frankston. I believe that it is a fool's errand to try to regulate how an Internet access provider can extract monopoly profits. If a cable company gets $100 million in excess profits, it does not matter whether those come in the form of e-commerce shakedowns or high monthly fees. Consumers lose either way. The only reliable form of consumer protection is competition. I do not see a way that the FCC can force a competitive market in broadband in the near term, because the technology is in flux. There are bound to be interim monopolies along the road to a more competitive market. Regulation would at best be ineffective and at worst could stifle alternative broadband access approaches. . . . . . .
Posted Sunday, September 1, 2002 Getting Personal about Michael PowellI sincerely believe that the most difficult domestic policy job in today's economy is chairman of the FCC. Everybody agrees that the "last mile" problem has an optimal solution. However, they disagree completely as to what that solution is.
The point is that these are complex issues, with valid intellectual arguments on differing sides. Any choice that the FCC makes is going to prove controversial. Into this fray steps The New Republic's John B. Judis, who as far as I know has no special credentials in telecommunications or economics. Judis launches a vicious, personal attack on Michael Powell.
Judis seems to advocate something like vertical divestiture of the Baby Bells, but the bottom line is that he does not trust the market to deliver broadband.
Judis calls this an "obvious" solution, but I think that many of us are leery of an "industrial policy" approach to telecom. If this had been tried two years ago, the government probably would have committed itself to a lavishly-expensive solution, such as fiber-to-the-curb, whereas now it seems evident that wireless is the most promising last-mile solution. Judis lives near me, and a few years ago he used his New Republic columnist's pulpit to launch a personal attack on our high school principal. Like Michael Powell, she is a well-intentioned, qualified human being trying to do a difficult job. Like Powell, she is African-American, and Judis' odd choice of arena (how many parents take their disputes with their school principal to the pages of a national magazine?) sowed racial conflicts that still have not healed. With a topic as complex as the last-mile problem in broadband, I do not like to stoop to the level of personal attacks. But John B. Judis makes them, and he deserves them in return. . . . . . .
Copyright 2002-2003 Arnold Kling. All rights reserved. Terms of use |
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