The Art of the Overreach…

Back in May of 2010, the popular file-sharing service Limewire was found guilty of copyright infringement in a federal court; Limewire closed last October.  Still, the plaintiff, the Recording Industry Association of America (RIAA), is seeking damages– $75 Trillion in damages.

Perhaps noting that $75 Trillion is roughly five times the GDP of the U.S. (and more than the world’s combined GDP), and materially more than the entire music recording industry has made since Edison’s invention of the phonograph in 1877, Judge Kimba Wood has ruled the request “absurd.”

But while this is good news for the forces of common sense, it’s a limited victory.  Under current IP laws, the defunct company could still owe more than $1 Billion.

[Read more at PCWorld.com]

Meantime, back at the ranch, RIAA members are presiding over the implosion of their business…

 larger image at source: “Online vs. Offline in the U.S.: Are the Media Shrinking?“ 

 … and it ain’t piracy that’s doing the damage.

From the Department of Pots-Who-Call-the-Kettle-Black…

Last December, Secretary of State Clinton delivered a rousing speech to a Conference on Internet Freedom held at the Hague in which she hammered what has become a steady theme for her over the last couple of years:

The United States wants the internet to remain a space where economic, political, and social exchanges flourish. To do that, we need to protect people who exercise their rights online, and we also need to protect the internet itself from plans that would undermine its fundamental characteristics.

Sec. Clinton has used this high-ground sentiment to bash repressive regimes, from China to Iran– all good… as far as it goes.

But beyond noting that the focus on repression is painfully selective (e.g., no criticism of Saudi Arabia), the U.S. government is behaving in just the way that Mrs. Clinton condemns:  even as her rhetoric rings “freedom blue”– State and the rest of the government has pushed repressive treaties like ACTA and domestic legislation like SOPA and PIPA, any/all of which threaten free speech (and promise to retard innovation).

Now, as the dean of intelligence watchers, James Bamford, reports in Wired, our government is adding blanket surveillance into the mix:

…Under construction by contractors with top-secret clearances, the blandly named Utah Data Center is being built for the National Security Agency. A project of immense secrecy, it is the final piece in a complex puzzle assembled over the past decade. Its purpose: to intercept, decipher, analyze, and store vast swaths of the world’s communications as they zap down from satellites and zip through the underground and undersea cables of international, foreign, and domestic networks. The heavily fortified $2 billion center should be up and running in September 2013. Flowing through its servers and routers and stored in near-bottomless databases will be all forms of communication, including the complete contents of private emails, cell phone calls, and Google searches, as well as all sorts of personal data trails—parking receipts, travel itineraries, bookstore purchases, and other digital “pocket litter.” It is, in some measure, the realization of the “total information awareness” program created during the first term of the Bush administration—an effort that was killed by Congress in 2003 after it caused an outcry over its potential for invading Americans’ privacy.

But “this is more than just a data center,” says one senior intelligence official who until recently was involved with the program. The mammoth Bluffdale center will have another important and far more secret role that until now has gone unrevealed. It is also critical, he says, for breaking codes. And code-breaking is crucial, because much of the data that the center will handle—financial information, stock transactions, business deals, foreign military and diplomatic secrets, legal documents, confidential personal communications—will be heavily encrypted. According to another top official also involved with the program, the NSA made an enormous breakthrough several years ago in its ability to cryptanalyze, or break, unfathomably complex encryption systems employed by not only governments around the world but also many average computer users in the US. The upshot, according to this official: “Everybody’s a target; everybody with communication is a target.”…

Read the full article– and you should read the full article– here.

Blockbuster economics…

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From the fascinating folks at Very Small Array, a graphic (pun intended) look the motion picture industry’s response to competition from other corners of the Experience Industry– television, then cable and video games, now the web…

A modest proposal…

A guest post from (Roughly) Daily…

Our copyright laws are stealing from the mouths of Charles Dickens’ great-great-great-great grandchildren

Neuroscientist and game designer Adrian Hon has a radical answer to the continuing problem of intellectual property; as he writes in The Telegraph,

…Imagine you’re a new parent at 30 years old and you’ve just published a bestselling new novel. Under the current system, if you lived to 70 years old and your descendants all had children at the age of 30, the copyright in your book – and thus the proceeds – would provide for your children, grandchildren, great-grandchildren, and great-great-grandchildren.

But what, I ask, about your great-great-great-grandchildren? What do they get? How can our laws be so heartless as to deny them the benefit of your hard work in the name of some do-gooding concept as the “public good”, simply because they were born a mere century and a half after the book was written? After all, when you wrote your book, it sprung from your mind fully-formed, without requiring any inspiration from other creative works – you owe nothing at all to the public. And what would the public do with your book, even if they had it? Most likely, they’d just make it worse.

No, it’s clear that our current copyright law is inadequate and unfair. We must move to Eternal Copyright – a system where copyright never expires, and a world in which we no longer snatch food out of the mouths of our creators’ descendants…

A bold idea such as Eternal Copyright will inevitably have opponents who wish to stand in the way of progress. Some will claim that because intellectual works are non-rivalrous, unlike tangible goods, meaning that they can be copied without removing the original, we shouldn’t treat copyright as theft at all. They might even quote George Bernard Shaw, who said, “If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.”…

Certainly we wouldn’t want to listen to their other suggestions, which would see us broaden the definition of “fair use” and, horrifically, reduce copyright terms back to merely a lifetime or even less. Not only would such an act deprive our great-great-grandchildren of their birthright, but it would surely choke off creativity to the dark ages of the 18th and 19th centuries, a desperately lean time for art in which we had to make do with mere scribblers such as Wordsworth, Swift, Richardson, Defoe, Austen, Bronte, Hardy, Dickens, and Keats.

Do we really want to return to that world? I don’t think so.

The full piece is here. [TotH to Pop Loser]

As we return to our senses, we might recall that it was on this date in 1632 that Galileo Galilei “published” Dialogue Concerning the Two Chief World Systems (Dialogo sopra i due massimi sistemi del mondo)– that’s to say, he presented the first copy to his patron, Ferdinando II de’ Medici, Grand Duke of Tuscany.  Dialogue, which compared the heliocentric Copernican and the traditional geo-centric Ptolemaic systems, was an immediate best-seller.

While there was no copyright available to Galileo, his book was published under a license from the Inquisition.  Still, the following year it was deemed heretical and listed in the Catholic Church’s  Index of Forbidden Books (Index Librorum Prohibitorum); the publication of anything else Galileo had written or ever might write was also banned… a ban that remained in effect until 1835.

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The essence of entrepreneuring…

A guest post from (Roughly) Daily…

From the Kauffman Foundation’s “Sketchbook” series, “Make it Happen,“ a wonderful animation of a recent interview with Tim O’Reilly on the “Maker Movement” (see here and here)– and on what it can teach us about innovation and entrepreneurial energy:

 click image above, or here, for video

For more, see CNN’s interview with Make‘s founder (and Tim’s long-time publishing partner), Dale Dougherty.

 

As we return with enthusiasm to our workbenches, we might recall that it was on this date in 1872 that U.S. Patent No.123,790 was awarded to Silas Noble and James P. Cooley for a device that allowed ”a block of wood, with little waste and in one operation, [to] be cut up in to toothpicks ready for use.”  The inventors had been working together since 1854, as drum makers; at the time of the toothpick breakthrough, their company , Noble and Cooley, which remains in the percussion business to this day, was manufacturing 100,000 drums per year.

So, in much the same way that an unplanned byproduct of NASA’s space program was the powdered drink that gave American households a convenient source of vitamin C (Tang), Noble and Cooley’s quest for better drum shells and sticks helped bring down the cost of cleaner teeth and healthier gums…

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Cognitive Dissonance…

The New York Times reports this morning on the latest U.S. GDP figures:

Growth Accelerates, but U.S. Has Lots of Ground to Make Up

 The American economy picked up a little steam last quarter, growing at its fastest pace in a year and a half. Whether it can sustain that momentum is critical to millions of Americans out of work — and perhaps President Obama’s re-election chances…

 

But Nomura Securities analysts looked at the same glass and saw it decidedly half-empty, as Business Insider reports:

Core Economic Growth Slowed Sharply In Q4

In regards to this morning’s mediocre GDP report, Nomura cuts right to the chase in a note titled ‘Core Economic Growth Slowed Sharply’ in Q4.

Here’s their commentary:

Inventory building contributed 1.9 percentage points (pp) to growth in Q4 2011 after subtracting 1.4pp in Q3. The measure of final sales, which is a “core” view of the economy that removes the effect of inventories, grew at an annual rate of just 0.8% in Q4 compared with 3.2% in Q3. Under this perspective, the US economy slowed sharply in the final quarter of the year. The choppiness in quarterly growth in the back half of 2011 is partially due to the rebound following the dampening effect on economic growth stemming from the Japan earthquake and tsunami that hit on 11 March. The second half rebound was front-loaded into Q3. The same pattern can be seen when looking at the industrial production data, which also tracks the broad economy. In Q3, industrial production rebounded to an annual growth rate of 6.3% (following 0.6% in Q2) followed by slower growth of 3.1% in Q4. To smooth the effect of the rebound from temporary factors, economic growth in H2 2011 advanced at an average annual rate of 2.2% compared with 0.8% in H1.

And here’s the chart that demonstrates the point. The gray line is what Nomura calls ‘core’.

Obesity moves upscale…

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It’s become conventional to blame fast food for the epidemic of obesity afflicting the poorest Americans.  But, as GOOD reports, a UC Davis study of thousands of adults found that McDonalds, Burger King, et al. are shoveling the fat higher up the income chain…

The relationship between fast-food eating and income looks less like a negative linear relationship—where the lower one’s income, the more fast food they eat—and more like an “inverted U.” Patronage of fast-food restaurants increases as families move out of the low-income bracket, peaks in the lower regions of the middle-income population, then declines after families begin to earn more than $60,000 annually.

From a commercial point of view, it makes perfect sense for the fast food establishment to target the middle class: they tend to operate under a perpetual time-and-money crunch– less free time + more children + shrinking disposable income = more Drive-Thru.  Besides, most fast food restaurants don’t accept food stamps.

America’s poorest are, of course, even more income constrained.  For too many of them, a friend in the grocery business explained, “it’s all about getting as many calories as you can for your dollar.”  That’s a competition that processed foods essentially always win… and so obesity and its evil children (Type Two Diabetes, et al.) are rampant.

At least some of America’s poorest have Medicaid coverage; so treating the expensive chronic ailments that result from horrible diets is possible– albeit a burden on the national treasury.

But for America’s middle class, the situation is the opposite:  the wounds are self-funded– they pay their Arby’s tabs with their own money.  And the consequences– the costs of dealing with chronic illness, or the pain of not being able to afford to– are also (increasingly) borne directly.   A Robert Wood Johnson Foundation report (pdf here) notes that the number of middle-class Americans covered by health insurance has dropped over the last decade far faster than that of any other income cohort; only 66% of middle-class Americans are covered by employer health plans; very few by individual plans.

Indeed, obesity-driven health problems can all too often be a family’s ticket from the middle class down into poverty: A study published in the American Journal of Medicine (pdf here) reports that 62% of all U.S. household bankruptcies were driven by medical debts; most of those in middle class households with inadequate or no insurance.  And, of course, many of those cases were obesity-related.

The obesity epidemic is costing America dearly.  Leaving aside the human costs to focus simply on economics, its drag on Medicaid is unnecessarily expensive at a time when the nation can ill afford it.  But its evisceration of middle class income and savings is even more damaging at a time when the country is struggling to turn itself around in a way that depends on a resurgent middle class.

The debate rages over the appropriate role for government to play in addressing the issue.  But surely one thing is clear: Americans “deserve a break today”– a break from the fast food habit.

Princeton vs. Prison

Created by: Public Administration

You can’t make this stuff up…

Sony’s Howard Stringer Says He’s Ready To Compete Against Steve Jobs

November 11, 2011

Sony Chief Executive Howard Stringer told The Wall Street Journal Thursday that he’s finally ready to compete against Steve Jobs.

“I spent the last five years building a platform so I can compete against Steve Jobs. It’s finished, and it’s launching now,” Stringer told the paper, referring to Sony’s strategy of competing on smartphones, PCs, televisions, and tablets.

Jobs, of course, died Wednesday, October 5, of pancreatic cancer. In August, Jobs resigned as Apple’s CEO and was replaced by his longtime Chief Operating Officer, Tim Cook.

Last week, Sony projected a 90-billion yen, or $1.2 billion, loss for the fiscal year ending in March after the company reported a surprise loss of 27 billion yen for the quarter ending September 30. Sony had earlier promised a 60 billion-yen profit for the fiscal year ending in March…

As the friend who forwarded this noted, given the headline, one might expect to find the article in The Onion…  But in fact it is (and one can find it in full) at Forbes.

To put this into context, Stringer is certainly right that (as he goes on to confess in the interview cited above), he’s presided over some lean years. especially as compared to his bete noire.  Consider these results, compiled by Dan Frommer at SplatF:

click here for larger version

Indeed, as Business Insider (drawing on Frommer’s further analysis) points out, to the extent that Sony has refrained from completely cratering, it is for reasons that have little to do with what consumers understand Sony to be about– financial services– and the one-time sale of Spiderman merchandising rights:

click here for larger image

Still, Stringer, who joined Sony in 1997, has enjoyed the continued support of his board.  Earlier this year he had to cope with disasters both out-of-his-control (the Fukushima melt-down) and self-inflicted (the multiple breeches of lax online security at Sony’s video game site, which exposed personal data of hundreds of thousands of users)… this, as Motley Fool notes, on the heels of

• Sony’s laptop batteries exploded. A lot. (2006. With a reprise in 2008.)
• Sony repeatedly stood up gamers waiting for PlayStation 3. (2006)
• Sony got “flogged” when Netizens realized it had created a fake blog to push its PSP. (2006) (Incidentally, this kind of marketing fakery wasn’t new — Sony created a fake critic to talk up one of its 2001 films.)
• Music unit Sony BMG took antipiracy efforts so seriously it went anti-customer and sold discs designed to install rootkits (popularly considered spyware) on buyers’ computers. (2005)
• Sony got in hot water for payola — yeah, for real. (2005)

None of these transgressions rise to Olympus-like levels.  And Stringer has taken a 15% cut in comp (to $4.3 million per year, plus benefits), while asking other senior execs to shave 11% from their pay…  But the stock has lost over half it’s value in the last decade, standing near it’s all-time low.  And there’s no end in sight.

You can’t make this stuff up.

I’m a poet, and I didn’t know it…

A guest post from (Roughly) Daily…

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The Economist‘s Free Exchange blog report’s on the Kauffman Foundation‘s most recent quarterly survey:

THE KAUFFMAN FOUNDATION conducts a quarterly survey of economics bloggers (you can see the third quarter results here). It tends to focus on current economic conditions and policy questions, but the fourth-quarter questionnaire contained something a little different: a challenge to capture the state of the economy in haiku. The results are sublime…

Indeed.  Consider the stylings of Reuters’ Felix Salmon:

No one has a job
Except econobloggers
And they’re not paid much

Or the musings of Professor Stephen Karlson:

Intermodal loadings increase
Trade conflict looms without cease
Occupy Wall Street

Or this, from Robert Cringely:

Econ guys, gentle souls
Think policies guide markets
Jail time is better

Or the only-too-culturally-appropriate contribution of Amol Agrawal:

When Japan fell in 1990s
They were lectured by the world economists
Time for Japanese to smile

… more at “The economy in haiku .”

As we think in seventeen syllables, we might recall that it was on this date in 1993 that the Maastricht Treaty came into effect, formally establishing the European Union (EU)… and laying the groundwork for the Eurozone– the European Monetary Union and the creation of the Euro– and thus for the painful pecuniary pageant that is playing out on the Continent today…

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