February 6th, 2009

Don't give me special treatment

Posted by John Carroll @ 8:01 am

Categories: Economic Policy

Tags: Developer, America, Bailout, American, Globalization, Free Trade, Government, Strategy, Management, Finance

Debates continue in the US Congress over the size and shape of an economic stimulus intended, in true Keynesian fashion, to create demand for products where it is in short supply. The size of the stimulus will be nothing short of awe-inspiring, though the shock-value is somewhat reduced after approving a similar-sized bailout for the banking industry last year.

In contention are “Buy American” rules which would require that much of the money be spent on products made in the United States. To some, this is a bit rich. Most of the money for this bailout will come from overseas sources given that low-saving Americans are hardly in a position to buy the government bonds necessary to finance this bailout-sized deficit. Foreign governments have already warned this would violate WTO trade rules. The Smoot-Hawley tariffs of 1930 whacked more than 10 percentage points off of global demand in short order. Could “Buy American” provisions result in similar levels of demand destruction?

Maybe. But what I find most galling about all this is that America, a country that is supposedly a “champion” of global capitalism, practically sprints away from its principles at the first opportunity.

How soon we forget Read the rest of this entry »

November 14th, 2008

Computers make the case for globalization

Posted by John Carroll @ 8:29 am

Categories: Economic Policy

Tags: Computer, Globalization, Productivity, Strategy, Management, John Carroll, Job, Laptop Computer

America was on a trade skeptic path even before the financial crisis hit. Ross Perot beat the drum against NAFTA during his election bid in 1992, and might have won had he not been a crazy Texas coot who quit the race in a huff because he felt his daughter was being insulted by those rude Bush people (history sometimes gives one a sense that we have dodged invisible bullets). The .com overinvestment in telecommunications, followed by the .com meltdown, made offshoring of higher tech jobs a cost-effective possibility, resulting in expressions of fear and loathing on technology sites across the Internet. Americans busily inflated a housing bubble in the past decade, tightening their finances and engendering a fear of the accelerated pace of change that globalized markets represent.

On Paltalk, I see a lot of soul searching among mourning die-hard Republicans who are trying to figure out how they went from being the party with visions of a “permanent majority” to one that has lost control of both Congress and the Presidency. Paradoxically, people in conservative chat rooms repeatedly declare their allegiance to capitalism and the principles espoused by Ronald Reagan, all the while declaring their opposition to trade agreements, support for tariff barriers, and a deep seated opposition to immigration, legal or otherwise. This is, of course, fairly incongruous, as Reagan was a champion of opening markets through trade agreements, reducing tariff barriers, and presided over the the last big “amnesty” bill for illegal immigrants passed in this country (in 1986). Further, such anti-market principles are likely shared with people on the other side of the political aisle, such as Nancy Pelosi.

If “free market capitalism” was a contestant on American Idol (which might be the only way to get most people to pay real attention to it), it would be loudly booed by the audience, and phones would be overrun by people trying to vote it off. The problem, of course, is that it is often hard for people to understand the benefits. The bottom 20% of incomes have been stagnant over the past 15 years, a marked contrast to the top 1%, where income growth has skyrocketed due to the wealth created by globalization. That’s a reality of the current state of the globalization process, where capital yields more returns.

Globalization, however, Read the rest of this entry »

November 13th, 2008

Remedying the trade imbalance with China

Posted by John Carroll @ 9:19 am

Categories: Economic Policy, Intellectual Property, Microsoft

Tags: China, Microsoft Windows, Tools & Techniques, Operating Systems, Software, Management, John Carroll, Henry Paulson, Intellectual Property, Piracy

Microsoft has been grappling with the problem of piracy in China in an unusual way. Over 90% of proprietary software used in China is pirated, and for Microsoft Windows, some estimates put the figure much higher. Microsoft’s recent approach uses public shaming as a tool by which to curb the actions of people who use their software illegally. Most bootleg versions of Windows connect to the normal Windows update site to receive fixes. One of those fixes causes the background of illegal copies of Windows to turn completely black every hour.

The brilliance of this approach is that it doesn’t suddenly deny users the ability to access and use their computer. That would somewhat merit the hue and cry raised by Chinese users in response to Microsoft’s moves, as Microsoft would have denied them access to their own data. It just makes it obvious to everyone else that a particular computer uses pirated software. How well that works depends on a culture’s sensitivity to individual perception by others. I have it on good authority that it wouldn’t matter so much in Mexico, but China is a different story.

Whether the new policy changes piracy levels very much is an open question. Until it does, as Ballmer recently noted:

“China’s not really very important to our business right now. I’d like it to be but it’s not because of the high rate of piracy of intellectual property. We need some IP reform in China for it to be important to our financial results.”

Though the problems Read the rest of this entry »

October 17th, 2008

The tangled web of broadcasting regulations

Posted by John Carroll @ 7:53 am

Categories: Economic Policy, Television

Tags: Web, Regulation, Broadcasting, John Carroll, FCC, Spectrum, Switchover, TVs, Tv & Home Theater, Personal Technology

I’ve been writing this blog for over three years now, and for the most part, have managed to write at least two posts a week. This month, however, has proven harder than most. Granted, I’ve never blogged through an election season (nor through the biggest financial meltdown since the Great Depression, but then again, as the Internet didn’t exist back then, its safe to say no blogger has), and I’m finding the idea generating part of my brain pumps out more politically-related stuff than technology-related posts. That is good for iReport, and it got me interviewed by CNN yesterday (shameless self promotion here), but it means I’m suffering from technology writers’ block from hell.

Interesting things are happening in the technology world, however, even if this blogger is as distracted as a two year old in a toy store.

It’s starting to look like the FCC may approve “white space” devices which use the unlicensed spectrum that exists between TV and other licensed channels. Personally, I think that is spectacular news, though I can see why broadcasters and mobile phone networks aren’t big fans of the idea. Those groups paid big bucks for owernship of spectrum, a price that not only reduces the potential number of competitors, but gives them a justification for charging higher prices.

“Public access” spectrum (which, in some ways, is what “white space” spectrum usage is all about) would challenge that model. It could make spectrum licensing a less valuable revenue spinner for governments, though that isn’t necessarily a bad thing. Europe hobbled the prospects of 3G (the high-speed successor to traditional GSM) by auctioning spectrum at such high prices during the boom-90s that it almost killed the market for such service (3G providers have a real trouble making a profit given the costs associated with spectrum ownership).

The loss in up-front licensing fees, however, is more than offset by the public benefit to be derived by lowering the barrier to entry for use of spectrum that can cover large areas. To be frank, maximizing licensing revenue and protecting a small pool of well-funded incumbents shouldn’t be an FCC goal. The National Association of Broadcasters (NAB), among others, may have vested interests which motivate them to continue the fight against such technology, but if the FCC truly has the public interest at heart, they should, in the end, fail in their challenge.

Of separate note, legislation will be introduced in Congress that aims to delay yet again the switchover to DTV. As things stand, analog broadcasting must end February 17th of next year. The NAB claims that 21.5 million are unprepared for the transition, though they are playing with numbers a bit. Only nine million US homes would be completely unable to receive any kind of television signal, while the rest just have a few TVs lying around the house that can’t accept over-the-air DTV signals.

That’s stretching things a bit, and so I think nine million is the real number that people should focus on. I understand the financial interest NAB members have in pushing for this legislation. Nine million fewer viewers after February 17th can reduce the value of advertising by some incremental amount.

On the other hand, there’s no better way to make people aware of the switchover than to have their televisions stop working. To quickly resolve the problem, I think the NAB should ensure that stores have information about vouchers for converter boxes so that they are ready when cave-dwellers come in wondering why their rabbit-eared TVs don’t work. Such a situation could be resolved in a few days, if handled correctly.

We’ve delayed the switchover too many times. Get it over with, already.

October 13th, 2008

Open source protectionism?

Posted by John Carroll @ 9:13 am

Categories: Economic Policy, Open Source

Tags: Open Source, John Carroll

I just caught a rather interesting piece by fellow blogger Dana Blankenhorn on the subject of the “value and values” found in open source ecosystems. Near the end, he references an article on InfoWorld which questions whether it is wise to “protect” open source development by mandating its use at the government level.

Dana had this to say in response:

Cogswell Cogs is deriving enormous value from its open source use but must share that with Spacely Sprockets? Placing this in the fictional world of The Jetsons lets you see just how big a leap this is. (The show is a product of the mainframe era, the 1960s.)

Yet that is precisely what open source values call upon us to do. It is why articles like this, equating a nation’s adoption of open source to protectionism, strike advocates as so silly and vendors as so right.

From a vendor’s perspective this is exactly what countries are doing, closing their markets to alternative approaches by mandating open source.

But from the advocate’s point of view, that mandate will also require sharing not only within that market but between markets, not only between developing markets but with developed ones as well. Where is the loss, they ask?

I don’t find Read the rest of this entry »

September 26th, 2008

Jackson Browne and Copyright

Posted by John Carroll @ 9:14 am

Categories: Digital Media, Economic Policy, Intellectual Property

Tags: Advertisement, Song, Media, John McCain, Advertising & Promotion, Marketing, John Carroll

This is old news for those who follow the legal machinations of musicians, but I didn’t know about it until I saw Jackson Browne appear on “The Colbert Report” on Monday (no, I don’t get ALL my news from Colbert, just the stuff related to musicians who sue people). Jackson Browne, apparently, is suing John McCain and the GOP over the use of the song “Running on Empty” by the Ohio Republican Party in a television advertisement. This follows a number of high-profile demands from other musicians, such as Van Halen and Heart, to prevent McCain from playing their songs at campaign rallies.

Now, just to put this in context, I can’t see any possible way I can vote for a McCain / Palin ticket. In other words, I am currently an Obama supporter. Based on recent trends in American political discourse, I’m supposed to absolutely DESPISE the opposing ticket, rejoicing at any and all humiliation which can be heaped on the candidate for whom I do not plan to vote.

I, however, HATE that aspect of American politics. Our tendency to turn the opposing side in political differences of opinion into demon-possessed caricatures demeans the political process in this country, though it is likely a result of the difficulties associated with running a campaign in a country as large as the United States. Elections are particularly expensive in the US. This provides ample opportunity for special interests to corrupt the process by helping to fund national campaigns, but it also creates incentives for parties to create simple stereotypes by which to characterize the opposition. Simple stereotypes travel well in the few seconds candidates have to communicate with the public through television advertisements, a medium which serves as the most important means by which candidates get their “message” out and which, consequently, is often the biggest expense of a national presidential campaign (which in my humble opinion should be banned; TV ads are like eating styrofoam, as they serve no informative purpose even as they make campaigns insanely expensive).

But the point of Read the rest of this entry »

September 12th, 2008

The LHC and the importance of pure research

Posted by John Carroll @ 8:37 am

Categories: Economic Policy

Tags: Europe, Health Care, Government, Vertical Industries, Taxes, Benefits, Healthcare, Enterprise Software, Software, Financial Planning

As anyone who has read some of my more economics-focused blogs would know, I’m a strong proponent of leaving many economic decisions to markets. I base this on the principle that individuals, though lacking perfect information, at least have more information about their own particular economic needs and circumstances than a central bureaucrat can ever hope to assemble. The principle of “information deficit” was famed economist Ludwig von Mises’ core criticism of socialism. Socialism doesn’t work because central planners can’t assemble the amount of information that individuals, on their own, naturally have when making buying and selling decisions.

On the other hand, I’m also very aware of the important role government plays in creating the environment within which capitalism can flourish. I attribute this awareness to Hernando de Soto, a Peruvian economist who argued that an essential component of any working capitalist system is a government that puts together sensible and coherent property and contract laws. This “structuralist” conception can easily include other functions. For instance, I consider it very important for governments to ensure that every citizen can read and write, as well as to provide each child the intellectual tools required to understand the important issues they must face as economic decision-makers and citizens. Universal education leads to an educated citizenry, and educated workers make better capitalists.

Consequently, that’s Read the rest of this entry »

July 24th, 2008

Government, markets and regulation

Posted by John Carroll @ 10:15 am

Categories: Economic Policy

Tags: Fannie Mae, Economist, Regulation, Freddie Mac, Subsidy, Government, Vertical Industries, Mortgages, Enterprise Software, Software

Problems in the housing markets aren’t usually something that relates to Information Technology. Housing in one market, retail sales another, filmed entertainment yet another, and Information Technology is about protocols and programming languages and computer operating systems and security.

So, perhaps this blog post is just an attempt by this Economics-trained programmer to interject thoughts relating to other areas of interest into his technology-oriented blog. I rationalize otherwise. Economic principles that apply in housing, retail sales, filmed entertainment and Information Technology have universal applicability, even if the micro details can vary considerably due to the nature of the products on offer.

The cover article Read the rest of this entry »

July 15th, 2008

Why Flash and Silverlight will save the web

Posted by John Carroll @ 8:53 am

Categories: Economic Policy, Programming

Tags: Web, W3C, Microsoft Silverlight, Technology, Paul Ellis, Standardization Committee, Problem Domain, Channel Management, Marketing, John Carroll

Usually, when I riff off another blogger, it’s a blogger with whom I strongly disagree. Disagreeing is a heck of a lot easier to do (a principle to which ZDNet Talkbackers may relate) because it gives you more to talk about. I’d rather join a discussion composed mostly of anti-globalization, closed border Luddites than one composed of free trade technophiles, not because I agree with the former group, but because we’d have more to talk about than the latter.

I agree completely, however, with Paul Ellis, and I think I have something to add to his argument. Ellis, in a post titled “A Proprietary Web? Blame the W3C”, discussed the issue of whether proprietary companies such as Adobe, with Flash, or Microsoft, with Silverlight, enhance the web or subvert it by popularizing technology that don’t conform to free and open web standards. Ellis’ argument was that its not the fault of Adobe and Microsoft for striking off in independent directions so much as the W3C, whose last major standardization effort (XHTML 1.1) was in 2001. Faced with a web that, in the words of Ellis, “has become increasingly stale for modern web development needs,” Flash and Silverlight fill a void left in the development architecture most closely associated with the most common communications medium in existence.

I have trouble, however, blaming Read the rest of this entry »

June 25th, 2008

America's blocked labor policies

Posted by John Carroll @ 9:15 am

Categories: Economic Policy

Tags: Visa, America, Economy, H-1B, Productivity, Entrepreneurship, Human Resources, Labor Relations, Management, John Carroll

A little known fact about the H-1B work visa program - the special visa used by most foreign technology workers who come to work in the United States - is that fashion models must compete for the same category of visa, a fact about which The Economist reminded me in its June 21st article “Beauty and the Geek.” This was less of a problem when the visa program was more generous and the visa allotment didn’t run out within hours of the start deadline. Ever since the cap was lowered in 2004 and the mad rush for the 65,000 visas allotted per year began, however, models have had a hard time coming to the United States to do fashion shoots…

…well, models who just look good in photographs and don’t regularly appear on the cover of Vogue, as apparently, supermodels qualify for another category of visa due to their “extraordinary ability.” What’s truly humorous about the situation is how a New York congressman, citing the interests of the New York fashion industry, proposed to deal with the problem.

No, he is not proposing that we loosen the restriction on the number of technology workers allowed into this country, a group of people who can be considered vastly more critical to this nation’s economy than fashion models. We need to make a new visa category for fashion models, so they aren’t forced to compete for slots with computer geeks going to work in Silicon Valley.

A comment by Read the rest of this entry »