“Advice is what we ask for when we know the answer but wish we didn’t.”
Erica Jong
So should it be called Apple Phone Inc?
Once upon a time, Apple was called Apple Computer Inc. This was partly because the Beatles had a lock on ‘Apple’, but it was also an honest description of the company.
But now? Well, the company still makes computers. (Some very nice ones too.) But consider this:
In the period that ended Dec. 27, Apple sold $51.2 billion worth of iPhones. Those sales comprised nearly 69 percent of the company’s total sales for the quarter — a record portion by a long shot. Indeed, Apple was so successful at selling iPhones during its first fiscal quarter that if it had sold nothing else — no iPads, no Macs, nothing — its total sales would still have been the third highest it had ever recorded.
The commentariat is busy opining that there are dangers in being a one-trick pony — which if course there are. Still, it’s one hell of a pony.
Medium is its own message
“Rather than casting our writing into the open maelstrom of the internet, Medium provides a sheltered space where writers don’t have to compete with other forms of content. Here, the written word rules, and everyone is an eager reader. If the internet is a city, Medium is a village.”
From an interesting essay by Marius Masalar reflecting on Medium as a publishing platform for writers and bloggers.
Do not try this
A fragment of the Yosemite climb. Unbelievable.
So what really lay behind Syriza’s victory?
Paul Mason has a hunch:
Syriza’s economics people have been crystal clear: they will no longer deal with the Troika (the EU/ECB/IMF body that runs the austerity programme). They will deal as a sovereign country with each institution separately. They argue the Troika itself was illegal.
So there is a real possibility that, as Tsipras annuls austerity this week, the hawks in the ECB – centred on Germany – will threaten to pull the Emergency Lending Assistance that keeps Greek banks afloat.
Right now Syriza’s economics team are trying to mobilise political support to stop this – from Francois Hollande, Matteo Renzi and, I am told, George Osborne. We’ll see.
For now make no mistake: this is going to become about sovereignty and democracy and the soul of the Eurozone.
Yes the Syriza people like to sing the Italian left anthem Bandiera Rossa; but if you could see the young people’s faces as they sing the anthem of ELAS, the resistance movement that defeated the Wehrmacht in 1944, you would understand what drives leftism here.
Note that last paragraph.
A Greek bearing not gifts, but common sense
Today programme interview with Yanis Varoufakis
Most interviews with politicians on BBC Radio 4’s Today programme are irritating. But not this one — with Syriza’s Yanis Varoufakis, an economist who has just been elected to parliament on the Syriza ticket and may well be the country’s next Finance Minister. Worth hearing in full.
So what’s driving the deficit reduction mania?
I’m not a conspiracy theorist, but…
Neither is Simon Wren-Lewis, the Oxford economist. But consider this interesting post on his blog:
I have searched hard to find a macroeconomic rationale for Osborne’s policy stance. A belief that QE is as effective as conventional monetary policy (there is no liquidity trap) comes close, but as I explained here it does not really fit with what Osborne has said (or not said). Osborne is certainly no market monetarist, as he has shown no interest in nominal GDP targeting. So there does not appear to be a coherent case for Osborne’s fiscal proposals that a macroeconomist could take seriously.
Second, the idea that the real motive is a small state is not the preserve of some small group of left wing conspiracy theorists. Here I quote Jeremy Warner, economics editor of the Telegraph (for non-UK readers, a newspaper firmly to the right): “In the end, you are either a big-state person, or a small-state person, and what big-state people hate about austerity is that its primary purpose is to shrink the size of government spending.” He also wrote: “The bottom line is that you can only really make serious inroads into the size of the state during an economic crisis. This may be pro-cyclical, but there is never any appetite for it in the good times; it can only be done in the bad.” I also think many of my non-UK readers will wonder why I am having to justify what is obvious in their countries.
Third, it must have become clear to many people now that reducing the deficit cannot be the overriding priority when there have been so many tax giveaways (50p rate, Help to Buy which creates large contingent liabilities, Cameron’s conference commitments, stamp duty changes that are far from fiscally neutral, pensioner bonds). Putting these down to ‘politics’, but counting spending cuts as ‘economics’, will not wash. (See Brad DeLong for the equivalent in the US). You cannot pretend that deficit reduction is driving government policy, when that driver only operates on the spending side of the accounts.
Economists in the media are beginning to realise this. It is really important that political commentators do so as well, so that those without an economics background get a clearer idea of the nature of the choices they will have to make in 100 days time.
Of course, it’s also conceivable that Osborne & Co don’t really know what they’re doing. It’s been known to happen with British governments.
And then, later this from Joseph Stiglitz:
For the past six years, the West has believed that monetary policy can save the day. The crisis led to huge budget deficits and rising debt, and the need for deleveraging, the thinking goes, means that fiscal policy must be shunted aside.
The problem is that low interest rates will not motivate firms to invest if there is no demand for their products. Nor will low rates inspire individuals to borrow to consume if they are anxious about their future (which they should be). What monetary policy can do is create asset-price bubbles. It might even prop up the price of government bonds in Europe, thereby forestalling a sovereign-debt crisis. But it is important to be clear: the likelihood that loose monetary policies will restore global prosperity is nil.
This brings us back to politics and policies. Demand is what the world needs most. The private sector – even with the generous support of monetary authorities – will not supply it. But fiscal policy can. We have an ample choice of public investments that would yield high returns – far higher than the real cost of capital – and that would strengthen the balance sheets of the countries undertaking them.
The big problem facing the world in 2015 is not economic. We know how to escape our current malaise. The problem is our stupid politics.
Bill Clinton was famous for his mantra “It’s the economy, stoopid”. The mantra we need now is “It’s the politics, stoopid”.
Jason’s First Rule of Start-ups
Jason Calcanis is one of the shrewdest tech investors around. He’s just published an insightful essay on why founders of start-ups need to keep their investors informed — really informed — about what’s going on. “Jason’s Rule of Startups” goes like this:
“If your startup isn’t sending you monthly updates it’s going out of business.”
How does he know this? Answer: Bitter experience
I know this because with two of my investments I found out that they were out of business because I emailed them over and over asking for an update. When the update finally came it was, “can we talk?”
When someone says “can we talk?” it’s over.
Today I keep a spreadsheet. The columns are the months of the year and the rows are the startups I’ve invested in. We check off the date in the month that we got the last update.
When we look at this spreadsheet — and we look weekly — we know instantly who is in trouble and who is rocking. If someone misses their second month I instantly call them on the phone — so I can help!
And that’s the big lesson for founders: if you’re not sending the report because you’re ashamed of how bad your startup is doing, you’re making a big mistake. I know, you want to clean things up a bit before sending your update — that’s reasonable.
I get it. I’ve done it. Don’t do it.
When you have problems, that’s when you should lean on your investors most. Nothing is more refreshing than getting an update from a founder that says:
- We lost our CTO to Google.
- The product is four weeks behind schedule.
- We have only nine months of runway left.
- I’m really frustrated at how slow this is going.
Awesome! Welcome to entrepreneurship … it’s really fucking hard! We know, we’ve been there and we know how to solve these problems. Let’s roll up our sleeves and get to work!
Great stuff. He’s right: I’ve been there, done that, got the tee-shirt.
We know the answer to “who blundered?”. So why the delay?
Lovely column by Simon Jenkins on the fiasco of the Chilcot Inquiry into Britain’s involvement in the Iraq war, which has taken longer to write than War and Peace and looks like coming out at twice the length. He argues that we all know who blundered — it was T. Blair with his personal infatuation with George W. Bush and the need to play poodle to the US. All of which seems obvious to most observers, but worth saying again. I particularly like this crack:
The Chilcot inquiry was a ploy of Blair’s successor, Gordon Brown, somehow to get his own back. At the time, in 2009, David Cameron said it was “an establishment stitch-up”. He little imagined it would be still be there when he was the establishment, and had to defend it.
Inequality is a feature, not a bug of neoliberalism (contd.)
Even the masters of the neoliberal universe are beginning to fret about this, as Seumas Milne reports:
The billionaires and corporate oligarchs meeting in Davos this week are getting worried about inequality. It might be hard to stomach that the overlords of a system that has delivered the widest global economic gulf in human history should be handwringing about the consequences of their own actions.
But even the architects of the crisis-ridden international economic order are starting to see the dangers. It’s not just the maverick hedge-funder George Soros, who likes to describe himself as a class traitor. Paul Polman, Unilever chief executive, frets about the “capitalist threat to capitalism”. Christine Lagarde, the IMF managing director, fears capitalism might indeed carry Marx’s “seeds of its own destruction” and warns that something needs to be done.
The scale of the crisis has been laid out for them by the charity Oxfam. Just 80 individuals now have the same net wealth as 3.5 billion people – half the entire global population. Last year, the best-off 1% owned 48% of the world’s wealth, up from 44% five years ago. On current trends, the richest 1% will have pocketed more than the other 99% put together next year. The 0.1% have been doing even better, quadrupling their share of US income since the 1980s.
What they’re really worried about, of course, is that the hoi-polloi might finally tumble to what’s been going on. Democracy has a slow-burning fuse, but in some places, notably Greece, it’s beginning to fizz.
“Escalating inequality”, continues Milne,
has also been a crucial factor in the economic crisis of the past seven years, squeezing demand and fuelling the credit boom. We don’t just know that from the research of the French economist Thomas Piketty or the British authors of the social study The Spirit Level. After years of promoting Washington orthodoxy, even the western-dominated OECD and IMF argue that the widening income and wealth gap has been key to the slow growth of the past two neoliberal decades. The British economy would have been almost 10% larger if inequality hadn’t mushroomed. Now the richest are using austerity to help themselves to an even larger share of the cake.
But there is one area of the world where this grim cycle doesn’t appear to operate:
The big exception to the tide of inequality in recent years has been Latin America. Progressive governments across the region turned their back on a disastrous economic model, took back resources from corporate control and slashed inequality. The numbers living on less than $2 a day have fallen from 108 million to 53 million in little over a decade. China, which also rejected much of the neoliberal catechism, has seen sharply rising inequality at home but also lifted more people out of poverty than the rest of the world combined, offsetting the growing global income gap.
And the implication of all this? The economic system doesn’t have to produce inequality. It’s just one version of it that does. So we need a change in the system. And for that we need a new politics. The big question is when will it arrive? And will the current intensification of ‘security’ stop it in its tracks?