The Austerity Delusion

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Krugman on The Austerity Delusion.

But couldn’t America still end up like Greece? Yes, of course. If investors decide that we’re a banana republic whose politicians can’t or won’t come to grips with long-term problems, they will indeed stop buying our debt. But that’s not a prospect that hinges, one way or another, on whether we punish ourselves with short-run spending cuts.

Just ask the Irish, whose government — having taken on an unsustainable debt burden by trying to bail out runaway banks — tried to reassure markets by imposing savage austerity measures on ordinary citizens. The same people urging spending cuts on America cheered. “Ireland offers an admirable lesson in fiscal responsibility,” declared Alan Reynolds of the Cato Institute, who said that the spending cuts had removed fears over Irish solvency and predicted rapid economic recovery.

That was in June 2009. Since then, the interest rate on Irish debt has doubled; Ireland’s unemployment rate now stands at 13.5 percent.

And then there’s the British experience. Like America, Britain is still perceived as solvent by financial markets, giving it room to pursue a strategy of jobs first, deficits later. But the government of Prime Minister David Cameron chose instead to move to immediate, unforced austerity, in the belief that private spending would more than make up for the government’s pullback. As I like to put it, the Cameron plan was based on belief that the confidence fairy would make everything all right.

But she hasn’t: British growth has stalled, and the government has marked up its deficit projections as a result.

Buffett cautions social-networking investors

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Warren Buffett is warning investors to be careful about which social networks they friend with their investment dollars.

Buffett, the chief executive of the Berkshire Hathaway investment empire, warned investors Friday at a conference in New Dehli to be wary of social networks such as Facebook and Twitter–a sector that has recently generated great interest and anticipation on Wall Street.

“Most of them will be overpriced," Buffett said, according to a Bloomberg report. "It's extremely difficult to value social- networking-site companies.”

“Some will be huge winners, which will make up for the rest,” he said, without specifying which companies he expects to be winners and which will be losers.

This is news?????

[Source.]

Google booked by judge

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This morning’s Observer column.

Last week, a US judge in Manhattan made a landmark decision. As to what it means, opinions vary. Some see it as arresting the cultural progress that began with the Enlightenment; others are celebrating Judge Denny Chin’s ruling as the blocking of a predatory move by a giant corporation to control access to the world’s cultural heritage. The truth, as always, lies somewhere in between…

LATER: Interesting comment by Tim O’Reilly:

I think that when we look back at the history of the e-book market one of the classic business school cases is going to be how stupid it was for publishers to sue Google. Here you have a powerful, monopolistic company, and then you have another company that comes in really as a white knight, and the publishers sued the white knight. And the thing that was wrong about this was that the publishers’ settlement basically made Google into an ineffective competitor to Amazon. It took away all of Google’s strength. It made their model like Amazon’s, in which it had no advantages.

There were some really interesting things that Google could have done like algorithmic pricing. They were talking about taking a much smaller cut of the transaction, building the marketplace in a very different way. They were talking about open standards. Google ideally should have been building a book search engine that searched all e-books where they were and not just on Google’s site. They made mistakes. If the settlement had pushed them in that way it would have been really, really interesting. But it made Google a book retailer, which they aren’t, and now we have one dominant player, and the publishers are going to really come to regret that. Apple may end up being a big player, but it’s hard to tell.

Thanks to Lorcan Dempsey for the link.

Framing ‘The Social Network’

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Terrific cinematic critique of the Sorkin/Fincher film by Jim Emerson. Sample:

Since it came out last fall, I’d almost forgotten what an exhilarating information-overload experience David Fincher’s ‘The Social Network’is. Cut and composed and performed with breathless, jittery speed, it’s a movie that consists of virtually nothing but conversations in rooms (the attempted, missed, short-circuited, coded connections that struck me when I first saw it). It’s action-packed — enough to give you whiplash, watching all the elements interacting within the 2.40:1 widescreen frame — even though there are no ‘action sequences’ (car chases, shootouts, fist fights, acrobatic stunts, etc.); the filmmaking is charged with energy without falling back on today’s routinely frenetic, handheld run-and-gun/snatch-and-grab camerawork (the camera is generally mounted on a tripod; when it moves, it’s on a crane or a dolly — often for establishing shots or a shift in perspective that brings a new element into the frame). Smart, quick, efficient.

Because I’m not a film buff, I’d never come across this kind of criticism before. But I know this particular film well, and suddenly began to see it in a new light.

Here, for example, is Emerson’s analysis of the opening sequence:

The crunchy guitar riff starts over the Columbia Pictures logo and then the crowd noise comes up, the music drops down, and before the logo fades to black and the first image appears, we hear Mark (Jesse Eisenberg) speaking the movie’s opening line — a question that’s also a challenge: “Did you know there are more people with genius IQs living in China than there are people of any kind living in the United States?” What follows is a blisteringly fast-paced screwball comedy exchange (“His Girl Friday” through a 64-bit dual-core processor) between Mark and his girlfriend (not for very much longer ) Erica in which nearly every line is a misunderstanding (intentional or unintentional), a sarcastic jab, a leap of logic, a block, an interruption, a feint, an abrupt shift in the angle of attack, a diversion, a retreat, a refinement, a recapitulation (I’m sure there are many fencing terms that apply to the various conversational strategies employed here)…

The scene offers just a few variations on some simple camera set-ups, deployed at high speed. Erica (Rooney Mara) is always on the left, Mark on the right (even in their individual close-ups they’re slightly shifted to those positions in the frame). The cutting is as quick and nervous and aggressive as the dialog, ricocheting from volley to return (and reaction shot to reaction shot). Most edits are right at the end of each character’s lines — there are hardly any pauses between them — so that the effect is like watching an intense two-camera tennis match, cutting from one side of the net to the other.

Only once after the opening shot does Fincher offer a balanced two-shot, as Erica presents an opportunity to disarm the conversation/confrontation and take it in a neutral direction: “Should we get something to eat?” Superficially, Mark makes a similar counter-offer, but it’s really another challenge: “Would you like to talk about something else?” And then we’re back to the over-the-shoulder shots (moving into close-ups) as Erica dives back in: “No, it’s just since the beginning of the conversation about finals club I think I may have missed a birthday.” By the time Mark tries to circle back to this juncture — “Do you want to get some food?” — it’s too late to recover that balance.

It would be fun to do a line-by-line, shot-by-shot accounting of the dynamics of this scene (or this whole movie), but let’s get to the point: The style here is a modern variation on some pretty straightforward, classical Hollywood filmmaking principles, distinguished two things: the velocity at which the scene is performed and cut; and the amount of information packed into the widescreen picture. (The idea of cutting a CinemaScope picture like this — especially for a simple, two-person dialog scene — would have been unthinkable until recently. Audiences for early anamorphic pictures in the 1950s and 1960s probably would have thrown up.)

Great stuff.

Hipstory

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Very interesting blog by a war photographer who has found his iPhone to be a useful casual camera. Some of his images, though technically crude, are very powerful — especially the shot of the feet of a civilian casualty in the Benghazi morgue.

This blog is part of a project borne during my travels as a professional photojournalist. For years, I have worked with bulky digital cameras, always mindful of the technical maneuvers from setting the shutter speed and aperture to editing and toning on a computer screen. In the last two years I have discovered that my iPhone has allowed me to capture scenes without feeling that I am once again on the job. To “point and shoot” has been a liberating experience. It has allowed me to rediscover the excitement of seeing imperfections and happy accidents rendered through the lens of my handheld device. I am able to create imagery, edit, and transmit all the images straight to this blog, creating a modern and efficient workflow for the most inefficient of pursuits – self expression.

The Hipstamatic App must seem weird to non-photographers — a digital app that makes digital images look like they’d been taken by a Kodak Brownie. A cynic would call it retro chic, but there’s more to it than that. See, for example, this picture of mine, snapped in a speeding train.

U.S. develops ‘Panic Button’ for democracy activists

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I recently attended a seminar in LSE given by a State Department official — one of the people who advise Hilary Clinton on technology. (The seminar was held under the Chatham House rule, so I can’t identify the speaker, but Charlie Beckett blogged about it.) What I found interesting — and encouraging — was the discovery that, despite its curiously disorganised reaction to the WikiLeaks release of diplomatic cables, the US administration still apparently believes in the idea of an open Internet. In that context, this report in the NYTimes is intriguing, perhaps even hopeful.

WASHINGTON Reuters – Some day soon, when pro-democracy campaigners have their cellphones confiscated by police, they’ll be able to hit the ‘panic button’ — a special app that will both wipe out the phone’s address book and emit emergency alerts to other activists.

The panic button is one of the new technologies the U.S. State Department is promoting to equip pro-democracy activists in countries ranging from the Middle East to China with the tools to fight back against repressive governments.

“We’ve been trying to keep below the radar on this, because a lot of the people we are working with are operating in very sensitive environments,” said Michael Posner, assistant U.S. secretary of state for human rights and labor.

The U.S. technology initiative is part of Secretary of State Hillary Clinton’s push to expand Internet freedoms, pointing out the crucial role that on-line resources such as Twitter and Facebook have had in fueling pro-democracy movements in Iran, Egypt, Tunisia and elsewhere.

The United States had budgeted some $50 million since 2008 to promote new technologies for social activists, focusing both on “circumvention” technology to help them work around government-imposed firewalls and on new strategies to protect their own communications and data from government intrusion.

“We’re working with a group of technology providers, giving small grants,” Posner told reporters.

“We’re operating like venture capitalists. We are looking for the most innovative people who are going to tailor their technology and their expertise to the particular community of people we’re trying to protect.”

Tim O’Reilly on why DRM on eBooks is a waste of time and effort

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Clip from an intriguing Forbes.com interview with Tim O’Reilly.

Jon Bruner: On all your titles you've dropped digital-rights management (DRM), which limits file sharing and copying. Aren’t you worried about piracy?

Tim O’Reilly: No. And so what? Let’s say my goal is to sell 10,000 copies of something. And let’s say that if by putting DRM in it I sell 10,000 copies and I make my money, and if by having no DRM 100,000 copies go into circulation and I still sell 10,000 copies. Which of those is the better outcome? I think having 100,000 in circulation and selling 10,000 is way better than having just the 10,000 that are paid for and nobody else benefits.

People who don’t pay you generally wouldn’t have paid you anyway. We’re delighted when people who can’t afford our books don’t pay us for them, if they go out and do something useful with that information.

I think having faith in that basic logic of the market is important. Besides, DRM interferes with the user experience. It makes it much harder to have people adopt your product.

Why some Apps work — and some don’t

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Om Malik has a thoughful post about why some products work while others don’t — no matter how much VC money and industry plaudits they attract.

He picks up Gary Vaynerchuck’s idea of The Thank You Economy, in which the companies that provide the most value to their customers win. “It is a quaint notion”, writes Malik, “as old as the first bazaar, but somehow it got lost in postindustrial over-commercialization”.

When I use Marco Arment‘s Instapaper, I quietly thank him, pretty much every single time. Why? Because he solved a problem for me and made my life more manageable. As a result I gladly upgraded to the paid version of the app. And when I am not saving or reading articles using Instapaper, I am telling everyone I can tell: Try it. That is what the “thank you economy” really is — me doing marketing for a product I have only an emotional or utilitarian connection to.

I look at all these great tablets coming to market. They are feature-laden, power-packed, and have bundles of computing oomph. And yet, they will all struggle because the makers are all looking through the wrong end of the telescope. My friend Pip Coburn emailed me, pointing out that people with iPads are the ultimate commercial for the device. The more people have them, the more people want them. “People will trust other people who do not carry an agenda to build revenues and manipulate you,” Pip wrote. Bing!

Don’t believe me? Put all the things that are part of your daily routine into these two buckets — happiness and utility — and you will see it for yourself that in the end those two are the driving forces behind a successful app, service, device or media property.

That rings lots of bells round here. Instapaper has solved lots of problems for me, and I really value it. Same goes for Dropbox, in spades. I’m currently finishing off a new book, and I’ve used Dropbox from the outset: it’s been a revelation compared with the last time I wrote a book — when I was continually fretting about back-ups, the location of different versions, etc.

Another revelation is how useful the iPad has become — for me, anyway. When it first came out, I was quite critical of it. What has changed is the ecosystem of apps which have transformed it into a really powerful mobile workstation. It’s still hopeless for my kind of blogging (which really needs multitasking), but for writing non-academic articles, reading and commenting on PDFs, note-taking in seminars and conferences and email-on-the-move it’s terrific. And Dropbox is the glue that binds it to my other ‘proper’ computers.

Thanks to Quentin, I’ve also found that the iPad is a pretty good thinking and presentation tool. It does run Keynote, which is fine if you like that kind of PowerPoint-type thing. But more importantly, it has a mind-mapping App which (unlike some iPad1 Apps) can drive a projector, and I’ve found that audiences which are PowerPointed-out seem to like it. You just work out the map of what you want to say, and then talk through it, squeezing and pinching and swiping as you talk. And if they want a printed record, you can export the map as a jpeg and email it to them.

The Libyan campaign: who’s in charge?

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Answer: impossible to say — as this sharp piece by Max Fisher argues.

On the fifth straight day of foreign, air- and sea-based attacks against Qaddafi’s forces, there is still no one leading the massive Western force. The U.S., as Pentagon officials frequently point out at daily press conferences, is not in charge. NATO, still deadlocked by internal disputes, is not in charge. The United Nations Security Council, which only gave enough authority to enforce a no-fly zone, is not in charge of the now far more aggressive campaign. The Arab League, which withdrew its support within hours of granting it, is certainly not in charge. It would be as if, in June 1944, the allied powers decided to invade Normandy at roughly the same time, but didn't bother to appoint General Eisenhower to command and coordinate the multi-national force.

Journalists trying to answer the question of who is in charge have been reduced, perhaps because no concrete answer yet exists, to speculating as to whether the U.S. might be willing to support France's proposal for a “steering committee” for the war, though it’s not even clear who would lead that committee or how it would delegate authority between the Western powers. Not only is no one in charge, no one wants to be, and no one has any idea who to appoint.

There appear to be two primary reasons for the confusion, both of which may also help explain why there’s no clear objective.

The first reason, Fisher maintains, is that all the states involved have different objectives. The most cynical is the frantic attempt by the French to overwrite the embarrassing fact that Sarkozy’s support for Tunisian dictator Ben Ali was deep, long-held, and consistent right up until the latter’s overthrow by popular protest. Italy needs Libyan oil more than most other states. And Germany, always reluctant, has become positively hostile to the venture — even to the extent of withdrawing four warships from NATO control in the Med.

The second reason is that nobody in Europe (or the US) is willing to take on a leadership role in a civil war in a fractured, tribalistic statelet.

As my mother used to say, never start something that you cannot finish.