August 26, 2011
August 25, 2011
ESR: what now for Apple in the wake of Jobs’ resignation?
Eric S. Raymond looks at the hard road ahead for Apple without Steve Jobs:
I’ve said before that I think Apple looks just like sustaining incumbents often do just before they undergo catastrophic disruption from below and their market share falls off a cliff. Google’s entire game plan has been aimed squarely at producing disruption from below, and with market share at 40% or above and Android’s brand looking extremely strong it is undeniable that they have executed on that plan extremely well. The near-term threat of an Apple market-share collapse to the 10% range or even lower is, in my judgment, quite significant — and comScore’s latest figures whisper that we may have reached a tipping point this month.
For Apple, the history of technology disruptions from below tells us that there is only one recovery path from this situation. Before the Android army cannibalizes Apple’s business, Apple must cannibalize its own business with a low-cost iPhone that can get down in the muck and compete with cheap Android phones on price. Likewise in tablets, though Apple might have six months’ more grace there.
Of course, this choice would mean that Apple has to take a massive hit to its margins. Which is the perennial problem in heading off a disruption from below before it happens; it is brutally difficult to convince your investors and your own executives that the record quarterlies won’t just keep coming, especially when your own marketing has been so persuasive about the specialness of the company and its leading position in the industry. This is a failure mode that, as Clayton Christensen has documented, routinely crashes large and well-run companies at the apparent peak of their success.
Does Tim Cook have the vision and the will to make this difficult transition happen? Nobody knows. But the odds are against it.
Look at what they actually do, not what they say
Tim Worstall peers behind the curtain of those noble, generous French fat-cats who wrote the letter to the French government, insisting that they be taxed more. It’s not a pretty picture:
All very jolly and public-spirited you might think, but applying a little bit of economic theory reveals that they’re somewhere along the “speaking with forked tongues” to “lying toads” continuum.
That bit of economics is the concept of “revealed preferences”: translated out of the jargon it just means don’t look at what people say, look at what they do. For example, Liliane Bettencourt, the L’Oreal heiress, is one signatory calling for higher taxes on herself: it’s also been widely reported that she has received tax refunds under French “fiscal shield” provisions intended to limit taxes on the wealthy to 50 per cent. Madame, if you really want to pay higher taxes, just don’t cash those cheques.
We see the same sort of call everywhere of course. All sorts of people call for higher taxes: it’s just that very few actually pay higher amounts of money. We can see this in both the UK and US.
The US has an account, “Gifts to the United States”, specifically for charitable-minded citizens. Send them a cheque, they’ll cash it and spend the money on government. Last time I checked, the figures they received were $2,671,628.40. Roughly speaking, 1 cent per head of population. OK, so, yes, taxes were too low in the US that year. By exactly that amount.
The UK numbers aren’t even that good. In the same year only five Brits sent in cheques to the Treasury and four of those people were deceased. No, the fifth was not Polly Toynbee, despite the impression one might get from her columns (well, I don’t know it wasn’t her but I’m sure she would have urged the rest of us to do the same if it were).
An FOI request revealed that from 2002 to 2009 actual living people contributed £7,349.90 to the Treasury, over and above their legally due taxation. No, not each or per year… but in total.
There’s literally nothing stopping people from paying more taxes than they actually owe: every jurisdiction appears to allow people to give more money voluntarily. The US government even allows it to be done electronically. So, if you feel you’re not paying “your rightful share”, go right ahead and give it to the government. If you don’t, you’re demonstrating that you really don’t feel under-taxed after all.
Niagara winemaker being punished for “stepping out of line”
Michael Pinkus who rarely lets an opportunity pass to let us know how he dislikes the LCBO (or as he sometimes calls it, the KGBO), reports on the troubles of Daniel Lenko, who appears to have provoked retaliation from the board for his criticisms:
An “order to comply” certificate was slapped on Lenko’s winery door. The order, from the Region of Niagara dated July 18, 2011, listed two areas of concern an official found after inspecting Lenko’s property on June 29, 2011. First, “Lenko must cease and desist from discharging winery production waste” (Lenko says this waste is 99% water and 1% wine) into an unapproved septic tank and then discharging that onto the ground surface. Second, Lenko is ordered to apply to the Region for a permit to construct a sewage system and, upon application, submit a detailed design plan from a qualified engineer or sewage systems designer and, upon approval, proceed to install the new system by Sept. 14, 2011. Costs for this work could get into the $50,000+ mark.
[. . .]
Then it hit me. I saw Danny’s face peering back at me from between two barrels in a May 6, 2011 article in the Toronto Star entitled “Grape Expectations frustrated by LCBO”. In the article Danny, who has never been shy about his dislike for our monopoly system and those who run it, said: “In the real world, there’d be an alternative, some place else to sell our wines, but the LCBO’s the only game in town … They say they’re the best at what they do, but how can you say that when they have no competition? What’s wrong with having a VQA store?” Another prominent quote in the article is not attributed to anyone, but with Danny’s face front and centre at the top it is easy for any reader to make an inference (rightly or wrongly): “Would I like to get more of my product on the shelves? Sure. But why would I provoke an 800-pound gorilla? There’s just no way to win that battle.”
[. . .]
The aforementioned picture at the top of the article had a caption that read: “Daniel Lenko started his winery in 1999 using the grapes from the vines that his father planted in Beamsville in the Niagara Wine Region, in 1959. Lenko sells his wines from the kitchen of a small house on the vineyard which he also uses as a wine testing lab and an office.” Now what do you think it take for the LCBO to get on the horn with the AGCO (Alcohol Gaming Commision Ontario — who “oversee” the wineries) or even a local official and say to them: “maybe you’ll want to look into this Lenko guy a little harder” he is after all selling wine from his kitchen and a kitchen might not be considered a suitable place to be selling alcohol from. I think someone is making an example of Danny.
Review of Australian defence establishment extended
They’ve apparently been overwhelmed by complaints, so the original term is being extended:
A review into sexual abuse in the Australian military has received such a high volume of complaints that it is being extended, Defence Minister Stephen Smith says.
The government asked a law firm to begin a review following a sex scandal at an Australian defence academy.
Mr Smith said investigators were dealing with more than 1,000 allegations of abuse.
The review will now report back on 30 September, one month behind schedule.
Investigations began after two cadets from the Australian Defence Force Academy were accused of secretly filming a female cadet having sex and broadcasting it on the internet.
They have now been charged in connection with the incident, which raised questions about the treatment of women within the Australian defence establishment.
August 24, 2011
Replacing “Lorem Ipsum”
You’ve probably encountered bits of Latin placeholder text on web pages, generally known as “Lorem Ipsum”, from the first words of the original. If you’re looking for something a bit edgier, you might try Samuel L. Ipsum instead:
Of course, I wouldn’t recommend actually using this unless you’re doing work for customers who wouldn’t be offended when it — inevitably — slips past the design phase and shows up in the finished product.
The origins of the “perp walk”
Tim Black outlines the Dominique Strauss-Kahn media drama, and explains the origin of the “perp walk”:
The whole tawdry affair looks to be petering out to a rather murky conclusion. Still, whatever else DSK might or might not have done, he has undoubtedly performed one vital function. That of the scapegoat. Historically, scapegoating referred to the ritual of investing an animal, a goat say, with the sins of the village, and then casting the burdened animal out. DSK, so-called, seems to have served a similar function. Strauss-Kahn was to be symbolically sent out of the community, taking the sins of men, especially French political ones, with him.
Nowhere was this strangely modern ritual more apparent than in the so-called perp walk. Introduced by FBI director Edgar Hoover in the 1920s to bolster public support for prosecutions, and used most famously with mobsters Alvin Karpis and Harry Campbell, it involves tipping off the press that the accused is about to be moved from one location to another. So as the ‘perp’ is walking between, for example, the jail and the police station, photographers appear to snap the accused in all their humiliation and shame. Yet although the perp walk has a long, ignoble, not to mention justice-thwarting history, it only really came into its own under then US attorney Rudolph Giuliani (a future mayor of New York) who, during the 1980s Wall Street-insider trading scandals, transformed it into a deliberately unceremonious ceremony. For example, in February 1987, handcuffed trader Richard Wigton was photographed weeping as he was marched from the trading floor of Kidder, Peabody & Co.
The purpose of the perp walk is worryingly clear. From the handcuffs to the embarrassment induced in the accused, we are encouraged to see the guilt before it has been proved. It is a spectacle designed to elicit condemnation — regardless of whether that condemnation is deserved or not. Strauss-Kahn’s perp walk was no exception. Snapped in all his handcuffed, unshaven and fallen-faced infamy as he was taken to a police station to be charged, the watching world was invited to see him as guilty, his sullen shame writ large in every defensive stride.
Australian government risks defeat over MP’s brothel expenses
Australian politics are so much more interesting than our boring old Canadian version:
A political scandal involving alleged payments to prostitutes by an MP, which threatens Australia’s minority government, deepened on Wednesday when the politician’s former union asked police to investigate his union credit card bills.
The move by the Health Services Union (HSU) increases the likelihood that police will launch a criminal investigation into the union’s former boss Craig Thomson over alleged payments using credit cards to a Sydney brothel.
Thomson, who is now an government MP, has denied any wrongdoing. But if he is charged with a criminal offence and then found guilty, he would be forced to leave parliament, prompting a by-election that could bring down Julia Gillard’s government, which has a one-seat majority.
August 23, 2011
Markets hate uncertainty
I’ve often remarked that the economy won’t — can’t — recover as long as governments (the US government in particular) keep messing around with the rules of the game. Amity Shlaes explains why:
One product makes clear exactly how unusual this year’s slide has been, and offers a clue as to why 2011 broke the rules. It’s called the Congressional Effect Fund. Founded by Wall Streeter Eric Singer in 2008, the fund is premised on the idea that equity markets dislike a hostile Washington, tolerate a friendly Washington, but prefer an inactive Washington above all.
It follows that stock-market rallies would come most often when Congress is idled — in recess, at home, in the districts. From 1965 until early this summer, the Standard & Poor’s 500 Index, Singer’s proxy for stocks, rose 17 percent while Congress was out of session versus only 0.9 percent while Congress was working in Washington.
In one study, four scholars took a step back to look at a century of returns — from 1897, just after the Dow Jones Industrial Average was founded, to 1997 — and found that average daily returns when Congress was out of session were almost 13 times higher than when it was in. Their explanation: “Perhaps the market enjoys the temporary certainty exhibited by the absence of Congressional decisions.”
Singer is blunter. About Washington’s impact on the economy, he says simply: “Congress subtracts value.”
The regulators are still on the job, but the legislators appear to be the ones causing the greater degree of uncertainty — and thereby limiting market opportunities. Nice work, government.
A nice reminder that I haven’t listened to “Finlandia” recently
Which I quickly remedied while reading this article:
Wildly popular a century ago as an icon of Finnish nationalism in a late-Romantic vein, Jean Sibelius was largely dismissed by music aficionados after World War II as something of a conservative lightweight. So why is the Bard Music Festival this month featuring his work in a series of concerts titled “Sibelius and His World”?
Because his condemnation, much like his popularity, was based on reductive assumptions colored by politics. Sibelius’s aesthetic paradoxes mirror those of his biography, and his iconoclastic work deserves close, fresh, sustained, and open-minded attention. A modernist in traditional musical trappings, a globalist whose work spoke in a nationalist dialect, an innovator whose pleasing tonalities snuck his inventions into the popular ear, Sibelius is as underappreciated today as he was perhaps overlionized between the world wars.
[. . .]
Like many of his Finnish contemporaries, as a young man Sibelius embraced the idea and dream of Finland. The notion of the distinct Finnish nation was redefined along the lines of a mythic and literary heritage embodied in the epic The Kalevala. Ironically, the generational embrace of the Finnish language was somewhat awkward for him, because Swedish was his primary and dominant language. Nonetheless Sibelius, more than any other artist, managed to define and embody the spirit and aspirations of an emergent national movement. By 1914 he had become recognized worldwide as the standard-bearer of Finland. For the rest of his life (and to this day), Sibelius’s primary reputation has been as that nation’s granitelike icon.
Ah, “Finlandia”, followed by the “Karelia Suite” and the “Lemminkäinen Suite”. Lovely.
Blatchford comes not to praise Jack, but to bury him
Christie Blatchford displays great courage in saying publicly in her column what others may only be thinking in the privacy of their own minds:
Yes, his death at 61 was sad and too soon; yes, he made an enormous contribution to his party and a significant one to Canada (though I would quibble with NDP MP Libby Davies’ characterization that “He gave his life for this country”); yes, he fought a brave battle against cancer, as, mind you, does just about anyone who has it; and yes, he was a likeable, agreeable, smiley man.
Yet what was truly singular about him was how consumed by politics he was and how publicly, yet comfortably, he lived.
How fitting that his death should have been turned into such a thoroughly public spectacle, where from early morn Monday, television anchors donned their most funereal faces, producers dug out the heavy organ music, reporters who would never dream of addressing any other politician by first name only were proudly calling him “Jack” and even serious journalists like Evan Solomon of the CBC repeatedly spoke of the difficulty “as we all try to cope” with the news of Mr. Layton’s death.
By mid-day, after Prime Minister Stephen Harper had offered a few warm words about Mr. Layton’s death and rued that their oft-talked-about jam session had never happened, Mr. Solomon even expressed sniping surprise that “Jack Layton wasn’t the sole focus” of the Prime Minister’s remarks.
Mr. Harper, who clearly had not spent the day watching the national broadcaster and thus was unaware that the NDP Leader’s death was the only story of note, had gone on to mention the families of the 12 people (including six-year-old Cheyenne Eckalook; now there’s someone who died far too young) who perished in the Arctic plane crash on Saturday and the tumultuous events in Libya.
She also addresses the mawkish over-sentimentality of people who probably never met Mr. Layton leaving bunches of flowers, notes, and the like (at least in this case, we’re being spared the teddy bears) as public marks of grieving:
Held out as evidence of Canadians’ great love for Mr. Layton were the makeshift memorials of flowers, notes that appeared at his Toronto constituency office and on Parliament Hill, and in condolences in social media.
In truth, none of that is remotely unusual, or spontaneous, but rather the norm in the modern world, and it has been thus since Princess Diana died, the phenomenon now fed if not led online. People the planet over routinely weep for those they have never met and in some instances likely never much thought about before; what once would have been deemed mawkish is now considered perfectly appropriate.
Certainly, Canadians liked Mr. Layton, but the public over-the-top nature of such events — by fans for lost celebrities they never met, by television personalities for those they interviewed once for 10 minutes, by the sad and lost for the dead — make it if not impossible then difficult to separate the mourning wheat from the mourning chaff. His loss — his specific loss and his specific accomplishments — are thus diminished.
“[T]he doughnut burger was pretty much the healthiest thing offered”
The horror, the horror:
I wish you could see the disdain my boys are showing as they pose for this picture. They’re embarrassed for their mother that they have to pose with food that you could get at TGI Friday’s. A true Hoosier would have ordered this:
Now that’s dairy. Someday my kids will understand that there are things you do for Mom so that she doesn’t realize your next stop is this:
That’s a doughnut burger. They take a Krispy Kreme and put it on the griddle. Then they take a bacon cheeseburger and put it on top. No veggies for us. Of course, it’s topped with another Krispy Kreme. Noah, who has the most discriminating palate in the family, loved this. Aimee will deny liking this, but she darn well tried it. What makes the Indiana State Fair better than any other food adventure you can think of, though, is that the doughnut burger was pretty much the healthiest thing offered at the grill.
The value of computer models
Over the last several years, we’ve been bombarded with advice from climate scientists that in order to slow down global warming, we needed to abandon any hope of economic growth, as their models clearly showed that it was our growth that was causing increased temperatures around the world (except for the last ten years, somehow). In a case like this, we are assured that the models are (practically) infallible and that any delay in cutting our various emissions will invariably doom the planet to runaway temperature increases.
However, when we take the scientific community (or the more outspoken members thereof) at their word, and go with computer modelling, that’s dangerously irresponsible of us:
The current plan for Environment Canada is to monitor and measure less, and to rely more on modelling. Models are computer simulations based on scientific understanding that are applied to problems ranging from weather forecasting to economics. Models of complex systems can easily get it wrong, as the unanticipated economic collapse in 2008 revealed. This is not to say that models are not useful: in economics they give helpful guidance for investments and policy.
Models are, however, no substitute for measurements. No economist would suggest that we stop measuring economic performance, and neither should we abandon monitoring the environment in which we live. New data leads to better models and more accurate predictions.
H/T to Elizabeth for sending me the link and pointing out the models good/models bad case.
