The Economic Oracles Speak

BBC NEWS | Business | US economy at a glance

Perhaps the only thing gloomier than this picture is the fact that no American news source can be bothered by the simple process of consulting publicly available data from the government. The Brits seem to have grasped the utility of the internet browser better than American journalists. Perhaps that’s because it was a Brit who invented the world wide web and the browser.

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Liberty Migrates to Europe

IP Addresses Are Personal Data, E.U. Regulator Says | washingtonpost.com

The diametrically opposed directions that the European Community and the United States are taking ought to be extremely disconcerting to those who reside in the United States. The United States, the country that invented the internet and the addressing protocol that identifies computers on the internet (known as Transmission Control Protocol/Internet Protocol, or TCP/IP), is moving rapidly to relegate TCP/IP to a means of spying on its citizens. The awful–perhaps nonexistent–regulatory regime in the US allows providers of network services to monitor what users do, to track their habits, and to share that information with just about any entity that requires. That entity could be marketers or the watchful eyes of the government.

Meanwhile, the EU is conducting the most rational debate on the status of the IP address of computers users. As the computer becomes a significant means of communication–through applications like Skype, Gizmo, Yahoo! MSN AIM and other instant messaging clients–the IP address will become as unique and as important as a telephone number. Hence, it ought to receive as much protection as a telephone number. Global governing bodies are beginning to realize this, but the different ways in which the US and the EU governing bodies are approaching the IP address’s significance is alarming.

The American government is actively extending and abusing the regulatory vacuum surrounding the IP address to let American companies and government bodies to gather information on every citizen. In contrast, the EU is actively discussing a regulatory regime that recognizes the importance of the IP address. While the US government is diminishing privacy, the EU bodies are seeking to protect and to expand privacy. Hence, the liberties in which Americans take excessive pride are being, in effect, exported to the European Union, where people can surf comfortably now and perhaps with even greater privacy in the future.

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Toyota vs GM: Round 2

Toyota announces plan to sell 9.85M vehicles in 2008 | USATODAY.com

Toyota’s public announcement of its plans to go for General Motors’ jugular is bold. Even though it is a safe bet according to consensus, the announcement runs counter to the typically conservative Japanese way of conducting business.  Whatever the outcome, the two facts in this story that ought to raise people’s eyebrows are

  1. the battleground between GM and Toyota is not the United States or Europe. The war is being waged in developing economies.
  2. the Corolla is considered a sub-compact vehicle in the US?

The former proposition follows from the economic woes that have received ample documentation in business pages all over the world. The latter is surprising because it was Toyota models like the Tercel, Echo and Yaris that were traditionally considered the subcompact models. The Corolla was always the compact model. Does mean that the SUV effect has been so dramatic that monstrosities like the Camry are now considered “compact” vehicles? So, the Yaris is a micro-compact? Or could it be that USA Today’s writers are still conspicuously error-prone?

Is Less But Poor Regulation Better Than More But Good Regulation?

US demands air passengers ask its permission to fly | The Register

This is an absolutely incredible step that the United States government is taking against the airline industry. It is hard to conceive of how a complete passenger manifest can be produced 72 hours before a flight is to take off, yet the Transportation Safety Administration seems intent on forcing the airline industry to do the impossible: produce a definitive list of passenger 72 prior to a flight’s departure. 

The names on this manifest are then going to be compared against a massive list of terror suspects in order to clear the flight for departure. The number of names on this list of suspects is astonishing.

ACLU’s Barry Steinhardt quoted press reports of 500,000 to 750,000 people on the watch list (of which the no-fly list is a subset). “If there are that many terrorists in the US, we’d all be dead.”

TSA representative Kip Hawley noted that the list has been carefully investigated and halved over the last year. “Half of grossly bloated is still bloated,” Steinhardt replied.

What is most  vexing about this proposition is that the TSA has offered little evidence that this draconian measure will reduce the threat of terrorism in any measurable way. Hence, the airline industry–arguably the must competitive on the planet–is going to be forced to lose money by refusing to sell tickets during the 72 hour period before a flight without any real justification. This step by the TSA provides significant support for the contention that the only reason Americans resent government regulation is that American government regulation tends to be ineffective and senseless. Perhaps Frank Zappa said it best: 

 The United States is a nation of laws: badly written and randomly enforced.

Welcome to the Unsocial

Microsoft Updates the Zune Player | New York Times

Shockingly, Microsoft’s update of the Zune media player more like the iPod. Streamlined interface, more vibrant colors, and simpler graphical menus. Whether it will sell enough for it to become a “sociable” remains in serious doubt.

The Zune’s advertising slogan is “welcome to the social” because it allows one to listen to songs on nearby Zune players wirelessly. This “social” exercise has almost certainly never been experienced by anyone because the Zune’s paltry sales (only about 1.2 million units, compared with more than 300 million iPods) guarantees that one will never encounter another Zune player within the range of Zune’s wireless capabilities.

Now, of course, the new iPod touch has complete wireless connectivity, a fully functional browser and the capability to buy and download songs anywhere. These capabilities are positively better selling points than the Zune’s “new” features. If the Zune player is ever going to sell substantially enough for it to become “the social”, it had better start competing with the iPod. Zune 2.0 is still hopelessly behind the iPod. If Zune 3.0 is not released soon, it may cease to be altogether. 

Bill Gates’ investment in his foundation seems to be a wiser move than any further investment in this ill-conceived product. 

 

Apple’s Ace in the Hole: Music Industry Stupidity

Technology News: Music: SpiralFrog Hops Into Digital Music Pond With Free Downloads

Undoubtedly, the greatest challenge to Apple’s dominance of the digital music market has come from the Russian pseudopirates allofmp3.com. Fortunately for Apple, allofmp3.com was shut down recently by a Russian court responding to international charges of piracy, but unfortunately for Apple, another Russian court recently ruled that allofmp3.com’s operation are legal, and allofmp3.com will be operational again, soon.

In the meantime, the American record industry has been wasting its resources with perhaps the dumbest idea ever to emerge from this industry: www.spiralfrog.com. According to the article linked above:

Once downloaded, the user can play the songs via a PC through Windows Media Player or a portable player that supports WMA files. SpiralFrog doesn’t support playback on Apple’s (Nasdaq: AAPL) iPod line or even Microsoft’s (Nasdaq: MSFT) Zune, nor does it provide a solution for Mac OS X users. The service only works via Windows XP or Vista PCs.

Furthermore, the user must remain active on the web site while songs are downloaded one at a time.

In other words, the recording industry has elected to challenge Apple’s service–which is functional and portable on Mac and Windows platforms–with a service that is functional only on the Windows platform and portable on no platform: the songs cannot be transported even on Microsoft’s Zune player. Spiralfrog.com seeks to challenge Apple by offering none of the features for which iTunes users are willing to spend hundreds of dollars (on an iPod, iPhone or other media player), and then charging the users by taxing their time in front of the computer.

Virtually all economic systems–barter, capitalism, communism, etc.–are based on the principle of quid pro quo, exchanging this for that. In total ignorance of the centuries of economic development that have resulted from the acceptance of this principle, the American recording industry is putting its weight behind a system that gives users absolutely nothing in exchange for their time and trouble. If spiralfrog.com is to be in anyway construed as a symbol of American capitalism, then heaven help the United States. The country will collapse under the weight of such stupidity long before any terrorist group can dream of executing another well coordinated attack.

As long as Apple’s iTunes Music Store is countered by such moronic efforts, buy Apple stock. 🙂

PS Universal Music has an inkling of business savvy left in its brain trusty by virtue of the Gbox service that it started in collaboration with Google. Unfortunately, this service is still for the Windows platform only, but it does sell DRM-free music in mp3 format. So, it may well become a viable challenge to Apple. PNM