Tuesday, December 20, 2011

The Case for a Strong Federal Government

There's been a lot of discussion on states' rights, particularly in the Republican primaries. Their targets vary from time to time, but the EPA and minimum wage have both been mentioned.

Here's the problem: the United States is a free trade zone. That means California cannot place tariffs on goods imported from Michigan or Alabama, and vice versa.

If environmental protection becomes a state domain, then companies that do pollute will all move to the least-stringent state, and still sell their products all over the US. A company in a stricter state will generally not be able to compete. Minimum wage also works in a similar way, as low-wage states take jobs from high-wage states. In other words, it is a race to the bottom.

The United States is also a free travel zone, so Arizona cannot deny entry to a New Yorker, and so on, which means the issue of universal health care also requires a strong central government. If one state subsidizes health care while another one doesn't, then sick people will go to the state with cheap health care, unfairly raising costs for everybody there. Just require the sick person to establish residency, I hear you suggest. The problem is that this shuts the door on people who move legitimately, but happen to be sick. In other words, each state must continue to provide whatever benefits it provides to citizens who depart for another state, at least for the duration of the residency period at the new state, or you'll have a (perhaps intolerable) gap in coverage. This is clearly a horribly messy situation that a nationwide coverage system can mitigate.

But you're free not to buy goods from polluting low-wage states, you say. The free market will take care of it, you say. How's that working for Chinese goods? Besides, the market is only a solution after the damage is done, and with things like carcinogens evident only after decades of exposure, punishing the polluters in the market is cold comfort. Worse, how would you like to travel halfway around the country to sue a polluter, while dealing with cancer?

Put simply, things that don't naturally obey borders require a central government. Pollution is not a state issue, because water flows from state to state, and the air is blown from state to state. Wages and other manufacturing costs are not a state issue, because we are all required to accept your products into our state. Communicable diseases. War. Long-Distance Transportation. Wild Habitat Conservation.

The US Federal Government may indeed be bloated, I'll freely grant. But unless you want to end free trade and movement among states, think twice about gutting the parts that require putting national interest above those of one or two states.

Wednesday, November 23, 2011

Wanderlust

I left Taiwan at age seven, and lived in the Philippines until I was 22, when I moved to the US. I lived in three different places in Taipei, three in the Philippines, two in Maryland, and two in California. So I think the longest I've ever stayed in one place is the eight or nine years in Mandaluyong, and the eight or nine here in Fremont.

Over the past few years, we thought it was probably time to buy a house, and started to save up for it. But on this previous vacation, an urge that had brewed for a couple of days came rushing out while we cooled our heels outside the Tate Modern museum in London, watching the Thames and fighting jetlag. An urge to leave it all behind and start over somewhere different.

I've always liked vacations for their time-warping quality. I feel like the whole world continues to move along its path while I've detached in observation, as if I've become timeless during those few days. This one was a bit different, and is probably mixed in with some mid-life crisis of sorts. I've long thought that aging was best represented as a narrowing of options, in the sense that as a child you could be almost anything, but as you go to college, graduate, and move from job to job, your path becomes more and more defined over the years. At some point, you are basically the one thing that you are, until the end. So this might really be an urge to fight nature, to create paths that are as wide as they were when I was young. A way to put off stagnation, decay, and therefore death?

I'm actually pretty happy with where I am, and I'm probably too responsible to actually do anything about it, yet the wanderlust tickles.

High

I'm tired of hearing Republicans complain about taxes being too high. What exactly is the magical percentage at which it isn't too high? Rick Perry wants 20%, Herman Cain is infatuated with 9%, but why not 8% or 2% or none at all?

I get the feeling that the Republican voter pictures the government as a Scrooge McDuck of sorts, hoarding all that tax money into a giant safe. In reality, every dollar collected is spent, in fact on top of taxes we borrow some more dollars to spend. Thus, taxes are not too high, they are by definition too low because we are incurring more debt every year. They might be spent on things you don't like, which is what we should be talking about instead.

Now, in many ways, government spending actually saves you money. If we each have to buy guns to defend our homes, it'll probably cost more than setting up a good police department, and probably won't even work that well (remember the wild west? really want to live like that?). Ditto for fire protection and various public works like roads, pipes, and bridges. Just imagine if your only way to get to work involves driving on a private road: how much do you suppose the owner's going to charge?

Other kinds of expenditures have a more indirect effect. The strong (and very costly) US military ensures the free flow of petroleum to fuel our economy. They deter foreign invasion, which provides a predictably safe environment for businesses to invest. All of that is worth money, but how much, exactly? If we cut the defense budget by a billion, what would it cost us indirectly? What about ten billion or a hundred billion? The same analysis can and should be done against each of the big expenditures.

In other words, there is no magic percentage to taxes or spending, and "too high" can only be true if you calculate it relative to what you're getting back. So let's talk about what government programs aren't worth the money instead.

Saturday, October 15, 2011

Percentages

Percentages are making waves these days.

There's the Occupy Wall Street movement, which is upset that 1% of the country controls so much of our resources. There's the backlash, the 53% who are upset that 47% pay no taxes (federal income taxes, to be precise). There's Herman Cain's 9-9-9 tax plan, which are three different percentages in one!

But there are plenty of truths hidden by these numbers. The top 1.5%, which is about 1.7 million households, make over US$250,000 a year. But not all of them are lazy fat cats sucking on our economic blood. Especially at the lower end of that scale, there are people who do real and relevant work. Similarly, 47% of Americans are not just lazy welfare queens who overextended their credit and are hoping for government to bail them out. Many of them work very hard and many of them wish they had work. The 9% national sales tax also hides a truth. Adding even 1% tax to the poor in this economy is a tremendous hardship. The truth is, once you reach a certain level of comfort, the percentages don't mean nearly as much anymore. If I have to pay thousands more in taxes, I might forego a vacation, perhaps delay buying a house, perhaps buy a cheaper car, none of which seriously affect my way of life. The truth is that I "lose" more than thousands just selling my Apple stock at the "wrong" time.

Are some things so egregious that they disgust me? Absolutely. My capital makes gains literally without me doing anything, and realizing those gains into cash requires a few mouse clicks. Why should those gains be taxed at a lower rate than salary? Yet, should we tax doctors and lawyers and owners of small businesses a lot?

Does it make sense that some people would have less money if they actually found a job? Absolutely, we should fix that nonsense, so we're not paying people to stay home. Are a few having too many children just to collect aid money? Sure, let's fix that.

But the very definition of "poor" is that you don't have enough money for what you need. Taking money from them either in the form of new taxes or decreased benefits means that they have to lose something else that they need. Since unemployment is already at 9%, they're not likely at all to find good jobs, even if you think taxing them would encourage them to seek jobs. So they fall further into poverty, credit, and perhaps even crime.

So look beyond just numbers. There are real people behind them that defy such simple categorization. Saying that it's 99% versus 1% or 53% versus 47% implies that there are only two kinds of people among 300 million Americans, which is just wrong.

Sunday, September 18, 2011

Absolutely

Here's the thing, conservatives: let's say we take US$1 more in taxes per year from every millionaire in the country. Do you honestly think they would change their job-creatin' investments in any way whatsoever? Surely not, since even middle-class people would not really complain (or even notice) losing a dollar a year. Some of us lose more than that just miscalculating a tip for a waitress, or just forget to take it out of our pants before washing.

Guess what? There are actually ten million millionaires in the US, and we've just cut the deficit by US$10 million. You care about the deficit, right? If so, you should be intrigued by my idea of reducing the deficit with no pain whatsoever.

Now, the other extreme is obviously bad. If we took most of what rich people earn, indeed they'll find some way to avoid it, perhaps by moving elsewhere. But surely there's some small amount that we could increase their taxes to help reduce the deficit, without them even really noticing? We can reduce the deficit by a billion dollars by taxing each millionaire a mere US$100 more. That's a bit over US$8 a month, not even three fancy coffees. Do you really think that would stop them from "creating jobs"?

The opposite in the political spectrum is true: if we paid a dollar less per recipient of Social Security, we'd save a good chunk of money (about US$60 million). If we cut too much, they'll be endangered.

Now, you might say that a billion here or there isn't a lot of money, compared to the trillions in debt. That's right, and the debt needs to be addressed by big (and probably painful) solutions, but why not cut a billion here or there anyway?

So let's stop saying that taxes absolutely cannot be raised, and benefits absolutely cannot be reduced, and instead find a balance that shares the burden like a united country should.

Friday, September 16, 2011

Dumberest

Close on the heels of my earlier post about conservatives who refuse to think more than a little, here are some recent examples of mind-numbingly simple logical errors they make.

As Dahlia Lithwick points out in her Slate article, conservatives believe that government can't do anything right. Not health care, not social safety nets, not protecting the environment. She also points out that despite all that, they believe that government can administer the death penalty just fine. Governor Perry of Texas claims to have never lost any sleep over the executions of 234 people. Whether or not any of them have been wrongly put to death is one thing, the more and immediately obvious problem is the total lack of doubt. How can the government be so inevitably bureaucratic and inefficient, yet make no mistakes on death penalty cases?

The other exception that she didn't write about is Defense. Somehow there isn't even a penny that should be cut from the over six hundred billion dollars spent on Defense. How can it be that the Pentagon runs with perfect efficiency, while no other department can run with even just an acceptable level of inefficiency?

If you think that's bad, their blind faith in tax cuts goes all the way into lunacy. The actual cost of the Bush tax cuts is not easy to calculate accurately, but suffice to say we're talking trillion. The tax cuts took effect in 2001, and completely failed to prevent the economic meltdown in 2009. The US$787-billion stimulus that conservatives called a failure? About a third of that was in tax cuts, so if the stimulus was a total failure, clearly tax cuts are a big part of that failure. More than a trillion in tax cuts failed to prevent the meltdown, and another US$218B in tax cuts "failed" to revive the economy. The latest round of tax cuts from the inane debt limit deal? Well, the first thing it failed to prevent was the downgrade of the US credit rating. When exactly are these tax cuts supposed to do anything?

You think corporations need cash? Apple Inc. alone is sitting on over US$76 billion in cash (or cash equivalents). If it's not spending that money, why would giving Apple another few more billion dollars change anything? If you understand anything at all about how banks work, you'll understand that the reason your savings account pays about 1% right now is because they have plenty of deposits compared to loans. There's plenty of money ready to be invested, if only there was something worthwhile to invest in.

The same Governor Perry also said that the verdict is still out on human causes of climate change. Ignoring the broad consensus among scientists for a moment, Perry's stance is foolish. Government leaders must act on incomplete information all the time. If he had some information the day before that terrorists were planning to hijack planes on 9/11, is he going to take no action until he gets complete and irrefutable intelligence on which buildings they plan to crash into? Of course not, he should do what he can with the best available information. Remember this is also a person who wants to dramatically cut social security now, even though it can probably still pay out 75% of benefits until 2085. Why is that verdict somehow "in"?

But Michele Bachmann takes this to her own level. She actually retold the story of a girl apparently suffered mental retardation after receiving a vaccine. Even the most cursory understanding of science should tell you that an anecdote has no meaning, because just because one happened after another does not mean there's any relationship between the two events. (In fact, it's quite hard to conclusively prove that one thing caused another.) Yet this woman - who has some non-zero chance of becoming president - believes this anecdote told by some random person she doesn't even know. She is completely unqualified for any position requiring judgement, because she has no way of telling what is reliable information and what isn't.

So, no, while I'm not at all pleased with many of his policies, President Obama doesn't really have to worry about losing my vote.

Friday, September 9, 2011

Dumb and Dumber

Two companies notorious for their lack of direction want to get together. They are not without talent. During my short stint at Yahoo! I gained respect for the mundane task of serving bytes, because when you have six hundred million customers, even the easy is hard. I've been a client-side developer for much of my career, and we scaled by selling more units of phones or iPods or whatever. The server side of things is complex, and people who can do it well (by virtue of you not hearing of disasters) are not to be sneered at. Apple has been a juggernaut this decade in seemingly all things, but many of its few failures have involved building servers.

Saving Yahoo! and AOL is actually simple: Decide a direction, brutally remove everything that doesn't fit along that direction, and concentrate your remaining resources on being the best at it. That is, simple to say, not simple to do.

Sunday, September 4, 2011

Thinking Ahead

I don't actually have a problem with conservatism per se. In many ways, I believe government should be minimal. My problem with conservatism in its modern incarnation is that it seems filled with people who are unable to think even a little bit ahead.

For example, they want to kill Social Security. Yes, it's flawed by design, requiring a base of workers to support retirees, and can fail spectacularly when demographics shift wildly such as when the baby boomers retire. However, killing Social Security does not make the seniors vanish in a puff of smoke, they just become poor. Some of them may be forced to sell their homes and move in with adult children. That means housing prices will plummet, and your spouse's mental health (and perhaps marriages) may be at risk due to increased stress. Some of them might sacrifice luxuries like travel, but some of them might have to sacrifice necessities like medicine. So it's one thing to say we should kill Social Security, but you should think a step ahead, and about the kind of country we want to have.

Medicare, Medicaid, and Unemployment Insurance all require similar thought. Would a poor person whose kids are sick just watch them die, or would he perhaps try to make that money any way he can? If enough of them do, would we need to build more prisons and hire more prison guards, at public expense? When they can no longer afford to live in a house, where will they live? That's right, they'll be on a street, perhaps even on your street. We would need more police officers to shoo them away. And unless we change our laws, emergency rooms still have to treat them, which happens to be the most expensive and least effective way of dealing with disease.

Conservative sacred cows like Defense are no different. If we shrink our standing army as the liberals want, that means a lot of young men and women will have to look for other jobs. Many of them carry trauma from wars, many of them are not highly educated. What jobs do we offer them, with an unemployment rate of consistently over 9%?

This isn't to say we can't or shouldn't cut government. This is to say that doing it drastically will have many side effects that are easily predicted, if we actually thought before we acted. Compared to the effects of raising taxes on the rich, it's downright unbelievable that Republicans still have any support.

Saturday, August 13, 2011

Christian by Redefinition

Do Christians not realize that they can't interpret the Bible whichever way they like? Take Michele Bachmann, for example:

What submission means to us, if that's what your question is, it means respect. I respect my husband. He's a wonderful, Godly man and a great father, and he respects me as his wife. That's how we operate our marriage. We respect each other, we love each other, and I've been so grateful that we've been able to build a home together.


She's referring to Colossians 3:18, where the key verb has variably been translated to "submit", "subject", and "place yourself under...authority". Any of the translations mean something very different than "respect", and Bachmann is either saying that these Bible translators are all wrong and that she knows the intention of God better, or that God has a vocabulary problem and says "submit" when He means "respect".


The obvious probability is that the Bible had been perverted in ways big and small to serve the interests of those who wrote it. That doesn't really affect its Big Meaning, but literalist Christians often have to go to these extreme stretches of mental gymnastics to face this. Instead of acknowledging that early Christians might just be sexist, they instead commit crimes against the English language.

On Expertise

Scott Adams makes an interesting point about being suspicious of people who appear certain in their knowledge or beliefs.

His mistake is confusing the experts who actually know their stuff from somebody who's merely sure. The world has become very complex, and we trust our lawyers to know the law on our behalf, our doctors to know our bodies on our behalf, and a lot of other experts to do their specialized jobs so that we don't have to try to understand it all. Modern society is a co-dependency of specialists, and what makes it all work is the trust inherent in delegation.

Now, even Einstein was famously wrong, and we are right to set up environments where experts can work without conflicts of interest, but in the end we trust the imperfect experts and make imperfect decisions, because they're still better than the layman's.

This fallacy has permeated everywhere. From politicians who label various scientists and institutions are "liberal" or "conservative", as if that's supposed to matter, to the anonymous Internet writer who has to start his sentences with "I hate Apple, but..." This is a noxious atmosphere in which political correctness of the worst form trumps actual expertise.

Saturday, August 6, 2011

On Software Patents

Here's the thing: if your company's strength is execution, then you don't need patents. In fact, you don't like patents. You want to be able to freely copy other people's ideas, execute better than they can, and come out on top.

However, if you believe in the strength of an Idea, then you need patents. Companies that are far more concerned about their reach than about money (such as Google, let's be blunt) will copy your idea. Google seems to have an internal sense of the extent of tasteful copying, and its engineers are certainly talented enough to innovate, but there are many other companies with neither the talent nor the shame.

I'm not talking about silly ideas like one-click purchase. What I'm saying is that if you think there are even a handful of great ideas in the past few decades that are worth protecting by not requiring its inventors to also be excellent executors in order to profit, then you need patents, and you're talking about patent reform, not its wholesale abolishment.

The current system clearly doesn't work. A software engineer is supposed to be familiar with most patents, at least those in his/her area of expertise, yet the sheer volume of granted patents makes this impractical. Since patents are not written in some rigid language (lawyerese is rigid by normal standards, but not at all by computer standards), it is not currently possible to use some tool to determine if your code infringes on any patents. Worse, trying to learn if you do infringe and failing to find anything can open you up to "treble damages" later in court, so the instructions I've been given at every job is to not look at all. This completes the failure of the patent system, because if I'm not allowed to look at other people's patents, I'm not "standing on the shoulder of giants" and so on.

Thus, starting from scratch, the system must have the following attributes:
  1. Patents must be few and far in between, at most 3-4 per month, so that professional software engineers can be expected to keep up.
  2. Patents must be effective long enough to give the inventor a significant market advantage, but not be so long as to stall progress. In the tech world, this is probably somewhere between 3 and 5 years.
  3. Due diligence must not be punished by extra fines. A well-meaning company must be able to document its patent search to show this.
This means a student is expected to know of as many as 240 valid patents upon graduation, and obviously many more expired but still useful ones.

Basically, I'd like a world in which a person with a great idea can make money without having to successfully run a business. I suspect these are very different skills not often found in the same person.

AA+

Apparently some faceless accountants just downgraded the the credit rating of the United States government. Frankly, that doesn't bother me too much. The US government hasn't exactly been a shining example of fiscal responsibility, not because it borrows a lot, but because of why it borrows. Going into debt for infrastructure investments and going into debt for wars are likely to have very different financial outcomes. This probably means that robotic institutional investors are no longer allowed to buy US debt, and probably means that interests would go up. That may not be such a bad thing in the long term: cheap credit is tempting, and we really ought to be more careful about going in to debt.

What truly worries me is that we're not investing in the future. As a nation we're tightening our belts and have lost hopes and dreams, as if we're merely waiting for death and hoping the money doesn't run out before then. The baby boomers might be forgiven for thinking this way, but it's time for the next generation to mentally take charge.

Friday, July 29, 2011

Tea Party Dictators

According to the Committee for a Responsible Federal Budget, the "apples-to-apples" difference between the Reid budget (US$912 billion cut) and the Boehner budget (US$917 billion cut) is about US$5 billion over ten years, which is about a third of a percent of the national debt. Neither one even comes close to a balanced budget (the 2010 deficit alone is over a trillion dollars), much less the surplus that we need to pay down the debt. So where exactly do the Republicans get the gall to claim moral high ground in keeping the budget low?

In their religious fervor for small government, the Republicans and the Tea Party in particular have forgotten one crucial thing: we are a democracy. Regardless of whether their political views are correct or wrong, about half of the country disagrees, and we get the same vote per citizen as they do.

You want your political views to lord over ours? That's called a dictatorship. In a democracy, we compromise just enough to get the laws we like passed, just as Barack Obama weakened his health care bill to make it palatable to the right edge of his party. Bills that have no chance to pass the Senate or be signed by the President are just wastes of taxpayer money. If they stay on this road, they would not only ruin our credit, they could very well ruin our democracy itself.

Saturday, July 16, 2011

Three Republican Lies

One, that cutting taxes for the rich will result in investment and therefore create jobs. This is so obviously false it's not even funny. Go look at the yield on your savings account, and I'll be surprised if it exceeds 2%, which doesn't even keep up with inflation. In other words, not only are you not earning interest, you're paying the bank to keep your money. This also means that banks just can't lend out enough money to pay you good interest. Any rich person with a good thing to invest in would've already pulled all his money out of the banks to invest.

Two, that the debt limit is an immediate problem. The fact that treasury bills also pay only tiny interest right now means lots of people want to buy it, which they wouldn't without some confidence in the long-term soundness of the US economy. The debt itself is a problem, but not something that suddenly needs to be solved by August.

Three, that the debt can be paid down by cutting taxes. The math is very simple: when you have a debt and ongoing spendings, the debt can only be paid down if you have a surplus, and it's not enough to just lower the deficit. In other words, Republicans are saying that we must cut spending until we have a surplus (because they refuse to raise taxes), but they're also trying to cut taxes at the same time, which creates even more deficit.

The debt is US$14 trillion. The deficit is US$1.5 trillion. To get a US$500 billion surplus to start meaningfully paying down the debt (and even then we're talking decades), we must find US$2 trillion a year in decreased spending or increased taxes. Since the Republicans not only will not increase taxes, they want to decrease it, so we're talking about more than US$2 trillion in spending cuts every year, and the cuts better not come from the US$600-billion defense budget.

What will happen when you cut most of this US$2 trillion from Medicare, Medicaid, and Social Security? Do you imagine this won't force seniors to become financially-dependent on their children? Do you imagine this won't force poor people into desperation, some perhaps even into crime? Do you imagine this won't send sick people who can't afford treatment to their deaths? It's clear to me that the less painful way is to make up some of this gap with increased taxes, on the rich.

Why should the rich pay more taxes? For the simple reason that they are, by definition, the ones who benefited the most from our deficit spending all these decades. Lots of programs can be audited to decrease waste, but to think you can brutally cut benefits on the poor and elderly (which merely shifts the national burden instead of solving anything) and at the same time generously lower taxes on the rich to result in a budget surplus is simply cruel.

Saturday, July 2, 2011

Hitting the Ceiling

Why is there even an argument about the federal debt ceiling in Congress? The debt is an inevitable consequence of more authorized spending than there are taxes or fees to pay for them, not something that the executive branch created. In fact, the law that limits federal borrowing is in direct contradiction to the budget bills, which is why the debt ceiling has been raised over and over again.

The Republicans who are making an issue of the debt ceiling are either idiots who don't actually understand that they've already required the government to take on this debt, or playing politics with the credit-worthiness of the United States.

Want to control the debt? Work on the budget.

...

Earlier, Rep. Paul Ryan had proposed replacing Medicare with a voucher system for seniors to go find their own medical insurance providers. Since seniors are the least desirable demographic to cover - because they actually need health care - it's laughable to think that any insurance company would take them on.

Laughable, of course, unless there's some sort of federal law requiring them to, such as the Affordable Care Act. You know, the one Republicans call "ObamaCare" and want to repeal.

...

Update: The Economist has joined in with a scathing indictment of Republican politics:
It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.

Saturday, June 25, 2011

Gay Marriage in New York

I'm firmly of the belief that marriage - particularly the "sanctity" of such - is not the business of government, much less of the US government that is specifically banned from establishing religion. But if a man and a woman can get the government to recognize their bond, so should two men or two women. Good for New York, more work to do in California.

Saturday, March 26, 2011

Challenging the iPhone, Part III

Wow, it's been nearly a year since I last wrote about this. Time really flies.

Today there are two giants in the smartphone arena: Apple's iOS and Google's Android. The market shares don't tell the full story, because other players with significant market share are in decline.

First, the Android dilemma. In many ways, this is a parallel of Microsoft Windows, which is why many observers are predicting for iOS the same fate as MacOS suffered against Windows. The main difference between Windows and Android is that Google doesn't make the bulk of its money from direct licensing, instead relies on advertising revenue, so it can afford to give away Android to manufacturers.

However, observers should also remember names like Gateway, Compaq, E-Machines, Packard Bell, et cetera, and ultimately IBM itself, which all fell to the wayside. It's hard to compete in a crowded market unless you have something unique to offer, such as Intel's CPU, or Microsoft's Windows OS, which is why these two are the big winners of the bloodbath. This is also why while the Android handset unit sales have overtaken iOS, Apple still takes home the bulk of the profits. If you're Motorola or Samsung or HTC, you know that competing on hardware alone is a race to the bottom, but you don't have the software capability to build something unique and desirable on top of Android. Android giveth, Android taketh away.

The other interesting thing is that Google has delayed the open sourcing of Honeycomb, their tablet-enhanced version of Android, because they admitted to taking shortcuts and don't want it used on the phone form factor. I find that entirely believable, and this may be the first external sign of some strain on developer resources inside Google. It also means that some significant effort will go towards unifying code for the two form factors instead of new features this year, slowing their heretofore breathtaking pace at least somewhat.

Microsoft has now shipped Windows Phone 7 to what appears to be some critical acclaim but lukewarm market success. It's had to pay Nokia US$1 billion to make handsets, which is the reverse kind of relationship that Microsoft would prefer. Nokia wasted years dithering among three or four possible challengers to iPhone, only to realize that none of them would catch up. I'm not hopeful that partnership with Microsoft will change anything. Oh, and I was right about the KIN: it turned out to be a footnote, pulled from the market after just weeks.

RIM bought QNX shortly before I wrote the previous post on this, so I'm a bit surprised I didn't mention it. Since then, RIM has announced plans to ship a tablet called the PlayBook that runs a version of QNX. However, it suffered several apparent schedule and spec changes and feature additions, most recently the inclusion of an Android compatibility mode. The chaotic SDK situation (five separate ways to write PlayBook apps) will make developers leery of committing to the PlayBook, and will diffuse their internal developer resources. While the Blackberry brand may help them sell to the enterprise market, the confused story will probably cost them in the consumer market, doomed perhaps by substandard ports.

Palm hasn't really done anything that is externally visible since the HP purchase. Presumably some time was lost to restructuring and replacing lost employees, but HP has announced that webOS will soon be used in a tablet, phone, and apparently be shipped with new PCs. Unfortunately, nothing will be available before "summer", which is quite a long time away in this market. I still think webOS is dead.

As for the iPad, Apple sold nearly 15 million of them in 2010, and has just started to ship iPad 2 to apparently warm reception. Earlier it also started shipping a CDMA version of the iPhone for Verizon to what seems to be disappointing demand according to some reports, although sales figures are not available.

To summarize, this market is still astonishingly vibrant. iOS and Android are now the two giants to contend with, while Microsoft/Nokia, RIM/QNX, and HP/Palm have started to consolidate in a bid for third place. I don't think more than one of these three will ultimately survive, and while the safe money is on Microsoft because of its resources, HP just might pull off something if the slowness back to market is made up for by serious innovation forward.

Diplomacy

Hillary Clinton's State Department should get a medal for the feat they pulled off. The Arab League unanimously asked for a no-fly zone over Libya, while China and Russia - two veto-wielding members of the UN Security Council traditionally leery of international interventions - took a step back and abstained to let the resolution pass. This is perhaps the biggest diplomatic coup for the US since President (George H. W.) Bush's State Department put together the coalition against Iraq in 1990, and this one did not involve the unprovoked invasion of a sovereign state, merely the threat of genocide by Gaddafi against his own people. These diplomats probably saved the US taxpayers billions of dollars in war expenses that other countries will now shoulder, not to mention American lives that are not risked.

Predictably, President Obama's critics couldn't just hand him a victory. People who were calling for a no-fly zone two weeks ago suddenly would not have intervened, people who had no trouble paying literally a trillion dollars (not to mention thousands of lives) to invade and occupy Iraq suddenly worried about cost, and people who championed unilateralism and exceptionalism now wanted consultation. Obama is simultaneously criticized as indecisive yet unwilling to slow down to consult with a congress at its most bitterly-divided state in recent memory.

But more importantly, the signal is that America isn't going to always show up in force anymore. Europe is now expected to keep the peace in its neighborhood, and since that includes northern Africa we can only assume it'll also include eastern Europe. South Korea and Taiwan should be taking careful notes right now, and seriously considering the possibility that the US isn't going to go all out for either of them.

Tuesday, March 15, 2011

Get Real

The House of Representatives has now gotten into the idiotic pattern of renewing government three weeks at a time. I don't work for the federal government, but anybody can easily imagine the chaos and low morale caused by constantly imminent threats of shutdown. Republicans think government is inefficient, but they're making it worse by making it difficult for even well-meaning people to do real work.

As far as I understand, even the most ambitious Tea Party politicians want "only" to cut about US$100 billion from this year's budget. This is a very big sum, but only a drop in the bucket of the US$14.2 trillion that we already owe, and not even a substantial slice of the US$1.2 trillion deficit. In other words, what we're witnessing is merely disruptive posturing. They complained that the health care bill was passed with too little discussion, yet they are wiping out substantial parts of agency budgets with far less thought, but not touching the truly costly programs.

Here's the problem. Even if you could erase the 2010 deficit with a magic pen, there's zero possibility that removing that sum from the economy would have no impact. Federal employees by the hundreds of thousands would lose their jobs. Houses would have to be sold or foreclosed. Wages in private industry would be depressed by the increased competition. These conservatives refuse to understand that we're talking about US$1.2 trillion of spent money, and even if we all agree it's wasteful (and we don't) doesn't mean cutting it abruptly is the right solution. Quite simply, a federal employee you lay off will soon be receiving unemployment benefits, so you would not see the savings you initially imagined. Worse, somebody you lay off or is laid off indirectly because of these cuts might commit a crime and end up in prison, costing all of us even more. People don't just vaporize when you cut their budgets.

Worse, since this is deficit money, nobody gets to pay a penny less in taxes without the government going into deficit again. So not even the ridiculous trickle-down theory (where rich people invest their tax savings in business, thus benefiting workers) can possibly apply.

What the Republicans need to do is grow up. The federal government didn't get this fat in a day, and it's dangerous to try to trim it down in a day. Government can grow and shrink depending on what the people think its role should be, but letting it grow for decades and cutting in one stroke is a shock that this economy probably can't take. What they need to do is to actually evaluate each agency, starting with the biggest spenders, but starting with next year's budget. What we need is a plan that gradually shrinks government over the next few years until we have a surplus, and actually pay down the debt. Right now, I see Democrats with little willingness to tackle the debt, and I see Republicans willing only to slash programs they already don't like, regardless of its share in the deficit. Either way, fighting over three weeks of government at a time is not what I would expect most Americans elected and pay them to do.

Saturday, February 5, 2011

Tax Credits for Hybrids

I was doing taxes, and decided to see what credit I'd qualify for if I bought a hybrid. Turns out a certain car model only gets a credit for the first 60,000 sold to their first owners, so popular hybrids are usually not qualified anymore. Here's the list of model year 2011 cars, their MSRP, and the respective credits:
  • BMW Active Hybrid 750i, $102,300, $900
  • BMW Active Hybrid Li, $106,200, $900
  • BMW Active Hybrid X6, $88,900, $1,550
  • Cadillac Escalade Hybrid (2WD & 4WD), $73,840, $2,200
  • Chevrolet Tahoe Hybrid C1500 2WD, $50,735, $2,200
  • Chevrolet Tahoe Hybrid K1500 4WD, $53,540, $2,200
  • Chevrolet Silverado Hybrid C15 2WD, $38,340, $2,200
  • Chevrolet Silverado Hybrid K15 4WD, $41,490, $2,200
  • GMC Sierra Hybrid C15 2WD, $38,710, $2,200
  • GMC Sierra Hybrid K15 4WD, $41,860, $2,200
  • GMC Yukon Hybrid C1500 2WD, $51,200, $2,200
  • GMC Yukon Hybrid K1500 4WD, $54,010, $2,200
  • GMC Yukon Denali Hybrid K1500 4WD, $61,360, $2,200
  • Mercedes Benz ML450 Hybrid, $55,790, $2,200
  • Nissan Altima Hybrid, $26,800, $2,350
  • Porsche Cayenne S Hybrid, $67,700, $1,800
As I have called out in boldface, only one of these qualified models sells for under $30,000. Why are we giving tax breaks to people who are buying $100,000 cars? Does anybody think that someone who buys the BMW 750i is even going to notice the $900?

Sunday, January 30, 2011

Spoiled and Stupid

For too long, the US government had been allowed to spend more than it made in taxes. Deficit spending per se isn't wrong, but borrowed money needs to be invested in things that will elevate society as a whole, or it will ultimately become more expensive than just taxing. Obviously, decades worth of borrowed money did not increase revenue enough to pay back the debt, and worse, it gave the taxpayers an unrealistic expectation of services for the price they actually pay in taxes.

Well, the house of cards is coming down. California's new governor Jerry Brown is facing a US$25 billion deficit, and he is now proposing to cover half of that in painful cuts, and the other half with increased taxes. Tea Party winner Edward Mangano of Nassau County in New York kept his campaign promise and repealed an unpopular home energy tax on his first day in office. Now, the Nassau County Interim Financial Authority has seized control of the county's finances, because he is $176 million short. Still, the US Congress is nowhere near an agreement on whether to raise taxes to pay for the services (we're really just talking about four or five things that make up 75% of the budget) or to severely cut into those. There is no other way. Math doesn't care.

The core problem is not Democratic or Republican, but that the American people don't want to pay for the government services they want to keep, and are not smart enough to realize that the politicians either don't know, don't care, or are lying about this.

Thursday, January 27, 2011

From Simmer to Boil

Looking at Tunisia and now Egypt and Yemen, I can't help but think that decades of American and European foreign policy that values stability over freedom and fairness had a hand in it. Since 1979, the US gives Egypt an average of about US$1.3B a year in military aid, and another $815M in economic aid, for some $50B in all. It's hard to say how much, but surely this money helped the government keep a lid on dissent.

I don't mean to point fingers. It's extremely difficult for any president who is in power for four or eight years to do anything other than keep the lid on for the duration of his office. The nature of democracy means that no administration can really commit future administrations to thirty- or fifty-year projects, such as the kind of broad education and outreach that would slowly move a country from tribalism or feudalism or monarchy towards a moderate and free society. Because it is so hard, we simply don't try, and make peace with the men who can keep the lid on for a few years.

Inevitably the pot boils over. Once in a while it happens in an almost orderly manner, such as in Taiwan and South Korea. Once in a while not much blood is shed, such as in the Philippines. But many times we see civil war, such as in Vietnam, Iraq, and other places. The problem when this happens is that the people and their leaders are often unprepared for the power-sharing that is core to democracy. Taiwan was ridiculed for having legislators who fight with their fists in congress, yet it was remarkably civilized compared to many other examples that involve assassinations and car bombs. The people were suddenly asked to be in charge of their nation, and expected to vote wise and peaceable people to lead them. But that of course doesn't just happen overnight.

While the Bush doctrine of imposing democracy is lunacy, we also can't just keep doing nothing until a strategically-important country suddenly explodes in revolution. It's tempting to just pay attention to the "hot spots" like Iran and North Korea, but when it happens we're trapped between our words praising democracy and our deeds suppressing it when inconvenient. We would never invade Egypt or Pakistan or Yemen, I hope, but we need to make front and center a foreign policy that does not tolerate inaction towards democracy. Yes, you can move cautiously, but if you don't move the money must dry up.

We can't very well help suppress the Egyptian people, but if the government they want is fundamentalist Islam, we don't really want that either. We should've changed their minds before it got to this, by helping to educate their people that ours really is the better path. The diplomatic coup of the century would be if we could get Europe, Russia, and China to all enforce this principle, but if they won't, we'd still have to do what we can with the power we still have.

Saturday, January 15, 2011

The Slow Death of Software as a Product

I'm a big fan of simple business models. For example, at Apple we make things that we sell for money. The better we serve our customers, the more likely they'll buy another one later. This isn't the case at Openwave, where the users are usually our customer's customer's customer, nor is it at a company like Yahoo!, where "monetization" is actually a word, and more pertinently at a company like Google.

Google makes many useful services available for free. I use Gmail and Google maps, this blog is powered by Google's Blogger, and I like Sketchup. They have, as far as I can tell, acted ethically despite being so powerful. Except for some no-win situations such as the episode with China, they have generally done right by their users.

However, all of this is possible because of their infinite income from search advertising. Because no other branch really needs to make money, Google manages to attract many bright and idealistic engineers to turn out these wonderful freebies. Many projects they take on, such as Google Earth and Google Books, are of a scale that is difficult to imagine just a decade or two ago.

But the way I'm writing this must lead you to expect the other shoe to drop.

Unfortunately, despite their best intentions, Google also is a distorting influence on many markets. Just because Google can afford to give things away for free doesn't mean that competitors who don't have their infinite search advertising revenue also can. Android is an obvious example. While Apple is unlikely to license iOS, and Palm probably wouldn't have either, Microsoft very much wants to license Windows Phone 7. Yet WP7 must now contend with a free and very competent alternative in Android. Now, it's hard to feel bad for Microsoft, which has it's own cash spigot in Windows and Office, but think about a small company. If Geoworks was around today, how might it compete with Google?

I believe Microsoft launched the first such cannonballs. By giving away Internet Explorer, it made it impossible for Netscape to sell its browser. Opera is probably the only browser that charges money today, but it has only a few percent of the market. This makes no intuitive sense. A modern browser is easily a few millions of lines of code, as complex as anything else installed on your computer, yet it cannot charge money for the effort.

Now, you might say that open source software has the same issue. Yes, it does, and the zero-price browser has much to do with Mozilla. (WebKit grew up with Apple, Nokia, and now Google support, so I won't count it despite its KHTML roots.) However, for whatever reason, free software simply hasn't taken hold in many places. Linux has not really made it on the desktop after two decades, for example, and Microsoft isn't really losing sleep over OpenOffice.org. I'm not going to try to imagine why right now, suffice to say commercial software can still find ways to compete in many realms with free software.

Competing with company-backed free software is a different thing. Apple's backing has made WebKit the number one mobile browser, rendering other mobile browsers like Openwave's mostly irrelevant. Google has made it nearly impossible to sell web-based mail or maps. This is not good for the software industry or its practitioners, because it accelerates the path to monopoly, and thus the reduction of competing solutions. Put bluntly, the only software engineers that will be needed are those who work for infinite-money companies doing this as a hobby or sideline.

This worries me a little, because I'd really rather build software as a product instead of something that attracts advertising or whatever other "monetizing" mechanism they come up with.

...

In October 2013, Apple announced that the new version of OS X, as well as the iWork suite of application software for both OS X and iOS will now be free to customers of new hardware.