Retaliate in kind – I could imagine a new service that lets you sic your own robodialer on the people who were nice enough to target you.  Surely the irritation could motivate some small transaction fee.  You could choose from a standard set of (long-winded) messages or record your own.

Now a startup is promising to let you “communicate with politicians the way they prefer to communicate with you: Robocalls.”  I look forward to seeing whether ReverseRobocall can bring us to a state of robodialer Mutually Assured Destruction and deter politicians and their pollster lapdogs from their ongoing acts of telephonic aggression.  You can sign up for the beta here. 

Hopefully there is an API (presumably it is built on Twilio) so I can automate my 100 to 1 retaliatory policy (and the multiplier goes up for negative ads or particularly chipper politicians).  If the politicians change the law so robodialers can call our mobile numbers, we’ll need to crowdsource the mobile numbers of the political establishment to ensure they receive a fully symmetrical experience.  In the end, I suppose, it turns into a daily deals operation like everything else, with the politicians in the merchant role.  Conspiracy theorists might even suspect politicians are behind the site, using their own despicable behavior as a surefire way to build up their email list as they recognize the inexorable decline of landline phones.

This is a misleading comparison.  Amazon’s philosophy towards developers is fundamentally different from Apple’s.  The Apple App Store is far more developer-friendly today. Shifty (it may be presumptuous but I’m going to leap to a first name basis here) also mentions in passing that Amazon retains the right to set pricing and write the product description, amongst other terms, for any app in their store.  This is far more important than how they compensate for promotional sales.  And Shifty is not the first developer to question Amazon’s approach.

Amazon is fundamentally a retailer. Their lizard brain comes from the same evolutionary tree as Walmart (and there was a fair amount of genetic transfer from Arkansas to Amazon in their early days).  Great retailers squeeze every last drop of blood out of their suppliers (here is a briny illustration of Walmart in action on this front).  The problem is that without a very conscious and explicit effort, Amazon will default to treating app developers as suppliers, triggering all sorts of behavior that it going to make it very hard to cultivate developer loyalty.  They almost can’t help but behave this way; it is the expression of their corporate DNA (and that is something I appreciate when I am an Amazon customer).  Retailers see applications as just another product that sits on their shelf.  And they unilaterally print the price tags for anything on their shelves and completely control the contents of any marketing materials they create. It is inconceivable to a retailer that someone else would be setting prices or deciding what goes in their weekly advertising circular.

This isn’t just one-off behavior for Amazon; they run the Kindle app store the same way.  It isn’t well known, but there is an SDK for Kindle (the device) and you can build apps for it (you can see various Kindle apps here).  I’ve now heard from developers about submission experiences for multiple Kindle apps and the approval process makes Apple look open, transparent and speedy by comparison.  Developers get heavy-handed guidance on what their price should be and once in the store, have no ability to change price, even to run a temporary sale.  Product descriptions are rewritten by people guaranteed to know less about the application and its customers than the developer.  Some of this is a function of a team that is running flat out (Amazon runs lean and has not staffed up for reviewing lots of apps, much less learning enough about apps to write accurate and persuasive sales copy for each app), but it also is a reflection of the basic fact they are a retailer.

Contrast this to Apple who are fundamentally a platform company (despite all those stores…).  Yes, they have a bunch of rules for what gets into the App Store, occasionally make a bad judgment call, stumble on political landmines or put their thumb on the scale to advantage their own products, but by and large they do pretty well by developers.  Once you’re into the Apple App Store, you control and can change your pricing and you get to explain to potential customers what your app does.

This cultural dichotomy between seeing developers as just another set of suppliers to be plucked versus partners to be cultivated is the biggest challenge for Amazon as they roll out what otherwise looks like a promising tablet strategy this fall.  Hopefully they will suppress the WalMart gene, recognize developers have a choice of platforms and at least meet if not exceed the Apple bar in order to build a vibrant application ecosystem.  Amazon has hired a lot of Microsoft people with platform experience who understand the care and feeding of developers.  They need to step up if Amazon is going build winning platforms.

IBM

MSFT

Source: www.finviz.com

We run the numbers so you don’t have.  There are four new options:

Where this gets interesting is when you compare these plans to the physical paper subscription plans which all come with the equivalent of the All Digital Access plan.

(space padding due to table width below)

Net, keep the Weekday or Sunday-Only mountain of ink-smudged paper if you are living la vida multi-device.  I had really hoped to get rid of the newsprint altogether but I shouldn’t be paying more for near zero marginal cost product.

* How long before there is a GreaseMonkey script that adds a Twitter or Facebook referrer to every link on nytimes.com and everything is free again?

** The physical paper of course entails the wholesale pulping of forests, vast carbon emissions for home delivery, “paperboys” with inadequate health care insurance, overflowing land fills and customers with inky fingers.  I look forward to the editorial page thundering in dismay at the shortsightedness of this lamentable capitalist organization.

“Connected World” – hopefully Paul Allen won’t call from the 1990s and ask for his strategy back.

“…its vision to provide seamless, secure, context-aware experiences for the connected world” – it probably sounds better in the original German.

“…continue delivering unparalleled value” – that sounds suspiciously like more of the same actually.  So much for the break from the Hurd era.

“…well positioned to win through a compelling combination of financial strength, unmatched scale and global reach, and market-leading positions that span from the consumer to the enterprise” – translation: we’re big and not entirely sure what we do either.

“…convergence” – the 1990s may just want to put HP on speed dial.

“Powerful trends like consumerization, cloud computing and connectivity are redefining the way people live, businesses operate and the world works.” – I’d always use ‘live, work and play’ when composing this sentence.  It rolls off the tongue a little better.

“…massive, agile and open” – massive and agile so often go hand-in-hand.

“…leveraging” – once.

“Meanwhile, the cloud is combining with mobility to create ubiquitous connectivity.” – ’meanwhile’?  Evidently you have to follow multiple plotlines.

“…leverage” – twice.

“…trusted partner” – naturally.

“…continue enhancing HP’s offerings across its broad hardware, software and services portfolio to meet evolving customer demands while also leveraging its core strengths to develop the cloud- and connectivity-based solutions of the future to meet the needs of consumers, small and midsize companies and large enterprises.” – this should really help employees with what NOT to do.

“…trusted leader” – is leader an upgrade from partner?

“…a four-point strategy” – the big decision was whether to have a three or four-point strategy.

“…leveraging” – thrice.

“…core strength in cloud” – you can’t spell Heffalump without the letters H and P.  But ‘cloud’, not so much.

“…trusted partner” – on second thought, partner was better.

“…delivering the connected world” – can I get that delivered to my house overnight?

“…leverage” – not sure what comes after thrice.

“…build a robust developer community that is eager” – you can lead a horse (or insert your own CAML joke) to water, but you can’t make him eager.

“…leveraging” – starting to think this is coded reference to printer cartridge business.

“…unmatched” – true, no other company looks even remotely like HP.

“…a multitude of initiatives” – so more than four then?

“…three strategic areas” – uh, oh, now we’ve lost one. 

“…leverage” – at this point we can just call him Leo Archimedes.

“…higher-value” – higher than what?

“…greater strategic value” – ah, higher in strategery.

“A device-aware HP cloud…” – eServices lives!

“…a leader in the area of connectivity” – look out AT&T?

“The focus on performance will come through a program focusing on growth, operational excellence and quality.” – looking forward to reading the white paper on this. 

“At HP, our mission is to deliver seamless, secure, context-aware experiences for a connected world.” – repeated just in case anyone didn’t memorize it up front.

Here is the word cloud if that helps. 

In HP’s defense, the only thing worse than reading this kind of press releases is writing them.  It is next to impossible to put a coherent and concrete story together that spans all the provinces of vast technology conglomerates, so you’re left with sweeping platitudes.  Been there, done that.

Disclosures: a delighted seller of all my HPQ at $49.

The New York Times Magazine today has an article on the past, present and future of the Obama administration’s economic policy.  It is a good if long read and chock full of inside baseball, political speaking points delivered with some repetition lest you miss them and, most entertaining, anonymous score-settling amongst the recently departed economics team.  The narrative is mostly cheerleading, ex post facto rationalization and blame-shifting for the last two years.  And despite an intent to paint a positive picture going forward, specific points of the story are quite damning:

• In a dramatic meeting December 16, 2008 before taking office, the new team was “warned the country was in far worse shape than anyone realized.”  Despite this deliberately seeded anecdote, one excuse offered is they didn’t understand the true magnitude of the crisis: “The problem was that the baseline economy was in worse shape than even the grim assessment of that Chicago meeting in late 2008.”
• Economists from both the left and the right are quoted saying the strategy and guiding principles for recent economic policy are unclear: “This was all new to Obama, who, unlike Bush or Clinton, had never managed even a state economy.”  The lack of strategy is charitably described as evidence of pragmatism.
• The stimulus package was a failure, despite being enacted in January 2009 with the prediction “that if the stimulus passed, unemployment would be at 7 percent at the end of 2010.”  Stimulus proponents continue to defend the strategy but say the particulars were simply “inadequate and poorly targeted”.  The inside-the-beltway crowd views this as a problem in expectations-setting rather than actual policy.
• Unemployment is obviously still distressingly high and government statistics underreport the pain: “Counting those who are seeking full-time jobs while working part time and those how have stopped looking altogether, it’s closer to 17 percent.”
• The economic team was “fractured” and “the word most commonly used by those involved is ‘dysfunctional’”.  Larry Summers bears the brunt of it (you know him from his appearance in The Social Network).  Budget Director Peter Orszag says, “Unfortunately I think the environment often brought out the worst in people instead of the best in people. And I’d include myself in that.” I have a gift suggestion for the new team.
• They continue to flail for ideas and a strategy.  As recently as the week before Christmas, the President replies, after being presented with “familiar and uninspired” proposals, with “I’ve told you before, I want you to come with ideas that excite me.”
• The primary speaking point, voiced by Treasury Secretary Timothy Geithner, is “it could have been so much worse.’”  Despite the litany of screw-ups mentions in the article, no one had the temerity to suggest that it could have been better as well.

My purpose in writing this is not to score partisan points (one can easily argue that Obama’s core economic policy differed little from Bush’s, and both were paltry in impact compared with the Federal Reserve), but rather to indict the whole macroeconomic-industrial complex (a sentence which to me evokes this clip starting at about 1:45).  What set me off is the implication in the article that the administration is looking not just to rejuvenate the economy, but also to salvage the reputation of government management of the economy.

Creating millions of jobs is one thing, but redeeming faith in the Keynesian dream of technocratic micromanagement of something as ridiculously complex as our economy after the last few years certainly qualifies as a big hairy audacious goal.  Especially after the economic policy team responsible admits they weren’t guided by a clear strategy or set of principles, didn’t understand quite what was going on in the economy, implemented a program that was ineffective and badly missed its predicted impact, don’t know what to do next, and were the poster child for a dysfunctional team, there is some real work necessary to believe they’ll get it right next time.  The basic problem is the economic models that underlie all these policy prescriptions seem to work better in every universe except our own.  The Times article mentions a model supporting the “it could have been so much worse” school:

Without the actions taken by Bush, Obama and the Federal Reserve, the economy was headed to what Bernanke called “Depression 2.0,” in which unemployment potentially would peak at 16.5 percent, according to a later study by Blinder and Mark Zandi, chief economist at Moody’s Analytics.

I somehow resisted the urge to pillory this study, entitled “How the Great Recession Was Brought to an End”, when it first came out.  The New York Times’ lede at the time said:

“Like a mantra, officials from both the Bush and Obama administrations have trumpeted how the government’s sweeping interventions to prop up the economy since 2008 helped avert a second Depression.  Now, two leading economists wielding complex quantitative models say that assertion can be empirically proved.”

Empirically proved!  You see, Misters Blinder and Zandi have a model of the US economy.  They can type in some parameters and find out what would have happened in the absence of the fiscal and monetary actions of the last couple years.  This model is so good, it can tell us how much worse it could have been to three significant figures.  They “empirically proved” that by the end of 2010, real GDP is 6.61% higher, there are 8.40 million more jobs, the unemployment rate is 5.46 points lower and the Low Income Home Energy Assistance Program has a Keynesian multiplier of 1.13 thanks to various government actions.

Conveniently, this counterfactual is set in an alternative universe which no one can disprove.  When it comes to forecasting things in our universe, this model and its cohorts don’t do so well.  This model that so accurately predicts events in that alternative universe didn’t predict the global financial crisis nor does it accurately predict what will happen next in our universe.  And there seems to be some kind of agreement amongst polite company not to point out the huge role of failed economic models in causing the global financial crisis (Michael Lewis’ The Big Short is a great read and a very accessible introduction to wayward economic models).  And I probably shouldn’t point out that Zandi and this model both come from Moody’s which of course used its various models to rate all those mortgage securities that blew up as AAA risks (and Moody’s of course has no incentive to pander to the government in order to keep their Federally mandated position in the bond rating oligopoly…).

The epistemic arrogance, to use Nassim Taleb’s phrase, of the macroeconomics profession is staggering.  They still have the keys to the car and are trying to pass their driver’s test by pointing to how they would have parallel parked in another universe, despite having hit the cars in front and behind them as well as sideswiping the parking meter in this universe.

The Times story does offer two bright spots.  One is perhaps they have figured out economic growth is the only hope.  The new head of the Council of Economic Advisors says “We’ve shifted out of the rescue mode.  We’ve got to move into full-fledged growth mode.”  And This Time is Different: Eight Centuries of Financial Folly makes an appearance.  I highly recommend this book, even if you just read the first and last two chapters (though you’ll miss cool things like how Newfoundland lost its sovereignty and the fact Greece has been in default roughly every other year since it gained its independence from the Ottoman Empire).  This Time is Different suggests tendencies in economic behavior and the consequences of various government policies without pretending to be able to accurately predict or control them.  The concluding paragraphs:

“The lesson of history, then, is that even as institutions and policy makers improve, there will always be temptation to stretch the limits. Just as an individual can go bankrupt no matter how rich she starts out, a financial system can collapse under the pressure of greed, politics, and profits no matter how well regulated it seems to be.

Technology has changed, the height of humans has changed, and fashions have changed. Yet the ability of governments and investors to delude themselves, giving rise to periodic bouts of euphoria that usually end in tears, seems to have remained a constant. No careful reader of Friedman and Schwartz will be surprised by this lesson about the ability of governments to mismanage financial markets, a key theme of their analysis.  As for financial markets, Kindleberger wisely titled the first chapter of his classic book “Financial Crisis: A Hardy Perennial.”

We have come full circle to the concept of financial fragility in economies with massive imbalances. All too often, periods of heavy borrowing can take place in a bubble and last for a surprisingly long time. But highly leveraged economies, particularly those in which continual rollover of short-term debt is sustained only by confidence in relatively illiquid underlying assets, seldom survive forever, particularly if leverage continues to grow unchecked. This time may seem different, but all too often a deeper look shows it is not. Encouragingly, history does point to warning signs that policy makers can look at to assess risk – if only they do not become too drunk with their credit bubble-fueled success and say, as their predecessors have for centuries, “This time is different.”

In the meantime, I await the Nixonian proclamation that “We are all Hayekians now.”

• This is “big” Windows, not yet another repackaging of Windows CE.  Remember Windows NT got its start supporting multiple CPU architectures.
• This has huge implications for Windows Phone’s future.  It makes no sense to have two separate operating systems and application ecosystems for increasingly overlapping touch devices (phones and tablets).  It sucks for customers, developers, OEMs and is terrible for Microsoft economically to have to build and support parallel operating systems.  And Windows Phone’s road is profitability is hard to imagine.  Even if you assumed a wild leap to 20% market share, at <=$10/unit, it isn’t going to pay for the 3,000+ people working on it, never mind the marketing spend and OEM “incentives”, any time soon.  Windows Phone 8 probably is a configuration of big Windows on ARM which lets that team focus on the phone experience and not have to build an operating system top to bottom.
• This also explains the demise of Courier – a third operating system in the mix would be exponentially worse.  Presumably the Courier application experience is being implemented on big Windows as the shell for Windows tablets.
• While iOS is Apple’s branded operating system for touch devices, it shares the same underlying kernel, tool chains, etc. with Mac OSX.  Microsoft aspires to have a single, modular operating system that can be factored appropriately for the increasing variety of form factors.  Better modularization will also help power efficiency from a software perspective.  Expect new configurations of big Windows for TVs, settop boxes, etc.
• In theory Windows apps can be recompiled for ARM, but in reality they all need new user interfaces for the touch world.  So much for the vaunted “applications barrier to entry”.
• Meanwhile, the modest traction Microsoft is making with application developers for Windows Phone 7 is at risk as it is not clear whether the Windows Phone application model will be supported in the future or whether something new will be introduced.  History suggests the big Windows team will have opinions on the application model.
• The ARM support won’t show up until Windows 8 (presumed to be 2012), which is an awfully long time to wait.  The incredibly late to materialize Windows 7-based tablets look like sacrificial offerings.  Meanwhile, analysts variously estimate Apple ships between 30 and 50 million iPads this year.  And we’ll see how whether Android 3.0 is as successful with tablets as it was with smartphones, with devices hitting the shelves shortly.  There is a huge difference between being number two and number three in  market (and I guess I should mention RIMM and WebOS for completeness and the possibility Microsoft could be number five in this market).  Microsoft might consider stopping spotting multiple competitors multi-year leads in some of these markets.  But maybe the company just likes a good challenge.
• Needless to say, Microsoft is in a tough position.  Getting to a single operating system and single application model is desirable for the long term, but the degree of difficulty to get there is incredibly high being a year or more from shipping product, having a full slate (yuck, yuck) of competitors in the market and potentially Osborning the current Windows Phone along the way.
• But it could be worse – you could be Intel.  Microsoft porting to ARM is a serious indictment of Intel’s power efficiency roadmap.  Historically, Intel-Microsoft executive meetings have had colorful moments and I’d pay to see video of some of the recent ones.  I do expect Microsoft to take the high road and throw Intel a conciliatory bone or two, deeming the next generation of Atom chips to be “pretty good (for you guys…)”.  And while client-focused, this move also improves Microsoft’s options for supporting ARM-based servers in the future, making this a double-barreled nightmare for Intel.  But at least they control their own destiny with that MeToo, er, MeeGo operating system.

Will be fun watching to see how Redmond plays this one.

Why have you taken out my post? It was very helpful information and i assure atleast 1 person found it helpful unlike the rest of the comments on this site. I’ll post it again… <actual offer deleted>

The rest of you, feel free to comment normally or through the Highlighter tool to the left that I am trying out.

(via Business Insider)

Amid discussions of how dire are the fiscal situations of American states and which state most resembles Greece, plus various initiatives on the ballot in the recent election, I was curious how our fair state of Washington stacks up in terms of fiscal responsibility and sustainability.

I pulled spending data on California, Illinois and New York as they’re the most often compared to Greece (Athens-on-the-Pacific/Great Lakes/Hudson respectively).  I also threw in Texas which has outperformed most states economically over the last ten years without being completely dependent on natural resources (sorry Dakotas) and it supposedly has a different governmental philosophy (does “everything is bigger in Texas” extend to fiscal policy?).

The results are surprising as seen in Figure 1 below.  Since 2000, Washington state government spending has grown faster than that of California, Illinois and New York (gulp!).  And that is after being the most frugal through 2006!  New York is actually the most restrained state of the bunch.

Figure 1: Growth in State Government Spending: 2000-2010

(Data is normalized so 2000 spending = 100)

If you look at it just since 2006 in Figure 2, Washington’s spending growth dramatically exceeds the other Hellenic wannabes.  Spending is up almost 60% in five years.  (And note supposedly modest Texas has seen faster growth than California in this period).

Figure 2: Growth in State Government Spending: 2006-2010
 

My operating assumption is government spending can’t grow much if at all faster than the underlying economy over time.  Unfortunately, that isn’t even remotely the case in Washington, as seen in Figure 3.  Growth in state spending has outpaced the economy massively over the course of the last decade.  The economy has grown by a little over 40% while state government spending has grown by almost three times the economic growth rate.  Now you could argue the growth early in the decade is the result of countercyclical spending and automatic stabilizers in response to the recession after the dot com collapse, but that doesn’t explain more recent growth.  Spending hit an inflection point in 2006 and has grown dramatically faster than the economy since.  This takeoff predates the Second Global Contraction or the Global Financial Crisis or the Big-Ass Recession or whatever we’re supposed to call our current predicament, so it isn’t just countercyclical spending.  In fact it is a straight line up from 2006.

Figure 3: Growth in Washington State Government Spending and Washington State Economy: 2000-2010

For comparison, the same spending vs. economy comparison for California is in Figure 4.  It is a similar graph of excess although California is less of a hockey stick than Washington as they lacked the restraint of Washington in the earlier years.

Figure 4: Growth in California State Government Spending and California State Economy: 2000-2010 

Now normalizing the data above to show growth hides some interesting comparisons between states.  Washington is the smallest of the states in the sample, with an economy half the size of Illinois and a sixth that of California.  But in relative terms, state government spending consumes a higher percentage of the Washington economy than any of the other four states as seen in Figure 5.  Moreover, it has grown from 10% in 2000 to now almost 14%.

Figure 5: State Government Spending as a Percentage of the Total State Economy: 2009

When you normalize spending for economic growth in Figure 6, allowing faster growing economies to grow their spending faster, California regains the lead for the most growth in state spending relative to underlying economic growth.  Both California and Washington grew state spending relative to economic growth by about three times what New York and Texas did over the last decade.  Washington has had decent economic growth during most of the last decade and outgrew both California and Illinois in absolute terms, but not Texas or New York.  But Washington has been growing spending much faster than any state since 2006 relative to economic growth.  And just to be clear, on this graph, government spending growth exactly in line with economic growth would be a perfectly flat line at 100, so other than Texas briefly, all our states have seen spending significantly outgrowing their economy.  You do see what looks like a countercyclical upswing in spending after the 2000 downturn, but the next upswing starts before the current downturn and just keeps on going even as the economy goes from growth to recession.

Figure 6: State Government Spending Normalized for Economic Growth: 2000-2010

I’m not sure what to conclude other than Washington state spending growth over the last decade seems irresponsible and unsustainable.  Washington was on a relatively modest path but then went nuts in its spending after 2006 and I don’t know why.  Strong economic growth is the absolute best solution for fiscal challenges, but even then you’d like to see growth in government spending tracking the rate of economic growth, and certainly not growing at three times the rate.  Unfortunately, we’re in all likelihood in for a period of slow economic growth over the next few years (read This Time is Different: Eight Centuries of Financial Folly for a good, if depressing, statistical look at the aftermath of financial crises – you can just read the first and last two chapters and skip all the data exposition in between, though you will miss cool asides on Henry VIII’s fiscal policy and how Newfoundland lost its sovereignty.  It also reinforces, starting with the title, the inability of government policymakers and appropriators to learn from past consequences of irresponsible fiscal behavior). 

A Note about Data

The data came from www.usgovernmentspending.com which lets you download raw data for manipulation.  Some of their data is historic, some estimated and some interpolated.  I double checked the data with Federal and individual State sources and, interestingly, none of the numbers matched identically but all were close.  I assume any noise averages out.  To get a full economic cycle, I started with the year 2000.  And these numbers don’t include various off-budget shenanigans or underfunded pension funds or any of the other inexorable headlines of the near future.

My Excel spreadsheet with the underlying data and normalization calculations can be downloaded here for those of you who want to wonk out even further.  And I uploaded it to both Google Docs and Microsoft Office Web Apps so you can have your own personal battle of web productivity solutions.

It would be interesting (but not interesting enough for me to actually do it today…) to look at a couple other things:

• Compare these spending numbers against other measures of economic performance such as per capita and household income as well as disposable income. 
• Combined state and local government spending to see if overall spending per head between states is closer. 
• Where the spending growth came from?  The dataset above lets you break down spending into some standard categories (e.g. healthcare vs. infrastructure).  Did specific categories booming or was it growth across the board?
• Why did Washington State spending go nuts after 2006?
• What has happened on the revenue side? How big a gap is there relative to spending as state revenues have declined along with the economy?  This is the biggest factor in sustainability – how well has Washington revenue held up relative to other states?