Let’s hope things don’t turn out this badly!
October 2008
The financial crisis currently consuming the U.S. has led tech industry leaders, such as Microsoft’s Steve Ballmer, to speak out in favor of quick Congressional action. Tech stocks, as well as general stocks, have plummeted, and there is confusion over why this crisis is happening and spreading so fast. One explanation that makes a lot of sense draws on network and information theory.
“[The U.S.] market economy is nothing more than a vast, parallel-processing information network,” explains noted economist John Rutledge in his new book Lessons From a Road Warrior. Network theory, the examination of interconnected systems, can help us understand the current market crisis, because it can aid in identifying and understanding cascading information network failures.
When a “super node” in a network goes down, for example, it has the potential to take down the whole system, since these key nodes are connected to many others. Perhaps the most familiar crash of this sort is a power blackout. If a storm or accident takes down a single power line, it can lead to a power loss for a whole city. That type of crash, Rutledge explains, is exactly what is happening now.
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Read more here.
When I open the Washington Post in the morning and find a headline like, “Banned Books, Chapter 2,” I assume that I will be reading about yet another attempt by certain conservative or religious groups to ban books from local libraries that they find objectionable, unethical, or sacrilegious. How ironic then that the debate over banning books that is currently unfolding in my home county of Fairfax County, Virginia, is being led by liberals. My ongoing series about “Liberals Abandoning the First Amendment” has been focusing on Lefties getting weak-kneed about free speech principles that they have traditionally supported, but this one takes the cake.
Here’s what is going on here in Fairfax according to Michael Alison Chandler of the Post:
During a week that librarians nationwide are highlighting banned books, conservative Christian students and parents showcased their own collection outside a Fairfax County high school yesterday — a collection they say was banned by the librarians themselves.
More than 40 students, many wearing black T-shirts stamped with the words “Closing Books Shuts Out Ideas,” said they tried to donate more than 100 books about homosexuality to more than a dozen high school libraries in the past year. The initiative, organized by Colorado Springs-based Focus on the Family, was intended to add a conservative Christian perspective to shelves that the students said are stocked with “pro-gay” books.
Most of the books were turned down after school librarians said they did not meet school system standards. Titles include “Marriage on Trial: The Case Against Same-Sex Marriage and Parenting” and “Someone I Love Is Gay,” which argues that homosexuality is not “a hopeless condition.” “We put ourselves out there . . . and got rejected,” said Elizabeth Bognanno, 17, a senior at West Springfield High School, standing before a semicircle of television cameras outside her school. “Censoring books is not a good thing. . . . We believe our personal rights have been violated.”
The New York Times, that dinosaur of old media, is currently live-blogging the most important Congressional debate since that epochal, thoughtful discussion back in October 2002 as to whether Iraq posed a clear and present danger to the United States justifying a declaration of war—I mean, total non-debate that preceded Congress’s decision to issue President a blank checkthat has proved nearly as expensive as the blank check currently before the Congress.
The highlight of the debate thus far:
11:39 a.m. | No socialism!: After Jeb Hensarling, a Republican representative from Texas, affirmed that he was voting against the bill because it smacks of socialism and might represent limits on liberty, Barney Frank, a Democratic representative from Massachusetts, said that he is “ever mindful” that George Bush might “lead us down the road to socialism,” and so Congress would monitor the bailout closely.
Wow. When Barney Frank, just about the closest thing to an avowed socialist in Congress after Bernie Sanders, warns about the dangers of a Republican president and supposed “free market” champion leading us down the “Road to (socialist) Serfdom,” we should all feel a terrible chill. To paraphrase the over-paraphrased Yeats:
Surely some revelation is at hand
Surely the Second Coming is at hand!
… what rough beast, its hour come round at last,
Slouches towards [Washington] to be born?
Amanda got to go to the debate and has a report:
On my way through the security checkpoint, I asked the Secret Service officer if I should remove my belt before passing through the metal detector. He responded, very pleasantly: “Ma’am, this isn’t an airport.” We all got to keep our shoes, too.
Note: Here’s a second post I just put live at DrewClark.com. It refers to an upcoming conference, on Friday, October 3, sponsored by the Information Economy Project at George Mason University School of Law. It will be held at 8:30 a.m. at the National Press Club. Registration details are below.
In the United States, the regulation of broadcast radio and television has always been done under a different standard than the regulation of the print medium.
As Secretary of Commerce in the administration of President Calvin Coolidge, Herbert Hoover declared: “The ether is a public medium, and its use must be for a public benefit,” he said at the Fourth National Radio Conference, in 1925. “The dominant element for consideration in the radio field is, and always will be, the great body of the listening public, millions in number, country-wide in distribution.”
When Congress created the Federal Radio Commission in 1927, it decreed that broadcasting was to serve the “public interest, convenience and necessity,” and this standard was re-affirmed in the Communications Act of 1934. Several Supreme Court decisions — albeit decisions that have been much criticized — affirmed that broadcasting could and should be treated differently than the traditional “press.”
This differential treatment for broadcasting — versus the print medium, and also cable television — was underscored by the decisions in Red Lion Broadcasting Co. v. FCC (1969), which upheld the “Fairness Doctrine,” and also FCC v. Pacifica Foundation (1978), which upheld indecency rules for over-the-air broadcast television. The Fairness Doctrine required broadcasters to grant reply time to those who said their views were criticized.
Don Marti has one of those posts I can’t resist reprinting in its entirety:
The New York Times columnists have gone to the well for reasonable pro-bailout arguments and come up dry. Time to fall back to name-calling.
People who don’t favor handing over $700 billion to known financial failures are “nihilists”, “madmen”, and “idiots”.
Look, Rep. Pete Stark, as a former bank founder and CEO, has more bank knowledge than the bailout cheerleaders, and he has come out against it. Rep. Stark is a Democrat, but this bailout issue isn’t the Republicans against the Democrats, or the free-marketers against the statists. It’s common sense against One-Big-Project-Can-Solve-Everything-ism.
Let’s bulldoze a neighborhood for One Big Freeway, and put the people in One Big Tower. Let’s put a huge percentage of the federal budget into One Big Airplane for the USAF. Let’s all read One Big Newspaper. Or let’s do One Big Bailout.
Come on, people. That never works. If there are bailouts needed, make them small, and focus them on the people who need them. Borrowers who are paying on deceptively sold mortgages? Municipalities that need bond underwriting? Fine, dig up some of the many good ideas floating around economics departments, and use them. Local and regional banks, which didn’t post the paper winnings of the big ones, are ready to take on a bigger role. Losing gamblers, and the East Coast Media Elite that wants to throw good money after bad? Let them fail.
And, he might have added, the One Big Operating System doesn’t work so good either.
http://penny-arcade.com/comic/2008/9/26/
Speaking of snakes, I am just returned from a camping trip along the Appalachian trail in the Michaux Forest, quite out of wireless reception range. Several days’ heavy rain had washed the forest clean, left the moss glowing green and the mushrooms, salamanders, crayfish, and frogs quite content. There one combats the same problems confronted by earlier settlers–mice (and the snakes they attract), staying dry and tolerably warm, the production of decent meals, and keeping small children from wandering off into the woods. Why do some people enjoy briefly returning to this world? Despite being one of those people, I can’t say. Now I am back and my day is easy and comfortable (comparatively), with time to spare contemplating the meta-structures of finance, property, and capital. Let’s all hope these structures are not nearly as fragile as our confidence in them, which, judging from the tone of remarks at last week’s ITIF conference on innovation, has fallen quite low. Continue reading →
Information Week has an article in its September 29th issue that illustrates why regulatory interventions to temper Google’s dominance are folly – things like antitrust scrutiny of the Yahoo! deal. But it takes a little understanding of how markets work.
The article lists all kinds of innovative startups that plan to challenge Google and take the field of search in all kinds of new directions. “The burst of activity over the past 12 months is more befitting a land rush than a market dominated by one powerhouse,” it says. Read it. There’s lots of interesting stuff going on.
But it’s not going just because. It’s going on because there’s a dominant player in the market. It’s going on because venture capitalists, innovators, and entrepreneurs can see the large profit that Google is making, and they want a piece of it. Excess profits act as an invitation and a spur to others, bringing new businesses and business ideas to that market.
If profits are “managed” and “brought under control” by curtailing a company’s ability to make deals (like Google would make with Yahoo!), that signal – that there is money to be made here – dissipates. Fewer innovators come to the market.
A second signal also goes out: “If you come up with something truly revolutionary in this field, we’re going to reward you with a haircut.” That dissuades investors – telling them that high profits will not come to them if they produce something great.
It’s a shame that the federal government is working to stanch the flow of innovation coming to search by going after Google.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.