Thursday, October 27, 2011

OWS - The Euthanasia of the Saver - More on Currency

Robert Hibbs chimes in with a timely review of Keynesian thought in The Euthanasia of the Saver | The Beacon:
"In chapter 24 of The General Theory of Employment, Interest and Money, John Maynard Keynes laid out his screwball idea that capital might soon become, or be made to become, no longer scarce; hence no payment would have to be made to induce people to save, and that condition would be splendid inasmuch as it would entail the “euthanasia of the rentier.” This stuff really must be seen to be believed; here is the meat of Keynes’s discussion in his own words:"
Quoting Keynes:  
"Now, though this state of affairs would be quite compatible with some measure of individualism, yet it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital. Interest today rewards no genuine sacrifice, any more than does the rent of land. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital. An intrinsic reason for such scarcity, in the sense of a genuine sacrifice which could only be called forth by the offer of a reward in the shape of interest, would not exist, in the long run, except in the event of the individual propensity to consume proving to be of such a character that net saving in conditions of full employment comes to an end before capital has become sufficiently abundant. But even so, it will still be possible for communal saving through the agency of the State to be maintained at a level which will allow the growth of capital up to the point where it ceases to be scarce.
"I see, therefore, the rentier aspect of capitalism as a transitional phase which will disappear when it has done its work. And with the disappearance of its rentier aspect much else in it besides will suffer a sea-change. It will be, moreover, a great advantage of the order of events which I am advocating, that the euthanasia of the rentier, of the functionless investor, will be nothing sudden, merely a gradual but prolonged continuance of what we have seen recently in Great Britain, and will need no revolution. [pp. 375-76]"
Should we economically-bomb ourselves back to the stone age?
If currency (credit and capital) are the lifeblood of Capitalism - is currency needed when Capitalism dies? What is the next best economic model to follow (Euro-Socialism?)

What is the correct leadership framework for a data-centric economy and how would you recognize that leadership? 
"Influencers"? "Klout score"? "Followers"?  "Committee Meetings Decisions"? "Mash-Up output"? "Crowd-Sourced Imagineering" "Team Ideation"? 

Bottom Line: 
I do not want my surgeon to have a high Klout score, I want my surgeon to be an expert, with plenty of education and experience. I am willing to pay for those skills (assets).

I'm still not sold on the imminent demise of currency or capitalism or the ability of OWS to precipitate either. See: Minyanville article by Conor Sen   

OWS - Occupy Wall Street - The End of Money and Free Museum Visits

Conor Sen of Minyanville gives a new view of a possible OWS output:  

Occupy Wall Street, Occupy Museums' Anti MoMa Protests, And The End Of Money As We Know It | Data As Currency | Museum Of Modern Art Protests | Business News |
"Is the notion of "data as currency" so absurd? We've been paying for products with data for years. Just ask Google (GOOG), Facebook, and LinkedIn (LNKD). Up until now we as consumers have mostly been giving this data away for free, letting companies use it for their own economic gain with very few consequences in cases of abuse (hey, look, there's Facebook squirming over in the corner). This will surely change in the years to come.
"But that's part of what our societal angst and Occupy Wall Street are about -- intangible goods and data are rising in value and power while the pillars of the last century, money and credit, are fading in importance. Policymakers are fighting this because they don't understand the changes that are occurring, and would consider them inane just as the 1920s-era central bankers would guffaw if you told them the world's monetary system would function for decades without a physical commodity-backing currency. This promises to be an incredibly volatile and challenging period, but one that I believe will ultimately be a huge boon for those outside the financial elite.
"It'll be a great time to be an influencer in the world of people and data -- and increasingly a less-great time to be Mr. Burns."

I think Conor makes a fatal leap of faith in his analysis. Many companies that have benefited from giving away data (free or very cheap) have struggled with ways to monetize or raise rates on the data. Somehow Netflix did not make the short list that was presented above. The rise in the importance of data does not diminish the need for currency.

As far as MOMA entrance fees: 
Art is a luxury that is enabled by economic surplus. You don't spend time painting on the cave wall if you are hungry. You shouldn't spend time in MOMA if you can't afford it. 

Bottom Line: 
Data is critical for business success, but currency - capital and credit, and the people and institutions  that control it, are not going away. 

After all, I can state a fact (data) "I am hungry", and that does not make food magically appear...


OWS Occupy Wall Street Kitchen Slowdown

Occupy Wall Street kitchen slowdown targets squatters -
"The Occupy Wall Street volunteer kitchen staff launched a “counter” revolution yesterday -- because they’re angry about working 18-hour days to provide food for “professional homeless” people and ex-cons masquerading as protesters.
For three days beginning tomorrow, the cooks will serve only brown rice and other spartan grub instead of the usual menu of organic chicken and vegetables, spaghetti bolognese, and roasted beet and sheep’s-milk-cheese salad.
They will also provide directions to local soup kitchens for the vagrants, criminals and other freeloaders who have been descending on Zuccotti Park in increasing numbers every day."
OWS will fail because protesting about stuff is hard without organic chicken and sheep's-milk-cheese salad. Oh, and the weather changed in Austin, so OWS-Austin is already in decline (the temperature dropped below 70 degrees - which is too cold for the flip-flop and t-shirt crowd). 

So, it's OK to redistribute from the wealthy (1%) to the 99% as long as you can exclude vagrants, criminals and other freeloaders??? 

Is it OK for one freeloader to hate another freeloader?

OWS - Occupy Austin "We are the 99%, 98%, 97%..."

OWS - Occupy Austin "We are the 99%, 98%, 97%..."

Austin Business Journal, Date: Thursday, October 27, 2011, 7:03am CDT 
Occupy Austin protest numbers shrink - Austin Business Journal:
"The Occupy Austin movement began nearly three weeks ago and the number of protesters at Austin City Hall are beginning to drop.
Taxpayers are paying overtime for police and extra cleaning costs for grounds while the occupiers who are left depend on food and water donations."
The weather is changing rapidly from mid to high 80s all the way down to the mid-60s!

Is it hard to be dedicated to a non-specific movement with non-specific goals and non-specific leadership?

Starve the beast. 

Friday, October 21, 2011

Toshiba Thrive Road Trip

My recent road trip was the first where I left my Dell laptop at home and took my Toshiba Thrive instead.


The weight difference was amazing. Lighter than my Dell E6400, the Thrive also let me shed the laptop bag and all of the bits and pieces inside. The only accessories that made the trip were a power cord and a couple of stylus. It certainly made TSA screening, storage, and access better on the trip. The Thrive went everywhere with me... the laptop might have stayed in the hotel room on coffee runs and quick errands.

Disadvantages/User Error

The biggest problems were due to user error (that would be me). Since the Thrive offers easy access to data on SD cards I keep most of my music on a 2GB card. This keeps my drive space free and lets me manage my music from my home workstation. Multiple SD cards are simple and easy to use. 

Of course, if you leave your SD cards at home… (oops). 

I do have some music on the internal drive so all was not lost. And, as far as the cloud based Google and Amazon music solutions – they really don’t work without internet connectivity.

The second issue was my failure to carry an HDMI cable. My hotel room had a beautiful LCD TV with a perfectly accessible HDMI port. No cable – no big screen movies. The hotel did supply a standard VGA/VGA cable - but VGA is about the only adapter missing on the Thrive This is one of the few places where the laptop would have worked better.
Android has an irritating behavior when connecting to new Wi-Fi networks. The Thrive would see and connect to new networks, but would not allow data transfers. A simple reboot resolved the issue every single time, but who wants to reboot every time they add a new network? The good news is that it does “remember” networks very well, so the second and third re-connects do not require the reboot. 

The Thrive offers the ability to disconnect from Wi-Fi at the same interval as the sleep function for the screen saver (in my case – 2 minutes). I had a "Guest Login" that forced me to re-enter my password with each reconnect. It was one of those system generated, complex passwords like “G91xe47#9G” —which is the equivalent of the expletive I muttered each time I had to retype the password.

Finally, the Firefox browser for Android Gingerbread (3.x) does not allow the viewing of Amazon Prime movies. Ok, the base Android browser does, but why is the Flash plugin for Firefox so lame? And, until Wednesday the 19th, Netflix was not available for Gingerbread. I arrived home to Round Rock to find it in the Android Store… just  a couple of days late.

Lessons Learned

  1. Carry an HDMI cable (Amazon has a huge selection under $10).
  2. Make sure to have SD cards (music and/or videos) because Wi-Fi is not quite everywhere. Example: my hotel room charges for internet access were $14.95 a day. I could have skipped that charge entirely with a little more planning. Also, 2-3 hours on a plane is perfect A/V time.
  3. Make sure to download Kindle books, or other cloud based media that you want to read or access.
So, a little learning curve for the user… and the Thrive proved to be a great travel companion.


Praising the One Percent, 1%, OccupyWallStreet in Wrong Place

George Riesman writing in the Mises Daily,
"In Praise of the Capitalist 1 Percent
"...all of us, 100 percent of us, benefit from the wealth of the hated capitalists. We benefit without ourselves being capitalists, or being capitalists to any great extent. The protesters are literally kept alive on the foundation of the wealth of the capitalists they hate. As just indicated, the oil fields and pipelines of the hated Exxon corporation provide the fuel that powers the tractors and trucks that are essential to the production and delivery of the food the protesters eat. The protesters and all other haters of capitalists hate the foundations of their own existence."
He continues: 
"Capitalism — laissez-faire capitalism — is the ideal economic system. It is the embodiment of individual freedom and the pursuit of material self-interest. Its result is the progressive rise in the material well-being of all, manifested in lengthening life spans and ever-improving standards of living.
"The economic stagnation and decline, the problems of mass unemployment and growing poverty experienced in the United States in recent years, are the result of violations of individual freedom and the pursuit of material self-interest. The government has enmeshed the economic system in a growing web of paralyzing rules and regulations that prohibit the production of goods and services that people want, while compelling the production of goods and services they don't want, and making the production of virtually everything more and more expensive than it needs to be. For example, prohibitions on the production of atomic power, oil, coal, and natural gas, make the cost of energy higher and in the face of less energy available for use in production, require the performance of more human labor to produce any given quantity of goods. This results in fewer goods being available to remunerate the performance of any given quantity of labor.
"Uncontrolled government spending and its accompanying budget deficits and borrowing, along with the income, estate, and capital gains taxes, all levied on funds that otherwise would have been heavily saved and invested, drain capital from the economic system. They thus serve to prevent the increase in both the supply of goods and the demand for labor that more capital in the hands of business would have made possible. They have now gone far enough to have begun actually to reduce the supply of capital in the economic system in comparison with the past."
Bottom Line: 
The 1% is the US Government. The protesters like the media spotlight of New York. Rather than OccupyWallStreet they really should be OccupyWashingtonDC where a few hundred people wield significantly more power.

Yes, economics is hard. Being ignorant or stupid takes much less skill.

Thursday, October 20, 2011

Student Loan Debts Crush an Entire Generation, Occupy Wall Street

Crushing Debt

Alex Pareene (@apareene) makes the following observation on in an article titled "Student Loan Debts Crush an Entire Generation".
"Some people have noticed that “student loan debt” comes up a lot among the Wall Street Occupiers and the members of the 99 percent movement. Often, older people, who either attended school when tuition was reasonable, or who didn’t attend college at all in an era when a high school diploma was enough of a qualification for a stable, middle-class career, tend to think this is all the entitled whining of spoiled kids. They don’t understand that these kids accepted a home mortgage worth of debt before they ever even had a regular income, based on phony promises, and that the debt is inescapable, regardless of life circumstances or ability to pay.
"Thanks to the horrific 2005 bankruptcy bill, one of the most nakedly venal modern examples of Congress serving the interests of the rentiers and creditors over the vast majority, debtors cannot discharge student loans through bankruptcy. The government is shielded from the risk, and creditors are licensed to collect by almost any means they deem necessary, giving no one in charge any real incentive (beyond basic human decency) to fix the situation.
"In other words, this is unprecedentedly awful for an entire generation of young people just entering adulthood."

Pareene identifies most of the list of OWS culprits: Congress, Banks, For-Profit Colleges. He omits, for some unknown reason, public and private Universities and the students that take on the debt.

There are many symptoms to the problem. But at the root... Government price supports are generally created to benefit their supporters (supporters of the government official that is). And, whenever the government guaranties a price the product will be over-produced. This rule applies universally to corn, or milk, or cheese, or houses, or college classrooms. 

NPR asks the question "Why is College So Expensive?"

"If you are a veteran of a public university, the jump in tuition at your alma mater might be downright jaw-dropping. Tuition at the University of California, Berkeley, was about $700 a year back in the 1970s. Today, U.C. Berkeley students have to fork over around $15,000 per year. That's a 2,000 percent increase.
"There's a simple explanation, according to Sandy Baum, who teaches at George Washington University. "States are paying less of the cost than they used to," Baum says. She adds that as state budgets shrink, the students' share of paying for education goes up.
Competing for Talent
"Berkeley's tuition increase is unusually large, but most public schools, which educate 80 percent of all college students, have seen dramatic increases. Private schools don't rely on state subsidies, and their prices have gone up more slowly in recent years. But they are still rising faster than inflation.
"In the past decade, tuition and fees at public four‑year colleges and universities increased at an average rate of 5.6% per year beyond the rate of general inflation. Costs at private schools, adjusted for inflation, have actually decreased."

Bottom Line 

Emerging Myth: Gaining a College degree is a ticket to the good life. 

The Government has morphed from direct subsidizer of schools, to primary lender -- with no escape clause for the borrower. The government has been managing the ability for students to pay the price (for a college degree), but not the cost (to finance the degree). 

How gracious of our government to remove the banks from the Student Loan process - why cut-in a middle man on such a sweet deal?

This Faustian Bargain has a Very High Cost

Handcuffs created by government, supplied by banks, slapped on by the Universities... subjugating those that voluntarily take on the handcuffs, the yoke, the chains and shackles of student debt. Voila, the creation of a voluntarily indentured class.

More on the Occupy Wall Street - Student Loan discussion (Link and Link)

Friday, October 14, 2011

New Media Literacy Requires Critical Thought

Josh Cantone on Mashable discusses Why New Media Literacy Is Vital for Quality Journalism
"In today’s media-saturated world, the concept of literacy is again changing. According to [Nichole] Pinkard, kids in school today may not be considered literate in the future if they don’t fundamentally understand new forms of media — things like blogs, Twitter and streaming video.
"To be truly literate, though, you also need to be able to think critically about media, discern fact from fiction, news from opinion, trusted from untrustworthy. These issues have always been thorny, but the explosion of self-publishing has only made media literacy more vital to the preservation of our democratic society." 

New Media Literacy Requires Critical Thought

Salisbury University has a quick summary of "7 Critical Reading Strategies".

Of course, the Xolotech blog as part of the "new media" would be remiss if it didn't point the reader to:  

Adler, M. J., and; Van Doren, C. (1972). How to Read A Book (Revised Edition (August 15, 1972) ed.). Touchstone. The New Yorker

"It shows concretely how the serious work of proper reading may be accomplished and how much it may yield in the way of instruction and delight."

Bottom Line:

The availability of information, in whatever media format, does not relieve the reader or viewer from using their brain. 

Miles Monroe: "My brain! It's my second favorite organ." ~Woody Allen, Sleeper

Wednesday, October 12, 2011

OccupyWallStreet, Student Loans, and Nontrepreneurism

ABC News Reports: Student Loan Payments Cripple Borrowers
"We work with our customers experiencing financial difficulty to find ways to help them remain successful," said Patricia Christel of Sallie Mae. "This can involve switching to a different payment plan and a review of their financial situation to see whether they could be eligible for a temporary period of lower or no payments."
Taking a break from payments via deferment or switching to a longer payment schedule could result in paying much more in the long run in interest.
"It doesn't make any sense when people don't care what the car costs, they only care what the payment is," said Jones about many of the options borrowers have to lower their monthly payments. "But so many people are desperate they will do whatever they can do."
"Bottom line is that we want to hear from our customers and work with them to find a way for them to be successful," said Christel. "Nobody wins — not the customer, not future students who depend on student loans for access to college, not the school and not the lender — if someone defaults.""
SmartMoney discusses the aftermathFor Student Borrowers, a Hard Truth

"What many people may not realize, however, when taking out a student loan is just how different it is from other kinds of debt. Credit-card debt, for example, can be wiped out in bankruptcy. Mortgages can be discharged through foreclosure.
For borrowers with crippling student loan debt, financial failure offers no such fresh start. The loan still must be paid off, and often with new collection costs tacked on, making it much more expensive than before. On top of that, up to 25% of a person's wages can be deducted until the loan is paid back in full. (Private lenders must get court approval for wage garnishment and the amount they can take varies.)
With federal loans, the government can also keep your federal and state income tax refunds, intercept future lottery winnings and withhold part of your Social Security payments. "Defaulting can be completely devastating to a family's finances and sense of well being," says Mark Kantrowitz, publisher of and"
[Author note: broken into 3 paragraphs for readability, emphasis added.]
Finally a quote from Peter Reilly at about an OccupyWallStreet example
"A typical, although on the extreme end, grievance is from someone who went $150,000 in debt to obtain a masters degree in Minority Womens  Studies.  She received an excellent education and is now extemely frustrated that no one is willing to hire her based on the important things that she has learned.  Now some even among the 99ers, who have posted, would put the blame for that squarely on her shoulders..."
Bottom Line: 
Just say "Maybe" to student loan forgiveness. Nontrepreneurism Part 2 and Nontrepreneurism Part 2a

Just say NO to Nontrepreneurism (Part 1), Warren Nontrpreneurism 
(See also: Part 3, Part 4, Part 5, and the Plugerville Example)

Just say YES to Entrepreneurism

P.S. Yes, there are options to avoid Student Loans entirely. See: UT Tuition and Checked Baggage, and 10 Most Affordable Colleges

Sunday, October 9, 2011

Freemium Games? How Much For Lawyer Upgrade?

Freemium Games - How Much For Lawyer Upgrade?

Who Spends The Most Money In Freemium Games? | TechCrunch
"At a quick glance: while you probably shouldn’t go all out and make the goriest, booty-filled freemium game the world has ever seen (if only because Apple would give it the boot in a heartbeat), it might not be as important to be as overly kid-friendly as smash hit freemium games like Smurfs’ Village might lead you to believe. If you focused on making a game that the 18-39 year old crowd would dig, there’s plenty of potential to walk away with quite the cash pile."
AppAdvice Reports "We Are in Love with Freemium Games":

"In the past 12 months, the majority of revenues from the App Store have shifted siginifcantly from premium to freemium apps. As such, there have now been 57 million purchase transactions across a set of freemium iOS and Android games that averages over 2 million daily active users.
"Most surprisingly, most of these purchases are for those items that are depleted when used, so called consumables. These in-app purchases include upgrades, add-ons, virtual goods, and the like."

How About Kids?

Apple learns their lessons quickly - the Smurf's Village Smurfberries fiasco was resolved and fixed. But GLUMobile (NASDAQ GM:GLUU) and the Android Marketplace was not paying attention. The Android Marketplace asks for the user to leave a credit card on file to facilitate purchases. That business practice allowed my six-year old to charge up several hundred dollars on "upgrades" for in app purchases within GLUMOBILE game.

So here are the (less than pretty) details. 

My credit card account has email notifications enabled for transactions. My email box started spinning as multiple purchases were made over a several minute period. Imagine your kid playing a game that rewards success with points and allows the points to be applied to upgrades... (practically every game they play). In this case the upgrades cost money, and my card was on file... so GLUMOBILE and/or the Android Marketplace rang up the charges

Apple and the Amazon Appstore for Android resolved this problem by forcing the user to enter a password to purchase, download or upgrade an app. 

No problem, right? 

Called home, got the kid off of the Android, then went to the GLUMOBILE website to locate customer service. Ummm, no. Their website clearly states that purchases are "confirmed" after a very short 15 minute period - nonrefundable, tough-luck. I'm not sure how that works since their app is free to download, offers no registration, and requires no login or password (authentication). I'm not exactly sure how they "know" who is playing their games or who is authorizing purchases. 

Ok, so called credit card company to contest charges. They took all of my details, no problem, it should be resolved in 6-8 weeks. BTW, the credit card company added cool feature to their dispute site. The customer can upload documents and attach them to the complaint. Very nice and very smart; why mail, scan and PDF when the customer can do the work?

Next, back to GLUMOBILE to try to work out the problem. We called the 800# several times and in addition to never getting to speak to a real person, we kept being dumped into voice mail purgatory. Since I'm not inept at Social Media I went to LinkedIn to find real people so that I could use the company directory at the 800# to locate a real person. No luck, tossed into purgatory once again. 

The good news is that Google Voice tracked all of the outbound calls (date, time, number called, length of call), and I pulled the card from the Android store. I suspect (deep in my heart I "know") that the forms submitted on their web site met a similar fate, probably assigned to a different bowge - specifically for email. 

So, the next step was "old-school" with a letter to customer service, explaining the issue and outlining the Apple experience - with a cc to the company lawyer (she was listed in LinkedIn). We just wanted a refund in a timely manner. 

Less than three weeks later our Credit Card company posted a "resolved" message online and stated that they would send us the details in the mail. I was able to confirm that the charges were removed from my account. A letter came in the mail a few days later.

So, What Actually Happened?

  1. GLUMOBILE customer service realized the problem and extended a refund.
  2. GLUMOBILE legal recognized a problem and extended a refund.
  3. The Android Marketplace realized the error and extended a refund.
  4. The credit card company reversed the charges since they were clearly unauthorized.
  5. None of the above. 

The Correct Answer is: 

5 - None of the Above!

Since the Android Marketplace and GLUMOBILE did not respond to the credit card company inquiry, the charges were "temporarily removed", pending a final resolution date in November.

I have no resolution right now, but the lessons outlined above should be shared, since the problem might apply to other in-app purchases from the Android appstore. 

In the meantime (for any GLUMOBILE employee that might read this blog), the law firm that handled the case against Apple was clearly identified in several articles - try Googling the term "Smurfberries". 

GLUMOBILE and the Android Marketplace may want to revisit the purchase, upgrade, enrollment and authentication processes, you may want to improve your customer service experience, and you may want to review your customer complaint process with your customer service team and your legal team. 

Bottom Line (for the companies): 

You should never blatantly copy the competition... nor should you ignore the important lessons that they learn. 

And, when a customer gives you a chance to do the right thing... you should try very hard to. 

Bottom Line (for the consumer):

If you really need to have a credit card number on file, consider the new American Express pre-paid card (Serve) with a very low balance. Exposing your bank debit card or your credit card is not a great idea. 

Also, the GLUMOBILE games are pretty solid, but this horrible experience overshadows the games.