The bailout’s for the banking industry are a failure.  I say this because we don’t have a set of goals to accomplish.  The government just hands over billions of dollars to the same people to messed up the financial industry and says, have fun, don’t fuck up.  As investors in these banks, the public has no oversight, transparency, or accountability all of which the government promises.  This is, of course, nothing new with our government, and is why I partially blame the news media.

I was optimistic when David Cay Johnston wrote about how journalists need to change their approach to the financial crisis, saying “let’s not make the same mistakes as were made with the run-up to the Iraq War, and the PATRIOT ACT that so eroded our credibility, in terms of how we cover this financial crisis.”  But nothing changed.  The news media was incapable of covering such a complex and nuanced story.  Same for our politicians.  For eight years, politicians and news media have been teaching the public to accept one liner answers and he said/she said narratives.  No filter, no analysis, no answers.  Should we go to war, not go to war. Should we protect ourselves from terrorists or not protect ourselves from terrorists.  The financial crisis couldn’t be broken down to simple platitudes making it impossible for 24-hour news channels (and many newspapers) to fully inform the public.

Without a news media, there is no accountability in democracy.  Sure people can vote every couple of years in the polls, but that doesn’t change the system.  Public shaming is a powerful tool. That’s why accountability in the bailout matters.  AIG has already spent billions on vacations and retreats for the same executives who wasted billions before.

I’m late to the bailout bashing, but felt there are still lessons to learn and things to do, especially since there’s more bailing out to be done (credit card companies, the second round of mortgage failures). First, let’s understand the goals of any bailout.  If it’s simply to save jobs, then save jobs (most of the banks and car companies are already having massive layoffs even after bailout payments).  But let’s have some publicly stated goals so we, the public and news media, can judge progress.  And have the news media follow up on politicians passing these bills.  Create websites to follow who’s getting money (banks and politicians) so the public can see the full story.

I’m not expecting change as the same people who screwed up before are still in power, at the banks, in government, and at news organizations.  But I still have hope for change.

More excuses from your friendly neighborhood blogger.  This is hell week not just because I have finals, but it’s also the week of my concert for the chorus I sing in (don’t laugh).  Next week, I’ll start posting somewhat regularly. Of course, then the holidays come and then I get started on the next quarter and my thesis for my masters.  On a bright note, I’ll be working on an independent study next quarter that might interest some readers: I’ll be writing a paper on video game usability and its influence on consumer software and hardware.  Not sure what I’ll find out, but that’s what research is for, right? If anyone has any resource recommendations, please leave a comment or email me.  As for my thesis, I’ll be posting more on that topic when I have one (it’ll probably be some kind of adaptation of one of my better blog posts).

Also, I will be finishing the 365 Geek-Out Moments, hopefully all within the year.  I have to for the eBook I’m making with them for next year.

Doomsayers are already writing the obituaries of Blu-Ray as expensive players and discs prevent widespread adoption of the new high-def format.  But through BD-Live and the massive size of the discs, Blu-Ray can offer unique experiences that make the discs worth paying for.

Hurting Blu-Ray are the proliferation of upscaling DVD players and high-definition download services, all of which are cheaper and good-enough alternatives.  Further, online piracy with free movies of DVD quality are always compelling.  So how does Blu-Ray carve a market niche?  The movie file itself is an infinite good, able to reproduced an infinite amount of times with negligible costs.  Blu-Ray quality movies, taking up 25-50 GBs of memory, are more taxing than a 1 GB movie even on my 1 terabyte hard drive.

Registered purchases of the Hellboy II Blu-Ray disc had the chance to join a live chat with director Guillermo Del Toro. Though I didn’t participate, the exiting potential to talk to directors and movie staff is a valuable scarce good (access to these celebrities).  Future discs might take this even farther with live commentary and discussions of the movie (it’s the magic of picture-in-picture).

The Dark Knight Blu-Ray included further technological innovations, changing the aspect ratio on the fly to better reflect the IMAX format the movie was filmed in. At this point, no pirated movie format can offer this feature, and while it’s limited in its appeal, it’s a start of turning Blu-Ray in a unique experience above just “it looks really good.”

These are the kind of features that can convince some to buy plastic discs (rather than, say, sue them into doing it).  These features reward fans for their loyalty and for spending their money.  Blu-Ray’s interactive potential is still in its infancy – most early discs don’t have any online functionality – and some companies might be waiting for more people to buy players before investing.  But that’s short-sighted thinking.  DVDs still look pretty good even on high-def TVs.  It’s unlikely Blu-Ray will ever be a complete replacement for DVR, sharing the limelight with download services.  Only by embracing the format for its strengths and exploiting those can you convince the market to embrace the format themselves.  Unique, scarce features are the way to convince people to give you their money.

Many of us dream of being our favorite super-hero, from living the exciting adventuring life to having kick-ass super powers.  We forget, though, how much being these characters sucks.  Most of them have died multiple times (Mr. Fantastic).  Some have tragic, depressing, haunting lives (Batman) that just keep getting worse and worse (Daredevil).  Some heroes can’t get a date because they’re pathetic (Spider-Man) or ugly (Nightcrawler).  This list weighs all the pros and cons, from great powers and fringe benefits to number of times dead, of literally living the life, continuity blips and all, of major super heroes to find out the lives most worth living.

7. Iron Man

He’s an alcoholic with major father issues and shrapnel in his chest.  But he does have billions of dollars and lots of women to sleep with. That means it’s easy to cure the syphilis I’m sure he gets on a regular basis.  Tony Stark’s life offers the best toys, cars, and women money can buy, but you’ll have to spend every few months in rehab or rebuilding your business from scratch.  There’s also your teenage version from an alternate future who replaces you at least once, but that’s no biggie - everyone just things you got plastic surgery to look younger and even more fabulous.

6. Flash (Wally West)

This is the simple life in fast forward.  You have a sweet wife and adorable twins with super speed (ouch).  Of course you died recently and had the entire world mind-wiped to forget your secret identity, but everything is pleasant now, repelling alien invasions and teaming up with the Justice League just like you always wanted to as a child (when you were Kid Flash, remember).  But now you’ve got the wife, two kids, and super duper speed.  It’s the American Dream.

(more…)

Arriving late to the internet revolution, Microsoft seems more interested in blocking the competition rather than building a long term business.  The software giant has already spent months paying people to use its search engine rather than convince them its a better product. But more payoffs are on the way.

Microsoft is paying or offering free software to developing countries to use its products rather than free alternatives like Linux (though Microsoft denies specific examples).  Microsoft is discovering the high price it charges for Windows and Office are pushing poor countries toward free and cheap alternatives. Instead of realizing the long term implications, Microsoft is hoping to lock in these customers with big payoffs now hoping they’ll pay in the future (even though they still won’t be able to afford Microsoft’s prices).  This is not a new business model, but it’s a nice way to blow millions of dollars (don’t need that research and development money anyway).

Further, to stave off Google’s free cell phone operating system, Android, Microsoft is looking to payoff cellular providers to use its expensive alternative. Steven Ballmer showed (once again) how disconnected he is from the realities of the software world when he said about Google’s Android “I don’t really understand their strategy. Maybe somebody else does.” I do: Google’s investing in a long term strategy, increasing the value of Google search and other Google products. It’s a way to make more money (even if that money is not from Android licenses).

The truth is Microsoft is still relevant and obviously has a place in the market.  The Xbox brand, with all its foibles, is a refreshing example of Microsoft’s innovation and willingness to take risks.  Even Xbox has relied on massive payoffs to game developers to push its way into the market – but that’s not a bad thing when it’s part of a long-term strategy. Microsoft wants Xbox to be profitable on its own merits, something that’s harder to say about Windows and its other products.

Even Microsoft’s branding strategy failed because of a lack of a long term plan – one that the company had faith in.  After three commercials, Microsoft pulls its controversial Seinfeld ads because bloggers didn’t like them.  But they were talking about them! People watched them over and over again to try to understand them.  But that understand would have come later on.  Instead, the new “I’m a PC” commercials reveal Microsoft’s lack of faith in their own branding and instead let their adversary, Apple, dictate the conversation (just ask McCain how well “change” worked for him).

I’m still an avid Microsoft customer (I’m writing this post on Live Writer).  But the company needs to realign itself with the new technology realities.  Branding, reminding customers how much we’ve trusted MIcrosoft all these years (even though they were fun to hate), shows they can still be relevant in our lives, for business and fun.  Paying off customers, buying also badly run companies (Yahoo), and criticizing successful competitors you don’t understand are not recipes for success.  Long term planning and real investment are.

You thought you knew Batman.  Apparently the billionaire playboy turned crime fighter is a southeastern city in Turkey.  Mayor Hüseyin Kalkan is suing Christopher Nolan, the director of the “The Dark Knight” and “Batman Begins” for infringing on the city’s name.

“The royalty of the name ‘Batman’ belongs to us … There is only one Batman in the world. The American producers used the name of our city without informing us,” said Kalkan to the Do?an news agency.  He claims citizens are not able to use the town name for businesses.

Kalkan likely has no merit, one because he is suing Nolan, not DC Comics, who own the copyright and trademark on Batman, or Warner Bros. who made the movie; and two because local regions cannot be registered as brand names in Turkey.  Though I do think local businesses should be able to use their town name without legal threats from DC (only one account this might have happened), this is more an example of a major overstating intellectual property rights and suing the wrong person.

I wanted to take my time reacting to the landmark presidential election that came to a close this week.  It’s hard for someone my age to truly comprehend the monumental impact of Obama’s win for race relations in the U.S. and around the world.  This is because I never looked or thought about Obama’s race.  For many of my friends, Obama was a youthful, exciting symbol of a generation.  The comparisons the John F. Kennedy speak volumes. I recognize JFK’s legacy not for policy, but for how he inspired the nation.  He gave the country goals, to work to make the country better and even tangibly putting a man on the moon.  The result was a generation excited by science and lofty goals that have build the economic powerhouse we are today.

I hope Obama can give us new goals.  It’s not simply about policy: Rhetoric matters.  Obama can pass better healthcare and fund green technologies, but unless the country comes together to be healthier and live greener, neither proposal is going to succeed.

Unfortunately, during the campaign, no one asked what does change mean? How will we know if things have changed? Will they have changed for the better? I and many others assumed the change Obama was speaking to meant the same thing (he’s still a brilliant politician). Obviously corruption and partisanship are bad, but is fixing that enough (assuming that’s possible). Obama’s victory speech spoke volumes about how hard things will be – it’s likely to get worse before it gets better. He’s won now, I’d hope for even more honesty and candor.

Being honest doesn’t have to destroy the hope he symbolizes. In fact, that makes the hope so much greater – there’s a light at the end of the recession. That light won’t come from bailouts (contrary to what other politicians say). It’ll come from calm, cool heads prevailing and bringing sanity back to the financial system.  See why we need hope?

Everyone has expectations for what Obama will fix in office – years of Bush bashing policies cleaned and refurbished with a nice, liberal sheen. Maybe I’m setting my sights to low, but I mainly hope Obama keeps that hope going.  Keep the U.S. and the world optimistic. He’s a symbol that anyone can succeed and that’s an image the world needs now. It’s the irony of hope – you always need it, because so much can happen tomorrow. So bring on tomorrow. We’ve got hope.

Last week Google announced a $125 million settlement with book publishers to allow the search engine to copy out of print books and make snippets available with options to buy. The settlement avoids a lawsuit brought by the Author’s Guild and Association of American Publishers.

While many are praising the decision, I’m hesitant for several reasons. While it’s excellent to make thousands of out-of-print books available for research, the many restrictions, cost questions, and lack of legal precedent make this a lost opportunity for so much more.

Harvard University criticized the program for these reasons, going to far as to back out of the deal already in place before the settlement.  The university pointed out libraries, who would pay an unspecified price for full access, would be restricted to one terminal with access to the books and many copies would be missing pictures. Downloading would still not be allowed.

Second, Michael Masnick points out Google had previously stated it wanted these lawsuits to make better laws, using its massive war chest to fight lawsuits others couldn’t afford to. By paying off book publishers, Google not only lets go of an opportunity to stand up for fair use, but also opens itself up to other companies looking for an easy pay off. Viacom, in the middle of a $1 billion lawsuit with Google, used this settlement to claim Google learn its lesson in relation to honoring copyrights. Google’s made similar concessions, like paying off the Associated Press just to link to its stories, leading other news organizations to want their cut.

I’ve already found the limitations of Google Book Search reasons not to use it. Google is certainly trying to make the search mroe valuable for users, using an opt-out program to make sure orphan works can be accessed so this is better than nothing. But once again, book publishers are ignoring the value Google is adding to their books, books that are out-of-print and wouldn’t find an audience without Google’s scanning and searching.  Google is adding value publishers should want and be seeking out. But because of these restrictions (and cost), fewer people will be able to find these books and thus fewer people will be likely to pay.

Patents and intellectual property are meant to incentives innovation. One person or company gets a limited monopoly on their innovation as reward for teaching everyone else how to do what they did. If that’s the case, why do we need separate government incentives for businesses?

Patents and intellectual property, allegedly, solve one problem but cause another. Even if they create an incentive to produce a new product (which some studies dispute), the resulting product will be more expensive because of the patent.  That shrinks the market and societal benefit. Instead of relying on this exclusionary practice, why not let the market take care of innovation through competition (the basis of capitalism, right) and use government incentives, such as low interest loans, grants, or tax breaks, to build new markets.

The market is enough. Competition forces companies to out innovate each other; they have to keep costs down and value high otherwise customers will find the bigger and better thing.  We’ve seen this work in the fashion industry, restaurant industry, and even in the drug and software industry before both were allowed patents (which courts only recently allowed).  People will always need better technology, drugs, and gadgets and smart companies can and do succeed without strong-arming intellectual property.

But what about things the market won’t support? This is where we already have an incentive system in place: government incentives.  Think about how much the government already pays out for scientific research. A third of drug research money comes from the federal government, but drug companies also get valuable patents and then charge taxpayers monopoly prices for a drug they already paid for.

The key difference is government incentives bring prices down while patents push prices up. For example, alternative fuels are an important leap in technology and currently very expensive and inefficient. It’s not that companies don’t want to do the research, several have formed already. The problem is new fuel systems are too expensive for the market. Oil and coal are cheaper. Patents can’t help this industry when no one wants to pay for it.  With government incentives, instead of patents, the price these companies charge would be lower, expanding the market. As the market grows, the technology improves, prices drop, and eventually the market becomes cost-effective and self-sufficient. Government incentives over.

The same can be applied to drugs. Let designer drugs for weight loss and ED be the cash cows for private firms, but use government funds to develop malaria and HIV medication. The main customers for these drugs are poor and can’t afford the monopoly prices being charged, so let’s think of the greater good, and by greater good, I mean long term financial benefit. If we cure all the illness in poor areas, those people will be able to work and eventually join the global economy. China and India can tell you how that’s a good thing.

Government incentives accomplish what we want patents to accomplish.  Unfortunately, patents are not pushing innovation, but following innovation. After alternative fuels get tons of government incentives and handouts, alternative fuel companies will patent their technology and prevent competition from making the technology better faster, even when taxpayers made the businesses viable in the first place.  If patents were enough, we wouldn’t need the government incentives we have now. And if we need those incentives, why should taxpayers pay twice?

School’s in full swing and sadly my blog is the first thing to suffer. Classes are obviously hard, but mostly due to reading and a few writing assignments (on theorists that would not be fun for this blog).  The next few months will be a trying time, so I’m aiming for posts at least once a week.  Geek-Out Moments will eventually get published, but that might not happen till Winter break.  Hopefully next semester will be better as I’ll be posting on my thesis ideas.  For now, I thank everyone for their support.  Always check out my Shared Google Reader items for articles I enjoy but don’t have time to write about and I’m still keeping Twitter updated as much as possible.