…still seems to have a remarkable number of adherents.

Business Insider has an interview with a 32-year-old Brit who is cofounder of Huddle, a startup aiming to compete with Microsoft’s SharePoint. While I didn’t read the comment thread, up toward the beginning there are at least 3 comments from people mocking the idea that a startup would be able to succeed against a product which (a)comes from a very large company and (b)is successful and growing.

Well, let’s see. Up through the early 1980s, IBM’s position in the computer industry looked unassailable…indeed, IBM’s dominance was so complete that the computer industry had often been referred to as “IBM and the Seven Dwarfs.” Who would have guessed that a couple of startups called Intel and Microsoft were about to start grabbing market share from IBM in a big way?

Up through at least the 1970s, Sears Roebuck & Co. was a colossus of the American retail industry. Who would have guessed that Sears–along with many other large retailers–would have found itself losing out to a bunch of guys from Arkansas?

The steel industry was long dominated by the giant integrated steel companies, especially Bethlehem Steel and U.S. Steel. Both of these companies went bankrupt–but for smaller and more nimble firms such as Nucor, focused on mini-mills and continuous casting, the story was very different.

I haven’t looked at Huddle in any depth, and don’t have a considered opinion about their future. But I do know that many SharePoint users are less than happy with the product, and I do know that small and focused companies often have considerable advantages over larger and more complex companies. Sometimes these advantages, intelligently applied, will suffice to dramatically overcome the also-very-real advantages of the larger firm.

The belief that the-big-guy-always-wins seems surprisingly resistant to historical experience. J K Galbraith, in his book The New Industrial State, asserted that large firms would simply become larger and more vertically-integrated and would control demand through advertising, making themselves fairly unassailable. This was in 1967–in view of the history of the last 45 years, people today have much less excuse for such beliefs that Galbraith did

Why is the big-guy-wins theory still so widely held?

In a previous post, I asked a question about leverages in terms of foreign policy:

A key–an essential–question on leverages at Abu Muqawama (Dr. Andrew Exum):

Where things get tricky is when one tries to decide what to do about that. The principle problem is one that has been in my head watching more violent crackdowns in Bahrain and Egypt: the very source of U.S. leverage against the regimes in Bahrain and Egypt is that which links the United States to the abuses of the regime in the first place. So if you want to take a “moral” stand against the abuses of the regime in Bahrain and remove the Fifth Fleet, congratulations! You can feel good about yourself for about 24 hours — or until the time you realize that you have just lost the ability to schedule a same-day meeting with the Crown Prince to press him on the behavior of Bahrain’s security forces. Your leverage, such as it was, has just evaporated. The same is true in Egypt. It would feel good, amidst these violent clashes between the Army and protesters, to cut aid to the Egyptian Army. But in doing so, you also reduce your own leverage over the behavior of the Army itself.

Okay, so we have leverage with an Army cracking down on its own people, an Army fattened on US military aid and training. I thought bilateral military training was supposed to mitigate the worst instincts of some armies? Isn’t that the theory? What does it mean to have leverage? To what end? To what purpose? I don’t know the answer and I don’t think anyone does, so Dr. Exum has a point. We have no strategy (link goes to Zen) within which to place “trade offs”. Well, if we do, I can’t see it.

Greg Scoblete at The Compass (RealClearWorld) asks the question in a much better fashion (I enjoy reading that blog, whether I agree or disagree with specific points):

But all of this begs an important question – leverage for what? The idea is that the U.S. invests in places like Bahrain and Egypt because it needs or wants something in return. During the Cold War, it was keeping these states out of the Soviet orbit. In the 1990s and beyond, it was ensuring these states remained friendly with Israel and accommodative to U.S. military power in the region. Today, what? What is it that U.S. policy requires from Egypt and Bahrain that necessitates supporting these regimes during these brutal crack downs?

How should we view American policy toward the Middle East? What is the larger strategic framework within which we ought to view the various relationships? What is the optimal posture for the United States? Folks, I don’t know. I’d love to know your opinions on the subject.

The Canon PowerShot S95 is a higher-end small point-and-shoot type camera. Its electronics are supposed to be similar to those in the Canon PowerShot G12. I haven’t used the G12 but my sense is that the main tradeoff between the two cameras is that the G12 is larger and easier to use with better controls and an optical viewfinder, while the S95 is very small. Indeed you can easily carry the S95 in a shirt pocket or trouser pocket (in the latter case I keep my camera in a Ziploc bag to minimize dust intrusion). For me the camera’s small size and reputedly high image quality were the reasons to get it. And it has turned out to be OK for my purposes despite some flaws. (The S95 is currently being supplanted by the similar S100. Most of my comments should apply to both cameras.)

Details follow.

Read the rest of this entry »

Ever since I finished the Adelsverein Trilogy, I’ve wanted to have a German language version out there.
Read the rest of this entry »

Today I read an article about the fact that the German government can issue debt with a negative yield.

Germany sold six-month treasury bills at a negative yield for the first time amid demand for the debt securities of Europe’s biggest economy as a haven from the sovereign debt crisis roiling the region. The government auctioned 3.9 billion euros ($4.98 billion) of securities maturing in July at an average yield of minus 0.0122 percent, the Federal Finance Agency said in an e-mailed statement today. It was the first time it sold the securities at a negative yield, Joerg Mueller, a spokesman in Frankfurt, said in a telephone interview. The Netherlands sold 107-day bills at minus 0.007 percent on Dec. 12.

Thus purchasers are paying the German (and Dutch) governments for the privilege of lending them money.

Meanwhile, Italy is having a tough time finding buyers for its bonds. In order to sell debt, the yield is now above 7%, a line that (for some reason) in the popular press is read as the dividing line for “unsustainable”, kind of like the “Mendoza line” for baseball batting averages.

Italian bond yields rose above 7% on Friday (Dec 23) as worries about the government’s debt problems resurfaced. The yield on 10-year Italian government bonds edged up to 7.04%, after falling below 6% earlier this month. Italian yields first topped 7% in November amid fears that Italy could fall victim to the same debt crisis that led to bailouts for Greece, Ireland and Portugal.

On the face of it, this seems odd. Germany and the Netherlands are issuing bonds in Euros, just like the Greeks, Italians, Ireland and Portugal. Theoretically, all of these countries have the same “backstops” built into the Euro, and there is no exit mechanism.

The debt market is saying something different than what the politicians are saying – the debt market doesn’t believe the hype and, when the dust settles, they want to be holding paper from the creditworthy countries (Germany and the Netherlands) and not the PIIGS (the above countries plus Spain).

Back when Dan and I were in college we had a friend nicknamed “Strohs”. Since we were all very poor back then when we played poker often people used “markers” instead of cash. At the end of the game (generally when we ran out of beer and / or someone passed out) you might hold cash or you might hold “markers” which were really IOU’s from each person at the game. “Strohs” markers were a deck of cards marked with the ubiquitous “Dogs playing poker” picture, and thus at the end of the game if you held his marker, they were “Dogs”. “Strohs”, while a good friend of ours, wasn’t an especially credit-worthy guy (at the time). He earned his nickname by showing up for college with some clothes in a hefty trash bag and a pallet of Strohs 30 packs with which he filled his entire closet top to bottom.

So as the night wore on, if you held “Dogs” in your pile of chips and markers, your betting became especially reckless. It was common to say “I’ll raise you a bucket of dogs” which probably meant you were bluffing because if you lost all you did was remove the markers with which payment was unlikely to happen out of your stack of chips, for the promise of winning “real” markers (equivalent to the German debt above) or actual cash, instead.

For years books and magazines have focused on “yield” and also the credit worthiness of individual companies and (mostly) ignored currency risk. A friend of mine in the investment business talked about a customer who bought a huge Australian debt position and their piddly yield was irrelevant as currency gains from the Australian dollar (which I wrote about here) drove the position to a huge gain, when translated back into (weak) US dollars. Obviously this trader was ignoring yield and betting on currencies.

This is what appears to be happening today. When Europe’s dust cloud settles, people don’t want to be holding “a bucket of dogs” backed by promises from PIIGS governments’, they want the equivalent of the old Deutschmark from Germany. That is why they are essentially ignoring yield and accepting a negative yield from one country and demanding a 7% yield from another country ostensibly backed from the same currency.

Cross posted at LITGM

Chicagoboyz is now a B&H Photo affiliate. I recommend B&H highly, particularly for expensive photo items. B&H is one of the largest photo and electronics retailers, with prices that are usually as good as anyone’s. I think their service is a notch better than Amazon’s, particularly if you want to return a purchase. As with Amazon, Chicagoboyz profits at no cost to you if you click on a B&H link or banner to shop for photo or electronic goods.

Thanks for your support.

I’ve long believed that the U.S. Constitution of 1817 is more important than the U.S. Constitution of 1787. The Constitution of 1787 was only a specification: it had to be implemented to become more than just another piece of parchment. With trial and error, over the thirty years between 1787 and 1817, a constitution founded on hope became a constitution rooted in practice.

Many of those who did the crucial leg work that transformed the hope of 1787 into the reality of 1817 either helped draft the 1787 original or influenced those who drafted it. In 1787, we see them crossing their fingers. In 1817, we see many of the same men only now they are tempered by thirty years of troubled neutrality during the largest war in human history, a brief, disastrous, yet ultimately triumphant second round of war with the British Empire, partisan strife more vicious than any seen thereafter, a serious secession attempt by a disaffected region of the country, and the monumental effort it took to make that whole government of the people and by the people thing work.

Two of the first four presidents of the United States served at the convention: George Washington and James Madison. Two were serving abroad as ambassadors in mid-1787 but influenced the convention through their public and private influence: John Adams through his writings, most importantly his 1776 Thoughts on Government, Massachusetts’ state constitution of 1779, and 1787 A Defense of the Constitutions of Government of the United States against some obnoxious Enlightenment-Era Eurotrash.

Thomas Jefferson helped by not being around to screw it all up.

Read the rest of this entry »

- Hebert E. Meyer memorandum, Nov. 30, 1983 (via National Review Online).

(We really should take up the President’s suggestion to begin planning for a post-Soviet world; the Soviet Union and its people won’t disappear from the planet, and we have not yet thought seriously about the sort of political and economic structure likely to emerge.)

- Reagan and India: ‘Dialog of Discovery’ (News India Times).

If his sunny disposition and easy manner charmed the original “Iron Lady” during their first encounter in Mexico, his administration’s ingenious framework to strengthen bilateral relations laid the foundation on which today’s U.S.-India strategic partnership rests.
 
In a clear departure from the preceding administrations – including the sympathetic Kennedy, Johnson and Carter administrations and the nearly hostile Nixon White House – President Reagan decided to engage India on areas where there was agreement and mutual interest instead of trying to resolve outstanding issues that were intractable.
[break]
The Reagan White House had to placate Islamabad – which was hell bent on gaining a military edge over India – without either weakening or hurting New Delhi, which was already furious at Washington’s move to arm Pakistan and cast a Nelson’s eye on its nuclear program.
 
The Reagan administration accomplished this impossible balancing act by rejecting the notion that U.S. relations in South Asia were a zero-sum game. So, while it appeased Pakistan’s Zia-ul Haq with aid and arms, it upped the ante on political and business relations with India. The president went about it by establishing personal relations with Indian leaders, including lavishly hosting Prime Minister Indira Gandhi and, later Rajiv Gandh, at the White House.
 
Unlike his predecessors, who regarded Indira Gandhi to be somewhat recalcitrant and obstinate and approached her warily, Reagan respected her forthrightness and strength.

A far thinking man, too. Unfortunately, post 9-11, someone within our National Security Complex thought replaying the Reagan Islamabad playbook might be a good idea. Unwise, given that the Pakistani-supported Taliban turned out to be a bit problematic for us in more ways than one (to put it mildly). I still don’t understand Rick “Musharraf” Santorum’s thinking or what I sometimes jokingly refer to as the “Musharraf corner” of National Review’s online Corner? You know, the pundits that turn up periodically to remind us how the secular Pakistani military is our best hope? Post-Abbottabad, I have to wonder about the ability of some analysts and pundits to put 2 and 2 together and come up with 4. The non-state actor/jihadi project is a long-standing and detailed design of the GHQ. You can’t just “hire” one General to go after a few assets and expect the whole thing to reform itself. That isn’t logical. And as far as the Al Q we supposedly did scoop up (to date)? I wonder just how much of that intelligence has been independently verified and just how much comes via our complicated CIA-ISI liaison relationship? Who knows?

Lest our progressive friends feel a bit “I told you so” about all of this: aid is fungible. Any money the US might spend on the civilian sector eventually gets into military hands one way or another so I wouldn’t feel too smug. Plus, the Taliban that the Obama administration is attempting to negotiate with have only to pretend to negotiate and then wait it out with Pakistani help (aided with our very own tax money).

Anyway, regarding the original topic of this post, President Reagan had the absolute correct instincts and I think he got it right in terms of the big picture. He can’t be blamed for the decisions that came after the Soviet Union collapsed, and besides, if Steve Coll’s book “Ghost Wars” is correct, the danger of the jihad project was downplayed by CIA higher-ups and others in his administration – and administrations that came after his. A President can’t do everything by himself, after all. How does the CIA keep getting away with being so wrong, time and time again? Or am I being unfair?

Ghost Wars II – if such a book is ever written – is going to be an interesting book….

Update Aspects of Indira Gandhi’s tenure were, er, problematic (emergency rule, certain domestic policies) and I am not a fan of her governance. I am learning (being so poorly educated on these topics), however, that grand strategy and national statecraft are tough and you can’t afford to make an enemy out of every nation whose governance you don’t like. Note to self, really, as I think about optimal policies for Afghanistan and Pakistan. The Obama administration wishes to “pivot” to Asia. How should we think about this in terms of American Strategy and what does pivoting mean?

The sports bar Butch McGuire’s on division street (famous for bars like “Mothers” and where the movie “About Last Night” was supposedly set) is known for their Christmas decorations. I went there recently to check them out (and have a beer) and was mightily impressed.

This is a view of the front bar from the doorway and you can clearly see the two levels of train tracks as well. There are also dual level trains in one of the other dining rooms off the bar.

Here is a close up of the trains.
Read the rest of this entry »

A writer at The Economist notes that hatred of bankers is one of the world’s oldest and most dangerous prejudices:

Civilisations that have eased the ban on moneylending have grown rich. Those that have retained it have stagnated. Northern Italy boomed in the 15th century when the Medicis and other banking families found ways to bend the rules. Economic leadership passed to Protestant Europe when Luther and Calvin made moneylending acceptable. As Europe pulled ahead, the usury-banning Islamic world remained mired in poverty.

and

In medieval Europe Jews were persecuted not only because they were not Christians but also because killing them was a quick way to expunge debts. Karl Marx, who came from a Jewish family, regarded Jews as the embodiments of capitalism who could only be rescued from their ancestral curse through revolution. The forgers of the “Protocols of the Learned Elders of Zion” wanted people to believe that Jewish financiers were engaged in a fiendish global conspiracy. Louis McFadden, the chairman of the United States House Committee on Banking and Currency in the 1930s, claimed that “the Gentiles have the slips of paper while the Jews have the lawful money.” The same canards have been used against Chinese minorities across Asia.

It can be reasonably argued that the financial industry in the US, and probably also in Europe, is too large as a % of the overall economy and also far too influential in political affairs–see my post about sticky governors. But the unthinking demonization of finance as an activity, and of people involved in that activity, is counterproductive, and, as the Economist author argues, dangerous.

via Stuart Schneiderman

Curiously for a sometime political animal, I was not all that wrapped up in the Iowa caucus. There are several reasons for that; one of them being that I just think it is a waste of emotional energy picking a favorite too early, another being that in the words of old Bobby Bare song “No matter how good they look at first, There’s flaws in all of them. That’s why on a scale of ten to one, friend – There ain’t no ten!” They’re human, every one of them – and every damn one has flaws, which will be put under a magnifying glass. Those who have been under a magnifying glass will have the magnification dialed up by a magnitude of a hundred, though.

Read the rest of this entry »

When I was a baby troop on my first overseas tour, at Misawa AB in Japan, I had a regular date in the form of a guy that Jenny bequeathed to me. Jenny was my friend simply because we were the only two women in the barracks who worked shifts. She was about to rotate out; her tour was up and she was going home.

She also added, by way of convincing me to consider him as a regular date, “A nice guy, he’s a gentleman and he’s always good for a meal, he’s Baby Deleo.”

Read the rest of this entry »

Thomas Sowell:

Can you imagine a man who had never run any kind of organization, large or small, taking it upon himself to fundamentally change all kinds of organizations in a huge and complex economy? Yet that is what Barack Obama did when he said, “We are going to change the United States of America!” This was not “The Audacity of Hope.” It was the audacity of hype.

A 16-year-old girl in Florida parked in the wrong space, had her car keyed, suspected another girl, and posted on her own Facebook page the following:

oh so you keyed my car? well your karmas gonna be a wholeee lot worse that that

The next day, school officials suspended her for three days–and a criminal charge of “stalking” was brought against her by the Pinellas County Sheriff’s Department

As Scott Greenfield says:

To call the arrest of Allie Scott crazy is to state the obvious. That both a school district and a sheriff’s office would nonetheless indulge in such insanity is the piece that would make a good subject for Kafka.

Other incidents of Kafkaesque abuse of authority by public school officials and local police departments are easy to find.

For most of history, in most places in the world, people have lived in fear of The Authorities. For a couple of centuries, that fear was largely lifted (with certain obvious exceptions) in the territory of The United States of America. Now, as a result of the endless expansion of governmental powers and the political and administrative arrogance which have inevitably followed, it is returning. The American populace is being collectively cowed.

See my related posts zero tolerance-zero judgment-zero compassion and Philip Queeg Public High School.

Commenter Lynn Wheeler writes at zenpundit:

“….Boyd would comment in the 80s that the approach was having significant downside on American corporations as former WW2 officers climbed the corporate ladder, creating similar massive, rigid, top-down command&control infrastructures (along with little agility to adapt to changing conditions, US auto industry being one such poster child).”

Wheeler’s comment reminded me of the following post that I had meant to blog earlier:

One occasion in particular in the late 1970s brought this home to me. McNamara had come to one of our staff meetings in the Western Africa Region of the World Bank, where I was a young manager, and he had said he would be ready to answer any questions.
 
I felt fairly secure as an up-and-coming division chief and a risk-taking kind of guy. So I decided to ask McNamara the question that was on everyone’s lips in the corridors at the time, namely, whether he perceived any tension between his hard-driving policy of pushing out an ever-increasing volume of development loans and improving the quality of the projects that were being financed by the loans. In effect, was there a tension between quantity and quality?
 
When the time came for questions, I spoke first at the meeting and posed the question.
 
His reply to me was chilling.
 
He said that people who asked that kind of question didn’t understand our obligation to do both—we had to do more loans and we had to have higher quality—there was no tension. People who didn’t see that didn’t belong in the World Bank.

– Steve Denning

This too from a speech by Robert McNamara, “Security in the Contemporary World”:

The rub comes in this: We do not always grasp the meaning of the word “security” in this context. In a modernizing society, security means development.
 

Security is not military hardware, though it may include it. Security is not military force, though it may involve it. Security is not traditional military activity, though it may encompass it. Security is development. Without development, there can be no security. A developing nation that does not in fact develop simply cannot remain “secure.” It cannot remain secure for the intractable reason that its own citizenry cannot shed its human nature.
 

If security implies anything, it implies a minimal measure of order and stability. Without internal development of at least a minimal degree, order and stability are simply not possible. They are not possible because human nature cannot be frustrated beyond intrinsic limits. It reacts because it must.
[break]
Development means economic, social, and political progress. It means a reasonable standard of living, and the word “reasonable” in this context requires continual redefinition. What is “reasonable” in an earlier stage of development will become “unreasonable” in a later stage.
 

As development progresses, security progresses. And when the people of a nation have organized their own human and natural resources to provide themselves with what they need and expect out of life and have learned to compromise peacefully among competing demands in the larger national interest then their resistance to disorder and violence will be enormously increased.

Think about this in terms of the “armed nation building” of the past decade or so and in terms of successive Clinton, Bush, and Obama administration policies. Really not that much difference if you look at it in terms of securing stability through development – armed or otherwise. Not a novel observation in any way, but bears in mind repeating as the 2012 Presidential campaign continues its “running in place” trajectory….

Update:“Running in place” and “trajectory” don’t really go together, do they? Oh well. You all know what I mean….

The month of January is associated with the Roman godlet Janus, conventionally pictured with two faces, one looking forward and one looking back. I’m looking forward at 2012 with subdued anticipation, wondering if the new year will be as much of a mixed bag as the old one was. Personally, during 2011, I felt as if I were skidding from one extreme to the other, in between every kind of loss and gain imaginable, both personal and professional. We lost my father, for one – the day after Christmas, 2010. Then I had a book to launch early in the year, and the sequel to it to finish in time for the Christmas rush – plus the all-in-one edition of the Trilogy. I had a round of speaking engagements – much fun ensuing from those, including keeping a straight face when urged to join the Sons of the Confederacy Ladies’ Auxiliary. I didn’t mention that my ever so-g-g-grandfather the Quaker abolitionist and Underground Railway safe-house keeper probably was a major disqualifier.

I severed a professional relationship with one publisher, and moved over to another, smaller and local publisher. I had sufficient paying projects as a free-lance writer and editor in 2011. Between the freelancing, my books and partnership in the Tiny Local Bidness, I didn’t need to take on a job such as I had to take some years ago, in a telephone call center. I’m starting off this year with a guest appearance on a local internet radio show – this Thursday afternoon at three CST on the Yankie Grant Show. For books in the new year? I’ll be working on the research for the next one for sure, a picaresque adventure set in California during the Gold Rush years. I’ve always wanted to write a novel about the Gold Rush, where an extraordinary number and variety of people came to California all at once, seeking their fortunes in the mines or from the miners.
Read the rest of this entry »