Coyote Blog

Watching the Superbowl, and seeing the McDonald's commercial where the company announced a policy that they will ask their customers to do various kinds of performance art rather than pay, I said to my kids, "well, I guess I am avoiding McDonald's for a while."  Not only do I not want to sing a song to avoid paying my $5 bill, I probably would pay them $50 to shut up and just give me my damn food.

My kids acted like I was being a curmudgeon, but apparently I am not alone:

Early on Monday morning I paid a visit to the Golden Arches while traveling through Union Station in Washington, D.C. After a moment’s wait I placed my order with an enthusiastic cashier, and started to pay.

Suddenly the woman began clapping and cheering, and the restaurant crew quickly gathered around her and joined in. This can’t be good, I thought, half expecting someone to put a birthday sombrero on my head. The cashier announced with glee, “You get to pay with lovin ’!” Confused, I again started to try to pay. But no.

I wouldn’t need money today, she explained, as I had been randomly chosen for the store’s “Pay with Lovin’ ” campaign, the company’s latest public-relations blitz, announced Sunday with a mushy Super Bowl TV commercial featuring customers who say “I love you” to someone, or perform other feel-good stunts, and are rewarded with free food. Between Feb. 2 and Valentine’s Day, the company says, participating McDonald’s locations will give away 100 meals to unsuspecting patrons in an effort to spread “the lovin’.”

If the “Pay with Lovin’ ” scenario looks touching on television, it is less so in real life. A crew member produced a heart-shaped pencil box stuffed with slips of paper, and instructed me to pick one. My fellow customers seemed to look on with pity as I drew my fate: “Ask someone to dance.” I stood there for a mortified second or two, and then the cashier mercifully suggested that we all dance together. Not wanting to be a spoilsport, I forced a smile and “raised the roof” a couple of times, as employees tried to lure cringing customers into forming some kind of conga line, asking them when they’d last been asked to dance.

The public embarrassment ended soon enough, and I slunk away with my free breakfast, thinking: Now there’s an idea that never should have left the conference room.

It didn't look touching on TV, it looked awful.  I had already decided to avoid McDonald's for the time being based on the commercial but my thanks to the author for confirming it.

I am just amazed at how many otherwise smart people are rooting for the government to regulate the Internet:

According to a pair of new reports from the Wall Street Journal and the New York Times, the FCC chairman Tom Wheeler will soon do what some net neutrality advocates have been clamoring for for ages: Try to officially reclassify internet service as a telecommunications service under Title II of the Telecommunications Act. That'd effectively put internet access in the same bucket as landline telephone service, which is treated as a public utility in the United States, and would basically ban the paid prioritization of certain web sites and services over others....

We -- along with many of you -- will be watching the outcome of that vote with bated breath. For that matter, so will representatives and head honchoes of the country's internet service providers. A vote in favor of reclassification means that all of those companies will eventually have to deal with way more intense regulatory scrutiny, and do away with plans to treat some web-centric companies with deep pockets as first-class citizens of the internet while the rest of us wait longer for other stuff to load.

So, out of the fear in the last sentence, that some people will get better service than others -- something that, oh by the way, has never really happened so is entirely hypothetical -- you are urging on a regulatory regime originally designed for land-line phone companies, a technology that basically went unchanged for decades at a time.  The phones that were in my home at my birth in 1962 were identical to the one in my dorm room when AT&T was broken up in 1982.  Jesus, we are turning the Internet into a public utility -- name three innovations from an American public utility in the last 40 years.  Name one.

And all you free-speech advocates, do you really think the Feds won't use this as a back-door to online censorship?  We are talking about the same agency that went into a tizzy when Janet Jackson may have accidentally on purpose shown a nipple on TV.  All that is good with TV today-- The Sopranos, Game of Thrones, Arrested Development, etc. etc. etc. results mainly from the fact that cable is able to avoid exactly the kind of freaking regulation you want to impose on the Internet.

Here is my official notice -- you have been warned, time and again.  There will be no allowing future statements of "I didn't mean that" or "I didn't expect that" or "that's not what I intended."   There is no saying that you only wanted this one little change, that you didn't buy into all the other mess that is coming.   You let the regulatory camel's nose in the tent and the entire camel is coming inside.  I guarantee it.

Update:   Apparently the 1934 Telecommunications Act imposes a legal obligation on phone carriers to complete calls no matter who they are from.  Sounds familiar, huh?  Just like net neutrality.  It turns out this law is one of the major barriers preventing phone companies from offering innovative services to block spam calls.

Watching too many TV crime shows will blind you to a stark reality:  Witness testimony sucks.  Look at the linked comparison of witness testimony in the Michael Brown shooting grand jury.  Take any column, like the last one with number of shots fired.  Its a total mess!

When videos emerge of police brutality, police defenders often say that video can lie.  But I would argue that it is a hell of a lot better witness than the average person.  My guess is that police like this kind of variation in witness testimony, because they know that in most, perhaps all, cases, they will be given the benefit of the doubt when the testimony conflicts.

From Reason: (emphasis added)

Actress Veena Malik was sentenced this week to 26 years in prison by a Pakistani court for reenacting her wedding with her husband on a morning TV show. Her husband, Asad Khattak, as well as Mir Shakil-ur-Rahman, the owner of Geo TV, which aired the program, and Shaista Whidi, who hosted it, all received 26 year sentences as well.

The program caused controversy when it first aired several months ago, leading the TV station to run apologies in Pakistani newspapers. The court primarily objected to the use of religious music in the mock wedding. "The malicious acts of the proclaimed offenders ignited the sentiments of all the Muslims of the country and hurt the feelings, which cannot be taken lightly and there is need to strictly curb such tendency," the court ruling said.

Net Neutrality is one of those Orwellian words that mean exactly the opposite of what they sound like.  There is a battle that goes on in the marketplace in virtually every communication medium between content creators and content deliverers.  We can certainly see this in cable TV, as media companies and the cable companies that deliver their product occasionally have battles that break out in public.   But one could argue similar things go on even in, say, shipping, where magazine publishers push for special postal rates and Amazon negotiates special bulk UPS rates.

In fact, this fight for rents across a vertical supply chain exists in virtually every industry.  Consumers will pay so much for a finished product.  Any vertical supply chain is constantly battling over how much each step in the chain gets of the final consumer price.

What "net neutrality" actually means is that certain people, including apparently the President, want to tip the balance in this negotiation towards the content creators (no surprise given Hollywood's support for Democrats).  Netflix, for example, takes a huge amount of bandwidth that costs ISP's a lot of money to provide.  But Netflix doesn't want the ISP's to be be able to charge for this extra bandwidth Netflix uses - Netflix wants to get all the benefit of taking up the lion's share of ISP bandwidth investments without having to pay for it.  Net Neutrality is corporate welfare for content creators.

Check this out: Two companies (Netflix and Google) use half the total downstream US bandwidth.  They use orders and orders of magnitude more bandwidth than any other content creators, but don't want to pay for it (source)

Why should you care?  Well, the tilting of this balance has real implications for innovation.  It creates incentives for content creators to devise new bandwidth-heavy services.  On the other hand, it pretty much wipes out any incentive for ISP's (cable companies, phone companies, etc) to invest in bandwidth infrastructure (cell phone companies, to my understand, are typically exempted from net neutrality proposals).  Why bother investing in more bandwidth infrastrcture if the government is so obviously intent on tilting the rewards of such investments towards content creators?  Expect to see continued lamentations from folks (ironically mostly on the Left, who support net neutrality) that the US trails in providing high-speed Internet infrastructure.

Don't believe me?  Well, AT&T and Verizon have halted their fiber rollout.  Google has not, but Google is really increasingly on the content creation side.  And that is one strategy for dealing with this problem of the government tilting the power balance in a vertical supply chain:  vertical integration.

Postscript:  There are folks out there who always feel better as a consumer if their services are heavily regulated by the Government.  Well, the Internet is currently largely unregulated, but the cable TV industry is heavily regulated.  Which one are you more satisfied with?

Update:  OK, after a lot of comments and emails, I am willing to admit I am conflating multiple issues, some of which fit the strict definition of net neutrality (e.g.  ISP A can't block Planned Parenthood sites because its CEO is anti-abortion) with other potential ISP-content provider conflicts.  I am working on some updates as I study more, but I will say in response that

1. President Obama is essentially doing the same thing, trying to ram through a regulatory power grab (shifting ISPs to Title II oversight) that actually has vanishly little to do with the strict definition of net neutrality.   Net neutrality supporters should be forewarned that the number of content and privacy restrictions that will pour forth from regulators will dwarf the essentially non-existent cases of net neutrality violation we have seen so far in the unregulated market.
2. I am still pretty sure the net effect of these regulations, whether they really affect net neutrality or not, will be to disarm ISP's in favor of content providers in the typical supply chain vertical wars that occur in a free market.  At the end of the day, an ISP's last resort in negotiating with a content provider is to shut them out for a time, just as the content provider can do the same in reverse to the ISP's customers.  Banning an ISP from doing so is like banning a union from striking. And for those who keep telling me that this sort of behavior is different and won't be illegal under net neutrality, then please explain to me how in practice one defines a ban based on a supply chain rent-division arguments and a ban based on nefarious non neutrality.

We have a TV on the wall of our patio.  We don't use it that often, but in fall evenings it is sometimes fun to sit outside and watch the baseball playoffs.  Also, that is the only TV we ever allowed a game system so we could always see our kids playing.  The TV  is under a covered area but close enough to the outside that rain will sometimes blow in and get it wet.   It gets really hot a lot, over 115F in the summer.  It is constantly subject to dust storms in the monsoon seasons.

For a while we considered an special all-weather TV like this one.  If the TV had been completely out in the open, we probably would have bought one.  But instead we bought a regular LCD TV -- just something from Samsung I think -- on sale at Amazon.   The regular TV was 1/3 the price, and we figured that even if it died, we would still be ahead having bought two instead of one of the more expensive TVs.

The TV has now been out there for over 5 years and is doing fine.  If you want a TV outside, unless it is directly in the elements, I have found that regular TV's are pretty durable.

Kevin Drum seems here to be making the case for Federalism

Via Vox, here's a colorful map from Broadview Networks that helps illustrate one reason that policymaking in Congress often seems so disconnected from the real world. It's because policymakers tend to be pretty well-off folks living in a pretty well-off region that shelters them from the problems many of the rest of us encounter. If you live in Missouri, you might be annoyed [about a local problem].  But if you live in Washington DC or northern Virginia, guess what? [Your local situation is much better]! Virginia is ranked #1 in the nation, and DC is right behind it. So is it any wonder that this really doesn't seem like a pressing problem in Congress?

Wow, this seems like a great argument for Federalism, as well as a number of libertarian critiques of government in general.   Good going, Kevin!

But then I realized he doesn't really believe this.  Drum is as much a supporter as anyone on the Left of Federal mandates over local action (e.g. Common Core).

Further, I realized that he was essentially nuts.  Because the issue he is lamenting is Internet speeds.  Some people have faster Internet than others, and he is just so frustrated that Congress does not realize this.  He actually seems to be hoping Congress will somehow intervene to equalize Internet speeds.  I would love to know, in these people's minds, if there are any issues to trivial for Congress to wade into.

By the way, if Congress had stepped into Internet regulation, we would still probably be surfing at 1200 baud.  After all, all that high speed Internet stuff might kill jobs at Hayes and US Robotics (makers of old telephone modems for those too young to remember).  Look at how long it took to get a political/corporate consensus on HD TV standards.  Ugh, we would probably all have that goofy French TV-computer solution the Left wanted to force on the United States 15 years or so ago.

Postscript:  The UN ITU spent a lot of time driving phone manufacturers to using micro-USB in a bid at government-led standardization.  The only problem is that micro-USB sucks.  It is ubiquitous, which is nice, but from a form and function standpoint is far harder to use and plug in than Apple's lightning connector, which is much easier to insert, less prone to damage, and can be inserted in either direction.  Perhaps young people with better eyes do not notice but I spend a lot of time jamming micro usb cables in the wrong way.  I hate having to put on my glasses just to plug in my phone, which is why I like my Nexus 5 with wireless charging.

This week, the NLRB agreed to allow the players on the Northwestern University football team to unionize.   This is one of those issues that is simple and straightforward in a free society and a total mess in our less-than-free society.  Here are a few thoughts:

1. In a free society, this is a no-brainer.  The Northwestern players are welcome to create an association among themselves and call it anything they like, including "union".  That association is free to try to negotiate with the university for better terms  (they are also free to fail at this and make no progress).
2. However, it is clear that we are not a free society because the players had to go to the government and ask permission to form this particular type of association.  The reason is that associations called "unions" have been granted special powers and privileges under the law not available to other associations.  There are also a large body of very particular rules for how such associations may conduct business and how other groups (in this case the University) can or cannot interact with it.  It is a very tricky legal and philosophical question whether this package of benefits and privileges should be accorded to a group of college football players
3. In a free society, the fact that the players don't get paid cash and that their universities make millions off the football program would be irrelevant.  The players freely agreed to the deal (in most cases, playing in exchange for free tuition and perhaps a chance to land an NFL job) so there is nothing inherently unfair about it.
4. However, in our society, we have all sorts of government interventions.  I consider many of these interventions to be counter-productive, even occasionally insane.  But if one is to navigate such a society (rather than, say, go off and live in Galt's Gulch), I think the principle of equal protection is critical.  Arbitrary government interventions in free exchange are FAR worse when applied unevenly.  From an equal protection standpoint, I think the players may have a good case.
   • The law generally does not allow profit-making businesses (and the NCAA and college footfall are certainly those) to accept unpaid labor.  Many folks who don't deal with the Fair Labor Standards Act every day will say: "players are paid, they get free tuition."  But this is not how the FLSA works.  It counts non-cash wages only in very specific circumstances that are enumerated in the law (e.g. lodging).  Think of it this way -- McDonald's could not legally just pay all its employees in french fries and claim to be compliant with the law.  Also, large numbers of Division 1 football and basketball players never graduate, which shows a fair amount of contempt by players for this supposedly valuable "free tuition" compensation.
   • On the other hand, most college athletics are not profit-making.  My son plays baseball at Amherst College -- it would be laughable to call this a profit center.  I am not sure there are but a handful of women's teams in any sport that generate profits for their school, and even on the men's side money-making is limited to a few score men's football and basketball teams.   But the few that do make money make a LOT.  University of Texas has its own TV network, as do most major conferences.
   • The law generally does not allow any group of enterprises to enter into agreements that restrict employment options.  Google et. al. are getting flamed right now, and likely face criminal anti-trust charges and lawsuits, for agreements to restrict hiring employees from each other's firms.  The NCAA cuts such deals all the time, both severely restricting moves between schools (transfer provisions in Division I are quite onerous) and preventing poaching at least of younger players by professional leagues like the NBA and NFL.   The notion that top players in the NCAA are playing for their education is a joke -- they are playing in college because that is what they have to do in order to eventually be allowed in a league where they can get paid for their skills.
   • Actually trying to pay players would be a real mess.  In a free society, one might just pay the ones who play the most profitable sports and contribute the most value.   But with Title IX, for example, that is impossible.  Paying only the most financially valuable players and teams would lead to 99% of the pay going to men, which would lead to Title IX gender discrimination suits before the first paycheck was even delivered.  And 99% of college athletes probably don't even want to be paid
   • Part of the pay problem is that the NCAA is so moronic in its rules.  Even if the university does not pay players, many outsider would if allowed.  Boosters love to pay football and basketball players under the table in cash and cars and such, and top athletes could easily get endorsement money or paid for autographs by third parties.  But NCAA rules are so strict that athletes can be in violation of the rules for accepting a free plane ticket from a friend to go to his mother's funeral.  When I interview students for Princeton admissions, I never buy them even a coffee in case they are a recruited athlete, because doing so would violate the rules.
   • Much of this is based on an outdated fetish for amateurism, that somehow money taints athletic achievement.  It is hilarious to see good progressive college presidents spout this kind of thing, because in fact this notion of amateurism was actually an aristocratic invention to keep the commoners out of sports (since commoners would not have the means to dedicate much of their life to training without a source of income).  The amateur ideal is actually an exclusionist aristocratic tool that has for some reason now been adopted as a progressive ideal.   Note that nowhere else in college do we require that students not earn money with their skills -- business majors can make money in business over the summer, artists can sell their art, musicians can be paid to perform.  When Brooke Shields was at Princeton, she appeared in the school amateur play despite making millions simultaneously as a professional actress.  Only athletes can't trade their skill for money in their free time.

I am not sure where this is all going, but as a minimum I think the NCAA is going to be forced to allow athletes to earn outside income and accept outside benefits without losing their eligibility.

Back in 2011 I wrote an article in Forbes on this topic

I have written before about how much trouble I had using windows as an unattended server for an application -- in this case for the XBMC video system on my TV's around the house.  No matter what I did, how many tweaks I made, how many websites I checked for advice, within a day or two some application or popup would take control of the screen and send my unattended application to the background.  This would not be such much of a problem if it was just me using it, but with a non-tech-savvy family members trying to interact with the device with a TV remote, it was unacceptable.  Eventually I switched to the Linux version of XBMC in a distribution call Openelec and I have had zero problems since.

I was reminded of all this at the San Diego airport.  They have these big beautiful screens with flight and weather and travel information.  But apparently they have problems making the windows popups go away as well (that's some sort of HP registration message in the window):

The most amazing example I have ever seen was on a giant, giant advertising screen on the front of a casino in Las Vegas, which had a huge windows popup covering whatever ads were supposed to be served up.  I wish I had my camera but I was out jogging at the time.

Update:  A reader sent me this, via gizmodo, from Cowboys stadium

I have seen this fact a number of times and am always amazed when I read it, since poverty figures are never, ever presented with this bit of context

LBJ promised that the war on poverty would be an "investment" that would "return its cost manifold to the entire economy." But the country has invested $20.7 trillion in 2011 dollars over the past 50 years. What does America have to show for its investment? Apparently, almost nothing: The official poverty rate persists with little improvement.

That is in part because the government's poverty figures are misleading. Census defines a family as poor based on income level but doesn't count welfare benefits as a form of income. Thus, government means-tested spending can grow infinitely while the poverty rate remains stagnant.

Rector argues that poor today is very different than poor in  Johnson's day, and that perhaps we might celebrate a bit

Not even government, though, can spend $9,000 per recipient a year and have no impact on living standards. And it shows: Current poverty has little resemblance to poverty 50 years ago. According to a variety of government sources, including census data and surveys by federal agencies, the typical American living below the poverty level in 2013 lives in a house or apartment that is in good repair, equipped with air conditioning and cable TV. His home is larger than the home of the average nonpoor French, German or English man. He has a car, multiple color TVs and a DVD player. More than half the poor have computers and a third have wide, flat-screen TVs. The overwhelming majority of poor Americans are not undernourished and did not suffer from hunger for even one day of the previous year.

Remember what I presented a while back.  This is what the Left thinks, or wants us to think, American income inequality looks like -- our rich are richer than comparable European welfare states because our poor are poorer.

And this is what income inequality in the US actually looks like -- our rich and middle class are richer, but our poor are not poorer.  A less redistributionist approach floats all boats.  I compared the US to many European welfare states, using the Left's own data source.  Here is an example, but hit the link to see it all.

When people ask me about my business, one of the things that is hard to explain is just how deep and visceral the skepticism of private enterprise can be.  I constantly have people take single words I might have uttered in the immediacy of a live TV interview and try to craft straw man positions for me out of them**.  Sometimes it is not even something I said, but something where some lazy journalist has poorly paraphrased my position.

Here is a great example, where a Flagstaff writer (who by the way knows me and my phone number quite well but did not bother to interview me) tries to take my opposition to the government shutdown to paint me with some sort of entitlement.  She lectures me that I don't actually own the land on which I operate, as if that is somehow news to me.  You can read my comments if you are interested, but the issue with the shutdown was the lawlessness of Administration officials, not any sense that I am entitled to the land any more than my lease contract allows me to be.  (As an aside, she seems to be expressing a strong theory of landlord rights, that my landlord (the US Forest Service) should have the absolute right to shut me down whenever they want.  Why is it that I don't think she has the same position vis a vis other tenants and landlords?)

By the way, compare her straw man to my actual position on public land, which is likely to the Left of many of my readers:

In my history of public discussions on private operation of public parks, it is no surprise that I run into a lot of skepticism about having any private role at all.  But I also run into the opposite -- folks who ask (or demand) that the government sell all the parks to private buyers.  So why shouldn't privatization of parks just consist of a massive land sale?

The answer has to do with profit potential.  Over time, if in private hands, a piece of land will naturally migrate towards the use which can generate the highest returns.  And often, for a unique piece of land, this most profitable use might not be a picnic area with a $6 entrance fee -- it might instead be something very exclusive which only a few can enjoy, like an expensive resort or a luxury home development (think: Aspen or Jackson Hole).  The public has asked its government to own certain unique lands in order to control their development and the public access to them.

Public ownership of unique lands, then, tends to have the goal of allowing access to and enjoyment of a particular piece of land for all of the public, not just a few.  Typically this entails a public agency owning the land and controlling the types of uses allowed on the land and the nature and style of facility development.  I call these state activities controlling the "character" of the land and its use.  (One could legitimately argue that private land trusts could fulfill the same role, and in fact I have personally been a supporter of and donor to private land trusts.  However, I am not an expert in this field and will leave this discussion to others).

Having established a role for the government in setting the character of the lands we call "parks," we can then legitimately ask, "does this goal require that government employees actually staff the parks and clean the bathrooms?"

** Postscript:  A couple of years ago I was asked to do an interview with Glen Beck on my proposal to keep open, via private operation, a number of Arizona parks slated for closure.  It was the first time I ever did live TV, and a national show to boot.  I had never seen his show but he had the reputation of being freaky and unpredictable, which just made me more nervous.   Anyway, during the interview I said that typically an agency would contract with us for a group of parks, instead of just one, so the stars could help cover the cost of the dogs.  This terminology is from a framework many business school students learn early, often called a BCG matrix (named after the Boston Consulting Group).  It is a two by two matrix with market share or profitability on one axis and market growth on the other.  Anyway, the profitable high revenue units within a company are stars and the unprofitable stagnant ones are called dogs (the profitable stagnant ones were cash cows and I can't actually remember what was in the fourth box).  You can see this nomenclature is so established they actually put little pictures of stars and dogs in the boxes.

Anyway, it was a poor choice of wording, but the nomenclature is wired do deep in my now it just came out.  The context of the entire interview was that I cared deeply about the parks and that I was offended that the legislature was going to let them close when there was an easy solution at hand.  No matter.  The #2 guy at Arizona State Parks took the video and make the rounds of the state park staff, highlighting my use of the word "dog" and inflaming their rank and file that I thought their parks were bad places and I was bent on destroying them, or something.  Anyway, none of the Arizona Park Staff I have ever talked to has ever seen an operations manual for their parks but they have all seen the video of me saying "dogs."

Postscript #2:  Don't ever think that consulting is different from any other business.  When I was an McKinsey, we had piles of frameworks we used (the 7S organization framework being perhaps the most common and actually fairly useful, as its intent was to take focus away from structure alone in organizational work).  Anyway, McKinsey had to have a growth-share matrix, but to try to differentiate this product a bit they had a 3x3 matrix rather than a 2x2.

Since I am somehow oddly onto a consulting tangent here, the single most useful thing I garnered from McKinsey was the pyramid principle in persuasive and analytical writing.  I have talked to a lot of other ex-McKinsey folks, and almost all of them wonder why the pyramid principle is not taught in high school.  I am not a believer in business books -- I am looking around my office and I don't think I see even one here.  But if I had to offer one book for someone who wanted a business book, this is it.

Local blogger Greg Patterson writes:

The Wall Street Journal is reporting that Gannett will soon be adding USA Today to it's local papers.

With this change, the Republic and USA Today are essentially a hybrid.  As print revenue continues to slide the USA Today side will grow and the Republic side will shrink.  Eventually, your morning Republic will consist of a copy of USA Today with enhanced local coverage.

This is a change I have expected for a long time.  The wire services have always existed as an attempt by local papers to share costs in national and international news gathering, but I would have expected this next step of national consolidation some time ago.  The internet allows not just the text, but the entire layout of newspapers to be transmitted instantly across the country.

The whole situation reminds me of television broadcasting, where local affiliates exist mainly as a byproduct of past technological limitations in signal transmission.  Satellite and cable have eliminated these restrictions, but still local affiliates exist, in part because there is some demand for local content but in part because of the fact that the government protects their existence (by law, cable and satellite operators must give you the local affiliate, they cannot give you the national feed).

This is what I wrote back in 2009

I actually think the problem with newspapers like the Washington Post is the "Washington" part.  Local business models dominated for decades in fields where technology made national distribution difficult or where technology did not allow for anything but a very local economy of scale.  Newspapers, delivery of television programming, auto sales, beverage bottling and distribution, book selling, etc. were all mainly local businesses.  But you can see with this list that technology is changing everything.  TV can now be delivered via sattelite and does not require local re-distribution via line of sight broadcast towers or cable systems.  Amazon dominated book selling via the Internet.  Many of these businesses (e.g. liquor, auto dealers, TV broadcasting) would have de-localized faster if it had not been for politicians in the pocket of a few powerful companies passing laws to lock in outdated business or technological models.

Newspapers are ripe for a restructuring.  How can one support a great Science page or Book Review section or International Bureau on local circulation?  How much effort do the NY Times, Washington Post, LA Times, SF Chronicle, etc. duplicate every day?  People tell me, "that's what the wire services are for."  Bah.  The AP is 160 years old!  It is a pre-Civil War solution to this problem.  Can it really be that technology and changing markets have not facilitated a better solution?

The future is almost certainly a number of national papers (ala the WSJ and USA Today) printed locally with perhaps local offices to provide some local customization or special local section.  Paradoxically, such a massive consolidation from hundreds of local papers to a few national papers would actually increase competition.  While we might get a few less stories about cats being saved from trees in the local paper, we could well end up not with one paper selection (as we have today in most cities) but five or six different papers to choose from  (just look at Britain).  Some of these papers might choose to sell political neutrality while some might compete on political affiliation.

Apparently, a company named "Sumpto" has adopted a business model right out of my novel BMOC (written about 7 years ago).  This is a scene where entrepreneur Preston Marsh is interviewing and trying to recruit the protagonist Susan out of business school.  They are discussing the business model of his company called BMOC.  Half of its business model was that companies paid BMOC to place their products in the hands of influential high school students.

[Marsh:] The real innovation, though is… do you know what a product placement is?”

[Susan:] “Sure. It’s when a company pays to get their product into a TV show or movie – like when Reese’s pieces were used in the movie ET or I guess if you showed Seabiscuit eating Purina Horse Chow.”

“Exactly! And product placements are particularly effective. They act like an ad but they can’t be ignored like an ad. Anyway, we have taken product placements one step further: We get paid by major manufacturers to place their products not in movies but in the hands of the most popular kids in high school, the ones who really lead opinion as to what’s cool and not cool who we…”

“Who you happen to have on retainer anyway.”

“Exactly. But be careful how you think about ‘on retainer.’ The natural reaction is to assume this means money, but in our case it’s not. We keep the most popular people on retainer merely by …”

“Giving them free products,” Susan interrupted again, with growing excitement, “that manufacturers are already paying you to put in their hands.”

This is from Sumpto's web site.  (You will have to click through, for some reason even copying it as text is crashing my site, not sure why).

Best Buy says it is not afraid of showrooming, the practice of testing products at a physical retailer and then buying it online.  Best Buy says it is confident it can convert visitors into buyers, even if their intent was to buy online.

Well, that is a brave front.  And I wish them luck -- I certainly like having bricks and mortar retailers around when I need something fast and can't wait for the UPS truck.  But it probably was no accident that the article was illustrated with this picture:

What don't you see there?  CD's, DVD's, speakers, DVD players, computer games and most of the other stuff that used to make up a lot of Best Buy's floor space.  Because they have already been demolished by online retailers in those categories.   The picture above is of appliances, one of the few high dollar categories that has not migrated to the web.   Go to Best Buy and you will see appliances, health equipment, and TV's, all categories where bricks and mortar stores have some advantages over online.

This makes perfect sense, but don't tell me Best Buy is ready to take on the online retailers.  They are bobbing and weaving, ducking this competition wherever they can.

Postscript:  Best Buy is hoping that having "trained" sales people to help customers will garner business.  There are two problems with this.  One, the training of their sales staff has always been spotty, and likely will not get better as their financials go south.  And two, I find that Amazon.com reviews are far more helpful, and often more knowledgeable, than most in-store sales staff.   But on the positive side, who doesn't enjoy getting hassled for an extended warranty at checkout?

When old guys like me go out to play pickup basketball, we all lay out our excuses before we start playing:  My knee is acting up, my job gives me no time to practice, etc. -- you know the drill.

So here are my excuses for the following video:  I had just arrived in Orlando to run a 10 mile race with my daughter, it was really early in the morning, I was jetlagged, I only had 4 hours of sleep, live TV is hard, live TV from a remote broadcast staring into the camera is harder, my earpiece was loose, I didn't like the questions they asked, etc.

That being said, here I am

Also, I missed it on Monday but I got a brief mention in the USA Today editorial.

My competitor Eric Mart does a great job explaining the issues.

We get literally (as they would say on the TV show Archer, literally literally and not figuratively literally) hundreds of paper bills to pay each month in our business.   We can barely keep up just with paying them all, much less vetting every one.  Which is what scam artist marketers count on when they craft fake bills they spam to businesses in hopes that some percentage, in their hustle and bustle, will pay the bills without knowing they are fraudulent.

These letters really, really tick me off.  They are sent by people who apparently cannot sell a product or service on its own merits and so must trick harried business people into accidentally sending them money.  I get these most frequently from companies that send me letters that look just like a government agency requiring yet another fee (the corporate minutes fraud).

So here is the most recent bill my accounts payable person questioned and put on my desk.   It is from a company called US Telecom, and despite the remission address on the letter it is apparently based in California.  You can click to enlarge the letter -- it is in very high resolution, which we will need to find the small print that they use to try to cover their butts.

Does this look like a regular bill to you for some service we have contracted for?  It did to me.  Note the "Due upon Receipt" at the top, the calculation below with previous balance and new balance and "pay this amount."  No reasonable person in this country would say it looks like anything but an invoice for service received.

But this is not a bill.  It is a solicitation for services.  If you send the money, then you are committed.  And by the way, per the terms below, once the agreement is in place, it cannot be terminated or amended (or likely refunded) without a signature from both parties, which means only if they approve it.  If they don't, congrats, you are stuck in this contract.  I have no idea if you actually paid, whether you would receive any services or not.  Since they priced this service without even knowing what assets I have that would be serviced (note no equipment or equipment location is listed in the bill, the first "tell" to me this was a fraud) I am not sure how they would ever provide any service.  (we were really saved by Quickbooks on this one, because my payables person flags any bill from a vendor not set up in our system).

They attempt to cover themselves, in the same way the corporate minutes scamsters do, with the small print in the last two lines at the bottom.   Can't read it?  LOL, I could not read it myself, even full size, without my glasses.  You can click through if you wish to see it on the high rez version.  But it says that it is not a bill, it is a solicitation, and that I am under no obligation to pay unless I accept the offer, which I do by paying.  But by the language, once paid, I have accepted the offer and cannot get out of it without a signature from an authorized officer of their company.  I bet that would be easy to get.

That last fine print may keep them out of jail or even let them sleep at night, but no legitimate business with a valuable product sells its services this way.

Update:  Apparently there is a legitimate US Telecom and they are understandably pissed.  They have set up a page on this billing fraud, and apparently the Attorneys General in a number of states are investigating.

Update #2:  Talk about waddling in late on a story!  These guys' registered corporate name is UST Development, run by a guy named David Bell.  Ken White of Popehat has been on these guys for years.  LOL, I even linked Ken's post a while back.  You sleazy folks out there can f*ck with me all you want but you do not want to mess with Ken White.

Update #3:  Good God, Ken did 14 posts on these guys.  Enjoy.

Kevin Drum has a post discussing vote counts on Syrian war in the House, and observing that support is coming from Democrats and opposition from Republicans.  Hilariously, Drum comes to the conclusion that the Republicans are the big hypocrites here and are much worse than Democrats.  I think most of us who are not members of the red or blue team see this conclusion for what it is -- a horribly blinkered partisan view.  Republicans who a decade ago were implying it was close to treason not to blindly support our President in a time of war are clearly hypocrites, but no more so than Democrats who filled the streets with people chanting about the fierce moral urgency to avoid war, with the robust and high-profile anti-war movement virtually disappearing once their guy was leading the wars.

But for those (mainly Democrats of late) who have criticized partisanship and gridlock and lack of bipartisan solutions, we are seeing the one and only advantage of partisanship:  That there are people in Congress who will always have an incentive to oppose anything that comes along, if only for narrow partisan tactical reasons.  Nothing is so good of an idea that it does not deserve challenge and push-back before we implement it (likely forever, since we never repeal anything and wars and their consequences take forever to go away).

The US Congress is like those hoarders you see on reality TV shows.  They have built up a 200+ year accumulation of laws and wars and regulations and other crap, until the very walls strain to hold it all.  And still they are out every day trying to add more.   They need an intervention every time they try to add another item to the hoard -- "Are you sure you really need that?"  Providing that intervention, whether out of good intentions or bad, is the one and only aspect of American team politics I can get behind.

From the location of the Yarnell fire deaths:

"We are going to hallowed ground," says Jim Paxon, spokesman for the Arizona Forestry Division, moments before leading reporters and TV crews to the site where 19 members of the Granite Mountain Hotshots were killed in a June 30 wildfire.

"They are almost superhuman," Paxon drawls to reporters gathered on the morning of July 23. "As we go up there, there's a Granite Mountain Hotshots shirt on a cactus. We would ask that you touch the shirt . . . in reverence to the loss."

Darrell Willis, the Granite Mountain Hotshots direct supervisor in the Prescott Fire Department said that their deaths were God's will

"The voice of what actually happened, we'll never know," Willis says. "We're not going to have that information from [the dead men]."

Willis continues, "It was just one of those things that happened. You can call it an accident. I just say that God had a different plan for that crew at this time."

I don't know how much this tragedy gets covered nowadays outside of Arizona, but it still dominates the news here.  I have no problem sending all the sympathy in the world to the young families of these men.  But I am exhausted with the fetishizing as heroic of what looks to be a total screw up.  An experienced crew had absolutely no business being where they were, or in this day and age so badly out of communication.   They either blundered into, or were incompetently led into (the facts are still coming out) an absurdly dangerous position.   At best, they were there to protect a ranch house that had already been evacuated and was likely insured a lot better than the lives of many of the crew members.

From my observations operating for years in the US Forest Service and other wilderness areas, wildland firefighting needs a serious housecleaning.  I thought for sure this tragedy would be a stick driven into that particular anthill, almost guaranteeing scrutiny and accountability might follow.  Now I am not so sure.

Give me a quick answer - are forest fires above average this year?  Is this an unusually bad fire season?

You could be forgiven for saying "yes".  In fact, it is an unusually quiet fire season.  Via Real Science

source:  National Interagency Fire Center

It is such a disconnect with news reporting that you may have to click the source link yourself just to make sure I am not having you on, but 2013 is an unusually quiet fire season (2012 was worse but still under the 10 year average).  This tendency to judge trends by frequency of the media coverage rather than frequency of the underlying phenomenon is one I have written about before.

let’s take a step back to 2001 and the “Summer of the Shark.”  The media hysteria began in early July, when a young boy was bitten by a shark on a beach in Florida.  Subsequent attacks received breathless media coverage, up to and including near-nightly footage from TV helicopters of swimming sharks.  Until the 9/11 attacks, sharks were the third biggest story of the year as measured by the time dedicated to it on the three major broadcast networks’ news shows.

Through this coverage, Americans were left with a strong impression that something unusual was happening — that an unprecedented number of shark attacks were occurring in that year, and the media dedicated endless coverage to speculation by various “experts” as to the cause of this sharp increase in attacks.

Except there was one problem — there was no sharp increase in attacks.  In the year 2001, five people died in 76 shark attacks.  However, just a year earlier, 12 people had died in 85 attacks.  The data showed that 2001 actually was  a down year for shark attacks.

I was at a couple of art shows during my vacation, and saw a lot of photography.  A staple of photography are the shots of Italian allies and colorful sea villages.  I have one on my wall that I shot myself, the classic view you have seen a million times of Vernazza, Italy.  My wife observed that these photos at the shows looked different than mine (she said "better").

The reason was quickly apparent, and I am seeing this more and more in the Photoshop world -- all the artists have pumped the color saturation way up.  I had to do this a bit, because the colors desaturate some when they get printed on canvas.  But these canvases friggin glowed.  I see the same thing in nature photography.  Is this an improvement?  I don't know, but I am a bit skeptical.  It reminds me a lot of how TV's are sold.  TV pictures tend to be skewed to over-bright and over-vivid colors because those look better under the fluorescent lights of the sales floor.  TV's also tend to have their colors tuned to the very cool (blue) color temperatures for the same reason.  None of this looks good in a darkened room watching a film-based movie.  Fortunately, modern TV's have better electronics menus and it is easy to reverse these problems, and my guess is there is less of this anyway now that many TV's are sold online based on reviews rather than comparison shopping in a store.

I am left to wonder though how this new super-vivid, over saturated photography would look in a home, and how it wears with years of viewing.  Am I being a dinosaur resisting a technological improvement or is there a real problem here?

I just read about a project dedicated to local celebrities, people who are very famous in their own backyard but not known at all beyond a small region.

The one person in this category I could think of (beyond local TV and radio personalities) is Johnny Barnes in Bermuda.   I encountered him around the year 2000 when I went to Bermuda for a job interview -- I was running Internet companies at the time and a group in Bermuda had an idea to combine an Internet B2B model with offshore banking and tax havens.  Transfer pricing games seemed to be prominent in the model.

Anyway, there he was, at a busy traffic circle almost everyone on the island passed when going to work in the morning.  He just stood there saying hello and good morning to everyone.  I found out later he was a Bermuda icon -- if he missed a day the radio stations and government offices would be flooded with calls from people asking if he was OK.  Searching the Internet, I found that someone has made a film about him.

I was down at the Arizona capitol first thing  this morning to do some live TV interviews on reaction to the Supreme Court DOMA decision  (as Chair of Equal Marriage Arizona, which has a ballot initiative in the works to allow same-sex marriage, we wanted to get our initiative close tied to the story today).

Once the decision came down around 7:10 AM local time, the networks wanted an immediate reaction.  I told them I needed to read for 5 minutes to make sure the decisions were what we expected (they were).  So I leaned up against a palm tree to stay in the shade and read my iPad.  Well, it turns out the tree trunk was crawling with ants.  So as I began my live TV interviews, I could feel them crawling all over my back and starting to bite.  I am not sure how coherent I was in the interviews.  I am pretty sure the reporters were confused about my ripping off my jacket and shirt once the interviews were over.  Maybe they thought it was some sort of Brandi Chastain celebration.

On a related note, having tangentially been involved now in the media rush around a Supreme Court decision, I found this analysis of the running of the interns quite entertaining.

My son and I were watching a TV show and at the end there was a blurb about it being made in Georgia.  I said to him "I guarantee that "filmed in Georgia" translates to "subsidized by Georgia."  He did not believe me, and could not understand why anyone would subsidize film production.  After all, we can argue about whether any government subsidized jobs make sense or just cannibalize investment in other areas, but film jobs are the most temporary and fleeting of all jobs.

Turns out I was right (I followed a web link from the credits):

Georgia production incentives provide up to 30% of your Georgia production expenditures in transferable tax credits.

The program is available for qualifying projects, including feature films, television series, commercials, music videos, animation and game development. With one of the industry’s most competitive production incentive programs, the Georgia Film, Music & Digital Entertainment Office can help you dramatically cut production costs without sacrificing quality.

Highlights from the Georgia Entertainment Industry Investment Act include the following:

• 20% across the board, transferable flat tax credit with a minimum of $500,000 spent on qualified production and post production expenditures within Georgia
• Additional 10% tax credit if a production company includes an imbedded Georgia promotional logo in the qualified feature film, TV series, music video or video game project
• Provides same tax credits to all instate and out-of-state labor working in Georgia, plus standard fringes qualify
• No limits or caps on Georgia spend; no sunset clause
• For commercials and music videos, a production company may group multiple projects together to meet the $500,000 minimum spend on qualified expenditures

This is just insane.  WTF is the state doing subsidizing 30% of the cost of making commercials?  What could possibly justify this, except that this is a sexy business and it gives politicians a chance to rub shoulders with film people?   Why are Georgia business people taxed in order to hand money film producers?   What makes film production a "good" industry and, say, campgrounds a bad one?

Well, I suppose it could be argued that filming in Georgia would help advertise Georgia by showing scenes filmed on location in the state.  Except that the show we were watching was Archer, an animated series about spies based in New York City.  Not one second of the TV show has ever shown or ever will show a live image of Georgia, and I am almost all the way through the second season and not one location in the state of Georgia has been mentioned  (though they might have mentioned the one in Asia).

One of the lessons we learned at business school is that there can still be money to be made in a declining business.  Today's case in point:  AOL.  The butt of much Internet-related humor, did you know that AOL still has 3.9 million US subscribers?  To give a sense of scale, that makes its subscriber base about as large as Charter Communications, a not insignificant 6th place player in the cable TV market.  Its income statements are a total mess, cluttered with enough special charges and unusual income items to scare me off from touching the stock, but it looks like it is still making about $50 million a quarter on about $500 million in sales.  Not what it once was, but not an awful business either.

A company like this run for cash flow could do well for quite a while for shareholders.  Of course, companies like that are seldom run for cash flow -- that is not how corporate management incentives work.  Corporate managers are going to want to take the cash flow from the declining business and try to build some new kind of empire on the corpse of the old one.  Shareholders can reasonably ask why they are not just dividended the cash to make their own reinvestment, but insiders benefit much more if the cash is reinvested within the company.  And sure enough, AOL seems to be buying a ton of small companies.