Friday, February 27, 2009

Compaine on Paywalls

Over at Rebuilding Media, Ben Compaine gives a pretty compelling breakdown of the sinking ad revenues of newspapers. Doing a little back-of-the-envelope calculation, he arrives at the conclusion
If newspapers have essentially been able to thrive on the revenue from advertisers alone (again, with cost of printing more or less covered by circulation revenue), why are they having so much trouble today? The answer is not one single factor, But a major contributor is that newspapers – whether print or digital—are just worth less to advertisers than they were 20 years ago.
It's yet more evidence that the bubble of the traditional one-way broadcast model of media is bursting. Newspapers are having a terrible time dealing with their business model failing (which Compaine gracefully remarks on, saying editors usually thrive on this kind of economic collapse, except when it's their own).

I have been under the assumption that newspapers could save themselves if they'd just pull their heads out of the sand, and go completely digital. I was working from the same calculations that Compaine noted: The revenue generated by dead tree circulation is roughly equivalent to the cost of the dead tree circulation machine. Therefore, content creation (reporters, editors) were always supported by ad revenue. Distribution was supported by circulation. With the Internet now able to entirely handle distribution (and generate ad revenue), just remove the cost of paper distribution and a newspaper is back in the black. I largely attribute resistance to this idea as some combination of legacy thinking:

1) We're a newspaper! We have to print! They feel that they will lose relevancy if they aren't on paper.

2) Newspaper folk are largely left of center, and the idea of creating mass layoffs on the distribution side of the house is so unpalatable to them that it is unthinkable. They'd rather "go down with the ship" (a la Tribune, Rocky Mountain News, Philidelphia Inquirer, San Francisco Chronicle).

3) Content-generation and distribution are inseparable. This is the crux of the issue for all traditional media. (Just ask the RIAA). Once they lose control of distribution, they lose the monopoly they've held on the monetization of information. This is the bubble that's bursting for television, music, and newspapers.

But yesterday, William Rattray and I were discussing this topic, and something useful fell out of the conversation: The writing in newspapers simply isn't as relevant as it was 20 years ago. Everything has become an opinion piece, and papers just aren't as essential as they once were to the reader, since we're all making our own opinion pieces now.

Then Compaine hits me with this revelation:
Between 1989 and 2007 local cable advertising increased from $500 million to $4.3 billion—or from 0.4% of all advertising to 1.6%. Advertising in newspapers fell from 26% to 15% in this period. Although some of the highly local advertisers going to cable may have taken some of their funds from budgets for radio or other local media, it is probable that a significant share came from the hides of newspapers. I estimate perhaps up to 20% of the decline in local newspaper advertising share can be attributed to local cable spots.

So newspapers are losing ad revenue in traditional markets to local cable spots, and at the same time, don't have the leverage they used to with online editions, because online advertising is so much more efficient than print advertising. Newspapers can't charge for targeted online ads what they once charged for blanket ads based solely on circulation numbers. Online ads have far better metrics, so advertisers can see their ROI (or lack thereof) much better online.

This leads to Compaine's conclusion:
...even an all-digital newspaper may have trouble supporting its economic model with online advertising.
Maybe traditional papers really don't have any way out...

Thursday, February 26, 2009

Quote of the Day

From Pat Buchanan:

"Republicans not only need an alternative to Obama's vision, they need an alternative to Bush's vision"

I don't want to know what Buchanan's alternative vision is, as I can't really get behind his usual closed-border, tariff-protected, populist claptrap, but his quote above is all too true.

Monday, February 23, 2009

Reason Happy Hour!!!

Okay, so it isn't what you think. :-)

But check out RSM's post on the opening of the CPAC party circuit. It has my new favorite tagline:

"Libertarianism is the last refuge of the scoundrel".

I can get behind that. And the fact that Reason's shindig is being held at a bar during happy hour only confirms it.

Could anybody be more pleased with their surname than me? :-)

Sunday, February 22, 2009

Social Media Threatens Traditional Media. Again.

I see about three articles like this per week, where a professional journalist takes a pot-shot at an up-and-coming social media site or application, and reveals just how impotent and threatened social media makes them feel.

Don't Trust Yelp! (Or Anyone Else) With Your Online Reputation, by David Coursey at PC World, is particularly egregious, and I thought I'd dissect it a bit, for nothing else than to follow the sage advice of Robert Stacy McCain's How To Get A Million Hits on Your Blog. ("Make some enemies" is Rule #4, by the way).

First, even the title belies a fundamental lack of understanding about social media. If there's one thing that social media has shown us, it's that companies are no longer in control of their "brand". Whether you "trust" Yelp or not, your market might be using it to talk about you and your product or service. Your "trust" is neither asked for, nor required.

The article begins with the worst kind of local news hook, a la "Something could be inside your house right now, killing your children. Film at 11":
Is Yelp using negative user reviews to coerce small businesses into buying its advertising? I don’t know, but it wouldn’t be the first time that a media company had tried such an innovative approach.

One way to tell might be to look at Yelp’s balance sheet, but who really knows? Does Yelp have an economic incentive in a tough economy to coerce potential advertisers? I don’t know and can’t say.
"I don't know and can't say". This seems to be the thesis to his article.
People have yet to figure out what it means to have largely removed gatekeepers from the media mix. It has been decided, by venture capitalists mostly, that the voice of the people is a fine substitute for professional journalists and reviewers. As one of the professionals, I’ve wondered how long it would take for readers to understand they get what they pay for. Anonymous reviews on sites that may have nothing to lose are, in general, pretty suspect.
What I *do* know, and *can* say is, as "one of the professionals", Mr. Coursey's ulterior motives for defending the status quo of the media elite are pretty clear. Venture capitalists aren't writing reviews on Yelp, the user community is. They may be somewhat anonymous, but the mechanics of the Yelp interface reveal just how trustworthy they are. Click on a reviewer's name, and you can see how many reviews they've written, how many people find those reviews useful, and how many compliments/complaints they've gotten from other users--everything you need to know about the reputation of the reviewer in the community. Some reviewers even have an "elite" badge next their profile picture. According to Yelp:
Elite-worthiness is based on a number of things, some of which include well-written and personal reviews of local businesses and services, being accountable for those reviews (use of a real name and photo, etc.)
Note the emphasis on accountability to the community. Reviewers aren't just reviewing venues on Yelp, they're reviewing each other. I don't see any such mechanism to evaluate Mr. Coursey's reputation on PC World's site.

The thrust of the allegations come from this article in the East Bay Express:
In fact, something seemed shady about the state of his restaurant's negative reviews. "When you do get a call from Yelp, and you go to the site, it looks like they have been moved," John said. "You don't know if they happen to be at the top legitimately or if the rep moved them to the top. You don't even know if this is someone who legitimately doesn't like your restaurant. ... Almost all the time when they call you, the bad ones will be at the top."
Now, as an experiment, go look up a local restaurant or venue on Yelp, and you'll notice two things. First, the default sort order of reviews is set to "Recent+Votes", meaning that the most popular and fresh reviews float up to the top. With a single click, the user can sort the order on date, reputation of reviewer, or how favorable the ratings are. The reader is in control of the presentation. If you are actually a sponsor on Yelp, as a business, you can select a single review as your favorite, and it will display in the top informational area, *clearly marked as such*.

Back to Coursey's article:
How would a reader know whether Yelp is cooking reviews? I guess you’d have to go to a bunch of Yelp-rated businesses and compare your experiences to what the reviewers had to say. Or you can just consider the allegations and decide on that basis.
Or you could just run the allegations up the flagpole without looking into the mechanics of the site, and take a cheap pot-shot at a form of media that's threatening your entire profession. How about you consider *that* allegation, Mr. Coursey?

He continues:
Again, I have no way to know whether the allegations against Yelp are true. I about half accept the COO’s suggestion that Yelp’s ad sales reps are doing unintentionally misleading presentations and that’s the cause of the complaints. However, I can’t imagine Yelp could drive enough traffic to a local business to make the $299 monthly fee worthwhile.

Either way, Yelp’s willingness to sell positioning for any reason makes the whole affair suspect. My bet is the paid top reviews are mostly, truth be known, advertiser written. And who could blame a small business person for gaming a system that’s so ripe for being gamed?
"Paid top reviews"? Again, taking a look at a sponsored entry, like this one for Cafe Claude, any reader can see that:
1) There is only a single "Top Review", separated from the main review list.
2) It is labeled as a favorite of the sponsor/owner of the venue.
3) There's a "what's this?" link on it, further explaining that it has been selected by the sponsor/owner.

Could they possibly offer more tranparency? Social media, in all it's forms, is about conversations and trust. If a site like Yelp could "game the system", even given the mechanisms they've built in to prevent it, the user community itself would cease to trust it (See what happened this week when Facebook edited its Terms of Service). Yelp is the very model of transparency in social media, which is precisely why it's such a threat to the traditional "gatekeepers" of media like Mr. Coursey. In a way, Mr. Coursey's article is an example of another kind of transparency: Mr. Coursey, we can see right through you.

Friday, February 20, 2009

Social Media for Organizations

I wanted to give some friends and colleagues a bit of a primer on "Web 2.0" technology. I don't want to talk about the tools specifically, but about a particular kind of approach.

In order to give folks a starting place, I thought I'd post a collection of recommended books, websites, and articles that can give them an overview of the world as it's becoming. But first, some context...

Media, since the time of its inception, has been about three things: Consuming, Sharing, and Producing. This may sound like an odd statement to most people. For my entire adult life, and likely yours, Sharing and Producing have been difficult. Consuming has been easy. Therefore, consuming has been the norm.

My generation, and my parents' generation, have been conditioned to be only consumers of media. Television, radio, and newspapers are each a one way conversation, with writers, producers, and advertisers addressing a silent audience that was largely isolated from each other. Whether we like it or not, thanks to the Internet, this is no longer the case.

Today, we are talking to each other. Sure, we are talking about our families, our friends, or dreams, and our wistful unmet desires. But we are also talking about products. We are talking about corporations. We are talking about government. We are talking about any organization that has previously considered us as silent and isolated consumers.

We are talking about them behind their back. And our voices carry. We control their brand.

We make videos on YouTube. We write blogs like this one. Through social media sites like MySpace and Facebook we share our musical and literary tastes, and stories about products, companies, and organizations. Sometimes those stories are flattering. Sometimes, they are damning. But one thing is for sure, we are having those conversations largely without them. To be sure, some companies and organizations are starting to understand this. Zappos.com is a great example of an organization that 'gets it'. Right on their main page, they let customers review their product, and not all the reviews are flattering.

Here's a list of material if you want a deeper understanding of social media:

1) The Cluetrain Manifesto

The definitive document on this phenomenon of "markets as conversations" was written a decade ago, if you can believe it. A group of four visionaries saw all of this coming. There is no better place to start than here. Best of all, you can read it online.

A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies.

These markets are conversations. Their members communicate in language that is natural, open, honest, direct, funny and often shocking. Whether explaining or complaining, joking or serious, the human voice is unmistakably genuine. It can't be faked.

2) What Would Google Do?, by Jeff Jarvis.

A great book on how to deal with new openness between organizations and markets. He takes the lessons learned by Google's success, and applies them to all sorts of enterprises.

Here's the author describing his aims for the book.


I'm not an advocate for everything Jarvis has to say, but he is seeing the problem (and the opportunity) for what it is, and is trying to get a handle on it. He discusses his ideas on social media (largely discussing it's effects on journalism) on his blog BuzzMachine.

3) Here Comes Everybody: The Power of Organizing Without Organizations, by Clay Shirky.

If you look at nothing else on this list, at least pick up this book. It's a tour guide of social media, and the fundamental shift it portends for not just the Media, but for society as a whole.

# Page 102:
Every webpage is a latent community. Each page collects the attention of people interested in its contents, and those people might well be interested in conversing with one another too. In almost all cases the community will remain latent, either because the potential ties are too weak, or because the people looking at the page are separated by too wide a gulf of time, and so on.

# Page 105:
Communications tools don’t get socially interesting until they get technologically boring... It's when a technology becomes normal, then ubiquitous, and finally so pervasive as to be invisible, that the really profound changes happen.

4) Where You Find The Time to Spend Online

After you've consumed all this material, you may be wondering how you'll ever have the time to participate in this wild new world? Here's a great talk, also given by Clay Shirky, on where we find the time. In itself, is has some frightening revelations for those who grew up only knowing one method of interaction with media: Consumption.

These few selections will give readers a real understanding of the fundamental shift in perspective that social media demands. For individuals, there's no substitute for experience. The best way to learn about social media is to get out there and play with it. You've already started! (You're reading my blog, aren't you?). No matter if it is starting your own blog, text messages on Twitter, links and notes on Facebook, photographs on Flickr, or any number of other outlets for your participation, just get our there and try things.

But for organizations, the stakes are much higher. If a company leaps out of the gate and immediately starts talking *at* its customers instead of *with* them, they can do irreparable damage to their reputation. Here's some advice from Universal Mcann International's report on Social Media on blogs and other social media tools:
All companies and brands should consider employing them to create open and honest dialogue. Any blog that spins he truth will be found out. In a world of social media, honesty is the only policy. The future of marketing is about acting how you want to be perceived instead of talking about it.

So, while the following rules apply to anyone interested in social media, they are especially important for organizations that have an identity or brand to protect and promote:

1) Observe and Share - Look around. See how people talk to each other. Learn the local customs before talking with the natives. Like what you see? Share it with your friends on Facebook. E-mail a link. Get in the habit of distributing worthwhile material to your friends.

2) Comment - When you're familiar enough with the territory, offer your own take. Comment on a message board, or on an article on the New York Times. Heck, comment on this blog! If you are an organization, go find out where people are already talking about you, and offer them a human voice to associate with your cause or company. Dip your toes in the water. Make sure you like the reaction you get. It may not always be warm.

3) Create - When you're finally comfortable with the environment and the tools, post some videos on Youtube and share them. Take some photographs and post them up on Flickr. Heck, start your own blog! People may love it--they'll tell you. People may hate it--they'll definitely tell you (and each other).

Most of all, whether you are contributing to the media landscape as an individual or an organization, be honest, be personal, be open. Always ask, am I talking *with* these people, or am I talking *at* them?

Wednesday, February 18, 2009

Singing The Strong, Light Works of Engineers

Someone reminded me recently of this stanza from Whitman's "Passage to India":


Lo, soul! seest thou not God’s purpose from the first?
The earth to be spann’d, connected by network,
The people to become brothers and sisters,
The races, neighbors, to marry and be given in marriage,
The oceans to be cross’d, the distant brought near,
The lands to be welded together.


How appropriate to our Internet-connected age. Even though Whitman was "Singing the strong, light works of engineers" of a different time, I long for this kind of celebration of the achievements of today's technologists.

Most folks fall into two camps, those who love technology for technology's sake, assuming that "novel" is always "good", and those who see at as only a destructive, disruptive force.

Technology, of course is both and neither of these things. Just as it always has been through our history, every tool can be used as a weapon. Swords and plowshares are interchangeable. That being admitted, I can't help but think that my field--that technology in general--could at least be given the benefit of the doubt by the people who so covet its products and effects everyday. We use more technology today than ever, and it's viewed with so much less awe and inspiration as it was a century ago. Where is today's Walt Whitman, singing of *our* earth-spanning network? Engineering needs a Poet. Any takers?

Tuesday, February 17, 2009

Built Ford Tough.

Now, this is what I'm talkin' about!

When you absolutely, positively, have to crush every zombie in the street... accept no substitute!

The Ford F650

Built Ford Tough, my friends. Tough enough to crush zombies.

Sunday, February 15, 2009

Many Hands Make Light Work

Wow, am I flattered.

I've been reading Robert Stacy McCain's blog for a while now, since one of my friends had been peppering me various RSM posts, which always seemed to be relevant to our recent conversations.

The post that sealed the deal, and got RSM's blog onto my RSS feed, however, was this one about Christina Hendricks, whom I'll always think of as "Mrs. Reynolds" from Firefly.

Today on his blog, after I tossed him an e-mail introducing him to AddThis, he posted this:

Thank you, Eric Reasons! thus thanking me twice over. (Once with his public offering of thanks, and a second time with the Hendricks clip).

Funny thing is, I never mentioned my infatuation with Hendricks to him. Clearly, he's simply a man of excellent taste.

In case you're unaware of who Mrs. Reynolds is, enjoy this snippet of the best TV show to ever grace the airwaves.

Mal Reynolds: "There's no bliss! I don't know this girl!"
Jayne: "Then can I know her?"

Saturday, February 7, 2009

In a Fix, Indeed...

David Leonhardt's article in the New York Times Magazine this week is well worth the long read. In it, he takes a stab at defining the key areas that can produce sustained growth in our economy, and what he thinks that the government should do in order to address them. In short order, how President Obama can use this perceived time of crisis to remake the economy.

I'm glad to see writers taking the time to dig deeply into the real issues facing the economy, even if I have my misgivings about their analysis. In short, I'd love to spend an hour over drinks with Mr. Leonhardt, and argue about this article.

I'll skip the first section in which Leonhardt is pimping for Keynes. I think you all know where I stand on much of that, and moreover, it's not the main push of his article anyway. He wants to get past reviving the economy, and dig into how to reform it for the long haul.

First, Leonhardt cites the problem of why we don't address the areas we should, and I can't disagree with a word of it:

In Olson’s telling, successful countries give rise to interest groups that accumulate more and more influence over time. Eventually, the groups become powerful enough to win government favors, in the form of new laws or friendly regulators. These favors allow the groups to benefit at the expense of everyone else; not only do they end up with a larger piece of the economy’s pie, but they do so in a way that keeps the pie from growing as much as it otherwise would.
[...]
In these cases, and in others, interest groups successfully lobbied for actions that benefited them and hurt the larger economy.


Isn't the best way to avoid this from happening simply reducing the amount of money and influence that Washington can throw around?

His first target, I think is well wide of the real target:

Home builders and real estate agents pushed for housing subsidies, which made many of them rich but made the real estate bubble possible.


Or was it the well-intentioned aim of helping the less affluent (read: "minority") Americans get loans that they couldn't necessarily afford to pay back? Both Bush and Clinton threw minorities in at the deep end of the pool to show off the increasing numbers in minority home-ownership like a badge of honor. What they were really increasing was crushing debt on a poorer demographic that was little prepared to shoulder the burden. The lending policies of Fannie and Freddie, combined with the effects of the Community Reinvestment Act on private lending, encouraged shaky loans, and then Wall Street (ever complicit, always reacting to the playing field set by government) built a ponzi scheme out of that debt to hide how risky it really was from their own investors (Credit Default Swaps, Mortgage Backed Securities). In a real free market, the government wouldn't have provided the incentive to make risky loans just to feel better about itself and look good for the voters. Wall Street wouldn't have been able to hide its activities from the investors who support them. Transparency and individual free choice could have prevented this. Well-intentioned but foolish government regulation in the left hand, and government protectionism of big business in the right hand, enabled it.

Leonhardt goes on to say,
Surely no interest group fits Olson’s thesis as well as Wall Street. It used an enormous amount of leverage — debt — to grow to unprecedented size.


My point exactly.

He uses Great Britain in the late 1970's, and the "Winter of Discontent", as an historical example of how politicians can use crises to make sweeping changes that an otherwise stable system will not allow:

The resulting furor helped elect Margaret Thatcher as prime minister and allowed her to sweep away some of the old economic order. Her laissez-faire reforms were flawed in some important ways — taken to an extreme, they helped create the current financial crisis


Can statements like this continue to go unassailed? If laissez-faire reforms really were taken to the extreme, then we wouldn't have had government intervention acting as a stimulus for bad lending. What really helped create the current financial crisis, Mr. Leonhardt?

Moving from housing debt and Wall Street, to education as a source of growth:

Goldin’s and Katz’s thesis is that the 20th century was the American century in large part because this country led the world in education. The last 30 years, when educational gains slowed markedly, have been years of slower growth and rising inequality.


Or have slower growth and rising inequality slowed educational gains?

I am tempted to argue that the 20th century was the American Century because we controlled the only means of production that was undamaged by WWII. As the third world caught up, and Europe rebuilt and reentered the market after WWII, our relative monopoly on production started to subside. I'm not sure we could have had a middle class, the engine of our economy, if we hadn't enjoyed that privileged spot in the years that immediately followed the war.

As for education, I could argue, with somewhat more confidence, that the inflated price of higher education to the middle class (those too poor to afford college on their own, or too wealthy to be granted that education by government grant) priced the middle class out of a degree. Education prices rise at many times the rate of inflation, at the same time that middle-class blue-collar pay is stagnating due to the rest of the world catching up and supplanting the source of the creation of the middle-class in America: manufacturing.

I'll go along, for the moment, with Mr. Leonhardt's theory that education automatically produces growth in an economy, as he provides himself with enough caveats for cover. He writes:

Kane is one of the researchers whose work shows that teachers may matter more than anything else. Good teachers tend to receive high marks from parents, colleagues and principals, and they tend to teach their students much more than average teachers. Bad teachers tend to do poorly on all these metrics. The differences are usually apparent after just a couple of years on the job. Yet in a typical school system, both groups receive tenure.


"The differences are usually apparent after just a couple of years on the job" -- Apparent to whom? If this data were apparent to a parent (sorry, I couldn't resist), and that parent had the choice of what schools to send their child to, we'd see this practice of granting tenure carte blanche disappear fairly quickly, as schools clamored to draw students towards them. Mr Leonhardt seems to agree:

Paul Tough has described some of the most successful schools for poor and minority students. These schools tend to set rigorous standards, keep the students in school longer and create a disciplined, can-do culture. Many of the schools, like several middle schools run by an organization called KIPP, have had terrific results. Students enter with test scores below the national average. They leave on a path to college.


Mr. Leonhardt fails to mention that KIPP schools (65 out of 66 of them, nationwide) are charter schools with open enrollment. That's right. Public schools, with parental choice. I wonder why he would leave that point out? Perhaps it is a hindrance to the way in which Mr. Leonhardt wishes to remake our new economy. After all, a freer market is what led us into this mess in the first place, isn't it?

Similar to so many other problems, it seems to me that the real solution is individual knowledge and individual choice. According to the KIPP website, "As primarily public charter schools, KIPP schools typically receive 60 to 90 percent of the operational revenue and none of the capital expenditure revenue of district schools". Giving parents choice of where to send their children brings down cost, and improves performance. Market forces at work.

Having government simply spend more on primary education isn't solving the problem, and historical data supports that.




Surely, I am a product of the public school system, and I believe that, in a democracy, our public education is a key part of our shared infrastructure. I want the resources to be there to educate our populace, but the resources, without the incentives provided by individual choice, are wasted in magnificent fashion.

Leonhardt goes on to say "States, for their part, will be cutting education spending to balance their budgets". But isn't the example of excellence he cites in KIPP schools a way to both cut education spending at the same time as increasing it's effectiveness?

As a whole, Leonhardt's article is looking at all the right problems (how to sustain and increase growth of the economy, provided that it can be resuscitated by "stimulus"), but the solutions hinted at are largely ineffective:

* Improving health care by mandating, across the nation, which procedures and care will be funded by medicare (removing choice from doctors and patients).

* Blaming Wall Street (rightfully), but exonerating the Government in the current economic downturn.

* Relying on the somewhat dubious assertion that education can be "reformed" with government mandated efficiencies.

All of these prescriptions remove the freedom of the individual, and hide the knowledge that the individual needs to make informed choices. An economy of this size cannot be directed. It's like trying to control the weather. No set of minds, however brilliant, can command the trillions of individual decisions that make our economy run. By limiting the individual's choices, you can seem to make the problem simpler, but you're no longer dealing with reality. You're dealing with some simplified simulation that can't be mapped to the real world, where unintended consequences are conveniently ignored in the mathematical model, but won't fail to show up in real life.

Monday, February 2, 2009

Citi - A Personal Tale of Moral Hazard...

I'm fighting the good fight in my tiny little corner of the economy. A simple business transaction between me and Citi is a perfect example of the problem with abandoning free market principles in the age of bailouts. Please read on...

I got a notice about a massive rate hike in my most recent Citi Mastercard statement. My base APR was going from 9.24% to 24.99%. If you are a Citi customer, I encourage you to carefully examine your statement for such a notice. Apparently, this is across the board.

For the record, I've been a cardholder with them for 5+ years, and have never been late on a payment. I carry a modest balance from month to month, and pay just above the minimum balance. In short, I should be their perfect customer.

I can't see the business sense in sticking it to some of their best customers... the kind of customers that a credit lender should love. Don't get me wrong, I'm not asking for some sort of sympathetic good will out of a bank, but why drive the likes of me away? I'm a sure thing!

So, considering how little I use the card (mostly a few big purchases in the form of tuition and books a while back, and the occasional mp3 or book from Amazon), I immediately decide to call them up and "opt-out" of their new terms. This will freeze my current rates, and close the account. So what is the likelihood that those people that didn't notice their rates tripling will be in a better position to make good on their debt to Citi? I can't be the only one closing my account with them, can I?

Being none too happy with the idea of giving Citi interest money on a credit card I can't really use anymore, I call up Capital One, apply for a credit card with 0% APR on balance transfers, get accepted (for twice the credit line I had with Citi... so much for the "credit freeze"), and transfer the entire balance. Sweet Justice. I have left a company whose terms were unacceptable to me, and started a relationship with a company whose are. I have voted with my wallet. Good decisions by a smart company are rewarded, bad decisions by a foolish one punished. Victory is mine. Or is it?

I turn around and catch the news that, in the midst of a $45 Billion bailout of Citi, paid for with our tax money, they're trying to buy a $50 Million French luxury jet. Yet another poor business decision by a foolish company.

So I'm paying Citi anyway, with tax dollars, and (if you live in the United States) so are you, whether you are a customer of theirs or not. A company making poor decisions is not being punished for those poor decisions. Instead, it is being rewarded with a taxpayer handout. This is the very definition of "moral hazard", and it is being repeated many times over right now in Washington.

I sincerely hope that Americans will not let their fear get the better of them, and blindly go along with whatever plans come spilling out of Congress. Regardless of your politics, look at legislators with a critical eye, and don't let their P.R. campaign of fear ramrod bad laws down our throats. (Sounds almost like the Bush administration, doesn't it? Meet the new boss... Same as the old boss...)

The Government has determined that Citi is "too big to fail". I have determined that they are too stupid to succeed. Of course, they have better lobbyists in Washington than I do.

Sunday, February 1, 2009

The Star-Spangled Banner

Today as you watch Jennifer Hudson belt out our national anthem, consider that, if today's copyright laws were as strictly held and enforced in 1814 as they are today, we probably wouldn't be legally allowed to perform The Star-Spangled Banner without the permission of John Stafford Smith's lawyers.

Just a thought.