Monthly Archives: December 2004

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No predictions 

Like everyone, I’ve spent a major part of the past week reading and watching reports on the Indian Ocean tsunami and its aftermath. Even after days of information, comprehension of what has occurred is difficult.

I don’t mean that in a scientific sense. As Richard Dawkins pointed out in a letter to The Guardian yesterday, science can simply explain what happened and why. What we can’t comprehend, however, is the consequences of the earth’s destructive power.

One of the minor effects of my taking a week off around Christmas was that I returned to a news aggregator filled with hundreds of postings. I’m usually foolishly assiduous about going through what I’ve missed. But all the pre-26 December postings — written with no knowledge of what was to come — were clearly irrelevant to the world I was now monitoring and witnessing.

The tsunami also makes clear the futility of the annual exercise at this time of writing predictions for the coming year. Either the predictions are banal (there’s no mystery, for example, about the winner of the likely UK election) or random (any guesses as to financial market performance). There is one prediction I can make confidently: the important events of 2005 will be unpredictable.

Great suggestion for president Bush 

Mark Cuban, blogger and Dallas Mavericks owner, has a great suggestion for president Bush:

  It’s up to President Bush to set an example.
  How about it Mr. President. Can you take the first step ? I can help you figure out where to start.
  Start by cancelling your inauguration parties and festivities.
  Could there be anything more confusing and shocking than to read that our country was offering $35mm in aid to the areas affected by the Tsunamis, but that the cost of inauguration parties would be about $40mm ?
  Does anyone else think that this is wrong ?
  I realize that the cost for the inauguration is being picked up by corporate sponsors and people purchasing outrageously priced tickets. The question is why.
  Why are all these corporations and people spending all that money ? Hey I love a good party, but there aint no party like a $10,000 per ticket party. Its a 10k dollar ass kissing. As an accountant, fund raiser when asked about the high prices to attend the Inaugural events told the NY Times, “its the cost of playing the game”.
  Mr President, it’s time to change the game.
  In your re-election campaign, you talked a lot about leadership. Your ability to lead in times like these. Your ability to set an example. Mr President, its time to show that leadership. Its time to set an example.
  Cancel all but the most basic inauguration requirements.
  It should be the easiest decision of your 2nd term.

Of course, given the unerring inability of the Bush administration to do the right thing in any context, this is not going to happen.


I just heard that public donations to tsunami disaster relief in Britain have now reached over £45 million. At current exchange rates that’s soon going to be more than $2 for every single person in the country. Additionally, the government has committed at least £50 million. Absolutely right.

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Holiday shutdown 

Like most of Britain, Davos Newbies is going to shut down for the holidays. I’ll turn off my computer this morning and it’s unlikely I’ll turn it on before next Tuesday.

Happy holidays to my readers.

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Financial Times wakes up to blogging  

Today’s FT has a mostly accurate piece about the rise of corporate blogging (although it’s sequestered behind the subscription firewall — even greater idiocy than usual in this case).

Mentions are made (and links provided) of Scoble, Jonathan Schwartz and blogs at Macromedia. Sadly, because I think they are atypical, much is made of Macromedia’s very corporate approach to blogs: allowed, but must be about Macromedia products, no straying off theme. This quote from Macromedia senior VP Tom Hale seemed a bit creepy to me: “It’s about hiring the right person who can tread the line between telling the truth and meeting the needs of the company.”

I also don’t approve of this point in a set of recommendations for corporate blogs: “Ensure quality and accuracy: bloggers should be experts in their field and encouraged to write only about what they know.” That reeks of a top-down approach to blogs, where someone in the hierarchy decides who is expert and what they can write about. The major part of value in corporate blogs comes from their bottom-up vitality and disregard for standard judgements about who is entitled to write about what topic.

There’s also a reference to the growth of internal blogs at investment bank Dresdner Kleinwort Wasserstein. DKW has about 120 internal blogs. “We think of it as the open-source marketplace for ideas,” says JP Rangaswami, chief information officer. “It’s potentially a very interesting tool to tap into the social fabric of the company and better understand where knowledge lies.”

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The uncontrollable world of blogs 

Richard Edelman explains why he thinks PR consultants deserve a seat at the management table:

  We are uniquely positioned to understand the uncontrollable world of blogs, the ultimate immediate feedback mechanism. We are in touch with dissonant voices such as non-governmental organizations. We can balance the needs of global marketing and local culture. We value the input of employees as partners in building great companies. We have a different mindset, in which relationships and listening are more important than selling and marketing. In short, we are the soft power advocates (to use a phrase invented by Prof. Joseph Nye at Harvard), who believe in attraction and persuasion rather than the hard power attributes of force and compulsion.

That discussion is prelude to an excellent announcement. Richard’s firm is donating $250,000 of time to the Global Business Coalition on HIV/AIDS in the new year.

A Schumpeterian world 

Joseph Schumpeter‘s most famous phrase muscles into the holiday season twice today.

In the Financial Times, Guy de Jonquieres visits Japan (subscribers only) and finds only the destruction part of creative destruction:

  The survivors from this turmoil [the response to Japan’s long recession] are indisputably leaner and fitter. Many Japanese manufacturers have reinforced their global market leadership by enhancing their efficiency, management and technological strength in depth.
  But much of the work has consisted of pruning rotten branches – not planting new saplings. The country is like a student of Joseph Schumpeter who has mastered economic destruction but has yet to learn how to make the process creative.
  Today’s internationally successful Japanese companies were all world-beaters 20 years ago, and in the same industries – chiefly electronic, mechanical and precision engineering. The main difference is that corporate casualties have thinned their ranks.
  Few thrusting newcomers have emerged to take the place of the fallen, or to pioneer novel markets. The most talked-about entrepreneurial success stories, such as Softbank and the thriving computer games and animation industry, are all about 20 years old.
  Meanwhile, Japan remains as divided as ever into two economies. One, the high-performing export sector, is peopled by corporate global superstars; the other by agriculture and a multitude of often small services businesses operating in a domestic market largely insulated from foreign competition and riddled with restrictions. Most have, by US standards, dismal productivity.

And Tom Peters picks creative destruction as one of his business stories of 2004. His take on it makes a vivid contrast with the Japan witnessed by de Jonquieres (warning: excessive exclamation marks ahead):

  Creative Destruction. Capitalism’s primary calling card (esp the American Flavor) was/is/will be “built to flip” (churn!), not “built to last.” Big Pharma imploding! Kmart buys Sears … and nobody cares! IPOs healthy again! BioTech rising! Cheer on the mess! Churn rules!

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The BBC and podcasting 

Stuart Hughes reports on the BBC’s positive experiment with podcasting:

  An internal BBC press release says:
  “More than 70,000 people downloaded Radio 4’s In Our Time programme in November.
  “The series, which explored the history of ideas, was available to download for seven days after broadcast for use on portable players and computers, as well as being available via live and on-demand streaming.
  “The mp3 download experiment aimed to test the public’s demand for radio downloads.
  “Podcasting, which allowers listeners to have new programmes automatically delivered to their computer as soon as they are posted on the web, also proved popular with technology-savvy listeners.
  “Simon Nelson, controller of radio and music interactive, said he was ‘surprised and delighted’ by the high demand for downloads on one of Radio 4’s most challenging programmes.
  “He said he would be working with rights holders to explore ways R&M interactive could earn from the experiment to drive radio listening forward.”

Bush and Hruska  

By some strange serendipity, I quoted senator Roman Hruska to a friend just the other day. The Bull Moose does much better (it’s so good that I have to quote at length):

  The Moose congratulates the President for redeeming mediocrities.
  The late Senator Roman Hruska (R-NE) anticipated the Presidency of George W. Bush. Senator Hruska gained immortality with an observation he made in response to President Nixon’s nomination of G. Harold Carswell to the Supreme Court. Hruska defended the controversial choice this way,
  “Even if he was mediocre, there are a lot of mediocre judges and people and lawyers,” Hruska declared. “They are entitled to a little representation, aren’t they, and a little chance? We can’t have all Brandeises and Cardozos and Frankfurters and stuff like that there.”
  That comment came to the Moose’s mind with the announcement that W. is Time’s Person of the Year. The President has done so much, with so little.
  George W. Bush is an inarticulate, incurious, unaccomplished man who has been re-elected to the most powerful office in the world despite relatively low approval ratings. He is the blameless beneficiary of South Carolina and swift boat slime while he casts himself as a compassionate conservative. His primary domestic acomplishments are turning surpluses into deficits and redistributing wealth to the comfortable.
  He is the Mr. Magoo of American politics who has presided over a war that was based on a premise that was wrong and a post-war period that has proven to be disastrous. He eschews all responsibility and admits no wrong.
  He is America’s chief beneficiary of the soft bigotry of low expectations.
  George W. Bush is Time’s Person of the Year. He is the Hruska Mediocrity of the Century.

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Ahead of the curve 

Harry’s Place has a wonderful roundup of likely seasonal columns by some of Britain’s finest. Caution: the humour requires a fairly detailed knowledge of newspaper columnists in the UK.

Startling China fact 

I hope Tyler Cowen keeps up his China fact of the day. Today:

  At $1.2 trillion, Italian GDP is roughly the size of China’s, and Italy’s total foreign-trade value of $750 billion is only slightly smaller than that of the mainland.

Yes, but. I remember in the ’90s the French ambassador responsible for attracting foreign direct investment to the hexagon was a Davos regular. He endlessly went on about the size of the French economy compared to China or any other flavour of the moment.

Where will global corporations find opportunity in the next 10 to 20 years, however? For most, it won’t be France or Italy.

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Weblogger in Home secretary kerfuffle shock 

One of the interesting side stories to the David Blunkett resignation is that a UK blogger is at the centre of the affair.

Stephen Pollard‘s biography of Blunkett contained the nasty comments about cabinet colleagues that some people reckoned did the former Home secretary more harm than the rushed-through visa. Pollard has gone silent on his weblog for two days, but there is understandably comprehensive coverage of the coverage of his book in the preceding days.

I’m disappointed, however, that he isn’t giving his weblog readers some insight into the centre of the storm, as well as the background to the Blunkett revelations. I suspect he’s saving the best bits for newspapers that will pay for the words.

Literary DNA 

The Paris Review has opened a free archive of its famous interviews with authors. There are teasers and the (dreaded) pdfs of the complete interviews (via The Econoclast).

Sadly, they couldn’t obtain the rights to the 1953 interview with Graham Greene. Here’s his reply on being asked whether he took characters from real life:

  No, one never knows enough about characters in real life to put them into novels. One gets started and then, suddenly, one cannot remember what toothpaste they use, what are their views on interior decoration, and one is stuck utterly. No, major characters emerge: minor ones may be photographed.

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Suckered by Putin 

Nicholas Kristof: “The bottom line is that the West has been suckered by Mr. Putin. He is not a sober version of Boris Yeltsin. Rather, he’s a Russified Pinochet or Franco. And he is not guiding Russia toward free-market democracy, but into fascism.”

Blunkett gone 

Many of his policies were illiberal, but I think we’ve lost talent, intelligence and a straighforwardness that is increasingly rare with the resignation of David Blunkett.

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Scientific consensus does mean something 

RealClimate sorts out those who might be swayed by Michael Crichton’s State of Fear into disregarding climate change (via McGee’s Musings).

  At the end of the book, Crichton gives us an author’s message. In it, he re-iterates the main points of his thesis, that there are some who go too far to drum up support (and I have some sympathy with this), and that because we don’t know everything, we actually know nothing (here, I beg to differ). He also gives us his estimate, ~0.8 C for the global warming that will occur over the next century and claims that, since models differ by 400% in their estimates, his guess is as good as theirs. This is not true. The current batch of models have a mean climate sensitivity of about 3 C to doubled CO2 (and range between 2.5 and 4.0 degrees) (Paris meeting of IPCC, July 2004) , i.e an uncertainty of about 30%. As discussed above, the biggest uncertainties about the future are the economics, technology and rate of development going forward. The main cause of the spread in the widely quoted 1.5 to 5.8 C range of temperature projections for 2100 in IPCC is actually the different scenarios used. For lack of better information, if we (incorrectly) assume all the scenarios are equally probable, the error around the mean of 3.6 degrees is about 60%, not 400%. Crichton also suggests that most of his 0.8 C warming will be due to land use changes. That is actually extremely unlikely since land use change globally is a cooling effect (as discussed above). Physically-based simulations are actually better than just guessing.
  Finally, in an appendix, Crichton uses a rather curious train of logic to compare global warming to the 19th Century eugenics movement. He argues, that since eugenics was studied in prestigious universities and supported by charitable foundations, and now, so is global warming, they must somehow be related. Presumably, the author doesn’t actually believe that foundation-supported academic research ipso facto is evil and mis-guided, but that is an impression that is left.
  In summary, I am a little disappointed, not least because while researching this book, Crichton actually visited our lab and discussed some of these issues with me and a few of my colleagues. I guess we didn’t do a very good job. Judging from his reading list, the rather dry prose of the IPCC reports did not match up to the some of the racier contrarian texts. Had RealClimate been up and running a few years back, maybe it would’ve all worked out differently…

The Guardian, astonishingly to me, gave most of its page 3 on Saturday to Crichton’s fictional account. In it, Crichton calls the scientific consensus on climate change “creepy”. “Science has nothing to do with consensus. Politics is about consensus.” No, scientific consensus comes about because of the overwhelming weight of data, experiment and analysis. If credible scientists can support an alternative hypothesis, then consensus can shift. That’s hardly creepy.

Calculate this 

Brad DeLong rightly skewers Donald McNeil of The New York Times, who reckoned there was no point in learning any mathematics:

  An accountant who relies on a tax-shelter spreadsheet that he or she doesn’t understand is a lousy accountant who will someday go catastrophically wrong. An architect who doesn’t understand the strength of materials and the speed of the wind is a lousy architect who will someday design something that simply doesn’t work. A New York TImes reporter who finds that the toughest math he tackles is tip-calculating is almost surely doing a very lousy job at his own retirement planning and general financial management. After all, the most important of math skills is knowing when the machine is giving you the wrong answer, and McNeil can’t know that.
  I think that we as a country do a lousy job at teaching people math–and that is one reason why a large component of America’s upper and upper-middle classes in the next couple of generations will be composed of the “thousands of math whizzes” whom we “successfully import… each year” because “jobs await them,” rather than of the children of New York Times writers.

Another failed state?  

There’s been plenty of evidence in recent years on the problems of failed states. Think Afghanistan, Congo, Sudan. Failed states breed violence and tragedy, which sometimes spills into neighbouring states and — when the failed state is a harbour for terrorists — the rest of the world.

So is Papua New Guinea a new failed state? That seems to be the message of a new report from an Australian think tank. The Australian Strategic Policy Institute reckons the chronically weak government in PNG has allowed a raft of criminal gangs to relocate from southeast Asia. Here’s the BBC summary:

  The report, by a think tank funded by the Australian government, warned that if PNG’s weaknesses were allowed to continue, the country could fall “off a cliff into full-scale state failure” within the next 15 years.
  The central government’s authority could collapse and criminals would dominate the economy, it said, resulting in “half a dozen lawless and unviable mini states”.

As usually seems to be the case with proto-failed states, hardly anyone talks about or knows about PNG. That’s not the case in Australia, where geography has meant that awareness of a near northern neighbour is important. Problems in PNG will certainly be Australia’s problems, but the ripples from failed states can reach much further than that.

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The Yiddish is the C++ 

I’m a voyeur when it comes to software programming. I enjoy reading the accessible things, like Frederick Brooks, and I’ve even worked through a good part of the “wizard book“. Why? Perhaps oddly, I think having some minimal understanding of programming is equivalent in our age to knowing some foreign languages. But I’m certainly not a programmer, or anything like.

Joel Spolsky is one of the best people to read. The evidence is all there in Scott Rosenberg’s interview in Salon with Joel. I particularly liked his analogy between the working method of Isaac Bashevis Singer and the connection between a specification and the actual code. An original mind.

What do you look for in a Treasury secretary?  

The Wall Street Journal invited two well-known economist bloggers, Brad DeLong and Tyler Cowen, to discuss what is needed from the Treasury secretary (unusually, there’s no subscription required).

Both contributions are well worth reading. Cowen captures the sombre tone both adopt: “As it currently stands, the job is a morass, not an opportunity.”

One other thing struck me. Neither DeLong nor Cowen are introduced in any way, nor are there links to their sites. Very odd. In contrast, both pepper their contributions with helpful links, completely unlike the WSJ or any other newspaper online. An excellent study in contrasting philosophies of media.