Monthly Archives: July 2007

Networked books and blogs

The newly released CommentPress is a wonderful idea.

This little tool is the happy byproduct of a year and a half spent hacking WordPress to see whether a popular net-native publishing form, the blog, which, most would agree, is very good at covering the present moment in pithy, conversational bursts but lousy at handling larger, slow-developing works requiring more than chronological organization—whether this form might be refashioned to enable social interaction around long-form texts. Out of this emerged a series of publishing experiments loosely grouped under the heading “networked books.”

I hadn’t come across their networked version of the Iraq Study Group report before. A really powerful new tool.

The surprising Mrs Thatcher

After a clunker of a column last week, the Financial Times’s Clive Crook is back on track with a reasonable plea to simplify the US tax system (subscribers only). What struck me, however, was his peroration:

Eradicating those treasured deductions is a enormous political challenge, needless to say. But it can be done. (British politicians used to think that mortgage tax relief was untouchable; it no longer exists.) Democrats need to weigh the difficulty against the prize.

I wonder if the Republican presidential aspirants who are ludicrously trekking to London to receive the benediction of Margaret Thatcher know about her tax radicalism. Sure, she reduced marginal rates of taxation. But she also eliminated tax relief on mortgage interest by first capping it (to the first £30,000 of a mortgage if memory serves) and then paring it away year by year. Who in the US wants to be that radical?

Way short of "a detailed case"

NPR usually does a better job than most of reporting accurately and maintaining the appropriate skepticism about our country’s leaders but it let me down this morning. While I was shaving, they had a report on president Bush’s speech yesterday about Iraq as the front line of the so-called war on terrorism. Mary Louise Kelly said: “In his speech, the president laid out a detailed case linking Osama Bin Laden’s terror network to its offshoot in Iraq.”

His case consisted of saying, “Al Qaeda in Iraq is Al Qaeda. In Iraq.”

The Wall Street Journal versus the Financial Times

I’d like to think Trevor Butterworth is correct when he writes:

The general feeling seems to be that over the past five years the Bancrofts have allowed the Journal to spiral into inconsequentiality, while the FT has poured its resources into much more aggressive and insightful coverage of finance. Whether or not that is qualitatively or quantitatively true, I cannot say; but the perception is that the FT is covering bonds, the subprime fiasco in an authoritative, news-breaking way that the WSJ and other papers are not. And such a perception is its own bull market on Wall Street for the FT — and for Murdoch taking over the Journal to restore its competitive edge.

Now it’s conceivable that in the relatively narrow confines of the internationally focused higher reaches of Wall Street, the FT is gaining the upper hand. On quality and breadth of international coverage, it certainly should. But I think Butterworth’s larger assertion is wildly off the mark. The Financial Times has a US circulation around 135,000 and a total global circulation of about 430,000. In the US, The Wall Street Journal has a daily circulation of 2 million. USA Today is only narrowly bigger. Now a lot of the WSJ’s circulation is to accounting partners in Omaha and bankers in Tucson. But I suspect its 20:1 national advantage over the FT is largely reflected on Wall Street as well.

The US would be a very different country if the FT could truly become a circulation powerhouse. It would mean that many people understand that the rest of the world matters, that nuanced analysis of difficult phenomena can be helpful, that columnists can write on complex subjects without sloganeering or dumbing down and many other things. That day isn’t around the corner.

The truth is that if you want to keep up with business and financial news in the US – and prefer to get your news in paper form in the morning – there is still no substitute for the WSJ (with the constant caveat to avoid the op-ed pages like the plague). The FT has, to my mind sensibly, largely given up being authoritative in its US business and financial coverage. The key stories are there, of course, but it long ago realized that with a comparatively minuscule staff in a vast economy that it had to pick its stories carefully. The WSJ does a poor job compared to the FT of covering the rest of the world, but it knocks spots off the pink ‘un for coverage of its home country.

The kangaroo ban

As someone who once ate an appetizer of kangaroo carpaccio (legally, in South Australia), I probably shouldn’t comment on the latest news rocking the youth soccer community in northern California. But the ban yesterday on the sale of kangaroo-skin soccer shoes has struck uncomfortably close to home.

I have a wildly eager soccer son and he has noticed with a little envy his teammate and next-door neighbor’s Adidas Predator shoes. Looks like they are not going to be on our shopping list this season.

I’m against cruelty to animals, of course, and would have no tolerance for trade in endangered species. But it’s patently ridiculous to claim that most kangaroo species are endangered. The most common kangaroos – red and gray – are staggeringly ubiquitous in Australia. Other than kangaroos being rather appealing looking creatures, I can’t understand the point of this ban.

Firefox upgrade problem

I opened Firefox today and it automatically installed the update to I have no idea what improvements it is supposed to bring, but it definitely has caused one huge problem. I can’t type an address in the URL window and have it do anything. So to navigate to any page I have to click a link, go from my Google home page or use the Google search box. A complete pain.

I see that Robert Scoble also had problems with the update, which he solved by turning off some extension. I don’t have time to figure out what is conflicting with Firefox, but I’m very annoyed.

Just because I don't care doesn't mean I don't understand

Grant McCracken: “7-Eleven is such a disastrous brand and retail proposition that there is no way it can save itself with a Simpsons endorsement. Now, if meanings are [to] going move here, they can only go the other way: from 7-Eleven to The Simpsons. And how sad is that? One of the most effective enemies of numb skull capitalism will have been damaged by one of the great accomplishments of numb skull capitalism. D’oh!”

Small earthquake for Murdoch. Not many killed

I have kept my counsel on Rupert Murdoch buying Dow Jones because I don’t think it matters a whole lot. The editorial stance of The Wall Street Journal can’t possibly be any more right wing than it is, and I don’t think Murdoch is quite the barbarian some make him out to be where editorial quality is concerned.

What I do find ludicrous, however, are the many comments that the reason why Murdoch wants Dow Jones is to improve his credibility. That was the line taken by Dennis Kneale, managing editor of Forbes, on the excellent Marketplace radio program yesterday. “It instantly takes a guy who is dismissed as this Australian-born U.S. citizen, a tabloid-press lord, and gives him credibility by owning one of the best journalistic brands in the entire world. It’ll be a good deal for that reason.”

For many years now, Murdoch has been able to walk into any world leader’s office or pick up the phone and speak to any CEO. His achievements in building one of the world’s major media groups give him vast credibility where it matters to him. I don’t think Murdoch is seeking credibility, enhanced stature or visibility. He wants to make even more money. He thinks he knows how to make the WSJ profitable, how to exploit its brand globally and how to use it to enhance the financial results of the rest of his empire.

There are plenty of media barons in the business primarily for proximity to power or prestige. Conrad Black certainly fits that bill. And Murdoch certainly doesn’t shy away from playing power games. But it’s all in aid of filling his coffers. Which is something he has proved to be very good at.

Felix Salmon asks…

…and I reply. Felix wonders what I think of a study by academics from Stanford and London School of Economics and McKinsey comparing management practices in various countries. It concludes that part of the European “productivity gap” with the United States results from superior management.

Now one of the reasons why Felix is a highly paid professional blogger and I’m not is that my eyes glaze over at this kind of study and his don’t (in fact, Felix seems to particularly relish analyses of obscure financial instruments — one of the joys of reading him is that it means I don’t have to read the originals). So my first reaction to the Vox paper was a sinking heart. My heart sank even further when I looked at the paper providing the technical background. It makes the Vox essay look like Jane Austen.

But on to the serious question. One thing that is welcome about the study is that it appears to avoid the halo effect. The researchers didn’t ask managers vague or leading questions that provide junk data: the halo effect asserts that people in successful companies generally provide positive answers and people in trailing companies negative ones. The questions in this survey are harder to manipulate. Take the questions regarding the introduction of modern manufacturing techniques:

a) Can you describe the production process for me?
b) What kinds of lean (modern) manufacturing processes have you introduced? Can you give me specific examples?
c) How do you manage inventory levels? What is done to balance the line?

Not much room for fudging there. Depending on the answers the firm scores 1, 3 or 5 on very specific criteria. So the methodology of the survey seems sound.

The significance is another question. First, there’s nothing novel about its conclusions. Second, it’s a survey of manufacturing only. I’m not anti-manufacturing, but the reality is that in the world’s advanced economies, manufacturing is a smaller and smaller percentage of economic activity. I’m perfectly prepared to believe that UK manufacturing management is inferior to Italian manufacturing management (although the survey difference is minimal). But the reason the UK has an economy with vastly superior performance over the last decade is that UK services are doing very well, thank you. Italian services are, for the most part, woeful. (I still haven’t figured out why my bank account in Italy, which I left with some $100-odd on deposit, managed to over a few years end up with me owing the bank money even though I never touched anything.)

I’m also surprised that the study doesn’t address one reason for the productivity gap that I have often seen cited: Europeans work fewer hours than Americans, so even in the several cases where there is higher hourly productivity, the annual productivity is lower. In return, there is more leisure time. I challenge you to contact a single Danish executive in July.

The new kings of subsidies

Brad Setser:

It sometimes used to be said that American farmers were far better at farming Washington than at farming. That comment stung because it had a grain of truth. The scale of US agricultural subsidies is now dwarfed by the subsidies that Beijing, Moscow, Brasilia, New Delhi and others offer to parts of the US financial sector.

Setser calculates that the BRICs – Brazil, Russia, India and China – are on track to accumulate a further $800 billion in reserves this year. Here’s how he breaks down the impact of that on the US economy: “If 65% of the BRICs combined $800b reserve growth is flowing into dollars and the BRIC currencies are on average undervalued by 25% against the dollar, the BRIC taxpayers are subsidizing the US to the tune of roughly $130b a year. That is roughly 1% of US GDP.”

As the saying goes, read the whole thing.