look at the bright side of life

Some uplifting optimism from Paul Krugman in an email interview with Andrew Leonard (Salon.com) about the economic meltdown:

How bad do you think this is going to get?
Awful. Without a major stimulus package -- sorry, I guess the politically correct term is now "economic recovery plan" -- I'd say that we were definitely headed for double-digit unemployment. Right now the economy is clearly falling as fast as, or faster than, it was in 1981-82, which was a terrifying slump. If Obama doesn't come up with a massive plan, and possibly even if he does, this is going to be a slump that pushes 10 million-plus Americans below the poverty line, and more.

Hey, why sugarcoat reality? Thanks Paul.
Here's to an "economic recovery plan" that invests in American infrastructure instead of more hi-def televisions. Better be a big plan too.

the unnecessary bailout

I was watching This Week in Northern California on KQED this morning, and Carolyn Said of the San Francisco Chronicle was echoing a theme that I seem to hear everywhere: an implied link between the increasing number of foreclosures and the fact that many people are owing more on their mortgage than their house is actually worth.

"Meanwhile, California led the nation in the number of foreclosures in October. Recent surveys show that hundreds of thousands of Bay Area homeowners owe more on their mortgages than their homes are worth. In response to the growing crisis, a number of key financial institutions including Citibank have pledged to put a temporary moratorium on foreclosures and rapidly rewrite loans."

The idea that somehow the state or federal government should be helping all the people whose homes are now worth less than what they owe is preposterous. The problem occurs when people can no longer afford to make their monthly mortgage payments ; this is completely unrelated to the current value of the home. The amount of the monthly payment was determined using the value of the home at the time of purchase, the length of the loan and the initial interest rate offered.

We (the government) have limited means of spending in the current economical climate, and this money should be spent wisely and parsimoniously. That means help should first go to those owners facing foreclosures, unable to meet the terms of their mortgage payments, either because they have lost a job and/or are unable to face a hike in their interest rate and are also unable to sell the house. If any plan is to be introduced to allow people to renegotiate their interest rate or payment schedule in order to reduce their monthly payment, it needs to be targeted towards those people first.

The millions of homeowners still able to pay their mortgage payments, even if their house has gone down in value below their purchase price, just have to ride it out like you do during any crisis. They might not like the idea of their investment being completely in the tank, but that is a risk that everybody takes and is not threatening the economy.

I've never heard anybody calling for a plan to help people whose stock portfolio is worth less than what they paid for it, and this should be no different.

Eiffel in blue

France has the rolling presidency of the European Union for six months (ending in January). For the occasion, the Eiffel tower is wearing the European colors. I took this quick picture while in Paris last week, from a "bateau-mouche".





(Some rights reserved)

About Apple's "locked strategy" for the iPhone

An article in today's New York Times chronicles the smuggling of iPhones across the planet, notably to China, where a large part of the "missing" phones are reported to be. The author explains that this "shows what happens when the world’s hottest consumer product defies a company’s attempt to slowly introduce it" and that the smuggling, while further proof of the iPhone's popularity, is a blow to Apple’s business model of exclusive partnership deals, similar to their partnership with AT&T in the United States.

To be sure, Apple is not getting as much money from unlocked phones, since they are not receiving any cut of the monthly subscription fees for those phones (reportedly a part of all of Apple's agreements with carriers in the US and in Europe to date). And it is also accurate that Apple is continuing to seek similar exclusive agreements in the new markets where it wants to offer the phone, and may be struggling to achieve those in China.

However, I feel that the article fails to mention an important reason behind Apple's initial marketing strategy: Apple offered exclusivity to US phone carriers such as AT&T and Verizon partly as a carrot, in order to ensure they had enough leverage to push through their Visual Voicemail feature. Visual Voicemail can require significant changes in the back-end operations of a cellular carrier's network, and is therefore not as attractive a feature to those carriers as it is to consumers. However, Apple believed strongly in changing the game for voicemail (thank god) and they promoted this feature right from the beginning, so they had to offer something in exchange for the carrier's efforts.

So while Apple could certainly choose to forgo its demands to share in the monthly subscriber revenues, the following quotes from analysts do not reflect the entire situation:

Some analysts say abandoning the locked phone system and allowing buyers to sign up with any carrier they choose, in any country, could spur sales.

“The model is threatened,” Mr. Wolf, the analyst, said. But “if they sold the phone unlocked with no exclusive carrier, demand could be much higher.”

From Apple's standpoint, "allowing buyers to sign up with any carrier" assumes that all carriers offer Visual Voicemail capability, and it would be tough to convince those carriers to spend the money for those network modifications without the promise of a large uptick in subscribers...

Junk food subisidies and other disasters...

Here is some required reading about the US farm bill that is about to be passed into law in Congress, yet again with no substantial changes.

This piece by Michael Pollan (the author of "The Omnivore's Dilemma") explains how far-reaching the consequences of this farm bill are, and what they mean to each person.

If you agree that the way we grow food, "make" food and eat food has gone seriously awry, contact your local lawmaker and insist that they overcome their political maneuvers and look out for the interests of their citizens.

Update (2007-10-16): Here's another interesting piece on Salon.com's "How The World Works" series. Andrew Leonard talks about a new ad campaign from Oxfam that criticizes where the major part of the Farm Bill's huge subsidies go – no problems with that –, but shuns the other important problems of our agricultural subsidies. From it:

The goal of the ad campaign's creators is obviously to keep it simple. No mention of how removing subsidies altogether would help farmers in the developing world, who can't compete with the low prices for commodity goods that result from subsidized American overproduction. No mention of the challenge of figuring out what crops and agricultural practices should be encouraged by the Farm Bill, in place of the current system, which, for example, provides huge incentives for King Corn monoculture. No mention of the Farm Bill's huge influence on the American diet,

Just the simple equation: The Farm Bill disproportionately caters to the greedy rich. Not that there's anything wrong with pointing that out.

oops!

I like this little movie from Travis Darcy. It received the first prize at the "Green World" contest of the San Francisco International Film Festival last May, where anybody could submit a 2 minute movie about the environment.
This one is pretty good ; cute and funny. Well, actually not that funny...

Green my Apple

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Here's a wallpaper (1440x900) that I put together to contribute to the "Green my Apple" campaign. This campaign by Greenpeace is designed to encourage Apple to be more conscious of their impact on our environment and modify their products and processes to reduce waste and toxic products. Find out more at: www.greenmyapple.org/

Feel free to use it for your desktop.

Update (2007-05-02): Apple has heard the call and is anwering. Great news!