Who sets prices?

NOTE - The photo is not Jeff Zucker (but it could be)

NBC Universal seems to be blowing a gasket. On Sunday the Chief of the organization said "We know that Apple has destroyed the music business -- in terms of pricing -- and if we don’t take control, they’ll do the same thing on the video side" Mr. Zucker, meet reality (oh no, that may not be possible.) In the press reports of the dispute between NBC and Apple there have been claims about pricing disputes. Zucker seems to have said this is all about pricing despite his denials “We wanted to take one show, it didn’t matter which one it was, and experiment and sell it for $2.99,” he said. “We made that offer for months and they said no.” He also said "They did not want to share in what they were making off the hardware or allow us to adjust pricing." It is odd that NBC, although they once did do this, does not derive revenue from TV or cable makers but Zucker seems to think he can ask for it from Apple. What nonsense.

NBC has decided to move their content to something called HULU.com (Great name Jeff - wonder how much your image consultants charged you for that brainstorm.) CBS and Fox have said they are happy with the current arrangements.

CBSs current chief seems to get the joke here. He was quoted earlier as understanding that the iTunes marketplace is as much a promotional vehicle as a revenue source. Fox's chief suggested that they would like a bit larger hand in determining price. But most content providers understand that electronic distribution reduces their costs in a couple of ways. No DVDs, no retail chain, no inventory. At the same time the distribution scheme allows people to get content 24-7 and to link simply because they are on the site. For example, at one point I wanted to find out what my daughter's interest in 24 was - went on iTunes and found an episode - then found out I could get a season pass and bought the entire first season. That would not have happened in a physical store and it certainly would not happen in a TV only related site like Hulu. Right now, NBC gets zip from all the TIVO recording that goes on. Any person who wants to can (and should be able to) convert the TIVO file into an MP3 so iTunes is adding a small amount of incremental revenue. NBC should also recognize that iTunes has been a great place to build audience. They have released pilot editions of new series where some people are lured into watching the series in the original. That helps build their Neilsens. But again Zucker does not seem to get the new world of media. It is strange that the CEO of a media company wants to live in the last generation of technology, but not surprising.

There is a real question about the appropriate price for TV shows on the net. Individual episodes should be less considerably than a movie. And the sum of the season should be considerably less than the price they get when they give you physical media. It might be slightly higher than $1.99 but it is not even close to the range that NBC seems to think they want. Jeff Zucker seems to have the naive notion that their whims will control pricing. Just ask the buggy whip manufacturers how much they are making now. They were pretty firm on price when technology moved them aside.

Community

Neely's service was yesterday and for the weekend we were with family in North Carolina. What struck me was the sense of community that this lady created around her. She lived in the same house for more than 80 years. I understand that community in places like Winston Salem is different than in other parts of the country but even for that the outpouring was extraordinary.

On Sunday night we had a dinner with the very close friends that Neely either lived next to or interacted with. It was a warm evening with lots of remembrances. Eerily as we were about to go about the room to say something about her - a glass in back of my oldest brother fell to the ground with no apparent outside intervention. On Sunday afternoon we had one woman come by the house to express her sympathies who was Black and very frail. Her dad had worked with our granddad. But she wanted to come by and express her sympathies. She brought along her grandson (or great-grandson) who has just started college and we had a chance to talk about his long term goals and dreams. The south is a very different place from what it was in 1923 when Neely moved into the house.

The service had more than 150 people at it. It was a mix of people from the community. The church, which is the location of so many important family events is about the same age as the one where our daughter was married in September. I will be back in Winston Salem in the next couple of weeks in part to continue to clear up some family matters but also to experience again the extraordinary sense of community.

My two brothers and I spoke at the funeral - we each hit a different set of points. Mine talked about George Mason (who is in our lineage) and Hank Williams, Jr., who is not.

Here is what I said -
When I thought about what I wanted to say about Neely today I thought about two people – one of whom had a plausible connection to her and the other where I cannot think of a logical connection. But I will try to explain why I chose both.
Neely’s middle name was Mason – named after her father but there is also a plausible argument that part of the motivation was to recognize the author of the Virginia Bill of Rights – George Mason. If you go back in our family lineage we can make the case that he was related to us.
At one point Mason told one of his sons that from his experience he preferred the “happiness and independence of his private station to the troubles and vexations of public business.” Neely would have agreed with those sentiments. She spent almost her entire life within 100 miles of where we are this afternoon. But her vision was a lot larger. She was not attracted to the limelight but that does not mean she did not do important things.
At the start of our republic George Mason helped to bind our nation together. Neely did the same thing – a few hundred years later and with a different target audience. My siblings and I had a sort of strange family. Since neither Mary nor Neely married and our father was an only child – the only real family outside of the four of us was Mary and Neely. Mary was especially important when we were younger because she would come and visit in California. But Neely took on a new role by the time we were grown in reminding us of heritage. That took two forms. Neely told us the stories of our forebearers but she also helped us think about the importance of community – not with some high level philosophy but by the demonstration she offered in her every day life. We had the treat of a weekly phone call where we would chatter about what we had done and which movies we had seen or in my case which opera was coming up. But we also talked about the issues of the day. She was annoyed by political buffoons of all stripes. I used to delight in sending Christmas presents signed by Quinlan, Emily, Peter and me and a senator from North Carolina.
In each of the visits to Winston, we would hear about some person in our history. There was also the occasional reference to one person who I cannot find in our family tree, a Mrs. Poopdaddle, who could also be quite an object lesson.
The second person that came to mind was Hank Williams, Junior. Those of you that know Mary well understand that Bosephus’ music is more to her taste than Neely’s. Neely had a taste for classical music. She knew opera. Indeed as we were driving somewhere if I turned on country music, she would protest. But like Bosephus she valued “family traditions.” While she was a repository of (and like all families we have lots of it) she understood the dichotomy of family history. On the one hand family lore binds us to our forebearers. But on the other they also offer didactic devices which help us understand greater principles. To do that we need to understand that some of those things are more true than historically correct. When I angered my mom by sending a gift of clothing back (I don’t like people to buy me clothes) she reminded me that Totsy (her father) had done the same thing after a neighbor bought him a Christmas tie. My mother did not like that story, but I did. When my son Peter and I went to a Civil War site of one relative’s supposed valor (which later turned out to be not quite true) – she regaled us with some stories about that same Uncle Billie after the Civil War. So she gave us context for family traditions.
But she did not just retell our history, she created it. Neely spent almost 60 years taking care of someone in the family – first her father, then her mother, then her sister. When you spoke with her about it she did not complain – that was not a part of her DNA. In my opinion that service was trivial compared to her greater role in helping us all fit together.
I am concerned that if we don’t remember Neely’s ties to Bosehpus and George Mason that we will miss the instruction that she gave us all. It is easy for each of us to be a bit grumpy that this remarkable lady did not stay around longer to help us understand the joy of family, community and nation. But like the best teachers, she offered us these lessons and now we need not to mourn her passing but to think about how we can emulate her skepticism about position but her genuine reverence about community.

My brothers' remarks reflected them well. Unfortunately, I did not get a copy of what they said. All of us mixed humor and sentiment. In this case it was important to have that mix.

The Difference Between PR and Governance

In the last week we have seen a lot of our governor (California) in responding to the fires in the southern part of the state. If you are on the Governor's press list, and I am, you have gotten a ton of press releases which explain all the things that the Governor has done. Many of those things are not entirely substantive. And that led one reporter to make the comment that this was the Arnold playing the role of the "super-action hero." That is a cheap shot.

The contrast when Katrina-rita hit could not have been more stark. The governor (now former) of Louisiana was made to look semi-competent because of the complete incompetence of the Mayor of New Orleans and the director of FEMA. But as time went on she even blew that initial standing. The comparison at that time between the governor of Mississippi and the idiots in Louisiana could not have been more stark. In both instances FEMA was slow in responding but in Mississippi, the governor acted quickly. Indeed some of his actions were symbolic but he really did move heaven and earth to get relief when it was possible. But he also used the symbols of office to show the people that he and his administration was on the job.

Our governor learned that lesson well. Some of his actions have been like Haley Barbour's - symbolic. But in a time of crisis a governor can perform a great service simply by calming the waters. And there the Governor has done very well - but that calming has also be followed by substance. There is also a lot of evidence that Schwarzennegger has a good idea about how to fill in on the substance. He was on the scene quickly but also seems to have mobilized every resource he could find to meet people's needs. That is a pretty good model of governance in crisis and is not deserving of the comments tying his current role to his former ones.

Tony D to the Bigs

The Oakland As promoted Tony D'Francesco to third base coach yesterday from being the Rivercats manager for the last several years. Tony D deserves the promotion. Now who should be the new manager for the Rivercats - I still think because of his leadership that Lou Merlino deserves a shot.

Neely

One of my aunts died yesterday. She was 85. By some traditional gauges her life would not be measured large. She lived most of her life in one city - taking an airplane only once in her life. She did not have a profession. But that measure would be wrong. She was the youngest sister of my mother. Her oldest sister got married, had four kids and got into a lot of things visible. Her middle sister, who is 91, achieved meteoric heights as one of the first female sports reporters in the nation.

Neely's contribution to us was a couple of standards around which she organized her life.

The first standard was Fidelity. Beginning in the early 1950s Neely ceaselessly cared for three members of our family - first her father, then her mother and then her sister. There was not concern about how tough or unfair the job was - that was just what she did - care for people. But her fidelity ran deeper. While she grew up in a prominent family in Winston Salem and thus was engaged in a series of things that women of her age were engaged in (social and cultural activities in the community) that does not begin to explain her fidelity to her community. For someone who never travelled much she was suspiciously well informed about events in Washington and the world. While she was a mild democrat, she was a pretty good judge of political gravitas. She sniffed out the phonies in both parties. She seemed to do the same for civic leaders.

Her patriotism was deep and consistent. Not the kind that Roscoe Conkling the NY Senator worried about - held by "scalwags and scofflaws" but that continuing and deep love for one's country. She wasn't fooled by the poseurs who used patriotism to wrap themselves. She and her sister had a continuing bet on the Army-Navy game. She upheld the traditions of our grandfather and contributed to VMI (part of the family lore which Neely told us was that he had blown up the guardhouse - either as a result of that or in spite of it he then transferred to Columbia to finish). One of her concerns about our current situation in the world was the notion that if we were really in a war there should be some sacrifices.

For someone who never went to college she was tremendously well read. She knew opera, which I like although she could not carry a tune. She knew Dickens, and Twain and all sorts of other classic literature - not just because she had had to read those things at some time but because she had thought about the major themes of those books. We had lots of talk about the key characters in Dickens (which I like a lot). But she was also a student of contemporary culture. That included everything from a wide range of movies and TV. I think she put the rantings of some cultural critics in their proper perspective - but we often talked about values in society.

A few years ago we got together in Winston Salem for a summer barbeque - and all of us were impressed by the genuine affection that her neighbors held for her. That support network was mutual and impressive. Neely was the anchor of that network. Again, because she cared for people, she helped to nurture a community.

She had some health challenges in recent years, including the knees, but those were not a source of constant lamenting - just something that you lived with. She talked to my brother the doctor about health stuff more than I - she talked to me about tax stuff. She solicited advice from a variety of people but never was caught up in accepting expertise as fully determinative.

The second standard was Humor. I am the youngest of my siblings - so was Neely, There is a duality in that role. On the one hand the youngest is perceived as being able to get away with almost anything. (Which is not entirely true, although we often laughed about both the perception and the reality there.) On the other, the youngest is often dismissed in discussions. Neely, in her role as youngest, could be one hell of a raconteur. She would tell stories about family forebearers which were mostly true. Like her feelings for politicians and civic leaders she was able to separate the real heroes in our family lineage from the pretenders. But all of that gave us a sense of history. Californians often lack that perspective and Neely was the link who got us to think about characteristics that were common in our family. When I sent back a gift from my mother (of clothing) Neely told me about Totsy's (my grandfather) rejection of other people's gifts of clothing. As Hank William's Junior would have said - she taught us about our "family traditions."

The third standard was Energy. When she was younger she was an avid horsewoman. And later in life her knees paid for that - in the last couple of years that prevented us from being able to catch a new movie. She was up early and often would stay up late often watching a wide variety of TV - from political type like Bill Maher, to boxing, to the slightly risque movies on HBO and Showtime. And yet she never seemed to want to come up to steam on technology - while her older sister was an avid emailer - Neely would have none of it. We spoke about that several times and she said - somewhat honestly - she did not have any use for technology (although she got a cellphone when they were new - but gave it up as she found it did not aid her - technology was something to use not to let it use you. She spoke to each of us on a weekly basis - so much so that we had to schedule times to get through. Those conversations were a chance to catch up (she was interested in what was happening to our children and grandsons) but also a chance to talk about the issues of the day.

For the past 30 years I have visited the family Manse at least twice a year. We had a normal routine. We would go out to a couple of dinners and breakfasts (she had a continuing joke about the $20 bill which she carried but which I never let her use for lunch). We'd catch up on developments in Winston Salem and California. I would show her my latest techno-gadget and she would defer interest in using any of them (although a favorite she had was an electronic picture frame which I could update on the net - so she was able to see pictures of things happening almost in real time). My next one of those was scheduled for November and we had talked about things we wanted to do. I will miss those visits. But I will not forget those three qualities that made her loom so large in my life and in the life of her family and her community.

The Dwarf that would be president

Joe Biden gave an interview to the Washington Post today which was a stunner. In addition to claiming that he was the most qualified to be president among the democrats he "stumbled through a discourse on race and education, leaving the impression that he believes one reason that so many District of Columbia schools fail is the city's high minority population." His staff quickly clarified his statements. If you worked for this guy that would be a constant skill. Remember the Delaware senator was the same guy who at one of his own events claimed that Indians owned all the Dunkin Donuts franchises in the state. No stereotype there.

Biden comes off as a skank in Clarence Thomas' excellent book. Biden promised Thomas that a) he would be fair in the hearings held for Mr. Thomas and b) that Anita Hill's declaration, which the FBI could not find any credible corroboration for, would remain confidential. Neither promise was maintained. When he last ran for president he favored cribbing speeches and no crediting them. The chapters in Thomas' book on what Justice Thomas called a "high tech lynching" are even more compelling than the rest of the book.

Biden claimed in the interview that most people do not know him - except for policy wonks who watch C-SPANN. To paraphrase Lloyd Bentsen - "I know Joe Biden and he is no serious candidate for president."

Sensible

Dan Henninger is the WSJ's political writer and deputy editorial page editor. He follows a very proud tradition of WSJ writers who are extraordinarily clear in their thinking and wise punditry. Their columns used to appear on Fridays, his is now in the Thursday Journal. He wrote a column this morning on the setting for Rudy Guiliani and the Christian right. In a clear statement about the state of American politics he commented "Call me old-fashioned, but I think governing philosophy is more important than the endless Chinese puzzle of moving this or that issue forward and back. American politics, right and left, has become obsessive about nailing where candidates "stand" on standalone issues--abortion, gay marriage, immigration, the North Pole melting or pulling out of Iraq."

Would that the political establishment understand that very simple truth in Henninger's column. I think the American people understand it quite well - but the politicos and the activists are not as astute.

Political Morons

The fires in Southern California have been devastating in many areas. The earlier post which showed smoke from the Arrowhead fire is but one example.

Any Californian understands that the risks for fires increase as a result of two cycles. First, the underbrush in the state grows and dries according to a cycle. Second, in years where we have very dry conditions the risk of fire increases.

But then we have politicians trying to get in for political advantage. The most egregious example was probably done by the Majority Leader of the US Senate who said yesterday "As you know, one reason that we have the fires burning in Southern California is global warming. One reason the Colorado Basin is going dry is because of global warming," He quickly retracted his idiotic comment - almost in the next sentence - but the sheer attempt by Reid to move politicize this event was at a minimum not helpful to the very real plight of California residents in the fire areas. In equal silliness, the junior senator from California claimed that the war in Iraq has limited the ability of the state to respond.

Ultimately, we need to think carefully about how to meet the needs of people who have losses. In the next instance we need to think about policies which would reduce the risk of future conflagrations of this nature. Some of these are almost impossible - but not all. Changes in building standards are critical - and the changes in roofs are an example of one such thing. But the rampant attempt by third rate politicians to inject their favorite political point of the day is simply not helpful. Perhaps when the fires are all under control one of the water bombers could dump some cold water on the politicians who want to heat things up.

Awe lots

Today I was in the LA area and was able to see the real power of the fires. All the time I have lived in California we have known about the "cycle of the chapparal" - about every five to seven years, dry winds (called Santa Ana winds - which come from the North) and the a dry year (like we had this year where LA only received 4" of rain - cause problems for Angelinos. But as I was leaving Ontario today you could really see the power of these forces. The San Gabriel mountains ring this part of LA and San Bernardino county and as I drove from Claremont you could see them very clearly - as if it were January - when you get clear air and pristine mountains. But as you can see from the picture as you looked east toward Arrowhead you the mountains were obscured by the smoke from the fires which were more than 30 miles away. The language lets us trip over ourselves. In the derivation of the word clearly awesome does not convey the scope, aw-ful - coming from the same base words does not either - so as I thought about it there was lots of awe or awelots. That is not to diminish the real tragedy that is present in the entire Southern California region. But in this case, at least IMHO, our language limits our ability to comprehend scope.

The fires in Southern California are almost pandemic. They have been big in Malibu, near Newhall and Valencia, Arrowhead and in San Diego County - the losses for these fires will be substantial. The most disturbing news this afternoon is that at least part of the problem was started by an individual. Were I to have the power, I would think seriously about dropping the perps into the middle of one of the fires.

Kindness

This morning I was flying to Claremont for a meeting at mid-day. The flight was delayed and there was a young kid playing near where I was waiting in line. He was traveling with his mom and was fine until he went down the jetway. All of a sudden all hell broke loose. He clearly did not want to be on the plane. (I feel like that often on Southwest but presumably for different reasons!)

He let out bellows that probably were heard in LA. A lot of people boarding were making jokes about where not to sit. I briefly thought that I would sit next to the mom and then found a seat next to a young Japanese couple. Soon after I was seated the young lady (wearing a new engagement ring) took out a piece of paper and quickly folded an origami frog which jumps when you press it down. Then she passed it back the couple of rows to the mom - and immediately the kid quieted down. It was a remarkable demonstration of kindness.

More on the RIAA's delusions

The interview with Cary Sherman, the President of RIAA, was even more timely yesterday. Yesterday, Apple announced that their catalogue of DRM (Digital Rights Management) Free music would be reduced in price to 99¢, the same price as a DRM restricted song. That announcement means two things. First, at this point there is no difference between purchasing a song on a CD and purchasing one electronically. But second, the Apple move reinforces the very thing that Sherman's organization has been trying to eliminate - the fair use of purchased music. Sherman's organization has made some outrageous claims about whether owners of music can share their music in various ways. Apple's announcement, which will simply reinforce the trend to this type of purchasing, will help to make his voice even more absurd.

Let me be very clear. Artists should be compensated for their music. But that principle should not be interrupted by Luddites who want to hold on to their outdated theories of distribution and compensation.

My Grandfather's Son

I was interested in Clarence Thomas' new book,My Grandfather's Son, if for no other reason because of the reviews I read. For example, Edward Lazuraus in the LA Times described this very personal memoir as a "polarizing memoir." Lazuraus goes on to describe Thomas' coverage of the Anita Hill affair in similar terms -"Spewing invective, Thomas depicts Hill as an abrasive, vindictive, politically motivated liar exploited by a "smooth-tongued" liberal "mob" (including a biased press) that was hell-bent on his personal destruction to prevent a more conservative court from overturning Roe vs. Wade." He then assaults Thomas' judicial philosophy thusly "This correlation between personal values, political beliefs and constitutional philosophy pose an ironic dilemma for the author. Of all the justices, Thomas has been among the most adamant in insisting that it is wrong for a judge's moral preferences and personal experiences to color his view of the law. Yet the memoir suggests on almost every page that Thomas has followed the opposite approach -- that his legal views appear to be the sum of his life experiences, that he is his grandfather's son both as a man and as a justice." The last characterization is utter nonsense. Thomas explains where his judicial philosophy comes from and although it has been formed in part because of his personal experience it is not the sum total of his experiences.

William Grimes in the NYT did a review which had the headline "The Justice Looks Back and Settles Old Scores." Dahlia Lithwick of Slate said the book "paints a stark picture of an America in which nothing but race matters. In his telling, virtually everyone who has ever wronged him has done so because of his race." Indeed, race is a part of this memoir but the message I got from it is quite different. Thomas had to live through segregation and then through the current period where political orthodoxy demands only one way to look at the issues of race. But the Justice has transcended that view. He seems to understand that there is not much difference between the segregation of the fifties and now. In either case, he believes that race should not be the determinant of one's character.

Jabari Asim of the Washington Post comments "This memoir will not sway those who oppose his fierce, unapologetic conservatism, but it does provide a fascinating glimpse into a tortured, complex and often perplexing personality." I guess Asim began with the assumption that it is wrong for Mr. Thomas to be "unapologetic" about his conservative beliefs. How dare he be conservative!

I am not sure which book these reviewers read but it was not the one that Thomas wrote. I happened to buy the audio version of the book, which is read by Thomas. What struck me about his reading is I think you can get a very good idea of the depth of this man who has been so mis-portrayed by the left. Thomas seems to be a precise person. His reading is measured. But his story is compelling none-the-less. I am not sure whether the reviewers understand the difference between resoluteness and anger. Thomas seems to be a precise man; his grandfather raised him in that way and as you hear his life unfold those lessons keep coming back. But the very point of this book is not that race should be considered but that one of the major ideas offered by this very stern man is that no one should be allowed to use race as a cover.

The future justice grew up under some extreme conditions both because of poverty and his race. But his memoir follows closely what I understand a book like this to do. Namely a memoir "especially as it is being used in publishing today, often tries to capture certain highlights or meaningful moments in one's past, often including a contemplation of the meaning of that event at the time of the writing of the memoir. The memoir may be more emotional and concerned with capturing particular scenes, or a series of events, rather than documenting every fact of a person's life."

The literary device that Mr. Thomas uses is his grandfather who raised him. His grandfather had a very strict set of standards and Justice Thomas and his brother were told at the start that his standards guided his life and would guide theirs so long as they lived in his house. In a very real sense Thomas, more than any other book I have read, explains with real clarity what it was like to grow up Black and poor in the south at the time that segregation was happening. Indeed there are passages in the book where Thomas relates experiences that I have never had - but they are not "tortured."

What I liked best about the book was the underlying theme. Thomas is a believer in the ability of individuals to make their own way (a reflection of the philosophy that his grandfather lived by) in the same way that Frederic Douglass told his story in his Autobiography. (By the way, in the same way that Thomas' book has been criticized in a manner similar to the one done by many who questioned Douglass' book at the time of its publication.) The message of Thomas' memoir might be summarized by the following quote "I have learned that success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome while trying to succeed." That came from Booker T. Washington. Thomas' fundamental message is one of the absolute requirement for self reliance. Evidently, the reviewers either did not read the book or chose not to hear his points.

In my opinion many of the reviews of My Grandfather's Son, were written before the book was read. That is unfortunate because I believe that the Justice has written a compelling and inspiring book.

Musical Delusions

On CNET this morning an interview was published with Cary Sherman the President of RIAA. Sherman says the RIAA was reluctantly dragged into filing outrageous lawsuits - "This was never a step we wanted to take, and we recognized that it would generate criticism in some quarters. It's tough love--for the first time, despite years of educational efforts and the availability of plentiful legal alternatives, we are holding people personally and financially accountable for the theft of creative works. But the backdrop was a community hemorrhaging jobs, careers and investment in new music, amid a pervasive culture of looting in which there was little understanding of the law or the negative consequences of breaking it." Yeah, right.

He then goes on to claim the that the lawsuits created a change in the marketplace - "Digital revenues doubled as a percentage of the market in 2006, from 8 percent in 2005 to more than 16 percent. An illegal marketplace which, prior to the initiation of our deterrence program, experienced exponential illicit P2P use has now mostly stabilized--the average number of households downloading music illegally on a monthly basis was roughly 7 million in 2003 and is now 7.8 million. Compare that with the growth in broadband access to the Internet, which grew from 38 million home users in 2003 to at least 80 million today." Those are impressive numbers but wrong. About the time that P2P was cresting iTunes created a new marketplace, not unlike what Starbucks did for coffee, although there is little evidence that there was any illegal downloading of coffee. The ultimate trick which the RIAA failed to grasp was a way to monetize a change in technology. Ultimately when they acted like idiots claiming more than they should, someone else began to think about a more logical way to improve both the lot of the creators and the end users. In the end that will reduce the influence and authority of the middle men that Sherman represents.

The RIAA claims in this are like their lawsuits, excessive. Ultimately, RIAA chose to persecute (I chose my words correctly) a number of people who had only tangental relationships to illegal downloading. By that they created a large amount of bad will for the industry. Their reactions were thoroughly predictable - in a post I did inFebruary 2005 I described the Kessler Cycle. Sherman's actions and even his justifications are a classic demonstration of the early stages of the cycle.

Sherman concludes his comments with "None of this, though, is about being in court or winning monetary judgments. We would rather be in the record studios helping artists make great music that we can distribute in lots of exciting new ways that music fans want. Because that's what this program is ultimately about--creating a marketplace that rewards investment in creativity and compensates those who make the best music in the world." Yeah, right. It seems that suing kids for their pocket change and grandmas for the sins of their children is not about "winning monetary judgments."

Tonight, at a small sports bar in downtown, a group of supporters gathered to celebrate the Rivercats championship(s) of the Pacific Coast League but also of the Brickyard showdown. As noted at the times of the game the last two games of the divisional playoffs and the only game of the PCL championship were among the most exciting games I have ever seen.

On display tonight were the two trophies the team won at the end of the season. And there were four people who helped bring us there. Tony DeFrancesco (three PCL championships in five years) was there but so were pitching ace Shane Komine (5-12 for the season with 133 innings pitched and an ERA of 4.87 - none of that reflected his value to the team) and Jeremy Brown (341 at bats with 37 extra base hits and a .276 average) and the new kid Richie Robnett (.152 average - 33 at bats) the new kid who came up from Stockton at the end of the season.

AAA baseball is strange - one would hope that this was the last time we will see two of the three that were there tonight. Both deserve a shot in the bigs. But we won't know who will be there until next April. And even after that, if this season is a guide, we still will not have an idea of who will play for this team!

Nobel Peace Prizes and Sound Policy

This morning my wife and I were going to the airport and discussing the environment. The mantra in many schools now (she was a school teacher) is reduce, reuse and recycle. I wonder about that kind of talk - does it really make any long term sense? Is it based on a sound set of values or is it based on the current civil religion that Mr. Gore was awarded the Nobel for yesterday. That got me to think about a set of policy tradeoffs. As we went through the security line, I thought about the policy that the Carter administration advanced which abolished the Civil Aeronautics Board. The elimination of the CAB had several positive effects. By eliminating the absurd price regulation it created a lot more opportunities to fly. It also encouraged a lot of people who had not previously flown to fly - many on discount airlines like Southwest. At this point I think Mr. Gore and others in his cult probably would think the democratizing of air travel would be a good thing. I would agree.

But then you need to think about another outcome which was, even with more efficient jets, to increase our carbon footprint. All those people flying meant more carbon usage - that, in theory, increased the contribution to climate change. Question, was the elimination of the CAB a good policy?

Anyone who believes in markets would say a resounding yes. But some of the extremists in the movement that Gore is the titular leader of would say no. I find that strange.

Two more comments on Nobels

Doris Lessing also won a Nobel yesterday. When reporters confronted her and told her of the news she simply replied "Oh crap." Lessing, who will be 87 on October 22, is no stranger to literary awards.

Czech President Vaclav Klaus had another take on the Gore prize - he said in an interview yesterday "The relationship between his activities and world peace is unclear and indistinct," the statement said. "It rather seems that Gore's doubting of basic cornerstones of the current civilization does not contribute to peace."

Nobel Peace Prizes and Shopping Cart Sweepstakes

The Nobel Committee today announced that Al Gore had been awarded its prize for this year - which follows such distinguished prior winners as Jimmy Carter and Kofi Annan. Carter has, especially after his presidency, contributed to nothing but hot air, which one could easily call global warming. His contributions to peace have been near zilch. His latest book was, according to many scholars of the Middle East, an assault on a sovereign nation (Israel). And Annan's corruption as Secretary General (he allowed countries with genocidal policies to participate in the Human Rights Committee of the UN) was legendary. With those types of predecessors excuse me for not being excited. I will admit there have been some deserved winners, but for the most part each of these awards is a statement of political correctness.

The Peace Prize often involves a lot of politics. One person's peace is another person's yabbering. Anyone can admit that Mr. Gore has vaulted the issue of climate change to the highest levels. But his relentless efforts to only look at one set of data and to look at one set of results is not likely to present much in the way of ultimate solutions.

Also noted on the award was the UN Panel which works on the same subject and helped to produce the Kyoto Protocol. (Notably done in 1997 during the Clinton Administration's watch but not ratified. In fact, the Byrd-Hagel amendment passed in 1997 (Senator Byrd is a democrat from coal producing West Virginia but in this case his home state interests were on the right track.) said the US should not ratify the Protocol. The Clinton Administration did not pursue much beyond that. The Clinton Administration produced a report which argued that implementation of the agreement would result in a significant reduction in GDP. Again, that was the right conclusion. So while Mr. Gore has talked a lot about this issue, his record when he had the ability to affect policy was much less stellar.

After he left the White House, some enterprising journalist snooped out his records on his own energy use (with the logic that if this is such a problem he should probably lead by example) and found him to be an energy hog who then argued that he was purchasing dispensations with carbon offsets. So excuse me if my response to the Nobel Committee is whoopdie frickin doo.

5 Steps to Fishing Bliss - Final Post

Saturday, on my way to Wyoming, I landed in Bozeman and then traipsed down to West Yellowstone to pick up a friend. Saturday afternoon it had snowed lightly and so as I drove down 191 at dusk there was an incredible set of scenes. The one with the Aspen was replicated many times over. It made me take about 3 hours for a 90 minute drive - simply because I wanted to slow down to see the sights. My friend and his wife said they were worried. They should know better.

Today on the return all of the snow had melted away - so there was a different set of scenes. In some cases a bit less interesting (snow is something I like not to live in but I am always captivated by the change in tone that it brings to the world). So the second picture is of one of the numerous river scenes - each one a little better than the last.

It gives one a sense of the world.

The 5 Step program continued

In my last post I offered 5 tips for dandy fishing. But these two pictures are to prove a point. The first is a second picture of the Brown in the previous post. On Tuesday, when I threw him back into the water, he stood by my feet for about 5 minutes. I continued to cast. I kept having two contradictory feelings. The first was that this fish figured out that by staying near the guy who was casting - there was minimal chance that he would get caught again. The second was that he was trying to tell me that even though I had just caught him - it was OK. Of course both are examples of what the noted Icthopsychologist Carl Sage once called troutlusions. But who knows. It could also be that the thoughts came to me late in the afternoon after a lot of tromping through water.

The second picture is but one example of the kind of scenery that one encounters in the West. My host this week commented that I had taken more than 200 photos. That is true. I caught a great sequence of an eagle landing, several of Moose and deer on the run and simply walking in the open land. It is a wonder I did not take more.

5 Steps to Fishing Bliss

OK, I admit it, this title is all wrong.

For the past couple of years I have been trying to learn how to fly fish. It has a lot of neat qualities. You never go to ugly places. Initial equipment costs can be pretty reasonable. Aging does not limit your skills.

But as I have spent more time on it - I think I have come down to 5 basic skill sets. (Not in order)

#1 - Finding - fish have some peculiar habits, especially trout. You need to understand where they live and why. I spent a lot of time this week working on that one.
#2 - Matching - fish are a lot like your 5 year old, they are finicky eaters. They generally will eat what is available (and to keep alive they need to almost constantly feed) but if you approach them wrong they will tell you to buzz off. One of the fun parts of this is figuring out what they are eating right now and trying to match it in something you have in your fly collection (they are not all flies). But there is a second part to this rule. When someone else has hit on something, you might do better at trying something different. (This is sort of a reverse psychology, again like a 5 year old, but only for something with a brain the size of a large pea.)
There are also lots of variations of rigging for fish - some involve little insect like hooks called nymphs (who are under water). Others involve things that are on top of the water (flies of all sorts or grasshoppers). Still others look like injured fish (streamers) or even Salmon eggs (glow bugs). The latter are considered by some of the purists to be not reasonable. (That is bunk).
#3 - Casting - This is the effort to move line off your reel and over the water. Notice I said over and not through. There is a natural tendency to try to hurl the line - but this step takes a lot of patience. The trick is to let the rod do the work - much easier said than done. There are all sorts of tips - but for me none of them work any better than looking a bit at the line and hoping it has a small loop when you transfer from the back cast to the forward one. The best line I have heard is 11-1 (like the positions on a clock) - but again practice makes better here. I still need some practice.
#4 - Setting - What do you do after the fish grabs your hook? - you yank it with care to make sure he has it. In catch and release - which is what I have been doing - the ultimate game is to land the fish and then release him. The trick here is to set the hook but not rip it. I am actually pretty good at this skill. Trout hits can be very subtle and the excitement of feeling the hit (sometimes you can see the hit and sometimes you only feel it) can get you to yank too much. If you do that you lose the fish.
#5 - Playing - After the set comes the attempt to land the fish. Trout (mostly) do not think this is a fun event - so they give it their best not to be landed. After the strike (hit) and the set, they tend to run. If you have some line out you need to do two things. First you need to get your rod tip up in the air - that allows the flexibility of the rod to work for you. But second you need to begin to reel the fish in. If you have line out (and you often do because you are bringing the line in slowly as you wait for the hit - called "stripping") you need to first establish a reasonable tension on the fish and then slowly wind up the reel. But if the fish runs - you need to let him do that. Each reel has a control which adjusts tension(drag) and that needs to be loose enough to allow him to run but not so loose that he gets away. He will try to run all sorts of places - in and under rocks, around trees in the water, through debris. Your job is to bring him back to you and away from the places he wants to go.

There are some things I have not mentioned. Knots - the basic knots are not that tough - but try tying something with clear line that is very tiny and threading it through a very tiny hole. On Wednesday, when I was alone on the water, if did one fly change in about 30 minutes. Clearly, here vision helps.

The two pictures (one of a 22" Rainbow and the other of a spectacular Brown) have been cropped to show you that at least this week I was able to catch some fish. The first Browns I have ever caught were here - notice the colors. Wild fish tend to look better than raised and planted ones. The Brown in the picture was gussied up a bit because spawing season is near. Their colors become richer now. But this is not about me - so I intentionally cropped out the part with me in it. There is one other thing about this hobby, (Especially where I was this week) the locations are often spectacular. So even if you do not get many fish, you see beautiful country. On a future post I will offer some pictures of the kinds of locations where this sport happens.

Professor Lessig's New Quest

I have long admired the work of Stanford Law Professor Larry Lessig. He has written carefully and forcefully on the issues of intellectual property. As a public intellectual he has also worked hard to improve the situation, especially as it relates to copyright law.

He recently announced a new quest defined thusly - he wants to think and write about corruption - "Or better, a "corruption" of the political process. I don't mean corruption in the simple sense of bribery. I mean "corruption" in the sense that the system is so queered by the influence of money that it can't even get an issue as simple and clear as term extension right. Politicians are starved for the resources concentrated interests can provide. In the US, listening to money is the only way to secure reelection. And so an economy of influence bends public policy away from sense, always to dollars." This change in focus was announced on his own blog in a thoughtful essay. I wrote a response which is republished below.


Professor Lessig, while I appreciate your efforts and hope they are successful, I am not sure I understand the scope or direction of your future work. The nature of the political process is one where interests clash. But there are also opportunities, as your colleague who was once at Stanford Anne Kreuger suggested, for rent seeking. As long as government is in the business of transferring resources from one source to another, rents are created. I suspect part of your solution will not be to reduce the influence which government exerts over Americans.

Why is Gore particularly exempt from the "shill" charge you raise - even on the issue of global warming? Was the Kyoto protocol a serious effort to respond to a problem or a set of ill-conceived political decisions which would do little to reduce the effects of the problem? From my view, a lot of the discussion of responses to global warming are not that at all but rather attempts to move rents from one side to another.

The concern that I have is that one person's corruption is another's legitimate source of political or substantive disagreement. In many cases the issues we try to deal with in the public sector are poorly defined which allows many to step in and adjust results inappropriately.

Does that mean we should allow all of the egregious activities that we have seen in the process, even after the enactment of a series of political reform (i.e. Anti corruption) acts? Of course not. But definitions are key here.

The possibilities for unintended consequences are substantial. For example, in the name of reducing corruption we changed the way political contributions are collected by reducing the amount that most individuals could offer in support. No sane person would suggest that we have made the process of running for office any less corrupt. Indeed, most observers suggest that the concentration on fund raising has become if anything more corrupting. When presidential candidates need to raise money in $1000 increments they spend a lot more time doing it. The Hsus of the world (bundlers) become more important.

As one guide look at the history of the municipal reform movements at the turn of the 20th Century. In California it was led by Hiram Johnson and the Progressives. Many of the reforms of that era (the Initiative, Referendum and Recall) were created to reduce corruption. And yet when one looks at how many initiatives are created and advanced they look pretty corrupt. Ditto for the reforms adopted by the New York Bureau of Municipal Research.

The caution here, based on my own 35 years of working in and around the political process, argues for clarity of definition and a lot of skepticism of purity of motives of ALL players in the process. From my academic work the best place to start is from the rich literature of Public Choice Economics.

Policy among friends

As I think I have written about before I have a group of guys who I have been eating lunch with for the last 30 years. The group is informal and includes people from across the political spectrum. The rules of entry are simple - have run campaigns at some point in your career, have an earned doctorate and be willing to listen to your colleagues (at least occasionally).

One of the people in the group has always worked for people left of the center. He did a USC Ph.D. and then spent a career working in the legislature, including a stint with legendary California political figure Jess Unruh and with the California Energy Commission. He has been asked to come back and help the Senate think about the issue of climate change. Many in the legislature have looked at the issues as almost a civil religion. I am skeptical of a lot of the discussions because many of the strongest supporters of the "global warming" thesis have no qualifications. Even some of the scientific experts are decidedly ideological. I am almost genetically skeptical of Malthusian explanations of anything.

My friend was skeptical of the California energy de-regulation and at one of those lunches right after the bill passed outlined the real perils about the new market that had been created by the legislation. A lot of what he argued made sense at the time and as the process evolved, he seemed to understand the perils that had been cobbled together by a legislator who had a huge ego but whose most outstanding qualification was that he had been the producer of a second rate movie called "The Attack of the Killer Tomatoes."

About three months ago we had a lunch and started to talk about Global Warming. I allowed as how I thought Gore was fundamentally a blowhard and that his then new movie was a rant that should not be taken seriously. But my friend began to ask about what I thought about climate change. We talked a lot. I got him a copy of Cool It Bjorn Lomborg's book on global warming - which I thought was pretty good (major argument sure people have helped to change the climate but most of the "solutions" proposed by the Kyotomaniacs will be expensive and not effective).

We've exchanged a couple of books about the problem. I am not a scientist. He has spent a good part of his career getting to know the technical stuff pretty well. But what has been fun about the process is that we have been able to look at a range of issues and suppositions with good will and with an ability to disagree (when we do) civilly. That is a value which is not present in much of the public policy debates about the issue. We have not come up with any "Aha" experiences but we continue to probe around the edges of our understandings and beliefs. It has been a refreshing ongoing discussion. He is deep in the process of trying to read everything he can and at least within my view he has tried to read from a variety of sources.

Ultimately, we have a responsibility to maintain our environment for the next generation. But the stylized policy kabuki that masquerades for serious discussion will no contribute to that. I wonder how we could extend the tent between me and my friend to a larger audience or as an ethic in policy discussions.

What to make of disturbing news

The WSJ had a disturbing poll this morning. The WSJ-NBC poll suggested that by a 2:1 margin GOP voters feel that free trade is bad for the US.

Over the last forty years or more we have gone through a period of trade liberalization that has been profound. In the early 1990s we passed, with the significant efforts of then Vice President Gore, NAFTA, which liberalized trade between the US, Canada and Mexico. Only seven years ago 37% of GOP respondents to a poll at the time said trade agreements had helped the US. The questions between the two polls were not identical. This new one asked two questions - "Foreign trade has been good for the U.S. economy, because demand for U.S. products abroad has resulted in economic growth and jobs for Americans here at home and provided more choices for consumers." and "Foreign trade has been bad for the U.S. economy, because imports from abroad have reduced demand for American-made goods, cost jobs here at home, and produced potentially unsafe products." 59% of the respondents thought the second statement came closer to their own sentiments. But as the Gallup Guru suggested today the interpretation of the results may not be accurate. The responses to a question which asks voters to choose one of two statements may or may not reflect true sentiment.

There are a couple of issues facing any advocate of free trade. The first is an economy that is in a pretty vigorous state of flux. Seeming key industries are under pressure and demagogues like Bernie Sanders, the socialist senator from Vermont, try to exploit that. We are moving away from making a lot of goods that we formerly made. At the same time, there have been some very recent hiccups (the China toy thing for one) which have raised the uncertainties of global markets in voter's minds. As global trade continues to grow standards will continue to advance.

Since Adam Smith supported the Act of Union, free trade has always had a dichotomous relationship to voters. On the one hand almost all economists (at least those not in the pocket of unions) argue that free trade is a benefit to societies who engage in it. Ricardo was right - we do gain from trade. But on the other hand the fear mongers like Sanders can generate irrational fears based on inadequate or erroneous data.

The Congress (remember that the opposite of Progress is Congress) has several pending free trade proposals before it. CAFTA (which extends the benefits of NAFTA to Central America, a pact with Korea and one with Columbia are among the most visible. But all are in jeopardy. The malaise that the WSJ poll suggests (whether the numbers are right or not) raises questions whether this long term trend which has aided the US for many decades is about to come to an end.

Keynes told a story in his memoirs about an earlier period of free trade when he could go anywhere on the European continent with ease. The world lurched into a period of WWI, and Smoot Hawley and other policy lapses that then plunged us into a period of declining trade. The regime began to change with Bretton Woods and a number of similar tracks in the post WWII era. That movement has provided huge benefits around the world. The state of progress seems to have stalled. Ricardo and Smith were right - trade does benefit us all, comparative advantage allows us to specialize and grow. It is too bad that some either to collect their rents or because of ignorance cannot get that.

Where I am next week(this could easily be called where my head is this week)

Starting on Saturday I am in Daniel, Wyoming fishing for a week. I fly to Bozeman, MT pick up a friend and then we both drive to Daniel to a friend's ranch to fish. This place is not rustic but it is out in the boonies. No, the small photo is not a picture of me fishing. But the picture of the sunset is typical of the land we will be on. It is well worth the trip. Very relaxing.

When I was last there I caught the second biggest fish of the week. (Not as big as the monster in the picture but large). But then at the end of the week one of the other guys caught a slightly bigger one. The owner of the ranch said to the guy who caught the fish - you are an LF or lucky f******. to which the guy who caught the fish said - no I am an LSF (for lucky smart f******).

As noted in a lot of earlier posts, I am still learning how to fly fish. It includes a lot of challenges including some physical and some mental. The reality is you never go to an ugly place. The weather is supposed to be changeable at this time of year - the weather reports look like 50-70 during the day but with the possibilities of snow. I am going with two other guys who are good friends so it should be fun.

The new (developmentally challenged) Zunes - a continuing effort

Microsoft introduced a "new" Zune music player. It includes some "great new features." It is priced at about the prices of the current iPods. It has some interesting WIFI features. But it is still not ready for prime time. The new features were introduced by Microsoft to allow a chance for the "new" player to compete with the iPods. I suspect it will continue to be in the rear of the purchasing line.

I guess the new Zune is a lot like the new operating system which has generated gales of laughter even among dedicated Windoze users. Vista, the operating system that took several years to build which met with an underwhelming consumer response may be the intellectual model for the Zune. Perhaps they could bundle the two products.

That does not mean that Apple should become complacent. The iPod is a good device - the Zune is an OK device - in this case equal does not equal equal. The Zune needs to be better to compete. There is, however, a lot on the horizon. WIFI, which is in Zune and also in the iTouch, seems to be a desirable feature. Amazon is beginning to offer MP3s with a cheaper version of music which is likely to compete with iTunes. NBC has grumped about the pricing of their shows on iTunes. The markets for music are changing. People continue to want something which is simple and which produces a lot of kinds of media. (Books, Movies, Songs, Podcasts) - for my money, at this point, Apple has the corner on the market. But for example when I wanted to get Justice Thomas' new book on audio - I went to Amazon because iTunes and Audible did not carry it. This is a fast moving market. And all of the major players - including Apple - need to think creatively. More stuff means more page views and more sales. Apple does not seem to be as adept as some other carriers in getting things like Justice Thomas' book.

Ultimately, some of the content providers simply do not get the new market. NBC will lose by dropping from iTunes. But Apple will lose at some point if they do not adjust their pricing model as more types of non-DRM music gets on line. Contrary to what the marketing professor at Wharton claimed (on a knowledge at Wharton podcast in which he also argued that the iPhone would not sell well) the future of downloads does not seem to be the subscription model rather it looks like it will be a nominally priced model - 99¢ was right early in the market cycle but those prices may change. The most important thing that ALL providers can do at this point is realize that the old market dominants (the labels and the music licensers) cannot sustain the old model.

But the "new" Zune is still a pale copy of the iPod. (any model)

Free Speech on Campus

I was struck in the last weeks by the confluence of four events relating to speech on campus. The first was the drama surrounding the selection of a new dean for the University of California at Irvine new law school, which I believe ended appropriately. (Although Lord knows California needs a new law school like Bush needs to go lower in the polls.) The second was the denial by the UC Regents to allow the former president of Harvard to speak at a private dinner on the Davis campus. That ended poorly. As noted in an earlier post, Summers (regardless of how his views have been quoted) should have important things to say to any academic group about how universities should function. No reasoning person can suggest that the University of California acted to protect or promote free speech. Their decision was disgraceful. The third happened at Columbia with the invitation for the President of Iran to speak to a group of students. That ended marginally. At the time I applauded the President and the University for allowing Mahmoud Ahmadinejad to speak. But President Bollinger's opening was totally inappropriate. The President could have said that in an academic setting that some of Ahmadinejad's ideas will be subject to questioning. But his introduction sounded like he thought the Iranian President was standing in the dock of a trial. It reminded me a lot of what probably happens to academic speech in Iran. Bollinger needed to find a way to welcome Ahmadinejad without accepting his absurd and dangerous ideas and actions. He failed miserably. The final one came from Duke where the President expressed regret to the Lacrosse students whose reputations were trashed by a university administration that was too quick to accept the politically correct explanation of events. While the apology was appropriate (and probably comes before a financial settlement with the students and the coach) it was a lot too late.

Colleges and universities should be a locus of ideas and discussions. A lot of those ideas will be unpopular with one group or another. In my first year as an undergraduate I took a course which was then called Western Civilization - something that many campuses would not accept today. About three weeks before the election the professor (I think we were on the Greeks) began a series of six lectures arguing that Goldwaterism was the equivalent of fascism. The claim was absurd on its face - after all National Socialism was a system to encourage additional state power not diminish it. But it was also absurd because it had absolutely nothing to do with the subject of the class. I debated the professor over those two weeks, which was an interesting opportunity, because I did not know what he was going to argue in the next lecture, and got kudos and criticisms from my fellow students. The point was not that I took on the debate or that the professor was using my time to offer his warped views but that the debate and discussion was possible. The evidence from the last few weeks in academe suggests that the width of the acceptance of civil discussion on campus is much narrower than it was in the past or should be. That is indeed unfortunate.

Pie-andering politicians

The election season started early this year. And for the next several months we will hear a continuous path of politicians who need to offer pie in the sky proposals to pander to one group of constituents or another. The first of these was "fiscal conservative" Hillary Clinton. Last week she offered a new policy proposal to suggest that at birth every child in the US should get a $5000 savings bond. Were each birth in a year to get a $5000 bond - the net cost to the taxpayers would be a cool $20 billion annually.

This is the same politician who called for a "new fiscal responsibility" in government. She is also the Senator who had $148 million in earmarks in the defense authorization bill for 2008. Chris Matthews described Senator Clinton's behavior thusly "Hillary Clinton did what she always does, what her husband always does is refuse to pay a price for political office. To always defer to someone; always avoid taking a position within any interest group that might offend some interest group within the Democratic Party. It seems the whole tactic of the Clintons, never take a stand that offends anybody in the whole room full of Democratic Donors and then you get elected because you don't offend anybody."

Although Hillary is the first to get this award, but she should not be the last. To paraphrase John Lennon - "She's not the only one."