by Dana Blankenhorn
  Volume VII, No. XXII

This Week's Clue: No New Tech, No Terror War

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This Week's Clue: No New Tech, No Terror War
SSP (Shameless Self Promotion)
SP (Shameless Promotion)
Critical Mass For Spam Debate?
How to Censor the Web
The Good Guys Win Again
Clued-in, Clueless

Dana Recommends The Blankenhorn Effect offers a powerful, positive message for our time. Once you understand how Moore's Law impacts every part of your life, how powerful it is, and how irresistible a force it truly is, you will have the power to predict the future and know how to change it. Buy it today, and make 2003 a better year for yourself, your business, and your family.


For the Week of June 2, 2003

As I noted last week America's military dominance is based on its economic dominance. It wasn't so much Clinton's "hollowed out" military that won the war in Iraq, but the economic miracle of the 1990s.

The ideological blinders of our time ignore the vital importance of a robust tech sector to economic health, and thus military health. This sector is in a depression, and no amount of spin (by itself) will change the situation.

Our current policy is entirely anti-tech. What would a rational tech policy be based upon? It would start with a rational economic policy, bring tech companies more of the human resources they need to succeed, and finally move toward favoring competition, away from monopoly.

Let's start with tax policy. Cutting dividends is anti-tech because no tech company in its right mind pays dividends. (There are other reasons to oppose dividend tax cuts, as Warren Buffett recently observed but I'm going to talk strictly about tech here.) Technology companies bank their profits for periods like the one we're going through now.

A company making cars or dishwashers may maintain high inventories when times get tough, then wait for buyers while cutting back production. A company making computer chips can't do this. Computer chips are like lettuce - time is their enemy. A car on a lot doesn't depreciate the way a chip in a warehouse does. When a recovery comes, the dishwasher maker can go back to making the same dishwasher. A chip company must not just cut production, but maintain its research spending, so the product it ships when demand recovers is competitive. If that money went out the door to shareholders you're out of business.

So a dividend tax cut is a subsidy to steel companies, tobacco companies, and newspaper companies at the expense of tech companies. It's not enough to cut tech a tax break on research. When tech companies are losing money tax breaks do no good, because there's no income to tax.

Now, on to spending policy. Tech companies need science, little science and big science. Private science (like Xerox PARC) doesn't pay - we need public science. We need universities, research centers, we need NASA and the CDC. And we don't just need direct investments in research, but long-term research projects. If you need to say "go to Mars" to get the funding, or "stop the killer asteroid that killed the dinosaurs," fine - but invest in research, in good times and (especially) in bad. You get the breakthroughs by solving problems you didn't know you had.

We need more engineers and we need more scientists, especially among the American-born. When times get tough foreign-born scientists may be lured home (as they are being lured now) and then where's your investment? Cut sociology, cut law, even cut journalism, but make sure our engineering schools get what they need. That goes for the high schools, too. Let's have some contests and some honor to nerds, all the way down to grade school. LeBron James is not going to found the start-up that funds your retirement. Margaret Gough might. Let him find his own way, put your money on her. Whatever else you think of him, Bill Gates has a Clue in this area.

Finally we come to what most people consider tech policy. The copyright wars must end on terms acceptable to technology users. The PC market dwarfs music, videos, and gaming combined. The last three are completely dependent on the first one. Consumers are cutting spending on both technology and entertainment because they don't like their options. And many of the options they want have been made illegal by the copyright industries. This impasse must end, on terms consumers will accept. That means fair use, it means an end to the concept of "illegal software."

We need to break monopolies so the competitive market can resurface. The Bells must die, if technology is moving them toward extinction. The cable guys must die, too. We need a ubiquitous always on network of the air, and at low, low prices, so that we can start investing in applications, not bandwidth. It's in the applications of always on technology where the next wave of innovation will come from. Selling broadband is like selling an operating system without applications. People don't "buy electricity," they turn on lights and TVs and electric blankets. Broadband is the same.

The last item on this agenda is security. The war over security is becoming just as destructive to our economy as the war over copyright. Civil libertarians are paranoid about every identity technology for good reasons. We need ironclad protections for personal data, and then we need to get personal data onto chip-based cards so people can take advantage of it. A secure, protected identity is essential, not just to growing Internet commerce, but to getting rid of paperwork and improving office productivity. Until people feel confident that their identifies and preferences are secure, they won't accept secure identity. Give people what they want and growth will follow.

The technology industry is not the politicians' piggybank. It is not something to be raided for the benefit of your friends. It is a garden, and without proper care it won't produce a crop. If the soil for technology growth remains rocky here, then technology will grow elsewhere, in China or India, in Singapore or Russia. The Golden Rule even covers the military - he who has the gold makes the rules. The technology industry is the gold of our time. It is slipping through our fingers.

If the present government can't get the technology economy back to work, then the technology economy must work to elect a government that will.


SSP (Shameless Self-Promotion)

I am no longer working at Mediapost . The work was great, I did it well, but I didn't like the bosses, and in the end the feeling was mutual.

We have a winner. "The Blankenhorn Effect" has won the Computer/Internet category in the 2003 Independent Publisher (IPPY) awards.

"Dana, it is GOOD," raves Pete duPont, lawyer, futurist and once a candidate for President. "This is some really powerful 'stuff.' I think you've got a winner," says Drew Kaplan of DAK Catalog fame. One result is I have begun working on a follow-up book, describing the future direction of technology, to be called "The World Of Always On." Buy "The Blankenhorn Effect" at Amazon.Com , or at least say nice things. You can use the ASIN number, 1553953673, and recommend it to readers of other, similar books. You can also save on shipping when you buy the book at Amazon, over the cost of buying it elsewhere.

If you can convince some more published reviewers to read "The Blankenhorn Effect" and recommend it to their readers, please send me a name and address. In exchange, you'll get the PDF version of my second book, The Blankenhorn Effect: Boom, Bust & Beyond. This is a collection of columns from, organized chronologically and by subject, with additional commentary from yours truly.

I have written recently for BtoB Boardroom and Mobile Radio Technology . You can follow the continuing story of "The Blankenhorn Effect" on my "Moore's Lore" blog . (Get my old ClickZ columns here

You have my permission to forward this newsletter widely. And if you have trouble subscribing let me know . Remember: it's journalism that keeps the Clues coming...


Shameless Promotion

Your list is your most important asset. But what happens when someone forgets who you are and you get on a "spam" blacklist? Your asset becomes worthless.

Need a-clue on how to avoid that? Get your list audited, and managed professionally, by the fine folks at Whitehat , part of the American Computer Group , a long-term leader in database services for direct marketers.

When your list is truly opt-in, not only do you become a white hat yourself, but your e-mails are read, even anticipated, by your audience. That means higher conversions and more money in your pocket.

If you're serious about Internet Commerce, you need Whitehat Interactive . Get it today.


Takes on the News

Critical Mass For Spam Debate?

The political debate over spam has reached critical mass, with a raft of proposals and even a Congressional hearing . But action is still unlikely because marketers have deliberately misled the government about what spam actually is. (The hearing even featured an acknowledged, self-righteous spammer , who claims if he buys an address from an ISP he can spam all he wants.)

Spam is unsolicited, mass e-mail. It is usually commercial in nature, but I've been spammed by politicians and interest groups as well. (This latter type of spam is harder to get a handle on because the First Amendment affords more protection to private political speech than commercial speech.)

The key word is unsolicited. If I didn't ask for it, it's probably spam. If I did ask for it, it most definitely is not spam.

Because marketers won't acknowledge that opt-in is the solution, and that their poor opt-in policies are the problem, we're getting idiotic solutions, like taxes on e-mail and special "tags" for commercial messages .

Meanwhile the collateral damage from ad-hoc inbox protection schemes keeps growing. One of my subscribers (you know who you are) using Spamarrest forces me to renew my connection to him every week through the Web. (What happens when 100 of you do this?) Copies of have been stopped at servers around the world because they allegedly contained "forbidden words." I'm losing subscribers and others are moving much of their business-related e-mail traffic to their home addresses.

The solution isn't a tax, and it isn't a tag. The solution to spam is a permission audit. Government should be requiring that businesses prove their lists are opt-in, using auditors such as Whitehat (which delivers this letter). Companies like Whitehat should be making money hands-over-fist by now, and it's the fact they're not which is scandalous.


How to Censor the Web

Just as the answer to spam is Whitehat, the answer to the problems of Web content is a white list. Instead of censoring the Web, offer families and children reviews and listings of really great content.

Yet-another attempt to offer this seems to be coming from Common Sense Media , although I'm qualifying that because a New York Times story makes the outfit appear to be yet-another censor outfit.

Some of the people involved, like former FCC chairman William Kennard and Newton Minow, are definitely good guys. Many of the moneypants involved are Wall Street types who have been found on the dark side many times. The Times emphasized that Common Sense will rate media based on sex, violence, and adult themes. But everyone knows those aren't the only ways to measure media, especially in terms of its appropriateness for children.

A regular viewer of Mr. Rogers Neighborhood often found adult subjects discussed. (Rogers was a favorite among seniors for this reason.) But any child who watched came away more knowledgeable, secure, and blessed. The original Grimm's Fairy Tales would have a hard time passing muster with today's bluenoses because they were cautionary in nature, and the stories often played with themes of fear. Personally I find Disney's happy endings far more dangerous to kids.

The world can be harsh and kids need to learn this. How do we help turn today's kids into responsible adults? These are hard questions, deserving serious online consideration. The answers should come from recommending what's good, not condemning everything else.


The Good Guys Win Again

News reporters often highlight contention or loss. It makes better copy.

But evil does not always triumph. Sometimes the good guys win, quietly. When that happens we should applaud.

It happened in Cambridge last week , when the World Wide Web Consortium announced the Internet will remain a royalty-free zone . Potential patent claims must be made known soon after a Working Draft of any standard containing them is published. One can assume that such drafts will be rejected.

The fight started last year when a committee containing lawyers for big patent holders started meeting in obscurity, considering a change in W3C procedures that would have allowed patented, royalty-producing technology to be included in Web standards, potentially subjecting every Web user to some corporate claim for money.

There are now some protections in place against that, but the cost is eternal vigilance. Just as the Bill of Rights doesn't guarantee liberty, and we must be vigilant against any threat to what we feel is our due as human beings, so this policy doesn't guarantee that greed-heads won't keep trying to steal from the public weal.

But it does mean we have a way to be alerted, and to stop them.


Clued-in, Clueless

Clued-in is California cutting journalism education and student papers . First Amendment advocates should steer interested kids to the market, and the Web. High schools that try and control what's written outside the school get in big legal trouble. Market discipline is what academic journalism most needs.

Clueless is the obscene PGA "terms of service" contract being imposed right now on all new users of the site . It is aimed at controlling everything one might do with the content and avoiding any complaints about what they do with your personal information. Personally I will never enter a site that tries to pull such a legal trick, and neither should you. If this becomes generally accepted practice throughout the Internet content industry, it will destroy that industry, and it should.


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