by Dana Blankenhorn
  Volume VII, No. XXXVII

This Week's Clue: If Wishes Were Horses Then Beggars Would Ride

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This Week's Clue: If Wishes Were Horses Then Beggars Would Ride
SSP (Shameless Self Promotion)
SP (Shameless Promotion)
The Google-industry
Phony Anonymizer
The Washington Plan
Clued-in, Clueless

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For the Week of September 15, 2003

During the boom I liked to note that I had predicted "nine of the last four" recessions.

I am a naturally-born bear. It may be because my parents were teens through the Great Depression. It may be because my mom constantly feared bill collectors while I was growing up (my dad ran a small business).

There are hazards in my nature. I missed the fun in 1997 and 1998. I was warning about the sky falling years before it fell. I had the same experience in 1979, during the Houston oil boom. I was younger then, and managed to find a job that got me out of town on June 1, 1981, about the same day the sky fell there.

I wasn't so lucky this time. My 15 paid columns dwindled to zero. Editors stopped calling. My attempts to raise money with books failed. I took the kids out of private school, spent hours searching for other cutbacks, and still the bills come faster than my wife's salary checks.

This is not meant as a "pity me" column. I know from my online travels that millions face the same problems, only much worse. The computer business has crashed as hard as oil did in Houston, and for as long. The Houston bust, however, was actually a good thing. It meant lower oil prices. The coasts boomed during the 1980s, and so did technology.

The Tech Wreck is not a good thing for the general economy. You cannot build a solid recovery on a foundation of oil contracts, TV reality shows, and increased debt. That kind of recovery is a house of cards.

Just as there are blind spots to my bear, in other words, there are also blind spots to the bullish attitude. Any viewer of CNBC (the channel for shut-in executives) would know that. We have been treated over the last three years to endless re-tellings of "we're bottoming out," "we're turning the corner," and "we're on the road to recovery" Real Soon Now. Wall Street wants to believe.

It has just about convinced itself. The Dow Jones Industrial Average, after all, is halfway back to its high. The NASDAQ is up by a third. If that isn't proof of a recovery what is?

Well it's an indication that a recovery might happen, but it's not proof. Hiring me would be proof. I have experience, intelligence, a lot to offer. But I'm not just talking personally here.

In the last month the local recession has taken another depressing leg down. The lone entrepreneur I befriended stopped calling. The e-mail traffic has slowed to a trickle. subscriptions are at an all-time low, and I can't reach the manager of my blog. I have gotten no response to an article that was ordered and sent a month ago, nor has any work come in from the think tanks I'm attached to.

Now it's true that my IRA is worth more today than it was at the start of the year - a lot more. But there are plenty of rallies that fail before self-sustaining economic growth begins. And that's the key phrase here - self-sustaining. Borrowing-and-spending $3 trillion wasn't real growth when dot-commers tried it in the late 1990s (we all waited on returns that didn't come) and it's not real growth when the federal government does it, either. But it is quite a party.

It's not like there isn't a lot of growth potential in tech today. You can change-out your old mainframe and get the investment back in less than a year, and a more flexible enterprise to boot. An 802.11 network in the home can share your broadband connection with the whole family for very low cost. There is great potential in 802.16 for delivering competitive broadband. Always-On technologies like Radio Frequency ID tags hold great promise for cutting inventory costs and losses from theft. Medical opportunities in Always-On are huge. We talk about this kind of stuff all the time here, don't get me started.

So what would it take to call a real turn, besides an employment contract and a nice fat check? Seeing someone else I know get one would be a start. Hiring in any sector I cover would be a start.

But if it hasn't started I'm not going to lie to you. We've been down so long anything looks like up to a bull, but I'm not so easily fooled. The headline is an old saying of my mom's (the mom who grew up in the Depression) - if wishes were horses then beggars would ride.


Shameless Promotion

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Takes on the News

The Google-industry

Recently a subscriber pointed me to a service called Google Alerts. This is a service that periodically searches Google for you, based on keywords you select, and sends along any new entries via e-mail. Google has its own, similar service, Google News Alerts, but that only works with Google News.

Google Alerts is just a piece of what I call the "Google-industry," a new set of start-up businesses developing around the Google API, which Google released to developers last year. Googlefight, in which you match two keywords against one another, is another entrant.

If you're interested in becoming an entrepreneur, you can do worse than download the API and join this industry. You will need to create your own "trade dress," and avoid the look-and-feel of Google itself. But apparently you can use the word Google in the name of your service. And if it's valuable you profit from it. I haven't seen a better, nor fairer, deal in ages.


Phony Anonymizer

The Bush Administration has signed contracts to create a version of the Anonymizer specifically for Iran . It's called Iranonymity.

On the surface this is a very good thing. The software masks the user's identity from Iranian censor computers, allowing them to get to Western news sites. But the stupid thing still includes a porn filter, a piece of U.S. censorware that is notoriously inaccurate (and will probably keep Iranians from reading this story because it uses the word porn). As one U.S. official sniffed, "There's a limit to what taxpayers should pay for."

The argument is self-defeating. When someone uses this software and asks, "Am I free now?" the software will respond, "Only as free as the U.S. lets you be." Freedom is an either-or proposition. You either trust people or you don't. The Iranonymity system trusts the human nature of Iranians only as much as the Iranian Mullahs themselves do, which is not at all. It simply redirects them to sites of which it approves. A House bill would give $150 million to create an Office of Global Internet Freedom, but presumably sex would be out there, too. (What happens when an Iranian wants to see a story about Britney and Madonna's kiss?)

The default sites on Iranonymity are also a dead giveaway to the authorities. Once users enter the system, they arrive either at the Voice of America site or Radio Farda, the pro-American Farsi site. Once authorities find a computer has gone to these sites, or sees someone using these sites (and everyone has to on entering the system) they know that user is "a tool of the Americans" and can execute them at will. Nice going, guys.


The Washington Plan

The recording industry's new Mr. Fix-It is a Washington insider, Mitch Bainwol, but the strategy he is pursuing has all the earmarks of the ultimate Washington (state) insider, Bill Gates.

First, there's this "amnesty." You give them your name, you delete all your music files, you promise never to download again, and they won't go after you. Sound familiar? It's precisely the strategy used by the Business Software Association (BSA), a Microsoft-led industry group that has since done highly-publicized "raids" of WAREZ sites and CD pirates.

Then there's the price cut strategy, so far being pursued by just one of the RIAA's players, Universal . Again, sound famliar? A 30% markdown brings most CD prices down to $13. Consider that they're paying artists roughly 25 cents per disc, and the reproduction cost is pennies, and this is not a huge concession, but it's being trumpeted as such. See, you don't have to go the Kazaa. We'll let you have a (copy protected) copy of the music for $1/song (which you can't put on your Rio).

All this will be pushed through a full-court press from a compliant press and the government, claiming the industry is making nice and everyone should go along. But what it really amounts to, in the end, is the content industry claiming for itself the special rights given to the software industry 25 years ago, rights based on the idea that software was uniquely difficult to write, and thus software companies should have a one-way street with users, all rights to them, all responsibility on you. Remember you never "buy" software, you license it. So too, now, with all content.

To make it all complete, Microsoft will lead the way toward putting Digital Rights Management (DRM) technology - which lets the publishers call the tune absolutely on what you can or can't do with your property - into every new PC, digital TV, and DVD player sold forevermore.

Think the consumer will bite? We shall see. I won't, and if the industry is still in the doldrums a year from now you know why.

The proper solution is to give consumers the same fair use rights they had in the past, to guarantee them into the future, and to negotiate with the market the price of content, both online and offline. But the big government-big business alliance has another plan. Back in the day The Grateful Dead had an album, produced by Little Feat front-man Lowell George, whose title track summarized the whole game.


Clued-in, Clueless

Clued-in is the family of former Pvt. Jessica Lynch who got Rick Bragg to write her life story. The shared $1 million is nice, but I guarantee his book will be a classic, not an insta-book.

Clueless are Microsoft's lawyers who seem to have gotten themselves into all kinds of trouble in fighting Burst Software. They didn't realize that, even after they destroyed the company, it might transform into a deep-pockets law firm.


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