a curious Yankee in Europe's court

blog about living in Europe, and Italy

Latest look at fortunes of Times’ paywall

Posted on the November 2nd, 2010

Continuing to keep an eye on reports about the ups or downs of Rupert Murdoch’s beloved paywall at his UK Times newspapers, I found this brief article from a couple of days ago by Peter Preston — “Murdoch’s paywall: those who leap are an engaging lot” (Guardian online, Oct 31, 2010).

Posting some stats from the latest Nielsen release on the paywall, Preston notes that the Times online traffic numbers certainly have fallen, and that only about 20 percent of visitors have opted to pay to read.


You can weave webs of relative triumph or disaster from all this. The good news for News International is that those who vaulted the wall were a bit older, richer and more dedicated to scanning the site carefully. They are the “engaged readers” advertisers admire – as opposed to the click-by-night trade who never stop to buy anything. The bad news is…

Read the rest here.

UPDATE: A much bleaker conclusion is drawn about the Times‘ paywall by Mathew Ingram writing today at GigaOM (“It’s Official: News Corp.’s Paywalls Are a Bust”).


… after four months of selling its new paywall system, News Corp. has only managed to convince a little over one-and-a-half percent of its readers to pay something for the newspapers’ content — and has only been able to convert half of that already tiny figure into actual monthly subscribers. Meanwhile, the site’s overall traffic has collapsed by almost 90 percent.

Ouch! Read full piece here.

UPDATE 2: A round-up of editors’ perspective on the Times‘ paywall — is it or isn’t it? — comes from Emma Heald at editorsweblog.org (“Times and Sunday Times have about 52,000 monthly digital subscribers” Nov 2, 2010).  Reviewing the basic stats just released, Heald takes a wait-and-see attitude on the fortunes of the Times’ experiment. She includes rosier remarks of a Times spokesperson, and also cites some comments from other media folk:

Media commentators were united in frustration at the lack of a more thorough breakdown of the numbers, but not about what they mean. Roy Greenslade believes that the paywall experiment “has, as expected, not created a sufficiently lucrative business model.” Malcolm Coles, on the other hand, sees the numbers as “actually quite good.” PaidContent’s Robert Andrews, stressing that it’s still early days, said that “the small subscriptions base at least offers hope of recurring customer income.” The 52,500 monthly subscribers figure could “signal a news business that has a future,” said Dominic Ponsford.

Read more here.

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A Contrarian Musing: Will Democrats lose big in tomorrow’s elections?

Posted on the November 1st, 2010

For an informed perspective on tomorrow’s USA midterm elections, I asked my political scientist friend back home, who occasionally writes posts for me under the nom de plume of A Contrarian Musing, to offer some of his thoughts about what may happen with the voters and why. For round-ups of pollsters’ predictions of tomorrow’s outcome, see here and here.

Tomorrow is the day of the 2010 midterm election in the U.S., and there is widespread opinion among pollsters and pundits that the Democratic Party will suffer substantial losses to the Republicans. If this proves to be true, much of the failure of the Democrats can be attributed to the poor performance of the economy and the general public’s impression that President Obama has delayed acting on policy changes that his supporters in the 2008 election expected from him.  When this is combined with the tendency of mid-term elections to go against the political party holding the Presidency, the result is an anti-Democrat popularity problem that demands extraordinary political competency to overcome.

It is understandable, and necessary, that the Democrats have fought back in their own defense with a long list of compelling reasons why they are not the cause of the economic problems, and why the President has delayed action on expected policy changes. Excuses, however, have only a limited power in countering public disapproval of a Party’s failure to overcome obstacles to its success.

The one thing the President and the Democrat leaders in the House and Senate could have done to counter the public’s disappointment in them (thereby giving their excuses more justification) would have been to persuade the American public that bringing down unemployment was, by far, their number one interest. Instead, the Democrats allowed health care reform and the rescue of the financial system to dominate the public’s perception of their agenda and policy priorities.

The Democrats have convincing excuses why this situation prevailed. One thing they can’t explain, however, is the President’s failure (unlike President Franklin Roosevelt during the Great Depression of the 1930s) to emotionally connect in a more dramatic, visible, and vigorous way with the emotional angst the public reportedly is feeling. The causes for the anxiety are high unemployment and the hardships that attend it, the lack of financing available to small businesses, and the drag on all things in the economy that this creates.

In the end, the Democrats’ popularity problems could have been greatly reversed by the President. He could have done this, firstly, by demonizing the big financial interests who oppose him or who have contributed to the recession, and, secondly, he could have seemed fully engaged, with all of his emotional and policy advocacy energies focused on reduction of unemployment through jobs’ creation.

Instead, the President has presented himself as the patient, policy plodder, and as the defender of the wealthy as the great hope for the country’s economic recovery. He may well be correct in the reasonableness of his actions. The middle class and poor, however, feel that he has somewhat emotionally deserted them. This perception has opened the door for the rise of the weird, the radical, and the scapegoating opposition candidates.

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Why I may never use the phrase “new media” again

Posted on the October 25th, 2010

What I don’t know is almost everything, I admit, and that everything is mushrooming in size daily. But today I did add a fascinatingly useful new term to my vocabulary by learning the meaning of the word grok. (Hint — it’s a verb and it’s actually been around since 1961).

I came across the word in a post on GigaOM last Friday by the site’s founder Om Malik. Titled “There is No New Media: It’s All New Consumption,” the post is a bit of a two-by-four aimed at the thickish, oldish heads running most of traditional media.


“For the media industry  (which is video, music and print), there has been one more, and perhaps the farthest-reaching, failure: the inability of the folks to grok that today’s audience is not tomorrow’s audience. It goes without saying there’s a whole generation of folk that has either grown up, or are growing up, on the Internet. Their consumption and online behavior is going to be predicated on a distribution medium whose basic premise is abundance. They will find, curate and consume on their own terms, on their own choice of screens and on their own time.”

Clarifying phrase, isn’t it — online behavior is going to be predicated on a distribution medium whose basic premise is abundance.

Highly recommended reading if you want some insight into a big picture perspective of media consumption trends. And if you aren’t familiar with another phrase — Generation D — it’s a chance to remedy that also.  See the full post here.

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Hoping for a future, magazines summon a ghost from the past

Posted on the October 14th, 2010

In their urgent push to find a business model — in this case, embracing digital “apps” as the way to induce readers (or somebody) to pay for their content — magazine publishers are hoping their subscribers will forget something rather important, according to Mathew Ingram.

Writing last week for GigaOM, Ingram said (“Too Many Magazine Apps Are Still Walled Gardens” by Matthew Ingram, Oct. 9, 2010):

…one thing is becoming clear: publishers mostly just want you to look at their content, and are hoping that you will forget all about the Internet and social media and all of those irritating things that get in between you and the consumption of their wonderful content.

Ingram reviews in particular the new app for Esquire magazine that has just been introduced, pointing out some glitches in functioning that he dislikes (he also discusses Wired magazine’s digital app, introduced earlier this year).

And since a picture is worth a thousand… etc, in order to see what exactly Ingram is talking about, here are the intro videos the two magazines produced for their apps.

First Esquire:

And Wired:

Technologically speaking, this is exciting stuff for Internet users, seems to me.  But Ingram objects strongly that these apps at present signal their publishers’ desire to turn back the clock to a “walled garden” world. Meaning that not so long ago old place and time where providers were in control of everything and users were passive and powerless and paying.

Ingram writes:

Wired’s app provides a slick interface to the magazine, but no way of actually sharing it, or of linking it to related content somewhere else — not even to Wired’s own website. It’s like an interactive CD-ROM from the 1990s.

The new Esquire app also has plenty of “interactivity,” if by that you mean the ability to click and watch an ad for a new Lexus, or listen to cover boy Javier Bardem recite a Spanish poem, or swipe your finger and watch a timeline of the construction of the new World Trade Center. All of those are very cool — but if you are looking for the kind of interactivity that allows you to post a comment on a story, or to share a link via Twitter, or to post anything to a blog and then link back to the magazine, you are out of luck. In fact, if you like the app or any of the stories within it, your only option is to close the app completely and then email someone to tell them that you liked it…

Earning praise, in contrast, from Ingram is the app for Flipboard.  As you can see in the video below, Flipboard stresses interactivity and all the social media aspects (Facebook and Twitter, as examples) of the Internet that are so hugely popular. You can read Ingram’s full article here.

Here’s Flipboard‘s video introducing its app:

For now, though, according to Peter Kafka writing in his column MediaMemo at All Things Digital (WSJ), the new magazine apps may be paying off for their publishers (“Magazine Publishers Turn Back From the Abyss” Oct 11, 2010). Alluding to the “brutal beating” magazines have experienced in recent years, Kafka reports that in recent months ad sales for magazines in general have begun to climb. Wired, he reports, is leading the pack:

Worth noting that Condé Nast’s Wired, which may have the most successful iPad magazine app, saw ad pages jump 32.8 percent.

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What China has to say for itself: Premier Wen Jiabao

Posted on the October 8th, 2010

At the end of a short interview early this week on a CNN news show, the anchor Charles Hodson asked Jamil Anderlini, the Beijing correspondent for the Financial Times, what was the point, the purpose of this week’s “enormous offensive, this diplomatic offensive by the Chinese in Europe?”

Hodson was referring to the official visit of Chinese Premier Wen Jiabao to Europe this week. The premier won headlines with his favorable remarks about the Eurozone. They included a pledge to support the Euro, and an announcement during a visit to Greece that China will buy government bonds to try and aid the struggling country (see here and here).

Anderlini, after offering his analysis of the reasons for China’s proposed largesse to Europe, summed up with this:

“Well I think what you’re seeing is, China is obviously now the world’s second largest economy, it’s the biggest energy user, it’s the biggest emitter of carbon and greenhouse gases in the world, and it really is – China is really rising very rapidly on the world stage, both economically, militarily, politically.

And I think, you know there’s a re-evaluation going on of the traditional foreign policy in China which is — it was laid out a couple of decades ago by former paramount leader Deng Xiaoping — and that policy was that China should hide its brilliance, hide its light, and bide its time. But I think China has really reached the point where it’s re-evaluating that policy and that strategy.”

But Europe wasn’t the only target audience of what amounted to a media blitz this week of the European, Anglo-American world by the Chinese premier. Wen Jiabao also sat for an hour-long CNN interview for U.S. television with superstar journalist Fareed Zakaria.

Pointing out that the Chinese premier rarely gives interviews to Western journalists, Zakaria introduced the session by also listing some of China’s recent power moves in international relations.

Here are some excerpts from the interview:

In his opening questions, Zakaria asked Wen Jiabao about the worldwide financial crisis, about China itself, and whether Chinese leadership has lost faith in the U.S.  The premier responded with a diplomatically amiable comment about President Obama and then spoke about his own country:

In the face of the financial crisis, any person who has a sense of responsibility towards the country and towards the entire human race, should learn lessons from the financial crisis. As far as I am concerned, the biggest lesson that I have drawn from the financial crisis is that in managing the affairs of a country, it is important to pay close attention to addressing the structural problems in the economy.

China has achieved enormous progress in its development, winning acclaim around the world. Yet I was one of the first ones to argue that our economic development still lacks balance, coordination and sustainability. This financial crisis has reinforced my view on this point. On the one hand we must tackle the financial crisis, on the other we must continue to address our own problems. And we must do these two tasks well at the same time and this is a very difficult one…

Later Zakaria asked Wen Jiabao about the much reported, and widely criticized censorship of the Internet by Chinese officials. Somewhat surprisingly, the premier praised the freedom of expression and freedom to criticize the government allowed on the Internet in China.  Zakaria challenged this appraisal, citing his own experience of the many restrictions he has encountered when he himself has visited China.

Wen Jiabao didn’t refute Zakaria’s assessment but responded:

“I believe I and all the Chinese people have such a conviction that China will make continuous progress and the people’s wishes for and needs for democracy and freedom are irresistible. I hope that you will be able to gradually see the continuous progress of China.”

In the last segment of the interview Zakaria mentioned a series of speeches that Wen has given in the last few months. He mentioned one in particular in which the premier said that along with economic reform, China must keep doing political reform. Zakaria then said that a lot of people he knows in China have told him that there has been a lot of economic reform but not much political reform: “What do you say to people who listen to your speeches and they say we love everything Wen Jiabao says but we don’t see the actions of political reform?”

After a preliminary comment on the importance of the ruling governing party being faithful to the constitution and its laws, Wen Jiabao ended with this:

I have summed up my political ideals into the following four sentences. To let everyone lead a happy life with dignity, to let everyone feel safe and secure, to let the society be one with equity and justice, and to let everyone have confidence in the future. In spite of the various discussions and views within society, and in spite of some resistance, I will act in accordance with these ideals unswervingly and advance within the realm of my capabilities political restructuring.

“I would like to tell you the following two sentences to reinforce my case on this or my view on this point. That is, I will not fall in spite of the strong wind and harsh rain, and I will not yield til the last day of my life.

To see the full interview, go here.

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The many wrongs of Anglo-American style capitalism? Ha-Joon Chang

Posted on the September 30th, 2010

At the end of the Q&A session following his talk at the RSA earlier this month, Cambridge University economist Ha-Joon Chang summed up his overall perspective with this:

Two hundred years ago, people thought it was quite all right to buy and sell people, slave trade, you know. A hundred years ago, they put women in prison for asking to vote. Fifty years ago, all the founding fathers of developing nations were hunted by the French and British as terrorists. Twenty years ago, Mrs. Thatcher said that someone who thinks there will be a moderate black rule in Africa lives in cloud cuckoo land. But these things all have happened, no?

So that I follow the Italian Marxist Antonio Gramsci who said that we have to have pessimism of the intellect but optimism of the will. We have to make these changes, no? And the first step in that process is to know what is really going on.

Chang was appearing at RSA to talk about his soon-to-be-published book “23 Things They Don’t Tell You About Capitalism” (Jan 2011). This title, coupled with Chang’s quoting of renown communist thinker Gramsci might suggest that Chang is anti-capitalist. Aware of this, Chang pointedly dispelled the notion early in his RSA talk:

When I say these things some of you may think that I’m anti-capitalist. That would be, actually, wrong. To paraphrase Winston Churchill, I think that capitalism is the worst economic system, except for all the others. I mean, it has a lot of problems but it is, in my view, still the best economic system that humanity has invented.

But the problem is that over the past three decades we have lived under a very particular form of capitalism that is free market capitalism, which has served us very poorly. The point is that there are many different ways in which to run capitalism. I mean, it’s not just American style capitalism that is viable. I mean there are many different forms. The Japanese form, the Chinese form, the Swedish form, the French form, the German form.

But over the last 30 years, we have been told that there’s only one form of capitalism that works and that is Anglo-American style free market capitalism. Over the last three decades, this form of capitalism has produced very disappointing results…

What a breath of fresh air is Chang! To hear the full and informative talk at RSA, go here (32 min).

It came as a welcome boon to my own small blogging campaign to counter the idea propaganda that only economists and financial experts can understand economics to hear Chang say the following:

And in trying to explain these and other things, I do my best to dispel the widespread perception that economics is too complicated for non-economists. You know, I say often in my lectures, but also in the book, that 95 percent of economics is common sense deliberately made complicated, while even the remaining five percent can be explained in its essence, if not in all technical details, if you really try.

So through this book I want to equip my readers with fundamental economic reasoning and some basic but misunderstood facts about capitalism so that they can better exercise what I call active economic citizenship, and demand right courses of action from their policy makers, political representatives and business leaders…

My earlier campaign efforts in this regard are here and here. A recent article by Chang for the Guardian is here (“Getting capitalism right” Sept 16, 2010).

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More about the Greeks (and some others)

Posted on the September 28th, 2010

In an earlier post today about a Vanity Fair article about Greece and its ongoing financial morass, I highlighted a question posed by the writer of the piece, Michael Lewis:

Even if it is technically possible for these people [Greeks]to repay their debts, live within their means, and return to good standing inside the European Union, do they have the inner resources to do it?

The last phrase of this question — do they have the inner resources to do it? — won’t stop echoing through my mind. Could it be my (blogger) conscience nudging me to recall something else Lewis said in the Q&A interview with him that accompanies his article? He was answering a question about a rather sizeable ongoing financial mess of another country, the United States.

Specifically, Lewis was asked if he could foresee a scenario in which the US Treasury goes bankrupt.

Excerpt of his reply (that begins with “Yes”):

…It’s not that hard to see us getting to a moment where we are essentially restructuring our debt. I think it is a long way off, but how can it not happen? We are so indulged by our creditors. Even though we have grotesquely mismanaged our financial affairs, people are willing to lend us money on terms that they would not lend on to anybody else in the world. It’s unbelievable to me that the U.S. Treasury can borrow 10-year money at around 2.5 percent.

The Chinese are willing to lend back to us all their surpluses basically for free, and we keep running these deficits. The benefits are just too great to our society for us to turn away…

So that question about having the inner resources to clean up your act is also being posed by Lewis here, more obliquely, about the US and its citizenry.

(Blogger) conscience clean now.

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It’s all Greek to him: Michael Lewis

Posted on the September 28th, 2010

When it comes to figuring out complex things in today’s world, Michael Lewis has proven himself better than most at doing so. Along with this, he has an uncanny sense for the perfect doorway into a narrative, and an eye (and ear) for the telling detail that raises the bar to new highs.

The reading public must agree — most of his ten or so books have made the New York Times bestseller list (see Vanity Fair bio and Wikipedia). And his 2006 book, “The Blind Side,” was made into a hit movie of the same name that earned an Academy Award nomination for Best Picture (2010).

But coming away from reading the more than 11,000 word feature about Greece by Lewis in next month’s Vanity Fair, I was struck by the series of questions he posed — and left unanswered — in the piece’s final paragraph (“Beware of Greeks Bearing Bonds” Oct 1, 2010).

Two, for example:

Will Greece default?…

Even if it is technically possible for these people [Greeks] to repay their debts, live within their means, and return to good standing inside the European Union, do they have the inner resources to do it?

To research the Vanity Fair article, Lewis spent some time in Greece,and interviewed some key figures and government workers in the national financial drama underway there. It makes for interesting reading — the full article is here.

Also interesting is the magazine’s companion Q&A with Lewis about the piece. Here you can read some opinions he has of the possible economic prospects of various other countries in Europe, in particular Germany.

My favorite segment  was a question asking Lewis to compare specific European countries to major baseball teams in the U.S. Of course, unless you’re a baseball fan, the metaphoric word play is illusive (and I can’t be of much help here — the sports world is certainly Greek to me).

One sample, though, was more explicit. His description of Italy — he compared the country to the baseball team The Marlins — is generous and apt, I think. He said:

Even though Italy is in financial trouble right now, like the Marlins are always in financial trouble one way or another, it still somehow feels like a successful place. Italy is this giant wild card; they can win the series at any point.

Italy certainly can do with a good word just about now. And maybe I’m biased, but I do favor such optimism. And I do so hope Lewis is as astute about this as he has been about so many other things. Vediamo.

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Whose century (or something) is it anyway?

Posted on the September 21st, 2010

One last glance back at the World Economic Forum panel discussion last week that I wrote a couple of posts about. This time I want to highlight some interesting wordplay there.

The minor verbal tussle sprang from reaction to the title of the panel discussion — “America in the Asian Century.”

First comment came from panel host Steve Clemons who opined that, for various reasons, he prefers to think of it as “America, China, Europe in a really, really messy century.”

Soon after Professor Moon Chung-In from Korea argued, instead, that it will be an “American-Asian century.” And then later, another panel member predicted that it would be, rather, a global century.

This all came back to mind this morning while I was reading yesterday’s Huffington Post blog post by Michael Brenner. He rather acerbically quoted US Secretary of State Hillary Clinton declaring earlier this month that we are at another American moment. (Video below)

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Economist Roubini says reality check is looming for Eurozone

Posted on the September 18th, 2010

At least, and that’s rather exceptional, Nouriel Roubini spreads the gloom around evenhandedly. Writing an op-ed piece this week for Project Syndicate about problems of the Eurozone, he grounds the assessment in a disapproving scowl at most of the world’s biggest economies (“The Eurozone’s Autumn Hangover” Sept 15, 2010):

.. all the factors that will lead to a slowdown of growth in most advanced economies in the second half of 2010 and 2011 are at work in Germany and the rest of the eurozone. Fiscal stimulus is turning into fiscal austerity and a drag on growth. The inventory adjustment that drove most of the GDP growth for a few quarters is complete, and tax policies that stole demand from the future (“cash for clunkers” all over Europe, etc.) have expired…

Roubini’s primary concern seems to be that European leaders have largely postponed having to account for Europe’s economic problems, rather than finding a real resolution for them:

In the periphery, the trillion-dollar bailout package and the non-stressful “stress tests” kicked the can down the road, but the fundamental problems remain: large budget deficits and stocks of public debt that will be hard to reduce sufficiently, given weak governments and public backlash against fiscal austerity and structural reforms; large current-account deficits and private-sector foreign liabilities that will be hard to rollover and service; loss of competitiveness (driven by a decade-long loss of market share in labor-intensive exports to emerging markets, rising unit labor costs, and the strength of the euro until 2008); low potential and actual growth; and massive risks to banks and financial institutions (with the exception of Italy).

You can read the whole essay here.

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US and EU citizenry share common priority about economic woes

Posted on the August 28th, 2010

The sentiment, “It’s the economy, stupid,” apparently also holds prime position in the hearts of Europeans when money troubles hit, according to the results of a European Union survey just released this week (“Spring 2010 Eurobarometer: EU citizens favour stronger European economic governance” Aug 26, 2010).

Survey results show that 75 percent of Europeans favor more coordination of economic and financial policies among countries belonging to the EU, the 2010 Spring Eurobarometer reports. The survey, conducted earlier this year at the height of the European debt crisis included more than 26,000 people in 27 EU member states.

“The clear majority for enhanced European economic governance shows that people see the EU as a decisive part of the solution to the crisis,” said Viviane Reding, Vice-President of the European Commission, who is also in charge of Communication. “Our spring survey – conducted at the height of the crisis – reflects the difficult times and challenges that Europeans faced during the past months…

See full report here.

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We need good souls: Lawrence Lessig

Posted on the July 31st, 2010

Lawrence Lessig brilliantly explains once again how there’s serious trouble in river city — the river being the Potomac and the city, Washington D.C.

To learn more about Lessig and the campaign to reform Congress, go to Fix Congress First!

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Online media is vastly improving journalism: Henry Blodget

Posted on the July 21st, 2010

cartoon from www.weblogcartoons.com

Online media, hard to believe, still endures shovels full of badmouthing and tsk tsking from its detractors. The blogosphere in particular is routinely chopped up, skewered, fried and refried by its critics.

And that cyberspace represents the killing of journalism itself, well that’s a grumble still coming from some.

So the praise served up today for journalism and online media by Henry Blodget (rehabilitated) is a fine, fine thing to see (“On Our Third Birthday, Some Thoughts On Digital Media And The Future Of The Newspaper Business” Business Insider, July 20, 2010).


The future of journalism, in fact, is bright.  Despite the struggles of many newspapers–and the pain that many newspaper folks have experienced in the past 10 years–the world is vastly better informed than it was only a decade ago.  Thanks to millions of blogs, experts, organizations, causes, digital media companies, print media companies, electronic media companies (Bloomberg, Reuters), Twitter, Facebook, and other next-generation information outlets, the world is now awash in primary and secondary information.

It’s true that this the information often appears in a rough, unedited, or incorrect form.  But within seconds, millions of online fact-checkers descend upon it and hammer it into shape.  This participatory, conversational journalism is certainly different than what came before, but it’s vastly more powerful…

Blodget’s praise is the summing up of a piece about the turbulent future of the newspaper business. He focuses in particular on the New York Times. There are some dismaying facts and figures that he says newspaper bosses aren’t telling their staff (read more here).


UPDATE: Recent news story from Bloomberg Business Week on Henry Blodget and Business Insider (“Henry Blodget’s Risky Bet on the Future of News” by Andrew Goldman, July 8, 2010)

P.S. Really appreciate the free cartoons (see above) from Dave Walker at weblogcartoons.com

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Time to move on from capitalism: David Harvey

Posted on the July 19th, 2010

In a recent talk for the RSA Society, social theorist David Harvey asked if the time has come for a new social order that would be more humane and responsible than capitalism. The video above is a special excerpted portion of Harvey’s 31 minute talk — accompanied by an entertaining cartoonist’s animation (full version here).

Harvey is a Distinguished Professor of Anthropology at the Graduate Center of the City University of New York (CUNY). His most recent book, “The Enigma of Capitalism,” was published in April of this year.

I’ve transcribed a short excerpt from the ending portion of Harvey’s talk:

Any sensible person right now would join an anti-capitalist organization. And you have to. Because otherwise we’re going to have the continuation. And notice it’s the continuation of all sorts of negative aspects. For instance, the racking up of wealth.

You would have thought the crisis would have stopped that. Actually more billionaires emerged in India last year than ever. They doubled last year. The wealth of the rich — I read something this morning — in this country has accelerated. Just last year, what happened was the leading hedge fund owners got personal remunerations of $3 billion each. In one year.

Now, I thought it was obscene and insane a few years ago when they got $250 million. But they’re now hauling in $3 billion. And as the famous statement — I think it was by Andrew Mellon — way back… ‘In a crisis,’ he said, ‘assets return to their rightful owners,’ i.e., him. And that, in effect, is the plug of the financial world right now. ‘Yeah, the assets are going to return to us.’ Now that’s not a world I want to live in. And if you want to live in it, be my guest.

But you’ve got to start thinking. And what bothers me about academia… I don’t see us debating and discussing this. I don’t have the solutions. I think I know what the nature of the problem is. And unless we’re prepared to have a very broad based discussion that gets away, you know, from the normal pablum you get in the political campaign and — you know, everything’s going to be okay next year if you vote for me — it’s crap. You should know it’s crap and say it is.

And we have a duty, it seems to me, those of us who are academics and seriously involved in the world, to actually change our mode of thinking.

I know I’m pretty sick of pablum. But I do think it’s not only academics who need to change their mode of thinking. We all need to (see more here).

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If you can pay, here’s the news: Murdoch’s paywall

Posted on the July 5th, 2010

Yesterday a friend tried to send me a copy of an article in the Times, the UK newspaper that is now secreted behind a paywall, its online content available to paid subscribers only.

The article, so my friend wrote, was an interview with someone whose life story reminded her of a personal situation I had discussed with her recently. So, being a good friend, she took the trouble of scanning the article into an email for me.

Unfortunately some technical glitch messed it up, and all I got was html code instead of text. I asked her to try again and I’m waiting for the re-send.

In the meantime, in spite of knowing about the paywall, I clicked on the Times website to search for the article. Immediately, up popped a page saying either pay us or go bye bye.

Annoyance compounded! How do I mean this? Months ago when I read about media mogul Rupert Murdoch’s insistence that his News Corp newspapers be swaddled behind a paywall, I felt vaguely, though truly, annoyed by what seems to me a clear outbreak of Ludditus

But yesterday, I felt a personal sting from this imposition by Murdoch that access to information be only available to those able to pay. It feels a violation of what more and more seems to be a crucial human right — open access to a free flow of information. And, furthermore, the idea that a simple paywall can restore profits in today’s complex media-scape of vast options doesn’t seem probable.

Newspaper paywalls (I hope!) are futile wishful thinking for the claustrophobic old days when circulation and audience markets were sitting ducks. Readers and viewers were imprisoned by a relatively small number of news and entertainment outlets — it was quite awful for those of us who were there and remember.

So I perked up today when I came across an interview with Internet technologies expert Clay Shirky in the Guardian (“Clay Shirky: ‘Paywall will underperform – the numbers don’t add up'” by Decca Aitkenhead, July 5, 2010). I noted especially the following segment:

Rupert Murdoch has just begun charging for online access to the Times – and Shirky is confident the experiment will fail.

“Everyone’s waiting to see what will happen with the paywall – it’s the big question. But I think it will underperform. On a purely financial calculation, I don’t think the numbers add up.” But then, interestingly, he goes on, “Here’s what worries me about the paywall. When we talk about newspapers, we talk about them being critical for informing the public; we never say they’re critical for informing their customers. We assume that the value of the news ramifies outwards from the readership to society as a whole. OK, I buy that. But what Murdoch is signing up to do is to prevent that value from escaping. He wants to only inform his customers, he doesn’t want his stories to be shared and circulated widely. In fact, his ability to charge for the paywall is going to come down to his ability to lock the public out of the conversation convened by the Times.”

I like that last sentence so much, I want to pluck it out and highlight it again:

In fact, his ability to charge for the paywall is going to come down to his ability to lock the public out of the conversation convened by the Times.

Raise your hand if you want to be locked out, again.

UPDATE – July 20, 2010: “Murdoch’s First Newspaper Paywall Not Off to a Great Start” by Henry Blodget, Huffington Post

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Money, money, money and the system: Lawrence Lessig

Posted on the May 28th, 2010

Harvard Law Professor Lawrence Lessig gave a talk last week at the Yahoo! campus (“Innovation Corruption” May 20, 2010). He spoke about how corruption in government and business are blocking innovation in the U.S.

In case you think this has always been the case and isn’t getting much worse, Lessig explains how this isn’t so. The details he provides are more than a little disheartening to hear. But…

His plea to the audience was to not be passive – that the public is very much a part of the problem when clearly there are patterns but no one does anything about it. As a major player in the Internet world, he’d like to see Yahoo! pushing for competition in the IP world. As far as the government is concerned, Lessig would like to see a return to citizen-funded elections – a concept born during Teddy Roosevelt’s term in office. Such a system would eliminate money from the economy of influence – the underlying cause of corruption and ultimate roadblock to innovation.

If you really want to understand precisely how the system goes so incredibly awry, you will learn here.

And if you agree with Lessig, you can go to his website, ChangeCongress.org, and sign up to participate in helping him bring our political leaders back to serving the common good. Lessig’s organization is non-partisan — its sole bias is for the good of “we the people.”  I think Lessig has a great idea here.

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Is the U.S. Congress really reforming Wall Street?

Posted on the May 28th, 2010

Must read investigative journalist Matt Taibbi provides an unvarnished play-by-play of what (and how) the U.S.Congress is and  is not doing to reform the country’s financial practices (“Wall Street’s War” Rolling Stone, May 26, 2010).

Congress looked serious about finance reform – until America’s biggest banks unleashed an army of 2,000 paid lobbyists.

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Can the gloomy left ever clarify its message?

Posted on the May 27th, 2010

I really like the article yesterday –“The left is trying to take back centre ground in Europe” — in the Netherlands newspaper nrchandelsblad International.  Reporter Marc Leijendekker nails down some of the meatier issues at the center of the accelerating conversation about social democracy versus free market capitalism.

To begin with he addresses the paradox of a voting public in Western democracies that often enough has drifted to the right in recent elections even after the worldwide financial crisis

…laid bare the faults in an economic model in which free market thinking takes centre stage and the state plays a supporting role.

Leijendekker explores some of the reasons for voters’ choices, a well-known and most unpleasant one being that in many cases it was the political leaders of the left who pushed the hardest for freer markets (See Tony Blair’s Third way and Bill Clinton’s Triangulation).

Division of wealth is a focus of the second half of the article, plus a glance at the upcoming June parliamentary elections in the Netherlands where “opinion polls show things are going well for social democracy…”

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Everybody is backing the euro: Romano Prodi

Posted on the May 18th, 2010

Europe’s reputation was damaged at the beginning of the recent eurozone crisis, but now everyone is backing the euro, former Italian Prime Minister Romano Prodi said in an interview today with Bloomberg Television.

He added that it would have been better if the European Union had not taken so long to make its decision, but now the clear decision is that there is no alternative.

The delay has had very, very high costs, you know, but to build Europe, you need time, as you know, Prodi said.

To see the full interview (7:33), click on thumbnail above.

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A few words that can change your life: Muhammad Yunus

Posted on the May 17th, 2010

When I began listening just now to the video of the commencement address that Nobel Prize Laureate Muhammad Yunus gave yesterday to some very lucky students at Duke University, my intention was to excerpt only a few sentences to accompany the video posted here. But Yunus’ words and ideas are so extraordinary that, as you can see,  I couldn’t stop transcribing.

With occasional wry touches of humor,  Yunus describes his kind of capitalism in action. It is astounding. This is a capitalism that is nothing like the rather awful deformity that is dominating our world now.

(The talk was less than 20 minutes — my transcription begins about four minutes in)

…I am very happy to be receiving this honorary degree. Not too many people are giving honorary degrees to bankers anymore…

You have just heard about my work, creating Grameen Bank. When I went back to Bangladesh, teaching economics, I had no idea that I would someday get involved in banking. I had no idea about banking. I didn’t have any learning about banking. But circumstances forced me into it. And since I didn’t know anything about banking, that became a big help for me. I didn’t have to follow their rules. I just looked with my eyes and saw what was there and tried to respond to the problems that I saw, and created a banking system that now looks like exactly the opposite of the conventional banks.

If I knew the rules, probably I would not be able to break those rules. Since I didn’t know it, I didn’t have any problem creating new rules and breaking all of them. Conventional banks go to the rich, we make sure we go to the poor. The poorer you are, the more attractive you are for us. If you are the poorest, we kind of celebrate that we found you. And it’s our job to find resources for you so you can change your life.

And we created a bank where we emphasize the women. Conventional banks mostly go to men, we decided to go to women. It changed their lives, it changed their families, it changed the country. The most dramatic thing that happened in Bangladesh in the last 25 years — any visitor to Bangladesh will tell you this — it is the empowerment of women. The status of women has changed so much from how it was 25 years back. One after another you see the differences that it made to people’s lives and the whole society.

And we created a bank, unlike conventional banks which are owned by the rich. We made the Grameen Bank owned by the poor. And owned by the poor women. So all the borrowers of Grameen Bank own the bank. Unlike the traditional way of thinking that you have to have donations and assistance from the government to run something for poor people, we defied that. We created a bank which runs by its own money. We just take the profits, just like any other bank, and lend that money to the poor women. We lend out $100 million a month, and all this money comes from the profits of the bank. And the bank makes profit, the profit goes back to the borrowers as dividends because they own the bank.

We concentrated on the children of the borrowers of Grameen Bank. We wanted to make sure they do not remain illiterate like their parents, who are totally illiterate. We made sure all the children go to school. And we’re very happy that we succeeded in that. And then we saw streams of these children going up the levels of education and coming to higher education. We gave them education loans to continue with higher education. So we have thousands and thousands of students in medical schools, engineering schools, universities all around the country. Many of them have completed their Ph.Ds.

And sometimes when I meet these young people, try to understand their problems, one common frustration they come up with, they say “We have education, we are finishing that. But what about our jobs? There’s no jobs in the country.” So I started telling them, “Look you are very privileged young people. You are privileged because your mother owns a bank. Why should you be looking for jobs? You should be taking a pledge. And that pledge will be, I’m not a job seeker, I’m a job creator. And prepare yourself to be a job creator. So change your mentality from just being in the employment market, to finding a job, looking and knocking at everybody’s door. If you feel frustrated that you don’t know how to start a business or something like that, you just look at your mother. She’s an illiterate woman. Many years back she joined Grameen Bank. She was scared to death taking this money in her own hand… but she overcame those fears and she became a successful business person. What good is your education if you are not better than your mother? So why can’t you at least do something with what your mother does, ten times as big, fifty times as big or 100 times as big, if you don’t have any new idea? And gradually you will come up with new ideas.

So we look at these young people, the son and the daughter, and then look at their mother, side by side. And I always come up with the same thought, that I always feel — the mother could have been a doctor too, like her daughter. But she couldn’t even go to school. Is this her fault? Is this something lacking in her? No, nothing is lacking in her. Simply, society never gave her the opportunity to go there.

So I sum up by concluding — poverty is not created by the poor people. Poverty is created by the system that we all built, in which we have to live. And that’s what created poverty. Seeds of poverty are not in the person, seeds of poverty are in the system. Look at the banking, what it does. Refuses to extend its services to the majority of the world population.

Two and a half years back, we started Grameen program in New York City because we were challenged that it could not be done in this country. I always said it could be done anywhere on this planet. So taking that challenge, we started it in Queens, New York in 2008, in January. That’s the year the financial crisis hit the world. So we had an amazing situation — in Queens, the Grameen program with no collateral, no guarantee, was flourishing… On the other side of the street, big banks were collapsing. These big banks told me back in 1976, “Banks cannot lend money to the poor because they are not creditworthy.” So I started asking people in New York, “Can you tell me who is creditworthy now?”

Journalists asked me, “What do you want to achieve in New York City by lending this little money to poor people? I said, “I just have one idea. I hope I can succeed in doing that. If we succeed in New York City — I hope we do — then there’ll be no payday loans in New York City. All these payday loans will be done, finished, with 1000 percent interest, 1500 percent interest. I said, “we are looking for a day when there will be no pawn shops in New York City. There will be no check cashing companies in New York City.” It became successful, we have opened a branch in Manhattan and Brooklyn, another branch in Brooklyn. This year we started in Washington D.C., and San Francisco…

The problem of the system is also in this conceptualization of what we are as a human being. In business, human beings are conceptualized as moneymaking machines. Business means business to make money, nothing else. And on top of it, you have to maximize profit. Except human beings are not a one-dimensional being. Human beings are a multi-dimensional being. They are not just money-making machines. If you can interpret the true human being within the framework of economic theory, then the world would be very different.

So I’m suggesting that we create another kind of business. The existing business is built on the selfishness of human beings. Everything is for me, nothing for others. But there is selflessness in all human beings. Every human being has this quality. And we create a business on the basis of selflessness. Everything is for others, nothing for me…

You have options now as young people graduating. You’ll be coming up with the idea, “What do I do? Do I work for a profit-making company or do I work for a social business? Or do I create a social business or do I create a profit-making business?” It’s up to us to decide. It’s an option, it’s not something anybody’s forcing on you.

A social business is a business dedicated to solve the problem. Any problem you see can be solved with a creative mind. Individuals become very powerful.

I was in Glasgow, and one of the problems they were discussing with me — they have thousands of families in Glasgow City who are on third-generation unemployment. I said, “How come?” They said, “Because of our welfare system.” I said, “That’s a shame. If I was one of those who is in third-generation unemployment, I’d be suing the government for crippling me. I’m not a crippled person, I’m a fullbodied human being. I have the creative energy, I can take care of myself.”

So in the discussion we decided to start social businesses to get unemployed people who remain unemployed for generations, to get them into opportunities and get out of the system they are forced into. So you see around us, whatever problem we see, we can create a social business. That’s the creative energy you all have as an individual. Each individual, each human being has the power, enormous power to change the world. And you have it. Are you going to use that to change the world? That’s the question I raise with you.

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