Monthly Archives: December 2013

Inequality, is the attention going to drive change?

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In the last few weeks there has been a huge amount of focus on inequality. The attention has been riding a bit of roller coaster since the Great Recession started in 2008 when the focus was on Occupy Wallstreet and the inequality because of the action of the bankers. However, Elizabeth Warren began to really shift the conversation away from just inequality to the total system that enables the inequality. In fact, she started to argue that our minimum wage wasn’t keeping up with the rate of productivity of the economic system. As I argued in my piece on Minimum wage there’s not much impact on local jobs comparatively to the theories that minimum wage increases would dramatically increase unemployment.

However, Wal-Mart and McDonald’s brought the conversation back to the fore through the food drive for Wal-Mart employees that couldn’t afford food for Thanksgiving. According to many theories of efficiency to maximize profit Wal-mart must continually drive lower costs through less employees doing more. However, there’s been some negative repercussions to this beyond the extremely low salaries for the majority of employees, it’s also impacted the stocking of shelves which can reduce sales. Wal-Mart’s salaries and behaviors have caught the attention of professors at Harvard, recently there was an HBR Blog post about Wal-mart’s food drive – I strongly suggest reading that article. It provides great perspective about the impact of low salaries. Essentially, if the bulk of Wal-Mart employees work full time at $7.25 per hour they are well below poverty line, which means that these employees would end up getting food stamps. Employees with a family of 4 need to make at least $15/$16 per hour to be above the poverty line. That gap of $7.75 that provides food stamps and medicare for these employees. The author is arguing that these government benefits aren’t purely entitlements for minimum wage workers, but also entitlements for the companies as well.

Of course HBR isn’t the only place arguing that inequality is a serious problem. Paul Krugman, the Pope, and the recent article in the Guardian (that I wrote about in Taking the Long View) are as well. Paul Krugman arguing this isn’t exactly surprising, he’s been arguing that inequity and the result of the recession has had massive negative impact on the economy. The long term under employment of workers is continuing to cause damage to our economy.

The real question is will this conversation actually drive any change? Will we see any change in policy? There has been some recent shifts in the republican perspective of the budget. Which may actually relax the demands on cutting unemployment and other “entitlements.”  Studies have shown that every dollar spent on unemployment adds about $1.64 into the economy. So this is something that will likely have a positive impact on the economy, if we do some different thinking about what we’re spending money on. That being said, I’m very skeptical that in our current state of politics that we’ll see any serious change in how to treat economic inequity in terms of changes in tax policy which can reduce inequality.

I think that at this point it would require a serious popular swing in opinion to drive the change through the elections. In most states that are negatively impacted by inequality, this is an unlikely occurrence as they are republican strongholds.

What can we do about inequality? Well, if you’re an employer work to make sure you pay fair wages. As a consumer we can make choices to buy products at locations that provider higher wages and access to benefits – we can also chose to boycott companies that do not pay a living wage. As I explained in my article about health costs, proper healthcare reduces quality of life and reduces inequality. As a employee of a company that pays low wages, you can work to ensure all employees that work for you receive a living wage through salary increases or other support. This won’t drive systemic changes though and if we want those we’ll have to work through contact our political leaders to drive change. Without these choices we will not see changes and will continue to have inequality. This inequality will likely only get worse over the next several years.

NSA Bulk Metadata ruled likely unconstitutional

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Today was a pretty big day for privacy fans. The NSA’s bulk collection of metadata has been ruled likely unconstitutional. Why is this a big deal? It’s “Just” metadata. Well, as the CBS 60 Minutes report showed the NSA is able to convert that information into a network. Networks show everyone that you talked with and despite assurances otherwise that phone numbers weren’t used, it’s fairly easy to unmask a person in a network based on the network characteristics. I wrote a blog post about this a while back that talked about a paper showing the power of metadata. I think it’s important to reiterate here what that is.

In the article, titled Using Metadata to find Paul Revere, the author explains by using who talks who it is possible to construct a large network and that it was likely to determine the major players of the US revolutionary war. Just using club membership, it wasn’t even what they talked about, just what groups they were members of and how they were all associated. Based on the metadata Paul Revere is a pretty central figure and knows a lot of the other leaders of the revolution.

The NSA would take this view and say, “See it could have caught those terrorists back before the revolution!” However, the judge in this case says that the government did not do a sufficient job showing that this actually worked. It is, in fact, likely that the British had some of this membership information but wasn’t able to put it to good use. In this case, the judge ruled that the collection of Bulk metadata is a violation of the 4th amendment.

What can we expect next? Well, the ACLU has a very similar case that is being heard. If the judge rules differently the Supreme Court may need to weigh in to deal with the problem once and for all. Which depending on how these cases are dealt with could be a good or bad thing.

It is unclear at this point how this will change the conversation in DC, it will likely just lead to more denials from the NSA and White House. They will argue it’s still legal and that they will appeal to the highest court that they can. If they lose this case, it will likely lead to a lot of other questions being asked and possibly calls for impeachment and resignations. I would not be surprised if some of the more extreme on the right call for Obama’s arrest as well.

The other piece that is of interest to me is the question about the companies that have been complicit with sharing of our metadata. Are they going to be in the clear or not? In the case of AT&T there was a law that protected them retroactively. I am interested to know if that will also be ruled unconstitutional as it enabled the government to break the law farther than it could have before.

In general this is something really good, but I believe it opens many more questions than it answers about the long term repercussions of this program. I will continue to blog about this topic!

Disrupting Mobile Phones – Google’s taking the lead and Apple is going to lose

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http://news.phonebloks.com/

Photoblok’s high level picture of their design

For some people, Motorola’s Project Aria, in partnership with Phonebloks, is going to be a game changer, while others are kind of like, meh. I think that the end result of this phone will actually be a game changer, but not everyone will switch to this format of phone. Many people will continue to buy phones that have been designed for the full experience. However, I do think that theses phone will significantly impact in how many people think of phones.

These phones represent a disruptive shift for the phone industry. Why are these disruptive when I said that Kayak isn’t disruptive? Well, in the book Innovator’s Dilemma Dr. Christensen argues that when new industries are formed the leaders are companies that are able to combine all the pieces that are needed for producing that good under one roof. In the case of airline travel all the booking used to take place through the airlines, eventually this was outsourced to Travel Agents which were something of an extension of the airlines. The first disruption came when other groups were able to use the internet to book reservations. The act of reserving a seat on a plane became decoupled with the actual flight and service.

So, in the case of mobile phones, specifically smart phones of course, the most successful firms were the ones that were able to combine everything you needed for the phone to be useful. Blackberry did this, but Apple was clearly the best at it. The original iPhone was basically an iPod with a cell antenna in it. This was an amazing thing though. Apple had disrupted the music distribution industry with iTunes and was able to leverage that innovation into smart phones. This of course was a disruption in that industry because everyone was focusing on productivity first, Apple approached it from a content perspective. Content always beats out productivity. In a very real sense, the market changed over night. Apple owns everything in their cell phone, the OS, the design of the chip, the distribution network for apps, music, movies, etc. This is a very classic example of fully integrating as much of the supply chain as possible.

This is exactly how computers started. Large companies like DEC and IBM built everything for a computer. The boards, the operating system, the software, and the interfaces. These companies were large and structured in a way to make money from extremely expensive mainframes which had a very small market. Between Xerox and IBM the personal computer as we know it today was invented.

Our PCs today are modular, which means that every portion of the computer can be built and designed by different firms. This allows a lot more innovation across the platform because it doesn’t rely on one firm to create everything. It allows specialization and diversification for an assembly company. It was because of this modular nature that Intel, Dell, and Microsoft became successful. They were able to leverage the platform that IBM delivered with the PC and grow and develop new capabilities.

This modularity also allowed just about anyone that wanted to the capability to built their own custom made computer. This has become less so with laptops – you can’t buy an empty laptop but you can customize it from a company. This just isn’t the case with smart phones – which are essentially mini computers. The new tablets coming out are as powerful as computers from the early 2000s.  The modularity of PCs offer an additional benefit, you have the ability to easily fix them. If your processor dies or your graphics card does you can buy another and simply pop it in. Even if the motherboard goes, you can still replace that and plug all your existing components into the board. The case is the only thing you don’t have to change if you don’t want to.

With phones the screen is like the case. You don’t really need to upgrade your screen every time. Especially with how hard the screens are unless you drop the phone and crack the screen you don’t need to replace it. Furthermore, we’re getting to the point we are with TVs that the resolution of the screen isn’t going to make much of a difference. Yes, we’re in a DPI battle between Amazon, Google, and Apple but we’re getting close to the point where we can’t tell the difference. Which means that the screen is a perfect thing to act as the phone’s “Case” for modularity purposes. The modularity will help immensely with repariability, which current scores pretty low, if you’re interested in those scores check out iFixit.

So, how does Phonebloks come into all of this? They are essentially pulling an IBM by creating a system that can be modular. Google’s Android will be the operating system of choice, but it’s likely that even this could be flexible in the manner that PCs are today. It’s unlikely that iOS will be on these phones legally, although I’m certain someone will figure out a way to install the operating system on these phones. This will hurt Apple in the long run as people will not be using their operating system will leave their ecosystem and prevent them from making as large of revenues in the future. People will still buy their products, but there will be much less sales. Apple could be repeating history if they don’t offer to sell their operating system for phones like this.

Why do I think that these phones are going to be winners? Well, it will increase the longevity of the phone. With phones costing upwards of $600 for the top of the line phone anything that can increase the length of time that a person is using one is a good thing. Secondly, as Android and other OSes evolve they require more capabilities from the phone which means older phones aren’t able to use the latest operating system. Buying a much cheaper CPU to install would be a lot better for end customers. This will also disrupt the supply chain as companies like Qualcomm aren’t used to selling directly to customers. Finally, as long as the design is good, then it won’t seem as much of a burden to have the same phone year in and year out. It will require people to think differently, but that’s something that I believe Motorola and PhoneBloks can over come.

These phones are going to change the industry and possibly enable other companies to develops phones in the same way. Hopefully they pick one standard interface like the Motherboard that all companies conform to. This will allow companies like Google and Microsoft to go back to innovating on operating systems and to get out of the phone building business.

Taking the long view

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I read a great article today that I needed to write about. I think it’s going to influence the way that I write. It was Adam Curtis – WHAT THE FLUCK! which take a very different view on writing and journalism that really intrigued me. His article is really long, but well worth the read as it is something of a history of two types of journalism in the UK. On the one hand he discusses the rise of Tabloid journalism while on the other hand he discusses the origin of muckraking which helped to unseat the powerful in the 1930’s and helped get FDR elected leading to his trust busting.

Curtis argues that we’re at a similar inflection point in our society as we were at the turn of the 20th century. There have been revelation after revelation and the general public hasn’t figured out how to tie all of this together. I believe that there are a few journalists out there that have been pushing the current power structures and they’ve suffered from this a great deal. Glenn Greenwald and Julian Assange are two that have been the most vocal in challenging our current societal structure.

Aside from the history lesson on journalism the article is important because the author uses something similar to a popular research style in academia called Actor Network Theory. This pushes the actors and the people they interact with to the fore of historic events. It also reduces the importance of a single individual because they act within the constraints of their network. In many cases the most pivotal people are those that build the network to connect individuals in the network. In many of the history of companies books I’ve been reading lately this style is implicit in the writing.

What I took away from this article is that when I write I need to work to ensure including the longer view. Looking back more than just the past few weeks but to include events that precipitated the topics I’m writing about. This will help build credibility for my perspective as well as help convince skeptical readers through a consistent evidence and a broader story to explain the reasoning rather than just a reactionary response to an event.

Goofy Stock photos might not be so silly any more

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Silly Stock photo

@NFEN and @Cheddarchezz having a conversation about “hacking”

I just saw a few people that I follow tweeting about trying to take over Youtube. There’s a Meme on Youtube right now that’s been going on for a while as a form of protest over some of the recent changes to the comment policy, copyright policy, integration with Google+ and probably a litany of other issues. To the gaming community Youtube is a dying platform.

What struck me about the conversation wasn’t really what they were talking about, but the stupid stock photos that are supposed to represent “hackers’ breaking into a network. For some absurd reason stock photography companies almost always put them in the same outfit they’d be wearing if they were breaking into a house, mugging someone, or doing some other nefarious activity. Clearly it’s just a ploy to help people understand that the person using the computer is up to no good, but it just looks ridiculous as almost no one wears any of those clothes while using the computer. So instead of making it look like a criminal it just make it look like an idiot. However, I think that with some recent revelations about the FBI and the hacking process called “RAT” these imagines are looking less absurd. Not that I’ll go out and buy clothes like this to work at my computer on.

One of the more recent Edward Snowden revelations has to do with breaking into personal computers by the US government. This isn’t really shocking, nor is what they do when they are on the computer. The FBI has admitted that they have the capabilities to hack into your computer and activate your webcam without turning on the indicator light. These capabilities aren’t new. In fact Ars Technica did a report on this in the kiddie hacker community called RAT. I imagine that some of the tools that my friends used to use while we were in highschool to remotely open a CD drive or type messages to each other operates in a similar fashion.

So, if you are hacking a computer does it make sense to take precautions against showing your face? It might or as the Ars article suggest, just cover up the camera.The difference is that you don’t know if you’re under surveillance or not. It’s also not clear if the FBI only means laptop webcams or if they are able to do the same to a smart phone or tablet. As the ACLU mentions in one article “we’ve never had discussion” about law enforcement hacking into computers. This is part of the reason there was a petition for We the People to update our privacy laws. Regular mail and packages are protected by the fourth amendment while email is not. Using a web cam with or without a web cam constitutes a much larger breach of privacy than just taking pictures through the camera. It’s likely that with access to the webcam the entire computer is open to the FBI, which means that a warrant for a web cam is a warrant for everything you do. If you have services that you’re always logged into like Drop Box or Tresorit those are also accessible through the computer you’re cam is being used on.

We need to have a conversation about the limits of searching and privacy. I don’t want to sit around in a ski mask or cover up my webcam. Users likely need to install firewalls, more passwords, and disconnect from services they aren’t actively using.