Archimedes’ Hot Tub

Fortune did a good piece on a diverter scam. Diverter scams involve someone getting merchandise to distribute in one channel and then shifting it to another, more lucrative one. This alleged grifter, Dina Wein Reis, used a sophisticated high-end effort to sting executives at big name consumer goods firms. In her best years, she apparently diverted as much as $35 million in goods.

She seems to have used her good looks (image search), apparent charm and the introduction of ethical conflicts to identify her marks. I was surprised she didn’t come up in recent reporting I did on organized retail crime. But she doesn’t seem to have operated a ring; diversion isn’t necessarily illegal, and at least some of the operation she had worked with legitimate firms.

I loved Alex Beam’s farce on the Henry Louis Gates/Sgt. Crowley flap in the Boston Globe. Beam manages to skewer everyone involved. He gets himself, too, by titling the piece “A tale told by an idiot.”

I’m just an editorial guy, but you’ve got to think some advertisers would like to be placed opposite Beam’s column. But the Globe never puts an ad there — always pictures of locals at a party. Then again, the G section’s only full page display ad this issue is for Boston.com, effectively a house ad.

The smart grid might open up new ways for hackers to plague us. Brian Krebs, writing in the Washington Post, notes the U.S. government attached a security string to $3.9 billion in smart grid grants. Krebs wrote, for instance, that

Smart meters give consumers direct access to information about their power usage and the ability to manage that usage over the Web, but that two-way communication also opens up the possibility that the grid could be attacked from the outside. Many such systems require little authentication to carry out key functions, such as disconnecting customers from the power grid.

If smart grid insecurity just knocks homeowners off the grid, most of us get sent back to the 19th century for a while, then go out and refill the refrigerator. That qualifies as a hacker parlor game.
Yes, organized groups might blackmail us to keep our power flowing. But look what they’ve done with computer networks — most damage comes from the people who don’t beat their chests at having taken over. Smart grid insecurity will probably work the same way. If these tools can help capture personal data and raid our bank accounts, then they will be used that way. Let’s hope the government sets the bar high enough to matter. “Taking steps to prevent cyberattacks” does not warm my heart.

Bill Gurley gives Chris Anderson’s Freeconomics book a tentative thumbs up.

Gurley, a noted Silicon Valley venture capitalist, also gives it a context. He writes, “If a disruptive competitor can offer a product or service similar to yours for “free,” and if they can make enough money to keep the lights on, then you likely have a problem.” (emphasis his).

He sees ‘free’ as something for most businesses to defend against, not build upon. Here we see savvy borne of years of Internet investing — how many ‘free’ business models blew up after the Internet bubble burst? Gurley’s post is good for the links it gives to criticisms of Anderson’s book, and for the context he provides. It does seem to treat the book too generously by calling it quintessential reading for entrepeneurial set. I respect Gurley’s taste in books (he recommended both Startup and Complexity to me)

But let’s look at some of Anderson’s examples: Gillette gives away razors so it can sell razor blades. A nice promotional gimmick, but a trope for businesses since long before the Internet (and have you seen a free Gillette razor lately?). Transistors are practically free. In fact, it costs billions of dollars to produce them and it costs money to put them into useful formats. Prince gives away CDs and sells out tons of shows in London. C’mon. This is Prince. He would likely have sold out those shows without a single giveaway. Show me an unknown artist who gives away CDs and sells out a tour.

Where the freeconomics argument seems powerful is the whole idea of ‘freemium,’ which extends the original Gillette idea in a new direction. It’s a good insight and well described. The rest qualifies as entertaining chicanery.

“It is fear I am most afraid of,” Montaigne wrote. He concerned himself mostly with fear in battle. But he noted that “People with a pressing fear of losing their property or of being driven into exile or enslaved also lose all desire to eat, drink or sleep…”

Journalists reek with fear right now. We fear the loss of our jobs, and with it our homes, our childrens’ future, our sense of self-worth. Most of all, we fear irrelevance, that metaphysical exile from society.

We can wring our hands until our skin falls off the bone. We’re being passed by. I remember reading about Beaux-Arts workers in the 1950s who shook their fists at the Museum of Modern Art, that icon of the International Style. “That goddam place is destroying us! Those bastards are killing us!” they said. [recounted in Tom Wolfe’s “From Bauhaus to Our House”]

Our goddam place is the Internet, and the bastards killing us are ourselves. We thought advertising would shift nicely from old media to new. We thought free content meant we could assemble vast audiences online and strike back at the mass audiences of television. We were wrong. Writers and editors, are and almost always have been a cost center. We’re paying the price now.

Those Beaux-Arts masons were forced to do something else. If they stayed in building, their work felt less meaningful. We journalists may find we have to do the same. “It’s over,” says Lawrence Weschler in The New, New Journalism. He meant long-form, writerly journalism. Now it looks true for text-based journalism as a whole.

I think a model exists for selling news and features content, regardless of medium. Until I figure it out, or someone else does, I’ll take heart in something else Montaigne said: “those who are actually impoverished, banished or enslaved often enjoy life as much as anyone else.”

I picked up a book at church I’d skipped multiple times in the past. “Welcome to Fred,” by Brad Whittington, seemed light. But my reading lately runs to Kierkegaard, Calvin, Montaigne and other brain-swelling books, so light seemed good.

‘Fred’ presents a coming of age story about Mark Cloud, a kid that people don’t much know what to do with, because he’s a preacher’s kid. Perhaps that creates his struggles with social interaction, though Cloud, the narrator, is also an annoying 98-pound weakling. He spouts non-sequiturs and possesses a vocabulary that sometimes seems to belong to the author, not the 8-year-old boy we first meet.

The plot holds some improbable twists. Why does a family that moves every year suddenly stay in one place for years on end? How does a preacher who triples attendance at a church in a single year find his next call in the middle of nowhere? Successful ministers usually get called to bigger churches in better places. Then there’s that Christian Lampoon Vacation.

Then again, many of the book’s events either go over Cloud’s head or go unexplained. Perhaps that comes from being a story about a boy. He bottles up a lot of things inside himself, and most of the people around him come into and out of his life like clouds.  They have about as much substance, too.Fred runs with the uneven pace of a country creek. Parts of it read like the first novel it seems to be. There are a couple of genuinely good scenes in the book. The book deals with big questions about faith and modern life in realistic and believable ways. The characters are a bit wooden, but several left me wanting to know more about them. And Mark learns something important, perhaps profound, at the end.

Somehow, he grew on me, and his coming of age as a Christian and the son of a preacher contained nuance and balance enough to suggest that Whittington could write a better second book (we’ll see, since it turns out he wrote a Fred trilogy).

Twitter was the flare, statistical analysis the spotlight on problems in the Iranian election. Statistics ace raises doubt, fans anger on Iran’s vote offers a short profile of Daniel Berman, an American working on a master’s degree in Scotland. Berman and a fellow grad student looked at election data posted online by Iran’s government and found suspicious patterns. They sent these to the fivethirtyeight, which posted Iranian election results by province, and noted some irregularities. (Here’s further work posted on the fivethirtyeight, Iran does have some fishy numbers.)

Later, the regime would have to acknowledge the math, though it said the irregularities merely inflated Ahmadinejad’s victory. Perhaps. Statistics, after all, make up the hypotenuse of the tainted triangle they form with lies and damned lies.
Will statistics make a perpetual beacon in politics, reducing Lippmann’s discrepancies between the conceived and the effective (i.e, the ideal and the real) political environment? More likely, they’ll be an anomaly of their own, like the Nixon tapes. Political regimes will of course adapt. They will either rig things in statistically reasonable ways, or at their clumsiest simply not post results on the Internet for all to see. But statistics should make corruption a little harder.

The developing world may save us from ourselves, according to this post on a high-powered energy crisis confab featuring Al Gore.
Not that there’s anything new about us needing help from the 3rd world to stop global warming — it gets reported ad nauseam that things like China’s “coal-fired power plant a day” and the emergence of a middle class in many developing countries will only accelerate global warming.

This post was nice because it featured people saying developing countries aren’t just part of the problem — they might create the answers we need. To wit:

Instead of the usual “trickle-down” of technology from first world to third, he [Fisk Johnson of SC Johnson] said, his labs have discovered that in many instances, the trickle flows in the opposite direction. One example: cheap, natural plant-based pesticides that SC Johnson is harvesting in Vietnam. “We have technologies from the developing world that we’re bringing down to the developed world,” he said. SC Johnson also has a special lab in China that deconstructs the company’s household products and strips them to their bare essentials, keeping only the qualities customers want most. That takes out unnecessary chemicals and ingredients which, he says, usually makes the end product cheaper.

At the end of the post, Gore is cited saying a joint U.S./China cap-and-trade emissions policy would mean “we’re really off to the races” in combatting global warming. I’m scratching my head here, since you would think he would push for a carbon tax applied broadly. That would really force companies to change their behavior. True, the political stomach to get a carbon tax through Congress probably doesn’t exist. But Gore doesn’t have to worry about Congress; he should be able to tell it like it is. Cap-and-trade gets the engine going, but it’s more like a Sunday drive in the country.

Book II is not the longest in Paradise Lost (Books ix and x are longer), but it felt that way to me. Yet here Milton’s framework forms. We see that Milton’s Jehovah is perhaps not all-knowing and all-powerful. He does not, perhaps cannot kill Satan, ‘progeny of heaven,’ and his ‘fiery seraphim.’ In fact, Satan, “hell’s dread emperor,” reigns “with pomp supreme” and enough autonomy to contemplate another battle with God:

Must we renounce, and changing style be called
Princes of hell? For so the popular vote
Inclines, here to continue, and build up here
A growing empire; doubtless; while we dream,
And know not that the king of heaven hath doomed
This place our dungeon, not our safe retreat
Beyond his potent arm…
…for he, be sure,
In height or depth, still first and last will reign
Sole king, and of his kingdom lose no part
By our revolt, but over hell extend
His empire, and with iron sceptre rule
Us here, as with his golden those in heaven.

[lines 311-324]

Iron is the stronger metal, hence its use in Hell. As if even God’s iron can hold back the hordes of Hell, or at least, Satan himself. For Satan will get out of Hell, and go to search for humans, though
“…long is the way
And hard, that out of hell leads up to light.”

In fact, perhaps billions of light years separate heaven and hell, in a Miltonian cosmology where the Big Bang came when Satan and his angels were tossed out of heaven. Eventually (several billion years later, perhaps), earth became home to humankind (in Miltonian biology, we humans are intelligently designed, rather than evolved, but he was writing in 1667).

….There is a place
(If ancient and prophetic fame in heaven
Err not) another world, the happy seat
Of some new race called Man, about this time
To be created like to us, though less
In power and excellence, but favored more
Of him who rules above;
[lines 330 to 350]

We also see that unlike Homer’s underworld or Dante’s Inferno, Milton’s Hell harbors beauty. The fallen angels, for instance, can refresh themselves with singing.

…Others more mild,
Retreated in a silent valley, sing
With notes angelical to many a harp
Their own heroic deeds and hapless fall
By doom of battle; …
their song was partial, but the harmony
(What could it less when spirits immortal sing?)
suspended hell, and took with ravishment
The thronging audience.
[lines 546-555]

Not that hell is a nice place. Hell, painted by Milton, breathes fire, unlike the passive, sneaky Evil we often see in church:

…let us rather choose
Armed with hell flames and fury all at once
O’er heaven’s high towers to force resistless way,
Turning our tortures into horrid arms
Against the torturer; when to meet the noise
Of his almighty engine he shall hear
Infernal thunder, and for lightning see
Black fire and horror shot with equal rage
Among his angels; and his throne itself
Mixed with Tartarean sulphur, and strange fire,
His own invented torments.

[lines 60-70]

Book II also holds verses that I think highlight one of the things that influences some modern atheism: subservience vs. ambition.

….Suppose he should relent
and publish grace to all, on promise made
Of new subjection; with what eyes could we
Stand in his presence humble, and receive
Strict laws imposed, to celebrate his throne
With warbled hymns, and to his Godhead sing
Forced alleluias; while he lordly sits
Our envied sovereign, and his alter breathes
Ambrosial odours and ambrosial flowers,
Our service offerings?  This much be our task
In heaven, this our delight; how wearisome
Eternity so spent in worship paid
To whom we hate.
[lines 237-249]

So while I remember suffering through this book, there were clearly good things in it, too. It perhaps had some allegorical tie-ins with the reversal of Cromwellian power, which occurred during the period Milton was writing Paradise Lost.

This Business Week story on why 3 million job openings mean bad news for America caught my eye.

As Business Week argues, all these open jobs provide “evidence of an emerging structural shift in the U.S. economy that has created serious mismatches between workers and employers.”

It seem like BW is soft-pedaling the obvious — a lot of the open jobs sound like low-level or low-salary jobs. The bulk of the open jobs are in services: education, healthcare, professional and business services. My guess is many of them don’t pay well and require extensive training (like teaching or nursing), so it will take time to fill them. My experience is that high-level jobs are open, but they often combine unusual mixes of skills and experience — in fact, they are trying to jumble together what should be multiple jobs, and find one person that will do them, for not as much money as either job would’ve paid before the downturn.

Certainly, the kinds of jobs being lost don’t match well with jobs that are open. Meanwhile, the housing bust means people who might fill some of those jobs are trapped in their houses, unable to move.

The solution? Retrain workers. The government and employers both need to invest in training. Even so, says Business Week, “workers and employers will have to accept harsh new realities: lower pay for workers starting new careers, and imperfect fits for employers filling vacancies.”

Business Week notes that there is $3.5 billion in the stimulus package for training. Let’s hope it helps people shift to whatever jobs will be left. Perhaps it’ll help some of those laid-off IBM workers move to India.