Yes, it's that time again.Now that you've read several dozens of such lists, I hope that you'll find this list pragmatic, useful, and perhaps occasionally surprising.
Here, then, are my thoughts on the most important trends inour world for the coming year.
1. We arere-balancing productivity across the globe; 2004 is the year in which this process turns from local political annoyances to an obvious global truth. While the developed world is quite rightlyproud of recent productivity increases per quarter in the 2-4% range, there isno comparison with the increases in productivity of workers moving fromhand-tool agrarian lifestyles to computer programming or heavy manufacturing.
Those observers who think that China'sdomination of the global economy is still some comfortable decade or two awayare in for a rough surprise. As Chinamoves toward manufacturing the most advanced chips, leading the world in stemcell research, and exporting top-line value-added goods, that hoped-for bufferwill turn into years or months. It maybe that absolute domination is still 5-10 years away (rather than 15), but athome others will feel it much sooner.
A corollary of this call: Asia"wins" both in technology market growth and as a net exporter oftechnology goods. South Korea and Indiawill make huge inroads in global markets this year, and, with Japan'smoney and production knowledge, the region's output will explode.
And the splitting of Europe NW/SE, driven partly byproductivity issues, will continue a long-term SNS trend.
2. Corporations trump nations - even in war. While we areall used to thinking just the opposite, given the Bush/Cheney/Wolfowitz PaxAmericana, the former is true and those who saw Paul O'Neill's 60 Minutesinterview, with the map of an Iraq divided between oil companies, taken fromBush's first week in office, will agree.The just-discovered list of corporations and nations Hussein was payingoff in oil contracts to oppose the U.S.invasion further proves the point.
It is fair to say that at the same time nations show theirpower, they show their weakness.
In other words, the Pax Americana stays in place, andcorporations become the defining power structures which play upon thatlandscape. Corporations already dominatethe American electoral and legislative process, and this discussion soheatedly debated by anti-globalization demonstrators will seem a thing of thepast by year end.
3. The online world becomes real. As suggested, onlineretail sales in Q4 of '03 just about doubled.In Q4 of this year I suspect there will be an even higher growth rate,perhaps 3-4x.We have just moved from a time in which online sales were experimentaland risky, to a time when everyone turns to the Net for purchases.
As the idea of platforms moves from hardware boxes to onlinesites, the growth in online offerings with sophisticated, safe and helpfulcustomer offerings will see terrific growth.And as these sites continue to open their technology and customer basesto other businesses a la eBay and Amazon and Expedia and Autobytel.com, we'llsee an acceleration in transactions at all price ranges with high-ticketitems purchased becoming more commonplace.
Last year will become the last in which online transactionswere considered unusual; this year the online world becomes the realworld.
4. 2004: The Year of Broadband. Although U.S.citizens may wonder about this, the time is now: whole nations are alreadythere, and many more are moving as quickly as they can. Countries that understand the power ofpublic/private partnership in accelerating the deployment of broadband as aneconomic stimulus will become the economic leaders of the next decade. That puts places like Singapore,South Korea, Hong Kong, Canada,Taiwan, Iceland,Denmark, Belgium,Sweden, Austria,Netherlands,and Japan, inthe vanguard and ahead of the U.S. If your country's leaders haven't figuredthis out yet, find new ones.
As broadband penetration increases, look foradvertising-based business models to return, further feeding megamedia bottom lines and the ranks of startups.
5. The dollar has bottomed, but there will be no immediate strong return. As with jobs, I think a large number ofinvestors somehow think that the dollar will come rushing back to priorstrengths as soon as the Fed begins ratcheting things up which they arecertain to do this year at least immediately after the Novemberelection. (Yes, I think"Fireman" Greenspan is just vain enough to hold off till then inreturn for another already-promised term.)
Raising rates will certainly strengthen the dollar, but Idon't expect the Japanese to stop being interventionists, nor do I expect those3MM lost jobs to reappear, while I do expect Bush to continue running up thedeficit. The result: a mild renewal ofinterest in the dollar, but not enough to create major movements.
More interesting on the currency front: how do the Europeansbattle Asia in the currency wars, perhaps using thedollar as a tool? They could sell Yenand buy dollars, in order to drive the Renminbi up and increase leverage in theU.S.market. With the Japanese doing the samething, we may see an intervention-based dollar strengthening, but it won't besustainable.
6. Biotech finally fulfills its promise. Even today,this sounds like a dream that may never be achieved, but by the end of the yearwe will become used to the idea that the long-held dreams of designer drugs andgenetic treatments are real.
Although this will just be the tip of the iceberg, the useof genomic data in cures will provide the first indication that all of thosehopes were well-founded, once we had the right basic model.
SNSers know that the real model of genetic control has yetto be described; we'll save that for another year.
7. The first "magic materials" are made in commercial quantities. SNSers know that scientists have madeamazing progress in designer materials, from learning how to assemble Buckyballs (buckminsterfullerenes) and carbonnanotubes to fine-tuning crystals for their electro-optic properties.
While many people are very excited about everything nano, itis less clear to some that one of the great revolutions of this century will bein what we used to call materials science, as we learn to first invent and thenproduce materials with properties literally perfect for each use.
I expect we'll see extremely strong production-quantity nanotube materials this year, and some wonderful surprisesin opto-electronic materials as well.
8. We no longer livein a Microsoft World. This isprobably hard for non-industry types to believe, insofar as they areexperiencing ever more contact with the Redmond colossus, but for those inside the industry this is becoming obvious.
Two years ago, it seemed as though MS were an inevitablejuggernaut that would consume every technology market on the planet. Today, as a litany of successful newplatforms arise and as the definition of platforms changes this seems muchless a threat.
If the MS folks are smart, they will use this change, judofashion, to rid themselves of the monkey they've been carrying on their backfor a decade. In a perverse way, beingjust another big kid on the playground is the next best way for them to expandthe empire. Whichleads to ---
9. Thehub relinquishes control, as intelligence and connections flow to the edge. In "the olden days," as my sonwould say, intelligence and connectivity were scarce and expensive, so theywere put at the hub of all IT org charts, with dumb, non-connected devices hungoff them. (And yes, a number of vendorsmistakenly see this as the map for invading the den and living room today.)
Now that intelligence is cheap and connectivity (via WiFi,powerlines and even Cat-5 interior cabling) is ubiquitous, the rules havechanged. Not only is everything smart,but it is increasingly common to find devices going straight to the Net,without the permission and gatekeeping functions of a central PC.
That's a switch.
10.Worm attacks and worm-driven spam gets worse, and anti-virus softwarebecomes mandatory. Both Billg and Ihave suggested that, now that we're getting legislatively and technicallyserious about penalizing spammers and stopping spam, we will have this problemunder control in a couple of years. (Andyes, Billg is an SNS member, and no, I don't know if he just made that call inDavos because he read it here recently.)
But, having just been through a particularly disturbing weekof worm-generated wasted time, I have a brand new suggestion, which I thinkyou'll really like.
Under this new "Kill Spam" regime, I am going tosuggest that no computers be allowed to connect to the Net without up to dateanti-virus software. If you connect andyour software is nonexistent or out of date, your ISP (whose system will do anauto-detect on this) will offer to sell you whatever you need, perhaps evengive you a week-freebie update for a couple of times, or to send you where youcan get it from someone else. In eithercase, ISPs will not be allowed to allow you onto the Net until you areprotected.
The legal point is this: like driving without insurance, ordriving drunk, it is irresponsible (and very dangerous to others) to go withoutupdated protection.
This would not stop all spam (we still need penalties andtools for that), but it would eliminate or defuse worms, worm-driven spam, andthe much more serious danger that they pose to the Net.
Just a thought, but it should work fine. This last is more a proposal than aprediction, but I have no doubt that serious, radical steps will need to betaken, and taken soon, to preserve the operational integrity of email and theNet. That we'll be driven to that stateof affairs is an easy prediction to make.
Your comments are always welcome.
Sincerely,
Mark R. Anderson
Quotes of the Week
"[The Department of] Commerce wasconcerned the rapid price declines for computers made the figuresmisleading."
-- The U.S. Bureau of Economic Analysis, quoted Monday in
Steve Milunovich's special report on "Techonomics."
Imagine how good the growth figures would have looked duringthe last administration if all of the computer hardware numbers had beenmultiplied by eight before publishing them, the effect such current practicehas had on figures since 2000.
"In the communication sector, the long drought is overnow."
-- Taiwan Semiconductor Manufacturing Corporation Chairman MorrisChang, at an earnings news conference last week. (See Upgrades).
"We could pattern a surface that shows the nanotubes where to start. There's a host of nano-structures you canbuild based on this stencil."
IBM researcher Kathryn Guarini, in announcing a new breakthrough in creating nanocrystal flash memory, and in manufacturing structures using self-assembling polymersanchored to silicon dioxide; reported to the IEEE in December, and quoted in small times last week.
"I think thisis an area where you can take back market share pretty quickly."
-- Motorola CEO Ed Zander, as the company's resultsshowed a rather miserable performance in cell handsets; quoted from the WSJ. Samsung, Siemens and Sony-Ericssonmight disagree.
UPGRADES
Q3 '03: A Funnier Number Yet
SNSers know that Iam on the record claiming that the GDP figure for Q3 last year was"funny," in one of the following two senses: it was either wrong, asin miscalculated or misrepresented; or it was wrong, in the sense of being asport figure driven by one-time handouts, and therefore not representative ofthe health of the U.S. economy.
At the time the figure was reported, I suggested that,rather than the 8.2% claimed by the government, the real figure was closer tothe 2-3% range.
We now have confirmation of that fact, in the form of Q4 GDPfigures. Keep in mind, Q4 tends to bestronger than Q3, in both consumer and business spending; the figure, reportedlast week, was 4%. For the year, reportedGDP grew 3.1% (vs. 2.2% in 2002 and 0.5% in 2001). If we take out the funny business from the Q3figure, we would end up with exactly what was suggested, a 2-3% growth rate forQ3 and relatively flat growth, or a very small increase, YTY in GDP.
For those who think no one is playing with these numbers, Irefer you to SNSer and Merrill Lynch VP Steven Milunovich's report entitled"Techonomics," out Monday morning (see also Quotes andEthermail). Steve first alerted SNSersto the government's new practice of overstating computer hardware figures a fewweeks ago (in response to the first Upgrade on this subject). Now he has issued a full report, notifyingclients that the government will no longer provide the real figures on spending(until now they have provided both), but will only show "hedonic"figures.
He has calculated the effect such "price-adjusted"spending figures would have had in the 2000-2003 timeframe, and concludes thatcomputer hardware GDP contributions would have been 8x the real figures.
In other words, the government is now using Moore'sLaw to puff up GDP, and they have decided not to provide the real numbers toinvestors.
This is important, because computer hardware (includingchips) is a bellwether for the U.S.economy, which in turn helps us to predict both IT and general economic movesworldwide. If a company spends $100 onhardware, and the government reports it as $200 well, things will look prettyrosy.
That Q3 03 number was as fake as Itold you it was. I would now expect tosee actual 2004 GDP in the range of 3-4% YTY and this includes all theelection-year pump-priming. Theun-pumped part of this will probably be about 3%.
TSMC Numbers
SNSers know that wekeep a pretty close eye on Taiwan Semiconductor (TSMC, nyse: TSM) and United Microelectronics (UMC) asleading indicators of broad trends in computing and consumer electronics.
Here are the numbers:
For Q4, earnings were up 526.9%, to 16B New Taiwan dollars($479.3MM), vs. NT 2.55B YTY; revenues were up 40.1% YTY to NT 57.8B from NT41.2B, and 5.3% QTQ from NT 54.9B.
The company revised its projection for global chip revenuesupward, from 20% to 26% YTY. TSMC alsoprojected increased investment in facilities, and noted that in Q4 equipmentwas being run at greater production capacities than that for which it was designed.
Projections for utilization figures going forward were"100% or greater," underlining both the opportunity and the problemfacing the company.
Expectations had been just under the earnings figure, butclose enough that the stock fell a bit on the announcement.TSMC performed as hoped last year, serving asour bellwether early in 2002 and leading a semi recovery for the year.The company's customer list includes Motorolaand TI, and the Chairman noted a strong resurgence in telecommunications (see Quotes).
Although the YTY compares to a very weak quarter, there isno doubt that TSMC is responding to the rapid return of the cellular andconsumer electronics market, as well as the boom in laptop computers.
This report suggests a very strong computing and consumerelectronics year in 2004.
Looking At Flat Screens
We've done well inpredicting the sales ramps of flat screen TVs over the last two Christmasquarters, and SNSers are no doubt already aware that this was indeed one of theprimary hits of this last season. Thesewill drive ancillary home markets in networking and peripherals (audio,surround sound, secondary Net connections) in the future, so we're all interested from an industry perspective.But what if you just want one?
As readers of The Members' Corner are aware, we have alsogotten an increasing number of requests about the screens themselves: what tobuy, at what price, from whom, etc.?
I started my education in this market exactly one weekbefore Gateway began shipping their relabeled Finnish Plasma TV sets. For those in this market, that week separates A.D. from B.C. I had some seriousfurniture-imposed size constraints, and was ready for a big screen. I went so far as to spend a week or twoinvestigating, and a day looking, and came home with a delivery slip for a Hitachiprojection TV that, surprisingly enough, would just barely fit into the rightshelf in our armoire.
The day after the big box hit the porch, Gateway made theirannouncement: a 42-inch plasma TV at half the cost ($2995 then) of the goingrate for similar models from Philips and others ($6K). Without a thought I shipped the big box back,bought the Gateway model, and have loved it ever since. (It is worth noting that, contrary to onerecent newsletter report, this unit comes trueHDTV-capable, and some models include tuner electronics as well.)
I had already decided that I would prefer the HighDefinition tech be in a separate box, so that as it advanced I wouldn't have toconstantly swap in my television. All ofthis worked out perfectly, and I can highly recommend the Gateway model.
I have not tried the Dell TV, which is similarly priced, butI assume it represents a similar value.
One can go from 42 inches up to about 60 inches in thistechnology, and all you need is money.The screens are stunningly bright and sharp. There is some talk of worry about burn-in,but when was the last time you left your TV on one image all night? The lifetime, according to the Gateway rep,is about ten years, and you'll never regret a moment.
The rest of the field in plasma remains in the 2x range, andwhen I really want to feel smart and thrifty I go to my favorite audio/videoshop (Definitive Audio, www.definitive.com,in Seattle) and look at the sametechnology from various Japanese makers for up to about $12-20K.
There are two other technologies worth looking at: liquidcrystal display (LCD) screens and projection TVs. The state of the art is not yet ready (in myopinion) for large-format LCD screens; the latency is still too high, despiteequally lofty pricing for big screens. So that temptation is removed, at least until the end of this year,when I'm told that large format screens with refresh rates similar to plasmawill be available.
If you want something smaller, however, LCDs could beperfect: latency issues go away, and they are nothing if not portable,hang-able, and cool looking. You'll payabout a 50% premium over a cathode-ray TV, but prices are reasonable in thesmaller formats, and I think we'll see a very large number of these in homesthis year, particularly as secondary screens outside the den.
Finally, Best Buy says that, despite all this expensivemagic, most of their Q4 sales were in projection TVs. I really did like the Hitachibest, but there are a very large number to choose from. Things to watch: any unit you buy should comeHD-capable. Viewing angles can rapidlydegrade with projection units, which means know the room where it's going, andmake sure you won't lose picture quality at those viewing angles. It's worth checking the repair story andprojection bulb life stats, since some models do poorly in this regard.
I hope that sheds a non-industry little light for those whohave asked about this subject. Keep inmind that LCDs and Plasma screens are more fragile than your old TV, and areparticularly vulnerable during moving and installation; you might consider awarranty for this reason alone.
If you use satellite, DirecTV now has an HDTV box, as does EchoStar; ask for it.And if you really want to enjoy your new unit, put Finding Nemo on theDVD player.
Which reminds me: I think Pixar is now on its way tobecoming a real institution, its split with Disney is Eisner's loss, andsomeday we'll look back at this moment and remember when Pixar began toovertake Disney whose cartoons look (and are) silly compared to the artisticmagic of Stevej's rendering machines.
ETHERMAIL
Re: ***SNS***: The Immigrants Respond
Mark,
Thanks again for all the airtime. Glad it struck a chord.
I was surprised you didn't mention in your comment on MyDoom that the attack onSCO is pretty much the kind of thing that I suggested the"scribe-tribe" could do when they had a point of view and goal. Oh my God - maybe it's not just one worm-writing hacker, but a whole tribe!Maybe they even represent a large DN body of opinion: "Give us what wewant or we'll clog your Internet!
no wait - it's OUR Internet!"
Will Ashcroft soon be building internment camps for the Digital Natives?
Best,
Marc Prensky
Founder & CEO, Games2train
Author, Digital Game-Based Learning
www.marcprensky.com/blog(weblog)
www.marcprensky.com/writing/default.asp(writings) www.dodgamecommunity.com
www.socialimpactgames.com
www.digitalmultiplier.org
www.games2train.com
Marc,
I wonder what a Digital Native internment camp would look like? Probably an open field with no plugs, no screens, and only flowersand wild animals.
If it's true that one or more DNs are behind theMyDoom/Novarg Worm, I hope the Immigrant FBI hunts them down like analog ratsand puts them into an Immigrant Jail for an inordinate amount of time, with acouple of Immigrant books to read.
Thanks again for stirring up our members. I suspect your piece will serve as aninspiration to other members interested in writing Special Letters.
Mark Anderson
Mark,
Great job. I was inspired to write by William R.Pickard's &Art Kleiner's letters re: Marc Prensky's article. [SNS: The Death ofCommand and Control?] Justa couple of quick thoughts.
1) The furor over "Intellectual Property" has great meaning to a guylike me, who lives off book and movie royalties. And yet, am I alone infinding Larry Lessig's views on this matter less than perfect? I think it'sterribly important to remember what patents, copyrights and other IPprotections were designed FOR.
They are not about some mystical 'property rights." They were invented fortotally practical reasons.
Patents and copyrights were (and remain) above all means for bribing creativepeople out of an underground economy of closed guilds, tightly-guarded tradesecrets and exclusionary protections, into the open, where others could see anduse and improve upon their innovations. A reasonable profit, in exchange forletting everybody use and leverage upon the creation.
Remembering that goal makes it clear that Marc's 'natives' are no more wisethan those RIAA 'immigrants' who want to turn back the clock, using federalcourts to sue teenagers. Both sides are so high on self-centeredindignation -- citing airy-fairy principles -- that they cannot see the needand opportunity to innovate. If we fail to find new ways to rewardcreative people, they will start going back underground. On the otherhand, we may have to let go of some old reward systems that are obsolete.
2) Regarding the military, I agree that something miraculous hashappened. I believe that George Marshall should have been named the"Person of the 20th Century" for about twelve reasons. Hisvision for a USmilitary doctrine that emphasized dispersed authority and individualinitiative is coming true as we speak.
3) The problem is that every trend that lessens hierarchical gradients andencourages creativity runs against counter-trends based on human nature. Look at history. The most 'natural' formof government is conspiratorial cheating by a small cladethat takes over and then hires an ad agency (bards, magicians, wizards,clerics) to justify continuing the cheating across generations. Thisisn't a matter of left-versus -right. Commissars and aristocrats andfeudal lords all did it.
It's not something to get angry about. Every generation simply has to find newsolutions that continue to engender creative competition, rather than thelatest attempt at an aristocratic coup. Heck, our entire civilization isbased upon fighting this part of human nature. It's why we're the firstculture to make suspicion-of-authority a core element in our mythic system.
The amazing thing is that we've developed rule-based systems -- markets,democracy, courts and science -- that have all found the only effectiveantidote to cheating. It's called accountability. Reciprocal,vigorous and mutual criticism. And it can only happen in the open.
4) What I'd like to see discussed someday is a best guess as to what wouldhappen if, suddenly, all ownership were openly avowed and no longer secret. Worldwide. From bank accounts to stock shares tomask-registered tankers at sea.
Notice that this does not suggest any change in taxation or any kind of confiscature... though certainly some cheaters would haveto return what they stole. Indeed, such knowledge might increase respect forlegitimate property rights and due process, by reducing public cynicism. Anyway, you'll not find a single reputable economist, from Caltech to Harvard,who does not say that capitalism works best in the open.
DO we have any idea who owns what, in this world?
More fundamentally (and I really am curious), would it really hurt us -- orenterprise capitalism -- if everybody knew who owned what?
Just poking away. (It's my job.)
With cordial regards,
David Brin
www.davidbrin.com
[San Diego]
David,
I love your idea about full disclosure; it does judo oncorruption. Take what they own, and makethem show it. It will never happen, ofcourse, but maybe we'll read about its potential beneficial effects in a newBrin book sometime soon.
I agree completely with your statements regarding powergroups protecting their money and influence.I know, from our talk at last year's Future in Review Conference, thatwe also agree on the disutility of the terms "left" and"right" in modern politics.How can a group that believes in increasing the size of government,taking away our rights, and running up trillions of dollars in deficits, becalled either "right" or "conservative?" All you can say about this behavior is thatit is designed solely for remaining in office, for staying in power by givingthings away things they don't own, but merely control, such as ourchildren's' indebtedness.
We also agree on both the misguided last-grasp efforts ofthe RIAA, and the importance of protecting intellectual property, and in this Ialso concur that Lessig, trying to be modern, is off base. Bill Neukom, when general counsel atMicrosoft, once said to me that the first step in China's growth would be toget the rule of law in place, and the second step would be to protect IPrights. Chinaseems to be trying to agree, despite natural (and historic) instincts to the contrary.
My hope for Digital Natives is that they will be moreoriginal and creative in designing and using these tools than we were. But rather than doing this against a backdropof slacker anarchy, I hope that they, too, find the protection of the rule oflaw for their IP, so that they can continue doing it. In this, I find a missing piece of theDigital Immigrant theory: it's one thing to downloadfree songs at work, assuming you have a job to begin with. But it's another if your work is programming,and no one wants to pay you: suddenly, being an Immigrant just sounds likebeing a sucker.
Even Natives grow up, have kids, get a mortgage, and want totake care of their families, and as they move through these phases, I suspectthat some of the attributes and behaviors that Marc has observed in teens willremain just that.
Thank you for writing in, and welook forward to seeing both you and Marc Prensky at FiRe 2004.
Mark Anderson
Mark,
Re: Intelligence, or lackthereof --
My father in law (recently deceased) was one of the members of the UK security committee within the Foreign Office somedecades ago, and privy to the intelligence advice given to the then primeministers.
I recall his comment to me leading up to the Iraq war was "The PM must know something he can'treveal, hence his otherwise illogical determination to go towar". His old colleagues, with whom he was still in touch,were of the same view. In other words, we may have to give the PM thebenefit of the doubt, because in his personal experience such situations hadarisen before and we would have to wait decades until any details ofintelligence advice would be made public.
No "classified" tittle tattle from this 85year old was forthcoming. I would have liked to have been a fly on thewall when these old FO [Foreign Office] types did on rare occasions gettogether privately. What little I did learn, however, was that Murphy's law frequently intervened in foreign affairs and much energywas expended by them as diplomats to smooth matters out and cover upindiscretions and cockups galore.
The Hutton enquiry and its consequences for the BBC are merely welcomediversions for the UK government and will pale into insignificance in duecourse. These days we won't have to wait 30 years. As the PMis the defacto head of the UK intelligence service it follows that it is he whomust carry the can when it's total failure withrespect to advice on Iraq is evidently irrefutable.
The only hero in all this sad affair is Dr Kelly. His "off the record" disclosures could never be described as a dangerto the "State," merely to its servants, i.e. the government of theday, who deserve everything coming to them.
Of course, as messrs Blair, Straw and Hoon are all ex lawyers, we should not expect a cleanfight, but there will be an election soon enough.
I suspect that whatever the "truth" of the intelligence advice givento the current PM and the way it was used/misused, Murphy's Law will be shownto be alive and well. The good news is that that is not a reliable defence in English law, nor remotely persuasive inpolitical elections.
Tim Coldwell
[TECSA
Paris and London]
P.s. http://www.bbc.co.uk/radio4/today/
0750am Today Programme, Jan 29th, 2004
"If we take Hutton's results as read ... we are left with an intelligencefailure." Former JIC Chairman and Chief of Defence Intelligence, Sir John Walker.
[And, a short while later]
The great whitewash
Rod Liddle says that Lord Hutton gave the government the benefit of the doubt,sometimes to the point of appearing either hopelessly naive or a visitor from akinder, gentler planet
<http://www.spectator.co.uk/article.php3?table=old§ion=current&issue=2004-01-31&id=4213>
(Note: It should be pointed out that Liddle was the editor of the"offending" Today Programme.)
With Liddle, Dyke and Davies now out of the BBC straightjacket, Teflon Tony hasmade some dangerousenemies who were formerfriends, party supporters/donors. They have found out what he is reallylike.
Tim
Tim,
Thank you for this on-the-ground view of the after-effectsof the already-infamous Hutton Report.(For those not following British news, Lord Hutton released a reportlast week completely clearing the government of any wrongdoing in "sexingup" the threat posed by Iraqin order to make the case for war, while severely criticizing the BBC formaking this accusation, and leading to resignations by three top managersthere.)
I'd like to share two thoughts about this situation that arefurther underlined by the Hutton Report, and by your letter.
First, I think that Tony Blair was put into an impossiblesituation by the U.S.'sudden and irrational demand for war with Iraq:you are with us, or you are against us.This tactic, applied to the rest of Europe,turned decades-long allies into mistrustful potential enemies on the worldpolitical stage, almost overnight.
George Bush was willing to risk the U.S./ British "special relationship," without doubt the most importantalliance to both countries since World War I or before, to get his IraqAttack. Tony Blair was not, and in someimportant sense, this was to his credit.I am extremely sorry that our nation put your nation into such aposition, particularly when we were outright wrong, but we did, and Tony wasleft to deal with it.
My guess is that this is "what Tony knew" that hewas unable to discuss with the people of Britain: he was going fully aware into a baseless military campaign for the sole purposeof saving the alliance.
And second, having said this, don't you find the coverup ballet danced by the two countries to be anintellectually-embarrassing pas de deux?The leaders lied to their people, then tried toget the intelligence chiefs to fall on swords.When that failed, and as the duped became aware of what had happened, wecalled for a reckoning. The WMDinspectors tried to tell the people that they were being lied to. The intelligence services, sensing before thewar that they were being set up, tried to tell the legislative bodies that theydid not believe Iraqwas a threat. And, now that both leaderslook like idiots for having gone to war without cause, they are doing all theycan to switch the issue back to an intelligence failure with attendantmulti-year studies, instead of facing the real question, which is why they liedabout intelligence reports less bullish on war than they were.
In the U.S., before the war, CIA Director George Tenet hadthe personal courage to go before the Senate and testify that he was indisagreement with the president over the threat presented by Iraq, and thatthey should not think that the CIA approved.This was testimony given in public, although one wonders, twelve monthslater, how many people remember.
If this weren't about a war, it would make for an amusingmusical. You could have each side,British and American, in different colored outfits, going through the samelitany of dissemblings and excuses. Butit is a war.
My kids have difficulty understanding how Bill Clinton couldhave been impeached for lying about a sexual peccadillo, and yet Bush can lieabout intelligence to lead our nation into a war he personally demanded, withimpunity. On that level, Tony is equallyto blame.
I think the Hutton Report is a sham, and it appears, fromhere, that there is already a serious backlash to it in Britain.The idea that the government is blameless,and that one should again Kill the Messenger, is notgoing over well among a people who are already, for some reason, betterinformed than their U.S.counterparts regarding their role as dupes in this drama.
Even so, it appears that Tony Blair is in no immediatepolitical danger, except that he may have lost the respect of his people, andperhaps have lost any chance at passing future important legislation. Bush is not so fortunate: although he hadlunch with now-resignedWMD inspector David Kay this week, the cat is out of thebag. In a news conference held soonafter Kay's revelation that not only were there noWMDs, but Kay had believed this before the war Bush looked confused anddefensive. In two separate pollspublished yesterday, Bush trailed Kerry by 8%.
The U.S./ British special relationship is vital to both countries' future plans. If I could, I would apologize to your countryfor our having put it at risk. This wasdangerous adventurism at its worst.
Mark Anderson
Mark,
Subject: Pixar - Jobs
<http://www.sfgate.com/cgi-bin/article.cgi?f=/news/a/2004/01/29/financial1621EST0115.DTL>
Watch this space I would bet on Sony winning the battle to lock down Pixar. Thepotential for links to Apple, and the development of a movie version of iTunesand the iPod is just too big to ignore.
Apple on the ascendancy, second-hand, with more than 65% of the downloadedmusic market going to iPod, and also now a license deal with HP in the backpocket so that Steve will not make the same mistake he did with the Mac OS.
Also note that every major label is part of the iTunes deal.
This guy is SMART
Phil Eastick
Strategic Consultant
[Adelaide, Australia]
Phil,
Indeed he is. And Ithink you've picked up on the one aspect of this deal that I find mostimportant: Steve has finally taken his efforts beyond the Apple base (which,last I heard, had now fallen to about 1.5%, probably an untenable number). And it is for this reason, if for no other,that the rest of us should pay attention.
Steve has always been the greatest product guy in the world,and probably the greatest marketer. But,in computing, it turned out that this was inconsistent with open technicalenvironments, so there was never a serious after-market hardware / softwaresupport system for Macs. In this sense,he failed to understand the importance of the ecosystem into which he put hismachines.
With the iPod, it's different: he has intentionally enteredthe music ecosystem with all players represented. Everyone benefits each time he sells a song(perhaps others even more than Apple).Did anyone catch the irony in the Super Bowl deal in which Pepsi paysfor and helps market a million free downloads from iTunes? Remember Steve's comment to Sculley aboutstaying at Pepsi and just selling sugar water?
I think this new point of view gives Stevej and Apple folksa chance to move their great ideas into much larger markets, and I look forwardto them continuing to do so.
While Sony and Apple have been longtime friends and rivals,and although Sony was approached in the past to purchase Apple, I think Applenow uses this new leverage to move into alliances with groups new to the Appleecosystem. Sony will no doubt beinvolved, but Apple is finally growing up and into a larger business stratum.
Mark Anderson
Mark,
No doubt this is more thanyou want to know, but the gov't has stopped reportingreal computer figures, only giving the nominal numbers. They still do thereal calculation though. The reason for the lack of disclosure appears tobe people like us (and you) pointing out how hedonic pricing overstates tech'scontribution to the economy.
Steve Milunovich
[First Vice President
Merrill Lynch
NYC]
Steve,
Thanks for keeping SNSers, and the world, up to date on thisissue. We've now gone through thecorporate scandals, where CEOs lied to us about their accounting; theaccounting scandals, where their auditors lied to us about their accounts; themutual fund scandals, where mutual fund managers skimmed profits on apreferential basis and forgot to tell us; and the investment banking scandals,where the banks forgot to tell us that the Chinese Walls were not being used inAmerica.
So it only seems right somehow that it would be thegovernment's turn to find a way to lie to us about the GDP. I hope that your work in this, and ours,leads to some pressure for a return to disclosure of real numbers. We have some Senators in our membership, soyou never know.
Thanks again for helping us understand this important andunfortunate development.
Mark Anderson
