Saturday, June 12, 2010

The Transformative Power of Rick Santelli's Rant

The Transformative Power of Rick Santelli's Rant

After the latest round of primaries, some lessons can already be drawn from this political year. Incumbents are not popular, especially Democratic incumbents. Democrats' big government programs are hugely unpopular. Economic distress has made Americans yearn not for more government but for less.

How to explain something contrary to the New Deal historians' teaching that economic distress increases support for big government? Clues can be obtained, I think, by examining what amounts to the founding document of the tea party movement, Rick Santelli's "rant" on the CME trading floor in Chicago, telecast live by CNBC on Feb. 19, 2009.

That was less than one month into the Obama administration. The stimulus package had been jammed through Congress almost entirely by Democratic votes six days before, but the Democrats' health care and cap-and-trade bills were barely into gestation. Chrysler and General Motor had received temporary bailouts, but their bankruptcies were months in the future.

"The government is promoting bad behavior," Santelli began. The object of his scorn was the Obama administration's Homeowners Affordability and Stability Plan providing aid to homeowners delinquent on their mortgages.

"This is America!" Santelli declared. "How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills?"

Granted, the words are not as elegant as those of Thomas Jefferson or John Adams. But the thought is clear. Santelli was arguing that the people who, in Bill Clinton's felicitous phrase, "work hard and play by the rules" shouldn't have to subsidize those who took on debts that they couldn't repay.

This was both an economic and a moral argument. Economic, because subsidies to the improvident are an unproductive investment. We know now that very many of the beneficiaries of the administration's mortgage modification programs ended up in foreclosure anyway. Subsidies just prolonged the agony.

But it's also a moral argument. Taking money away from those who made prudent decisions and giving it to people who made imprudent decisions is casting society's vote for imprudence and self-indulgence. It mocks thrift and makes chumps out of those who pay their own way. We should, Santelli argued, "reward people that can carry the water rather than just drink the water."

While scarcely taking a breath, Santelli went on to denounce the administration's Keynesian economists, deployed to defend the huge spending in the stimulus package and in the budget the new administration was preparing.

"They're pretty much of the notion that you can buy your way into prosperity. And if the multiplier that all of those Washington economists are selling us is over one that we never have to worry about the economy again, that the government can spend a trillion dollars an hour because we'll get 1.5 trillion back."

The reference is to the argument made by administration spokesmen that every dollar of government spending would put something more than a dollar into the economy. Past research, including some by Obama's chief economist, Christina Romer, cast doubt on that theory.

Now we can check the results, and the research seems to have been right. The administration said the stimulus package would keep unemployment under 8 percent. It's been at 10 percent, rounded off, for 10 months now. About 95 percent of new jobs in May were temporary Census Bureau positions.

"Cuba used to have mansions and a relatively decent economy," Santelli went on. "They moved from the individual to the collective, and now they're driving '54 Chevys" -- which left him unable to resist a dig at GM and its co-owners-to-be the United Auto Workers -- "the last great car to come out of Detroit."

"If you read our Founding Fathers, people like Benjamin Franklin and Jefferson -- what we're doing now in this country is making them roll over in their graves." No one would mistake Santelli's cri de coeur for the prose of the Founders. But their grievances against Britain, like Santelli's complaints about the Obama Democrats' policies, were rooted in moral considerations as well as economics.

"We're thinking of having a Chicago tea party in July," Santelli said. As it turned out, thousands of previously uninvolved citizens flocked to tea parties all over America even sooner, and now they're making their mark in primaries and special elections. New Deal historians can't explain that. Rick Santelli's rant does.
 Rick Santelli

Sunday, June 6, 2010

How a Silly Phone for Teens Reveals Microsoft’s Plan for Us All

How a Silly Phone for Teens Reveals Microsoft’s Plan for Us All

How a Silly Phone for Teens Reveals  Microsoft's Plan for Us All
Despite its mobile prowess, Apple sucks at the internet. But surprisingly it’s Microsoft—not Google—that’s best positioned for Our Future in the Cloud. Here’s why.
It’s common for writers to trot out the Google/Apple binary. It’s not entirely invalid: Yes, following spectacular success with the iPhone and the App Store, Apple has let its online ambitions — Mobile Me and the like — whither. And Google, inexperienced in hardware and consumer software as it may be, is an internet company, so you’d expect it to be ahead of the curve when it comes to, well, using the internet.
But consider Microsoft, the lumbering giant, the sprawling monster. This is a company with more experience online than the other two companies combined; which could, if it wanted to, brings peoples lives—their media, their documents, their photos, their everything — online in a way that its competitors only dream of.

The Sacrificial Kin

I didn’t give the Kin, Microsoft’s new social network-y, teenage-aimed handsets much credit as phones, or as products. (They’re seriously flawed, and fatally overpriced.) Yet the one unequivocally great feature is a web service called Studio. The concept is simple: Each Kin phone automatically and transparently uploads virtually everything created with the phone to Microsoft’s servers, from photos and videos to text messages and social media updates. Everything can later be accessed through a single web interface. It’s no surprise that the Kin came from the same team that had designed the Sidekick years earlier.
It’s a stupidly simple system, but for some reason the effect is stunning. Here’s my stuff, on my phone. Here’s my stuff, on my computer. Here’s my stuff, on another computer. Why doesn’t every phone work like this?
How a Silly Phone for Teens Reveals  Microsoft's Plan for Us All
Kin Studio bears all the hallmarks of a pilot program, with a limited scope of ambition—there’s no outgoing email or SMS component, nor is it particularly powerful as a photo management tool—as well as a severely limited deployment. If the Kin sells at all, it’ll be to a narrow slice of the population. A sample group, basically. This sample group will glimpse the future of Microsoft, and without knowing it, the future of how we use gadgets.

A Clear Path, for Once

The Kin is Microsoft’s polished vanguard—considering its likely failure in the market, perhaps more like a feint—but it’s also indicative of what Big M could be moving toward. Microsoft has been open about its ambitions to merge the Kin and the forthcoming Windows Phone 7, albeit well down the road. Before launch, Microsoft’s Aaron Woodman said as much:
He wouldn’t confirm anything, but did say that a few years from now, we shouldn’t be surprised to see a point where the two platforms are more interrelated. That may sound like a typical Microsoft “mañana, mañana” promise, but given the rate at which Microsoft cooked up both Windows Phone 7 and Kin, adjustments to either roadmap probably wouldn’t be that difficult.
For the Kin, this means apps. For Windows Phone 7, one hopes, this means Studio, or something like it.
But in many ways, what Microsoft is telling us here is painfully obvious: In the future, their mobile OSes will necessarily combine, because our phones will be mere extensions of our online epicenters; bulging hubs of data from which we conduct our computing, and our lives. Of course Kin and Windows Phone will share more DNA in the future—they’re powered by the same conglomeration of servers. They live in the same cloud.
Whether or not this is a good thing is a different discussion entirely, because it’s well on its way to happening. Google, Apple and Microsoft are all run by people who understand, to varying degrees, that our data is moving online, and all of the companies want to be there when this finally happens, dutifully archiving, repurposing and serving all of your information. Microsoft is just two steps ahead.

Microsoft’s Dormant Army

All this talk about Kin, Windows Phone 7 and Studio is interesting not so much for what these products are, but for what they mean. They are healthy evolutions of existing products, with some great new features. They mean that Microsoft is serious about the cloud, and that it’s (hopefully) ready to wield its massive stable of online services to dominate cloud services. To name a few:
How a Silly Phone for Teens Reveals  Microsoft's Plan for Us All
• Live: They might not have the same userbase as a lot of Google’s services (though some aspects are actually wildly popular, and have been for years) but, Microsoft’s spread of Live services is massive. There’s (Hot)Mail, Calendar, Messenger, and contacts. There are photo galleries, folder sharing and bookmark syncing. And of course, there’s the Live ID, a single login for all of them.
• Live Office: Like Google Docs, except created by the company that inspired Google Docs. Officially, and in name, this is simply part of Live.
• Xbox Live: There are two ways to view Xbox Live: As a part of the individual Xbox experience, or as a staggeringly massive social network, which could be leveraged onto other devices, and into other products. (Guess which one Microsoft sees?)
• Live for Mobile: Aside from mobile versions of Live services, Microsoft’s got Mobile backup, and mobile messaging.
• Zune: Anyone with a Zune Pass has experienced a very particular aspect of the cloud: The prospect of unlimited, on-tap music, streamed from faraway servers.
• Skydrive: This is perhaps the most silent of Microsoft’s web services (Do you use it? Didn’t think so.) but easily one of its most formidable. It’s a web drive, well-integrated with Microsoft’s existing web services, and fairly well integrated with Windows. (Though not so much with OS X.) It’s a bit like Dropbox, except for one tremendous difference: For signing up, you get 25GB of space. 25GB. Free.
In other words, Microsoft already has in its possession all the pieces it needs to embarrass Apple’s meager online efforts, and even enough to dominate over Google, with vastly more developed music and gaming tech. In other words, Microsoft is ready to own our online lives—almost.

What Microsoft Needs to Do

For all the promise we see in Kin Studio, and all the potential power we see in Microsoft’s sprawling empire of cloud-ish services, it won’t amount to anything if Microsoft doesn’t force it together. Microsoft’s various continents are prone to drifting apart if left unchecked.
It’s an trivial feature, technically speaking, but Google’s Dashboard will blow you away.
How a Silly Phone for Teens Reveals  Microsoft's Plan for Us All
It’s a one-stop interface, showing you just how much of your information Google holds, where it is, and how you can access it. Google’s always been smart about this: Every service of theirs you use has the same ID, the same login, and links conspicuously to its stablemates. And the brand is inherent. Google.
Now, imagine if Microsoft did this with their services, if the process of using Microsoft Office Live, Hotmail, Xbox Live, Windows How a Silly Phone for Teens Reveals Microsoft's Plan for Us AllMessenger and Zune was this integrated, and this unified.
Microsoft has feinted toward this goal a few times, and yeah, your Live ID will get you past a lot of the checkpoints in Microsoft’s online world. (The homepage is a relatively comprehensive Dashboard as-is.) But they need to take this principal so much further: I’m talking about merging Xbox, Zune and Live into a single mega-service. Letting our Windows Phones upload their photos, videos and text data, Kin style, not just into a cordoned-off site, but into a main hub. Letting the same account that you pay into for Xbox credits accept payments for Zune. Mingling the friends I met gaming with the friends I met in real life.

What Microsoft Is Already Doing

This is what they need, and according to Microsoft’s Brian Hall, the General Manager of Live:
If someone wants to access their stuff, their files, their devices, they should be able to go to one place to do that.
Microsoft seems to understand that the feeling of control is important to consumers, and that the ability to administrate via some kind of dashboard, to feel as though you’re operating within a coherent ecosystem is important, but their approach so far, and going forward, is more subtle:
I absolutely think there should be one place to [manage your online presence]. At the same time, I think that the way people will interact with their people, their stuff, their information, will be much more within the context of an application. I will email with people through my email, I will share photos and view photos through my photo application, I will play games with people through my gaming system. I think we have to do both really well if we’re going to give people not only the experience they want, but the control that they need. We’re definitely investing, and focused, on doing that.
This—this—is Microsoft’s secret weapon: depth. If Microsoft rolls out an online service, it doesn’t just join a stable of other, complementary online services, it has the potential to reach every corner of Ballmer’s empire, from cellphones and music players to PCs and gaming systems. A company like Google has to convince its users to jump onboard. Microsoft, via its tremendous software and hardware userbase, already has them—and through Windows, Xbox, Zune and the like, has a direct line through which to feed its online services. They have the means, and according to Hall, the will. All that’s left is to see if they can execute.

How They Could Blow It

What’s left is for Microsoft to sell a vision, subtly but convincingly, to the masses. This is no small feat for a company that can be maddeningly unfocused. But just as grave as the threat that the vision would hold together is that the actual ecosystem could fall apart. Just last week Microsoft saw Robbie Bach, President of Entertainment and Devices (Zune, Xbox, Media Center, Kin, WinPho, Courier) outed, with his suboordinates now answering directly to Steve Ballmer himself. This could draw the various far-flung limbs of Microsoft together, which would make everything we’ve talked about here more plausible. Also possible: It could throw what remains of the E&D structure into chaos, and sabotage all that potential—the potentially massive unification of Xbox, Zune, Windows Phone and Live—that Microsoft’s depth has given it.
Last week’s news shouldn’t change too much, in theory. But the instability is worrying.
It’s staggering to think how close Microsoft is to realizing the inevitable future of computing, especially when you contrast that with how out of touch they sometimes appear to be. But truly, Microsoft’s engineers have already done the legwork, and with a little guidance, and little clarity, it could be Microsoft—not Google or Apple—that’ll accept all the data that we’re so willing to give.


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