The Business Insider

The Age of Outrageous Ideas

By Jack B. Rochester, Managing Editor

A remark attributed to the great French philosopher Voltaire goes something like this: "I disapprove of what you say, but I will defend to the death your right to say it." It seems a fitting phrase for the plethora of views of our modern world, economic systems, ways of life, etcetera: think of a problem or issue and somebody's written an article, blog, or book on how to correct it.

The latest entry is Joshua Cooper Ramo, weighing in with his first book, The Age of the Unthinkable. Ramo, a former editor at Time [a magazine - remember?] and currently employed by Kissinger Associates [yes, that Kissinger], gives us a great read and much to think about regarding aspects of the world and its systems that we can do next to nothing about.

Books of this seem to be proliferating. They're reviewed in the New York Times Book Review, The New Yorker, and at the book's Amazon Web page. Who reads them? Or even parts of them? Why do publishers think we'll buy them?

How about you - what book of outrageous ideas are you reading, and why? I'd love to hear your thoughts.

Cheers,
Jack

Big Brother Redux in China

By Jack B. Rochester, Managing Editor

Is it a coincidence that, within a day of the 60th anniversary of the publication of George Orwell's prescient novel, 1984, the repressive, dictatorial, Communist Chinese government issues an edict that all imported computers must have its homegrown filtering software installed?

 

As if Vista wasn't slow enough to begin with!

Chinese officials say that "unhealthy information" must not be exposed to its people. Under the guise of blocking pornography, this "Green Dam" will block other topics the Communist leaders don't want, "...Web sites that discuss the Dalai Lama, the 1989 crackdown on Tiananmen Square protesters, and the Falun Gong, the banned spiritual movement," The New York Times reported.

Jon Zittrain, professor of law at Harvard Law School and co-founder of the Berkman Center for Internet and Society, says Green Dam can scan all your personal data, working both directions, so to speak: an insidious Big Brother, just like in Orwell's 1984. You can hear Jon's views here in an NPR interview.

This is a big deal, and scary like North Korea's sentencing the two women journalists to 12 years at hard labor. Make no mistake, even as addle-headed as the Chinese leadership is [and they don't hold a candle to Kim of The North Korea], and even as worried as they are about saving "face" in the view of the world, these are political animals bent on larger issues. [Interesting, how to the Chinese Communist government leaders, saving face about Tianaman Square and social criticism on the Internet consists of sticking their collective head in the sand.] 

Not only are these leaders obsessed with saving face, but they are utterly humorless. Consider the story of "the grass-mud horse...an example of something that, in China’s authoritarian system, passes as subversive behavior. Conceived as an impish protest against censorship, the foul-named little horse has not merely made government censors look ridiculous, although it has surely done that."

I've spent time touring China and have seen its policies at work on its sweet, interesting people. It's very sad.

And it's scary because the Chinese hold most of the paper on the U.S. That means they can pretty much dictate trade and finance terms, and even if a particular company - say Dell - decides it doesn't want to play ball, you can bet that our government will "encourage" Dell to do so.

There's no negotiating with these new Chinese regulations. No computer vendor doing business with China was consulted. It was a fiat, plain and simple. Do we really want to continue to roll onto our backs and let this government tell us how to build our products and do business with them?

I think not. We should be doing business with countries with whom we share common values and want to explore the future.

Yet I think that's exactly what will happen. The Chinese leaders have probably thought through all the implications, ramifications and ratiocinations of their act. We're caught flat-footed, belly in the air, and no position to fall back upon. Regulate. Comply.

That's too bad.

Regretfully,

Jack

Jack B. Rochester is a professional writer and editor who has worked in nearly every aspect of publishing since 1974. He heads Joshua Tree Interactive, and is Managing Editor of The Business Insider blog.

Are There No Limits To Intellectual Property?

By The Business Insider Editors

In the song "Taxman," the Beatles sang, "If you take a walk/I'll tax your feet." A similar phenomenon is being considered by the Supreme Court: If you cook up an idea for a way to do business, can you call it unique enough to patent it? The end result being, of course, that you can then charge others who want to use it: If you think of an idea I already thought of/I'll sue your butt.

"Here's an Idea: Let Everyone Have Ideas"

What's considered intellectual property in the past decade has grown like weeds in a garden. According to the National Football League, a journalist can't use "NFL" in a news story without advance, written permission. Now, according to a story in the New York Times,  a couple of yahoos named Bernard L. Bilski and Rand A. Warsaw think they own an "idea," masquerading as a "business process," which is described in the Times article as "a method of hedging risks in the sale of commodities, including the risks associated with bad weather."

The notion is absurd. In his blog discussing the first court opinion of this case, Joe Mullen wrote at his blog, "I suppose Mr. Bilski's company, now run by his old partner Rand Warsaw, will have to keep making its money the old-fashioned way: allegedly, by helping power companies overcharge consumers with dubious billing schemes."

Say we come up with an idea for a way to think about education, bicycle lanes, soup, nuts, and call it a "business process." We somehow get a patent for it, then we sit around and wait for somebody to replicate it - now we can sue them for damages, thus furthering the ghost economy where nothing tangible is either bought, sold, or in this case transacted.

This is stinkin' thinkin' and it's the cause of much ruination of our economy. It's utterly ludicrous that the Supremes are even hearing the case. Bilsky and Warsaw didn't get a patent, and their case was rejected by lower courts. All we can reasonably hope for is that the Spreme Court throws out the case.

We'd love to see the gang at "Boston Legal" do this one on their television show. They'd have a ball.

The Business Insider Editors

The Early Warnings About Banking That We Didn't Heed

By The Business Insider Editors

The U.S. military has long had early warning systems (EWS) to protect against provocation from other military powers. Why didn't we have one for the banking system, perhaps our most vulnerable asset - both physically and electronically? There were three early warnings that banking was in trouble:

• The Savings & Loan industry meltdown
• All kinds of trading and investing businesses being categorized as "banks"
• The banking and finance industry calling its services "products"

Still not sure what's happening/happened? Please do yourself a favor; watch this interview with Elizabeth Warren, the Harvard law professor tapped to oversee TARP.

Second, read [as much as you can] of The Economist's Special Report in the May 16-22 issue, "Three Trillion Dollars Later...." It's a thorough, worldwide analysis of what happened and how to move ahead, unlike anything you'll read in the lightweight American newsmagazines.

The Obama administration is working on this, of course, but we all need to pitch in with our two cents worth - pun intended.

The Editors

A Veritable Whirlwind of Reg & Compliance Activity

By The Business Insider Editors

The complete 180-degree turnaround from the Bush administration's lassitude about regulatory matters to the Obama administration's activity in just a few months is mind-boggling to us.

It seems that no sector of the economy, nor entity affected by the regulatory or compliance environment - from the largest business to the least empowered citizen-consumer - is unaffected. And it's not just rhetoric: consider the President's pushing the implementation of credit card reforms up from July, 2010, to Memorial Day, 2009, or the signals regarding conscience in healthcare.

An interesting article from Reuters regarding the Obama administration's first 100 days in office and push for regulatory reform discusses this trend. It's worthwhile reading, because it discusses many aspects of regulatory change and reform and it shares some interesting comments and viewpoints regarding them. For example, one interviewee thinks the uptick in reg & compliance activity is because we've moved into a slower, down economy: good economic times means no regs, but poor economic times means more regs.

We're not so sure about using this correlation to explain extremely different political and social viewpoints between Bush and Obama. Give this article, "First 100 Days of Obama Administration Pave Road for More Regulation," a read. What do you think?

The Business Insider Editors

No Post Today for Regulatory & Compliance

See you next week!

The Business Insider Editors

On Government, Enterprise, and The Legacy of David Souter

By The Business Insider Editors

New Hampshire's license plate bears the words, "Live Free or Die," from a letter written in 1809 by the state's most famous warrior, General John Stark: "Live free or die: Death is not the worst of evils."

David H. Souter, the Supreme Court Justice, has announced his retirement from the Court. He was an Attorney General and a Circuit Court judge in New Hampshire before his appointment.

After New Hampshire changed its license plate tourism slogan, "Scenic," to "Live Free or Die," a rebellion of sorts ensued: some motorists, for personal or religious reasons, wished to cover up the phrase. The Supreme Court ruled that New Hampshire could not prosecute them for doing so.

It's interesting to learn that a government's wish, by use of this remark, to portray its state as independent and free would then attempt to sue its citizens for behaving with personal independence and freedom. We find parallels in what's occurring in the new Obama Administration, which while liberating the U.S. citizenry from an oppressive and seemingly irresponsible Administration which practiced an extreme form of governmental-enterprise laissez-faire would turn around and begin running America's corporations. First it was banks, then the auto industry, and now back to banks.

Faced with a crisis of his own making, one might ask, What would Bush have done?

Few astute observers would dispute that the government and banking have been in bed with one another forever, but the question was always: who's on top? In today's cozy environment, it's difficult to say who's running the show; we, the vox populi, seem to have lost perspective on what happened to those bad-boy bankers and if they're calling the shots or acting as advisors for the "regulators" these days.

We're not siding with one or the other; no, we believe change is good, and it is essential that we seek out new business models to fit the changing times in which we find ourselves. That's why it's more than a little distressing to hear and read of simplistic calls for a woman to replace outgoing Justice Souter. Bush chose him because he believed he was a conservative; after all, New Hampshire has long been considered the bastion of New England conservatism, unlike its neighbor to the south, Massachusetts. But even that has changed: New Hampshire is growing more liberal all the time.

While it's just fine to seek qualified women for the Court opening, it makes more sense to us to seek a person of any gender, race, or persuasion who will bring even-handed justice to his or her opinions - as did David Souter. More than ever, we need a sense of balance and moderation in how government governs and how businesses conduct enterprise, for indeed, what happens in the United States is still the shot heard 'round the world.

The Business Insider Editors

Banking Stages A "Quiet Coup"

By The Business Insider Editors

We recently had lunch with one of our favorite colleagues, a former owner of several businesses, a college professor of mathematics and physics, a successful venture capitalist and cagey investor - all in all a pretty smart fella. At one point in our conversation he said, "I look around and I say 'Where's the recession?"

Nick Danger would say, "In your eyes, Lt. Bradshaw."

Well, now the answer is more than a glint or glimmer in the eye: Please take the time to read the cover story in the May issue of The Atlantic entitled "The Quiet Coup: How Bankers Took Power, and How They're Impeding Recovery" by MIT Sloan School of Management professor and chief economist at the International Monetary Fund (2007 - 2008) Simon Johnson. The following excerpt may whet your appetite - and sharpen your pique:

"...for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.

"The great wealth that the financial sector created and concentrated gave bankers enormous political weight—a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent."

Perhaps the largest question here is, will the Federal regulatory agencies ever recover from having their power stripped from them by the bankers? We need to worry about this in exactly the same way we worried about the credit card companies manipulating the U.S. Comptroller of the Currency over interest rates. That may be about the change, however getting regulatory control over the national - and international - monetary system is going to be a bit more of a slog.

The Business Insider Editors

Accountability: What's Your Policy?

By The Business Insider Editors

We're playing a bit fast and loose with Liberty Mutual's slogan this week to bring up a point: The Obama Administration is moving quickly on a wide variety of fronts to establish new regulations, as well as enforce many that already exist. It's really quite extraordinary to see how quickly government can move when properly [sic] inspired. Consider:

• Within days of plausible deniability from "top officials," we learn that waterboarding - at first said to be legitimate because it was used on our own troops - was in fact used to expose them to how the Chinese Communists were likely to torture them. Anybody for a screening of "The Manchurian Candidate" here?
• Many banks have become gun-shy of Federal aid and are returning funds, citing fear of having a tarnished image as a recipient [think giving money to the homeless here] and the distinct possibility of having to adhere to more stringent reporting requirements. Bankers: can't live with 'em, can't shoot 'em.
• And across the board, the Obama Administration is driving more transparency in the spending of economic stimulus dollars. But wait - when We the People bailed out the banks and other financial institutions, who did we hire to do the regrouping and spending? The same guys, right? Well, in the new administration this task will fall to -surprise - We the People. To learn how this will work, go to Jerry Brito's new Web site, StimulusWatch. Brito is a Fellow at George Mason University and is intent on assuring that officials administering all this money are held accountable.

Cynics will say - indeed, have already said - that we may only know where one in three of these dollars are spent. Brito's idea is to use technology - a kind combination of a kind of Twitter and Wikipedia - to monitor stimulus money expenditures. It could work. Maybe we won't see a repeat of ripoff contractors like those who plundered New Orleans after Katrina. Now we can even see real dollars and cents reporting for Congressional salaries.

Your takeaway: It's a good time to be transparent, keep your nose clean, and be a leader in fiscal accountability reform. What's your policy?

Information Governance An Asset for Compliance

Editor's Note: This is Part Two of a three-part special on the changing nature of information governance, begun on Monday in Business Intelligence, continuing here today, and concluding in Technical Documentation tomorrow.

By The Business Insider Editors

"The cable of the pendulum
A plumb-line dropped into a pit

Around the edge of wooden pins
The orb describes our daily turn

The thing's all swing steadily ticking
The velocities of the hours

To rise and fall and rise again
Through the stillness of the middle

It makes an unmodern motion
Around the mind this measurement...."

This excerpt from "At Griffith Observatory, Los Angeles," by Eric Rawson, seems a poetic version of how the world works, swinging back and forth like a mindless pendulum, unaware of the lessons of history, a mere circumstance that has gone too far one direction and now must come back, incapable of finding any kind of stasis in the middle. 

So, as surely as one U.S. Administration leaves its mark - in this case the second Bush Administration creating a regulatory environment where almost all bets were off - the Obama Administration has begun to correct what it views as needing "fixin'." Few would argue that, given the financial and business fallout from the past eight years of little if any regulation, many things need to be fixed.

That said, it's a sure thing we will see many new and revisited regulations to throttle the errors and abuses that have occurred: pollution, corruption, tax evasion, etc. But many would argue that it is not the government's role to be the repairman. Nevertheless, it will take up that mantle, and we can only hope all will be better for it. 

Governance. We know it by many names and variations, including Information Governance, e-Governance, M-governance, and so on. Implicit is a basis, or rationale, in establishing regulations and terms for internal and external management and attendant compliance, whether the particular form of governance applies to information or business practices or mobile phones or (shudder) government oversight.

Governance is a global issue; we have seen that what occurs in the U.S. has a domino effect around the world, and this is as true of regulation and compliance issues as it is with banking and finance matters. At its heart, governance is about managing information from an entirely new perspective and at an entirely new, higher level to assure that compliance edicts are met.

The takeaway is this: How come we have U.S. governments where Administration-driven policies, regulations, laws, etc. are like wide, wild swings of the pendulum whenever there is a regime change? We have noted the interdependence of worldwide governments; is this any way to run the world? What would be a better, more stable solution? The G20? The World Bank? We welcome your comments.