Category: From the Old Server

This article about last weekend’s Moosehead Lake seaplane fly-in (only two crashes) contains a great idea for any pilot faced with an FAA or NTSB inquiry:  “my flight controls malfunctioned”.  Anyway if you read the article you’ll find out why insurance companies don’t like seaplanes…

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Today’s NY Times has a timely story on the record industry’s latest lawsuits against 261 of their customers.  My favorite part:

… But record industry officials said that some people who contacted the record industry group after learning that they had been subpoenaed have already agreed to settlements averaging about $3,000. The settlements are expected to be slightly higher for those who are named in the lawsuits.

“It’s our version of an olive branch,” Mr. Sherman said. [referring to the demands for $3000+]

Got to love Amy Harmon, the journalist, for getting that quote!

I enjoyed this paragraph almost as much as flipping on the television up at Moosehead Lake.  It was tuned to CNN and Larry King was interviewing some sort of right-wing Christian.  Just as the TV came on, with no context, the talking head uttered the words “I consider Justice Kennedy to be one of the most dangerous men in America.”  [Referring to the 65-year-old Anthony Kennedy, appointed to the Supreme Court by Ronald Reagan in 1988.]

Rarely is the news media so entertaining!

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Hmm… one of the nice things about software like what our students at MIT build and like what’s behind photo.net and philip.greenspun.com is that all postings are stored in a standard relational database management system such as Oracle or Microsoft SQL Server.  It is virtually impossible to lose transactions in a commercial RDBMS.  This server, though, runs its own object database and it seems to have eaten all of the comments on the Music CD item (from Friday).  Fortunately I have many of them in email alerts and I’m posting them here…

Anonymous:  As “anti-corporate” attitudes become more mainstream, it’s become easier and actually enjoyable to help the music industry fail. Many people now *do* think as they download, ha! the music industry just lost my dollar. Watching them fining college kids with voracious appetites for music just makes me want to steal more.

Ted Marcus (http://www.tedsimages.com): The only people the record companies are at all interested in making happy are the executives and shareholders (in that order) of the conglomerates that own the record companies. It’s strictly about greed. And it completely explains the ridiculous behavior of the record industry. As you noted, the conglomerates desperately desire to retain complete monopoly control over the production, distribution, and pricing of the product they call “music.” Unfortunately, the consumers who are supposed to be eagerly paying full price to the conglomerates for their product recognize that the product is overpriced. The product is also of continually declining quality as the conglomerates seek to maximize profit by putting out a narrow and repetitive range of “hits” formulated by accountants to target a particular demographic. The conjoined twin of greed is arrogance, which in this case prevents the media conglomerate executives from recognizing that their overpriced formula-driven pap isn’t attracting consumers. So they resolutely insist that something is wrong with consumers rather than with their industry. In desperation, they declare war on consumers and bring on the legal equivalent of nuclear weaponry to vanquish the “piracy” that they insist is the sole cause of their declining revenues. The only other industry I know of with so much arrogance that it treats paying customers as an “enemy” is the airlines– and we all know what sort of shape they’re in. The arrogance and greed of media conglomerate executives also prevents them from recognizing that their desperate tactics to save their monopoly only antagonize their customers, drive them away, and create further justification for choosing alternatives to paying $20 that contains one worthwhile song. As you also note, the “answer” to this problem is to embrace and exploit the needs and desires of customers rather than waging pointless wars to preserve a dying marketing model (the dinosaur eating its tail). If anything, the capitulation by Universal in lowering its prices is an excellent sign that the executives of at least one conglomerate are beginning to see beyond their own greed and arrogance. Perhaps they will begin to realize that the only way they can survive and prosper is to offer a desirable product at a price (and distribution method) that customers will accept. This realization will require a major paradigm shift, forgoing the “need” for immediate spectacular profit in favor of a more reasonable profit over the long term. If the shift does occur, it may even portend a shift beyond the media conglomerates. But I’m not holding my breath.

Enloop(?): When I was a member of the prime music buying demographic, I bought hundreds of CD’s, often on little more than a whim. Many of those CD’s were played once or twice before taking up residence in a cardboard box in a closet. Price wasn’t really a factor. In addition, many of those CD’s were purchased while I lived in the UK, where prices of 15-20 quid were common. But, somewhere along the line, that compulsive need for a music fix subsided. Today, I might buy 2 or 3 CD’s in a year, if that. (And those are likely to be reissues of music recorded decades ago.) I don’t download music because there’s nothing on offer that I want to hear, whether it is free or 99 cents a track. In other words, I don’t spend money buying music for the same reasons I don’t buy comic books — I’m well beyond adolescence. If others have experienced the same thing as they grow older (and our population is aging) then decreased music sales — via any medium — are here for the long term.

Justin (http://www.streeteclipse.com): If I could go to a record/cd store and put any 20 songs on a cd I would glaldy pay $10-12 for this. It would have to be *any* songs I choose, not just 200 or so. I would even wait a couple of days for this order to happen. The record industry could have been doing this for years.

BadGimp:  Why I buy less CDs these days: I have discovered that I buy less CDs now in part because I have ripped most of my 400+ CD collection onto my PC, and uploaded all of the liabrary of songs to my 20 gig iPod. NOW I find I am listening a lot more to the music I already own and finding that I desire new muisic less and less. Guess I have good taste 🙂

Simon Hawkins:  I sometimes use a Russian service (web site) which allows me to download selected CD tracks (mp3s, actually) for between 2 and 5 cents apiece. I am gladly paying this, and so will many others. Micropayments are definitely better than macropayments.

Albert Lash:  Merchandising, Philip, Merchandising! Several years ago I threw away all my CD cases and sleeves opting for the more convenient carry all. These days, when thinking about inviting prospective dates and girlfriends I kick myself and wish that I could take up all my shelf space with my ultra cool CD collection,! allowing them to freely browse, seeing firsthand what good taste I have. (Here, have some salt.) Now I keep my CD cases so that I can buy a cool CD holder too. I even save my books – I used to give them away after reading them. Also worthy of note is the logevity of CD’s – they don’t last very long! Vinyl records are the best for that, but they REALLY take up alot of space, and worse yet, the most efficient way to store them makes them incredibly hard to browse and organize. Whats worse is that the edges of the sleeves do not last long making them even harder to show off.

Federico Mena: Pay-a-reasonable-amount-to-the-artist may get to work very well for four-guy rock bands, but what about studio recordings of big orchestras? Those take a lot of resources.

Tom Hoffman (http://tuttlesvc.org): See also Steve Albini’s essay, “The Problem WIth Music,” which predates Courtney Love’s speech by a few years. http://www.negativland.com/albini.html

Jagadeesh Venugopal (http://www.jagadeesh.com): The trick is to price music at a cost where piracy would be no longer worthwhile for most people. Imagine you could get a song for 50 cents. And you could transfer this song to any device you wanted without any DRM hassles and with a song buying interface that is straightforward. Would you not want to just buy the song outright instead of tracking down a friend, copying it to a transferable medium, then copying it to your hard disk, etc?

Undertoad (http://cellar.org/iotd.php): Real/listen.com Rhapsody is a similar model; pay $9.95 for all-you-can-stream. For anyone doing most of their listening at/near 128kb or bandwidth, it’s a tremendous deal.

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Record stores around the country have been closing; our local Harvard Square HMV closed a few months ago.  Universal is cutting CD prices by 30 percent (but not for classical).  The really interesting question is how did the industry survive for so long?

The record companies don’t make artists happy (see Courtney Love’s speech from May 16, 2000).

The record companies don’t make government regulators happy, having been prosecuted for price fixing and other antitrust law violations.  (see this Federal Trade Commission consent order)

The record companies don’t make convenience seekers happy.  A CD is absurdly huge compared to the number of bytes that it holds.  Why would you want to devote a whole bookshelf to storing a collection of 500 CDs when the same music would fit onto a pocket-sized MP3 jukebox?  Why would you want to lug your music from house to office or house to car when the MP3 files could be easily copied onto a separate device?

The record companies don’t make environmentalists happy.  A digital file that could be transferred electronically is instead encased in a plastic anti-theft package, a plastic shrink wrap, a plastic anti-piracy sticker, a plastic jewelbox, and a plastic disk.  Why pump all that oil out the ground and make all those environmentally unfriendly wastes when we have multiple magnificent electronic infrastructures that can carry a song?

The record companies don’t make audiophiles or technophiles happy.  The encoding system is so badly designed that 80 percent of the bits in the disk’s data stream carry no information, which is one reason that MP3 compression is so successful.  They forgot to allocate a few bytes for the name of the album or the titles of the tracks on the disk so you have a medium that stores 700 megabytes but not the critical text information that you’d want to see (if, for example, you loaded your CDs into a jukebox).

CDs are so badly engineered that they actually have more distortion than the LP records that they supplanted, especially for classical music (the CD is at its least accurate for very quiet sounds but works great for Heavy Metal).  Most serious audiophiles listen to analog LPs or the new DVD-Audio and Super Audio CD (SACD) formats.  The record companies have done their best to alienate their least price-sensitive customers by charging insane $25/disk prices for SACDs and releasing only a handful of titles in the new formats.

How does an industry like this survive for so long?  Faced with high monopoly prices, why wouldn’t consumers simply turn on the radio or TV, watch DVDs instead of listening to music CDs, or … (gasp) read books?   Actually that may be what is happening.  The record industry likes to blame the peer-to-peer file sharing services but these are awfully painful to use.  Someone with money to spare could presumably find something more entertaining to do than wait for half-broken files to download.  More likely Joe Average looked at a nice collection of 500 CDs being offered for sale at the old prices and said “Thanks, but I’d rather have a brand new car instead.. and it comes 20 channels of free music on the radio.”

Copyright is created by the government in order to encourage artists.  Due to a combination of technology stagnation, lack of imagination by the music industry, and price fixing by record companies, the artists haven’t been getting too much encouragement, at least not as a percentage of the $12-15 billion in annual revenue (source).

In the long run it is tough to see how the average consumer would be willing to pay more for music than the $10-12/month that Sirius and XM satellite radio charge for a subscription [I’ve tried both XM and Sirius by the way; XM has a lot of tremendously annoying commercials and “house ads”, even on the ostensibly commercial-free classical station; Sirius is much superior.].  It probably makes a lot more sense to treat the Internet as another form of subscription radio.  Individuals pay 25 cents per hour to listen to music, up to a maximum of $10 per month, and the revenue is divided up among the artists according to how much airplay there was.  To make it work would probably require “trusted systems” such as the new Microsoft Palladium environment but at least this fits with how consumers actually like to buy stuff.  Most people don’t want to make a lot of 25 cent or 99 cent purchase decisions every day.  They’d rather pay a fixed known subscription and have the freedom to “flip channels” to their heart’s content.

Actual sales figures seem to bear out this idea.  While the CD industry has seen unit sales drop by 10 percent and has resorted to suing 20-year-olds, Sirius had signed up more than 100,000 subscribers by June 2003, less than a year after beginning operations.  XM, a slightly older, cheaper, and (in my opinion) crummier service has nearly 1 million subscribers.

People will pay for music but they won’t pay $18 for one song that they really want to hear that otherwise could be nicely stored in less than 1 cent of hard drive space.

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The news lately carries reports that George W. Bush is going to ask the U.S. Congress for an extra $65 billion to rebuild Iraq.  Presumably this pushes the cost of the Iraq operation well over $100 billion.  Is it worth it?  It depends on whether or not you have faith in technology.

Karl Taylor Compton, one-time president of MIT, was a believer in technology.  Here are his words from 1938: “In recent times, modern science has developed to give mankind, for the first time, in the history of the human race, a way of securing a more abundant life which does not simply consist in taking away from someone else.”

The Arab world does not share this perspective.  In a region where illiteracy is common and people lack the ability to manufacture the most simple items the best way to get richer is in fact to steal from neighbors (viz. Iraq’s takeover of Kuwait in 1990).

George W. Bush has some things in common with Arab rulers.  For example, he is uninterested in technology and owes his wealth to family connections and special deals.  For this kind of person it makes perfect sense to invade an oil-rich country and pump out the underground wealth.

What would an engineer do with $100 billion?  Perhaps start by asking whether if the money were spent on building nuclear power plants we wouldn’t need Iraq’s oil.  Let’s look at the numbers.

A nuclear power plant, using crummy old technology, costs less than $2000 per kilowatt-hour to construct (source) so $100 billion would suffice to build 50 million kilowatt-hours or 50 gigawatts of capacity.  Total U.S. 2001 electricity demand was 670 gigawatts (source).

You get about 641 kwh per barrel of oil (computing backwards from this source).  So those 50 million kwh save 78,000 barrels of oil per hour, which in a 24-hour day is 1.8 million barrels per day.  Compare this to the U.S. total imports of about 10 million barrels per day (source) and total Kuwaiti production of 2 million barrels per day or 2.5 million barrels per day for pre-war Iraq.

Roughly speaking, then, the amount of money the American taxpayer is spending to improve life in Iraq would be sufficient to generate as much power as all of the oil being pumped out of Iraq under the most optimistic scenarios.  This is assuming no technical innovation in the design or construction of nuclear power plants (there are actually a bunch of slick new nuke designs that could be cheaper and safer, e.g., pebble bed, at $1000/kwh).

Nuclear power is, of course, very unpopular, and it would probably be possible to generate quite of a bit of electricity with $100 billion of wind and solar power.  But let’s stick with nukes for the moment.  Under the worst case scenarios it is very hard to see that nuclear accidents or waste could kill as many people as are being killed by oil.  Burning oil fills the atmosphere with CO2 (10,000 deaths in France last summer, perhaps as a consequence of global warming).  Burning oil fills the atmosphere with filth (many thousands of extra deaths from lung cancer every year).  Buying oil from people who hate Americans causes deaths.  Without Saudi wealth, all of which is derived from oil sales, Sept. 11th would not have been possible nor would various embassy bombings and other mass killings of Westerners (at least 5000 people in the last couple of years).

The Earth is abundantly supplied with energy.  Why are we mud-wrestling with Iraqis when we could be working around the source of their power?

[Minor caveat:  oil isn’t actually used for much electricity generation in the U.S.; most of it is coal, natural gas, or nuclear already.  To replace all of the U.S.’s imported oil with electricity we’d have to get people to drive to the 7-11 in Toyota Priuses instead of Hummers, put much more advanced electronic engine controls on most engines, and probably put some of that $100 bil into fuel cell and electric car research.]

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Our nation seems to be gearing up for the 2004 elections… more than a year in advance.  At first glance you’d think that the Republicans couldn’t win.  Here’s a party that represents rich people, corporate executives who loot from average Americans’ mutual funds, and Enron.  A party that can take credit for focussing on the welfare of people in Iraq while Americans are losing their jobs.  You’d expect George W. to get votes from Jack Welch, Kenneth Lay, William T. Esrey, and a few other rich guys.  But why would another 49 million Americans vote for the Republicans?

Basically the Democrats are the party of mediocrity.  Schools are in bad shape, sure, but maybe if we pay the existing bureaucrats and teachers more money we could achieve a 2 or 3 percent improvement.  Not this year but maybe in five years we’ll see results.  Government services are shoddy and sluggish but perhaps if we raise taxes by 20 percent they can be improved slightly.  We have to come to terms with the fact that we’ve sucked most of the North American continent dry of oil.  Troublesome foreign dictators and rioting mobs can be appeased for a few years if we look the other way while they build more advanced rockets and nuclear bombs.

This could explain why Democrats are popular with very well educated people, such as college teachers.  When you’ve got a PhD and think that the average person is frighteningly stupid you don’t dare hope for anything better than mediocrity from a government that is inevitably operated by citizens of average intelligence and education.

The Republicans by contrast are the party of grand aspirations.  Inner city children will be able to choose from a range of high quality schools, all competing with each other.  Taxes will be low and economic growth will be strong.  We’ll get back to a pre-WWII state of oil independence if only we start drilling in obscure wilderness corners of Alaska.  Restive Muslims worldwide will be awed by American military power into abandoning their dreams.

The Republican goals may be unrealistic but they are inspiring, just like the goal of winning the Lottery.  And apparently equally popular…

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A variety of airplanes and ultralights have parachutes in case of catastrophic airframe failure, mid-air collision, engine failure over the ocean, the only capable pilot on board suffering a heart attack (passenger pulls ‘chute), or any other situation in which for some reason the plane can’t glide in to land.  The company that makes most of these, including the ones in the Cirrus airplane (“a machine for preventing the world from becoming overpopulated with doctors and lawyers”), is http://brsparachutes.com/

As it happens the situations in which a parachute is helpful to an airplane are extremely uncommon and the common hazardous situations that fixed wing pilots get into are not helped by a parachute (hence the Cirrus having a much higher accident and death rate than the venerable Cessna 172, despite the older plane’s lack of parachute).

What about a helicopter though?  If you screw up an autorotation and let the blades get below a critical speed you drop like a rock.  If the tail rotor gets damaged the machine becomes uncontrollable.  If various other parts come off, the machine becomes uncontrollable.  The military sticks various sensors above the rotor blades.  Why not put a parachute up there?  The BRS site shows some that weigh 30-40 lbs. and would easily float a Robinson R22.  Out of the payload of 400 lbs. that’s quite a bite.  Would provide some incentive for helo students to lose weight (my instructor is 190 and I’m 200 so we’d have to lose 10-15 lbs. each to fly with a ‘chute, for example).

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Howard Dean complains that recent Federal tax cuts primarily benefit the richest 2 percent of Americans.  This sounds unfair and unreasonable unless you ask the question whether it makes sense to tax rich people at all.

Consider John Richman.  He works as the CEO of a public company and earns $20 million per year.  Suppose that a greedy state government such as New York tries to tax Mr. Richman.  As part of his job, John is entitled to unlimited free travel on the fleet of corporate jets and with $20 million/year in income a person can easily afford 6 houses.  John has the corporation buy a penthouse triplex in Manhattan that he can use a few days every week but he tries to spend as much as time possible in his beach house in Florida and on his ranch in Wyoming.  When tax time rolls around John declares his residence to be in one of these two states, both of which lack any kind of income tax.

When John shops for Impressionist paintings, yachts, and collectible Ferraris, you can be sure that he is smart enough to have it all delivered to one of his homes in a state free of sales tax.  As long as there is one state in the union without a sales tax, it is impossible to collect sales tax from John for 99% of the stuff that he buys.

Suppose that the federal government tries to put a heavy tax on John’s $20 mil annual income.  John has a lot of flexibility about how he brings his money home.  He can elect to put it into a deferred compensation account so that it won’t be taxed for many years to come.  He can give himself stock options and then take the money out later when the market has risen a bit, thus converting current income to long-term capital gains, taxed at a maximum rate of 20 percent.

Suppose that John accumulates a lot of wealth during his term as CEO.  If the American authorities get really aggressive about taxing it he can afford to hire lawyers and accountants to shield his wealth from taxation.  If worst comes to worst he might put it into a tax-exempt Virgin Islands business or possibly move his wealth altogether out of the United States.  John is presumably retired by this point, in possession of $200 million in wealth.  He doesn’t need to remain in the U.S. in order to work.

By contrast let’s consider Jane Rabblewoman.  She works as a Walmart cashier and shops at Walmart.  Jane doesn’t have enough money to maintain multiple houses.  If she were to move away from her high-tax state she’d not have enough money to afford airplane tickets to travel back to see her friends and family.  Jane’s income is a sitting duck for state tax authorities and it doesn’t really matter how low taxes are in some other far-away state.

Because Jane doesn’t have a second home and a private jet she does most of her shopping locally and thus pays sales tax on the majority of her purchases.

As a point of political rhetoric it makes sense to talk about how the rich should pay tax.  But as a practical matter it seems virtually impossible to collect tax from the rich, except perhaps for property tax.  Could it be that George W. Bush cuts taxes for the rich not because has so many rich friends but rather because he recognizes the impracticality of actually collecting?

[Note that the idea of taxing what’s easy to tax rather than what is fair isn’t original.  The Europeans have a sales tax that is triple what we’ve got in the U.S. and more broadly applied (they call it Value Added Tax and it is between 16 and 25%).  They put in V.A.T. partly because so many people were cheating on their income tax whereas VAT is easy to collect.]

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Edward Tufte’s Q&A forum contains a very interesting thread linking to an air traffic animation prepared by NASA to show one day of air traffic over the continental U.S.  As long as we’re following the Great Man, it is worth linking to an online version of his article in the September WIRED magazine.  Much better to get the full essay (available from www.edwardtufte.com), of course, but this one is just a mouse click away…

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Just back from an overnight party in what Manhattanites would call “the country” (a two-hour drive up the Hudson River)…  New Yorkers are definitely different from the backward academics here in Cambridge.  Lots of guys at the party were classic late 1980s “masters of the universe” Wall Streeters, drinking single-malt Scotch and smoking cigars.  An 11-year-old boy, who attends an expensive private school in Manhattan, responded to the standard “What do you want to be when you grow up?” question with “I want to be an investment banker.”

Managing other folks’ money and taking 2% off the top every year sounds great but there is a dark underside.  One mother noted “I wish that we never had to go back to the City.  Every day that I’m in Manhattan I’m reminded that there are millions of Muslims out there trying to blow us up.  Three of the parents in my kids’ school were killed in the World Trade Center.”

[A fellow who puts money into new insurance companies (where they expect to earn a 15% annual return!) noted that September 11th cost insurers $50 billion, making it the most expensive loss in the history of the industry.]

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