Philip Greenspun’s Weblog

If we believe what we read in the newspaper, for the past few weeks we have had all of our top legislators and executive officials occupied with the challenge of saving GM and Chrysler from the indignity of a Chapter 11 reorganization.

Stepping back from this waste of time and effort there are a few question worth asking…

Question 1: Given that our government can’t run its own core functions efficiently, why did we think that a government-appointed “Car Czar” was going to be able to solve GM and Chrysler’s problems?  The federal government is going to spend $400 million for each new presidential helicopter that it buys.  Under a cost-plus contract, the $30 million Augusta/Westland EH101 morphed into the Lockheed Martin VH-71, a machine with nearly identical specifications and appearance that costs more than a Boeing 747.  Are we paying for speedy delivery?  The first EH101 flew in 1987.  Lockheed Martin is currently scheduled to start delivering the VH-71 presidential helicopter in 2017.  The folks who worked who worked on that project are supposed to show GM how to compete with Honda?

Question 2:  Could our politicians be working on things that are likely to yield better results for the overall economy?  While we dither about GM and Chrysler, our schools continue to be the most expensive in the world while producing mediocre results.  Per-capita, our goverment spends nearly as much on health care as any other country in the world… while covering less than half of the population.

Question 3:  Does preserving GM and Chrysler in their present forms address our most serious transportation issues?  As discussed in my economic recovery plan, unclogging America’s streets and highways with smarter networks and congestion pricing would be a lot more valuable to business than getting everyone out of a Toyota and into a Dodge.  To encourage development and sale of electric cars we will need to install power outlets in a lot of Burger King parking lots (more).  Who is thinking about that?

As of 2:30 pm, Wall Street has greeted the probable Chapter 11 filings of GM and Chrysler with a yawn.  The S&P 500 is down less than one percent.  It seems that GM and Chrysler reorganizing do not constitute a national emergency.

Could we possibly generate the same kind of excitement that we’ve seen around GM and Chrysler about bringing our public schools up to internationally competitive standards?  Children graduating today are educated to only a fraction of their potential, which would have been a serious waste 100 years ago.  Now that our least able citizens are in direct competition with the most able workers in Mexico, China, and India, the situation would seem to merit some urgency.

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Now that the Republican Scrooges in Congress have denied GM and Chrysler a $14 billion Christmas present, perhaps it is time to step back and ask what lessons we can learn from this mess.

Lesson 1:  When you’re running out of cash, don’t advertise the fact.  Now that GM and Chrysler have said that they can only last another month or two, who is going to buy their cars?  Surely those cars will be cheaper after they file Chapter 11.  What about suppliers?  Will they continue to extend credit?  Employees?  Wouldn’t any who had sufficient skills to find a job on the open market already be packing up their desks?

Lesson 2:  When traveling to Washington to ask for taxpayer funds, share one Gulfstream or learn how to use Travelocity or Expedia to book an airline seat on one of the many daily non-stop flights from Detroit to Washington, D.C.  It may be painful to buckle a seatbelt that hasn’t been gold-plated, but we all have to make adjustments in these tough times.  (Save the bizjets for when you’re visiting a supplier or factory in an obscure town that lacks commercial airline service.)

In the history of American business, it is tough to find an example of any company that managed its own demise this badly.  Most management teams keep up a cheerful patter right until the morning that the Chapter 11 filing lands in the bankruptcy court’s lap.  Customers and suppliers are the last to know and employees get hints at best.

Realistically, how can taxpayers help companies that can’t even go bankrupt competently?

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A new perspective on the Canon versus Nikon debate:  Adolf Hitler discusses the Nikon D3x.

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I want to mail friends a New Year’s card that says “Let’s hope that 2009 can’t be any worse than 2008”.  It would be good to illustrate this with some cheerful photos, e.g., Wall Street tycoons hauling their billions in bailout cash up to Greenwich, CT, our elected officials getting handcuffed, etc.  Given that I forgot to move all of my money into T-bills a year ago, price is a concern.

What’s a good service to use for high-quality photo printing into greeting cards?  Here are some constraints…

• does not require me to prepare camera-ready PDF files (i.e., I want to give them JPEGs to put into a template, not pretend to be a competent user of Quark or Adobe tools) or color separations
• reasonably cheap for quantity 200 (don’t have that many friends)
• will send out a proof and then the total print run within a couple of weeks

Thanks in advance!

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Listening to music makes people happy.  Listening to news makes people unhappy.  Listening to fundraising drives makes people irritated and unhappy.

Let’s compare government-funded radio here in the U.S. and in Canada.

Public radio stations all over the U.S. have been cutting down on music and substituting news programs.  In the rare event that they still have a music or entertainment program, it will be interrupted every 10 minutes while they ask for money and tell you how great public radio is.  Their digital terrestrial stream (“HD radio”) will be 96 kbps and their Internet stream will be about the same.  Americans who are fed up with this and just want to hear music subscribe to Sirius or XM and pay $300+ per year to hear radio in their car and their house at… 64 kbps!  That’s the same as an ISDN telephone line!

Canada, by contrast, has public radio stations that live within their means.  Whatever they get from the government is what they use for their budget.  They don’t constantly ask listeners for money.  The Internet streams are 192 kbps, 1.5x the bitrate of the iTunes that Apple sells.  What do they play on these stations?  Music, interrupted very occasionally for station identification.  Check it out at http://www.cbc.ca/radio2/ (CBC Jazz has found much more favor in our household than Sirius jazz stations).  These streams work great throughout a house on a Sonos system.

As long as our government is spending another trillion dollars or two, would it be too much to ask for a few all-music free non-commercial radio stations?  Like the passengers on the Titanic, shouldn’t we have dance music right up until the ship sinks?

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Now that gasoline is below $2 per gallon, we allowed ourselves a bit of extra driving through Massachusetts during the weekend.  We rolled over brand-new bridges, repaved roads, past sparkling new $50 million municipal libraries, gaping at new public school buildings (e.g., Newton’s more than $200 million high school).  We listened to radio programs debating the likely effects of various government stimulus programs, including increased public works spending.

If public works spending were effective, shouldn’t Massachusetts already be doing great in jobs and growth?  We have the highest per-capita public debt of any state in the union, presumably as a consequence of having spent a lot on infrastructure.  Yet this Globe article says that we’re not going to be strangers to unemployment, which means that we’re doing worse than most states in job creation (because our population growth is very low compared to the national average (source)).

Throughout the U.S., local, state, and federal governments have not been slouching for the last 10 years in public works spending.  In fact, many local and state governments went on spending sprees as their income and property tax revenues boomed.  Yet 12.5 percent of Americans find themselves unemployed or “discouraged” from hunting for a job.

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Now that the Detroit automakers are being nationalized we’re debating who is going to administer them on behalf of the taxpayers.  What government functionaries have experience in this area?

Let’s look at G.M.:

• product that isn’t competitive internationally
• union labor force
• costly pension and health care obligations
• management promoted and rewarded despite decades of failure

What does that sound like?  Any one of thousands of America’s public school systems.  If we were to rename “General Motors” to “Michigan Vocational Public School #103 for Lifelong Learners” it could be administered by existing public school superintendents.  Given that the state of Michigan’s population is shrinking there are probably some well-qualified superintendents soon to become jobless.

Once we rename G.M. into a public school it won’t bother us that it can’t compete with Honda, Hyundai, and Toyota, just as it doesn’t, apparently, bother us that our public school systems aren’t competitive (we complain about it, but we never make substantive changes).

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Just back from seeing the movie Milk.  It turns out that Harvey Milk, while building his political base in San Francisco, ran a camera shop in the Castro.  Some early scenes feature a class Nikon rangefinder camera and many scenes have the formerly ubiquitous retail film cube shelves as a background.

The movie may provide some career inspiration to today’s youth.  With the U.S. entering a prolonged period of economic decline, a career in politics should be much lower risk than a career in business.  In fact, the best time to enter politics is when the economy is collapsing.  Voters are more likely to look for fresh faces when the country is going down the tubes.  A modern-day Milk would have to get onto the city payroll more expeditiously than the 8 years that it took Harvey Milk.  Anyone starting a retail store today would probably go bankrupt within a year or two…

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Remember back in the 1980s when we were all afraid of being eclipsed by Japan?  They started out with a higher average IQ.  They added a superior education, work ethic, and devotion to craftsmanship.  Nippon’s best and brightest went into engineering and product design while ours went into law and financial chicanery.

We thought our world domination was coming to an end in 1989 when the Japanese bought Rockefeller Center.  How could we compete with a country where everyone was good at his or her job?  Where the crime rate was negligible and therefore expenses for security, police, and prisons were minimal?  Then the Japanese economy stumbled and we relaxed.  Apparently fat dumb and happy was a fine recipe for economic growth.

As I unboxed a Canon 5D Mark II today, it occurred to me that perhaps our 1980s Japanophobia was justified.  It just took longer for the U.S. to fade than we thought it would.  The Japanese unemployment rate is less than 4 percent right now and they probably don’t play around with the statistics as much as we do, excluding “discouraged” workers (our rate is 12.5 percent when measured semi-honestly (source)).

What did those Canon engineers manage to accomplish with the 5D Mark II?  The camera costs $2700, less than its predecessor did when introduced almost four years ago.  The old camera was the best low-light tool on the market for most of its life; the new one has useful performance at ISO 25,000.  Resolution is up from 13 megapixels to 21, comparable to the most expensive professional Canon body.  The battery lasts longer, the motor drive is faster, the weather sealing is better, the viewfinder is more accurate (98 percent coverage).  A lot of extra software goes into making the best possible JPEGs, with more attention to capturing scenes with high dynamic range, face recognition for autofocus, and a database of optical performance for all of the Canon lenses so that light fall-off in the corners is automatically corrected.

In the department of “just because we can”, the engineers threw in the capability of capturing 1080p HDTV video.  My friends who work with professional studio equipment say that the Canon 5D Mark II produces quality comparable to $50,000 TV station cameras.

I reflected on the 15 or so Canon bodies that I’ve purchased since 1994.  All performed flawlessly from the time that they were removed from the box until they were given away.  All of the people to whom I’ve given Canon bodies are still using them with no problems.  These are machines with motors, springs, electronics, etc. that are subject to vibration, impact, dust, water, and the other hazards of modern life.

Let’s be honest with ourselves and ask if there is an American company that could produce anything competitive to the Canon 5D.  Keep in mind that Canon makes the CMOS sensor in its own fab.  Canon writes the software itself.  Canon designs and makes the lenses.  An American company is lucky if it can handle a challenge in one domain; everything else needs to be contracted out.

What about Japan?  How deep is their technological prowess?  If they didn’t have Canon they’d have to supply us with cameras from Nikon, Olympus, Pentax, and Sony.

[Where can you get a 5D Mark II? amazon.com is sold out. This one came from Adorama.]

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Companies that go through a Chapter 11 backruptcy reorganization tend to shed jobs, close factories, and discontinue product lines.  Airlines do this on a periodic basis and it doesn’t seem to upset anyone.  The managers of the Detroit automakers claim that somehow a Chapter 11 bankruptcy reorganization by them would be disastrous for the U.S.  We wouldn’t be able to survive if they were to shed jobs, close factories, and discontinue unprofitable product lines.  We need to give them billions of dollars of taxpayer funds.

What do they propose to do if they get these billions of dollars?  Shed jobs, close factories, and discontinue product lines.

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