November 2012
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Month November 2012

Meeker’s Address on the State of USA Inc

Michael J De la Merced:

Ms. Meeker says that the country’s expenses — think programs like Medicare, Medicaid and Social Security — outstripped revenue by 56 percent. That compares with a difference, or what she calls net margin, of just 7 percent 15 years ago. And tax breaks exceeded $1 trillion last year, which she argues accounted for 83 percent of the deficit in cash flow.

Ms. Meeker adds a few more points to her latest USA Inc. presentation as well. She cites a Pew Research Center poll from December that showed that 49 percent of adults aged 18 years to 29 years viewed socialism favorably. And she points out that the United States tax code contains 859 times more words than the Constitution.

When It Comes to Security, We’re Back to Feudalism

Bruce Schneier:

Some of us have pledged our allegiance to Google: We have Gmail accounts, we use Google Calendar and Google Docs, and we have Android phones. Others have pledged allegiance to Apple: We have Macintosh laptops, iPhones, and iPads; and we let iCloud automatically synchronize and back up everything. Still others of us let Microsoft do it all. Or we buy our music and e-books from Amazon, which keeps records of what we own and allows downloading to a Kindle, computer, or phone. Some of us have pretty much abandoned e-mail altogether … for Facebook.

These vendors are becoming our feudal lords, and we are becoming their vassals. We might refuse to pledge allegiance to all of them – or to a particular one we don’t like. Or we can spread our allegiance around. But either way, it’s becoming increasingly difficult to not pledge allegiance to at least one of them.

Related: Mikko Hypponenn – Three Types of Online Attacks.

Over-50s stage work revolution from home

Sarah O’Connor:

From her house in Widnes, beside the river Mersey, Mereli McInerney is working for companies in Dubai, Lithuania and London.

She drafts joint-venture agreements, sets up human resources procedures and guides people through employment tribunals. Some days, if she is feeling unwell – she is diabetic and suffers from fibromyalgia, which can cause chronic pain – she works in her pyjamas.

“The beauty of working from home is, if I’m having a bad day, I can get myself on the sofa, with a few cups of coffee and my laptop and my phone, and work away all day,” says the 50-year-old.

Ms McInerney is one of a growing number of older people who are changing the face of Britain’s labour market by choosing to work for themselves.

Why Are Hotel Rooms So Expensive?

Matthew Yglesias:

Hotel customers tolerate these marked-up amenities because they generally aren’t very interested in driving a hard bargain. The business traveler is likely to feel that he “needs” appropriately located accommodations and isn’t going to be interested in exhaustive research about the costs and benefits of staying someplace cheaper and more remote. What’s more, he’s generally not paying out of pocket. A responsible employee will of course try to be reasonably frugal, but even so frugality is benchmarked to local costs. That encourages a market that’s biased toward higher price points. The existence of premium business travelers who can fully pass on costs on to clients (think fancy lawyers and consultants) further pushes the market up. What’s more, even when people do pay for their own work travel, the cost is tax deductible. If a journalist travels for a freelance assignment or speaking engagement, it makes sense to take extra consumption in the form of staying in a nicer hotel with pre-tax dollars than to spend after-tax dollars at home.

Tourists may be more frugal. But even so, for many vacationers (especially in America) time is in shorter supply than money, so it makes sense to invest extra money in ensuring that the time is well spent.

Obama: a GOP president should have rules limiting the kill list

Glenn Greenwald:

Now that Obama rather than Romney won, such rules will be developed “at a more leisurely pace”. Despite Obama’s suggestion that it might be good if even he had some legal framework in which to operate, he’s been in no rush to subject himself to any such rules in four full years of killing thousands of people. This makes it safe to assume that by “a more leisurely pace”, this anonymous Obama official means: “never”.

There are many important points raised by this report: Kevin Gosztola and Marcy Wheeler, among others, have done their typically excellent job of discussing some of them, while this Guardian article from Sunday reports on the reaction of the ACLU and others to the typical Obama manipulation of secrecy powers on display here (as usual, these matters are too secret to permit any FOIA disclosure or judicial scrutiny, but Obama officials are free to selectively leak what they want us to know to the front page of the New York Times). I want to focus on one key point highlighted by all of this:

Democratic Party benevolence
The hubris and self-regard driving this is stunning – but also quite typical of Democratic thinking generally in the Obama era. The premise here is as self-evident as it is repellent:

Manufacturing the future: The next era of global growth and innovation

James Manyika, Jeff Sinclair, Richard Dobbs, Gernot Strube, Louis Rassey, Jan Mischke, Jaana Remes, Charles Roxburgh, Katy George, David O’Halloran and Sreenivas Ramaswamy:

The global manufacturing sector has undergone a tumultuous decade: large developing economies leaped into the first tier of manufacturing nations, a severe recession choked off demand, and manufacturing employment fell at an accelerated rate in advanced economies. Still, manufacturing remains critically important to both the developing and the advanced world. In the former, it continues to provide a pathway from subsistence agriculture to rising incomes and living standards. In the latter, it remains a vital source of innovation and competitiveness, making outsized contributions to research and development, exports, and productivity growth. But the manufacturing sector has changed—bringing both opportunities and challenges—and neither business leaders nor policy makers can rely on old responses in the new manufacturing environment.

Manufacturing the future: The next era of global growth and innovation, a major report from the McKinsey Global Institute, presents a clear view of how manufacturing contributes to the global economy today and how it will probably evolve over the coming decade. Our findings include the following points:

The lottery of life Where to be born in 2013

The Evonomist:

Warren Buffett, probably the world’s most successful investor, has said that anything good that happened to him could be traced back to the fact that he was born in the right country, the United States, at the right time (1930). A quarter of a century ago, when The World in 1988 light-heartedly ranked 50 countries according to where would be the best place to be born in 1988, America indeed came top. But which country will be the best for a baby born in 2013?

To answer this, the Economist Intelligence Unit (EIU), a sister company of The Economist, has this time turned deadly serious. It earnestly attempts to measure which country will provide the best opportunities for a healthy, safe and prosperous life in the years ahead.

Its quality-of-life index links the results of subjective life-satisfaction surveys—how happy people say they are—to objective determinants of the quality of life across countries. Being rich helps more than anything else, but it is not all that counts; things like crime, trust in public institutions and the health of family life matter too. In all, the index takes 11 statistically significant indicators into account. They are a mixed bunch: some are fixed factors, such as geography; others change only very slowly over time (demography, many social and cultural characteristics); and some factors depend on policies and the state of the world economy.

A forward-looking element comes into play, too. Although many of the drivers of the quality of life are slow-changing, for this ranking some variables, such as income per head, need to be forecast. We use the EIU’s economic forecasts to 2030, which is roughly when children born in 2013 will reach adulthood.

The High Price of Nickel-and-Diming Doctors

Shannon Pettypiece:

Dr. Thomas Lewandowski, a Wisconsin cardiologist, had a tough choice to make in 2010 after the federal government yet again reduced the payments he received for treating Medicare patients: He could fire half his staff to keep his practice open, or sell it to a local hospital. He sold, becoming one of more than 6,000 employees at ThedaCare, which runs five hospitals and numerous clinics in the northeastern part of the state. Lewandowski is among thousands of once-independent doctors who are joining with hospital chains to stay afloat, a trend that threatens to raise the price of health care even as the federal government strains to keep a lid on costs.

Under Medicare’s tangled payment system, hospitals get higher reimbursements than individual doctors for cardiology treatment and other specialty services—in some cases a lot higher. The program pays a hospital $400 for an echocardiogram, $180 for a cardiac stress test, and more than $25 for an electrocardiogram, according to data from the American College of Cardiology. At a private physician’s office, Medicare pays $150 for an echocardiogram, $60 for a cardiac stress test, and $10 for an electrocardiogram.

Looking to Industry for the Next Digital Disruption

Steve Lohr:

When Sharoda Paul finished a postdoctoral fellowship last year at the Palo Alto Research Center, she did what most of her peers do — considered a job at a big Silicon Valley company, in her case, Google. But instead, Ms. Paul, a 31-year-old expert in social computing, went to work for General Electric.

Ms. Paul is one of more than 250 engineers recruited in the last year and a half to G.E.’s new software center here, in the East Bay of San Francisco. The company plans to increase that work force of computer scientists and software developers to 400, and to invest $1 billion in the center by 2015. The buildup is part of G.E’s big bet on what it calls the “industrial Internet,” bringing digital intelligence to the physical world of industry as never before.

The concept of Internet-connected machines that collect data and communicate, often called the “Internet of Things,” has been around for years. Information technology companies, too, are pursuing this emerging field. I.B.M. has its “Smarter Planet” projects, while Cisco champions the “Internet of Everything.”

“here in the United States we don’t have problems. We have challenges. And every challenge is an opportunity.”

Jack Ewing:

MUNICH — In 1987, a recent engineering graduate named Norbert Reithofer wrote a treatise that in retrospect reads like a manifesto for the German economy. The only way manufacturers in a high-cost country with few natural resources could survive, he argued, was by becoming the most flexible and efficient in the world.

Mr. Reithofer, now 56 and chief executive of the automaker BMW, has since put that principle to work with a vengeance, delivering consistent profit through two crises and becoming something of an icon of the revival of German industry.

Though continuing to build roughly 60 percent of its vehicles in high-cost Germany, BMW reported another rise in quarterly profits this month despite the worst downturn the European car industry has had in decades.

As the auto crisis shows signs of spreading to the premium market, though, Mr. Reithofer faces a test of his management skills that will have implications for the whole nation. Cars are Germany’s largest export product. But the losses that companies like Fiat, Ford and General Motors have been piling up in the region raise fundamental doubts about the future of automobile manufacturing in Western Europe.