St. Paul Was in Minneapolis Last Night
“Tonight John McCain will be in St. Paul, but St. Paul will be in Minneapolis.”
Huh?
That was a line spoken yesterday by Doug Wead at a political convention in Minnesota. The first “St. Paul” he mentioned was the city where the G.O.P. is holding its convention; the second one is Ron Paul, leader of the “constitutionalists” who convened in his name yesterday in Minneapolis for a counter-convention.
Paul as the messiah.The two gatherings couldn’t have been much more different from each other. The G.O.P. convention, where the candidate has a good chance of winning the Presidency, felt more anxious than triumphant. The Paul convention, meanwhile, felt like a celebration even though its candidate got only a sliver of votes in the Republican primaries and wasn’t even invited to speak at his own party’s convention.
Paul himself was more dour than his supporters. “The American Republic hangs by a thread,” he reminded them, “and a thin one at that.”
The G.O.P. convention has been a tribute to not only “country first” but, primarily, to government itself. The Paul convention, representing “the revolutionary wing of the Republican Party,” was as anti-government as a political convention could be. Arguments were made against nearly every task that government carries out, including taxation (not surprisingly) and regulation (of just about any sort), but also the funding of education.
The Paul convention was upbeat, heartfelt, and a bit on the wild side. If you didn’t know better, you might not have known their candidate had lost.
Grover Norquist speaking at the Ron Paul convention.His supporters rallied with a vigor seeming to suggest that they felt their concerns represent the hearts and minds of the majority of Americans — whereas in fact, if they really did, Paul would have gotten an awful lot more votes. Paul supporters see themselves as the true G.O.P., representing the best intentions and true will of the American people; the big-biz G.O.P., meanwhile, seems to see Paul supporters as a lunatic fringe.
What were the biggest applause lines of the day at the two gatherings? At the G.O.P. convention, the delegates responded mightily to 9/11 references, “country first,” the stories about McCain’s captivity in Vietnam, and the protection of unborn children.
The big applause at the Paul convention went to lines about abolishing the Federal Reserve, getting the U.S. out of the U.N., and being left alone by the government. Grover Norquist, president of the Americans for Tax Reform and a board member of the National Rifle Association, summed up the prevailing view succinctly: “Taxes bad, guns good.”
Site of the G.O.P. convention.One of the very biggest applause lines of the day, believe it or not, came upon a mention of the Austrian School of economics, to which was appended this line: “And by the way, free markets do not cause housing bubbles and mortgage crises.”
What does?
The Competitive Dollar Boosts GDP the Right Way: Exports UP; Imports Down; Real GDP UP
Today's GDP revisions were delicious, especially the positive impact of trade responding to our more competitive dollar.
The earlier estimates of real GDP owed the 1.9 percent annual growth rate entirely to a 2.4 percent increase in net exports, with exports increasing and imports shrinking. The substantial upward revision of the Real GDP estimate to a 3.3 percent growth rate included an even larger increase in exports and decrease in imports, although other revisions contributed as well. In the current estimate, the increase in exports accounted for 1.65 percentage points and the reduction in imports accounted for 1.45 percentage points of the 3.3 percent increase in Real GDP. In other words, net exports accounted for 3.1 of the 3.3 percentage point increase.
I've been arguing for some time that the weak dollar would play a crucial role in avoiding a negative GDP. That has been happening. I've also argued the "right" way for the dollar to strengthen is through an improved trade balance. That also has now begun to happen.
If the dollar strengthens through magic, prayer, jaw boning, intervention, or some other form of levitation, its negative impact on trade would hurt GDP. A dollar made stronger by growing export demand and import substitution can strengthen along with GDP.
I've been emphasizing the trade accounts because they've been ignored by most commentators. Looking at the role of foreign investment and the capital accounts in influencing the dollar, expectations of future dollar movements are more important than the current level of the dollar. What a foreign investor wants is for the dollar not to depreciate during his investment horizon so he can get out of the investment more favorably than he got in. If the dollar appreciates during his investment horizon, so much the better. For this reason, once the recent appreciation of the dollar comes to be viewed as a longer term trend, the appreciation would likely accelerate. By the same token, it could weaken on opposite expectations. Given the size of the trade deficit, and the outflow of dollars it represents, a more gradual appreciation of the dollar would allow continued improvement in the trade deficit while a precipitous increase might kill off that needed source of strength.
As I've said before, to take greater liberties with St. Augustine's famous prayer regarding chastity, I say give us a strong dollar, but not too strong too soon.
| ||||
Alaska's Congressmen
Are a Bridge to Nowhere
King Salmon, Alaska
An albatross Republicans must haul around this year is that voters no longer clearly see them as the party best able to control government spending and taxes. GOP pork-barrel kings such as Sen. Ted Stevens and Rep. Don Young are a big reason. Now allegations of corruption are swirling around both men as they face stiff challenges in Alaska's Aug. 26 Republican primary.
![[Alaska's Congressmen Are a Bridge to Nowhere]](http://s.wsj.net/public/resources/images/OB-CB707_oj_ccf_20080815180206.jpg) |
| AP |
| Sen. Ted Stevens speaks to supporters in Alaska, Aug. 4. |
Messrs. Stevens and Young have done enormous damage nationally to the Republican brand. They were champions of the infamous "Bridge to Nowhere," a $223 million span to Gravina Island with 50 people on it, that became the butt of late-night comedians. But the jokes have been replaced with anger: Mr. Stevens was indicted last month on seven felony counts of lying about $250,000 in gifts he received from the head of the oil services company VECO, Bill Allen, who was seeking earmarks from the senator. Mr. Young has spent over $1 million in legal fees fighting a federal investigation of his ties to VECO.
Yet both may win nomination from fellow Republicans, in part because of their long incumbency -- decades in Congress -- and because of all the pork they've dragged home. Alaskans have long justified their raids on the U.S. Treasury because the feds have locked up so many of the state's natural resources (the Arctic National Wildlife Refuge being the most famous example). In what some called "compensation," the state made sure it became No. 1 in the nation in pork per person -- $984.85 for each Alaskan in 2005.
Alaska has come to be dominated by welfare-state conservatives. An oil-revenue fund that this year will dish out $2,100 to every resident; now $1,200 in state-issued debit cards is being handed out to help residents pay for higher gas prices.
But voters are voicing dissent. Gov. Sarah Palin swept into office in 2006 by winning a GOP primary over incumbent Frank Murkowski, a former colleague of Messrs. Stevens and Young in Congress. "I want Alaska to be known for more than FBI sting operations," she has declared. Mrs. Palin openly encouraged Sean Parnell, her lieutenant governor, to mount a primary challenge to Mr. Young and has not endorsed Mr. Stevens against his primary challenger, Anchorage banker David Cuddy.
Both challengers talk about the need for a new model of economic development. "We cannot wholly rely on the federal government," Lt. Gov. Parnell says. "Alaska is 50 years old, we've got a surplus. It's time for us to step up and use some of that." Mr. Cuddy is equally adamant. "Earmarks have bred corruption and that should signal it's time to return to constitutional limits on runaway spending." Even former Gov. Wally Hickel, who appointed Mr. Stevens to his seat in 1968, now says "his time is over."
Alaska's Old Bulls are fighting back. Mr. Young has collected boatloads of cash from out-of-state unions who admire his pork-barrel ways and his support for "card check" legislation, which would permit unions to organize without holding secret ballot elections. His ads tout the claim that Mr. Young does "too much" for Alaska.
Mr. Stevens cites advice from his lawyers in refusing to discuss his indictment beyond claiming it's "not some extreme felony." He will learn this Monday if his Sept. 24 trial will be moved from Washington, D.C., to Alaska and a potentially more friendly jury pool. The odds are strongly against him winning a change of venue, leading many to think he will then seek a postponement of his trial.
Still, even tarnished incumbents can win if challengers divide up the vote against them. That may happen in Alaska, where Mr. Stevens faces not only Mr. Cuddy, but Vic Vickers, who moved back to the state in January after decades in Florida, and who is spending $750,000 of his own money.
Mr. Vickers's long ties with Democrats and unusual policy stands -- he favors withdrawing U.S. troops from both Iraq and Afghanistan -- preclude him from winning the nomination. But he could enable Mr. Stevens to win with a plurality.
Meanwhile, Lt. Gov. Parnell must share anti-incumbent sentiment against Mr. Young with Gabrielle LeDoux, a state legislator who is pumping $350,000 of her own money into the primary.
All of this puts the GOP in a pickle if either incumbent wins. "Anyone who thinks Stevens or Young will be re-elected if they survive their primaries is living in Fantasyland," says Frank Bickford, a government affairs consultant in Anchorage. Indeed, polls show both men trailing their Democratic opponents by double digits -- a remarkable feat, given that Alaska has sent only Republicans to Congress since 1980.
"I tell Republicans to find the courage to take on the old guard," says Dan Fagan, a popular talk-show host and columnist at the Anchorage Daily News. "Don't let the Stevens, Young, Murkowski dynasty intimidate you."
Indeed, it was the power of the purse that Messrs. Stevens and Young wielded for so long that helped entrench the earmark culture among Congressional Republicans. Few dared risk their wrath. When he became chairman of the Appropriations Committee in 1997, Mr. Stevens proclaimed, "I'm a mean, miserable SOB." When his "Bridge to Nowhere" was challenged in 2005, Mr. Stevens warned fellow senators "if we start cutting funding for individual projects, your project may be next."
In the House, GOP Rep. Don Young of Alaska -- the former Transportation Committee chair who stuffed the last highway bill with 6,371 earmarks -- played a similar intimidation game. "Those who bite me will be bitten back," Mr. Young warned Rep. Scott Garrett last year. Mr. Garrett, a New Jersey Republican, had tried to kill a $34 million earmark sponsored by Mr. Young.
The ethically suspect bullies who have represented Alaskans for decades are passing from the scene. Voters now have a choice between electing reform Republicans who want to break that mold or Democrats, who are at least up front about their support for big government.
Bush Has a Good Economic Record
Successive speakers at the Democratic National Convention poured scorn on President Bush's economic record. The clear aim was to justify the party's call for "change," and to undermine support for Republican presidential nominee John McCain. His election would mean a "third Bush term," delegates groaned.
![[Bush Has a Good Economic Record]](http://s.wsj.net/public/resources/images/OB-CF559_oj_mar_NS_20080902194402.jpg) |
| Corbis |
Yet Democrats cited no good evidence for their claims that the administration has produced a stagnant economy, widening disparities of income and wealth, high unemployment, and a heavy burden of government debt (supposedly resulting from an unwise military intervention in Iraq).
How does the performance of the U.S. economy really compare with other advanced economies over the eight years of George Bush's presidency? Data published by the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), the World Bank, the International Comparison Program (ICP) (a cooperative venture coordinated by the World Bank) and the U.S. Census Bureau allow a nonpartisan, factual assessment. Here are some of the findings:
- Economic growth. U.S. output has expanded faster than in most advanced economies since 2000. The IMF reports that real U.S. gross domestic product (GDP) grew at an average annual rate of 2.2% over the period 2001-2008 (including its forecast for the current year). President Bush will leave to his successor an economy 19% larger than the one he inherited from President Clinton. This U.S. expansion compares with 14% by France, 13% by Japan and just 8% by Italy and Germany over the same period.
The latest ICP findings, published by the World Bank in its World Development Indicators 2008, also show that GDP per capita in the U.S. reached $41,813 (in purchasing power parity dollars) in 2005. This was a third higher than the United Kingdom's, 37% above Germany's and 38% more than Japan's.
- Household consumption. The ICP study found that the average per-capita consumption of the U.S. population (citizens and illegal immigrants combined) was second only to Luxembourg's, out of 146 countries covered in 2005. The U.S. average was $32,045. This was well above the levels in the UK ($25,155), Canada ($23,526), France ($23,027) and Germany ($21,742). China stood at $1,751.
- Health services. The U.S. spends easily the highest amount per capita ($6,657 in 2005) on health, more than double that in Britain. But because of private funding (55% of the total) the burden on the U.S. taxpayer (9.1% of GDP) is kept to similar levels as France and Germany. The U.S. Census Bureau reports that 84.7% of the U.S. population was covered by health insurance in 2007, an increase of 3.6 million people over 2006. The uninsured can receive treatment in hospitals at the expense of private insurance holders.
While life expectancy is influenced by lifestyles and not just access to health services, the World Bank nevertheless reports that average life expectancy in the U.S. rose to 78 years in 2006 (the same as Germany's), from 77 in 2000.
- Income and wealth distribution. The latest World Bank estimates show that the richest 20% of U.S. households had a 45.8% share of total income in 2000, similar to the levels in the U.K. (44.0%) and Israel (44.9%). In 65 other countries the richest quintile had a larger share than in the U.S.
Investment has been buoyant under President Bush. According to the ICP, outlays on additions to the fixed assets (machinery and buildings, etc.) of the U.S. economy amounted to $8,018 per capita in 2005 compared to $4,963 in Germany and $4,937 in the U.K. Higher taxes on the upper-income Americans, as proposed by Mr. Obama, are likely to result in lower saving and investment, less entrepreneurial activity and reduced availability of bank credit. Lower-income Americans would be among the losers.
When considering the distribution of income and wealth in the U.S., another factor that should be taken into account is the sharp rise in the number of immigrants. The stock of international migrants (those born in other countries) in the U.S. grew by nearly 10 million from 1995 to 2005, reaching a total of 38.5 million according to the World Bank.
The inflow of migrants may have restrained the growth of average income levels in the bottom quintiles. Nevertheless, their earnings still allowed immigrants to remit $42 billion to their families abroad in 2006, double the level in 1995. So the benefits are widely spread among the families of immigrants remaining abroad -- an important U.S. contribution to the reduction of poverty in these countries.
- Employment. The U.S. employment rate, measured by the percentage of people of working age (16-65 years) in jobs, has remained high by international standards. The latest OECD figures show a rate of 71.7% in 2006. This was more than five percentage points above the average for the euro area.
The U.S. unemployment rate averaged 4.7% from 2001-2007. This compares with a 5.2% average rate during President Clinton's term of office, and is well below the euro zone average of 8.3% since 2000.
- Debt interest payments. The IMF reports that the interest cost of servicing general government debt in the U.S. has averaged 2.0% of GDP annually from 2001-2008, compared with 2.7% in the euro zone. It averaged 3.2% annually when President Clinton was in office.
The cost of the wars in Iraq and Afghanistan has been largely absorbed in a relatively small increase in the defense budget (to 4.1% of GDP in 2006 from 3.8% in 1995). A much higher proportion of U.S. income was devoted to the military during World War II and the Korean War.
The evidence shows that much of the Democratic Party's criticism of President Bush's economic record is wide of the mark. True, the economic slowdown now affecting most advanced countries will likely result in rising unemployment over the coming months. But thanks to sensible policies pursued by the Bush administration (not always with adequate support from a Democratic-controlled Congress), the U.S. economy is sufficiently flexible to keep unemployment below the 7.7% peak reached in the last postrecession year of 1992.
The main risk is that, if elected, Barack Obama will pursue a "social justice" strategy. This would encompass higher taxes on entrepreneurs, savers and investors, more direct government intervention in the economy, and protectionist policies (including revoking existing trade agreements) aimed at safeguarding the jobs of his union backers in "old" industries and public services. If so, the pain is likely to be more widespread and prolonged.
Mr. Marsden, a fellow of the Centre for Policy Studies, was formerly an adviser at the World Bank and a senior economist in the International Labor Organization.
The Market Will Punish Putinism
The financial abyss is the deepest abyss of all; you can keep falling into it your whole life.
-- Ilf and Petrov
"The Golden Calf" (1931)
In the early years of the Soviet Union, Marxist policies for a "workers' paradise" wrought such devastation on the Russian economy that Vladimir Lenin was forced to restore certain aspects of market capitalism -- limited private ownership, trade with foreign countries -- to salvage the future of Bolshevism. The line above comes from a famous Russian satire about two scoundrels who took full advantage of the widespread corruption under the New Economic Policy (NEP) to accumulate illegal fortunes.
Fear of financial failure is a recurring nightmare for Russians, who recall with angst the collapse of the Soviet economy at the end of the 1980s. The following decade, in August 1998, a newly constituted Russian Federation defaulted on its government bonds as the ruble lost two-thirds of its value in less than a month, plunging the nation back into bankruptcy.
While humiliation still lingers in the national psyche, Russia has seemingly entered a new phase in its struggle to reconcile totalitarian tendencies with capitalist rewards. Today, oil revenues ostensibly provide a bulwark against economic losses caused by government misjudgments.
But even as Russian tanks assert a physical claim on Georgian territory, Moscow is already feeling the consequences in fiscal terms. Foreign investment capital -- the lifeblood of Russian equity and credit markets -- is draining out as the world recoils.
Group of Seven leaders should take particular note of this spontaneous market phenomenon -- and also take heart. Because no matter what sanctions the European Union might choose to impose, no matter how severely the world's leading industrialized nations jointly condemn their "fellow G-8 member" -- nothing will punish Russia more than to watch the dream dissolve yet again.
Vladimir Putin, who used to chase rats with a stick in the stairwell of his crumbling apartment block during his Leningrad boyhood, today seeks to thrash what he perceives as a hostile world order. He vows to "put an end to the unipolar world ruled by the U.S.," and has shown his willingness to raise the specter of financial ruin -- his nation's deepest fear -- to indulge this obsession.
The irony of the story, and the tragedy, is that Mr. Putin needs little assistance from the U.S. and its trans-Atlantic allies to destroy Russia's own standing in the international political and economic order.
The rout in Russian stock markets actually began before the invasion of Georgia, prompted by Mr. Putin's rumblings of despotic displeasure in late July. The shares of Mechel, one of Russia's leading mining and metals companies, plunged 38% on the New York Stock Exchange after Russia's prime minister publicly accused the company of selling raw materials to foreigners at lower prices than those charged domestically. Perhaps it was Mr. Putin's ominous advice (widely viewed as a sinister threat) to Mechel's owner and director, who was hospitalized at the time -- "I think Igor Vladimirovich should get better as quick as possible, otherwise we'll have to send him a doctor" -- that chilled investor sentiment, wiping out $6 billion in shareholder value in one day.
Only hours earlier, Robert Dudley, president of the Anglo-Russian energy company TNK-BP, was forced to flee Moscow after systematic harassment by government authorities. Locked in a power struggle for managerial control, the joint venture is Russia's third-largest oil producer; its Russian principals want to wring maximum cash payments out of the business while the British side argues for capital investment to increase future production. Analysts suspect the Kremlin is fully complicit in the effort to oust the foreigners -- denying visas to the company's British employees, launching tax investigations, tapping residential phones.
Since the attack on Georgia began in early August, the decline in Russian financial markets has accelerated sharply. The benchmark RTS Index of leading Russian stocks has slumped to its lowest level in two years. The ruble has registered its biggest monthly decline against the U.S. dollar in more than nine years as foreign investors rush to retrieve their capital -- some $25 billion in the last three weeks, according to French investment bank BNP Paribas. The amount of debt raised by Russian companies in August has fallen 87% from July levels. The issuance of new equity has come to a virtual halt -- a mere $3 million was raised in August compared to $933 million in July.
To combat the alarming magnitude of capital desertion, officials at Russia's central bank have scrambled to raise interest rates, allowing the yield on domestic ruble bonds to increase by 150 basis points. But complaints about the tightened credit situation have already begun among Russia's powerful industrial oligarchs. One of them, Vladimir Potanin, paid a recent visit to Mr. Medvedev to let him know that Russian companies' restricted access to world financial markets was causing difficulties. The billionaire businessman suggested that the government tap state reserves to ease the liquidity crisis. Mr. Medvedev quickly acquiesced, promising to unveil a new program of easy credit before the end of September.
It is part of the continuing pattern for Russia -- forever trying to have it both ways with "private" companies in cahoots with the Kremlin, entrepreneurial ambition subject to Big Brother's approval, and capitalism without democracy. It's a pattern that has consistently led Russia to blame outsiders for woes incurred as the result of its inherent dissonance, and to petulantly abandon earlier aspirations for global integration.
And it has always led to the financial abyss. Even now, the outlines of the old command-style economic blueprint are emerging as Mr. Putin promotes his 12-year development plan for the country. The foreign capital required to fund it is disappearing by the minute, however, which means the plan must be altered. Expect the nastiness to ratchet upwards as Mr. Putin wields his stick against his purported enemies. On Friday, he threatened to cut supplies to Europe of "oil, gas, petroleum chemicals, timber, metals, fertilizers" should it align with the U.S. in confronting Russian aggression against bordering nations. In Moscow, reports are circulating that Lukoil executives have been notified by the Kremlin to be prepared to restrict oil deliveries to Poland and Germany through the Druzhba pipeline. (In Russian, druzhba means "friendship" -- a perfect tribute to Orwellian doublespeak.)
What Mr. Putin has yet to learn is that capital does not respond well to extortion. Global investors are not impressed by economic threats to cut off supplies to vital customers. Indeed, they abhor the elevated "country risk" associated with political adventurism.
But what can the West do to express its rejection of such tactics? Preventing Russia from joining the World Trade Organization means little to a country that disdains the rules of free trade -- on Friday, Moscow banned poultry imports from the U.S. -- and blatantly circumvents antimonopoly policies. Russia's refusal to acknowledge intellectual property rights is consistent, if unscrupulous; according to researchers at the Brookings Institution, Mr. Putin plagiarized much of his dissertation for a Ph.D in economics in 1997 from a management study written by two professors at the University of Pittsburgh in 1978.
The most farsighted move Western governments could make would be to set up a fast-track approach to European Union membership for the most vulnerable of Russia's neighbors: Ukraine. As a parallel step, an interim monetary facility should be arranged to help the country make an early transition to the euro; if the EU balks, the U.S. should offer Kiev the opportunity to dollarize. Investors will be drawn to the stability and freedom of conducting business in a major reserve currency.
Mr. Putin, who harbors dreams of a vast ruble zone across the former Soviet empire, won't like it. But he has to understand: Sometimes the invisible hand strikes back.
Ms. Shelton, an economist, is author of "The Coming Soviet Crash" (Free Press, 1989).
'Stop! Or We'll Say Stop Again!'
With apologies to comedian Robin Williams, that's the line that comes to mind when weighing the European Union's declaration Monday on Russia's continued occupation of Georgia.
At a special meeting in Brussels, EU national leaders told Russian President Dmitry Medvedev to abide by the terms of a French-brokered cease-fire, including a pullback of Russian troops to their preconflict positions. If he doesn't do so, they warned they will hold another meeting.
It's been almost three weeks since Mr. Medvedev signed the cease-fire, and five days since Moscow broke with the world by recognizing the self-declared independence of Georgian provinces South Ossetia and Abkhazia. Yet European leaders evidently need more time to ruminate over the situation in the Caucasus.
The European leaders did make one concrete gesture. The EU said it would freeze negotiations with Moscow on a new economic cooperation agreement if Russian forces haven't pulled back to their pre-August 7 positions by next Monday. But this is meaningless. It had taken the Europeans months to agree among themselves to begin the talks, and even before Russia's Georgia invasion Eastern European leaders had signaled they were unlikely to sign off on a deal anytime soon. Nor was Moscow pushing very hard for it.
During a postsummit press conference, French President Nicolas Sarkozy, who holds the rotating EU presidency, got the obvious question: Is the EU a "paper tiger"? Mr. Sarkozy, visibly angered, responded that "Demonstrations of force, verbal aggression, sanctions, countersanctions . . . will not serve anyone."
Mr. Sarkozy also insisted that his efforts to reach a cease-fire had borne fruit. The Georgians might disagree. Russia has used the agreement's vague language to justify a continued presence in Georgia far beyond the original conflict zone. The cease-fire called for international talks about the separatist regions, but that didn't stop Mr. Medvedev from recognizing their independence.
The most cynical comment of the day was Mr. Sarkozy's attempt to use the conflict to bully the Irish over their rejection of the EU's Lisbon Treaty in June. "This crisis has shown that Europe needs to have strong and stable institutions" like those it would have gotten under Lisbon, Mr. Sarkozy said.
No, what Europe needs is political will. Rather than scolding Irish voters, Mr. Sarkozy would do better to name and shame those member states whose desire to curry favor with Moscow keeps the EU from taking a firmer stand.
The world wide web
The second browser war
Google’s new web browser is its most direct attack on Microsoft yet
SEVERAL years ago, Silicon Valley was rife with rumours that Google, then primarily a search engine, might be building a new web browser to rival that of Microsoft, called Internet Explorer (IE), or even an operating system to rival Microsoft’s Windows. Google mocked those rumours and they died down. But if Sergey Brin, Google’s co-founder, is to be believed, the speculation itself made him think that “maybe it’s not a bad idea”. And so this week Google did launch a new browser, called Chrome, that is also, in effect, a new operating system. The rumours, says Mr Brin cheekily, “just happened to migrate from being false to being true.”
Chrome amounts to a declaration of war—albeit a pre-emptive one, in Google’s mind—against Microsoft. So far, Google has been coy about admitting the rivalry (whereas Microsoft’s boss, Steve Ballmer, is obsessed with it). In web search and advertising, Google dominates roughly as Microsoft does in operating systems and office applications. To the extent that Google has challenged Microsoft’s core business at all, it is through its web-based word-processing, spreadsheet and presentation applications. But these, so far, have few users.
Google’s fear has been that Microsoft might use its grip on people’s computers and browsers to tweak the default settings so that Google’s search engine and other services might be disadvantaged. This, after all, is how Microsoft behaved in the 1990s, when it crushed Netscape, an early browser.
Microsoft’s fear, by contrast, has been that computing as a whole might move from the operating system as a platform for applications to the web (or “cloud”). This is why it attacked—also pre-emptively, in its mind—Netscape and landed in antitrust court.
As Google rose to dominate the web during this decade, it therefore invested a lot of energy into a rival web browser to IE, called Firefox. An open-source project (whose code can be altered by anybody), Firefox comes from a foundation, across the street from Google’s offices, that happens to be based on the remnants of the old Netscape. Google’s engineers contribute code to Firefox and pay the foundation a share of advertising when people search Google in the browser’s toolbar. Thus Firefox rose to become the largest browser after IE, with almost 20% of the market.
But Google concluded that even Firefox could not protect it against Microsoft. It began to define its business as “search, ads and apps”, where the apps (applications), with a few exceptions, run on the web and are accessed through a browser. So Google decided to build a browser from scratch, explicitly for those fledgling services, from word processing to snazzy virtual worlds.
Chrome, which it launched with a cheeky comic book instead of a press release, is the result. It is based on tabs, each of which runs independently of the others for security, speed and stability. It even works offline. It is, in short, the scenario that Microsoft has dreaded ever since Netscape. As Arnaud Weber, a Google engineer and one of the characters in the comic book, says in a speech bubble: “We’re applying the same kind of process isolation you find in modern operating systems.” It is a geek’s way of saying that developers and consumers may soon stop caring about the operating system on their own hard drive altogether.
Ingeniously, Chrome itself need not take a lot of market share to fulfil Google’s objectives. Google does not expect to sell or otherwise “monetise” Chrome directly. Like Firefox’s, Chrome’s source code is free for anybody to change and improve, and even for rival browser-makers to incorporate. That could even include Microsoft. As Mr Brin says, “we would consider it a success” if the next version of IE were “built on Chrome, or even if it were just a lot better as a result of Chrome.” Google wants ever more people doing ever more things on the web, and peace of mind that nobody, not even Microsoft, can interrupt that.
The Clueless Class
Journalism: The national media are based in New York and Washington, D.C., and don't always get the rest of the country as they should. That may help explain the coverage of Sarah and Bristol Palin.
John McCain asked for, and got, a perfect storm of ignorance and condescension when he picked Sarah Palin as his running mate. Geographically, politically and culturally, Palin is about as far from Manhattan and the Beltway as you can get.
She's not even from Rush Limbaugh's "flyover America," which is in the Lower 48. She's from Alaska, where people shoot moose for the same reason the rest of us go to Costco — to stock up on food. She's also a Republican, Christian conservative, a gun owner and a mother of five children.
Maybe millions of people see themselves in her, but few if any of them work in the mainstream media. Hence some of the early snap judgments about her inexperience. Over the past two years she has singlehandedly upended Alaska politics, but (outside conservative circles) that story didn't penetrate D.C. or New York.
So Sally Quinn, the ultimate D.C. insider who knows everything and everyone in the nation's capital, says: "From what little we know about her, she seems to be a bright, attractive, impressive person." Gail Collins at the New York Times smirks, "There's a lot we don't know yet about Palin, and I am personally looking forward to deconstructing her role in the Matanuska Maid Dairy-closing crisis."
"Palin seemingly came out of nowhere," says the Associated Press, and it's been duly noted that she has never appeared on NBC's "Meet the Press" — though we're sure she will get her chance now.
What do all these reporters and pundits have in common? For one thing, they are not kicking themselves for ignoring Palin and being caught off-guard by a big story.
To the contrary, instead of admitting they may have been out of touch, they use their own ignorance to argue that Palin lacks the experience to be vice president: We haven't heard of her, so she must not be any good.
The news that Sarah Palin's daughter Bristol is pregnant and not yet married gave the national media a chance to parade another form of cluelessness, this time cultural. Despite Barack Obama's decent admonition to leave a 17-year-old girl alone, CNN and the New York Times jumped all over the story, judging it newsworthy (and Larry King-worthy) for reasons not made fully clear.
For CNN, it was one of the two big stories on Labor Day, the other being Hurricane Gustav (the Republican convention was a distant third). Why this zeal to break the longstanding rule of respecting family privacy even for presidential candidates? To judge from all the commentary, some people wanted to make a point about the futility of abstinence-only sex education.
But others seemed to hope that the Bristol Palin story would provoke some evangelical backlash against McCain. Here's Quinn again: "This may be a hard one for the Republican conservative family-values crowd to swallow."
If anything, however, Bristol Palin's story seems to have inspired a new sense of common ground in conservative women.
One GOP delegate, Sue Sharkey, told National Review's Byron York that the news brought her back to her own past, when she was pregnant and out-of-wedlock at 17. She chose to have her son and "from that point I realized that I was a very strong right-to-life advocate."
If we were to guess what millions of religious conservatives are thinking now, we'd say most of them see a girl who erred but who is dealing with the consequences of her error courageously. Her family would also get high marks for supporting her.
Had media outlets like CNN understood this, they probably would have dropped the story on the grounds that it was too helpful to Sarah Palin and her cause.
No comments:
Post a Comment