The Recession is sooo… 2009 (For the Upper Classes at Least)
Over the past week or so I have had a few conversations with friends and colleagues where the conversation turned to why–in the midst of a global recession and EU fiscal problems–that some companies are pulling in record profits and/or revenues. To me the answer is obvious but then, I guess, I have to remember that as someone with virtually no social life and who enjoys spending almost every spare moment reading and what not, I have the luxury of time to spend on such matters. For others (who have a social life or other family responsibilities) the seemingly conflicting signals coming out of the mainstream media about the economy would be exceedingly confusing.
When it comes to the media, we should always remember that most of these conflicting signals originate in a media echo chamber, itself filled by a mixture of mainstream and social media, which more often than not tends to latch onto good news without digging any deeper. This is why whether stocks or gold or currencies are up or down is such a major focus… it can be delivered quickly and spun in almost any way (good or bad). In an era where news is crafted into fifteen second sound bites and 140-character-or-less chunks it is easy to become convinced that being well-connected is therefore the same as being well-informed. And when those doing most of shouting in the echo chamber are nothing more than readers of government and/or corporate press-releases or are (paid to be) obsessed with the latest celebrity Facebook posts and Twitter ‘Twends’… it should not be surprising that people get confused or are sometimes completely misinformed.
A week or so ago, while listening to CBC Radio (coming out of Calgary so this shouldn’t be surprising), they held up another statistic stating that some high-end retail sector in the city is doing great and that this must be some sign that the recovery is here/gaining-momentum. This is typical of Calgary radio… economic analysis with heavy rose-coloured spin is a regular occurrence. Which brings me to the title of this post or at least the ‘the recession is sooo… 2009′ part. That was another statement made by someone on CBC radio in early 2010. Another rose-coloured, and completely misleading, statement made by a business reporter on our beloved public broadcaster. On the private broadcasters (I cannot even watch Global National anymore) it is just as bad. After Christmas, the stories centered around boutique brands and other high-end retail enjoying healthy sales over the holidays:
Porche & Lamborghini: http://www.bloomberg.com/news/2012-01-10/porsche-rolls-royce-chasing-record-sales.html
Samsung: http://www.arabianbusiness.com/samsung-posts-record-q4-profit-amid-high-end-sales-boom-438831.html
And, of course, more recently, Apple: http://www.theglobeandmail.com/globe-investor/apple-profit-doubles-thanks-largely-to-37-million-iphone-sales-in-three-months/article2313464/
And this is not a recent trend either as is evidenced by these articles from approximately a year ago:
IBM: http://www.theregister.co.uk/2011/01/18/ibm_q4_2010_numbers/
High-end Retail: http://blogs.wsj.com/marketbeat/2011/03/03/retail-sales-high-end-most-trendy-teens-doing-best/
So, what is up? Should we be like the average CBC Calgary reporter and announce that this all is just more evidence that the recession (and economic worries) are “sooo… 2009″? that European contagion is a myth? that Canada is not in a housing bubble? That everything is just the fault of lazy Greeks and PIIGS?
As I said, I do not find this surprising at all and if you have been reading entries on this blog then you will know why. To me, this makes perfect sense. Since the global meltdown in 2007 and 2008, governments and central banks have been pouring trillions into various financial sectors and bailing out corporations in sectors like banking and auto manufacturing. And this continues. It continues because the crisis never went away; rather than being a solution, the actions of governments and central banks the world over were just an attempt to kick the can down the road… and funnel more money into the financial/banking sector (which donates lots to (re)election campaigns after all). The (intended) side-effect was that all that money-printing went directly to the upper echelons of the economy. With a few exceptions, such as Lehman Brothers Holdings Inc., the upper echelon was preserved. The best example is the housing market in the U.S. As thousands of individual homeowners lost their homes, the lenders and mortgage brokers were thrown government-guaranteed lifelines. This is the real ‘wealth redistribution’ and not the kind that those on the extreme right banter about.
And this is reflected in the retail numbers. While the U.S. faces record numbers of people living under the poverty level or using food stamps (http://www.businessweek.com/news/2011-11-02/u-s-food-stamp-use-reaches-record-45-8-million-usda-says.html), high-end retail surges. The upper middle class and the elites in Western nations are doing fine (and are driving record sales in upscale, high-end, and boutique sectors). Their wealth has been preserved while the poor and the lower end of the working population are suffering and inflation is exported to less-developed parts of the world.
The dangerous thing is that for in the media echo chamber (which, let’s face it, is populated mostly by the middle and upper-middle classes) they look in the mirror and things seem fine. The mainstream media doesn’t tell anyone that the stock markets are kept afloat by a few profitable companies like Apple (http://www.zerohedge.com/news/ieconomy-demonstrating-how-apple-distorts-market), Microsoft and IBM (mostly tech and energy companies) and the illusory effects of ramped up high-frequency trading (http://www.zerohedge.com/news/presenting-rise-hft-machine-visual-confirmation-how-skynet-broke-stock-market-us-downgrade-day). And the illusion is rebroadcast and retweeted endlessly so that it appears, on the surface of televisions and smartphones everywhere, that the recession is sooo… very 2009.
Venture Capital and Technology… is the Tech Boom Over?
I have been blabbering on… to anyone who will listen to me… about my fears that the ‘tech boom’ we are living through is likely to end. And by ‘end’ I mean that it will take its place among other (sometimes struggling) industries and reach a level of normalcy. What this means is that the pace of innovation and heated competition–all fuelled by venture capital and the easy credit of the 1990s and 2000s–will be scaled back.
I teach media studies in a New Media department at a well-funded Canadian university. This means I am surrounded by well-meaning but caught-in-the-hype individuals who like to buy lots of iThings and assume (if they think about it at all) that it will all continue like this forever. They do not realize that the industry is extremely resource- and energy-intensive and that it has been heavily subsidized by governments (at all levels), venture capital, and monopoly money in the form of easy credit. Instead, they think that iPads are made in LaLaLaApple Land by happy little fairies (not slave labour) with materials that magically appear out of thin air (not mined by slave, migrant labour in some far off country controlled by some dictator friendly to Western corporations). Or, they assume that all these gadgets are magically powered by the sheer combined genius emanating from the craniums of Bill Gates, Michael Dell and, of course, Steve ‘God’ Jobs (he is the father of the ‘Jesus Phone’ after all) and not by an electrical grid that is increasingly under pressure from our air-conditioned, convenience-at-all-costs lifestyles. Or, they think that when they toss out their months-old smart phone (what makes it ‘smart’ again?) or GPS unit or PSP and then head on down to Sprawl-Mart to buy a newer and better one on their credit cards, that the old unit magically disappears, does not leach toxins into the environment, and certainly is not a waste of all of the labour, engineering, and the increasingly-hard-to-find precious metals and other resources. Today, technology for us Westerners is merely something to buy on a whim (and a credit card), use to a tenth of its capacity, get board with when the lustre (and fashionableness) wears off, and then discard. (One day soon, I am sure, we will be wishing we could rescue some of the mountains of discarded technology that are sitting in landfills.)
That is why I don’t think it is a particularly bad thing that this all will come to an end. With the financial industry (not just the housing market, the entire financial industry) having imploded, the mirage of free money appearing out of thin air starting to disappear, and–most of all–the shrinking of the middle class in Western nations, there is going to be little to continue to fuel the tech boom that laid the foundations for the technology that we are enjoying right now.
“Sure,” you might ask. “But what of the return to profitability? The impressive sales of the gadget and software? The fact mainstream media pundits can only talk about Facebook and Twitter? And that Steve Jobs is a friggin’ god? What do you have to say about all that?”
My reply would be that these things take time to develop. Most people have been convinced (more likely they convinced themselves) that this little ‘recession’ was over, and began spending again, apparently confident that everything would return to ‘normal’ (instead of realizing that we are returning to normal after many years of excess and fantasy). Politicians around the world handed over trillions (trillions!) in monopoly money to prevent the financial sector from melting away (along with their campaign contributions no doubt). And, perhaps most important, many people just cannot be bothered to pay much attention to all this until they are impacted directly.
But, today, I came across an interesting analysis of investment in the broad sector of technology development and it is extremely eye-opening:
“Technology Bubble Ten Years Back: The Money’s Not Back,” iTulip, Aug. 3, 2010.
Looking at some of the information presented in the article is very interesting and eye-opening. The level of investment ten years ago, and which disappeared after the tech- and other bubbles burst, was mind-boggling. One graph in particular shows just how different things were back then:
If you consider the investment made in software, telecom, and networking companies in 2000 as compared to now, the difference is huge. It is no wonder that we are swimming in a sea of tech gadgets today. And remember that it takes years for technology in established industries to make it into the marketplace. (It takes decades for technology in unestablished industries to make it into the marketplace which is why our need to develop alternative energy sources–and new gadgets, including vehicles, that will run off that alternate energy–is so desparate.)
As I said previously, I don’t think this is a bad thing. If we return to normal sure, we might not buy new gadgets like we did in the last decade, but we will learn to live with that. Some sectors of the economy and some in these indstries might be affected, but these are companies that built business models that are entirely reliant upon a creadit-fuelled, highly subsidized system where we act like complete, mindless consumers… and these companies will not be as profitable (and some might not survive) in this new market that looks like it might be based more on reality and not reliant on phantom money and subsidized by future debt and tax-payer money.
Apple as technology, Apple as Brand
Or, Why I hate Apple in 2000 words of less.
I often encourage my students to think about companies in an objective/realistic way, rather than in a branded way. Modern branding is often based on emotions (and very often is far removed from reality). But trying to think objectively (which also requires some much empirical investigation) can be useful since it allows us to see these companies more clearly and will help us understand why corporations make certain decisions and develop certain products. Looking objectively at Sony, Microsoft, and Nintendo (and temporarily putting out of our minds such emotional attachments as nostalgia or genre preference) will reveal that these are three very different companies even though they compete against one another in the international videogame market.
For example, Sony released the PS3 in part to nudge the industry in favour of its high definition format for the movie and computer markets. Microsoft has sunk money in its historically less-than-lucrative games division because it provides badly needed branding amongst the ‘hardcore’ tech crowd and the larger videogame/entertainment consumer market. Nintendo has focused on maintaining a firm grip on the large and lucrative family market. Knowing this helps explain why Sony would sink a gazillion dollars into the development of the PS3 (all-the-while knowing it could bank on profits still coming from the PS2, which is now obscenely inexpensive to produce and therefore very profitable) and why Nintendo for the most part ignores the self-described ‘hardcore’ crowd (and is immensely successful because of it). (Of course, leaving out the branding process entirely is not a good idea either since we might miss why Microsoft was so very unsuccessful with the original Xbox in Japan: they tried to bring in high-concept branding designed for a North American ‘hardcore’ enthusiast to a very different culture… look up ‘the Duke’ controller as a blatant example… but also why they are making inroads by encouraging the release of old and new 2D shooters in Japan.)
And this brings me to why I hate Apple… it’s sort of complex so bear with me.
Many people misunderstand my general opposition to the company and my thoughts on their products. For me, it is important to separate the two. I am often very critical of the introduction of Apple products at the place where I work (a small, liberal arts, research and teaching university in Canada). But I am not completely against their products either. I do not own an Apple computer at the moment but I do use them occasionally where I work (and have in the past), and I might even buy one sometime in the future. I am opposed to their use in very specific ways and this is simply because I work at a public university and we receive a lot of public funding (for the record, we also receive a lot of private funding too, from both corporations and individuals). And because we are supported by tax dollars, we should be as prudent as possible with that money and not indulge in what are brand preferences with respect to an expensive ’boutique’ brand.
While there was a time (many years ago when the ‘big brother’ that Apple ads implicitly referred to was more about IBM than Microsoft), when an Apple computer tended to be quite different from the many other kinds of PCs, but those days are effectively over. Today, the OS for Macs is based off Unix and the hardware is manufactured by many companies that produce PC components. In fact, now that Apple has moved away from the PowerPC architecture and moved to the x86, Apple uses the very same Intel processors that show up in a large portion of the home PC market and the very same architecture used for virtually all consumer PCs. Increasingly, software is available for Mac OS, Windows, or Linux-based operating systems and each has a stable set of drivers available to it.
When it comes to the differences between operating systems, all I can say is that after seeing technicians where I work deal with all manner of different builds and OSs, Macs are no more or no less trouble free than machines running Windows or Linux-based OSs. The one area where I would definitely give a nod to Mac OS and Linux is in the security department (and that is no doubt important but it can be effectively managed in Windows too). So, when it comes to PCs, I see relative advantages and disadvantages to using each of the many types and OSs.
But here is where we need to be specific. When it comes to things like price, maintenance and reliability, then I think that there can be major disadvantages with Macs. They are expensive (as boutique brands are) and in many important ways, more difficult to maintain. There is no argument about the price, I recently priced out low level workstations and building my own machine cost me approx. $2000 less than buying a Mac (and about $1000 less than a Dell) with identical hardware specifications. From an institutional and even an individual perspective, that extra money can buy a lot of software (or tuition or rent and groceries) or other hardware.
The whole issue of quality or ‘ease of use’ really depends on personal preferences and levels of proficiency. One reason that Macs are considered easy to use is that the computer hardware and software is highly controlled. But while such rigidity is good for tech-newbies or those that just don’t want to spend too much time maintaining a computer, it also presents many issues, especially in terms of flexibility, repair and even maintenance. In addition, proprietary interfaces (which Apple is famous for) adds unnecessary complexity and cost, as does the fact that many models are made so that if one component fails, the whole machine has to be sent for repair. (And yes, Apple hardware does fail, it is made at the same Chinese factories that produce parts for all kinds of other PC vendors.)
So, while I recognize that Macs are great for people who don’t mind spending more on a computer, I am against them being used more and more in public institutions.
And it is here where I really begin to hate Apple. For it is their marketing (which is amazingly effective but which also adds to the hefty price tag) that has really changed things. Apple marketing has convinced many that Macs are not PCs (essentially making it a false choice between Apple and that-which-is-not-Apple) and, especially annoying and dangerous, that Macs are superior computers for every individual and in every situation. I see this all the time where I work. Now that technology is becoming’ mass-consumerified’, I increasingly see upper management types using Macs and then making the above assumptions and more. Of course, in the privileged halls of academia, this technology is all free (bought with tax-payer money) and supported by an army of technicians. Combine that with the fact that most administrators (and many faculty and staff) are extreme newbies or, worse, they think they know more about computer-based technology and the computer market than they actually do, then that is when it starts to become (budgetarily) dangerous.
I came across a post from what I would call a realistic Apple fan who has put this phenomenon very well:
I have already mentioned before what I love about Apple – their hardware design is phenomenal.
Now I would like to point out what I truly loathe about Apple.
I usually call it “look-it-has-wheels” syndrome. This comes from my allegory that Apple acts like a car company advertising things like “Our cars have wheels!”. The stereotypical computer-inept Mac disciple, will then misunderstand this and think that everyone elses cars have no wheels. Or that they do, but that Apple Cars innovated The Wheel. Fortunately, the unix based Mac OS X have attracted a good deal of real computer nerds, diluting the stupid-pool a bit, but there are still more of them than I would care for (I would care for none at all). This is one of the reasons why I took the plunge and bought a PowerBook.
Now if you take that attitude and combine it the context where I work (a public institution where those who work there don’t have to pay for the hardware/software they use and, especially when it comes to administrators, have many technicians at their beck and call ensuring that those Macs ‘just work’… and those technicians are badly needed let me tell you), then you know where I am coming from and why I loath Apple marketing.
If a person wants to buy a Mac or some other boutique PC like Alienware, then that is fine by me. If they like their machine and are developing a healthy interest in computer technology, that is great. They can brag about it too, I don’t mind. (Although, morally I think there is a very good case to be made about using open source such as Linux-based OSs.)
But when it comes to spending public money, I think it is highly unethical to buy Apple computers when equally good (often more flexible) and far cheaper alternatives exist. It really galls me when I see someone demand to have a Mac to do little more than word processing, normal video editing, some work in spreadsheets and “some photoshop” but assume they need to have a $3000 Mac that in reality only has $1000 worth of specifications.
The fanboys and girls will no doubt argue with me but again, that is primarily the emotional ‘branded’ sides of our brains talking. I can understand that too as I have ‘branded’ preferences of my own: for instance, I discriminate against some of the many ‘distros’ of Linux-based operating systems and these preferences are often made on ultimately-meaningless-but-oh-so-meaningful characteristics such as the time it takes to boot or whether its aesthetic appearance matches my particular sensibilities.
And sure, the lower end models indeed are really good computers for newbies (essentially those who want a computer to ‘just work’). But if you were to supply them with a Mac, you pay a hefty price for that, it reduces flexibility (which is bad for an institution) and there is a great deal of technical support provided at universities so newbie users don’t worry about this anyway. Besides, any operating system is ‘easy’ if you spend enough time with it and there are a few Linux-based distributions that are coming extremely close to becoming suitable for the casual and/or newbie market. I don’t even buy the argument that Macs are better for higher end applications unless a piece of software or hardware is absolutely not available on another platform (and, increasingly, that is becoming less common too).
The insidious nature of Apple marketing is that it is for a boutique brand which, for now, has a successful branded image. In this era of badly needed fiscal responsibility, there is the added ethical dilemma of wants and needs to think about, and how to separate the genuine need for technology from the desire for fashion and trends. I don’t even really blame the people I work with because it does take a fair amount of technical knowledge to see through the marketing BS. Again, that is testament to the success of that marketing since these people are often very surprised to learn that Apple still has only 9-ish% percent of the PC market (it fluctuates) and that for many people, they do not want or simply can’t spend a great deal of money on a personal computer… or, that in many cases the inflexibility of a Mac (high end or low end) simply does not allow them to make that choice. They simply look at the ubiquity of Apple marketing and look at many people around them (who, of course, tend to be in higher socio-economic brackets) using Apple gadgets and assume that is the way for everybody… and that everyone’s computing needs are as simple or streamlined as their needs.
At any rate, that is why I hate Apple (or, at least, some of its effects), but not really Apple products.
.
PS. I updated this post to fix many stream-of-consciousness grammatical and spelling mistakes (I doubt I fixed them all) but also to add this final thought. Today, while interviewing candidates for a ‘techie’ position, I was reminded of another ‘Apple effect’ and that is the tendency to censor comments. I noticed this recently when Jon Stewart critiqued Apple and even its products while excessively pandering to Apple users (at the end of the Daily Show piece, Stewart acknowledged the ‘heresy’ of being critical about the company since his main demographic tends to be fans and users). Today, I noticed that when candidates made reference, from a technical and budgetary standpoint, to the unsuitability of Macs in an institutional setting (basically the points I am making here), they would do the same thing as Jon Stewart and make another pandering or positive remark (of course, there were Apple products on the table which were owned by some of the interviewers… so go figure.) It is interesting too since I think another feature of this many assume that the Apple vs. PC debate also includes non-computer-related Apple products like the iPod and iPad.* At any rate, that is another ‘Apple effect’ too.
*And, yes people, the iPad is not a full computer or tablet… in the previous sense of that term. Sure, it is a very cool device but it is not a computer… it is more like a well-designed media consumption device or, as I like to think of it, a direct link between your bank account and iTunes 
.
Moblin 2.1 on an inherited Dell netbook
A little while ago, I inherited a little Dell netbook (an early netbook as it is more like a tiny laptop) from my sister. The battery does not hold a charge very long and it was running kind of slow. It had Windows XP, SP2 for the OS and was used a lot over a few years. I thought I would use it to experiment with and so I accepted the gracious gift.
I instantly knew what I was going to do wit it… install Google Chrome and Moblin 2.1 that I had on a DVD (which I acquired from a DVD insert in either Linux Journal or Linux User). Perhaps Chrome had some problems negotiating older hardware or the version I had to install was intended for different hardware, but it was a glitchy install and basically unusable (I might give it another try again soon as I am sure it is my mistake). Next, I tried Moblin 2.1, a Linux distribution that is being supported by Intel. It is being developed for netbooks, handhelds and other mobile devices.
So far, it is an interesting operating system and I might just keep it for a while. I suspect that the hardware I am using (Dell Latitude D430) might be a little slow for its needs, but it seems like an interesting operating system if you only want to use your netbook as a surfing device. It is clunky when trying to use files (pdfs, text docs, or images) as it is really designed to work with the limitations of small screens. But it recognized the hardware instantly, connected to my wireless, and basically worked right off the bat. For surfing, it is very quick. It loads quickly and recovers from hibernation quickly too. Once you get used to the interface and figure out where and how to access needed resources, it is nice to use.
It is rather clunky when it comes to working with files since you navigate between open applications by using ‘zones.’ I saved some screenshots (which in Linux-based distributions like Moblin is very quick and easy) and moved them via a USB flash drive to a different computer in a normal fashion (I had read of some problems with USB drives if I remember correctly) and of course moving files over the network is fine. By the way, if you press ALT and <– (left arrow) or ALT and –> (right arrow) you access some kind of run-time debugging interface or something and so can see what is going on internally as you are working (this was interesting to view when I connected the USB drive as I could see it was reading the FAT file system). (To get back to a ‘normal’ view just use the key combination to go into the other direction.)
It is based on Linux so it will be basically familiar if you use some Linux-based distribution. After an update, I keep getting warning messages about the kernel failing to load properly but it seems to correct itself. Of course, the OS is still under active development and I don’t think I am really using it on hardware envisioned by the developers, so any glitches are to be expected.
The OS has a nice, clean (and slightly quirky) aesthetic too. It will be interesting to see where they take this but as I said, I think I will keep this on the Dell laptop for a while and just use it. This afternoon, I took it out with me to sit and read in my backyard. I was surprised and the quality of the Dell laptop to pick up signals in the neighborhood. It picked up the signal from my old wirless router at high strength and it was quick with accessing the web. So, if you are looking for a quick-but-still-in-development OS to try, Moblin 2.1 is interesting.