ARTS & FARCES internet

Business

Richard Florida calls it the Great Reset. Others call it Freelance Nation and the Gig Economy. Sara Horowitz, writing for the Atlantic, calls it the industrial revolution of our time. It’s been a long time coming, and now it’s finally, really here. No more spending an entire career working for a single company, keeping your head down for the last 10 years to ensure your pension. As Horowitz writes, “We’re no longer simply lawyers, or photographers, or writers. Instead, we’re part-time lawyers-cum-amateur photographers who write on the side.” Horowitz reports that as of 2005, one-third of the US workforce were at least partial participants in this new freelance economy and that by 2009, “entrepreneurial activity” was at its higher than it had been for 14 years. Surprisingly, or perhaps not, the US government stopped tracking independent workers in 2005. Horowitz, who founded Freelancers Union, writes that it’s time to migrate our support system from the employment model to one that is more flexible and mobile. “The solution will rest with our ability to form networks for exchange and to create political power,” writes Horowitz. “I call this ‘new mutualism.’” She promises to dig deeper in subsequent articles.

This week the Institute for Policy Studies (IPS) released its 18th annual executive compensation report which opens, “Corporations don’t dodge taxes, the people who run corporations do. And these CEOs are reaping awesomely lavis rewards for the tax doding they have their corporations do. In fact, corporate tax dodging has gone so out of control that 25 major US corporations last year paid their chief executives more than they paid Uncle Sam in federal income taxes.” Those 25 companies averaged global profits of US$1.9 billion (seven showed losses) and paid their chief executives an average US$16.7 million annually. The IPS report, as Katrina vanden Heuvel, writing for the Nation, points out, has cost the US government at least US$100 billion annually. Chuck Collins, one of the co-authors of the IPS report, notes in an article for Yes!, that “20 of the 25 companies spent more lobbying Congress last year than they paid the IRS in federal corporate taxes.General Electric invested $41.8 million in lobbying and got $3.3 billion in tax refunds. Boeing spent $20 million on lobbying and got a $35 billion contract from the U.S. government, while paying a paltry $13 million in U.S. taxes for a company with $4.3 billion in U.S. income last year.

Business

Matt Haughey reveals the utter bullshit that is the credit scoring system in the US. While in college, Haughey racked up debt because he was amazed that anyone would give him credit. His credit lines kept growing, as did his credit score, since he wasn’t paying much, if any, of the debt off. Several years later Haughey and his wife paid off all their consumer debt, closing unused credit card accounts, and began using a debit card instead of credit cards. Reducing his use of credit, closing unused accounts, stocking his retirement account, and paying ahead on his mortgage was rewarded with a lowering of his credit score from the 800s to the high 600s because he opened a new credit card account with a lower line of credit. “I had the highest credit score at a time in my life when I was leveraged to the hilt and I lived paycheck to paycheck,” writes Haughey. “Now that I have my own business, a healthy retirement, and can pay for everything I need/want, I have a low score and I’m dubbed a higher risk even though my ability to pay is very high. I used to think a credit score was all about your ability to pay, but it’s clear now it’s more about how profitable you will be to banks.”

Stephen Roach, Morgan Stanley’s chief economist since 1991 and the investment bank’s nonexecutive chairman for Asia, told CNBC that it’s imperative to get consumers spending again in the US and that consumer debt forgiveness may be necessary. Roach told a presumably shocked host that while a stronger dollar and higher interest rates would work, he preferred a more direct approach: “... ways to forgive the excesses of mortgage, installment, and revolving credit, as what was done in the 1930s, that will help consumers get through the pain of deleveraging sooner rather than later.” Roach went on to lay the blame squarely at the feet of the bankers: “... they’re the ones who wrote the bad loans and they’re the ones who had the free ride. There’s no gain without some pain and we have to decide who in society has to bear the brunt of that.”

If you thought the housing bubble was a wild ride, buckle up for the coming higher education bubble. Andrew Hacker and Claudia Dreifus, writing for the Atlantic, published a stunning analysis of the student loan crisis that this fall will close in on US$1 trillion. Middle class families traditionally paid for college educations for the kids with savings, but now two-thirds of all undergraduates carry education debt which, according to the College Board, averages US$27,650. And that’s non-dischargable debt that never, ever goes away. But it took Daniel Indiviglio’s chart a day later to really make this sink in. Since 1999, student loans have grown by an absolutely shocking 511 percent. That dwarfs US household debt that is currently growing at about 150 percent.

Steve Jobs has resigned as Apple’s chief executive effective 24 August 2011.

Business

Google is buying Motorola for US$12.5 billion. Corporate media, at least initially, mistakenly thought that Google is getting into the hardware business. By the second day, most had picked up the reasoning of the bloggers, recognizing but not acknowledging their error. This is all about defending itself from the patent trolls. For its US$12.5 billion, Google gets 25,000 patents and a handset vendor. More than anything, Google’s purchase should serve as a giant red flag that the US patent system is badly broken. Think about how many jobs—or how much innovation—that US$12.5 billion could have created if, as Jeff Jarvis notes, Google didn’t have to spend it on rat poison. Meanwhile, meet the new borg and wonder what will happen when it buys Sprint.

In a remarkable op-ed for the New York Times, Warren Buffett writes that it’s time to derail the super-rich gravy train. Buffett reveals that in his 21 person office, he pays the lowest tax rate, mostly because of the “carried interest” tax code loophole, allowing his income to be taxed at 15 percent. His tax rate (17.4 percent) was less than half that paid by his employees (36 percent). When the capital gains tax rate was 39.9 percent in the mid-1970s, Buffett continued to invest. Buffett proposes raising the tax rate on those with taxable income greater than US$1 million “... including, of course, dividends and capital gains.” And another tax rate increase on those making US$10 million or more.

Censorship

The Long Beach police have a policy whereby photographers are detained for taking pictures “with no apparent esthetic value.” So reports Greggory Moore, writing for the Long Beach Post.

Intellectual property

When US copyright law was revised in the mid-1970s, creators were granted termination rights whereby they could recover control of their works after 35 years, if they apply at least two years in advance. This means that recordings made in 1978 are eligible for these termination rights. Bob Dylan, Kris Kristofferson, Tom Waits, and other musicians and songwriters have filed their intent to regain control of their work. “In terms of all those big acts you name, the recording industry has made a gazillion dollars on those masters, more than the artists have,” Don Henley of the Eagles told Larry Rohter, writing for the New York Times. “So there’s an issue of parity here, of fairness. This is a bone of contention, and it’s going to get more contentious in the next couple of years.” Rohter reports that the four major recording labels—BMG, EMI, Sony, Universal, and Warners—and the Recording Industry Association of America (RIAA) will fight to retain the rights. The labels argue that they own the master recordings in perpetuity and that the musicians and songwriters made the recordings under work-for-hire arrangements. If that were true, the labels would hold the copyrights, not the artists and the artists would have never had to pay for the recordings to be made. Bob Marley’s heirs sued Universal to regain control of five recordings in 1981. Last September a New York federal district court ruled that “each of the agreements provided that the sound recordings were the ‘absolute property’” of Universal. That decision only applies to recordings created before 1978 and Marley’s heirs are appealing.

Business

Barbara Ehrenreich’s 2001 Nickel and Dimed surveyed the poor in the best of times. In a column for the Guardian, 10 years later she doubts she’d be able to repeat her “experiment” of trying to make ends meet by working unskilled jobs at US$6-US$7 per hour because she wouldn’t be able to find a job. Overcrowding apartments, food auctions and urban hunting, and reduced use of prescriptions and healthcare services are how the working poor are dealing 10 years on. Ehrenreich questions why food stamp use is up by about 30 percent and welfare reform is up by only about 6 percent since the recession began and finds, “There is a right to food stamps. You go to the office and, if you meet the statutory definition of need, they help you. For welfare, the street-level bureaucrats can, pretty much at their own discretion, just say no.” Poverty, Ehrenreich observes, has been criminalized in the US.

Censorship

The Bay Area Rapid Transit (BART) system in San Francisco shut down cellular telephone service Thursday night in four downtown stations to subvert a protest over a shooting by a BART police officer. Transit system officials “shut down power to the nodes and alerted the cell carriers,” reports Elinor Mills, writing for CNET, citing James Allison, BART’s deputy chief communications officer. Allison goes on to tell Mills that the action was taken to “ensure the safety of everyone on the platform.” Really? By blocking 911 calls? Mills reports that BART first asked the carriers to suspend service but then decided to cut power itself. As for the telecommunications carriers? AT&T and T-Mobile had no comment for Mills. Sprint and Verizon didn’t respond or said they were looking into the matter. BART and, perhaps, the carriers have placed themselves squarely in the shoes of Hosni Mubarak, the former president of Egypt currently facing trial. Mubarak ordered cellular service shut down in Tahrir Square in response to peaceful, democratic protests this spring. Freedom of expression is a fundamental human right and what BART (and possibly the carriers) did in cutting power to the nodes constitutes prior restraint of the First Amendment rights of every citizen in the stations.

Media

Richard Saul Wurman launched the Technology, Entertainment, and Design Conference (TED) in 1984, selling most of the rights to Chris Anderson in 2002. Warren Berger, writing for Fast Company‘s Co.Design, reports that Wurman is back with the WWW Conference, an attempt to reinvision the business conference yet again; this time with public one-on-one conversations. Between two humans. No speeches; no slide shows. Conversation. Wurman describes the endeavor as “like a dinner party with a hundred of the world’s greatest minds having a conversation, two at a time,” and aims to launch it in the fall of 2012. The conversations will be held in front of a small, invitation-only audience with the experience captured in a commercial app.

Business

Christina Larson, writing for Foreign Policy, has a devastating take-down of Apple’s operations in China, specifically the company’s indifference to “labor rights and environmental enforcement.” That’s in addition to its well-known secrecy and obfuscation. Instead of a marketing emphasis on rebellion that works so well in the west, Apple has focused its marketing on the luxurious nature of its goods. But those are first-world problems. The depth of Apple’s corporate depravity is tapped when Larson looks at how Apple treats its low-level manufacturing employees. They’re not actually Apple employees, but rather employees of convenience for Apple’s subcontractors and manufacturing partners.

ESRD

Researchers at the University of Miami Medical School claim to have identified a protein in the blood—suPAR—that is capable of scarring the kidney and reducing its filtering capabilities. Locating and removing suPAR in a patient’s bloodstream can slow the progression of chronic kidney disease. Jochen Riser tells Fred Tasker, writing for the Miami Herald, “This will have a significant impact on chronic kidney disease. It can reduce the need for dialysis and kidney transplantation, and increase the success when you do have transplantation.” The results of Riser’s study were published in Nature Medicine‘s July issue. Martin Pollak at the Harvard Medical School told Tasker that Riser’s discovery helps medical practitioners understand chronic kidney disease.

The Colorado US Attorney’s Office has opened a grand jury investigation into the practices of dialysis provider DaVita, Inc. This appears to overlap with a US Justice Department investigation into overuse of Epogen, the drug used to treat anemia in dialysis patients. In an earnings call, Kent Thiry, DaVita’s chief executive, said the company’s relationships with physicians is of particular interest to the Coloradio US Attorney’s Office, report Christopher N. Osher and Jennifer Brown, writing for the Denver Post.

Intellectual property

The Electronic Frontier Foundation (EFF) has published a remarkable response by Corynne McSherry and Eric Goldman to the deal recently announced by the entertainment cartel and the large US internet service providers to work together in a “graduated response” to alleged copyright infringement on the internet. What would have happened if users were at the bargaining table, asks McSherry and Goldman. Most importantly, “The burden should be on the content owners to establish infringement, not on the subscribers to disprove infringement ... Subscribers should be able to assert the full range of defenses to copyright infringement ... Content owners should be accountable if they submit incorrect infringement notices…,” write McSherry and Goldman.