NBC Universal to be floated?

Probably the most under-reported politics storyline is the news that Vivendi may IPO its stake in NBC Universal. This is been seen as part of a larger move that is expected to see NBC spin out of GE which currently has majority control.

The political impact of this is likely to be significant. At the moment MSNBC has a bizarre status as a tabloid that changes political complexion from Conservative in the morning to Liberal at night. From a business standpoint this makes no sense, the audience for Joe Scarborough is not going to watch Rachel Maddow in the evening or vice versa.

MSNBC would surely have addressed this incongruity years ago if it had been an independent company or owned by a media combine (Comcast may acquire the majority stake). The reason it has not is that GE is an industrial combine whose management is clearly more comfortable with conservative commentators. In the wake of 9/11 the channel attempted to refashion itself as 'Fox News Lite'. The spectrum of political debate was deemed to run from John McCain on the left through Dick Cheney in the center and off into the far right. The Democratic Party, the party that had captured more votes in the 2000 Presidential election and only a few percent less in the 2004 election was to be considered an irrelevance, a party of perpetual opposition whose opinions were now irrelevant and were not worth air time.

Things look rather different now. The Democrats hold the White House, Senate and House and appear to have every chance of keeping them for the indefinite future. MSNBC has recognized this trend and has switched their programming so that they are now backing left and right approximately the same amount of time. This is what passes for 'balance', favoring the GOP when it is the dominant party and switching to 'balance' when it is not.

I expect that MSNBC will jettison its Conservative hosts soon after it changes ownership and afterward attempt to establish itself as the unabashed liberal equivalent to 'Faux' News.

That is really not good for liberals. The reason that the GOP is in the electoral hole that it is today is that it has been marinading itself in the ideological foment of Fox 24 hours a day. That is really unhealthy to say the least.

Instead of coming to terms with the fact that the Bush administration approach of executive policy made through gut level instinct was a total failure, Fox keeps telling the GOP to double down on the gut.

Historically the progressive party is the party of ideology and the conservative party the party of pragmatism. The idea being that most people will be better off with a pragmatic conservative than well intentioned liberal following some ideological program designed before the invention of the internal combustion engine. Thanks to Fox News in particular, and the Murdoch press ion general, the conservative and liberal parties throughout the English speaking world have switched roles. The liberal parties are now the party of pragmatism and the conservatives are the ones peddling the ideological drivel written by charlatans and frauds channeling pre-industrial economic sages.

Liberals have been well served by not having a Faux News of their own. Hopefully MSNBC will not become one.

What happens if we automate everything

According to legend, if you can boil a frog if you put it in cold water and raise the temperature to boiling slowly enough.

Strangely enough, there is even empirical evidence for the claim. One physiologist, a Freidrich Goltz noted that if you remove the brain from a frog, it will no longer hop out of the water. Small detail that, the brain had been removed. In another source which I was unable to track down immediately, a researcher noted that frogs with intact brains will tolerate higher temperatures if the water temperature is raised slowly. In several hundred observations, every frog jumped out except for the one which became the 'proof' of the anecdote.

The reason I raise the question is that I have been thinking about the question of what happens if computers and robots start working so well that they effectively replace most forms of human labor? The idea is not so far fetched as it was even a decade ago. Twenty years ago practically all leisure time was spent either sleeping or watching television. Today people while away the hours on the Internet.

As one of the instigators of this brave new world we have inflicted on you all, one of the most frequent objections made against proposals I make is that they will 'kill jobs'. To which I answer that eliminating unnecessary jobs is a good thing. One of the biggest challenges we face in the industrialized world is the fact of an aging population. People are living longer and spending a lot more time in retirement. So the people in work are having to work for the people who are retired. To date we have answered this issue by importing labor from the rest of the world. But those countries are also starting to face the same trends and those sources will dry up, if not reverse the emigration trend as ex-patriots start returning.

But what if every job turns out to be replaceable?

Economists are not much help on questions of this type. The best they can provide is an explanation of the circumstances that caused the last event. At worst they attempt to bully 'unqualified' commentators into silence with specious claims of expertise.

Only about 15% of the wholesale price of a book is paid as royalties to the author. If we add together all the costs associated with producing the content of a book they represent less than 10% of the retail price paid by the end customer. The other 90% represents the cost of paper, printing, distribution and retailing. Costs and jobs that will be eliminated entirely as the industry moves from paper to digital.

The story is not new, the introduction of industrial robots has led to a similar transformation in manufacturing industry. Employment in agriculture, already negligible, continues a steady decline. What is different this time is that the job losses are affecting the part of the economy that grew under the previous transformation. The 'knowledge workers' whose skills were meant to guarantee employment turn out to be as replaceable as the Victorian farm workers were.

Perhaps the biggest shock of the current recession was the realization that the feckless idiots funding extravagant lifestyles by borrowing against their house were previously the foundation of our apparent prosperity. Sales dry up when there is nobody with money to buy.

In retrospect, it appears that the introduction of containerized shipping transport is a much more likely cause of the recession in the mid 1970s than the oil price shocks on which it is usually blamed. The patient was already sick, the oil price shock was simply the trigger that sent him to the hospital. If the Wall Street crash had been the sole cause of the great depression it should have ended with the recovery that followed FDR's initial recovery act. Instead the country faced a second dip that I suspect was more likely caused by the displacement of agricultural workers displaced by rural electrification.

It is perhaps the worst legacy of Keynes that economists insist on ignoring the impact of technology on the economy in favor of mathematical and fiscal explanations for economic trends. It is not surprising why they prefer this, you can't plot a smooth curve through the invention of the shipping container, the barcode or the World Wide Web. More importantly, predicting economic trends from technology trends would require intellectual skills that modern economists have largely abandoned in favor of abstract algebra.

So we are caught in something of a trap. The aging population will cause our living standards to collapse if we do not eliminate jobs fast enough. But if we eliminate too many jobs we risk a depression or a slump. There may not even be a 'Goldilocks solution', merely eliminating the unnecessary jobs means that the economy has the additional capacity to meet the increased needs, it does not guarantee that the resources can be moved from one place to another.

We are caught in a trap, but here is where the frog comes in. If the water gets too hot, we can jump out.

As technologists, our only responsibility is to make sure that the economy has sufficient capacity to meet necessary needs. We cannot and should not worry about doing that job too well. If there is a temporary shortage of demand then it is the responsibility of government to address the issue. If we reach the automation limit then society is going to have to invent a new basis for allocating resources.

Cloud Coockoo Land Computing

According to Slashdot, Booz-Allen has analyzed the cost of cloud computing for the federal government in a new report

So what does the report actually say?

As with many articles written by consultants, this one spends a great deal of time introducing Spurious Three Letter Acronyms (STLAs) and almost none explaining or justifying its underlying assumptions.

The short answer is that the government can best realize the cost savings of cloud computing by moving as fast as possible. It is thus regrettable that "there are currently no security standards for cloud computing".

In other words, we have an analysis of the cost/benefits of cloud computing that is forced to admit that the brave new world of cloud computing suffers from at least one significant technical deficiency.

Once this is understood, we can view the reams of jargon in a somewhat more skeptical light. The article is heavy on conclusions but the assumptions leading to those conclusions are hidden in the proprietary Booz-Allen "detailed cost model".

Forgive me for being a skeptic on this, but hasn't every development in computing infrastructure offered lower costs? When was the last time one actually did? Despite predictions, paper consumption increased rather than decreased as a result of the paperless office. It is only recently that electronic displays have become good enough and ubiquitous enough to rival paper. And the largest factor in the current decline in the demand for wood pulp is the displacement of newspaper by the Web.

Cloud computing certainly offers major cost savings in certain specific types of computing environment. But talk of 'the switch to cloud computing' suggests that cloud computing guarantees significant cost savings in every type of computing environment.

At no point in the Booz-Allen article do we learn where these cost savings are to come from. It is implied that some of the savings will come from lower expenditure on hardware and power as a result of better utilization of the underlying resources. There is also what should be a very clear red flag in the assumptions:

"Existing application software will migrate with the infrastructure to the cloud. Application software support costs remain out of scope. "

While some applications will migrate to a cloud environment without issue, those of us who have experienced government computing environments know that even minor changes can require considerable time and days of expensive consulting effort. In a government environment the costs of failure are high. The processes that control change to critical computing resources are designed to mitigate the risk of failure. Computing resources are comparatively cheap compared to consulting manpower. It is by no means obvious that cloud computing will be a break even prospect for the typical government data system, let alone a source of savings.

It is certainly rather difficult to understand how a $3 million investment in cloud computing infrastructure would result in a reduction of 'O&S' expenses from $77.3 million to $22.5. No explanation is given for these figures except for the admitted omission of the costs of migrating applications. While hypothetical cost savings of $50 million for a single data center might appear to be impressive, it represents only a hundred man years of consultant time, an amount that can easily be consumed several times over when an agency is required to make substantial configuration changes to every application running in the data center.

The key oversight of the article is the fact that no distinction is made between adopting the cloud computing model for new infrastructure deployments as opposed to 'switching' existing deployments to the cloud model. This distinction is critical when we look at the costs that the model is focused on:

4.Our model focuses on the costs that a cloud migration will most likely directly affect; i.e., costs for server hardware (and associated support hardware, such as internal routers and switches, rack hardware, cabling, etc.), basic server software (OS software, standard backup management, and security software), associated contractor labor for engineering and planning support during the transition phase, hardware and software maintenance, IT operations labor, and IT power/cooling costs.

These are of course costs that are typically incurred early in the deployment of a specific application. Once a system is deployed these are sunk costs that will not be recovered through a 'switch' to the cloud. While a switch to the cloud may allow a reduction in the cost of power and cooling, this benefit must be set against the real costs of making a significant change in the configuration of a deployed system, costs which are omitted from the Booz-Allen model.

The only scenario in which it is likely that cost savings of the magnitude anticipated in the study might be realized is if the cloud computing model is adopted before the expenditures are made on hardware infrastructure when a new application is deployed or a major revision made to an existing application.

While the savings in such circumstances may well be significant, it is important to describe them as a development choice and not the 'switch' described in the article. Since only a small percentage of government information technology applications are newly deployed or substantially revised in any given year, it follows that the expected savings from cloud computing will also be modest in any given year, if indeed it is possible to reliably measure them at all.

Since the savings from cloud computing are likely to be considerably more modest than those promised, the urgency for action is likewise reduced. Rather than committing to 'switch' to the cloud computing model as quickly as possible, government agencies should only proceed at the rate justified by actual cost savings from actual trials.

Cloud computing certainly offers significant advantages to certain enterprises for certain types of computing services. In particular it is likely to be most relevant for the small enterprises that have no computing staff whatsoever, let alone dedicated 'data centers'. The more often cloud computing is presented as a panacea, a magic wand that automatically delivers dramatic cost savings with little effort, the more practitioners are going to dismiss it as yet another passing fad that promises much and fails to deliver anything.

James Arthur Ray | Create wealth in all areas of your life: Financial, Relational, Mental, Physical and Spiritual.

Take a look at the Web site of 'motivational speaker' James Arthur Ray.

No cliche left unturned, note the use of words like 'harmonic' and 'spiritual'. There is even a little pyramid thrown in there.

This is the guy who ran the 'Spiritual Warrior' sweat lodge ceremony at which three people died.

50 people at $9695 each, makes close to half a million dollars, not bad for a week's work.