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Big business news this past week was made by IBM’s sale of its PC business. And it raised a lot of eyebrows, as well it should. Here was IBM, one of the original major players in the PC business—in fact, the company that gave that business the moniker, “PC”—selling it off.
But there were a lot more reasons for eyebrows to be raised—reasons that were hardly discussed in the press at all.
Why was IBM selling a business that grosses over $9 billion a year, for a paltry $1.8 billion? After all, just a few years ago Hewlett-Packard paid $25 billion for Compaq Computer. Okay, IBM wasn’t making a profit, but HP is actively developing their PC business, and with the IBM brand name, and $9 billion in additional annual sales, they could make the computers their way so as to control prices, and build their business substantially.
Robert X. Cringely writes weekly on technology. His widely-read columns are on the PBS web site. I’ve been a regular reader of his for years. (In fact, a suggestion of mine became the subject of two columns of his in 2001.) He writes:
Okay, so IBM didn’t want to make HP an even bigger competitor, then why not sell to a big Japanese player like NEC, which after all paid more than $1.8 billion for Packard Bell, of all things. The dollar is down, the yen is up, and the cost of corporate borrowing in Japan is almost free, so why didn’t IBM sell to a Japanese company? Or a European one? Or even another American company? Gateway paid more cash for e-Machines than Lenovo is paying for IBM; Wouldn’t Ted Waitt have ponied-up big bucks for the use of the IBM brand? Of course he would have.
So what’s the explanation? China. Population 1,295,000,000 (in 2000). Vast new market for information technology products. Cringely continues:
What is absolutely key to this deal is that the buyer is Lenovo, the largest Chinese PC manufacturer. Yes, the division was unprofitable and IBM would have eventually had to do something about it, but Sam Palmisano wanted a Chinese buyer and was willing to accept far less cash than he might have received elsewhere just to get the buyer he wanted.
IBM got rid of a headache and in doing so, gained unique access to what will shortly be the world’s largest IT market. This deal is all about China, not the U.S.
Doing business in China always requires having a partner. You don’t just set up an IBM China and start selling stuff. You find a local partner company and move into the market together. Now IBM’s partner will be Lenovo, the biggest, baddest PC maker in China, which is a good partner to have. IBM not only has its Chinese partner, it has a substantial equity position in that partner as a result of this transaction. That’s unique as far as I know. Chinese-U.S. corporate partnerships aren’t always the easiest marriages, but in this one, IBM actually has a vote. It also got Lenovo to move its global headquarters to the U.S. and accept an American CEO and 10,000 U.S. employees, which will have to change the way Lenovo runs its global business.
In any other U.S.-China corporate partnership, a top-level meeting requires a 20-hour plane ride, but the top guys at IBM and Lenovo can meet for lunch at Denny’s. All this is nothing but good for IBM. Look for this partnership to expand inside China to cover much more than just personal computers as IBM tries to become the number one or two player in every segment of Chinese IT.
And that’s how that works. What appears in most press accounts to be a head-scratcher, or a debacle for a great American company, is in fact a work of profound global strategic business insight.
Wall Street Journal editorial board member Susan Lee discusses Social Security Reform in a recent op-ed piece. Her observations were a surprise to me. I’d been under the impression that there was no plan currently under discussion that could rescue the program.
Lee notes that current Social Security payments increase from year to year to keep pace with increases in wages. She contends that if increases kept pace with increases in prices, rather than wages, that alone would fix the system:
All [social security] benefits are based on something called the primary insurance amount. This amount, in turn, is based on a worker’s earnings, indexed to the growth in average real wages, for the highest 35 years of earnings…So every retiring worker gets to take advantage of overall economic prouductivity, pushing up the level of wages during the time in which the work was performed. This adjustment allows the purchasing power of benefits to grow over time…
Under the current arrangement, the purchasing power of benefits grows over time. In other words, historically wages are increasing faster than prices—which in itself is a very interesting and encouraging insight. Possibly the original planners of Social Security did not foresee this. It’s this disparity, Lee observes, that’s crushing the system:
If benefits were indexed to prices however, Social Security would, at this very minute, be in balance over the long-termthe system would be permanently solvent. Not only would future revenues equal future costs, but there would be a surplus!
Indexing for price changes alone would protect retirees, new and not-so-new, from inflation, thereby maintaining purchasing power.
Hal Pawluk of BlogCritics disagrees:
Earlier in her column she quickly glosses over a couple of key facts:
...the proposed switch to price indexing would reduce benefits relative to what the current law promises (and would require a 50% increase in payroll taxes to finance). [Ibid.]
So how wonderful is that? If the payroll taxes are raised without privatization, Social Security is fixed, so why privatize and reduce the benefits?
Hal is saying that he finds a mere 50% increase in payroll taxes to be a perfectly acceptable way of fixing Social Security. If that’s the best argument against what Lee is saying, then the opposition to this appears weak.
Tyler Cowen of Marginal Revolution agrees with Lee, saying “Did you get that right? Just stop boosting benefits.” [Emphasis in original – ed.]
It is encouraging that what Lee is proposing isn’t some pie-in-the-sky plan that will never get a chance to be implemented. It’s part of a plan that has been proposed by the President’s Commission to Strengthen Social Security:
Look no further than Plan Two offered by the President’s Commission to Strengthen Social Security, in 2001. ...Plan Two changes the way benefits are allowed to grow. How? You guessed it, by replacing the computation of benefits via wage indexing to a policy under which initial benefits would grow from one cohort to the next at the rate of price increases.
Cathy Siepp has had a look at The Real Gilligan’s Island, a new reality show.
I tried to watch The Real Gilligan’s Island, the new TBS reality series in which two Skippers, two Gilligans, etc. compete to see who can be rescued first, but gave up on the wretched enterprise after 15 minutes.
I had a similar experience. Regarding the original, which “has never, not once, been off the air since its CBS premiere 40 years ago,” Cathy notes:
The Millionaire displays an unseemly Western uxoriousness toward to his one wife insulting to societies where women are fourth-class citizens, after the children and the camels. Mary Ann, besides her fondness for short-shorts, is offensively spunky to anyone who thinks women belong in burkas.
Then there’s Gilligan, the essence of the nave, childish American as Americans are so often described, ad nauseum, abroad. But bumbling, unsophisticated Gilligan has a way of ruining the plans of every Soviet cosmonaut or banana-republic dictator who drops by the island.
“Representing the average citizen at his most ordinary,” literary critic Paul Cantor wrote in his 2001 book Gilligan Unbound: Pop Culture In the Age of Globalization, “Gilligan presides over a kind of democratic utopia on the island and is repeatedly called upon to act as its savior.” What’s more, he always prevails.
Given what Cathy points out, it seems to me that it’s a surprisingly good representative of America to the world.
I’ve really enjoyed assembling this week’s COTV. I received many submissions from blogs I read regularly, as well as from sites that were new to me and which I look forward to visiting again. Herewith, now… the 116th CARNIVAL OF THE VANITIES.
Dr. Charles is reading The Da Vinci Code, (which I just read as well), and posts some very intriguing and funny reflections on things that only a professional physician would work with.
These physician blogs rock. Mad House Madman has a very moving post on having to tell a patient that an x-ray indicates the presence of cancer.
The Electric Commmentary notes an instance of the term “racism” being applied to a clothing policy at a bar—for which white customers are turned away far more often than black customers. If real racism is getting so rare that the word is now applied to clothing policies like this, perhaps it means we’re getting somewhere on this issue.
”...is it too much to think that we might measure the quality of education by the, um, quality of education, and not by how much the employees make?” That’s the question posed by Coyote Blog in finding that the Latest NEA School Report is Absurd.
Sean Gleeson brings us “Jinkies, it’s Murrow’s Ghost!”, in which the Scooby Gang investigates Dan Rather’s sightings of the ghost of Edward R. Murrow. It’s really funny.
False Assumptions nails the errors in a recent environmental report on the arctic climate and global warming.
Shaking Spears talks about the coming of Democracy to the mid-east: Iraq Tectonics.
From nikita demosthenes: “Viktor Yanukovych’s goons apparently poisoned Viktor Yushchenko using dioxin or a similar toxin”...
...but at time of going to press Code Blue Blog had found no evidence that Yushchenko was poisoned—and presents evidence to support an alternate diagnosis, of a more common condition.
Paris Hilton looks quite different as a brunette. Spirit Fingers has a photo, as well as thoughts on several blond-to-brunette celebs.
Tim Worstall notes that the “New Math” hasn’t kept pace with the new world.
The Radical Implications Of Affirmative Action are analyzed in an incisive post from Discriminations.
Kelly Marshall tracks career moves of several prominent media personalities in Firing Day.
Josh Cohen has a fascinating discussion of the states-rights implications of a current case before the Supreme Court involving medical marijuana.
Darleen is just a little—shall we say—steamed that some Liberals haven’t yet come to terms with the election results. Just a little bit.
DaGoddess watches an ultra-liberal local university roundtable discussion on TV, and channels what life may be like for the participants.
The history of Key Lime pie is entertainingly available chez Blog D’Elisson.
PeakTalk has a lot of good observations on Europe’s current approach to Islamo-fascists.
Bob Gronlund is happy to say that this homebrew bumper sticker hasn’t gotten him in trouble yet. Also, I saw this cool quote in his sidebar: “When my grandfather left Europe in 1937, the graffiti on the walls read, ‘Jews go to Palestine’. Today the graffiti reads, ‘Jews out of Palestine’. How soon Europe forgets.”
Paul Gorman has observations on Todays Modern Media.
Thoughts on politically correct language are on FringeBlog.
Classical Values has a comparison of public attitudes toward gay behavior in Japan vs. the U.S.
45% of Brits Never Heard of Auschwitz? Interested-Participant has the scoop.
point2point has Ten Things More Pathetic than Cheating in a Weblog Awards Poll.
Solomonia has thoughts on the first public showing of Columbia Unbecoming, a new documentary.
Taken in Hand has a discussion of some fairly trippy dominance and submission stuff.
The Unrepentant Leftist finds that the war in Iraq was intended to make profits for Halliburton.
Parableman finds that Conservatives who oppose Bush’s nominee for attorney general are acting like Liberals who opposed John Ashcroft.
Let’s Try Freedom has a series of posts regarding gay marriage.
Intellectualize says Iraq was The wrong war for the wrong reasons.
John Ray opines that Most Morality is Instinctive.
And praise for Spiderman 2 comes from Watcher of Weasels.
And that wraps up this week’s COTV. It’s been great hosting it. Thanks to Silflay Hraka for creating and maintaining COTV. Watch The Pryhills, for next week’s edition.
Update 12-9-04. Thanks to Instapundit for the link.
BLOGROLLED BY MORE GREAT SITES. The Big Picture is honored to have been added recently to the blogrolls of these weblogs:
Medienkritik
Regime Change Iran
The Right Blog
The Royal Flush
The United States of Earth
Iraq War Was Appropriate
Pattern Recognition
Radio Blogger
To the owners of these sites: thank you!
Govindini Murty on MSNBC Tonight. My friend Govindini, who with her husband Jason Appuzo organizes The Liberty Film Festival, will be on MSNBC’s Scarborough Country tonight. Jason and Govindini send this email:
Dear Friends of the Liberty Film Festival,
Festival Director Govindini Murty wil be on MSNBC’s Scarborough Country tonight, Tuesday, December 7, from 7:30 – 7:45 pm Pacific (10:30pm – 10:45 pm Eastern), with a repeat 12:30am – 12:45 am Pacific (3:30am – 3:45 am Eastern).
Govindini will be speaking on the topic: “Should the left dump Michael Moore and his politics of hate?”
Of course, being somewhat of a contrarian, Govindini will argue that the left should not only not dump Michael Moore, but should embrace him even further. She hears the U.N. will be seeking a new Secretary-General soon – perhaps filling Kofi Annan’s illustrious shoes is the logical next step for someone of Michael Moore’s weight and gravity.
After all, in a long line of liberal totalitarian apologists – from Walter Duranty in the 30’s (who covered up Stalin’s mass murders for the New York Times) – to Hanoi Jane Fonda in the 70’s, Michael Moore is unique in being the first left-wing media celebrity to actually tilt an election to the right.
In fact, if Michael Moore hadn’t existed, we on the right might have had to invent him.
The Liberty Film Festival would once again like to thank Michael Moore for helping elect President Bush, turn mainstream America against liberal Hollywood, and inspire a whole new generation of conservatives to enter filmmaking!
Jason Apuzzo & Govindini Murty
Co-Directors, Liberty Film Festival
http://www.libertyfilmfestival.com
I’m looking forward to seeing this.
Update 10-9-04: Govindini did so well she was invited back to Scarborough Country the very next night. My favorite moment was when she told the Liberal panelist that he was living in a fantasyland!
Coming tomorrow: The 116th Carnival of the Vanities. Lots of great articles came in. I think you’ll enjoy it.
Wave of the future? Throwing out plastics could plants flowers. Evidently Motorola has worked with their supplier, Pvaxx R&D, and developed a completely biodegradable plastic:
Scientists said on Monday they have come up with a cell phone cover that will grow into a sunflower when thrown away.
Materials company Pvaxx Research & Development, at the request of U.S.-based mobile phone maker Motorola, has come up with a polymer that looks like any other plastic, but which degrades into soil when discarded.
...”It’s a totally biodegradable and non-toxic plastic,” said Pvaxx spokesman Peter Morris.
“This is the first product that we’ve made public. We’re working with blue chip companies and will introduce several products next year,” he said, adding it would be used in electronics, horticulture, ammunition and household cleaning.
Embedding a sunflower seed in the plastic can lead to a flower growing when the plastic is discarded:
...Researchers at the University of Warwick in Britain then helped to develop a phone cover that contains a sunflower seed, which will feed on the nitrates that are formed when the polyvinylalcohol polymer cover turns to waste.
The LA Times has a story today that makes our military look good. It’s buried on page A9.
It reports on special units of Marines, the elite Force Reconnaissance units, that covertly infiltrated Fallouja two days before the battle, to provide intel on the enemy, and to “shape” the battle:
Almost two days before the battle for Fallouja, the Marines’ elite Force Reconnaissance units had infiltrated the northern periphery of town. They had dug into “hide sites” and “shaped” the future battlefield, calling in guerrilla positions for the spectacular bombardment that preceded the invasion.
”’Shaping’ the battle is making the enemy do what you want him to do,” said Marine Gunnery Sgt. Ed McDermott, 35, of Force Recon. “You drop bombs on him. You make him pull back. You subject him to direct and indirect fire. You cut off his supply lines.”
...”Force Recon provided us with some tremendous capabilities,” said Col. Craig Tucker, who headed one of the two major battle groups that descended on this city last month. “I just can’t say enough about the job they did.”
The reporter was with them during the battle:
The specially trained Marines are similar to Navy SEALs and Army Green Berets and Rangers. Their precise role is often shrouded in secrecy, but a group attached to the 1st Battalion of the 8th Marine Regiment during the battle of Fallouja agreed to talk as the fighting raged.
“We enjoy what we do,” said Capt. Jason Schauble, 29, a Force Recon commander whose platoon suffered casualty rates of more than 50% during the fight, though most returned to action. “There’s a lot of risks, but we’re all volunteers. We understand the risks.”
They spoke late at night in this blacked-out and devastated city from their perch in a darkened fourth-floor apartment that once housed guerrilla gunmen.
In one of the rooms, Staff Sgt. Mark Detrick lay on his stomach in classic sniper position, his rifle balanced on a tripod, its muzzle protruding through a punched-out hole in the wall. “They don’t have a clue what’s coming,” Detrick said, scanning the ruins of the city to the south, where unseen combatants were still dug into the rubble and moving about.
The enemy liked to take a lunch break:
The firing leveled off about midday, as it often did during the fighting in Fallouja. The insurgents were inclined to take a break, grab a bite, maybe take a nap, before resuming their labors in the afternoon, Marines said.
Descriptions of fighting:
“As we were crossing to go, some machine gun and something else [coming] from an alley just lit my team up,” Detrick, 29, recalled. “Right off the bat, my assistant team leader, he got hit and he was down, KIA [killed in action] automatically.”
Detrick and others took cover at a garbage Dumpster, cut off from the rest of their unit. “As I was crawling up, they shot an armor-piercing round through that Dumpster,” Detrick said. “It hit the ground in front of me and bounced off my left forearm. Hit the wall behind me and came back at me.”
The staff sergeant got a good look at the round. The memory lingers: “It was basically a steel bullet about a foot and a half long, an inch in diameter.”
Fortunately, the lethal projectile, meant to pierce tanks, didn’t explode.
...But by 4 p.m. that first day, the streets again resounded with gunfire, the crackling rounds of Kalashnikovs and the steady thuds of M-16s.
To the east of a Force Recon position, a group of insurgents was suddenly flushed from an alley. They jetted down an open street, apparently trying to join colleagues retreating to the city’s southern reaches. Within minutes, four were slumped over, cut down by intense Marine fire. One of them had lugged a heavy machine gun and had several belts of large-caliber ammunition slung on his shoulders. The Force Recon troops say the four were probably responsible for the death of their comrade.
“There’s a very good chance we got all or part of those guys who killed our guy,” said the officer called Frisky. “I think it’s important to mention that.”
...On Nov. 12, three Force Recon Marines survived a pair of rocket-propelled grenades that blasted the apartment where they were holed up. Cpl. Frank Delgado was knocked unconscious by a separate RPG barrage and pulled from the rubble; he was later shot as Marines exchanged fire with attackers positioned in another mosque. Delgado was evacuated and survived.
In all, 13 of Schauble’s platoon of 24 would be eligible for Purple Hearts for injuries sustained in the battle for Fallouja. Several, among them Detrick and Delgado, are in line for multiple Purple Hearts.
The rebels who had held sway for so many months in Fallouja were soon on the run, pushed south in an increasingly desperate struggle.
When great reporting like this, that shows the bravery of our military, is hidden on an inside page, what does that say to reporters who are trying to get their work on the front page of the paper? Well, let’s see what Iraq headlines the LA Times put on their front page today:
But the report that shows the bravery of our guys, was put on page A9.
There’s nothing subtle about that.
How Apple Got Itself Out of Some Trouble in the UK. A whole bunch of British rock royalty recently remade Do They Know Its Christmas?, with proceeds to go to charity. Apple’s iTunes refused to carry it, because everywhere else it’s being sold for twice the normal price for a song download so as to raise more money, and Apple has a policy that every song it sells costs the same. So this was turning into a big anti-Apple story in the British press:
As you might imagine, many people took umbrage at Apples scrooge-like stance. How dare it deny charity for the sake of some arbitrary pricing policy?
In a surprise move that got them out of trouble, Apple decided to sell the song, at the usual price, and contribute the difference to charity out of its own pocket.
Also surprisingly, the rest of the UK online music business—instead of following suit—decided to slam Apple:
You can imagine the screams of outrage from those merchants who were selling the song for twice the price. A spokesman for Napster voiced the industrys reaction thusly:
We are pleased to see that iTunes has finally agreed to sell the Band Aid 20 single, but disappointed theyve chosen to use the biggest charity event of the year to undercut every other music retailer in the UK.
...If Napster is so concerned about this it need do one thing only: Play the same game. Theres nothing to stop it from charging 69 pence for the song and dipping into petty cash to make up the difference.
After all, its for charity.
It’s a pretty good story, isn’t it?
In 2004 mainstream media was finally revealed to much of the public as being little more than a PR machine for the Left. It was seen that MSM had lost sight of their rightful, honorable, and noble mission of reporting all the news. It was not just a matter of what they reported, but also a matter of what they refused to report—of what they suppressed. For example, there were month after month of stories on Abu Ghraib, but there was very little about the Swift Boat Vets.
Here are my nominations (in no particular order) for the biggest stories of 2004 that were suppressed by mainstream media.
That’s my list so far. Can you suggest any more?
Update 12-8-04. From a comment here by Bohemian Conservative:
How about the fact that there were free and democratic elections in Afghanistan? I know there was some coverage of it but a lot of that coverage focused on the few problems in the election. I mean, if you are at all interested in history, the fact that Afghanistan now has a freely elected president is just amazing! The fact that that particular area of the world was pivotal in bringing both the British Empire and the Soviet Union to their knees in contrast to the fact that in the time span of about 3 years, the U.S. led coalition has now allowed it to become a fledgling democracy with a western-friendly leader is just profound!
Excellent! Adding to the list:
On what the US achieved:
Coalition troops killed 1,200 to 1,600 guerrillas and captured more than 1,000. They uncovered 26 bomb factories, 350 arms caches (containing thousands of weapons), several chemical weapons laboratories and eight houses where hostages were held and probably tortured and killed. And they accomplished all this with less than half the number of casualties suffered in Hue, Vietnam, in 1968, the last major urban assault mounted by the Marine Corps.
...The clashes with Muqtada Sadr’s Al Mahdi militia this summer proves the point: After being whipped by U.S. forces, the Shiite rabble-rouser decided to join the electoral process. Sadr City, once among the most dangerous areas of Iraq for U.S. troops, has become relatively quiet. The hope now is that the fall of Fallouja will convince more Sunnis of the futility of armed resistance, while elections on Jan. 30 will convince them that their grievances can be addressed through peaceful means.
On the pro-terrorist bias of Al Jazeera:
...The only major PR snafu came when a journalist taped a Marine shooting a wounded insurgent. Though endlessly replayed on Al Jazeera (which refused to show the video of terrorists apparently slaughtering aid worker Margaret Hassan), there is no sign that this action has cost the U.S. any public support in Iraq. On the contrary, many Iraqis, fed up with terrorist attacks, no doubt applauded the Marine’s ruthlessness.
On the setbacks:
This is not meant to suggest that everything went perfectly. Many terrorists were able to escape Fallouja before the assault and create mayhem in Mosul, where the local police folded with dismaying speed. But U.S. and Iraqi forces quickly shifted their focus to the north and snuffed out the uprising in Mosul. Now they are pressing their offensive in the “triangle of death” south of Baghdad.
On what it means for the future:
Even in a best-case scenario, however, the bombings and beheadings won’t end the day after the vote. It can take a decade or more to defeat an insurgency
...Thus, for all their success in Fallouja, we should not expect U.S. troops to completely pacify Iraq anytime soon. What they can do what they are doing is to keep the insurgents from derailing a political process that, one hopes, will soon result in the creation of a legitimate government that can field indigenous security forces and defend itself.
This week’s Carnival of the Vanities, created by Bigwig of Silflay Hraka, is at Ashish’s Niti.
Next week this weblog will be honored to host the 116th edition of COTV.
Articles should be submitted to me at this email address. Please include:
Thanks! I look forward to hosting another great edition of COTV.
Peggy Noonan: CBS Didn’t Change; The Rest of the World Did. From her current article on Dan Rather, for whom she worked:
Two things to be said here. One is that CBS News hasn’t changed that much, and the other is that the media world in which it operates has changed completely. The whole context has changed. No one has to accept the enforced corporate liberalism of the networks anymore, as they did from 1950 through 1990. They have options, from cable to Fox to the Internet to hundreds and thousands of radio shows, newspapers, magazines. The old network hegemony is over. That’s why network news viewership is down, that’s why the evening news isn’t appointment TV anymore. America didn’t turn crazily right, Americans just finally got political options in how they’d get the news, and took advantage of them.
As I noted in a previous post, MSM will have to reform.
They’ll have to faithfully renew their grand tradition, their rightful, honorable mission, which is reporting the news, rather than reporting just the news that supports the Left, and suppressing the rest of it. They’ll have to do what the NY Times slogan says: not “All the News That Supports the Left,” but “All the News That’s Fit to Print.”
It’s very honorable to report all the news, precisely because it may not all support the candidate you yourself favor. There’s nobility in that.
