What do Made-in-USA iMacs, fracking in North Dakota, and right-to-work in Michigan have in common?

Yesterday I blogged about the huge glowing area in North Dakota that is experiencing a shale oil boom thanks to hydraulic fracturing (fracking). This morning I tweeted about new legislation passed to make Michigan a right-to-work state. And for the past few days I’ve been reading enthusiastic news that Apple is resuming manufacturing in the United States.

What do these things all have in common? Well… the always insightful Jason Kottke has the answer.

We’re witnessing an interesting cycle in the US economy right now. Changes in China in recent years have presented new challenges to its burgeoning manufacturing base; meanwhile here in the US the combination of Great Recession-related unemployment, the GOP’s 30-year experiment in rolling back labor rights, and (as Kottke notes) the artificially low price of natural gas here due to the fracking boom, have suddenly made the United States a much more desirable place for manufacturing. But will it last, and at what cost?

Why I care so much about stopping SOPA/PIPA (and why you should care too)

As someone who works with, and is constantly immersed in, the Internet, I’ve been hearing a lot about SOPA (the Stop Online Piracy Act, in the House) and PIPA (the Protect IP Act, in the Senate) over the last couple of months. But I suspect most Americans have heard much less about these bills currently under “debate” in the US House of Representatives and Senate. That’s the way the sponsors of these bills (and their corporate donors) likely want it.

You can read the text of the bills, or the innocuous-sounding summaries the government has published. On the surface, without careful reflection, they seem like good ideas, designed to protect hard-working American creators from having their intellectual property stolen. But the implications of these bills, for freedom of speech, for innovation, even for the very feasibility of their technical implementation, are anything but innocuous, and may irreparably harm, rather than protect, the American economy.

What’s it really all about?

Let us be frank: the true objective of these bills is not to prevent illicit foreign websites from destroying American jobs by stealing our movies and music. It is to prop up a dying dinosaur media industry that would rather kill innovation than have to learn to change. Follow the money. A simple look at the lists of corporate supporters of SOPA/PIPA, along with the corresponding list of companies that oppose these bills, tells the story.

The Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), countless “old media” conglomerates. These are the companies that want these bills to pass, because they are in their death throes after over a decade of spending their dwindling profits on fighting, in any way they can, the changes the Internet has wrought, refusing to admit that the massive profits they achieved from the 1970s through the 1990s were built upon an unsustainable model. These industries refuse to adapt. Adaptation is hard. But the world changes. You have to be prepared to change with it, or die.

So what’s the threat?

The Internet has fundamentally transformed the way people communicate, and as a result it has changed the way they get their entertainment. Sure, piracy is a problem. It needs to be dealt with. But there are also huge opportunities to build profitable businesses legitimately selling entertainment products (intellectual property) online. iTunes, Amazon and Netflix prove that. The problem for old media, though, is that the Internet has obviated their role as a high-markup middleman. Look at Louis CK’s wildly successful experiment in DIY production and promotion. Change or die.

True, as the old entertainment industry contracts, American jobs are being lost. But the entertainment industry is a small piece of America’s GDP. By contrast, the Internet, and more broadly, information technology, is significantly larger. (According to Census Bureau data, in 2008 the film, recording and broadcasting industries employed 643,089 people; information services, software publishers and computer systems employed 3,443,162 people.)

The Internet is possibly the brightest spot in America’s economy right now, and it is profoundly threatened by what SOPA/PIPA could do. So, in effect, Congress is preparing to kill (or at least maim) one of the most thriving parts of our economy to save a sector that is going to die anyway. (I’m trying to think of an analogy to make here but they’re all too gruesome.)

How does it work?

Aside from understanding the true motivations of SOPA/PIPA, it’s just as important to understand the implications these bills have for American Internet companies, our cherished freedom of speech, and the daily use of the Internet, even by Americans who by and large are engaging in purely harmless, infringement-free activities.

I’m about as squeaky-clean as Internet users come when it comes to copyright. Sure, I may have a handful of music files on my hard drive that I got from friends, just like we’d dub cassettes of our favorite CDs back in the late ’80s and early ’90s to share. Ever heard of a mixtape? But the overwhelming majority of my 18,000+ songs were purchased legitimately, either on CD or through download services like iTunes or Amazon. And a lot of the music I own, I purchased because I learned about it through friends. Even if they had already given me copies of the music. Even in the peak of the music industry’s profits from CD sales in the ’90s, that’s how it worked.

(I’m also a content producer myself, as a blog writer and independent musician. I’m skeptical of current copyright law and as such have taken to releasing all of my work under Creative Commons licensing. But that’s a topic for another post.)

The point is, sharing music doesn’t necessarily reduce music sales. I’d argue that, in limited quantities, between friends with similar tastes, it actually encourages music sales. But even if we agree that illicit copying and redistribution of things like movies and music is bad (and, when it’s done at a large scale, I do) piracy is not what’s killing old media — mediocre content and exorbitant pricing are. And SOPA/PIPA can’t help that.

The real danger of these bills is in their implementation. While ostensibly they’re only targeted at foreign websites, their means of recourse against infringers could result in the blocking of entire sites due to the alleged infringing activities of one member. This sledgehammer approach has broad-reaching implications for all Internet users in the United States (to say nothing of what it means for free speech, and the company it places America in amongst governments that censor the Internet).

What’s worse, it won’t even work. Already there is much discussion online of means of circumvention (which I will not link to here), and, worse, it breaks the Internet. I don’t just mean that it is going to destroy the way we use the Internet. I mean it actually runs contrary, on a deep technical level, to how the Internet functions. Even SOPA supporter Comcast (my ISP… for now) admits, albeit inadvertently, that at least on a technical level the requirements of the law are incompatible with how the Internet works.

A threat to America’s small-business owners

I’m one of those fabled “small business owners” politicians so love to talk about. I’ve been freelancing full-time in web development since 2008. Business has been great, even through the worst economic times in America since the Great Depression. All of the work I do is 100% legitimate, for honest, productive American businesses. This is the new economy, and it is America’s best hope for a brighter future. I’m expecting to expand my business this year, becoming an even larger presence in the community and helping to further spur on positive economic activity.

But SOPA/PIPA threaten the way I do business. Republicans in Congress put on some great political theater in 2009-2010 in their fight against “Obamacare,” claiming its provisions represented an undue threat to small businesses. But here we have a real threat to small and growing Internet-related businesses. If passed, these laws will impose odious burdens of monitoring and self-policing upon website owners, and the threat of takedown without due process will have a chilling effect on whether or not new ventures even get started. In short, nothing could more effectively put the brakes on this “engine of growth” for the American economy.

Take action

So what can you do? Old media still has deep pockets, and is well-represented on K Street. It has the ears of Congress. But, last I checked, these elected officials do also still represent us, the individual Americans who will be affected by these bills. So call them. Politely tell them why you believe these bills are bad. Check out other online resources that can help you get involved.

I will admit, however, that personally I have not attempted to contact any of my representatives. I already know that my House representative, Keith Ellison, opposes SOPA. Over in the Senate, unfortunately, Amy Klobuchar is one of the sponsors of PIPA. And, despite his genuine progressive spirit and work on behalf of American individuals, Al Franken is simply too deeply connected to old media not to also back PIPA. I sincerely doubt either of Minnesota’s senators will be convinced to change their position, no matter how many constituents call them.

But your representatives may still be on the fence. Reach out to them. Let them know why you think these bills are not just bad, but downright dangerous for America. The implications for America if they pass are far bleaker than the prognosis for the industries they are intending to protect.

And, this is an election year. Vote. While it will most likely be too late to affect SOPA/PIPA, do your part to make sure none of its supporters get re-elected in November. I have been a strong supporter of Amy Klobuchar in the past, even having donated to her first campaign, but unless she withdraws her sponsorship of PIPA, I will not be voting for her re-election this year.

As someone who works in the Internet, the implications of SOPA/PIPA are huge for me and for my business. But this affects us all.

Tell me more!

As with a lot of hot-button issues, when I get my dander up it’s sometimes hard for me to calmly and clearly explain the rationale for my argument. I’ve linked throughout this post to some great resources for learning more about what SOPA/PIPA is and why it’s bad, but as I come across other sites that do a more effective job of explaining it than I have, I’ll add them here.

Other sites discussing problems with SOPA/PIPA

Updates on the fight against SOPA/PIPA

Why we should resign ourselves to acceptance of the Geithner plan

I was underwhelmed from the beginning with President Obama’s choices of Lawrence Summers and Timothy Geithner, and the events of the last couple of weeks have shored up a lot of public opinion that Geithner, in particular, may not have the right vision to shepherd the economy into a genuine recovery. But, for the moment, his plan is all we’ve got.

It doesn’t help that economic heavyweights like Paul Krugman are down on Geithner’s plan, but for now I will take limited solace in the words of economist Brad DeLong:

Q: What if markets never recover, the assets are not fundamentally undervalued, and even when held to maturity the government doesn’t make back its money?

A: Then we have worse things to worry about than government losses on TARP-program money–for we are then in a world in which the only things that have value are bottled water, sewing needles, and ammunition.

In other words, there may be a better plan out there; this plan we have may not work; but if it doesn’t, the reason it won’t is because things are so fundamentally screwed up that probably nothing would have saved us.

Yeah… that, uh, makes me feel… better?

(Found, as usual, on Daring Fireball.)

Off Target

TargetI’ve been shopping at Target for years. In fact, I’ve been kind of a Target freak even as I’ve railed against the “evils” of Walmart.

I know Target does a lot of the same “bad” stuff that Walmart does — fighting unionization, driving competing local businesses into the ground, forcing its suppliers to operate by its rules or lose their shelf space, skirting local taxes and ordinances — but Walmart has always seemed to be leading the “race to the bottom.” Plus, unlike Walmart, spending time inside a Target store can actually be a pleasant experience.

But the ostensible “savings” Target offers as a discount store do come at a price. Since a Super Target (a gigantic Target store with a full-service supermarket inside) opened near our home in late 2007, we’ve done almost all of our shopping there. SLP complains that their selection of many goods is lacking, and I’ve found some questionable pricing tactics (more on that in the next paragraph), but it hasn’t been enough to dissuade us from shopping there.

On the matter of pricing, here are some examples I’ve observed: Market Pantry (Super Target’s store brand) peanut butter inexplicably jumping up to become more expensive than Jif, after months of being substantially cheaper; Market Pantry milk gallons selling for $2.99 and then a few weeks later displaying a “Price Reduction” tag but selling at $3.29 (“marked down” from $3.49); 8-packs of Gillette razor blades selling for more than the price of two 4-packs of the same.

Essentially there are three tactics happening here: in the first case, Target relies on your assumption that store-brand items will cost less than their name-brand counterparts. And, in fact, they are cheaper… for a while. But then Target can, on occasion, jack up the prices on the Market Pantry items and most unsuspecting customers won’t notice. In the second case, they’re audaciously labeling a price increase as a price reduction by jacking up the “regular” price considerably, but then selling the items at a “reduced” price that is somewhere in between. And in the third case, they’re relying on the buyer’s assumption (based on years of experience) that larger quantities of… well, just about anything… will cost less per unit than smaller quantities. Most people probably don’t even check the price on the shelf, and even if they do, they’re probably not doing the math in their heads. And Target doesn’t offer price-per-unit information on those tags (unlike Cub Foods and a lot of other supermarket chains) to assist customers in making economical choices.

By the end of 2008, we were often shopping at Target 3 to 4 times per week, rarely dropping less than $50, and in general spending upwards of $1,000 per month there. Super Target counts on the fact that, since you can buy just about everything you need there, in fact you could pretty much just live in the store, you won’t be able to keep track of how much money you’ve been spending on whatever it is you’re buying there, and, you know, it works. I bought an iPod at that Super Target shortly after it opened, and on my bank’s website, the purchase was just lumped into the “Grocery” category. Even if you realize that’s what’s happening, unless you’re extremely diligent (and/or have a lot of time on your hands), you’ll probably just give up. And that’s exactly what they want you to do.

So as 2009 was rolling around, an experiment was devised: we would live for one month without shopping at Target. At all. For any reason. I considered writing a daily blog about the experience; given the trend of people coming up with a random little experiment for themselves, blogging about it, and landing book deals, Oprah appearances, and whatnot, it almost seemed silly not to. But in the end, I decided there just wouldn’t be that much interesting to write about something that’s fundamentally not-very-interesting to begin with, so instead I would just wait until the end of the month, or near it, and then reflect upon the experience and the lessons learned (or not).

Today is January 26, and so far we’ve made it. It’s actually been surprisingly easy. And I’ve made some interesting observations:

  1. There’s a big difference between “if we had it in the house, we’d use it” and “we need it.” I had never released how much I was conflating the two before this. I rationalized that if it was being used in our house, it was more-or-less necessary, and if it was (ostensibly) cheap (or… oh man, on sale!) at Target, all the more reason to get it!
  2. Even if things cost more at another store, you still might end up paying less. How’s that? Well, it relates to the first observation. The individual items you’re buying at, say, Byerlys might cost more — sometimes, a lot more (the Barilla pasta sauce I was used to paying $2.09 for at Target is a jaw-dropping $3.49 at Byerlys). But if those higher prices discourage you from buying stuff you don’t really need, or less of the stuff you do, the net result might just be less money spent.
  3. There are much better places to get things than Target. We already knew this about certain things, like furniture and fresh produce. (In fact, Super Target’s pathetic options for fresh produce have long been one of SLP’s biggest complaints about shopping there.) But this experience has really reinforced that although you could live your life only buying anything you ever need at Target… why would you really want to?

January is almost over, and with it, our “Off Target” experiment. Will we go back to Target? Probably. We are starting to run out of some of the “we need it” items that, even after contemplating everything above, are probably worth going to Target for — mostly household items like dishwasher detergent and plastic bags. But will we go there less, consider our other shopping options, and/or just buy less stuff in general? I most certainly hope so.

Don’t Expect them NOT to Be Incompetent

It is always with mild amusement that I listen to people complain about the incompetence of the sales staff at CompUSA or Best Buy or Radio Shack, or of the technical support people they get on the phone late at night or on weekends.

Think about it for a minute. Even though the economy is down, there are still plenty of well-paying high-tech jobs for people with knowledge and skills. If a person actually knows enough to be competent with computers, they will be able to get a better job than a thankless, $6.50-an-hour sales floor job at CompUSA, or working the graveyard shift doing phone tech support!

Now I am not saying there’s anything wrong with these kinds of jobs. Nor am I saying people seeking these services don’t deserve to be met with intelligence and courtesy. But in a market-driven economy, some things have to give.

If you want to walk into a store and pay under $1000 for a brand-new PC that’s roughly 10,000 times more powerful than those used to guide Apollo 11 to the moon, you’re going to have to accept that the place you’re buying it from can’t afford the overhead to hire people who can tell their heads from their asses (much less their hard drives from their RAM).

And if you’re going to get 1.5 Mbps broadband Internet access in your home for a little more than the cost of dial-up, and a tiny fraction of what businesses used to pay for T1 lines (in the “olden days” — about 3 weeks ago), your ISP also won’t be able to hire people to answer your phone call at 2 AM on a Saturday who have any skills beyond basic literacy so they can step through the phone script they’ve been given.

Accept it. Do the research yourself so you know what you want before you get there, and be glad you live in a world where electronics hardware and demeaning, thankless labor come cheap.