Nobel Prize economist Joseph Stiglitz is ten years older than Paul Krugman, over whom Stiglitz had some influence. They’re like-minded, but as one would expect they don’t always agree on the details. In this month’s Vanity Fair, Stiglitz weighs in on the top 1% wealthiest among us Americans. Stephen Colbert had Stiglitz on his show shortly after the economic meltdown of 2008, when Krugman won his own Nobel.
| The Colbert Report | Mon – Thurs 11:30pm / 10:30c | |||
| Joseph Stiglitz | ||||
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The new Amazon Cloud Player works only with a web browser or on an Android device. Before making it available on other platforms, perhaps Amazon is waiting to see how the music industry reacts to its otherwise bold move. An article on Ars Technica has the headline, “Music industry will force licenses on Amazon Cloud Player—or else,” but I hope Ed Bott on ZDNet has it right, explaining “How Amazon has outsmarted the music industry (and Apple).” There are laws, and there are contracts, and I don’t know if Amazon’s lawyers advised Jeff Bezos that he would be in violation of one or the other by introducing the Cloud Player, but so far none of the big music labels or the RIAA have filed for a cease and desist order.
Back in the early 80’s, when cassettes were an essential audio component, many LP’s came with a warning on the sleeve that said, “HOME TAPING IS KILLING MUSIC… and it’s illegal.” And that was before CD’s! Well, neither claim turned out to be true. I remember when Disney wouldn’t allow its pre-recorded video cassettes to be rented. They could only be purchased, and they even came with a message saying that, embossed into the cassette. Eventually, Disney had to relent to the reality of the times and, of course, video rentals became a huge revenue source for the studio and helped to fund its resurgent animation department.
Time and again, the music and movie industries have had to react to new technologies. Silent movies didn’t survive talkies, but movies survived the competition from radio and, 20 years later, television. The only way to succeed is to find a way to take advantage of the new technology. As I’ve pointed out before, Napster was predicted in 1972, so the music industry had plenty of warning of what was to come:
Since huge quantities of information can be computer-digitalized and transmitted, music researchers could, for example, swap records over the Net with “essentially perfect fidelity.” So much for record stores (in present form).
Stewart Brand
Rolling Stone
December 7, 1972
The controversy over this latest music distribution method will be fun to watch, because Amazon isn’t a lone college kid sharing MP3’s with friends, who can be easily intimidated. If pushed, Amazon can push back very, very hard. Similarly, the movie studios want to squeeze Netflix, but the question is, without Amazon and Netflix who’s left to distribute audio and video — Wal*Mart, Best Buy, and Target? None of them are still committed to selling physical media.
The BBC clears up any confusion you may have about the making of TV news features…
http://www.youtube.com/watch?v=YtGSXMuWMR4
How the mighty have fallen. Economist Paul Krugman cuts no slack for Alan Greenspan, the former longtime chairman of the Federal Reserve.
If [Greenspan] wants to redeem himself through hard and serious reflection about how he got it so wrong, fine — and I’d be interested in listening. If he thinks he can still lecture us from his pedestal of wisdom, he’s wasting our time.
As I’ve said before, I’m appalled by Alan Greenspan’s adherence to the naive ideas of romance novelist Ayn Rand. Upon what rigorous academic research did Rand develop her philosophy? None. She was simply a fanatical anti-Communist with obsessive fantasies about her ideal leading man. That’s it. Nothing more complicated than that, except she happened to be a darn good storyteller. Yet Greenspan bought into her idea that capitalism should mean that anything goes. Only after the damage was done, did he acknowledge the failure of unregulated markets to correct themselves, and now he’s even backpedaling on that.
To recap what happened in 2008, Wall Street played fast and loose with money that came from mortgages that hadn’t been properly underwritten. This was possible because the Glass-Steagall Act of 1932 had been repealed, removing the barrier between investment and commercial banks. The bankers took their gigantic bonuses, then the mortgages dried up, the market tanked, and the financial markets collapsed. After the government bailed out the banks, the bankers kept their bonuses.
This cataclysmic worldwide mess started with the deregulation of American investment banking during the Clinton Administration, under the influence of Alan Greenspan, Bob Rubin, and Lawrence Summers.
Almost every online article about the economy and jobs seems to include at least one comment from somebody who thinks the whole problem is that people waste too much money on gadgets and toys. Let’s take the example of a large-screen HDTV that costs $1200.
I was listening to a 1954 radio show today, and it had an ad for GE TV’s, “starting at only $169.95.” According to the inflation calculator at the Bureau of Labor Statistics, that’s equivalent to $1400 today. My parents bought the family’s first color TV in 1967 for $450. That’s like spending $3000 today!
Now let’s look at houses. My parents bought their house in Massachusetts for $38,600 in 1968. Adjusted for inflation, that’s $245,000 today. The current Zillow estimate for the house is $527,000, and before the crash in ’08 it peaked at $615,000. I don’t think it’s money spent on toys that’s the biggest financial problem for most families.
When I read that Ben & Jerry’s ice cream had given Jimmy Fallon his own flavor, I knew that Stephen Colbert wouldn’t let the threat to his Americone Dream go unchallenged.
