money

San Francisco surveillance cameras prove useless

politics, security, tech in changing society / /

From Heather Knight’s “S.F. public housing cameras no help in homicide arrests” (San Francisco Chronicle: 14 August 2007):

The 178 video cameras that keep watch on San Francisco public housing developments have never helped police officers arrest a homicide suspect even though about a quarter of the city’s homicides occur on or near public housing property, city officials say.

Nobody monitors the cameras, and the videos are seen only if police specifically request it from San Francisco Housing Authority officials. The cameras have occasionally managed to miss crimes happening in front of them because they were trained in another direction, and footage is particularly grainy at night when most crime occurs, according to police and city officials.

Similar concerns have been raised about the 70 city-owned cameras located at high-crime locations around San Francisco.

…

So far this year, 66 homicides have occurred in San Francisco, compared with 85 in all of 2006. On average, about a quarter of the city’s homicides happen on or near public housing property every year, according to statistics from the Mayor’s Office of Criminal Justice.

…

The authority has spent $203,603 to purchase and maintain its cameras since installing the first batch in the summer of 2005. It has plans to install another 81 cameras, but no date has been set.

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A collective action problem: why the cops can’t talk to firemen

politics, security, tech in changing society / /

From Bruce Schneier’s “First Responders” (Crypto-Gram: 15 September 2007):

In 2004, the U.S. Conference of Mayors issued a report on communications interoperability. In 25% of the 192 cities surveyed, the police couldn’t communicate with the fire department. In 80% of cities, municipal authorities couldn’t communicate with the FBI, FEMA, and other federal agencies.

The source of the problem is a basic economic one, called the “collective action problem.” A collective action is one that needs the coordinated effort of several entities in order to succeed. The problem arises when each individual entity’s needs diverge from the collective needs, and there is no mechanism to ensure that those individual needs are sacrificed in favor of the collective need.

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A wireless router with 2 networks: 1 secure, 1 open

business, technology / /

From Bruce Schneier’s “My Open Wireless Network” (Crypto-Gram: 15 January 2008):

A company called Fon has an interesting approach to this problem. Fon wireless access points have two wireless networks: a secure one for you, and an open one for everyone else. You can configure your open network in either “Bill” or “Linus” mode: In the former, people pay you to use your network, and you have to pay to use any other Fon wireless network. In Linus mode, anyone can use your network, and you can use any other Fon wireless network for free. It’s a really clever idea.

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If concerts bring money in for the music biz, what happens when concerts get smaller?

art, business, history, law / /

From Jillian Cohen’s “The Show Must Go On” (The American: March/April 2008):

You can’t steal a concert. You can’t download the band—or the sweaty fans in the front row, or the merch guy, or the sound tech—to your laptop to take with you. Concerts are not like albums—easy to burn, copy, and give to your friends. If you want to share the concert-going experience, you and your friends all have to buy tickets. For this reason, many in the ailing music industry see concerts as the next great hope to revive their business.

…

It’s a blip that already is fading, to the dismay of the major record labels. CD sales have dropped 25 percent since 2000 and digital downloads haven’t picked up the slack. As layoffs swept the major labels this winter, many industry veterans turned their attention to the concert business, pinning their hopes on live performances as a way to bolster their bottom line.

Concerts might be a short-term fix. As one national concert promoter says, “The road is where the money is.” But in the long run, the music business can’t depend on concert tours for a simple, biological reason: the huge tour profits that have been generated in the last few decades have come from performers who are in their 40s, 50s, and 60s. As these artists get older, they’re unlikely to be replaced, because the industry isn’t investing in new talent development.

When business was good—as it was when CD sales grew through much of the 1990s—music labels saw concert tours primarily as marketing vehicles for albums. Now, they’re seizing on the reverse model. Tours have become a way to market the artist as a brand, with the fan clubs, limited-edition doodads, and other profitable products and services that come with the territory.

“Overall, it’s not a pretty picture for some parts of the industry,” JupiterResearch analyst David Card wrote in November when he released a report on digital music sales. “Labels must act more like management companies, and tap into the broadest collection of revenue streams and licensing as possible,” he said. “Advertising and creative packaging and bundling will have to play a bigger role than they have. And the $3 billion-plus touring business is not exactly up for grabs—it’s already competitive and not very profitable. Music companies of all types need to use the Internet for more cost-effective marketing, and A&R [artist development] risk has to be spread more fairly.”

The ‘Heritage Act’ Dilemma

Even so, belief in the touring business was so strong last fall that Madonna signed over her next ten years to touring company Live Nation—the folks who put on megatours for The Rolling Stones, The Police, and other big headliners—in a deal reportedly worth more than $120 million. The Material Girl’s arrangement with Live Nation is known in the industry as a 360-degree deal. Such deals may give artists a big upfront payout in exchange for allowing record labels or, in Madonna’s case, tour producers to profit from all aspects of their business, including touring, merchandise, sponsorships, and more.

While 360 deals may work for big stars, insiders warn that they’re not a magic bullet that will save record labels from their foundering, top-heavy business model. Some artists have done well by 360 contracts, including alt-metal act Korn and British pop sensation Robbie Williams. With these successes in mind, some tout the deals as a way for labels to recoup money they’re losing from downloads and illegal file sharing. But the artists who are offered megamillions for a piece of their brand already have built it through years of album releases, heavy touring, and careful fan-base development.

Not all these deals are good ones, says Bob McLynn, who manages pop-punk act Fall Out Boy and other young artists through his agency, Crush Management. Labels still have a lot to offer, he says. They pay for recording sessions, distribute CDs, market a band’s music, and put up money for touring, music-video production, and other expenses. But in exchange, music companies now want to profit from more than a band’s albums and recording masters. “The artist owns the brand, and now the labels—because they can’t sell as many albums—are trying to get in on the brand,” McLynn says. “To be honest, if an artist these days is looking for a traditional major-label deal for several hundred thousand dollars, they will have to be willing to give up some of that brand.

”For a young act, such offers may be enticing, but McLynn urges caution. “If they’re not going to give you a lot of money for it, it’s a mistake,” says the manager, who helped build Fall Out Boy’s huge teen fan base through constant touring and Internet marketing, only later signing the band to a big label. “I had someone from a major label ask me recently, ‘Hey, I have this new artist; can we convert the deal to a 360 deal?’” McLynn recalls. “I told him [it would cost] $2 million to consider it. He thought I was crazy; but I’m just saying, how is that crazy? If you want all these extra rights and if this artist does blow up, then that’s the best deal in the world for you. If you’re not taking a risk, why am I going to give you this? And if it’s not a lot of money, you’re not taking a risk.”

A concert-tour company’s margin is about 4 percent, Live Nation CEO Michael Rapino has said, while the take on income from concessions, T-shirts, and other merchandise sold at shows can be much higher. The business had a record-setting year in 2006, which saw The Rolling Stones, Madonna, U2, Barbra Streisand, and other popular, high-priced tours on the road. But in 2007, North American gross concert dollars dropped more than 10 percent to $2.6 billion, according to Billboard statistics. Concert attendance fell by more than 19 percent to 51 million. Fewer people in the stands means less merchandise sold and concession-stand food eaten.

Now add this wrinkle: if you pour tens of millions of dollars into a 360 deal, as major labels and Live Nation have done with their big-name stars, you will need the act to tour for a long time to recoup your investment. “For decades we’ve been fueled by acts from the ’60s,” says Gary Bongiovanni, editor of the touring-industry trade magazine Pollstar. Three decades ago, no one would have predicted that Billy Joel or Rod Stewart would still be touring today, Bongiovanni notes, yet the industry has come to depend on artists such as these, known as “heritage acts.” “They’re the ones that draw the highest ticket prices and biggest crowds for our year-end charts,” he says. Consider the top-grossing tours of 2006 and 2007: veterans such as The Rolling Stones, Rod Stewart, Barbra Streisand, and Roger Waters were joined by comparative youngsters Madonna, U2, and Bon Jovi. Only two of the 20 acts—former Mouseketeers Justin Timberlake and Christina Aguilera—were younger than 30.

These young stars, the ones who are prone to taking what industry observer Bob Lefsetz calls “media shortcuts,” such as appearing on MTV, may have less chance of developing real staying power. Lefsetz, formerly an entertainment lawyer and consultant to major labels, has for 20 years published an industry newsletter (now a blog) called the Lefsetz Letter. “Whatever a future [superstar] act will be, it won’t be as ubiquitous as the acts from the ’60s because we were all listening to Top 40 radio,” he says.

From the 1960s to the 1980s, music fans discovered new music primarily on the radio and purchased albums in record stores. The stations young people listened to might have played rock, country, or soul; but whatever the genre, DJs introduced listeners to the hits of tomorrow and guided them toward retail stores and concert halls.

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Today, music is available in so many genres and subgenres, via so many distribution streams—including cell phones, social networking sites, iTunes, Pure Volume, and Limewire—that common ground rarely exists for post–Baby Boom fans. This in turn makes it harder for tour promoters to corral the tens of thousands of ticket holders they need to fill an arena. “More people can make music than ever before. They can get it heard, but it’s such a cacophony of noise that it will be harder to get any notice,” says Lefsetz.

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Most major promoters don’t know how to capture young people’s interest and translate it into ticket sales, he says. It’s not that his students don’t listen to music, but that they seek to discover it online, from friends, or via virtual buzz. They’ll go out to clubs and hear bands, but they rarely attend big arena concerts. Promoters typically spend 40 percent to 50 percent of their promotional budgets on radio and newspaper advertising, Barnet says. “High school and college students—what percentage of tickets do they buy? And you’re spending most of your advertising dollars on media that don’t even focus on those demographics.” Conversely, the readers and listeners of traditional media are perfect for high-grossing heritage tours. As long as tickets sell for those events, promoters won’t have to change their approach, Barnet says. Heritage acts also tend to sell more CDs, says Pollstar’s Bongiovanni. “Your average Rod Stewart fan is more likely to walk into a record store, if they can find one, than your average Fall Out Boy fan.”

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Personally, [Live Nation’s chairman of global music and global touring, Arthur Fogel] said, he’d been disappointed in the young bands he’d seen open for the headliners on Live Nation’s big tours. Live performance requires a different skill set from recorded tracks. It’s the difference between playing music and putting on a show, he said. “More often than not, I find young bands get up and play their music but are not investing enough time or energy into creating that show.” It’s incumbent on the industry to find bands that can rise to the next level, he added. “We aren’t seeing that development that’s creating the next generation of stadium headliners. Hopefully that will change.”

Live Nation doesn’t see itself spearheading such a change, though. In an earlier interview with Billboard magazine, Rapino took a dig at record labels’ model of bankrolling ten bands in the hope that one would become a success. “We don’t want to be in the business of pouring tens of millions of dollars into unknown acts, throwing it against the wall and then hoping that enough sticks that we only lose some of our money,” he said. “It’s not part of our business plan to be out there signing 50 or 60 young acts every year.”

And therein lies the rub. If the big dog in the touring pack won’t take responsibility for nurturing new talent and the labels have less capital to invest in artist development, where will the future megatour headliners come from?

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Indeed, despite its all-encompassing moniker, the 360 deal isn’t the only option for musicians, nor should it be. Some artists may find they need the distribution reach and bankroll that a traditional big-label deal provides. Others might negotiate with independent labels for profit sharing or licensing arrangements in which they’ll retain more control of their master recordings. Many will earn the bulk of their income from licensing their songs for use on TV shows, movie soundtracks, and video games. Some may take an entirely do-it-yourself approach, in which they’ll write, produce, perform, and distribute all of their own music—and keep any of the profits they make.

There are growing signs of this transition. The Eagles recently partnered with Wal-Mart to give the discount chain exclusive retail-distribution rights to the band’s latest album. Paul McCartney chose to release his most recent record through Starbucks, and last summer Prince gave away his newest CD to London concertgoers and to readers of a British tabloid. And in a move that earned nearly as much ink as Madonna’s 360 deal, rock act Radiohead let fans download its new release directly from the band’s website for whatever price listeners were willing to pay. Though the numbers are debated, one source, ComScore, reported that in the first month 1.2 million people downloaded the album. About 40 percent paid for it, at an average of about $6 each—well above the usual cut an artist would get in royalties. The band also self-released the album in an $80 limited-edition package and, months later, as a CD with traditional label distribution. Such a move wouldn’t work for just any artist. Radiohead had the luxury of a fan base that it developed over more than a dozen years with a major label. But the band’s experiment showed creativity and adaptability.

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China’s increasing control over American dollars

business, history, politics, security / /

From James Fallows’ “The $1.4 Trillion Question” (The Atlantic: January/February 2008):

Through the quarter-century in which China has been opening to world trade, Chinese leaders have deliberately held down living standards for their own people and propped them up in the United States. This is the real meaning of the vast trade surplus—$1.4 trillion and counting, going up by about $1 billion per day—that the Chinese government has mostly parked in U.S. Treasury notes. In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China. Like so many imbalances in economics, this one can’t go on indefinitely, and therefore won’t. But the way it ends—suddenly versus gradually, for predictable reasons versus during a panic—will make an enormous difference to the U.S. and Chinese economies over the next few years, to say nothing of bystanders in Europe and elsewhere.

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When the dollar is strong, the following (good) things happen: the price of food, fuel, imports, manufactured goods, and just about everything else (vacations in Europe!) goes down. The value of the stock market, real estate, and just about all other American assets goes up. Interest rates go down—for mortgage loans, credit-card debt, and commercial borrowing. Tax rates can be lower, since foreign lenders hold down the cost of financing the national debt. The only problem is that American-made goods become more expensive for foreigners, so the country’s exports are hurt.

When the dollar is weak, the following (bad) things happen: the price of food, fuel, imports, and so on (no more vacations in Europe) goes up. The value of the stock market, real estate, and just about all other American assets goes down. Interest rates are higher. Tax rates can be higher, to cover the increased cost of financing the national debt. The only benefit is that American-made goods become cheaper for foreigners, which helps create new jobs and can raise the value of export-oriented American firms (winemakers in California, producers of medical devices in New England).

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Americans sometimes debate (though not often) whether in principle it is good to rely so heavily on money controlled by a foreign government. The debate has never been more relevant, because America has never before been so deeply in debt to one country. Meanwhile, the Chinese are having a debate of their own—about whether the deal makes sense for them. Certainly China’s officials are aware that their stock purchases prop up 401(k) values, their money-market holdings keep down American interest rates, and their bond purchases do the same thing—plus allow our government to spend money without raising taxes.

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Details on the Storm & Nugache botnets

business, law, security, tech in changing society, technology / /

From Dennis Fisher’s “Storm, Nugache lead dangerous new botnet barrage” (SearchSecurity.com: 19 December 2007):

[Dave Dittrich, a senior security engineer and researcher at the University of Washington in Seattle], one of the top botnet researchers in the world, has been tracking botnets for close to a decade and has seen it all. But this new piece of malware, which came to be known as Nugache, was a game-changer. With no C&C server to target, bots capable of sending encrypted packets and the possibility of any peer on the network suddenly becoming the de facto leader of the botnet, Nugache, Dittrich knew, would be virtually impossible to stop.

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Dittrich and other researchers say that when they analyze the code these malware authors are putting out, what emerges is a picture of a group of skilled, professional software developers learning from their mistakes, improving their code on a weekly basis and making a lot of money in the process.

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The way that Storm, Nugache and other similar programs make money for their creators is typically twofold. First and foremost, Storm’s creator controls a massive botnet that he can use to send out spam runs, either for himself or for third parties who pay for the service. Storm-infected PCs have been sending out various spam messages, including pump-and-dump stock scams, pitches for fake medications and highly targeted phishing messages, throughout 2007, and by some estimates were responsible for more than 75% of the spam on the Internet at certain points this year.

Secondly, experts say that Storm’s author has taken to sectioning off his botnet into smaller pieces and then renting those subnets out to other attackers. Estimates of the size of the Storm network have ranged as high as 50 million PCs, but Brandon Enright, a network security analyst at the University of California at San Diego, who wrote a tool called Stormdrain to locate and count infect machines, put the number at closer to 20,000. Dittrich estimates that the size of the Nugache network was roughly equivalent to Enright’s estimates for Storm.

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“The Storm network has a team of very smart people behind it. They change it constantly. When the attacks against searching started to be successful, they completely changed how commands are distributed in the network,” said Enright. “If AV adapts, they re-adapt. If attacks by researchers adapt, they re-adapt. If someone tries to DoS their distribution system, they DoS back.”

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The other worrisome detail in all of this is that there’s significant evidence that the authors of these various pieces of malware are sharing information and techniques, if not collaborating outright.

“I’m pretty sure that there are tactics being shared between the Nugache and Storm authors,” Dittrich said. “There’s a direct lineage from Sdbot to Rbot to Mytob to Bancos. These guys can just sell the Web front-end to these things and the customers can pick their options and then just hit go.”

Once just a hobby for devious hackers, writing malware is now a profession and its products have helped create a global shadow economy. That infrastructure stretches from the mob-controlled streets of Moscow to the back alleys of Malaysia to the office parks of Silicon Valley. In that regard, Storm, Nugache and the rest are really just the first products off the assembly line, the Model Ts of P2P malware.

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Virtual kidnappings a problem in Mexico

business, law, security, tech in changing society, technology / /

From Marc Lacey’s “Exploiting Real Fears With ‘Virtual Kidnappings’ ” (The New York Times: 29 April 2008):

MEXICO CITY — The phone call begins with the cries of an anguished child calling for a parent: “Mama! Papa!” The youngster’s sobs are quickly replaced by a husky male voice that means business.

“We’ve got your child,” he says in rapid-fire Spanish, usually adding an expletive for effect and then rattling off a list of demands that might include cash or jewels dropped off at a certain street corner or a sizable deposit made to a local bank.

The twist is that little Pablo or Teresa is safe and sound at school, not duct-taped to a chair in a rundown flophouse somewhere or stuffed in the back of a pirate taxi. But when the cellphone call comes in, that is not at all clear.

This is “virtual kidnapping,” the name being given to Mexico’s latest crime craze, one that has capitalized on the raw nerves of a country that has been terrorized by the real thing for years.

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A new hot line set up to deal with the problem of kidnappings in which no one is actually kidnapped received more than 30,000 complaints from last December to the end of February, Joel Ortega, Mexico City’s police chief, announced recently. There have been eight arrests, and 3,415 telephone numbers have been identified as those used by extortionists, he said.

But identifying the phone numbers — they are now listed on a government Web site — has done little to slow the extortion calls. Nearly all the calls are from cellphones, most of them stolen, authorities say.

On top of that, many extortionists are believed to be pulling off the scams from prisons.

Authorities say hundreds of different criminal gangs are engaged in various telephone scams. Besides the false kidnappings, callers falsely tell people they have won cars or money. Sometimes, people are told to turn off their cellphones for an hour so the service can be repaired; then, relatives are called and told that the cellphone’s owner has been kidnapped. Ransom demands have even been made by text message.

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No money changed hands in her case, but in many instances — as many as a third of the calls, one study showed — the criminals make off with some valuables. One estimate put the take from telephone scams in Mexico in the last six months at 186.6 million pesos, nearly $20 million.

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What Dell learned from Wal-Mart

business, technology / /

From Fake Steve Jobs’ “Why Dell will not bounce back” (11 May 2008):

On the manufacturing side, Dell figured out faster than the others in its space how to squeeze component suppliers and play them off each other. They brought in loads of former Wal-Mart people to refine this practice. One example: If you want to sell parts to Dell you must agree to ship your parts to Round Rock, Texas, and store them in Dell-owned warehouses (paying rent to Dell!) and to hold them until the very moment Dell needs them at which time you drive your tractor trailer to the Dell manufacturing facility and unload your parts through the shipping bay — and only then, as the parts go across the threshold, does Dell take ownership of them. Thus you, Mr. Parts Supplier, end up paying rent to Dell for the privilege of carrying its inventory on your books. Nice, right?

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Scarcities and the music, movie, and publishing businesses

art, business, on writing / /

In Clay Shirky’s response to R.U. Sirius’ “Is The Net Good For Writers?” (10 Zen Monkeys: 5 October 2007), he takes on the persona of someone talking about what new changes are coming with the Gutenberg movable type press. At one point, he says, “Such a change would also create enormous economic hardship for anyone whose living was tied to earlier scarcities.”

It’s not just writing and writers and publishers that now face that change. Scarcities drove the music and movie businesses, and those scarcities are disappearing. When music is no longer tightly controlled in terms of creation, availability, manufacture, and distribution, when it’s possible to download or listen to anything at any time, those businesses face rapid, discombobulating change.

Is it the government’s – or society’s – duty, however, to put those scarcities back into place, either through technologies or law?

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Like music, authors will make more money from personal appearances

art, business, on writing / /

From Douglas Rushkoff’s response to R.U. Sirius’ “Is The Net Good For Writers?” (10 Zen Monkeys: 5 October 2007):

But I think many writers – even good ones – will have to accept the fact that books can be loss-leaders or break-even propositions in a highly mediated world where showing up in person generates the most income.

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More on Fordlandia

business, history, politics, technology / /

From Mary A. Dempsey’s “Fordlandia” (Michigan History: July/August 1994):

Screens were just one of the Yankee customs transported to Fordlandia and Belterra. Detroit physician L. S. Fallis, Sr., the first doctor sent from Henry Ford Hospital to run the Fordlandia medical center, attempted to eradicate malaria and hookworm among Brazilian seringueiros (rubber gatherers) by distributing quinine and shoes. The quinine was accepted but shoes were an unwelcome novelty. It is an exceptional photo that shows the shirtless seringueiros, machetes in hand, shod only with floppy rubber-soled sandals; their children went shoeless. The jungle dwellers also found Fordlandia’s two-family homes hopelessly hot and ugly and the idea of bathrooms repulsive. Even today, plumbing is a rarity in the jungle.

At the same time, Ford’s 6:00 A.M. to 3:00 P.M. work schedule was unpopular with plantation employees accustomed to slashing trees several hours before dawn, then resuming the work at sunset for piecemeal pay. But the promise of free housing and food, top-notch health care for the workers and their families, and a salary of thirty-seven cents a day—double the regular wage—kept the seringueiros on the job. …

Generally, the company-imposed routine met hit-and-miss compliance. Children wore uniforms to school and workers responded favorably to suggestions they grow their own vegetables. But most ignored Ford’s no liquor rule and, on paydays, boats filled with potent cachaca—the local sugar-can brew—pulled up at the dock. Poetry readings, weekend dances and English sing-alongs were among the disputed cultural activities. …

Former Kalamazoo sheriff Curtis Pringle, a manager at Belterra, boosted labor relations when he eased off the Dearborn-style routine and deferred to local customs, especially when it came to meals and entertainment. Under Pringle, Belterra buildings did not contain the glass that made the powerhouse at Fordlandia unbearably hot, and weekend square dancing was optional. Alexander said Henry Ford balked at building a Catholic church at Fordlandia—even though Catholicism was the predominant Christian religion in Brazil. The Catholic chapel was erected right away at Belterra. …

Alexander said of the long-closed but impeccably maintained facility that once boasted separate wards for men and women, thirty nurses, a dentist, three physicians and a pharmacist, who also administered anesthesia during surgery.

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Henry Ford’s debacle in the jungle

business, history, politics, technology, weird / /

From Alan Bellows’s “The Ruins of Fordlândia” (Damn Interesting: 3 August 2006):

On Villares’ advice, [Henry] Ford purchased a 25,000 square kilometer tract of land along the Amazon river, and immediately began to develop the area. …

Scores of Ford employees were relocated to the site, and over the first few months an American-as-apple-pie community sprung up from what was once a jungle wilderness. It included a power plant, a modern hospital, a library, a golf course, a hotel, and rows of white clapboard houses with wicker patio furniture. As the town’s population grew, all manner of businesses followed, including tailors, shops, bakeries, butcher shops, restaurants, and shoemakers. It grew into a thriving community with Model T Fords frequenting the neatly paved streets. …

But Ford’s effort to transplant America– what he called “the healthy lifestyle”– was not limited to American buildings, but also included mandatory “American” lifestyle and values. The plantation’s cafeterias were self-serve, which was not the local custom, and they provided only American fare such as hamburgers. Workers had to live in American-style houses, and they were each assigned a number which they had to wear on a badge– the cost of which was deducted from their first paycheck. Brazilian laborers were also required to attend squeaky-clean American festivities on weekends, such as poetry readings, square-dancing, and English-language sing-alongs.

One of the more jarring cultural differences was Henry Ford’s mini-prohibition. Alcohol was strictly forbidden inside Fordlândia, even within the workers’ homes, on pain of immediate termination. This led some industrious locals to establish businesses-of-ill-repute beyond the outskirts of town, allowing workers to exchange their generous pay for the comforts of rum and women. …

Workers’ discontent grew as the unproductive months passed. Brazilian workers – accustomed to working before sunrise and after sunset to avoid the heat of the day – were forced to work proper “American” nine-to-five shifts under the hot Amazon sun, using Ford’s assembly-line philosophies. And malaria became a serious problem due to the hilly terrain’s tendency to pool water, providing the perfect breeding ground for mosquitoes.

In December of 1930, after about a year of working in a harsh environment with a strict and disagreeable “healthy lifestyle”, the laborers’ agitation reached a critical mass in the workers’ cafeteria. Having suffered one too many episodes of indigestion and degradation, a Brazilian man stood and shouted that he would no longer tolerate the conditions. A chorus of voices joined his, and the cacophony was soon joined by an orchestra of banging cups and shattering dishes. Members of Fordlândia’s American management fled swiftly to their homes or into the woods, some of them chased by machete-wielding workers. A group of managers scrambled to the docks and boarded the boats there, which they moved to the center of the river and out of reach of the escalating riots.

By the time the Brazilian military arrived three days later, the rioters had spent most of their anger. Windows were broken and trucks were overturned, but Fordlândia survived. …

In 1933, after three years with no appreciable quantity of rubber to show for the investment, Henry Ford finally hired a botanist to assess the situation. The botanist tried to coax some fertile rubber trees from the pitiful soil, but he was ultimately forced to conclude that the land was simply unequal to the task. The damp, hilly terrain was terrible for the trees, but excellent for the blight. Unfortunately no one had paid attention to the fact that the land’s previous owner was a man named Villares– the same man Henry Ford had hired to choose the plantation’s site. Henry Ford had been sold a lame portion of land, and Fordlândia was an unadulterated failure. …

Be that as it may, Ford’s perseverance might have eventually paid off if it were not for the fact that scientists developed economical synthetic rubber just as Belterra was establishing itself. In 1945, Ford retired from the rubbering trade, having lost over $20 million in Brazil without ever having set foot there.

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1st book written to be filmed

art, business, history, language & literature / /

From Claudia Roth Pierpont’s “Tough Guy: The mystery of Dashiell Hammett” (The New Yorker [11 February 2002]: 70):

In March, 1928, [Hammett] had written to his publisher, Blanche Knopf, about his plans to adapt the “stream-of-consciousness method” to a new detective novel. He was going to enter the detective’s mind, he told her, reveal his impressions and follow his thoughts … But a few days after sending the letter, Hammett received one himself, from the head of the Fox Film Corporation, asking to look at some of his stories. He promptly fired off a second letter to Knopf, informing her of an important change in his artistic plans: he would now be writing only in “objective and filmable forms.” In the finished novel, Spade is viewed from the outside only, … we are granted no access to his mind. “The Maltese Falcon” may have been the first book to be conceived as a movie before it was written.

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A coup in Equatorial Guinea for fun

business, history, politics / /

From Laura Miller’s “Rent-a-coup” (Salon: 17 August 2006):

In March 2004, a group of men with a hired army of about 70 mercenary soldiers set out to topple the government of the tiny West African nation of Equatorial Guinea and install a new one. Ostensibly led by a political opposition leader but actually controlled by the white mercenary officers, this new regime would plunder the recently discovered oil wealth of Equatorial Guinea, enriching the coup’s architects by billions of dollars.

The Wonga Coup never came off, but not because of the kind of double-crossing anticipated in that early planning document. … One of the strangest aspects of the story is that the Wonga Coup nearly replicated an earlier failed attempt to take over Equatorial Guinea in 1973. And that coup had since been fictionalized in a bestselling book, popular with the mercenary crowd, by Frederick Forsyth, “The Dogs of War.” A case of life imitating art imitating life? The truth is even more bizarrely convoluted: Roberts has found evidence that Forsyth himself financed the 1973 coup. (And Forsyth has more or less admitted as much.)

The 2004 coup plotters made noises about installing a better leader, but their real motives were “wonga” — British slang for money — and something less tangible. “It’s fun,” said one observer. “Some of the guys did it for kicks, because life is boring.” …

Arrayed against rent-a-coup schemers like Mann is a breed that Roberts calls the “rag-and-bone intelligence dealer,” a kind of freelance spy who “darts about Africa with a laptop and satellite phone, lingering in hotel bars, picking up scraps of information where he can, selling them to willing buyers, whether corporate or government. The more sophisticated use electronic, online or other surveillance.”

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The real solution to identity theft: bank liability

business, law, security, tech in changing society, technology / /

From Bruce Schneier’s “Mitigating Identity Theft” (Crypto-Gram: 15 April 2005):

The very term “identity theft” is an oxymoron. Identity is not a possession that can be acquired or lost; it’s not a thing at all. …

The real crime here is fraud; more specifically, impersonation leading to fraud. Impersonation is an ancient crime, but the rise of information-based credentials gives it a modern spin. A criminal impersonates a victim online and steals money from his account. He impersonates a victim in order to deceive financial institutions into granting credit to the criminal in the victim’s name. …

The crime involves two very separate issues. The first is the privacy of personal data. Personal privacy is important for many reasons, one of which is impersonation and fraud. As more information about us is collected, correlated, and sold, it becomes easier for criminals to get their hands on the data they need to commit fraud. …

The second issue is the ease with which a criminal can use personal data to commit fraud. …

Proposed fixes tend to concentrate on the first issue — making personal data harder to steal — whereas the real problem is the second. If we’re ever going to manage the risks and effects of electronic impersonation, we must concentrate on preventing and detecting fraudulent transactions.

… That leaves only one reasonable answer: financial institutions need to be liable for fraudulent transactions. They need to be liable for sending erroneous information to credit bureaus based on fraudulent transactions.

… The bank must be made responsible, regardless of what the user does.

If you think this won’t work, look at credit cards. Credit card companies are liable for all but the first $50 of fraudulent transactions. They’re not hurting for business; and they’re not drowning in fraud, either. They’ve developed and fielded an array of security technologies designed to detect and prevent fraudulent transactions.

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Why the US toppled Chile’s government

history, politics / /

From Robert Sherrill’s “100 (Plus) Years of Regime Change” (The Texas Observer: 14 July 2006):

Kissinger, then secretary of state, was certain he detected the odor of communism in the election of Salvador Allende Gossens to the presidency of Chile. …

Chile was one of the most stable countries in South America, with a high literacy rate, a relatively large middle class, and a strong civil society. But millions of its people lived in desperate poverty, and Allende made no secret of his ambition to lift that class – and to do it by controlling some of the giant corporations operating in Chile but owned by yanquis.

Topping his hit list, besides consumer-product companies like PepsiCo Inc., were the world’s two largest copper mining companies, Kennecott Corp. and Anaconda Mining Co., and International Telephone and Telegraph Co., all owned by U.S. interests. Allende wanted the Chilean government to take them over. …

Kinzer’s account of these rebellious years ends with the death of Allende in La Moneda, the presidential palace and traditional seat of Chilean democracy. He had been president for 1,042 days. He refused an offer of free passage out of the country and committed suicide.

So Kissinger and Nixon and Rockefeller and their friends got what they wanted: a Chile run by Gen. Augusto Pinochet, who took office after the coup of September 11, 1973.

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Why the US toppled Guatamala’s democratic government

history, politics / /

From Robert Sherrill’s “100 (Plus) Years of Regime Change” (The Texas Observer: 14 July 2006):

At roughly the same time Secretary of State Dulles was destroying democracy in Iran, he was also busy destroying democracy in Central America, and once again it was on behalf of a renegade industry: United Fruit Co. …

“Few private companies have ever been as closely interwoven with the United States government as United Fruit was during the mid-1950s,” writes Kinzer. For decades, Dulles had been one of its principal legal counselors. (At one time Dulles negotiated an agreement with Guatemala that gave United Fruit a 99-year lease on a vast tract of land, tax free.) Dulles’ brother – Allen, the CIA Director – had also done legal work for the company and owned a big block of its stock. So did other top officials at State; one had previously been president of United Fruit. The head of our National Security Council was United Fruit’s former chairman of the board, and the president of the International Bank for Reconstruction and Development was a former board member.

These fine chaps and their numerous colleagues in our government were, not surprisingly, very upset when between 1944 and 1954, Guatemala entered what would be known as its “democratic spring,” denoting the presidencies of Juan José Arevalo and – after the first peaceful transfer of power in Guatemalan history – Jacobo Arbenz.

What those two did was nothing less than breathtaking. Under Arevalo, the National Assembly was persuaded to establish the first social security system, guarantee the rights of trade unions, fix a 48-hour workweek, and even slap a modest tax on the big landholders – meaning three American companies: a huge electric monopoly, a rail monopoly, and, of course, United Fruit, which controlled the other two.

Arbenz was even bolder. He persuaded the National Assembly to pass the Agrarian Reform Law, which gave the government the power to seize and redistribute uncultivated land on estates larger than 672 acres. United Fruit owned more than 550,000 acres, about one-fifth of the country’s arable land, but cultivated less than 15 percent – while many thousands of Guatemalans were starving for land. So in 1953, Arbenz’s government seized 234,000 uncultivated acres of United Fruit’s land, for which the government offered in compensation (one can imagine the vengeful hilarity this must have stirred in Arbenz’s circle) a paltry $1.185 million – the value United Fruit had declared each year for tax purposes. …

Arbenz was forced into exile and replaced by Col. Carlos Armas, who promptly canceled reforms and established a police state.

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Why the US toppled Iran’s government

business, history, politics / /

From Robert Sherrill’s “100 (Plus) Years of Regime Change” (The Texas Observer: 14 July 2006):

In 1953 the brutal, venal shah of Iran, Mohammad Reza Pahlavi, was pushed into exile by Mohammad Mossadegh, the democratically elected prime minister. …

Iranians loved Mossadegh. He made clear that his two ambitions were to set up a lasting democracy and to strengthen nationalism – by which he meant get rid of the Anglo-Iranian Oil Co., which had been robbing Iran for half a century. Indeed, the British company had been earning each year as much as all the royalties it paid Iran over 50 years. Mossadegh intended to recapture those riches to rebuild Iran.

In a scheme to get rid of Mossadegh, the British enlisted Secretary of State [John Foster] Dulles; he in turn enlisted his brother, CIA Director Allen Dulles, and what ensued was a truly masterful piece of skullduggery. … The CIA plotters ousted Mossadegh and restored the shah to his Peacock Throne.

For Secretary of State Dulles and his old law clients – including Gulf Oil Corp., Standard Oil Co. of New Jersey, Texaco Inc., and Mobil Corp., who were subsequently allowed to take 40 percent of Iran’s oil supply – the shah’s return was a happy and very lucrative event.

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14 governments the US has overthrown in 110 years

history, politics / /

From Robert Sherrill’s “100 (Plus) Years of Regime Change” (The Texas Observer: 14 July 2006):

[Stephen Kinzer’s] Overthrow is an infuriating recitation of our government’s military bullying over the past 110 years – a century of interventions around the world that resulted in the overthrow of 14 governments – in Hawaii, Cuba, the Philippines, Puerto Rico, Vietnam, Guatemala, Nicaragua, Honduras, Panama, Chile, Iran, Grenada, Afghanistan, and … Iraq. …

Most of these coups were triggered by foreign combatants and then taken over and finished by us. But four of them, in many ways the worst of the lot, were all our own, from conspiracy to conclusion. American agents engaged in complex, well-financed campaigns to bring down the governments of Iran, Guatemala, South Vietnam, and Chile. None would have fallen – certainly not in the same way or at the same time – if Washington had not acted as it did.

Each of these four coups was launched against a government that was reasonably democratic (with the arguable exception of South Vietnam) …. They led to the fall of leaders who embraced American ideals, and the imposition of others who detested everything Americans hold dear. They were not rogue operations. Presidents, cabinet secretaries, national security advisers, and CIA directors approved them …. The first thing all four of these coups have in common is that American leaders promoted them consciously, willfully, deliberately, and in strict accordance with the laws.

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Prescription drug spending has vastly increased in 25 years

business, history, politics, tech in changing society, technology / /

From Clifton Leaf’s “The Law of Unintended Consequences” (Fortune: 19 September 2005):

Whatever the answer, it’s clear who pays for it. You do. You pay in the form of vastly higher drug prices and health-care insurance. Americans spent $179 billion on prescription drugs in 2003. That’s up from … wait for it … $12 billion in 1980 [when the Bayh-Dole Act was passed]. That’s a 13% hike, year after year, for two decades. Of course, what you don’t pay as a patient you pay as a taxpayer. The U.S. government picks up the tab for one in three Americans by way of Medicare, Medicaid, the military, and other programs. According to the provisions of Bayh-Dole, the government gets a royalty-free use, forever, of its funded inventions. It has never tried to collect. You might say the taxpayers pay for the hat–and have it handed to them.

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