Over four months beginning in early August, Kearsarge planned to visit Nicaragua, Colombia, Panama, the Dominican Republic, Trinidad and Tobago and Guyana, delivering free medical and engineering assistance to isolated, impoverished populations. It was actually the second phase of Operation Continuing Promise, which began in May when the amphibious assault ship USS Boxer made a humanitarian run down the Pacific side of Central and South America, eventually treating around 14,000 patients and conducting 127 surgeries, while an accompanying force of Seabees rebuilt eight schools and repaired roads.

Continuing Promise is just a single chapter in a much broader U.S. military "medical diplomacy" initiative in Latin America that began in earnest in summer 2007, with the four-month deployment of the hospital ship USNS Comfort. That trip resulted in some impressive figures: 1,170 surgeries, 32,322 immunizations and 24,242 pairs of glasses handed out.

—David Axe, Seapower Magazine

What a good idea.

I don't think there was ever a point when my reaction to the 9/11 attacks was a desire for my country to invade another country. I was in China when it happened, and my reaction for the first day or so was, "that's awful." Then America went insane, and my reaction was, "please stop going insane"¹. All of my reactions since then have been variations on a theme: please stop waging war to stop violence, please stop destroying our liberties in the name of saving them; please stop torturing people; please stop disappearing people; please stop developing the apparatus of a police state; and so forth. But I digress.

What I want to say is that I feel stupid right now because, for just a moment, I bought into the fiscal crisis conventional wisdom. I don't say that there is no crisis, but when I first heard about the $700 billion rescue plan the other day, my initial reaction was, "gee, I guess we need to be talking about something like that." It took a few days to cycle through "wait a minute, this bailout plan looks pretty bad" to "wait a minute, why are we arguing about the details of the bailout plan instead of its premise and justification?" And I'm embarrassed to admit that it took me most of a week to proceed to the reaction I should have had in the first place. When the same administration that used pure, baseless fearmongering to start a war that has among other effects enabled a company the Vice President recently led and remains financially entangled with to flagrantly steal billions (tens of billions?) of dollars now tries to use fearmongering to justify a massive transfer of taxpayer wealth under the exclusive, unaccountable, and secret supervision of a Treasury Secretary who recently led and almost certainly remains financially entangled with a company which stands to receive tens (hundreds?) of billions of dollars, the only proper response is, "go fuck yourself."

Is there a crisis? Surely. Does it put the economy of the United States and the world at risk? The fact that a pack of proven compulsive liars who stand to make tremendous gains say that something is true does not make it false. I may not be qualified to figure out this whole thing out on my own, but I did just finish a degree that included serious doses of international development, and included a solid year of reading economics bloggers, including Nouriel Roubini. So I do feel qualified to call bullshit when I see it, and to assess the opinions and credibility of experts. Here's my two ¢s:

• Jim Romanesko writes in a memo to the press: "The coverage of the Paulson plan focuses on the edges, on the details. The focus should be on the premise." If we are arguing about executive pay and whether or not the US taxpayers get an equity stake in the institutions they bail out, the debate is already over and the criminals have won. Gus's lecture notes from his "Venture Capital and Private Equity Investments" class from business school say, "Many people find it difficult to think of concepts or issues that the page does not already list. There is a tendency to edit what you see, rather than to create fresh ideas or radically different approaches." Perhaps Paulson took a similar class many years ago.
• The need for a bailout, especially a massive bailout, is not proven. It's tempting, but ultimately childish, to take the mere fact that proven liars Paulson and Bush are arguing for it. Still, every day that passes with the sky still above our heads gives us more information. Let's take a moment to thank the founders for designing a legislative system that can, without any meritorious individual performers, still perform a vital governance function of slowing over-hasty reaction.
• If a bailout is required, there are much better ways to do it than raising money through borrowing the equivalent of a one-time 50%+ tax increase and then giving the money, no strings attached, to the people who lost it in the first place. For example, government-mandated debt restructuring.
• The crisis is the consequence of deregulation. This seems fairly self-evident. Pure capitalism is not a stable system. Perfect competition and frictionless markets don't exist, people are not rational utility-maximizers, and most real systems are not "close enough" to perfect to be well-understood through purely rational economics. Market failures are the norm, not the rare exception. Markets need parameters and boundaries to be stable and healthy over the long term. It's true that bad regulation can kill markets. It's also true that a lack of good regulation kills markets.
• The repeal of Glass-Steagal contributed to the collapse. That seems likely. The counter-argument, that repeal "made it possible for JP Morgan to buy Bear Stearns and for Bank of America to buy Merrill Lynch," just doesn't make sense to me. Of course it's better for a financial institution comprising a monstrous fraction of the US financial system to be acquired rather than to collapse, but isn't the size of the institution part of the initial problem? Now we have a small number of giant institutions, all "too big to fail", and thus all big enough to blackmail the taxpayers. This is bad, not good. The Washington Post notes: "Smaller Banks Thrive Out of the Fray of Crisis".
• The bailout, and in particular the Paulson plan, represents the apotheosis of corporate democracy: heads I win, tails the taxpayers lose.
• Dani Rodrik points out that "The rough rule of thumb for emerging markets is that banking crises are associated with an output loss of around 10%".

So, to summarize, the bailout plans feels more like an opportunistic greed reflex than good public policy. It would transfer more money to private interests than the Iraq war did, although it should be noted that it at least wouldn't require tens of thousands of American soldiers and others to spend years killing each other to provide a pretext for wealth transfer. It's not proven that we need such a bailout; and if we do, the current administration certainly cannot be trusted in any respect. If you think this is hyperbole, remember that Paulson told Congress last Tuesday that, "We gave you a simple, three-page legislative outline and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism. ... So if any of you felt that I didn’t believe that we needed oversight: I believe we need oversight." But the proposal said, "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

---

1. Here's a letter I wrote to my representatives on 18 Sep 2001

Moderator Amy Shuen, author of "Web 2.0". Opening question to panel: How many of you are in Web 2.0 companies? Give us a one sentence tagline about your company, what is web 2.0?, why is your company a web 2.0 star and a model to be learned from?

Christa Quarrles, "As a representative of the large companies"

• Yahoo is the bastion of Web 1.0. CPM
• 2002-2007 era of Google. cost per click
• brought the "promise of the web" to bear, meaning that advertising could be better measured
• stopped addressing the questions in any discernable way and started speaking what Neal Stephenson called "bulshytt"

The MC quoted somebody calling her the "number two" analyst for whatever.

Josh Elman, Facebook platform program manager.

• a social utility that gives people the power to share to make the world more open and connected.
• In web 1.0, information was picked by editors. In web 2.0, the tables have turned, and all the information is being provided by people.

Seth Sternberg, Meebo.com, The web's live communication platform. If users want to chat, anywhere, we want that to happen. Just as everybody outsources search, and monetizing search, to Google, they should outsource chat to Meebo Rooms or Meebo Community IM.

Moderator asks for show of hands, how many have used it. I see about 10 hands. I count about 70 people. Moderator says, "so, a little bit less than half."

Michael Veys, COO of jahjah. "How can we bring the power of those new tools (IP telephony?) to ... and make it as easy to use as a search engine? We've opened up our whole platform and made it available to businesses so businesses can take advantage of, can enjoy all the advantages of web 2.0. The business has evolved and is much more of an infrastructure business than the original consumer business."

Can you explain in detail the business model and revenue stream of your company?

Christa: Ballmer said nothing's changed in search in five years, it's just 10 blue links. That overlooks the improvements in monetization. What's beautiful about the Google model, so scalable (only took $25 million of invested capital, now worth $100 billion+), is the self-service model. How do we get the right ad in front of the right consumer at the right time? ... Myspace is using Google as its monetization engine. Google in their 1st quarter call said they were having problems monetizing Myspace.

Q: How much does Google make per day on some of the most popular keywords? A: mesotheliomia gets $150 a click, top mortgage keywords $15/click (not anymore), debt relief is skyrocketing. If you try to create an equivalent CPM, Google's effectively getting about $120 CPM. Superbowl ads are probably $30 CPM equivalent. Sitewide, Yahoo gets about $1 CPM.

Josh at facebook: As the world becomes a lot more social online, we think new, interesting [advertising] models will appear. A lot of advertising is generating demand; people use facebook to share with each other. More money is spent in demand generation than lead generation. We're doing really well with our current model, advertising. 25,000 different applications, some of those developers have monetized, over $1 million per month reported, users paying for virtual currency. Moderator: Also talked about, iLike and flufffriends, "just such amazing examples of the way in which the facebook platform allowed other companies to be able to monetize on the web." Josh: startups face the challenge of how to get users and monetize users. Facebook provides that. iLike started as their own website and moved to Facebook. Got to 1 million users on facebook in a week, sustained and leveraged that. make money off of ticket sales, music sales, and other things. Users spend a lot of time and money caring for their (virtual) pets, buying people pets and accessories.

Seth of meebo: Google is the panacea for direct response marketers. Brand advertisers, Coke, Pepsi, not served by Google. Where can they advertise on the internet? Nowhere. ... we are aiming to be the best place on the web for brands to park their ad dollars. Three criteria: you have to be able to create very high engagement with the brand. The average meebo user spends over 2 hours per day, and has it active over an hour per day. We give advertisers 10 minutes with the user; when they click on it, we give them something engaging, if it's coke, maybe a game to keep the coke away from the bears, make it social, invite your friend to play with you, the funny thing is you're inviting friends to an ad. Nike did a shoe configurator, you could configure it and send it to your friends. You could set your icon to Chris Brown, using the networks of all the people to let them share that cool branded content with their friends. Second criteria is sharing. The last thing is metrics. How does a brand figure out if they created affinity with a brand? Show them x% click rates. Second thing is to show them the impact of conversation streams in Meebo. Real example: Weezer was being talked at let's say 2000 mentions per day, just to have a number. They released an album and hyped it and went up to 10,000. Then they advertise on meebo, and it spikes to 20,000. You need to give hard metrics to the brands, are people talking about them, is it positive stuff or negative stuff. People spend 300+ years of time in meebo per day.

Joel's note: when the moderator responds to a lengthy piece of answer/bulshytte with fawning praise, I wonder if she's slipping in any indirectly revealing questions, or if she's just fawning? Update: well, the fawning and the fudging of numbers at least are consistent: "If you were one of the fortunate 100 attendees at the beautifully-appointed Silicon Valley Bank auditorium yesterday, you know the answers to the following questions:"

Jahjah: "... disruption .... Apple came to the online music problem and said, how can we do this better without upsetting the whole apple cart? They partnered with the content providers. Jahjah ... enables [some companies] to have some of the new things that are happening, like facebook and meebo, or ip-only phones. We'll give them whatever [?] they need in their value chain so they can go to market with it." Ways to monetize ... subscription model, people will prepay for services, use those minutes, and renew, ofter automatically. Or they pay a monthly fee. We provide a lot of the services, provisioning, fraud, customer care, for yahoo voice premium services. eHarmony, they have a subscription service, you pay every month, you can they have IM conversation on jahjah completely embedded in that environment. Or a revenue share model. The third monetization is advertising. "Still there is no real advertising on the phone. Typically the phone will ring 6-7 seconds before the other person picks up, and that's effectively dead space. So we [use it] ... always with the authorization effectively of the user. Keep the ringtone in the background and play a message over it. Nike can say about a shoe. Or if we see a pattern where users will call between San Francisco and London, the airlines can easily insert a short ad in there, 'try the new promotional services of Virgin between SF and London' We've used that on our own network."

Moderator: notice that there are at least five kinds of network effects that all of them are using

tips: ... "you'll have that passion, and that will translate into something you'll bring to market."

Joel's note: I'm personally aware of two coherent definitions of web 2.0. The first is web applications that use AJAX to behave more like desktop applications, such as Gmail. The second is websites that rely on user-generated content, such as Facebook. To the extent that this panel has any coherent definition of web 2.0, it's the latter. And we are out of time and there are no audience questions. There were a few audience survey showings of hands. Those notwithstanding, this was probably the least interactive event of the forty or fifty public events I've been to since last year.

One of the lists I've been working on is the "default answer per domain" list. The idea is that, in any specific field of knowledge, there's one answer that's far more common than any other. My friend Michael introduced me to the idea by explaining that, in pilot training (he's a military pilot), when the instructor is screaming at you and your mind is completely blank, your best bet is to reply, "sir, to maintain the stability of the aircraft, sir." It's very rarely outright wrong, and even if it doesn't answer the question, it's still a good thing to be doing at all times. There are in fact NTSB crash reports that essentially say, "something minor went wrong, and while the pilots were trying to fix it, they flew a perfectly functional airplane into the ground." When you are flying an airplane and something goes wrong, the need to continue flying the airplane remains both urgent and important.

So I set about trying to extend this concept to other domains. Here's my list so far:

• piloting: "maintain the stability of the aircraft"
• martial arts: "foot position"
• construction: "vapor barrier"
• computers: "permissions problem"
• electronics: "grounding"
• economics: "marginal cost"

My bicycle, as it turns out, was manufactured by RANS, whose primary line of business is airplanes. And the rule for piloting applies to cycling: rule one is always to keep the bicycle upright.

One of the benefits of a recumbent bicycle is supposed to be greater safety in crashes. You ride lower and you are basically supine, not vertical, so your head, container for your vital brain, is not only lower but less likely to lead your body in a Newtonian arc over the handlebars and into pavement. However, Wikipedia does warn that "remaining clipped in during a front tire or wheel failure at high speeds can result in the recumbent rolling over the rider and taking a clipped in leg or legs with it. This scenario, although very rare, can create severe spiral fractures of the femur ..."

So I was riding Sunday morning, southbound on the 1, big shoulders, hardly any traffic, dry road, partly sunny. The only problem was that I couldn't see the ocean. So I craned my neck and tried to peek over the rise between the 1 and the ocean. Then I looked back at the road, saw the pothole, and went down. Fortunately, I was going uphill, hence only about 13 mph, and I went down on dirt, not asphalt. So, did the recumbent layout save me from serious injury, or did I fracture both femurs in matching spirals?

Good news. I basically fell a few feet onto my ass and slid to a halt, balanced on one side of rump. Total damage: a bit of road rash, a small tear in my shorts, and a dirty pannier bag. I'll count that as a cheap refresher lesson in the keeping my eyes on the road.