Knee jerk that reaction, doctor

An apparently reputable business publication set the blogosphere abuzz recently with the report that a very prominent tech company was planning to make its play in the mobile payments arena. Other media outlets picked up the report and blogs were lit by the fuse of speculation.

The rumors coming out of this tech company are probably true to some degree. However, the source of the insider information on which the apparently reputable business publication based its report is suspect in my view. You would think this consultant with all this juicy information was vetted by the apparently reputable business publication. But who knows these days.

So I researched the consultancy. I can't get to the website. There's always a problem loading the page. I found the consultancy's phone number and called it up. The receptionist said the consultant was on the other line. I asked if I could have the consultant's voicemail. The receptionist said she would take a message. (No voicemail?) When she took my message, I had the impression she wasn't actually writing anything it down. When I said thanks, she muttered something and hung up. (Maybe she's a temp, or his wife.)

I did a little research on the consultant. He seems to have a decent background, is reportedly an expert resource for media outlets. But, on the other hand, he has a crappy website, a lousy receptionist, and no voicemail.

So I am left to wonder about the factuality of his insider knowledge about future product roll-outs by this tech company, and yet one media report using this guy as the source got the whole tech world hyperventilating. It just proves how easily led we still are. 

If a Big Lie comes wrapped in the mantle of authority projected by an apparently reputable business publication, will we have the wisdom to at least take a second look at it before broadcasting it like mindless parrots across the world?

I doubt it.

CAUTION: DISRUPTIONS AHEAD

Mark this event as a small signpost to the Dead Man's Curve we are approaching as a society. A rapper named 50 Cent posted on his Twitter page that all his 3.8 million Twitter fans should buy shares in H&H, a company in which the rapper owns stock. H&H's shares subsequently skyrocketed by 290 percent, as his Twitter fans apparently did what he suggested.

Now 50 Cent is in trouble with the Fed. He may have done something illegal to artificially boost stock in the company. But what exactly did he do wrong? Is it insider trading to make a public statement on a public facing page about stock that you own? I don't think the Fed would care if I made such a statement on this obscure blog. It was the size of the audience he was reaching, the speed with which he reached it, and the immediate effect his suggestion had on the stock's performance that caused the Fed to take notice.

There are all kinds of legal gray areas when it comes to the electronic world. Privacy and copyright infringement concerns immediately come to mind. It doesn't seem our laws are keeping pace with the rate of change that is going on in society.

So how do you change a legal system that is antiquated, overly complex, and deeply embedded in the culture? I don't believe you can. New technologies always create loopholes in laws that can be overtly or innocently exploited. 

When the legal system catches up to restrict celebrity stockholders from posting stock tips on their Twitter pages, the next new technology will already be creating new opportunities for exploitation. As the speed of change accelerates, that gap will only grow. The only thing the government could do is try to clamp down on the Internet. If they do, it will herald a new Dark Age. If they don't (a far more preferable outcome), democracy as we know it will be broken and what comes next is anyone's guess.

A brief post on Time

We have a funny way of thinking. We talk about things that happened in the past, things that are happening now, and things that will happen in the future. But if you think too hard about how we compartmentalize Time, you start to question the categories.

The past is past, we say to ourselves, as if it were a fixed thing. But it's anything but. When scientists excavate the ruins of some mysterious ancient civilization, isn't that civilization now vitally "new" with the knowledge it has to impart to us through its ruins? And how can we say the Crusades of the Middle Ages are a thing of the past when we are still seen as occupying infidels in the Middle East today? 

The present is just as hard to pin down. When does the present begin and end? Is it a second, like the one that just passed? Or is it a centisecond (a hundredth of a second), or even smaller, a millisecond? Maybe it's something larger -- a year, two years, a decade. If there is no acceptable definition of what makes up the present, how can we know it exists?

The future is a funny thing, too. We are worried and excited about it. We are always planning for it. We are constantly thinking about it, imagining it, even though it doesn't yet exist. And it never will. That's the thing about the future; it's always in the future.

So what we call the past, the present, and the future doesn't stand up to even the briefest scrutiny. Maybe one day those artificial distinctions will fall away and we'll realize that Time is an infinity of concentric circles and not an arrow going only in one direction.

Short term short circuit

I guess members of Congress don't play chess. You know, developing a strategy, thinking several moves ahead, taking into account that every move you make will generate a counter move. The inevitability of that counter move apparently escaped Congress when they passed the financial reform bill with the Durbin amendment intact.

Durbin mandates the Federal Reserve to regulate debit card interchange. For those of you who have never heard of or do not understand interchange, it's a small, per transaction percentage charged merchants when bankcards are used to purchase products and services. A Fed report puts the average amount of interchange per transaction at $0.44.

The Fed's plan announced last week is to artificially cap interchange on debit cards (not credit cards) at $0.12. If the proposal is approved by the Fed, merchants will save money when customers use debit cards to make purchases, which will allow merchants to pass along savings to customers. Or that's what lawmakers and regulators think will happen -- end of the story.

But every action has a reaction. The reaction will likely be that banks (beneficiaries of interchange) will reduce or eliminate low-cost or free services on checking accounts, since debit card interchange helps to fund those programs. Because banks will start to charge fees on checking accounts to make up for the lack of interchange, people will stop using their debit cards as much.

If consumers shift from debit back to credit cards, merchants will start paying more credit card interchange, which is significantly higher than debit card interchange. And if consumers can't shift back to credit cards because they have bad credit, and they don't want to pull out those expensive-to-use debit cards, maybe they start to reduce (even more) their amount of shopping altogether.

So, an amendment designed to help merchants and consumers ends up costing merchants more than they already pay in interchange, causes consumers to spend less or go into greater debt with credit cards, and hinders economic growth.

If Congress plays any board game, it's checkers, not chess.    

   

Putting tech in its place

The software developer I interviewed a few weeks back seemed a little uncertain about me when I mentioned I don't own a smart phone. But it gets worse. Not only do I not own a smart phone, I don't own a cell phone with a wireless plan. I use a prepaid phone.

For someone who portrays himself as a tech writer, I can see why someone would have reservations. But the reason I don't own a smart phone is simple -- it wouldn't improve my life.

When I go for a walk, I don't need the ability to download MP3s and "friend" yet another stranger. When I drive my truck, I don't need wireless connectivity.  When I'm on a plane, I'd rather sleep. When I'm crossing the street, the last thing I want to be doing is surfing the Internet (California drivers can NEVER be trusted.)

Of course, there are downsides to my personal brand of Ludditism lite. I can't check e-mail on the fly and I can't use my phone to ignore other people in awkward social situations, like standing in line at the pharmacy and waiting for the movie to begin.

I am not saying I will never own a smart phone. It would be novel to play games on one or otherwise divert myself from the real world. But I prefer a slower pace of life. I access technology when I need to pay bills, write a blog, conduct research, communicate with friends and colleagues. So I ask myself, why do I need a smart phone?

Of course, I would think differently if I lived in the slums of Mumbai or in a tiny village in Malawi, where owning a smart phone might make the difference with that ultimate of applications -- survival.

   

The United Consultancy of America

An offhand comment on talk radio sparked a thought about the future of America. The subject of the talk show was the economy. The host mentioned that Apple could not possibly manufacture the iPhone in the United States, since it would cost $5,000 per unit. 

Everything is expensive to produce in the U.S. when compared to the rest of the world. The effects of  unions, globalization, trade agreements and enviable living standards has starved us of our ability to be competitive as a producer of goods, even if the stuff we import from China is inferior to what we used to make here.

But the one thing we still have is knowledge. We know how to make the best windows, the best doors, the best hinges, the best of  just about anything. If you have an idea for a widget, we have the engineers and the craftsmen to design and build it to perfection. Just not cheaply.

Is that our future? Will we be the priestly class, keepers of secret knowledge -- the divine ratios and secret formulas?

It is being said that this may be the future of NASA.With Obama gutting the program (funding it but giving it no purpose), NASA may discover its new direction as a consultant to other space programs around the world.

Imagine our best road builders and metal workers, civil engineers and technological experts, the best our private sector has to offer,  fanning out across the globe to improve living and working conditions across the globe. Obviously, that is happening today. But has it become nationalized? Is it part of our identity as a people?

Ennobling the private sector into a Jedi class of subject matter experts is an idea that returns to America its special standing in the world. We may no longer be the global superpower in military prowess, but we certainly are the priests of DIY.

Oh, mighty Isis!

As a Gen X outcast, I recall the joy of Saturday morning cartoons of the late 1970s -- Batman, Scooby Doo, The Jetsons, Yogi Bear. But also the live action adventure series Shazam!, which chronicled the exploits of Captain Marvel, and its sister series Isis.

Isis was about a young teacher who finds a necklace that transforms her into the mythical goddess Isis when she utters the incantation, "Oh, mighty Isis!" As Isis, the woman could fly and command the elements of sky and earth.

All I really remember about the show is Isis in flight, with her arms extended out in front of her. The rest is a complete blank, probably because the episodes weren't memorable. (The show only lasted one season.)

This is the dilemma of the new Isis -- a brand new mobile contactless payment network at the point of sale. It is made up of AT&T, T-Mobile, and Verizon. The big three telecoms are trying to leverage their 200 million U.S. wireless phone subscriber base to transform themselves into a payments network like Visa and MasterCard.

Isis is going to use Discover's network of 7 million retailers to develop its own Isis branded network over which smart phone payments will be made.  It's a bold but problematic undertaking because V/MC are such entrenched, well-known brands that operate powerful, worldwide networks. Of course, the card brands also have designs on mobile payments, with pilots in the works that seek to circumvent the power of the telecoms.

So, will Isis soar or bomb? It is very much an open question that hinges primarily on how consumers want to pay with their phones. Remember, Isis was kicked off the air back in the late 70s because not enough kids like myself watched the show. If not enough consumers opt to use Isis, 30 years from now we'll be strolling once again down the hazy corridors of memory lane.