Tuesday, August 28, 2012

Apple vs. Samsung

In 1985, Microsoft launched their Windows operating system.  Windows was a huge increase in ease of use over the earlier versions of Microsoft's operating system, known as DOS.  The new operating system went a long way toward erasing Apple Computer's lead in easy to use computer software.

Apple sued Microsoft for patent infringement on their software.  Even though the actual computer code of the two systems was very different, Apple's claim was that Microsoft had pirated the "look and feel" of Apple's software.  The judge hearing the case disagreed, in what was a landmark case for its day.

Fast forward to this week.  In another patent infringement case, Apple sued Samsung over several of the features of smartphone technology.  The most important patent allegedly infringed was one on "pinch to zoom" technology.  This is the feature of a smartphone or tablet computer where you put two fingers on the screen and spread them to zoom into and expand an image, or close them together to shrink the image.

This time, the jury ruled in Apple's favor.  The ability to control an image on a computer screen that way is such an innovation that Apple has an exclusive right to that feature, regardless of the technical details of how it is done.  The jury found that Samsung had cost Apple a billion dollars by violating the patent.  And because the jury found that it was a willful violation (i.e. Samsung's execs knew what they were doing) the judge in the case has the option to assign treble damages.  That means Samsung would have to write a check for up to $3 billion.

The real impact of this case is that if Samsung or any other cell phone or tablet amker wants to use the patented features, they have to get Apple's permission.  Apple can either charge hefty licensing fees, making the other companies' phones more expensive than the iPhone, or just flat deny the rights to other companies.

The impact of this case is to make everybody's cell phones and tablet computers more expensive from here out, including Apple's.  After all, why drop the cost of your product when you have a monopoly?

Wednesday, August 15, 2012

Voter ID

The Commonwealth of Pennsylvania recently passed a voter ID law. Passed on party lines (Republicans for, Democrats against) it headed for state court, as these things tend to do. The basis of the law is the position that before you vote, you should have to prove your identity by showing a photo ID.


Those in favor of the law argue that it will prevent fraudulent votes being cast. There is no evidence that there is an epidemic of voter impersonation going on, but that is the fear cited in justifying the new requirement.

Those opposed to the law argue that it will disenfranchise numerous legitimate voters, who are too poor, infirm, or disabled to acquire photo IDs. The ACLU and other voting rights groups suing to have an injunction blocking the law brought a number of witnesses to testify that they would be unable to comply. Interestingly, they could manage the logistics of making a court appearance and testifying, but would be unable to manage the logistics of getting to a DMV office to procure a state photo ID. Still, when you ask someone to lie to you, don’t be surprised when that is what they do.

Since you cannot cash a check or buy a drink without ID, it does not seem an unreasonable burden to ask for proof of ID when casting a vote. And this is pretty much what the judge found, when he ruled that the new law could go into effect. Neither side proved their case, and the legislature passed it, so it goes into effect.

Two thoughts on this issue:

First, I’m not sure that it’s a good thing for the Democrats to be taking their side of the debate. At least, not from a branding perspective. “Join the Democrats! You too can be a member of the party for people who are too feeble to get a driver’s license.”

On a more serious note, the Democrats are in favor of allowing voter registration to take place when you get a driver’s license. Republicans are in favor of retaining the current dual system of keeping voter registration separate from the DMV. They oppose so called motor-voter legislation.

Using driver’s licenses as a form of ID required to vote erodes the Republican rationale, at least from my way of thinking. After all, if getting a driver’s license is a prerequisite for voting, why not allow the registration to take place at the same location. It seems to me the Democrats should embrace the need for photo ID, and then turn that against thte Republicans.

If it were up to me, I’d restrict the franchise to tax payers. By tax payers I mean people who belong to households that actually pay in federal income tax. Otherwise, what’s to stop people from voting themselves benefits out of the public treasury, and thereby bankrupting the nation.

Oh, wait. We’re pretty close to that now, aren’t we?

Thursday, August 9, 2012

The Deleveraging of America

US households are continuing to reduce their debt burden. According to the Federal Reserve, the amount of money dedicated to paying off debt has shrunk from 14% of disposable income in 2007 to a current level of 11%


There are three ways to ease the cash flow burden associated with debt.

First, you can do it the old fashioned way: whittle it away a little each month. Then once you have eliminated some debts, don’t turn around and add on more. If you get the car paid off, drive it for another six months and accumulate a bigger down payment on your next vehicle. If you pay off a credit card, cut it up and close the account. Avoid taking out a home equity loan to pay for a vacation.

Second, you can take advantage of lower interest rates. If you refinance existing debt at a lower interest rate, either the term of the loan gets shorter or the monthly payments go down. Or both, depending on what the spread is between the old interest rate and the new refinance rate.

The third way you can reduce your debt and ease up your cash flow is by surrendering assets pledged as collateral in discharge of your debt. That’s just a fancy way of saying you get foreclosed on by the bank. In the last five years there has been a mountain of debt erased by this method.

However they are doing it, a reduction in household debt is good economic news. With more disposable income in their pockets, consumers will have more cash to spend. Deleveraging has the potential to help drive the economy forward.

Of course, with the paltry retirement savings of most Americans, the best use of increased cash would be to divert the extra money into long term savings.

Thursday, August 2, 2012

Chick-Fil-A

The CEO and member of the founding family of Chick-Fil-A gives an interview to a Baptist religious newspaper, in which he declares his opposition to changing the traditional definition of marriage to encompass same sex couples. This is not new or surprising, given that CFA closes on Sundays because of management’s belief that the employees should be in church.


The story is picked up by national media. Then things get interesting.

Within 24 hours, headlines like “Head of Chick-Fil-A Takes Antigay Stance” appear. This is a case of the mainstream media deciding “If yer not fur us, yer agin us.” You can be opposed to redefining a social institution that has persisted for thousands of years without caring one way or the other about individuals’ sexual orientation. Tolerance does not necessarily require approval.

Then the mayors got into the act. The mayors of both Boston and Chicago publicly stated that they would oppose the opening of any Chick-Fil-A stores in their cities, solely based on the political opinions of the owners. These guys espouse a belief in diversity, as long as it doesn’t include anybody who disagrees with their opinions.

Now, I can pretty much guarantee that both cities have permanent trade representatives in Beijing, and that both mayors have participated in trade missions to China. Part of their job is to encourage investment in their respective cities.

So they would welcome investment from an authoritarian regime that suppresses dissenting views, but they are discouraging investment from an American company whose owners disagree with them?

Birds of a feather flock together, I guess.