Apple expands its China market by 1 million overnight

In a stunning game-changing announcement, proving once again that Apple is the world leader in business management and innovation, Apple’s new CEO Tim Cook declared:

As a company and as individuals, we are defined by our values. Unfortunately some people are questioning Apple’s values today, and I’d like to address this with you directly. We care about every worker in our worldwide supply chain.

This morning the Apple board has agreed to distribute our on-hand cash, of about $100 billion, among the 920,000 Foxconn employees who make our amazing Apple products. That’s over $100,000 for each and every hard-working employee who put together the products that delight us. Put another way, we’ve just given them a 6,000% bonus over their $1,680 yearly salaries.

Within minutes of the announcement, a majority block of Apple shareholders began a lawsuit based on the legal concept Volumus Quod Pecunia, which roughly translates as “Hey, We want that money!”

Tim Cook responded to the irate shareholders:

We would never neglect our fiduciary shareholder responsibility. We are not paying $100,000 per Foxconn employee out of any sense of fairness, or out of the goodness of our hearts. We’re doing this because it just makes good business sense. We’re expanding our customer base.

Each of those employees can now, for the first time in their lives, afford to purchase the products they’re making. In fact, we’re pressuring Foxconn to mandate that every employee buy an iPad and an iPhone (although employees younger than 14 are required to get a parent’s permission).

One more thing: we’re mandating a reduced 90-hour workweek so our Chinese workers now have time to shop for Apple products. That’s how markets are grown.

Flush with Community Pride

Off in the distance is the flame that burns all night on the local sewage treatment plant. Some call it "our eternal flame". Whatever you call it, it's something we as a community create together.

They say it takes a village. Come see the beautiful children.

Super Simple Job-Killing Calculator

It seems like everyone is talking about job-killing this and job-killing that, but nobody gets into the specifics. Who is killing the jobs and how many jobs are they killing?

Who is killing jobs?

Find a business that is making a profit. That profit represents money the business is bringing in that is NOT being paid to any employees. So if you’ve found a company making a profit, you’ve found a job-killer.

Fortune has listed the top 50 American job-killing companies here (although instead of “job-killing” they use the euphemism “profitable”).

How many jobs are they killing?

Let’s say the cost of a full-time employee (including, wages, benefits, etc..) comes to about $60,000 per year (according to Department of Labor numbers referred to here and some guessing).

Here’s the super simple calculation to determine how many jobs a company has killed:

JOBS_KILLED = $PROFIT / $60,000

Using that formula, and Fortune’s list of job-killing companies, here’s a list of how many jobs have been killed by the top 20 American job-killing companies in 2010.

Company	# jobs killed
Exxon Mobil	507,667
AT&T	331,066
Chevron	317,066
Microsoft	312,666
JP Morgan Chase	289,500
Wal-Mart	273,150
IBM	247,216
Apple	233,550
Johnson & Johnson	222,233
Berkshire Hathaway	216,116
Proctor & Gamble	212,267
Wells Fargo	206,033
Coca-Cola	196,817
General Electric	194,066
Intel	191,067
ConocoPhillips	189,300
Citigroup	176,700
Hewlett-Packard	146,017
Google	141,750
Goldman Sachs	139,233

That’s 4,743,480 jobs killed by just the top 20 American companies.

What and where are the jobs being killed?

We’ve seen who is killing jobs, and approximately how jobs many are being killed. That part is super simple. To understand what jobs are being killed you have to know the particulars of the industry. I’m a Silicon Valley computer programmer, so I really understand only two of those companies in Fortune’s list of top-20 job-killers: Apple and Google.

It’s super simple to understand how Google kills jobs. Google is in the advertising business, and have by far the most efficient advertising model ever created. For every advertising dollar that goes into Google, an advertising dollar is not going somewhere else (where the advertising dollar would have been used less efficiently). In other words, each Google employee is replacing multiple people that used to be in the advertising business somewhere else (advertising agencies, advertising artists, pitchmen, newspapers, many levels of middlemen, and so on).

How Apple kills jobs is more complicated only because they’re in more businesses. The iPhone business, for example, is hugely profitable, which is just another way of saying it kills a lot of jobs. What jobs has the iPhone killed? Tons of jobs at Nokia, Motorola, RIM, and everyone else that were making an inferior mobile phone. For another example, Apple is also hugely profitable selling music through iTunes, and again by “profitable” I mean “job-killing” where the jobs are tons of people in the old music-supply chain who are now jobless (everyone from evil music industry executives down to the offbeat employees of record stores that used to exist in every mall and main street).

But aren’t profitable companies the top job creators?

Yes, profitable companies are the ones creating jobs. But for every one job created at profitable company A, there are probably about four jobs lost at companies X, Y, & Z. Again, taking Apple and Google as examples, they each employ about 1 person for every 4 jobs they’ve killed (Apple: 60,000 jobs created versus 233,550 jobs killed; Google: 31,000 jobs created versus 141,750 killed).

Lesson Learned: Do you want to create a profitable business? Figure out how to do something with one person that used to require five.

Why are these job-killing companies the same ones politicians praise as “job creators”?

Because politicians are stupid or hypocritical, or because they know we are.

How about this “tax repatriation holiday” to bring money in to create jobs?

Oh please, that’s hardly even worth a reply! (Who writes these idiotic questions?) These companies use shenanigans to sequester profits offshore, and then ask for a tax holiday to bring the money back to the US to “create jobs”? If the goal of these companies were truly to “create jobs” then they wouldn’t have those profits in the first place. If their true goals were both to create jobs and to avoid taxes on $1 trillion in profits, as they claim, then they would have hired $1 trillion in employees already, and their taxes on profits would be zero.

Who are you to pass judgment?

I’m not passing judgment. I’m just explaining economics and jobs in simple terms. As a computer programmer, I’ve written lots of code that has led to small teams being hired at the expense of large (inefficient) teams being fired. I’m a job killer. That’s why I’m paid the big bucks. I’m not against profit (especially my own), nor am I against replacing lots of workers with a few workers being more efficient.

I’m just against lying about what creates jobs and what kills them. Profits are generated by killing jobs. That's pretty simple.

Why I support SUPA

I support SUPA. There, I said it. Bring on the hate.

In case there’s anyone left who doesn’t know, SUPA (Stop Underage Prostitution Act) is a U.S. congressional bill that purports to fight trafficking in underage prostitutes. SUPA would allow law enforcement to seek court orders against anyone accused of transporting, facilitating such transport, or accepting payment for, underage prostitutes into this country.

Proponents of the bill say it would prevent abuse of young girls while protecting the rights of 18+ working women. Opponents say it infringes free love, our rights, young girls rights, and will cripple the sex trade.

To tell the truth, I know very little about SUPA other than what I just cut-and-pasted from the first page of its Wikipedia entry. I’m leaning toward supporting SUPA mostly because I’m so tired of the vitriolic, reactionary, and self-serving responses of those who are against it. For example, this rant I just saw on reddit, from the CEO of LulzLita.com: “SUPA is ripe for abuse. Anyone could claim that an arriving ship holds a container of 13-year old sex-slaves and the SUPA police could use this as an excuse to slow or even prevent unloading of that ship into the free marketplace. Anyone could make such a claim--my competitors, troublemakers looking for a cheap laugh, the girls’ Thai parents wanting to renege on the sale--and the police would have to conduct a search for underage prostitutes, slowing the unloading of that ship, wreaking havoc on worldwide shipping, ending free trade, and destroying our economy. SUPA is a job killer. Worse, SUPA could delay my third round of funding for LulzLita.com.”

Another way to understand SUPA (without actually *reading* the legislation) is to look at those who are most against it. Many of the corporations shouting the loudest against SUPA *claim* that they’re against underage pornography, and that SUPA is just the wrong way to fight it, but they haven’t offered an alternative. I suspect most of these companies are really just afraid of losing the huge cash flow they get from facilitating underage prostitution. For example, the company fighting hardest against SUPA is Ogle, the giant search engine that most people use to locate young hookers. Or look at the latest anti-SUPA restrictions imposed by XXXCombinator, the incubator that twice a year takes a group of young people for 3 months and trains them to be, um, ahem, “entrepreneurs”. Are Ogle and XXXCombinator fighting the good fight, or are they just watching out for their bottom lines.

The most interesting case may be YoDaddy, which specializes in selling really really cheap licenses to pimps. Originally YoDaddy supported SUPA (due to pressure from pimps who didn’t want an influx of young girls to undercut the prices charged for experienced ladies) until the huge backlash from 10 gazillion underage prostitution startups forced YoDaddy to change its position.

I suspect that, fundamentally, our responses to SUPA, or anything that is a reaction to rampant underage prostitution, has very little to do with particulars of this piece of legislation. Both sides are over-reacting based on fundamentally different values. Either you A) think underage prostitution is bad and steps should be taken to prevent it, even imperfect steps, or B) think the world has changed and we need to just accept that there no longer is an age limit on prostitutes and anyone denying that fact is just badly in need of a new business model.

As for me, I’m torn. On the one hand, I’d like young kids to be encouraged to stay in school, develop healthy relationships with their families and their peers, and so on; but on the other hand, it would be nice to if I could break in a fresh young virgin every day for a couple bucks.

So in the end, I do support SUPA, but just barely.

self-portrait of the artist as a shakyface

Because you can never get too much of me (right?) here's pictures I took with my iPhone...

while shaking my head in various ways...

taking advantage of the CMOS scanner...

which is slower on the iPhone...

than on most electronic cameras. That's one explanation...

the other explanation is...

that there's a tiny dose of LSD...

in every iPhone.

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Here's a big raspberry for you.

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These are pictures of my talented friend...

Mary-Anne...

with the shaky hands...

what they've done...

to her man...

those shaky...

hands.

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More links on legal uses of your iPhone's slow rolling shutter:

• Wired psychophone wiki
• google image search fro "iphone cmos rolling shutter"
• the guitar string video
• drunk photography
• the coolest airplane prop photo and a good explanation
  

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Bonus: For your listening pleasure, this archipelago version of Mary-Anne's song:

Two Options for Carbon Sequestration

"Carbon Sequestration" refers to storing the carbon from fossil fuels (e.g., oil, coal, shale, tar sands, natural gas) so that it is not released into the atmosphere.

There are two basic options for carbon sequestration:

Option #1: Extract the carbon-based fuels that are stored underground (through mining, drilling, fracking, etc...), build power and carbon-capture stations to break the carbon bonds and recapture them, then pump the recaptured carbon back underground for storage. Here's a graphic representation (as found on Halliburton's web site):



Option #2: Leave it down there. Here's a graphic representation:



Anyone taking bets on which option we'll select?

A Bazaar Plan to Bring Our Troops Home

A couple of months ago my phone started ringing a few times a day. I didn’t answer it, of course, because I never answer the phone (that’s just good policy: phones are for browsing the internet, not for talking). The ringing went on for a couple of days and on the third day the phone rang and I heard a voice coming out of it even though I never pressed the talk button, which was just freaky. I asked whom it is and how they could talk on my phone without me answering.

He said he was Robert Gates, Secretary of Defense, and that he has ways to get around a lot of technical barriers. I thought he was kidding about who he was until he started talking about the book I’ve been working on—he spoke about it in great detail so he’d obviously read the whole thing. What’s weird about that is I’ve been working on the book in private, in a personal Google Docs account, and nobody even knows I’m writing it. I asked how he’s able to read my private documents and he says he has ways to get around a lot of technical barriers, but that Google Docs is so easy to hack that he can hardly call it a “barrier”.

The book I’ve been writing in secret (or so I thought) is a critical history of the open source software movement, and is to be called “Open Source, Schmopen Schmource: The Triumph of Quantity Over Quality”. Mr. Gates was particularly interested Chapter 11, called “The Business Cases for Open Source: Turning Your Failure into Your Enemy’s Disaster”. Chapter 11 describes the two situations in which it makes business sense to concentrate on creating open source.

The first situation in which it makes business sense to open source your work is when you create something for free that is a crucial money maker for someone you don’t like. You have no hope, not even a desire, to be in their core business, you just want to deprive someone you don’t like of their oxygen. Google sums up this business case in their famous manifesto “The Meaning of Open” which says, basically: “if someone else is ahead in a market we don’t care about, then open source reams of stuff and give it away, but if it’s the one market where we actually dominate and make money then create some amazingly-transparent double-talk reason to keep it proprietary”.

Mr. Gates summed up the second situation in which open source makes business sense like this: “Chapter 11 is saying that when you’ve sunk all your money into a campaign, but see that there’s no possible hope of winning, the right strategy is not to admit defeat and withdraw but to instead claim victory and open source it. At West Point we used to call this ‘salting the earth,’ a whiner’s strategy, but ‘open source’ makes the same approach sound victorious. I think your book called it the ‘Eclipse’ model. I like the sound of that: Operation Eclipse.”

“I see where you’re going with this,” I said. “You’re not going to withdraw from Afghanistan, but you’re not going to continue the fight, either. You’re going to Open Source the Long War on Terrorism.”

“Exactly!” He said. “And invite the many eyes of Pakistan and Iran to join our Open Source community, to welcome them to the bazaar we have created, while we quietly ignore it and bring our troops home. The open source long war on terror will become their problem, not ours. I sincerely hope I can sell this to the O-Man while I’ve got time.”

I just read that Robert Gates has retired, but I see no mention in the news of any new open source policy at the department of defense. I guess ‘the O-Man’ didn’t like Mr. Gates plan. I wonder why not? Is using open source as a weapon too underhanded to become U.S. policy?