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What’s So Bad About Google+ Integration with Google Search?

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There has been a lot of complaining lately about Google’s integration of Google+ results into its search. There have been a lot of accusations. Many say we can no longer trust Google’s search results. Some have gone so far as to say that Google is going back on its pledge to “Do no evil.”

I see things a bit differently. Google offers a variety of services, many of which can be called apps in their own right. Google wants to integrate these services into a single app, each piece of which integrates into each other. The black toolbar added recently took a major step in this direction. The inclusion of social results from Google+ is yet another step.

My primary problem with social results isn’t that it only offers search results from Google+. My primary problem is that it only offers results from Google+. Google isn’t evil because they are only investing their own social service, but they are choosing to offer me special results from a service that is not high on my list of social tools. My primary social tools are Twitter and Facebook. I would find inclusion of those services to be quite useful, but they fall into the normal search results with no integration to show more focus on those I follow or friend on those services. Google is missing out on opportunity by not integrating more social services within its search.

The goal of the Google+ integration isn’t to improve search results directly. The purpose is to increase the value of the Google+ social network. I personally think that Google+ could use a bit of a value-increase. The proper tools are there to run a social network.  The value, though, is in the people.  Like it or not, the value in social networking is in Twitter and Facebook, and Google+ is still an also-ran.

What is bad about a company integrating various services into a single system? There may be a higher cost incurred by the user if they are required to pay for previously unneeded services.  There could be features that are forced upon the user that they are not comfortable with.  The company may use a dominant market position to force users to “lock-in” to their services, or to drive competitors from the market. I am sure that the list is longer.

Looking at these in turn, the first two do not seem to be at issue. Google is not charging users for access to its search engine, or many of its other services.  Those services that cost a fee still exist, unchanged.  I am not aware of any plans for this to change.  What if Google decided to move to a subscription service, charging $1 per month for access to their now unified application? Many would think of it as a good price for a valuable service, and would pay.  Many would make the opposite decision.  As the price for the service increases the percentage of users who will say and pay the price will drop. At the low price of $1 per month the percentage of takers will be quite high.  Raise the price high enough, though, and users will go elsewhere.

What about unwanted features? Users are used to these. Microsoft’s Ribbon interface replacing normal menus?  Horrible idea.  I don’t want it.  Ubuntu’s Unity interface? Why, oh WHY did someone think that was a good idea? Yahoo? Google putting results from a service you are using in a small area on the search page?  Honestly, I’ve had worse.  If it was a hill I was willing to die on, I’d stop using Google and go elsewhere for the same services they offer.

Google does have some significant dominance in certain areas. In the last half of 2011 Google accounted for just over 80% of all search traffic. Bing and Yahoo shared almost all of the rest. Microsoft has built a good search engine in Bing. The biggest reason it isn’t gaining better market share is inertia.  Similar inertia accounts for why such a large majority of us use Microsoft’s operating systems, Office software, and at one time web browser. Microsoft learned with Internet Explorer that a bad product, or even one perceived as bad, would continue to lose market share until it and its image have improved. With Bing they have a worthy competitor for Google, not only because it’s well-made, but also because it isn’t Yahoo.

What about email?  Google’s Gmail product is huge, right?  Not really.  Google accounts for 4% of email opens in a survey done by Litmus.  Microsoft’s Outlook product in various versions accounts for 37%. Gmail lags behind Hotmail, the iPhone, Apple Mail, Yahoo Mail (a strong point for them), and even the web-based version of Microsoft Outlook.

What other market besides search does Google truly have a dominant market share?  Office software?  No.  Instant Messanging?  No. Social Networking? Most definitely not. Chances are we’re using something other than Google for most everything we do except search. The one major exception is in Adwords Advertising, but this does not cost the user.  In fact, it is what allows the other services to stay free.

This begs the most important question in the argument.  Can Google leverage its dominance in search to gain dominance in other markets in which it chooses to compete? So far the answer to that has been no, except for Adwords. Even the Android operating system for mobile phones hasn’t succeeded in breaking the market dominance of Apple in smartphones. It may yet succeed, or a third party may become competitive in the race.

There’s always someone else in the race.  This isn’t like cable companies, utilities, and Standard Oil.  There’s no law saying we can’t use another service.  If Google upsets enough users, they’ll go to the competitors.  This is how markets correct. The fact that we can go to someone else denies a monopoly.  Google does not have a monopoly on search.  Microsoft has never had a monopoly on operating systems or web browsers, though it has defended itself against accusation on both cases.

In the end, to me, it’s just a little search feature.  I’d like to be able to disable it if I want.  I’d prefer to be able to select and link with services I use along with Google+.  It is not, however, the end of the world.

Economics Fallacy – The Broken Window

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Listening to Walter Williams in my morning commute speak about the “Broken Window Fallacy” reminded me of one of my favorite books on economics, “Economics in One Lesson” by Henry Hazlitt. The text of this book is available online, and well worth a read for anyone who wants to learn more about economics. I highly suggest reading this book if you have any interest in understanding how economics works, without having to dig too deep into mathematics. For a taste, read the chapter on “The Broken Window.”

“A young hoodlum, say, heaves a brick through the window of a baker’s shop. The shopkeeper runs out furious, but the boy is gone. A crowd gathers, and begins to stare with quiet satisfaction at the gaping hole in the window and the shattered glass over the bread and pies. After a while the crowd feels the need for philosophic reflection. And several of its members are almost certain to remind each other or the baker that, after all, the misfortune has its bright side. It will make business for some glazier. As they begin to think of this they elaborate upon it. How much does a new plate glass window cost? Two hundred and fifty dollars? That will be quite a sum. After all, if windows were never broken, what would happen to the glass business? Then, of course, the thing is endless. The glazier will have $250 more to spend with other merchants, and these in turn will have $250 more to spend with still other merchants, and so ad infinitum. The smashed window will go on providing money and employment in ever-widening circles. The logical conclusion from all this would be, if the crowd drew it, that the little hoodlum who threw the brick, far from being a public menace, was a public benefactor.”

The rest of the chapter is at this link.

One Tax-Cut to Rule Them All

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We are in a serious economic situation right now.  Not many people are aware of how dire things really are.  While President Obama and the Democrat-run House and Senate are trying to work out how much more to spend on this and that, the available funds to pay for it have come and gone.  Right now, the United States is out of cash, and must borrow to pay for anything Congress might decide is a good idea.

Did you know that it it costs over $300 billion just to service the debt of the US Federal government right now?  Some readers may not know what that means.  It means that the interest payments alone, on past loans given to the US Government add up to $300,000,000,000 every year.  Let’s put that into perspective.

The top company on the Fortune 500 is Exxon Mobil with $45 billion in profits. The top four profitable companies on the list totaled profits of $100 million.  You have to go down to #70 in the list before the profits add up to the interest on the US debt.  If we taxed these companies at 100% of their profits for a year, we could pay the interest, but not the principal on the debt. If you think taxing these companies at 100% is a good idea, you’re an idiot that should have studied some basic economic theory, but nonetheless, I know you’re out there.

We are in an economic downturn, and even if some are saying we’re on the way out, we are going to continue to be in a dire economic situation unless something is done about government spending and debt.  Congress, and President Obama should not be doing anything that would cost, well, pretty much anything. If they do, it adds to the debt, and offers no stimulus to the economy to offset the costs.

That’s right.  As a blanket statement, I said that anything Congress and the President do that costs money will provide no stimulus to the economy.  There may be some ancillary benefits, but all money spent by the government must be, sooner or later, paid for by the citizens of the United States.  Personal income taxes are a direct tax, to be sure, but the rest of the taxes are paid by the citizens as well.  Corporate taxes aren’t paid for with money pulled from trees.  The taxes are a cost of doing business, and that cost is always passed along to the consumer.  If Congress passes a new tax on oil companies, you pay more for gas at the pump.  It’s a simple concept, and one that many cannot grasp.

What do we consider a recession?  A recession is an economic downturn that lasts at least 3 fiscal quarters.  Why do we care if there is a recession?  It’s because of the worry that we, as citizens, will end up with less financial stability, or cash to purchase for our needs.  How do we improve the economy?  We increase the amount of money flowing between individuals, businesses, and corporations for goods and services.

Will the “Cap and Trade” bill, which is designed to put certain power companies out of business, increase the flow of money for goods and services?  Of course not.  It’s designed to do otherwise.  Will the so-called “health care reform” bills in Congress increase this flow?  No, like the cap and trade bill, the health care bill is designed to put a large portion of the health care industry out of business, leaving many thousands unemployed.

What if there was something we could do that would increase the flow of money for goods and services on a large scale?  What if it would also result in a dramatic cut in the number of people able to get insurance?  What if it would result in a turnaround in the home market?  What if it would stimulate the automobile industry?  What if it would mean more jobs, lower prices on many items, higher food production, and possibly even more people driving fuel-efficient cars?

I know what it would take to make this happen.  It would work.  The results would be dramatic, and immediate.

All we have to do is drop the federal personal income tax to zero.

Look at your last pay stub.  How much of your income was taken out to pay the federal income tax? Are we talking $50, which would buy groceries for one for a week?  Is it more like $100? For one month’s income taxes, could you buy an iPod? A new PC? Make a car payment? For some, it may even be a house payment.

What would be the cost to the US Government of a tax cut like this?  It would remove approximately $1 trillion from the government’s coffers.  Let’s not get stuck on that, though, because that number is false.  It isn’t even worth considering without more information.

You see, the influx of cash that a personal income tax cut of this magnitude would cause would have other effects. With more money available, more will be spent.  Sure, some will throw their money away on beer, but that means more sales for beer companies, and they’ll have to hire new employees to meet the demand.  Some will buy cars, meaning automobile companies will have to produce and sell the cars. How many iPods and iPhones will be purchased?  Apple will probably have to build new manufacturing facilities just to handle the demand. More production and purchasing of goods and services means more corporate income, and therefore more money going to corporate income taxes.

That $1 trillion cost for the tax cut would mean more purchasing, more manufacturing, more hiring, more income, and therefore more purchasing.  It’s a wonderful circle that can be helped, or harmed, by government action.  It is likely that, within a year or two, the $1 trillion hit the first year would result in more than $1 trillion in increased tax returns.  The government would, if history is any guide, make more then it cost.

Of course, as brilliant as this idea is (it wasn’t mine originally, mind you) it won’t happen.  You see, this idea is based in one concept that few in Washington DC understand.

Freedom.

Warcraft Economics – Auctions, Profiteering, and Helping Others

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I love to play World of Warcraft.  Questing, killing beasties, gaining achievements, and Player vs Player are just entertaining things to do on a nice relaxing evening. One of the great things about WoW, as it is known, is that there are so many different ways to play the game.  One of my most enjoyable things to do, though, is profiteering.  I farm expensive materials, gather sellable quest items, and pick up items from vendors in my travels for resale.

My favorite way to find things to sell, though, is to scan the auction house for items that are, frankly, being sold too cheaply.  I buy them at the seller’s asking price, and immediately place them back up for sale at a higher price.  The price I sell for more closely matches the price that the market will bear.  Sometimes, I can multiply my investment several times on one item.

More: Read the rest of this entry…

Stimulate Me – How Obama Could Win the Economic War

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Now that we’re starting to get an idea of what President Obama’s economic knowledge is like, it’s starting to get a little worrisome. Taxpayer money is being thrown at hundreds of projects, like museums, sidewalks, libraries, and a trolley in Puerto Rico.  Pushes for more “green energy” projects will do more to raise energy costs, which tends to hurt the economy as that cost is reflected in the price of milk and bread.  Even Obama’s so-called tax cut is designed to cause hardship, as taxes aren’t being cut.  When your income tax withholding is reduced, but the actual tax rates are not adjusted, it isn’t a tax cut at all.  It’s a deferred payment, because you’ll either have to pay the money back in April 2010, or have your refund reduced.

So … is there a stimulus plan that could work?  Is there an idea that could put an immediate cash infusion into the American economy?  Could we, with one or two quick decisions, take action to put our economy on the fast-track again, while costing no more than the estimated one to three-and-a-half trillion dollars that Obama and the Democrat-controlled Congress have allocated so far?

Yes.

More: Read the rest of this entry…

How to Save the US Auto Industry

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As the arguments have gone on about how to bail out the US auto industry, I’ve thought a lot about it myself.I believe that the US auto industry can be saved with some rather simple steps.  Primarily, these include such common-sense things as un-crippling the automakers, reforming the automotive market, and trying some innovative experimental tax reform.

More: Read the rest of this entry…

My Advice for President-Elect Barack Obama Pt. 1

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Now that Barack H. Obama, the only messiah to actually have H. as a middle initial, has won the election, he can assemble his transition team, staff, and advisors. Since I’m a firm believer that not all advice should be taken from people who believe exactly as you do, I am applying for a role as advisor to the future-president. With that in mind, I am offering a series of short pieces of advice in this blog.
**Part 1 – Middle-Class Tax Credit**
There are undoubtedly plenty of people in America who think you were serious about your tax-cut plan. That happens every presidential-election year, so it’s not surprising. Now, though, it’s time to start transitioning the promises into realities. Now it’s time to break your promises while making it look as if you really tried to keep them.

More: Read the rest of this entry…

Dubai Ports Deal – Could it be a Good Idea?

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There has been a lot of talk, lately, about the security of our ports, as a Dubai-based company is soon to gain control of certain aspects of our container shipping and receiving structure. Concerns about foreign control of these shipping terminals seems rather late, as foreign control is exactly what we’ve had for years. What’s happening is that the British company that has controlled the terminals is being purchased by a company based in Dubai. We’re just seeing a transfer of control to a company in another country. More reasonable fears seem to be based in the fact that the company gaining control is in a Middle-Eastern country with potential ties to terrorism. Perhaps these ties are less potential and more actual.
Many of the ports from which containers may be shipped to our shores are already controlled by this Dubai-based company. I believe this is a long-term economic strategy on the part of Dubai to increase its non-oil income. This is a necessary step, as Dubai expects to run out of oil in the next 10 years. Dubai has been taking many steps to replace its oil income, spending billions to create a worldwide economic center and tourist destination. Many world-class hotels have been built, and some other amazing landmarks are being created, as well. Aside from the economic center, they are building a series of huge theme parks, archipelagos in the shape of huge palm trees and even one called The World. Dubai may well be the major tourist destination of the 21st Century.
The major question of the port deal is whether Dubai’s control of the container shipping aspects of some of our major ports poses a major strategic threat to America. I do not believe this to be the case. I believe quite the opposite, that having Dubai involved in a major link of our economic chain actually increases our security.
Economics is the key to this analysis. Let’s take a look at the feared threats in a bit more detail.
One fear is that having foreign control could have an adverse economic impact on the United States. I do not believe this to be the case. Whichever company controls the container shipping terminals in our ports, that company will create its income by processing ships full of cargo that arrive at, and leave those ports. In order to have a greater income, ships must be processed. Containers must be unloaded from arriving ships and their contents routed to rail and truck services for transport elsewhere in our country. Containers from within our country must be brought in by rail and truck, loaded on ships, and sent elsewhere in the world. That’s the business being done at these terminals. Each container processed, and each ship docked, holds a specific dollar value of income for the company involved.
In order for this company to use their control of the ports to damage our economy, they would have to slow the processing of ships and containers. Dubai, in their transitional economic state, isn’t trying to reduce their own income in order to hurt the rest of the world. In fact, they’re trying to enhance the incomes of the rest of the world to create more customers for their own finance and tourist economy that they are building. It is in the best interest of Dubai to help America improve its own economy, because they can see front-end profits at the shipping terminals, and back-end profits at their theme parks as Americans gain more disposable income.
Why, then, would Dubai want to leverage their control over our ports to reduce the activity at those ports? It makes no sense. Dubai isn’t becoming our economic adversary with this move. Instead, they are taking a direct step to make themselves America’s economic ally. We could use a few more of those.
Another major fear is that Dubai, through its control of our container shipping facilities at these six major ports, could make us more vulnerable to terrorist threats. I’m not sure that this fear is well-founded, either.
Theoretically, the controlling company of the terminal could allow containers with nuclear, chemical, or biological weapons to enter America. These weapons, in the hands of terrorists, could be used against a variety of targets. Major targets would be governmental and economic sites. On September 11, 2001, terrorists attacked both types of sites. Of those two, the more effective attack was on the economic location of the World Trade Center. For months after the attack, the US economy struggled to rebuild. The damage was done to our financial center, with collateral damage to our manufacturing base, personal incomes and employment.
One major economic target would be the ports themselves. Obviously, an attack on one of the major ports would do serious damage to the ability of the controlling corporation to make an income at that port. To attack one of those major ports would be to damage the economic state of Dubai itself. As self-destructive as Islam is, I doubt that Dubai is interested in cutting its own economic throat by allowing major destruction to its own economic assets. As a side-effect of such an attack, Dubai would likely lose control of other major US ports, as well as major ports it controls in other countries. This would not be a smart move.
So, we can assume that any weapons allowed into our country would not be destined for one of the major ports.
A nuclear weapon brought in through one of these ports may be used on a major city. New York would have to be marked off the list of potential targets, as Manhattan (the obvious target) would allow the blast radius to do great damage to the port in question. Likewise, attacks on the cities hosting the other five major ports would cause damage to the ports in question. An attack on Washington, DC would make more sense from a strategic standpoint. There again, though, some factors must be taken into account. For once, the attack would have to have a near perfect chance to succeed to be allowed. Any failure to detonate the weapon successfully would probably result in an investigation taking place, and the source port of the container would quickly be traced. The resulting scrutiny would probably result in a change of control over the port, and thus the loss of income for Dubai.
Chemical or biological weapons, unlike nuclear, do not vaporise themselves and their surroundings when used. Even if used successfully, the after-effect would include investigation, and the probable loss of control over the ports. Again, I don’t believe Dubai wants to slit its own economic throat in this way.
No, I believe Dubai has an interest in making sure that NO NBC (Nuclear, Biological or Chemical) weapons make it through their ports. This is why they would cooperate with officials in ensuring that all containers entering our country go through already-existing controls and audits designed to prevent their use as weapons-transport.
In addition to the above, Dubai knows that a major attack on US soil will have adverse impact on the US economy. Such adversity would result in reductions in exports, as the manufacturing base takes a jolt. Likewise, imports would be harmed as personal incomes dipped and the need for imported goods reduced. Reductions in manufacturing means reductions in imported raw materials, as well. Such reductions will reduce the loads on the ports, and reduce the income to Dubai. On the back end, a hurting US economy means much less international travel, especially to tourist destination.
We are on the cusp of a major coup in international relations. By allowing this transfer of ownership to continue, we have the chance to turn the United Arab Emirates into a major economic ally of the United States. I think this is a good idea.
The long-term implications of such an economic alliance are great. In Middle-Eastern politics, UAE would be forced to argue against support of terrorist attacks on the United States. In order to safeguard their own economic well-being as their oil-based income dries up, UAE would become an example of how cooporation with the United States and the Western world is in the best interest of other Middle-Eastern states. As time passes, and UAE reaps the economic benefits of our alliance, other states would be forced to either stand with them and join the greater economic world, or fight them and invite the judgement of the rest of the world.
In the end, the rest of the Middle-Eastern and Islamic world will be forced to choose. Will they see this economic divide and follow the UAE to prosperity and membership in the greater world society, or will they divide the Middle-East against itself and weaken themselves?
Either way, the United States and the greater peaceful world benefits.
Thoughts?

Excellent Explanation of Oil Markets

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DJ Drummond, over at Polipundit has written a fantastic entry on the economics of oil. I’ve written on this subject in the past, but Drummond really did a fine job of covering a lot of the details of why the oil prices fluctuate. Also, there’s a great chart showing the inflation adjusted prices of gasoline since the early 1970s. If you think gas prices are outrageous, and that the oil companies exist just to screw you, this post should be a good education.

100 Million Missing Women?

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While persusing the website of one of the authors of Freakanomics, I found an interesting article from Slate by Stephen J. Dubner and Steven D. Levitt. The article tells of the work of Emily Oster in studying the problem of the “missing women” in Southeast Asia. The hypothesis of the missing women is that, given normal ratios of births of male to female children, there should be many more females in Southeastern Asia societies than there are. The supposition is that the reason for this disparity is mysoginistic in nature. Oster showed that much, but not all, of this disparity can actually be traced to a higher than normal rate of Hepatitis B infection in those societies. As Hepatitis B infected women are more likely to give birth to boys, many of those missing women were simply never born at all.
The article is quite an interesting read. It ends with another anecdote about Oster that I found quite interesting as well. I’ll leave it to you to check it out.

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