Throwing good money after bad

On the BBC this morning, Geoff Mulgan accused governments around the world of poring good money after bad, propping up big failing industries including banks and car manufacturers. A former policy adviser to the Blair government and now Director of the Young Foundation, Mulgan's opinions carry a lot of weight. He points out that all initiatives so far are biased towards big business and very little is being channeled into iniatitives that help us prepare for future needs, such as green industries and finding new models for supporting an increasingly aged population.

Mulgan is not alone in questioning the wisdom of bailing out the banks, with eminent economists proposing alternative solutions in bastions of the conservative media, including the Financial Times, the Wall Street Journal and Daily Telegraph. Nobel economist, Joseph Stiglitz says we should let the bad banks fail and set up new good banks instead. Paul Romer, from the Stanford Institute of Economic Policy Research has the same idea. Accepting that we need banks, Romer says "Turning bad banks into good banks is a difficult and risky way to get them. It's simpler and safer to start entirely new banks." Financier and philanthropist, George Soros, stops short of the new bank idea but argues that we should not purchase the toxic assets of bad banks. William Buiter, from the London School of Economics, sees a common logic between these proposals and says that "Bailing out the holders of existing bank debt and other bank creditors would be outrageously unfair: they did the lending and made the investments, they should eat the losses."

Less eminent writers are also tackling the issue on the blogosphere. Irish blogger, Niall Larkin, blogged about a conversation he had with an economist friend about the possibility of dumping bad banks in place of new, good internet banks, perhaps using the Post Office and Credit Union network for on-the-ground activities. The commentary includes a post from a lady in New Zealand who tells us about the Kiwibank that is doing exactly that. And, even the right-wing Daily Telegraph published a blog by Tracy Corrigan where she references Voltaire for reasons "Why executing bankers is good for morale".

I'm not sure that execution is either a humane or practical way to fix things, but the blog sums up the sense of moral outrage people in the UK have been feeling recently. Last week, some of the leading bankers in the country appeared before the Treasury Select Committee to account for themselves. Despite glib apologies, it was abundantly clear that none of them felt any real remorse. One of them gave great offense when he described his income as modest and, on further questioning, we learned that he has been earning an average of £1million per year. This in a country where the minimum hourly wage is under £6.

The committee hearings occured at the same time that we learned that the banks intended to pay themselves their customary enormous bonuses. Despite swallowing up billions of tax payers money, the government said it was necessary to pay the bonuses due to contractual obligations. An online petition was set up to stop the bonus payments and is open for any UK citizen or resident to sign.

On the Baseline Scenario, blogger James Kwak, suggests excessive bonuses be paid in the form of toxic assets from the institution. "That would get the assets off the bank’s balance sheet, and into the hands of the people responsible for putting them there - at the value that they insist they are worth."

Irish economist and writer, David McWilliams has also given thought to how we can turn crisis into opportunity. Describing public service cuts as "social vandalism", McWilliams turns his focus on the social consequences of mounting unemployment. He suggests following the course taken by Argentina during economic crisis, where they matched middle-aged, out-of-work experts with young, innovative but inexperienced entrepreneurs. The process led to to the establishment of many successful businesses and helped turn around the economic decline.

This blog describes just a handful of the ideas and suggestions that are out there. But, for all the great ideas, it will take political will to make a difference. We won't stop propping up the old order until we make it clear to our rulers that nothing less is acceptable. In these desperate times it is not enough to talk about things and expect somebody else to do them for us. We are all responsible for our future.

References
http://short.ie/mulgan

http://short.ie/corrigan

http://short.ie/stiglitz

http://short.ie/romer

http://short.ie/soros

http://short.ie/buiter

http://short.ie/larkin

http://www.kiwibank.co.nz/

http://petitions.number10.gov.uk/bank-greed/

http://short.ie/baseline

http://short.ie/mcwilliams

Did Dick Turpin apologise?

Yesterday, some of the leading bankers in the UK appeared before the House of Commons Treasury Committee to explain themselves in light of the near collapse of our economy due to their collective greed. Although quick to apologise, none showed any real remorse for their actions. At least two of them made fulsome apologies to their shareholders but I heard no apologises to the English taxpayers that will be paying for their greed and stupidity for generations.

Outside an RBS branch in Scotland, the BBC sought public opinion on these shallow apologies and one wag summed it up with "Dick Turpin probably apologised too". Dick Turpin was a thief, murderer and highwayman who was hanged in 1739 in York for horse-rustling. His legend is more glamorous, depicting him as a dashing champion of the poor, more in the tradition of Robin Hood.

The bankers who were questioned yesterday were a motley crew, elevated (?) to nobility (?) by the Blair/Brown government, earning obscene amounts of money and without a banking qualification between them. Rewarding themselves with monthly salaries that most people don't make in a year, these are only small change compared to the annual bonuses they earn.

The Treasury Committee investigation happens against the backdrop of announcements that these banks intend to pay bonuses as usual this year. In the case of the RBS, this amounts to bonus payments of over £1 billion being paid to the staff of a business that recently reported approx £8 billion losses for last year (the biggest corporate loss in UK commercial history), and which has been bailed-out by the government to the tune of £20 billion. When questioned how this can be allowed to happen, our government tells us that the banks have contractual agreements that must be honoured. Excuse me - did I hear that right? We, the tax payers, own 68% of the RBS - does that not give us any say in arrangements?

Since when did a bonus become a right, not a reward? Who wrote these contracts and what court would uphold them? You can write all the contracts you want but if they are illegal, based on bad law, then they won't stand up. And what on earth are our elected representatives up to, giving £20 billion of our money to an organisation without any provisos such as "you won't steal from us anymore" and "you won't get any more big salaries or pay rises until you pay back every single penny you borrowed from us"?

At the same time we hear that the FSA (Financial Services Authority) that oversaw this fiasco plan to reward themselves with £13 million in bonuses. We could be forgiven for thinking that this is all one big conspiracy of the powerful and the wealthy and that our government is as complicit as the rest of them.

As the country heads into the worst recession for a hundred years, according to Ed Balls, close confidante of the Prime Minister, jobs are rapidly disappearing as small and large businesses go to the wall. The High Streets are becoming ghost towns and local government is cutting back. It won't be long before children are going to school hungry and going to sleep cold. What is the future for them, saddled with a debt that will last for generations, supporting an increasingly aged population and a national debt the scale of which we can't even comprehend.

We can't undo the damage done by immoral shysters in suits, drinking gold champagne and storing their ill-gotten gains offshore, beyond the reach of the taxman. We can, however, insist that the rot stops now. You can start by signing a petition to stop the banking bonuses at http://petitions.number10.gov.uk/bank-greed/ and you can email your MP and councillors and ask for an explanation.

There are other things we can do, such as think about new economic and banking models where we stop throwing good money after bad and take control into our hands. More on this soon.

Pret-a-porter for the web?

The term "pret a porter" means ready to wear. Is the web about to explode with ready-to-wear content the same way as 60s fashion moved things out from the couture house to the high street and the market stall? Blogs, wikis and Facebook, Flickr and podcasts, RSS and Twitter - all have helped. But chaos prevails in our online activities - too many passwords, sites, profiles, contact groups, communication channels and more and more. Dataportability aims to address this and, today, they reached a significant milestone with the selection of a steering group of 12 people to drive the effort.

Since the group formed late last year, organisational issues have hampered progress. Two attempts at establishing a logo (a simple task you might think!) have been met with cease and desist communiques from various quarters. As an open movement, many large internet companies were quick to jump on board but the actual day-to-day work was left to a small number of committed volunteers. Everybody had an equal voice and a unique set of opinions, making it difficult at times to find consensus or to stay focused.

The new steering group has a lot of work to do. A guick glance at the dataporatiblity wiki will frighten all but the most curious minds. Too many links, too many directions, too much information - too much of which ends in blind alleys and unfinished business. But the underlying idea is almost clear - a desire to give web users ownership and control of their data on the web.

The challenges facing the steering group remind me of the film, Twelve Angry Men, where Henry Fonda was relentless in his pursuit of truth and fairness. Their prolonged deliberations were concerned with:

• coming to the truth
• overcoming personal limitations
• serving the public
• coming to know people they would never meet otherwise
• a pressure cooker because the stakes were high
• great personal cost
• every voice was important

The stakes for dataportability are very high. The aim of breaking down the walls of privacy on the web is commendable, but turning a list of standards and protocols into a viable framework with solid working examples is not easy. In an industry where many web developers don't even pay lip service to the needs of security or accessibility, the business case for adopting dataportability must be crystal clear and the techniques and processes must be well-devised and documented.

The open movement is maturing and gaining credibility. But, until the use of open standards becomes an expectation from users and businesses, the revolution will limp along while the software giants continue their race for control of our online activities and content. If the dataportability group can deliver concrete working examples, solid business cases and a viral mechanism for spreading the news, we could be on the brink of something great.

Dataportability is an open movement and anybody can join and help out. If you are interested, visit their website or just go directly to their wiki, where all the meaty (and confusing) stuff resides. There you will find links for various different action groups and links to google groups and skype public chats.

Open source synergies

Today I was in London to help users understand how to use a new Drupal site I am developing for an educational research project in London. Tonight I attended the inaugral meeting of the Drupal for NGOs group because it coincided with my trip and seemed like a useful way to spend my evening.

Now I am sitting in All Bar One in Holborn, who had a sign outside inviting people to come and hot desk here. My time is short or I'll miss the last tube so here it is. Today's training was exciting and interesting - lots of user feedback, occasional friction but amazing progress and vision going forward. Tonight was amazing.

The synergies between open source , theeducation sector and NGOs is mind-boggling and the passion, commitment and professionalism I met this evening was heart-warming. This is where I want to be, where I want to work and be useful.

I learned that the scary timeframe I have of delivering a Drupal site as a public prototype in 2 weeks is unheard of. Six months seems to be considered a reasonable timeframe. I met the guy that designed one of the Drupal core themes and designed it with a view to accessibility. I met a couple of guys that are stuck on some aspects of a stunning social network site for people with cancer - and learned from them what are the technical blockers to their project. I met with a compatriot from Dublin who works for Concern (the "fasting charity" all us Irish know and love so well) - he's over to learn more about Drupal and off to Bristol with a bunch of tonight's attendees to be trained in scrums - think agile development rather than scrummage. I met a young developer from Brighton as young as my kids that referenced Douglas Adams (a boy thing) and Bucky Fuller - an over there, totally creative thing.

My mind is full of ideas, creativity and the potential of open source and Drupal to empower. But now I must dash to catch last tube back to Balham. What a day, what a night, bring on more of the same.

Little peepel doing it for themselves

The last few weeks have been as volatile as they get in the stressy life of a tech writer in the world of web apps, open source and agile development - when the ink is hardly dry on a text string or a protocol before the terminology, the requirements and the brand itself are reinvented - again.

In the midst of this chaos, it seemed like a good idea to ground myself and my aspirations in an office. Bucking nigh-on 15 years of home-working tradition (ironically, my stint at Skype was the exception), I took an office in a new business centre at the end of my street. Home working has been good to me, enabling me to earn a reasonable income living in remote and idyllic places while being more productive in my writing which is, in its defining moments, a solitary task.

It has become more difficult for me to work from home - when the kids return from school they want to natter and too often I respond with "later, I've got to work right now" - sound familiar? So, I got an office and on Tuesday I moved in. The office has 2 desks and a filing cabinet and a view over the playground where my kids sometimes play. The children are on school vacation and my daughter has taken up residence on the second desk as my "apprentice".

Wednesday, my apprentice sets up a spreadsheet for my business expenses. To do so, she had to download and install Open Office, all done easily and without problem. Wednesday I also learn that OpenX, the main source of my current income, is moving HQ from London to LA - oops - who will pay my office rent? Time for some soul-searching.

Thursday, in the office before 9am, and a number of pings about OpenX news. My apprentice arrives and I put her to work on another spreadsheet but this time she is a "guinea pig" 12-year-old using Peepel. She captured my ideas on whiteboard first. Next, she set up a Peepel account. Then she entered the contents of a new spreadsheet which defines different rates for different tasks/expertise. Finally, my apprentice shared this with me through my Peepel account, which I was able to edit before returning edit control to her.

I've been a small business for a long time and have learned many ways and means of collaboration to simplify my work. Personally, I'm not a lover of Google apps because I don't trust their motives or the ability of a monster to deliver the goods for the individual. I'm impressed by the ability of Peepel to make it easier for me to collaborate with my daughter without a big learning curve or complicated downloads.