Look, Google Books Can't Rip Off Everyone At Once

There were a lot of responses to my defense of Google Book Search, and a couple of them are worth mentioning here. Harvard law student Jason Harrow wrote to point out that while I said that Google has clearly expressed a preference for a price point of "free," the Google agreement with authors and publishers precludes Google from offering the complete database of out of print books for free. Harrow is absolutely correct here. What Google can, and I expect will, continue to offer for free is the chance to search the entire database, see excerpts, and buy individual volumes at a reasonable price. That already goes beyond anything that I would have expected a publicly supported database of the sort that Harvard's Robert Darnton would do.

Which brings us to the other point, made by Mike Perry, who claims that I was grossly inaccurate in saying that opponents of the Books Search agreement have been unsuccessful in getting actual writers or publishers to explain how they might be harmed by Google's efforts. He points out--accurately--that opposition to the Google Books has been stronger outside the United States than inside, and he's right that I probably should have looked more outside the country. But Perry's main example is a letter signed by 2,000 German authors objecting to the Google settlement. You can go ahead and read the letter, a master work of high falutin' rhetoric about the rights of authors from which I absolutely can't deduce exactly what harm the folks who signed the letter actually expect.

Is it worth mentioning, by the way, that Perry's own Inkling Books business seems to consist partly (judging by the titles listed on Perry's website) of reprinting no-longer-copyrighted works, which, thanks to Google, are now available for free online? I'd say so.

I'm convinced that many of the authors who oppose Book Search outside the US completely misunderstand the terms. They think that unless they opt out, they give Google the right to publish their work for a token fee. This is completely false. The moment rights holders want to get out of Book Search, they can, simply by asking that their work be excluded. The only thing that the settlement prevents is an author or publisher having Google include a book in its database, wait a few years until plenty of people have seen it, and then sue for copyright violations. All the people who imagine that Google is stealing their rights should take a careful look at the opposition in the US from people who have actually looked at the settlement carefully, and comes not from those who are afraid that Google will pay authors too little but those who are afraid that the database will cost (and therefore, pay authors and publishers) too much.

Boring Post Plugging Other Stories

But they're not boring stories! One reason that there have been fewer posts than at some points in the past is that with my column running on The Big Money most weeks ... well, there's only so much I have to say. Sometimes I respond to reader comments about those columns here, but mostly I can't even keep up with that.

So, for those who've missed my Deep Thought On The Pressing Matters of our time, I'll just take a second to direct anyone who's interested to a couple of recent stories I've liked. One's about the ass-covering talents of Angelo Mozilo, the chief of the late, unmourned Countrywide and possibly the most evil man in American business this side of Madoff--and yes, I emphatically include the folks who ran Enron in this calculation. Mozilo's worth writing about because while the never-ending financial crisis continues to receive attention, the cynicism of the people who made it happen, with Mozilo at their head, is already receding into memory.

On the other hand, no one will claim that Michael Jackson has not received enough attention (especially me; I have never owned "Thriller" and am not rushing to buy it now). But I don't think I've (yet) seen another story on Jackson, the Oscars best picture expansion, the "Winner Takes All" economy, and Chris Anderson's "Long Tail" theory. All in one go.

Protagoras Goes To Wall Street

I've gotten a lot of reaction to my story about Nassim Nicholas Taleb, which is not surprising, because he has a lot of followers. In looking over the story, I feel like I made one point a little too equivocally. So I'll put it more strongly here: Taleb's general approach, as far as investing goes, is a losing strategy. Maybe times have changed, and we are in a protracted period of increased flux and unpredictability. But in general, historically Taleb's strategy of effectively buying insurance and waiting for a crash has been a loser. And I would add that I suspect it's especially likely to be a losing strategy at points when the rest of the world is running to safety and it is no longer contrarian.

There's another point, thought, that comes out of reader's letters and comments that's more interesting. Many Taleb fans wrote or commented to say that, hey, I just don't get Taleb's philosophy. As one commenter wrote, "He is totally against those making predictions. He laughs at them." Well, I do get that. The thing about Taleb is that he wants to get credit for his good calls, and at the same time he wants to be seen as making a broader philosophical point about the nature of prediction and expectation. It's that second part that gets a lot of people very excited, and they see some really deep thinking there. But it's all not nearly as new as a lot of Taleb's fans believe. It falls in a skeptical tradition going all the way back to Protagoras, who was supposed to teach his students to argue both sides of an issue with equal vigor, and has branches that stretch out not just to Karl Popper, the philosopher of science, but to Jacques Derrida and deconstruction.

Taleb talks about "prediction" where others talk about "truth," but the basic philosophical game of first undermining the received wisdom and then turning the skeptical view around and undermining your own claims is very old, and still very exciting when you first see it.The best practitioners are those who can play it longest without getting pinned down. But it is a game, and eventually it ends. Either you do get pinned down with "truths" or "predictions," and it loses its interest. Or you you don't, and eventually your followers get bored and go back to all the received ideas they'd so wholeheartedly abandoned and trying to remember what all the fuss was about.

So What About That Big Bad Bank?

Okay, so do you remember that there was going to be a trillion dollar bank bailout that would have private equity funds, with government backing, take all those bad real estate assets off the banks' hands. Well, that was a long time ago--like, two months. Now the first part of the big asset purchase plan has fizzled to nothingness. And the whole project seems to be shrinking by the minute. What the heck happened?

I wish I could say that I called this early on. I have looked through old blog entries convinced that I must have, but the truth is that I did not. What I did say is that banks weren't anywhere nearly as eager to get rid of their "bad" assets as folks thought, and if the government did make sure that banks got more for these dead assets than they were worth, then it really wouldn't be much of a bailout. But I thought some kind of asset swap was a done deal, which meant that the government would ultimately come up with a plan that overpaid for bad assets to help prop up the banks.

The first idea here--that despite all the talk of "zombie banks," cleaning up their balance sheets wasn't all that big a priority for bankers--was right. Banks think that the value of cleaning up their balance sheets is a lot less than that of kicking the can down the road and seeing if all those bad debts might be worth something. The second part though, that the government was so committed to putting all that debt in the hands of private equity players or some Resolution Trust-style entity that it would find a way to make the math work, was not.: Nobody's giving the banks much of a bonus to sell. Ergo, that trillion dollar asset swap ain't happening.

Evan Newmark of the Wall Street Journal says that's because we don't need it anymore, and ready to hail Hank Paulson as a "national hero" who saved the economy. Newmark is jumping the gun on this--let's see just what happens with all that distressed debt over the next few quarters (and maybe over years)--but he does have a point. If Paulson's plan wasn't enough, and taking over all that bad debt and putting it in A Big Bad Bank was really so pressing, then shouldn't we be dealing with a new wave of bank failures and an economy accelerating toward doom right about now?

How To Sell Single Payer: Lie About Other Policies

One tried and true way to win political debates is to vigorously misrepresent the facts. Health care, full of genuinely knotty public policy tangles, particularly lends itself to this. Everybody remembers the contribution of the insurance industry's "Harry and Louise" ads to the failure of the Clinton health plan. Just don't imagine that the dishonesty is confined to the right wing.

The Times last week ran one of their "room for debate" online roundtables, about health insurance mandates. In it, Marcia Angell, the former editor of the New England Journal of Medicine and a supporter of single payer, tries to paint any other system as a giveaway to insurance companies. Says Angell of the mandate to buy insurance:

I live in Massachusetts, where we have one. It requires people to buy private insurance at whatever price the companies choose to charge. As might be expected, this is a windfall for the insurance industry. Premiums are rising much faster than income, benefit packages are getting skimpier, and deductibles and co-payments are going up.

The idea that people in Massachusetts are buying insurance at "whatever price companies choose to charge" is absolute nonsense. You'd imagine from this that every insurance company in the country is rushing in to squeeze the poor citizens of Massachusetts. But in fact the only insurers that offer individual plans that satisfy the state mandate are non-profit. And while they offer many plans, including very expensive ones, the price of the most basic plans is not "whatever the companies choose" to charge, but fixed by the state. As for this premiums going up: you bet they are. That's because the reality of the "mandate" is that it has plenty of holes, and the first people to sign up have been, as you'd expect, the ones who need the most services.

At least Angell is honest enough to admit that one reason she doesn't like mandates is that she doesn't like any health plan that's not a government run single payer system. I don't think that misrepresenting the alternatives is the way to make that happen--then again, I don't like single payer and don't think it's politically viable anyway, so, like Angell, I'm biased here. I don't love mandates either, but if I had to choose between that and single payer, I'd go for the mandate. The biggest problem in health care isn't figuring out who should pay for it. It's changing how care is delivered so it does more and costs less (you can see some of the problems with the current system on display in Atul Gawande's fantastic article about McAllen, Texas). Neither mandates nor single payer will help on that score, but single payer will just bring us universal Medicare: ever rising costs for over-aggressive, under-effective medicine.