Creative Destruction and Congress

Category : Political Science & Economics
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A company invents a lotion that absorbs and neutralizes chemical weapons “seven times better” than the current solution.  The military wants to buy it to help save lives, instead of continuing to buy the inferior product.  Makes sense, right?

Well, in the real world, what really happens after the military decides that it wants to buy the better product?
Companies who make the inferior solution make campaign contributions to Senators who represent the states that produce the inferior product and tell them to issue earmarks forcing the military to buy the inferior product, of course.
That’s what really happened over the last two years when Senators Clinton D(NY), Schumer D(NY)and Spector R(PA) sought out $7.6 million in earmarks, forcing the military to buy the inferior product.  They also received a total of just under 100k in campaign contributions.
This type of government intervention is not only sleazy because it risks American lives, but also prevents the creative destruction that is vital to US competitiveness and creating an entrepreneurial culture.

What’s the Difference Between Bookies and Finance?

Category : Business & Advertising
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I’ve always wondered why it was ok for a person to make a “bet” in the form of a put or a call in financial markets, but not ok for someone to bet on a similar event from a private service. Freaknomics blogged about this same issue the other day.

It will be interesting to see if there is any backlash against financial “gambling” if the economy continues to struggle.

In Trouble with the Law? Delete Your Facebook Profile

Category : Technology
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Shana Madoff, the niece of Bernie Madoff, the now infamous hedge fund fraudster, has deleted her Facebook profile to try to get out of the public eye.  Will this be a trend that others continue when they run afoul of the law, or is this a special case?

Imagine the political fallout of the discovery of Obama or McCain photos of the caliber of the average college student. These pictures will be commonplace in the future for any person coming of age now.
It’s going to be interesting to see whether politicians and others of high status of the social networking generation are going to be punished for photos of them engaging in behavior that would be frowned upon by today’s politicians.   Will people in their 20s now be more forgiving of drunken pictures or off color halloween costumes than would people in their 50s?
We will find out.

YouTube and Terrorism

Category : Political Science & Economics
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An Egyptian student studying Engineering at the University of South Florida was sentenced today for a video he put on YouTube.  It showed how to make a bomb detonator from a remote control car that he bought at WalMart.  He narrated the how-to video in Arabic and called the US a “vile nation.”  It had been viewed “hundreds” of times.

This case shows that YouTube and other innovations like Twitter, Facebook and other web 2.0 applications are susceptible to use by people who do not have the best intentions.  Just in the last week, I’ve seen articles about many popular sites and their ability to be used by terrorists.
From Wired, an article about Al Qaeda trying to “infiltrate” Facebook.
From ABC News, an article about terrorists and Twitter.
From Computer World, an article about Google’s refusal to take down, at Sen. Joe Lieberman’s request, videos of American soldiers being attacked by terrorists.
From Znet, an article about how the NSA is monitoring MySpace for terrorists.
All of these stories show the challenge of the Internet and web 2.0.  They allow the good, along with the bad, to communicate faster and share more information with a wider audience.  It is a challenge that we will continue to face as technology continues to evolve.