Clay Christensen:

Is there a solution? It’s complicated, but I offer three ideas for discussion:

Change the metrics
We can use capital with abandon now, because it’s abundant and cheap. But we can no longer waste education, subsidizing fields that offer few jobs. Optimizing return on capital will generate less growth than optimizing return on education.

Change the politics
Both parties are wrong on taxing and distributing the capital of the wealthiest 1%. The Republicans are wrong in thinking that the rich create jobs. In reality many of the richest Americans have been investing in efficiency innovations rather than to create jobs. And the Democrats are wrong, because growth won’t happen if they distribute the wealth of the wealthy to everyone else. Money will be spent buying sustaining innovations — replacing consumption with consumption, because there are few empowering products to buy.

Robin Harding:

The US economy is in the doldrums, unemployment is stubbornly high and Social Security, the New Deal-era safety net for older Americans, is running out of money. It is 1981.

To salvage the popular programme, President Ronald Reagan forms a commission. At its head is Alan Greenspan, the man he later makes chairman of the US Federal Reserve.

The commission procrastinates but then, in a model of backroom bipartisanship that is hard to imagine today, a “gang of nine” does a deal. Payroll taxes go up; over time, so does the Social Security retirement age, from 65 to 67.

But as Mr Greenspan recalls today, from his office overlooking Connecticut Avenue in downtown Washington, the fix was not forever. “Funding over a 75-year period was all that the political system would take. What that does is create a very large deficit in the 76th year and forward.”

Edward Luce:

It did not emulate the brevity of Abraham Lincoln, who squeezed his second inaugural address into 701 words (yes, considerably shorter than this piece). But at triple Lincoln’s length, Barack Obama was certainly briefer than his own more prolix self in 2009. He was also more directly political. Then Steven Spielberg famously said that it would be impossible to stage the scene for a film. With a crowd of up to 800,000 this time rather than 1.8m, Mr Spielberg might still struggle. But it was a very different occasion.

With the theme “Faith in America’s future”, Mr Obama was always going to give it a lofty frame – the first requirement of any inaugural speech. He was tee-ed up by an unabashedly exceptionalist Chuck Schumer, the New York senator and master of ceremonies, whose words reminded us that the US is in reality a constitutional monarchy as opposed to a crowned republic (such as Canada). The “innate majesty” of US inaugurations “never fails to make our hearts beat faster”, Mr Schumer said.

Wikipedia on the Lincoln Town Car.

Steve Cheney:

The numbers are shocking in magnitude: e.g. over the past several years AmEx actually spent about half of its ad spend on buying likes—tens of millions of dollars. Your friends didn’t just go to the American Express fan page and “like” the company for no apparent reason. They did so because they got something.

Across the board big advertisers were told to spend 50% of their ad buy solely on fan acquisition. This is a dirty little secret in ad agency land. Trust me. I’ve seen it firsthand from the marketer, advertiser and agency side.

One direct effect of all this passive liking is an ugly messy data set with a bunch of implicit signals… that are wrong. What happens when your girlfriend types in “restaurants in San Francisco” into graph search and P.F. Chang’s gets spit out because it’s the most-liked restaurant. Was a bad Chinese chain the kind of serendipity you were looking for on your date? Didn’t think so.

Sure FB places check-in feature is another signal (beyond the like) I get it… but this isolated piece of structured metadata means almost nothing without massive scale and structure. So… someone in your social graph went to a restaurant and checked in. Wow! Stop the presses. Thank you FB for saving my night, I could not have eaten without you…

And basic math backs up how weak FB’s structured data is in spades. At launch yesterday FB claimed that one trillion connections have been made on the network to date. Great, that’s a lot of restaurant recs, right? Uhm, not really…

FB has 1 billion users. 1,000 signals x 1 billion is 1 trillion. So each user has logged on average 1,000 events/photos/places/things etc. IN TOTAL. And that’s gonna somehow predict where I want to eat? Most of that 1,000 pieces of data are your actual photos and friends.

Glenn Greenwald:

The Wall Street Journal reported this week that – two days before the 26-year-old activist killed himself on Friday – federal prosecutors again rejected a plea bargain offer from Swartz’s lawyers that would have kept him out of prison. They instead demanded that he “would need to plead guilty to every count” and made clear that “the government would insist on prison time”. That made a trial on all 15 felony counts – with the threat of a lengthy prison sentence if convicted – a virtual inevitability.

Just three months ago, Ortiz’s office, as TechDirt reported, severely escalated the already-excessive four-felony-count indictment by adding nine new felony counts, each of which “carrie[d] the possibility of a fine and imprisonment of up to 10-20 years per felony”, meaning “the sentence could conceivably total 50+ years and [a] fine in the area of $4 million.” That meant, as Think Progress documented, that Swartz faced “a more severe prison term than killers, slave dealers and bank robbers”.

Swartz’s girlfriend, Taren Stinebrickner-Kauffman, told the WSJ that the case had drained all of his money and he could not afford to pay for a trial. At Swartz’s funeral in Chicago on Tuesday, his father flatly stated that his son “was killed by the government”.

Ortiz and Heymann continue to refuse to speak publicly about what they did in this case – at least officially. Yesterday, Ortiz’s husband, IBM Corp executive Thomas J. Dolan, took to Twitter and – without identifying himself as the US Attorney’s husband – defended the prosecutors’ actions in response to prominent critics, and even harshly criticized the Swartz family for assigning blame to prosecutors: “Truly incredible in their own son’s obit they blame others for his death”, Ortiz’s husband wrote. Once Dolan’s identity was discovered, he received assertive criticism and then sheepishly deleted his Twitter account.

The Economist:

PIRATES get a bad press, or so Rodolphe Durand and Jean-Philippe Vergne conclude in their short history of the profession. Pirates are not marauding egotists who prize only bullion and rum, argue the two French professors; they are in fact heroic risk-takers who defy the excesses of capitalism and the tentacles of state control. Nor are they simply the hook-handed, peg-legged sea dogs of popular legend. Modern Blackbeards are hackers and gene-tinkerers. They will come to change capitalism for the better, Messrs Durand and Vergne think, as pirates often do.

Pirates have a long history, from plunderers of the Barbary coast to modern Chinese cybercriminals. St Augustine reported a convicted pirate’s testy exchange with Alexander the Great: “Because I have only one rickety ship, I’m called a bandit, and because you have a large fleet, you are called an emperor,” says the plucky seafarer. Defenders of internet freedom make similar stands. A 1996 act bringing in anti-indecency rules to the web “attempts to place more restrictive constraints on the conversation in cyberspace than presently exist in the Senate cafeteria,” said John Perry Barlow. Hackers rallied to his cause.

Matt Taibbi:

It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

Joanna Chiu:

Mishra was in the city to discuss his book From the Ruins of Empire: The Intellectuals Who Remade Asia, at the Hong Kong International Literary Festival in October. The Economist named the book one of the best of 2012 – describing Mishra as “the heir to Edward Said” and having a “surprising new perspective”.

In person there is only a hint of the caustic, mischievous wit he expresses with full force in his writing. He has a knack for taking people down a notch.

In 1999, when fellow Indian novelist Salman Rushdie was already an established member of the global literary elite, Mishra wrote a review describing the former’s novel The Ground Beneath her Feet as “an alarming new kind of anti-literature”. More recently, Mishra criticised Rushdie for calling Nobel laureate Mo Yan a “patsy” for refusing to sign a petition calling for the release of writer/human rights activist Liu Xiaobo. In an article for The Guardian newspaper, he accused Rushdie of being guilty of accepting the “unexamined assumption lurking in the Western scorn for Mo Yan’s proximity to the Chinese regime: that Anglo-American writers, naturally possessed of loftier virtue, stand along with their governments on the right side of history”.

Frank Partnoy & Jesse Eisinger:

The financial crisis had many causes—too much borrowing, foolish investments, misguided regulation—but at its core, the panic resulted from a lack of transparency. The reason no one wanted to lend to or trade with the banks during the fall of 2008, when Lehman Brothers collapsed, was that no one could understand the banks’ risks. It was impossible to tell, from looking at a particular bank’s disclosures, whether it might suddenly implode.

For the past four years, the nation’s political leaders and bankers have made enormous—in some cases unprecedented—efforts to save the financial industry, clean up the banks, and reform regulation in order to restore trust and confidence in the American financial system. This hasn’t worked. Banks today are bigger and more opaque than ever, and they continue to behave in many of the same ways they did before the crash.

Consider JPMorgan’s widely scrutinized trading loss last year. Before the episode, investors considered JPMorgan one of the safest and best-managed corporations in America. Jamie Dimon, the firm’s charismatic CEO, had kept his institution upright throughout the financial crisis, and by early 2012, it appeared as stable and healthy as ever.

One reason was that the firm’s huge commercial bank—the unit responsible for the old-line business of lending—looked safe, sound, and solidly profitable. But then, in May, JPMorgan announced the financial equivalent of sudden cardiac arrest: a stunning loss initially estimated at $2 billion and later revised to $6 billion. It may yet grow larger; as of this writing, investigators are still struggling to comprehend the bank’s condition.