Jason Fried:

In 2005, I read a book called The Innovator’s Dilemma, by Clayton Christensen. It blew my mind, because it seemed to describe my business perfectly. 37signals had just released Basecamp, our Web-based project-management app. Aimed at small-business owners, Basecamp was designed to be affordable and easy to use. It did only a few things, but we made sure it did them well.

Our major competition at the time was Microsoft Project, which was expensive, complex, packed with features, and aimed at large organizations. It wasn’t particularly pleasant to use. I’ve yet to meet someone who is excited about Microsoft Project.

In The Innovator’s Dilemma, Christensen explains how successful companies with well-established products are constantly being threatened by newcomers. Winners, he argues, don’t lose when new rivals attack from the high end of market. They lose when start-ups attack from below. This, of course, was precisely what 37signals was trying to do to Microsoft. And it was working. Needless to say, I became a passionate fan.

Jamil Anderlini:

Lunch, ordered in by Chen’s minders, is an excellent, enormous Italian meal of pasta, pizza and salads from Otto Enoteca Pizzeria on nearby Fifth Avenue. Before we start eating, he asks if he can hold my digital recorder. “I have a deep fondness for audio recorders,” he tells me, as he examines my device with his fingertips. “I was given one in 2005 that I used to document accounts of the government’s violent family planning practices. It survived countless confiscation raids on my house and I still have it today.”

His casual, dispassionate reference to the work that got him into so much trouble is striking, as is the serenity and forgiveness he displays while describing horrific events and the people who subjected him to them.

. . .

As we start our meal, I ask Chen how he likes the food in New York. His wife gives him a piece of pizza, telling him what it is and that he can use his hands to eat it. He smiles and says he likes all kinds of cuisine, especially Japanese and Indian. He explains that, while under house arrest in his village, he was regularly stopped from going out to buy food and supplies, and he and his family often went hungry.

In his simple, aphoristic style he continues, “Sour, sweet, bitter and spicy – they all have their own nutritional value, and it’s the same in a person’s life – eating some bitterness [having bitter experiences] also has its benefits and value.”

Matt Taibbi:

The great mystery story in American politics these days is why, over the course of two presidential administrations (one from each party), there’s been no serious federal criminal investigation of Wall Street during a period of what appears to be epic corruption. People on the outside have speculated and come up with dozens of possible reasons, some plausible, some tending toward the conspiratorial – but there have been very few who’ve come at the issue from the inside.

We get one of those rare inside accounts in The Payoff: Why Wall Street Always Wins, a new book by Jeff Connaughton, the former aide to Senators Ted Kaufman and Joe Biden. Jeff is well known to reporters like me; during a period when most government officials double-talked or downplayed the Wall Street corruption problem, Jeff was one of the few voices on the Hill who always talked about the subject with appropriate alarm. He shared this quality with his boss Kaufman, the Delaware Senator who took over Biden’s seat and instantly became an irritating (to Wall Street) political force by announcing he wasn’t going to run for re-election. “I later learned from reporters that Wall Street was frustrated that they couldn’t find a way to harness Ted or pull in his reins,” Jeff writes. “There was no obvious way to pressure Ted because he wasn’t running for re-election.”

Kaufman for some time was a go-to guy in the Senate for reform activists and reporters who wanted to find out what was really going on with corruption issues. He was a leader in a number of areas, attempting to push through (often simple) fixes to issues like high-frequency trading (his advocacy here looked prescient after the “flash crash” of 2010), naked short-selling, and, perhaps most importantly, the Too-Big-To-Fail issue. What’s fascinating about Connaughton’s book is that we now get to hear a behind-the-scenes account of who exactly was knocking down simple reform ideas, how they were knocked down, and in some cases we even find out why good ideas were rejected, although some element of mystery certainly remains here.

John Torinus:

Eric Bricker, a former primary care doctor, a former financial analyst for hospitals, and now chief medical officer for Compass, a patient advocacy firm, conceded that big hospital systems use a variety of pricing strategies, but they are not based on costs.

In most industries, there is a close connection between costs and prices. But that takes an accurate assessment of costs, which is accomplished through an old discipline called cost accounting.

We payers are told by hospital executives that medical services are “too complicated” to analyze for costing purposes.

In a word: nonsense.

Andy Xie:

QE3 has finally arrived: the US Federal Reserve has promised to buy US$40 billion of mortgage-backed securities a month for as long as it deems necessary to revive the economy. QE3 is QE Infinity! Will it end with a thriving economy or a catastrophe? Remember, it was former Fed chairman Alan Greenspan’s “Midas touch” that brought us the dotcom bubble, the property and financial bubble, and the global financial crisis. Will Ben Bernanke’s so-called “quantitative easing” take us to a better world?

The mere fact that this is the third round of quantitative easing tells us the limited effectiveness of such a policy. Between February 2008 and August 2010, the US economy lost 8.7 million jobs, though it has gained 3.4 million back. By contrast, between 2004 and 2007, the US economy created an average of about 2 million jobs a year. The Fed bought US$1.6 trillion of assets through the first two rounds of quantitative easing.

Yet, still, the US labour market hasn’t performed. Of course, one could always argue that it would have been much worse without the Fed’s action. We will never know.

What we do know is that food and oil prices have been rapidly rising despite a weak world economy. Statisticians in the US and China don’t see much inflation. Yes, the price of my bowl of beef rice may be the same, but the beef on the rice has been performing a vanishing act. Do the statisticians feel hungry?

Jim Quinn:

Is it just me, or are the signs of consumer collapse as clear as a Lowes parking lot on a Saturday afternoon? Sometimes I wonder if I’m just seeing the world through my pessimistic lens, skewing my point of view. My daily commute through West Philadelphia is not very enlightening, as the squalor, filth and lack of legal commerce remain consistent from year to year. This community is sustained by taxpayer subsidized low income housing, taxpayer subsidized food stamps, welfare payments, and illegal drug dealing. The dependency attitude, lifestyles of slothfulness and total lack of commerce has remained constant for decades in West Philly. It is on the weekends, cruising around a once thriving suburbia, where you perceive the persistent deterioration and decay of our debt fixated consumer spending based society.

The last two weekends I’ve needed to travel the highways of Montgomery County, PA going to a family party and purchasing a garbage disposal for my sink at my local Lowes store. Montgomery County is the typical white upper middle class suburb, with tracts of McMansions dotting the landscape. The population of 800,000 is spread over a 500 square mile area. Over 81% of the population is white, with the 9% black population confined to the urban enclaves of Norristown and Pottstown.

The median age is 38 and the median household income is $75,000, 50% above the national average. The employers are well diversified with an even distribution between education, health care, manufacturing, retail, professional services, finance and real estate. The median home price is $300,000, also 50% above the national average. The county leans Democrat, with Obama winning 60% of the vote in 2008. The 300,000 households were occupied by college educated white collar professionals. From a strictly demographic standpoint, Montgomery County appears to be a prosperous flourishing community where the residents are living lives of relative affluence. But, if you look closer and connect the dots, you see fissures in this façade of affluence that spread more expansively by the day. The cheap oil based, automobile dependent, mall centric, suburban sprawl, sanctuary of consumerism lifestyle is showing distinct signs of erosion. The clues are there for all to see and portend a bleak future for those mentally trapped in the delusions of a debt dependent suburban oasis of retail outlets, chain restaurants, office parks and enclaves of cookie cutter McMansions. An unsustainable paradigm can’t be sustained.

Glenn Greenwald:

Nothing tests one’s intellectual honesty and ability to apply principles consistently more than free speech controversies. It is exceedingly easy to invoke free speech values in defense of political views you like. It is exceedingly difficult to invoke them in defense of views you loathe. But the true test for determining the authenticity of one’s belief in free speech is whether one does the latter, not the former.

The anti-US protests sweeping the Muslim world have presented a perfect challenge to test the free speech convictions of both the American right and the Democratic party version of the left. Neither is faring particularly well.

Let’s begin with the Democrats. On Thursday, the Obama White House called executives at Google, the parent company of YouTube, and “requested” that the company review whether the disgusting anti-Muslim film that has sparked such unrest should be removed on the ground that it violates YouTube’s terms of service.

In response, free speech groups such as the ACLU and EFF expressed serious concerns about the White House’s actions. While acknowledging that there was nothing legally compulsory about the White House’s request (indeed, Google announced the next day they would leave the video up), the civil liberties groups nonetheless noted – correctly – that “it does make us nervous when the government throws its weight behind any requests for censorship”, and that “by calling YouTube from the White House, they were sending a message no matter how much they say we don’t want them to take it down; when the White House calls and asks you to review it, it sends a message and has a certain chilling effect”.

Right-wing commenters loudly decried the White House’s actions on free speech grounds. Some of their rhetoric was overblown (the sentiment behind the request was understandable, and they did nothing to compel its removal). But, for reasons made clear by the ACLU and EFF, these conservative objections were largely correct.

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Tom Holland:

Anyone who fears that Washington’s “pivot” towards the Pacific increases the risk of conflict between the United States and China is behind the times.

America and China are already at war. Only the battle ground isn’t the East China Sea. It’s money.

In his latest book Paper Promises author and Economist columnist Philip Coggan describes economic history as an endless struggle between borrowers and lenders over the irreconcilable difference in their interests.

Today that difference pitches the US, as the world’s largest debtor, into conflict with China, the planet’s biggest creditor.

Coggan explains that creditors are always trying to defend the soundness of money as a store of value, in order to ensure they get paid what they are owed.

Debtors, on the other hand, have a powerful incentive to debase the value of money, which effectively lets them off the repayment hook.

Michael Powell & Danny Hakim:

“Sandy’s right; government created a banking oligopoly with no accountability,” said Peter Solomon, a friend of Mr. Lewis’s who runs an investment banking firm.

Arthur Aeder, a retired accounting executive, was twice fired by Mr. Lewis. “Not many antagonize Goldman just for the hell of it,” Mr. Aeder said. “Most people think, ‘I have a family to feed.’ ”

Mr. Lewis is no less harsh on himself. After a visit, he handed us laptops containing every furious e-mail he had sent and received over 10 years.

“The Wall Street ethic broke decades ago,” he said by way of goodbye. “The stink is terrible.”