Germany’s political establishment doesn’t know how to react to the Pirate Party, which now has seats in two state parliaments and owns the debate on Internet issues. But although the party’s radical experiments in transparency and participation may have caught its rivals off guard, its no-holds-barred debating culture can also backfire.

When German political parties invite their leaders to retreats, they like to use proven formulas. On the evening before the event, the top officials arrive in their dark limousines at a luxury hotel in the countryside, where they attend a festive dinner followed by fireside chats in small groups.

The next morning, they meet for discussions behind closed doors. The view of the beautiful rural surroundings is meant to take the politicians’ minds off their hectic lives in Berlin and allow them to focus on the important things. After the retreat, the leadership announces its new strategy to the party base.

But it can also be done differently. A couple of weeks ago, the national and state executive committees of the Pirate Party, which campaigns on a platform of political transparency and Internet freedom, met at a youth hostel in the central German city of Kassel. The officials slept in four-bed rooms with bunk beds, which makes sense, given that the party advocates a culture of sharing, at least when it comes to data. Their debates were broadcast via the Internet using webcams, so that party members would not feel left out when their leaders discussed upcoming election campaigns.

Aleks Lessmann, the managing director of the Bavarian wing of the Pirate Party, was happy to explain some terminology — while sitting outside on a table tennis table in the sun. Phrases like “executive meeting” are taboo for his people, because they make them think of hierarchies and backroom meetings. Continuing with the pirate metaphor, “captains’ meeting” isn’t bad, Lessmann said, but perhaps it would be even better to use a term like “small harbor.” In the end, the group agreed to name their weekends at the youth hostel the “Marina Kassel” (“Kassel marina”).

Alice Schroeder:

The last few years have been a struggle for investors in Berkshire Hathaway Inc. (BRK/B) Since the March 2009 market low, the Standard & Poor’s 500 Index has risen 80 percent compared with 44 percent for Berkshire, even though crashing stock prices and unprecedented volatility perfectly suited Warren Buffett’s investing style.

Now Berkshire stock hovers at about a 10 percent premium to the company’s estimated $110,000 per-share book value at March 31, 2012, (assuming the overall book value increases in a rising stock market by about $10 billion this quarter) and perhaps below a liquidation price. In essence, the market is placing no value on Berkshire’s prospects.

I believe two basic problems have brought Berkshire to this pass. First, Buffett’s investing record has been underwhelming for the past few years, except for special opportunities linked to his own reputation and relationships. Second, Buffett has lost stature because of the way he uses his role as a public figure. And both of these situations will be difficult to reverse.

quaro.com:

I’ve heard PlentyOfFish.com is essentially operated by one guy from his living room and makes $10M+ per year. He’s the programmer, designer, marketer, customer service, everything. What are some other examples like this?
Repost

Vanessa Friedman:

When the new iPad went on-sale at midnight last Friday night it provoked the usual frenzy — miles of lines, ecstatic buyers — as well as one very interesting blog that somehow seems to have fallen through the cracks over the weekend. I think it’s worth revisiting.

It was written by Evan Clark, deputy business editor of WWD (the site of insider fashion publication Women’s Wear Daily), and it takes a good, analytic look at the general perception that Apple is a luxury brand (a perception that Apple itself has created), pointing out that it does tick all the boxes save one; exclusivity. But here’s what I wonder: is exclusivity really a luxury value these days?

Ray Dalio:

A Template for Understanding…
…How the Economic Machine Works and How it is Reflected Now
Ray Dalio | October 2008 (Updated March 2012): The economy is like a machine. At the most fundamental level it is a relatively simple machine, yet it is not well understood. I wrote this paper to describe how I believe it works. My description is not the same as conventional economists’ descriptions so you should decide for yourself whether or not what I’m saying makes sense. I will start with the simple things and build up, so please bear with me. I believe that you will be able to understand and assess my description if we patiently go through it.

An In-Depth Look at Deleveragings
Ray Dalio | February, 2012: The purpose of this paper is to show the compositions of past deleveragings and, through this process, to convey in-depth, how the deleveraging process works.

Why Countries Succeed and Fail Economically
Ray Dalio | June, 2011: This study looks at how different countries’ shares of the world economy have changed and why these changes have occurred, with a particular emphasis on the period since 1820. As explained in this study, the rises and declines in countries’ shares of the world economy occur as a result of very long-term cycles that are not apparent to observers who look at economic conditions from a close-up perspective.

Lee Fang:

Update: Republic Report has launched an effort to bring transparency to the revolving door. See our letter to retiring lawmakers here; David Halperin explains why here.


Selling out pays. If you’re a corporation or lobbyist, what’s the best way to “buy” a member of Congress? Secretly promise them a million dollars or more in pay if they come to work for you after they leave office. Once a public official makes a deal to go to work for a lobbying firm or corporation after leaving office, he or she becomes loyal to the future employer. And since those deals are done in secret, legislators are largely free to pass laws, special tax cuts, or earmarks that benefit their future employer with little or no accountability to the public. While campaign contributions and super PACS are a big problem, the every day bribery of the revolving door may be the most pernicious form of corruption today. (See our post on Monday about current members of Congress already negotiating for jobs on K Street)

Ed Wallace:

Twenty-two years ago the California Air Resource Board decided to enact a new mandate that would have required that a large percentage of any vehicles auto manufacturers sold in the Golden State have zero emissions at the tailpipe – and CARB officials were adamant that this would be accomplished in less than a decade. Every major manufacturer understood this to be a demand that they sell mostly electric cars out west. Only Honda took it to mean that, if its emissions could be reduced to nothing, a gasoline-powered car could be sold in California. Of course, just to hedge its bet, Honda delivered the EV-Plus electric car in order to meet the new rules.



The mandate in and of itself was something close to insanity. But it was also the start of the modern era of electric, series hybrid-electric and partial zero-emissions vehicles.

Andrew Edgecliffe-Johnson:

The headlines about the US newspaper industry have never been so bleak.

In recent weeks, LinkedIn, the networking website, and the Council of Economic Advisers have reported that the press is “America’s fastest-shrinking industry”, measured by jobs lost; the Newspaper Association of America has shown that advertising sales have halved since 2005 and are now at 1984’s level; and the Pew Research Center has found that for every digital ad dollar they earned, they lost $7 in print ads.

As media from television to billboards bounce back from the recession, newsprint is being left behind. Zenith Optimedia this week predicted that internet advertising would pass newspaper advertising next year around the world – but in the US, where internet penetration is high and newspaper audiences are shrinking, digital will overtake newspapers’ and magazines’ combined ad sales this year, eMarketer estimates.

David Cay Johnston:

If President Barack Obama can persuade Congress to reduce the corporate income tax rate to 28 percent from 35 percent, he will move tax rates closer to what other modern countries charge.

But his plan to treat “manufacturing” as a special category, with a 25 percent tax rate, brings us to what I call Obama’s hamburger problem.



The problem is how to define manufacturing. To paraphrase Justice Potter Stewart on obscenity, I know manufacturing when I see it; I just don’t know how to define it in tax law.



Assembling automobiles is considered manufacturing. So what about assembling two hot protein discs with special sauce, lettuce, cheese, pickles, onions — all on a sesame seed bun?



The notion of hamburger-making as manufacturing may seem silly, a bit like the 1981 U.S. Agriculture Departmentproposal to classify ketchup as a vegetable for school lunches. But classifying activities as manufacturing or not becomes crucial if manufacturers pay taxes at a reduced rate.

Scott Cleland:

Memo: To All Google Spokespeople

From: Brandi Sparkles & the Privacy Excuse Algorithm Team (PEAT)



RE: The New Google Public Line on FTC/State/EU Privacy Investigations



Google has changed the company’s public line concerning our inadvertent, unintentional, un-anticipatable, accidental, unexpected, unwitting, un-premeditated, unconscious, and totally innocent bypassing of Apple Safari browser’s privacy protections, which was first reported by the Wall Street Journal February 19th, and which is now being investigated by the FTC, State Attorneys General, and the EU per the WSJ today.



Initially, Google said: “The Journal mischaracterizes what happened and why. We used known Safari functionality to provide features that signed-in Google users had enabled. It’s important to stress that these advertising cookies do not collect personal information.”



Upon advice of our attorneys — who informed us that the crux of Google’s potential legal and financial penalty liability stems from whether or not Google’s actions were intentional or willful — we now fully, totally, completely, absolutely, and with-every-fiber-of-our-body, retract, repudiate, rescind, revoke and recant our original media statement because it dripped with intent and willfulness.



Our new statement previewed today in the WSJ: “We will of course cooperate with any officials who have questions, but it’s important to remember that we didn’t anticipate this would happen, and we have been removing these advertising cookies from Safari browsers,” is now the operative Google public statement going forward.