connellyenterprises.com

This column has a global audience so sometimes I have to defend my tendency to see things from an American perspective.  But I’m not sure there even IS a defense for this particular item so I’ll just jump into it, because I think even readers from Kazahkstan and Kuwait (my two big K’s) may ultimately find it interesting.  It’s about Apple and Hulu and the direction Internet TV is going in the United States.

It’s not headed where you think it is.

Hulu is the ad-supported video distribution site set up by NBC-Universal and Fox.  It’s where, in addition to the TV network pages, viewers can go to watch thousands of television shows, old and new, supported by commercials.  Of the four big broadcast (as opposed to cable) networks in the U.S., Hulu until recently had half of them with CBS hiding out at TV.com and ABC residing solely at ABC.com.  But now ABC, which is owned by Disney, has decided to join Hulu and the pundits think that’s generally a big deal, not only because of the whole three-to-one thing but because Steve Jobs is the largest shareholder in Disney and on the Disney board and this would appear to be a kick in the face to Apple’s iTunes, where people rent or buy the same shows without commercials.

Is it or isn’t it a big deal?  And what does this move mean for Apple?

There have always been two general methods of distributing Internet video — downloading or streaming — and three business models — buying, renting, or watching with commercials.  Conventional wisdom — what THEY say — has it that streaming (YouTube) is better than downloading (iTunes) and watching with commercials (Hulu and TV.com) are better than renting or buying (iTunes again).

No, they aren’t, at least not as businesses, not yet.

Business Week, among others, made a grand effort this week to present Hulu as a masterstroke that will hurt or kill iTunes rather than what it is — an expensive streaming service that doesn’t make money.

My wife and I last night watched an episode of Chuck on Hulu.  We started on nbc.com where I thought we might see the show in HD but that wasn’t the case.  And even the standard definition version at nbc.com didn’t play well despite our dual-core 2.4-GHz system with four gigs of RAM and an eight megabit business broadband connection.  So we switched to Hulu where the 480p version stuttered a bit so we dropped to 360p where it played fine except for having to rebuffer a couple of times during the show.

In contrast to this with iTunes you have to wait for downloading but then none of this performance stuff happens. If you want HD you get HD, but then again you are PAYING for HD.

We watched the episode (fun) and all but one commercial was for Rwandan relief.  There is no way Hulu or NBC-Universal were making a profit on that stream, and this was a very popular show.

When you buy an episode on iTunes everyone in the production food chain makes a profit.

Hulu and its ilk are money-losing services that rely largely on concessions in various guild contracts that pretty much keep the writers and producers and actors from sharing in profits that aren’t there anyway, at least not yet.

How is this a threat to iTunes?

Fox owns a big chunk of Hulu, yet American Idol performances are exclusively available on iTunes, not Hulu.  Why is that?  Because American Idol performances on iTunes make a lot of MONEY, that’s why.  Adam Lambert downloads alone make more money every week — a LOT more money — than do ALL the shows on Hulu put together.

So Apple is being criticized and seen as an Internet antique because it is making a profit?  I don’t get it.

I’m not saying here, by the way, that there is no room for commercials on Internet TV.  Nor am I saying that Apple won’t possibly move to commercials or streaming at some point.  This is not gratuitous Apple ass-kissing. What I AM saying is that it is a lot easier to move from paid to free than it is to go from free to paid.  Hulu can’t choose to emulate Apple and become profitable that way because viewers would flee.

As I’ve written over and over, Apple is moving slowly and steadily toward becoming primarily a content provider.  Microsoft is trying to do the same but without Apple’s discipline.  Apple is putting in place all the pieces it needs to make a run at dominating the future of TV, but they know it takes time to get all those bits where they need to be.

What’s needed are devices and services and bandwidth at a given price point where it all works smoothly not just from a technical but also from a commercial standpoint.  Apple is there right now when it comes to downloading and selling or renting, but not for streaming or commercials — the numbers aren’t right yet, nor is the mix of devices.  But the time is coming soon when it will be right, certainly in no more than two years and maybe less.

Now here’s the key for all the pundits who see Apple failing or faltering: you are looking in the wrong direction.  It doesn’t matter how many networks are part of Hulu.  In time they will probably all be there.  But Hulu will remain an artifact of network labor agreements and will be vulnerable for that reason.  Hulu can’t afford to PAY its way.

Follow the money.

Apple has at this moment just under $29 billion in cash and not many good ways to get a reasonable return on that money.  Only Microsoft has more cash than Apple and Microsoft is being pulled in a lot more directions so Microsoft doesn’t have Apple’s flexibility.

What will Apple do with that money?

Most of it will remain unspent is my prediction, but I’m guessing we’ll shortly see $3 billion or so per year go into buying Internet rights for TV shows — not old TV shows but NEW TV shows, shows of all types.

TV production in the U.S. is approximately a $15 billion industry.  An extra $3 billion thrown into that business would change its dynamics completely.  Most production isn’t done by networks but by independent producers who are hungry for revenue and risk reduction.  Three billion Apple dollars spread around that crowd every year would buy Internet rights for EVERY show — more than every show in fact.  Whole new classes of shows would be invented, sapping talent from other parts of the industry.  It would be invigorating and destabilizing at the same time.  And because it is Apple — a company with real style — the new shows wouldn’t at all be crap programming.  They’d be new and innovative.

And just as the artistic heart of TV shifted to cable with HBO in the 1980s, so it will shift to the Internet and Apple.

And where will be Hulu?

Nobody will care.

Not long ago I had a chance to visit the big data center at 365 Main Street in San Francisco.  I was invited by friends to help them install the first servers for their startup, which is still in stealth mode.  The data center was enormous, though my friends occupied only a small part of one rack not far from the Oakland Raiders and one floor up from Bebo, the social network bought not long ago by AOL.  Bebo is a big hit in the UK and I found it odd that all those British profiles are hosted in San Francisco, eight time zones away.

We installed the servers — three little boxes and one big one — then fired them up.  In moments the site was live, though with only a few alpha clients.  The application, which I am sworn not to mention yet, is clever, but not particularly resource intensive.  It’s just like any other web site only a little different in several good ways.  The three little web servers just sat there blinking, doing their jobs.  But the bigger box (a 3u, versus the 1u web servers, if you are keeping track) was wailing right from the moment of booting.  Inside were three 15,000-rpm drives, a bunch of processor cores, and a ton of RAM — all of it thrashing away despite the small load.  What was going on?

What was going on was the twilight of enterprise application development as we know it today.  That 3u box was a database server that sits behind the three little web servers and makes this new enterprise work.  And work hard, apparently, for all the drive thrashing and lights blinking.

We’re at an interesting point in the development of computer technology.  Processors, having been failed somewhat by Moore’s Law in their attempt to become more powerful by widening data paths and raising clock speeds alone, have now resumed or even accelerated their performance growth by replacing one processor core  with 2, 4, 8, and eventually hundreds of cores, most of them not really needed.

Processing power isn’t what binds enterprise or Internet applications today.  I/O and disk access do that.  Servers have one or two gigabit Ethernet connections, each of which could be easily saturated by an old Pentium 4.  It’s the pipe that limits us, not our ability to pump bits through that pipe.  Thanks to the gamers, I suppose, and to a surreal and not particularly useful competition between Intel and AMD the main server CPUs are barely sweating even though they are running the core business logic of the application.  It’s the database server with its disk drives that is working so hard, grabbing data to feed the web servers seemingly just in time.  But don’t blame the hardware here or even the disk drives — blame the database.

We’re at the apex of SQL database development.  It’s 1890 and we make the best darned database buggy whips on Earth.

There is a better way to handle large volumes of data and that better way has been established, not surprisingly, by Google with its BigTable semi-structured database that essentially caches the entire Internet.  HBase from Hadoop is the Open Source version of BigTable and both are rapidly making old SQL databases like Oracle and DB2 obsolete for certain users.

Amazon.com runs on an Oracle database, but one that was extended and optimized at a cost of more than $150 million.  Amazon probably represents the most that one can do with SQL in terms of scalability.  Anything bigger requires a completely new approach like BigTable.

Or maybe it isn’t so new at all.  I recall something very analogous to BigTable during the network operating system wars of the 1980s.  Microsoft had a couple dozen OEMs working on network operating systems based on the hierarchical file system of DOS 2.0 (Paul Allen’s last technical contribution to Microsoft).  While a hierarchical file system may have made some sense for a workstation it made little to no sense for a server accessed by dozens of workstations in the view of the programmers at Novell, where Netware was being born at the time.  Those guys ignored the hierarchy and wrote the entire File Allocation Table for each drive to memory as a single flat file called an Indexed Turbo FAT.  Where the DOS-based network operating systems had to search the disk for files, Netware had the entire index loaded in memory and instantly knew where the target data could be found.  The system was easily 100 times as fast.  BigTable takes this a step further, I suppose, by ignoring the distinction between index and data, dramatically expanding the memory footprint but, at the same time, completely eliminating a retrieval step.

An irony of BigTable and Indexed Turbo FATs is that both Google and Novell were pretty upfront about what they were doing and why, yet competitors have remained bound to lower performing technologies because, well just because.

Which brings us back once again to Oracle buying Sun, a deal that has continued to bug me because it didn’t make sense… UNTIL I thought about it in terms of the scalability of SQL architectures and market positioning.

Right now almost every web application has an Apache server fronting a database box running MySQL or its closed source equivalent like Oracle, DB2, or SQL Server.  The data bottleneck in all those applications is the SQL box, which is generally doing a very simple job in a very complex manner that made total sense for minicomputers in 1975 but doesn’t make as much sense today.  Five years from now the situation will be very different with HBase running everywhere, the dedicated SQL box eliminated completely, and the database shared across redundant web servers like a micro-Google.

Where does this leave Oracle?

It leaves Oracle bleeding its big stupid corporate customers for another decade but eventually losing both the bottom half of the market and the very top where applications scale to tens of thousands of servers.

Part of the distinction here is between running a mobile phone billing system in one case and Facebook in another.  In the mobile phone example you’d better get all those minutes or money will be lost.  But in the Facebook example reality is more approximate and if an update propagates slower than expected, well big deal, so you missed Little Johnny’s birthday pictures for an extra 20 seconds.  There are even business software cases where this philosophy applies.  Progressive Insurance, for example, is always ready to give you a comparison price quote for auto insurance not because they can generate that quote (and the price quotes of their major competitors) on the fly, but because THEY GENERATE A SPECULATIVE PRICE QUOTE FOR EVERY CAR IN AMERICA EVERY NIGHT.  They don’t generate a quote when you call, they just access it because it is already done.

So Oracle keeps the mobile phone company as a customer but doesn’t keep Progressive in this example.  And in the long run there’s enough data redundancy built into the loosey-goosey HBase model that it becomes just as reliable as the more rigorous SQL model that it is inexorably replacing.  That’s when Oracle loses the mobile phone company, too.

Larry Ellison won’t like that.

So what’s to be done?  Buy Sun.  Get into the database appliance business.  Start selling highly-tuned database appliances that achieve the simultaneous goals of vertical integration (making profit on the hardware as well as the software), obfuscation (keeping the customers out of the lower-level code by encasing it in an appliance), and increased overall performance (putting off the inevitable loss of market dominance for another three years through a hardware tour du force).

IBM, as the other big SQL company, doesn’t really share Oracle’s problem, because IBM makes money from the hardware already.  If DB2 gives way to something like HBase, IBM will run HBase on its premium iron — a luxury Oracle can’t share without buying Sun.

As hardware gets cheaper we extend performance by distributing software across more and more machines.  But that distribution in itself undermines the lucrative software licensing system.  So we introduce a new level of abstraction — the database appliance.  Prices will go up a little while performance will go up a lot. Customers will think they are getting more for their money and they will be. But the ultimate comparison that has been at least postponed is between paid and free, where free always wins in the end.

And THAT’s why Oracle NEEDS Sun — to extend its current run by another three years, buying Larry time to write an Act II for his company.

So Oracle ends up owning Sun Microsystems.  I couldn’t believe it at first, thinking somehow that it was all just a ploy to get IBM to pull out the Big Checkbook.  And while the deal may have begun with that thought glowing in the mind of Jonathan Schwartz, it ends with the heart of Sun moving a few miles up 101 to where it will certainly die.

IBM doesn’t want Sun and is gleeful with the idea of Oracle taking over, as you’ll learn if you read the internal IBM memo copied below.  Big Blue does a very good job here of explaining its thinking and most of it makes sense.  No white knight.

But what will Oracle DO with Sun?  Make a lot of trouble for IBM, or try to, I think, but even doing that will be a challenge.  Java is deliberately unprotected by patents and subject to enough industry oversight that Larry Ellison can’t just kill it or somehow make it proprietary overnight.  MySQL could be killed, but for Open Source that just means it would branch and be reborn a day or a week later mostly intact and protected by nerds who would by then be very, very angry.  On a positive side Oracle will undoubtedly make some very useful database appliances and may well come to dominate that as yet non-existent product space.

But for the most part what Oracle will do with Sun is show a quick and dirty profit by slashing and burning at a produgious rate, cutting the plenty of fat (and a fair amount of muscle) still at Sun.  If you read the Oracle press release, the company is quite confident it is going to make a lot of money on this deal starting right away.  How can they be so sure?

It’s easy.  First drop all the bits of Sun that don’t make money.  Then drop all the bits that don’t fit in Oracle’s strategic vision.  Bring the back office entirely into Redwood Shores.  The cut what overhead is left to match the restructured business.  Sell SPARQ to some Asian OEM.  Cut R&D by 80 percent, saving $2.4 billion per year.  I’m guessing sell StorageTek, maybe even to IBM.  And on and on.  Gut Sun and milk what remains.

The plan has to have been on the table since last Fall when Andy Bechtolsheim, the mine canary of Sun’s executive suite, left the company for the second time.  Even then it was clear that the options were a good sale or murder-suicide.

I blame Schwartz, of course, but I don’t blame him, too, because I think he had little choice.  He just wasn’t a lucky guy, it turned out.

So what’s next for Sun?  Nothing, I think.

Here’s the internal IBM memo on the deal:

PPublished on 21 April 2009
News home > Top stories >
Oracle enters a twilight zone

The acquistion of Sun creates opportunities for IBM.
The surprise announcement of the Oracle deal to buy Sun Microsystems creates
some new opportunities for IBM. Since its days as a bright star in the dot-com
era, Sun gradually lost its place in the UNIX server market it once dominated.
How does IBM stand to gain, if and when this transaction closes?
Momentum
First, momentum. According to IDC’s latest report, IBM’s share of the $17 billion
UNIX server market grew to more than 37% in 2008 while Sun’s share fell to 28
percent; since 2000 IBM has gained 19 points of share, while Sun has lost 7
points.
Since 2006, the number of clients that have migrated from Sun to IBM Power
Systems has grown 10% annually to more than 750 clients as of 1Q 2009. IBM’s
Migration Factory has eased the transition for these Sun clients to the Power
platform with its leadership performance and virtualization technologies. In
addition, IBM technologies such as its Infosphere Information Server have enabled
a steady stream of Oracle clients to migrate from Oracle’s high-maintenenace-fee
database to IBM DB2 and Informix data servers. The fact that Oracle and Sun will
share the same address does nothing to change these trends.
Openness
Second, openness. IBM offers every client the greatest choice and best value in
both hardware and software to meet their business needs. IBM will continue to
support Power Systems clients that have chosen Oracle’s middleware or database,
just as we will continue to support the IBM middleware and data server needs of
Sun server clients.
Oracle, after acquiring many software vendors partial to IBM server platforms, has
long promised to protect the compatibility of IBM servers, notably Power; Oracle
clients will continue to demand this compatibility moving forward.
Oracle’s self-serving interpretation of “open” sharply contrasts with IBM’s
championing of Linux and the broad open source community. Despite this, clients
committed to IBM middleware have forced Oracle to maintain long-term
compatibility with IBM software through previous Oracle acquisitions of IBM
Business Partners such as PeopleSoft and Siebel, and this bodes well for Java

News
4/21/2009
http://w3.ibm.com/news/w3news/top_stories/2009/04/stgswg_sunoracle.html
technology. Oracle is unlikely to make sweeping changes – it’s the subtle changes
we’ll watch for. MySQL, an open-source competitor to Oracle’s database that was
acquired by Sun last year, should pose an interesting test of Oracle’s openness.
Sun’s billion-dollar acquisition was hurting Oracle. If they kill MySQL they could
alienate the open-source community, which loved Sun. If they keep it, they may
not have the ability to capitalize on it.
Client confidence
Third, client confidence. IBM’s consistent roadmaps and disciplined delivery enable
clients to effectively gauge the long-term value of their investments in systems,
middleware and services. Sun’s much-publicized business problems will not be
erased in the minds of clients by the Oracle acquisition. If anything, significant
questions are raised. For instance, the omission of any mention of SPARC in
yesterday’s statements from Sun and Oracle is certain to make Sun hardware
loyalists very anxious about a future where Oracle is calling the shots.
Earlier this month the latest of a long line of executive departures from Sun was
its lead processor designer who headed development of Sun’s long-promised and
much-delayed next-gen RISC processor, codenamed “Rock.” The future direction
of Solaris in the hands of Oracle is also unknown, while IBM’s substantial
investments in the future of AIX and Linux are ongoing and well known.
Cost advantage
Finally, cost advantage. In today’s economy, clients are looking to reduce the
heavy maintenance costs associated with Oracle database use. IBM hardware and
software technologies together provide a significantly lower total cost of
ownership.
Several Wall Street analyst reports yesterday saw Oracle’s move as defensive in
response to a dwindling ecosystem. Other observers see the Sun deal as an
attempt to emulate IBM’s successful solutions strategy. However, Oracle’s ability
to manage this type of integration is unproven. Oracle’s remains an application-
led play while IBM has a thriving software ecosystem of application developers
and a much different acquisition style.
Whatever changes take place within Oracle and Sun, one thing that remains
unchanged is IBM’s position of strength and our proven ability to win against both
these competitors.
More details on the Oracle-Sun announcement are posted on the Market Insights
Web site .
For more information concerning this article, please contact Smith, Bruce P.
(brucesmi@us.ibm.com).

This week more than 20 million people watched on YouTube and other video sharing sites a single performance from the ITV show Britain’s Got Talent in which a frumpy spinster from Scotland sang like an angel. You can see her astonishing performance here.

It’s not the singing that makes me write this, though the singing was good. I lived as a boy in the north of England and knew ladies like this Susan Boyle. What makes me write about it is the effect she and her singing had on the Internet and the Internet in turn had on the performance and its aftermath.

The video file as presented on YouTube is just over seven minutes and 26 megabytes long. Twenty million (and counting!) times 26 megabytes is 520 terabytes or approximately half the size of the Internet Archive. That’s 520,000 gigabytes or the equivalent of maxing-out in a single week the monthly bandwidth allotment of 260 co-lo servers at Rackspace.com. Running at top speed for a week would require 1040 such servers to do the job and we haven’t even made it to a week yet. That’s 520 million-million bytes.

Okay, so it was a nice lady singing a nice song, but what’s astounding is the performance had been round the earth twice or three times before the broadcast in the UK was even over. It was one of those seminal moments of mass-communication that showed the world was different than it used to be and thank God it didn’t require a wardrobe malfunction to do so.

What resonated with audiences about this performance was that it hit everyone – everyone – the same, as a long-coming reward for a life of good cheer and choir practice. I make documentary films from time to time and this performance is one of those emotional moments that every documentary director dreams of. It’s not the facts, you see, or even the stories that matter, it’s the emotional state of the people on-screen and how the viewer relates to them that matters. Real feelings count.

And thanks to the Internet in this instance such feelings count everywhere, it seems. For one happy moment we’re drawn together as a single audience to share a single emotional high that involves, for a change, no losers at all.

Think how rare that is, which explains its power.

Marshall McLuhan, who seems smarter every day, called it The Global Village. He said communication technology would link us together in ways we couldn’t imagine and those ways would lead to common experiences and shared values. McLuhan didn’t know about the Internet when he wrote that and he sure as Hell didn’t know about Twitter. But his prediction came true.

This Susan Boyle experience doesn’t come along very often, but with the growth of broadband technology it can’t help but happen more and more. It’s not the Super Bowl or the World Cup — it’s better. That’s because it is personal – a moment we all can share, well so far 20 million of us, one at a time.

Now the folks at Google are no doubt scratching their heads, as are the TV producers back in the UK, trying to figure how to put this effect in a bottle and make a living from it. But it can’t be done.

This is an event that was created for TV but not really anticipated by its creators, I’m guessing. They couldn’t reliably repeat it if they tried.

If they did try, it wouldn’t work.

That’s the beauty, because every time this happens, every time our Global Village comes together in this way, it’s because of a shared delight that makes us feel more alike and less apart.

We could all use more of that.

And the next time it happens, now we all know what to do.

When Barack Obama was running for President one of his favorite sound bites was that any financial bailout should not just involve Wall Street, but Main Street, too – that the government’s responsibility was to help both bankers and homeowners. But now that the election is won and Obama is in office, the two streets are still being treated very differently, with Main Street getting a lot less help from Washington.

This is a HOUSING crisis, not a BANKING crisis, yet $700+ billion has gone to help bankers and only $75 billion to “help” homeowners. The banker’s money has mainly been spent and the homeowner money has hardly been touched. If this is a HOUSING crisis, why aren’t more resources being devoted to housing?

It comes down to an issue of morality, believe it or not, with homeowners expected to be moral and bankers not. Everybody blew it, but the homeowners are being disproportionately punished for their actions.

There is no morality issue in the bank bailout. Banks are having their capital boosted based not on whether they are well run or in some way “deserving,” but purely on the basis of whether they are viewed as being in three groups: 1) doomed; 2) capable of being saved through injecting government funds, or; 3) too big to be allowed to fail no matter how poorly run. This means the least-deserving banks tend to get the most help.

But the Obama Administration’s attempt to help mortgage holders is different. If you hope for government help in restructuring your mortgage you’d better not be behind in your payments. If you missed a mortgage payment months into this crisis, you are out of luck. If your mortgage isn’t guaranteed by Fannie Mae or Freddie Mac, you are out of luck. If your mortgage is jumbo you are out of luck. And if you owe more than 105 percent of the value of your home you are out of luck.

That’s a lot of homeowners out of luck. No wonder the Obama Administration thinks it needs only $75 billion to do the job, it is excluding so many people.

Let’s try applying the homeowner rules to the banks. If both played by the same rules, then banks with mortgage portfolios that have dropped by more than about 15 percent (are five percent or more underwater) would be ineligible for government assistance. Banks that MADE jumbo loans would be ineligible for assistance. Banks that made loans with private insurance or no insurance would be ineligible for assistance. Banks that had shown themselves unable to meet capital requirements (had effectively missed a payment) would be ineligible for assistance. In each case, these criteria define EVERY bank that has received assistance. They ALL have mortgage portfolios down in value by 15 percent or more, ALL made jumbo loans, ALL made uninsured loans, and ALL are under capitalized.

So if we apply to banks the same rules that are being applied to homeowners, then no banks deserve support and there should be no bank bailout. Well that can’t be, can it? So screw the rules, screw the idea of there being a moral issue with bankers, just start handing out cash without even requiring that they use any of it to make or restructure loans.

So that’s what the Treasury and the Fed have done – bailed out the bankers without regard to their past OR FUTURE behavior. And $700+ billion later do we really truly feel better as a result?

Hell no we don’t, because we still can’t pay our mortgages!

This bailout is broken, it is unfair, and it is incredibly inefficient as a result. The bank bailout is based entirely on providing INCENTIVES to the banks – bribing them to THINK ABOUT doing the right thing.The government won’t MAKE the banks do anything. They just ENCOURAGE the banks by giving money.

Where are the incentives in the much smaller housing bailout? There are incentives. THEY ARE ALL BEING GIVEN TO THE BANKS. It is very difficult to find in the new Federal mortgage modification rules much of anything that truly helps homeowners. Banks aren’t REQUIRED to do anything; they can reject any mortgage holder for any financial reason. The banks are PAID to restructure the mortgages and the way those mortgages are being restructured (primarily through increasing term and adding balloon payments) not only costs the banks nothing, it tends to make them MORE money over the life of the loan.

So that $75 billion allocated to modifying mortgages and keeping people in their homes, how much of that $75 billion will actually go to homeowners? About 25 percent, or $18 billion almost entirely in first-time buyer tax credits. This means the bank bailout isn’t $700+ billion, it is $758+ billion or FORTY-TWO TIMES the size of the housing bailout.

And why only first-time buyers? What makes them more deserving of help? The theory is that these are new homeowners so they’ll be buying-up excess inventory and helping to firm prices. They aren’t people selling one house to buy another. In another view they are virginal and uncorrupted by the housing bubble.It wasn’t their fault, so they are being rewarded. More morality, inequitably applied.

Main Street isn’t doing very well under this policy. Main Street is being cheated.

This is a bad plan, unfair and poorly executed. It places a moral burden on individuals and not on banks, yet there is no good explanation for why it has to be so.

What is it about banks that make them deserving of 42 times as much support as your Mom?

Nothing.

Like the Bush Administration before it, the Obama Administration has a bias for helping Wall Street. They couch this as a claimed inability to come up with any better ideas. Yet better ideas – ideas NOT couched in moral argument (or more appropriately couched in EQUAL moral justification) were presented right in this spot in the post titled The Not So Bad Bank. That’s a plan that helps banks and homeowners equally, doesn’t require incentives to work, acts faster, and costs a tenth as much.

What’s wrong with doing the job better, faster, and cheaper?