Monday, December 22, 2008

Independent Video Game Designers

There's a lesson here:

"...Perhaps just as important, independent games shifted from quirky distraction to viable business model. With digital distribution taking off on all three consoles, small teams crafting small, innovative games captured more and more of our gaming dollars...." ("Top 10 Games of 2008" Wired (December 22, 2008)) [emphasis mine]

'Nuf said?

Bank Bailout Scandal? Maybe - But Think Before You Decide

I found these headlines in a Google 'news' search. They're really op-ed, but that's another matter.

  • Bank bailout funds flow into executive compesation
  • $1.6 Billion of Bailout Went to Pay Top Execs
(That one headline really did read "Bank bailout funds flow into executive compesation" - maybe the author had good reason for that alternative spelling.)

Bank Bailout Scandal? Maybe, But We Don't Know That Yet

Those headlines make it look like over a billion dollars of American taxpayer money went into the pockets of top bank executives. So do the stories:
  • "Bank bailout funds flow into executive compesation"
    (December 22, 2008)
    • "You'll be happy to know that a hefty chunk of the $700 billion bailout designed to help banks in order to stabilize the economy has, at least indirectly, flowed into the coffers of top executives...."
  • "$1.6 Billion of Bailout Went to Pay Top Execs"
    Dollars and Sense ("the magazine of economic justice")
    (December 21, 2008)
    • "According to a study by the Associated Press, $1.6 billion of the federal bailout funds went into the pockets of top bank executives. Even institutions that have cut the salaries and bonuses of top corporate officers have awarded massive compensation packages, despite having logged billions of dollars in losses...."
The December 22 piece is honest, or accurate, enough to say that the $1.6 billion dollar figure is from 2007 - and let the reader remember that the bailout was in late 2008. The December 21 op-ed is, simply, wrong.
Review and Reality Check
The "$1.6 Billion" figure is from an Associated Press article, published yesterday: "AP study finds $1.6B went to bailed-out bank execs." What the Associated Press found was that bank executives got $1,600,000,000 in pay and perks: in 2007. That's before the federal bailout.

Lies, Assumptions, and Due Diligence

I have no idea why the authors of those two op-ed pieces were so inaccurate. It's possible that they weren't aware that what they wrote wasn't true.

The Associated Press headline might give an impression that bailout funds were part of those $1.6 billion dollars of compensation. This may help show how easy it is for "$1.6B went to bailed-out bank execs" to become "$1.6 Billion of Bailout Went to Pay Top Execs."
  • AP study finds
    $1.6B went to bailed-out bank execs
    (Associated Press)
  • $1.6 Billion of Bailout Went to Pay Top Execs
    (Dollars and Sense / D&S Blog)
Lies and Assumptions
Sometimes a person might write something that isn't true, but isn't intentionally lying. Assumptions are powerful things: if you 'know' that bank executives are going to steal the bailout money; and you read that they got $1.6 billion dollars; you're likely to assume that the money they got was from the bailout funds.

Someone who made associations like that might not consider the possibility that the billion-plus dollars were spent before the bailout was planned: and not read past the headline.
Due Diligence
The term has a precise, legal, definition: "A measure of prudence, activity or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent person under the particular circumstances" (Mortgages, Ltd., Arizona). I think it can be used to describe the reasonable process of doing a little research before 'buying into' claims or ideas.

A Word of Advice: THINK!

I don't used all caps very often, but this warrants it. If you're running a business, you can't "trust your feelings," even if your name is Luke.

Facts are big, hard, heavy things with sharp edges. If you walk around with your mental eyes closed, you'll get hurt.

What do I Think About the Bank Executives?

It's too early to tell. The massive failure of so many financial institutions clearly indicates that something went wrong. You might call that a 'well, duh!' deduction.

I'm no financial expert, but I see at least two possible causes that make sense.

First, claims that investment banks made too many loans that were too risky could be true.

Second, although it's discussed as a possible outcome of the present crisis, I think that well-intentioned efforts at making it possible for just about everybody to own a house may have been part of the cause of the housing loan problems.
Housing Loans: Realty and Reality, a Personal Look
When I bought the house we live in now, I spent a long time negotiating ways to pay for it. I had worked the numbers, and knew both how much money we had, and how much we could pay over time. I was shown offers that looked very, very tempting - and would have allowed me to keep the house for months, maybe years.

But, each time, when I worked out what would happen as I complied with the proposed agreement, I lost the house.

I finally found an arrangement that allowed me to buy the house, and keep it. But it took time and a lot of thought. Not everyone has the background and willingness to go through that process.
Back to the Bank Executives
Loaning money to people who can't pay it back isn't a good idea: whether you do it of your own will, or are forced to do so by a well-intentioned set of federal regulations. It looks like quite a few major American financial institutions were doing just that.

And, it didn't help that the top executives were getting ridiculously large pieces of the financial pie.

I simply don't know if the debacle is the result of fraud, incompetence, greed, other factors, or some combination. There aren't enough published facts yet: not that I've seen.

Related posts: News and views:

The Town's Hardware Industry: A Parable

On the surface, this is the story of a small town's need for hardware. But, reading between the lines, you may discern a message about a major American industry, presented with the subtlety of a pile driver.

Saving the Town's Hardware Industry

The town had three hardware stores: Bud and Bubba's Hardware and Bait; Central Tool and Hardware; and Abe's Tools. They provided a wide selection of products. You could get an 8-track stereo for your convertible, aluminum siding kits, and all the parts needed to build your own bomb shelter.

People who worked for one of the Big Three hardware stores were the envy of their neighbors. Over the years, they'd negotiated their way into top-rate pay, health coverage, and retirement plans.

Bud, Bubba, Abe, and Waldo, the fellow who ran Central Tool, weren't doing too badly, either.

Now, if you wanted an exhaust fan for your bathroom, you'd be better off talking to Ralph. He had a small stock in his garage, and could have just about anything else shipped in.

You'd call Lacy if you needed an electrostatic filter, and Pat for something like a USB cable.

One day, the Big Three hardware store owners noticed that they were running out of money. And had been for a while. So, they went to city hall and told the town council that they needed money. Lots of it. It wasn't just for them, they explained, it was for the Town Hardware Industry.

Without the Town Hardware Industry, the town's economy would collapse, they said.

The oldest and wisest member of the council, who had seen 8-tracks come and go, told Bud, Bubba, Abe, and Waldo that they shouldn't get one cent of the town's money. And, that the town would be better off getting its hardware from Ralph, Lacy, Pat, and all the other townspeople who had been paying attention.

And so, the town council sent Bud, Bubba, Abe, and Waldo away, empty-handed. The Big Three owners retired to private resorts on the lake country, some of their employees went to work for Ralph, Lacy, or Pat, and some opened their own little hardware stores.

And the Moral of this Story is -

Do I really have to say it?

Related posts:

Sunday, December 21, 2008

Bank Bailouts, Bloated Bonuses, and Common Sense

The federal government's earmarked around $700,000,000,000 dollars, given by American citizens, to pull an assortment of financial institutions out of the hole they dug for themselves. The Big Three automakers are getting a wad of cash, too.

Happily, there do seem to be some conditions attached to Uncle Sam's generosity with other people's money. However, I think that America's leaders, in government and business, have missed vital points of economic theory:

  • A business is supposed to take in more money than it spends
    • Spending more than you make leads to trouble
    • Wasting money leads to trouble
  • Goods and services provided by one business can be provided by another
Enough of Economics 101.

$1,600,000,000 on Executive Perks?!

Never mind Big Three executives flying in individual corporate jets: Executives of banks that are getting bailed out got a tidy little $1,600,000,000 in salaries, bonuses, and other perks in 2007. Okay: salary isn't a "perk," but the numbers are still, well, impressive.

"Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

"The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines." [emphasis mine] (Associated Press (December 21, 2008))

Feeling Good and Doing Good: Not the Same Thing

Although a tiny fraction of the bank bailout was done with my money, I've never personally made it possible for people to keep their jobs for a little while longer. My guess is that it feels good. And, there's probably a sort of warm glow that comes with 'saving the American automotive industry.'

Nice feelings are fine, but to do any practical good all that giving has to come with changes in the way banks and the Big Three do business. Big changes.

Executive Compensation and Bribery

It's not very often that I agree with Barney Frank: my take on how the world works comes through in blogs like Another War-on-Terror Blog and A Catholic Citizen in America.

This time, though, Mr. Frank made a good point about monumental perks that executives get. He said that the billion-bucks-plus bonuses bribed executives " 'to get them to do the jobs for which they are well paid in the first place.

" 'Most of us sign on to do jobs and we do them best we can,' said Frank, a Massachusetts Democrat. 'We're told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!' " (Associated Press (December 21, 2008))

I have nothing against managers and higher-ups getting more than someone at the front desk or on the assembly line. But I have trouble believing that the average bank executive was worth $2,600,000 a year. Particularly when the bank was emulating the Titanic.

The Big Three Automakers and The American Automotive Industry: Not the Same Thing

This isn't 1953, when the president of General Motors said that he "thought what was good for the country was good for General Motors and vice versa." Even then, a moderately garbled version of what Charles Wilson said was used as an example of corporate arrogance.

Today, I think it's time to take a look at GMC, Ford, and Chrysler: and the American automobile industry. And remember: the Big Three are three huge, and now desperate, companies. They've dominated the American automobile industry for a very long time. But, in my opinion, they are not the American automobile industry.

The American automobile industry is that part of the American economy which makes, distributes, maintains, and repairs cars.

I've compared the Big Three to three 800-pound gorillas. Right now, they're sitting on the American automobile industry like it was a pile of bananas. Not surprisingly, it's a little hard for smaller companies to compete.
A Detour, About an 'Un-American' Car
The Big Three aren't the only American companies involved in making cars. Nevada's Hybrid Technologies makes a power plant for the MINI-E, an electric car that does 0-60 in six seconds, with a top speed that exceeds the speed limit here in Minnesota.

The MINI-E isn't a purely American car. The running chassis is made in England. But the rest is assembled in Mooresville, North Carolina, and although I haven't confirmed it, my guess is that most of the people who work at that plant live in America, and buy their groceries in Mooresville.

My point is that a company doesn't have to be in the Big Three to make cars.

Time for Real Change

I don't doubt that if the assets of any or all of the Big Three automakers were sold off, there would be some very real stress. As I wrote before, it's not likely that Americans will stop buying cars, or needing to have them maintained.

And people who worked on an automobile assembly line for one company might be work for another company. They might even be able to learn new procedures.

As for the executives who drove the Big Three into the ground, it might be worth the money to pay them off, let them enjoy an ill-deserved retirement, and let entrepreneurs who know how to build and sell cars take over.

Related post: Background: In the news:
1 Opinions about the American Congress, from Another War-on-Terror Blog:

Friday, December 19, 2008

"Spear Phishing" - New and Improved Spam

Maybe "improved" isn't the right way to describe "spear phishing," a new and personally focused sort of spam.

CNNMoney described this new wrinkle in annoying (and possibly dangerous) email: "Unlike traditional spam, most of which is blocked by e-mail filters, personalized spam, known as 'spear phishing'" messages, often sail through unmolested. They're sent in smaller chunks, and often come from accounts the criminals have set up at reputable Web-based e-mail services. Some of the messages are expertly crafted, linking to beautifully designed Web sites that are bogus or immediately install malicious programs...."

These messages could look legitimate, since they may include personal data that the spammers have mined: like where you went to school, your mother's maiden name, or where you do your banking.

Part of the idea is to trick business owners into, for example, giving data about their

  • Google (or other) advertising accounts
  • Bank accounts
There's even something called "whaling," where an email to an executive claims that the business is under investigation by the FBI. I suppose that a panicked exec might be less than cautious.

How to Avoid Being Spear Phished

It boils down to three words: Don't be stupid. "Imprudent" might be a nicer word than "stupid."

There is pretty good advice in several places: including Microsoft and SANS Technology Institute (Which refers back to Microsoft's resource).

Some major points I found are:
  • Don't send sensitive information in response to an email - no matter who seems to have sent it
    • Call (don't email) the presumed sender, to make sure the request is legitimate
    • 'Trust, but verify' applies here
  • Don't click links in an email that asks for personal or financial information
    • Never
    • SANS T.I. says to put the Web address in your browser window instead - Microsoft has some advice about how to avoid bogus URLs

It Couldn't Happen to Me - Five Dangerous Words

I've been spammed, and phished, and fielded quite a few bogus phone calls. The experience has given me an appreciation for how easy it is to get fooled. One of my kids has called me "paranoid," for the way I insist on verifying a message before believing it. Much less responding to it.

Well, maybe so. I prefer terms like "cautious."

In the news:

Wednesday, December 17, 2008

Online Software Training: This Resource Looks Promising

Depending on what your skills are, how valuable your time is, and a number of other factors, it makes sense to:

  1. Pay someone with graphics or coding skills to get a job done
  2. Do the job yourself
  3. Have someone else pay you for the use of your skills and time
Except for Option 1, though: you need to have the skills a task demands. Thanks to a rather eclectic resume, and a sticky mind, I've picked up a pretty broad set of skills. But there's still a lot to learn, when it comes to digital media.

That's where comes in. I was introduced to it today, and was told that it provides everything I need for learning how to work with graphics, HTML coding, and using software from 3ds Max and Access to Xcelcius and ZBrush 3: even Windows Movie Maker.

Their "About Us" page says: " is an award-winning provider of educational materials, including Hands-On Training™ instructional books, the Online Training Library®, CD- and DVD-based video training, and events for creative designers, instructors, students, and hobbyists...."

It costs $25 a month to have access to the Online Training Library®, but from what I've seen, it could be worth the money for someone who needs to learn new skills, fast.

The online training is a set of videos, organized by topic: sort of like attending a series of how-2 seminars. For someone like me, a visual learner, this looks good.

Advertising, Product Placement, and Psychology

If a scientist is right, the trick in marketing is to show the product often, but not too often: and not get the conscious mind involved.

I did a micro-review in another blog:

Sunday, December 14, 2008

Recession's On, Game Sales Up: Let the Bad Times Roll!

There's a lesson to be learned here: "November video game sales near $3 billion" (Associated Press (December 12, 2008)). That's up about 10% from last year at this time.

Not bad for an economy in crisis.

The data comes from a market research outfit called NDP. Someone from the company said that it's

  • A broad range of games produced
  • Games are relatively cheap stay-at-home entertainment
Industries thriving - or at least staying afloat - in bad times is nothing new. A professor of history recalled that the Great Depression gave some businesses a boost:

"One-third of Americans were below the poverty line, yet some industries actually managed to make a profit at the beginning of the 1930s as the public looked for a way to escape. If Americans couldn't find work, at least they could go for a drive, have a cigarette, or go to a movie. Correspondingly, sales of oil, gas, cigarettes, and movie tickets all went up."
(H102Lecture 18, American History 102: Civil War to the Present (Stanley K. Schultz, Professor of History; William P. Tishler, Producer) (© 1999 Board of Regents of the University of Wisconsin System ))

Escapism: It's Good for Business

I read someplace that movie ticket sales going up during economic bad times wasn't a given any more. I believe it, but that doesn't mean that the Depression Lesson isn't still valid.

Back in the 1930s, nobody had video games. Duke Nukem was decades in the future. Kirby was a brand of vacuum cleaners. If you were going to escape, you'd go for a drive, smoke a cigarette, or go to a movie. Maybe all three.

That was then, this is now.

People have more ways of getting away from real-life stress now: video games; and the medium you're using right now: the Internet. Actually, the thirties saw an equivalent to today's video game micro-boom: Monopoly became paradoxically popular while real-life tycoons were selling apples out of a box. (There seems to be more to the game's history than that. See "Monopoly History.")

But, Escapism Is Bad, Right?

One thing I learned in college, back in the seventies, was that Escapism was bad - unless you were following Timothy Leary's advice to "Turn on, tune in and drop out."

I think a friend of mine, who shared my interest in role-playing games, had a better approach: 'Building castles in the sky is fine: but when you try to collect rent, you've got problems.' The point is, a little 'escapism' is a sort of intellectual and emotional R & R. So, with some reservations, I'd say -

Escapism is Fine: As Long As Someone is Paying You For It

I'm not wasting time, being upset about the global economic crisis and the collapse of the American automotive industry (the Big Three, anyway).

I'm trying to figure out what I can do, to help people relax, escape, or learn, while they're not taking a Caribbean cruise or flying to Aspen. 'Let the bad times roll!'

Friday, December 12, 2008

So the Big Three Collapse: Is That a Problem?

There may be Americans who don't know that the Big Three automakers in this country are ready to fold. But my guess is that they don't watch the news, or get out much.

The conventional wisdom seems to be that, if General Motors Corporation, Ford Motor Company, and Chrysler go bankrupt, unemployed auto workers will be thrown out of their homes, Big Three executives will have to cut back on their trips to Starbucks, and the American economy will collapse.

There's a bit of truth to that.

  • America makes more cars than any country
    • Except Japan
  • The automobile is an important part of American culture
    • Although not what it was in the fifties
      • Laptops, anyone?
  • A whole lot of people are employed by the Big Three
  • A whole lot more people's living depends the spending habits of auto industry
    • Line workers
    • Executives
    • Everybody in between
I don't doubt that there would be a lot of trouble and personal hardship, if GMC, Ford, and Chrysler go the way of the Taylor Aerocar; the conservation-minded Enger; the advanced hybrid Owens Magnetic; or the Zimmerman.

On the other hand, I find it hard to believe that Americans will stop buying cars, trucks, and other machines to get them from place to place.

Yes, quite a few will start buying imports. My guess is that they'll buy them from dealerships that are in America - so some of the money will go right back into the local economy.

I have trouble believing, though, that nobody of the several-hundred-million people who live in this country doesn't want to open an automotive design and assembly company, and have the brains and background to do it.

It's been a long time since a new automotive company has had a chance to get started, with three 800-pound gorillas sitting on the American car market.

Time for a Real Change?

I know what it's like to be laid off. It happened to me over two years ago, and that's not the first time I've lost a job. That's not something I'd wish on anyone.

But, maybe it's time for GMC, Ford, and Chrysler executives to get their golden parachutes, consign some of the existing products to automotive museums, and make room for people who have plans that will work in the 21st century.

There's no question that some people who've worked on the same production line for years - or decades - will have a rough time adjusting. On the other hand, entrepreneurs may soon be able to employ a huge number of very trained people with years of experience in automotive assembly - and (I hope) an ability to learn.

The down side is that, right now, it looks like getting financial backing is going to be tricky.

Real Change in America: It's About Time

It's been a century, since America's automotive industry took radical innovation seriously. Most of the early-1900s startups didn't last long. Many, from the ABC to the Zentmobile and the enigmatic Zip, only lasted a few years. But, while they were around, people were paid to make the cars - and some of the new ideas were successful.

American has tried having an automotive industry that's a sort of three-way monopoly. Maybe it's time to try something else.

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