Category Archives: Stupid Cartesians

In defence of the Verizon iPhone

OS share

Baruch has already forgotten about the iPad. Whether chick magnet or large print e-Reader for the elderly, any ideas we have about its significance are speculation at this point, and will probably unravel in the face of reality.  The most tangible action at the moment is in the iPhone, and the most interesting thing that didn’t happen last month is that Verizon didn’t get their own CDMA iPhone announced alongside the iPad.

This was seized on last week by a number of Wall Street analysts who concluded that poor old Verizon won’t get an iPhone at all this year. Credit Suisse reckons there’s a “75%” chance the iPhone stays with AT&T in 2010. I read the research, which also suggested that AT&T might have made some interesting concessions in order to persuade Apple to play along. Barclays Capital (I haven’t read theirs) thinks the fact that Apple is sticking to AT&T for the iPad is a “vote of confidence” in the AT&T network; that, and the comments Apple have made to the effect that they think the AT&T network is very nice, thanks, and they are very happy with it. They don’t see a VZ iPhone in the works either.

Hey, sell side analysts! Are you totally, like, stupid!? There is no way you can make that conclusion on the facts we have so far. The rudest understanding of what Apple is trying to do here and the opportunity set it faces would tell you that the most mind-bogglingly idiotic thing Apple could do would be to keep the iPhone as an AT&T exclusive a moment longer than it has to. And I am not alone assuming that Apple is not mind-bogglingly idiotic. Continue reading

Google: Scientist

Baruch,

Symbolism is never lost on the Chinese, who are the masters of signaling, and thus there was some great poignancy to Google’s A new approach to China being posted to the blogspot.com domain, which is blocked in its entirety by China’s censorious government. This proved quite a sassy way to illustrate a point, before even starting on the merits of the case. Those outside China didn’t even notice. Everyone inside China, including the officials, had to turn on their VPN to read it.

Now that the deed is done so publicly, I don’t imagine either side will back down, and nobody expects Google.cn’s redacted search service to last much longer, with perhaps a further punitive ban on google.com for the sheer audacity of this insubordination. But already today the blogosphere erupted in competing narratives explaining Google’s autodefenestration from Chinese search, and not all were wholly credulous of Google’s stated motives.

Among the cynics, the arguments ran thus:

- Google is misrepresenting its decision: It was a face-saving, kudos-generating way to exit a failing business (though without explaining why profitably capturing 31% of the search market in China should prompt shutting down).

- Google is making a mistake: No business in their right mind would purposely anger the masters of such a lucrative market, so this has to be a stupid tactical mistake. (The stated presumption here is that Google cannot be ethical, or it would not have entered China in the first place, so this fiasco must be a very bad business decision merely masquerading as a moral decision.)

Among the partisans:

- Google was pressured into it by Hillary Clinton, thinks Rao Jin, the founder of the China’s patriotic Anti-CNN forum. (I suspect a failure of the imagination on the part of Rao — clearly, he is projecting onto the US how things are done in China.)

And tomorrow, expect the official mouthpieces’ take, which I predict will involve far more references to the peddling of pornography than to the free market of ideas.

I, Bento, take Google’s explanation at face value, however. And I intend to restate the narrative in terms that will be familiar to long-time readers of Ultimi Barbarorum: All along, Google’s approach to China has been that of the scientist: There was a testable hypothesis, an experiment, and a conclusion based on that experiment. And today, we saw the publication of the results — the hypothesis proved false.

Specifically, the hypothesis, as formulated by Google during 2005: The internet in China will become freer in the coming years, and Google’s presence in China will help strengthen this process. Many believed and hoped this might be the case — the Olympics were approaching, China was opening up, officials exuded reasonableness.

The experiment, initiated in January 2006: Enter the Chinese search market, try to improve the system from within by collaborating with the regime, and see if China’s internet gains freedoms over time.

The evidence: Over the past few years, a progressively stricter program of shutting down those Chinese sites that do not comply with demands for censorship and surveillance. The progressive blocking of all popular foreign sites that allow uncensored anonymous communication, including several Google properties: Twitter, Facebook, YouTube, Blogger, WordPress, IMDB, Google Docs, URL-shortening services… And, what Google cites as the final straw, recent industrial-strength malware attacks aimed at Gmail-using Chinese dissidents.

The conclusion: Google’s collaboration was not making things better; things were getting worse. They admit they were wrong! There may have been a financial return on its China investment, but the civic return proved disappointing.

Faced with this realization, Google could have done nothing. But that way lies death by a thousand cuts as web property after web property gets axed. How soon before Gmail gets blocked? Google Maps? Earth? Picasa? Google Reader? Instead, Google cleanly terminated the experiment: There will be no more collaboration with the regime. Now China must throw them out if it wants to save face domestically — albeit at the price of losing face internationally.

As Spinozists, this is a proud day for us. Google has posted that placard declaring China’s government Ultimi Barbarorum in a public place. Gone for them is the queasiness of having to placate a regime that believes calling for free elections deserves 11 years in jail for subverting party state power. I’m betting it’s a relief.

A postscript: I was surprised that several Shanghai-based European VCs and businessmen I follow on Twitter were among the cynics, berating Google for not conforming to Chinese/Asian business practices based on saving face, consensus and relationship-building, instead reverting to an “American” ultimatum. But these views come from individuals who have already made their peace with China’s political system, and whose business models and reputation do not depend on the unfettered flow of information. Perhaps some of them are unwittingly using the occasion to signal their own reliability as partners in China: “Look at us — we’d never consider doing what Google just did.” Google may have burned its financial bridges, but they are burning their moral bridges, making them the Stupid Cartesians of this sorry episode, Baruch.

iPorn exists! I take it all back

See full size image

(Asian Boobs)

As proprietor of a family site (in the sense that my mum sometimes reads the blog), Baruch is unwilling to show the images of one of the apparently best-selling apps on the iPhone, “ASIAN BOOBS“. Yes, it is Asian soft porn, charming oriental ladies in bras and knickers, in uncomfortable poses; it’s not pictures of vaguely silly people from China. Of course, this gives the lie to Baruch’s contention that there is no porn on the iPhone platform.

Baruch would like to claim this app only exists because someone at Apple reads Ultimi Barbarorum. No such luck.  Baruch’s scribblings on the banality of the iPhone’s walled garden might have forced the iPhone censor to respond in that inconsistent, atavistic manner of all pro “decency” censors through the ages, you would think, by allowing Asian Boobs onto the platform as a sop. But the app has apparently been a best seller for some time before Baruch wrote his post. Baruch fancies Apple have a group of blog flaks somewhere in Marketing whose job it is to influence commentary on prominent sites, or at least to report on Apple-related issues as reported in the blogosphere. The blog flak would take one look at Baruch’s traffic on some blog rating site or something and realise he didn’t have to bother.

(Don’t bother checking Asian Boobs out by the way; the app is rubbish. You don’t even get to see any nipples).

Meanwhile in another threat to Baruch’s Apple-as-victor thesis, as Dear Reader Cash Mundy points out in comments, the Android axis has been going great guns this week, with Android 2.0 launched, the announcement of a lovely Garmin-killing free navigation app from Google, and the launch of the new Motorola Droid (and a host of follow-on machines from other) to peans of praise from the techno-bloggers. Is this the point when the tide suddenly changed, the El Alamein of Apple’s global smartphone dominance?

Maybe. Who knows? I think Android is definitely likely to clean PALM’s clock, and possibly RIM’s too. But while it looks exciting and all, it also looks very fiddly. Do I want “widgets”? Whatever the hell they are. Do I want my phone constantly bleeping at me with the tweets of distant acquiantances I met once in a bar and don’t know how to tell to sod off, do I want Facebook offers of fricking virtual Bonsais and the latest appeal to stop dogs being used as shark bait force fed to me while I am in meetings or trying to play minesweeper? I suspect Android will be a mess; will all the apps work on all the different hardware configs of the thousand different manufacturers in the ecosystem? How will it work with the Verizon app store, the Vodafone store, the Google-hosted app store etc? Will it be as crap as Gmail (Baruch still has terrible problems using Gmail)? Will it actually have porn? And most importantly, will Google be able to pay it the consistent attention it deserves, outside of brief spurts of focus like we got this week? Prioritizing everything at the same time in one’s quest to organise the world’s information must be hard.

My current thinking is that Android manufacturers probably come to dominate the non-Apple part of the market, but probably don’t flatten the trajectory of iPhone adoption. Apple has many things it can do to step on the gas if it looks like someone is catching up: accelerate the end of operator exclusivity, create a portfolio of devices at different price points and/or, worst of all, decide to accept a lower gross margin, a merely impressive 50% rather than the quite astonishing 60% they are supposed to be getting, and cut price.

But let’s hope, as I said, that I’m wrong.

Where’s the iPorn?

Baruch is slowly coming to terms with the ghastly truth. Apple is closing down everyone else in the smartphone market, and it seems that nothing can stop it.

For over 10 years the mainly European giants of wireless, the operators, equipment and handsets makers, touted the bright sunlit uplands of our 3G mobile internet future their products would lead us to. Well, they didn’t. Total fail. Handset makers never got their act together, never worked out how to make it easy to use the interwebs. Meanness, fear and general hopelessness meant operators never spent the capex; making fat margins, no-one wanted to rock the boat. Equipment makers were slow to release the fastest network upgrades. Everyone was culpable in their inaction, and until about 2 years ago it looked like we were never going to get anything like what we had been promised in the powerpoint presentations.

But now we are there; look around you at all the people browsing the web on touch screens, using mobile apps, downloading music and watching video. It took an outsider, the least Spinozist company in the world, and an (overpriced) PC maker to boot to make it happen. We have to face facts: the mobile internet has been created, and is now owned and controlled by, Apple, and we owe them a debt of gratitude. Those who know Baruch will realise how nauseating it is for him to write that.

Now read on to find out why all this is in fact a Bad Thing:

Continue reading

Defending the Squid

The Blogotariat is up in arms on the subject of Goldmans latest evilness-itude. Goldman Sachs, apparently, blatantly favours clients that pay them more money. Baruch is shocked. And so we should all be. The tone of the original article on the subject in the WSJ is strongly disapproving; here the tagline:

Critics say Goldman Sachs gives key trading tips only to its own traders and favored clients, hurting others who aren’t given the opportunity to profit from the information.

Apparently, GS analysts go into “huddles” with their salesguys, come up with short term stock ideas that may or may not totally chime with their formal ratings on the stocks. They may, in the case of Janus as cited in the article, sort of front-run ratings changes when the analyst says something like, “I like it more now” or “it may go up into numbers” or something. This stuff gets sent out in calls to high rolling punters like the big hedgies. According to a lot of bloggers (none of whom I note actually run any money, unlike Baruch) and those holier than thou twerps, the CFA brigade, this is a Bad Thing.

One can perform a reductio ad absurdiam on the more disapproving of the reactions: clearly Goldman Squid should be sending out every twinge every analyst feels on every stock under coverage all the time to everyone who pays GS any amount of money at all as well as those who don’t. This would mean everyone would be able to make lots of money all the time, in a completely fair and transparent way. Wouldn’t it.

Of course not. Actually, what GS is doing here really makes very little difference at all. Continue reading

Cisco earnings wildly overstated: management milks shareholders for fun and profit

The nexus between US share options and share buybacks is one where great evil lurks, dear readers. I’ve banged on about it before and got very little reaction, but even after all that Baruch got very cross indeed this week, when he finally took the time to get round to looking at Cisco’s fiscal 4th quarter results (belatedly it is true). Wankers! he yelled when he had a look at the guidance on share count.

Basically, Cisco bought $600m worth of its own stock in the quarter. This is a lot of money, obviously, about 30% of the net profit for Q4. The average number of shares out didn’t decline from Q3, which is odd, but potentially explainable if Cisco bought back all those shares towars the end of the Q. Except they also guided to a  flat share count next Q. What the fucking hell did they do with that $600m then? Answer: the management used that money, shareholders money, to enrich themselves and their colleagues and hoped we wouldn’t notice. By and large, we haven’t.

Prof Lazonick of UMass sort of has, in a recent article for Business Week (HT Abnormal), but at the same time he misses the true perniciousness of share buybacks.  He thinks they are merely a waste of money, which could be used for something more wholesome than merely enriching shareholders.  The Prof points out that in the past few years IBM bought back lots of shares as it replaced good old American workers with Indians (apparently that is a Bad Thing because Americans are Better People). Drug companies buy back shares wastefully, yet argue that they are strapped for cash enough that it would be a Bad Thing to regulate drug prices. Now-bankrupt or government-supported companies like GM and the banks wasted loads of money that could have staved off ruin by buying shares. From the perspective of class warfare then, which is where Prof Lazonick seems to be coming from, share buybacks are a weapon for use by fat cat capitalists to screw the workers and should therefore be banned. If only they did enrich shareholders.

While we can disagree on the class warfare thing, however, he and Baruch are each others’ running dog; both our conclusions are the same, which is that Something Should be Done about shitty buybacks. And Prof L. gets close to the heart of the matter when he says:

It is the executives themselves who frequently benefit from price boosts generated by repurchases—by selling their personal shares after exercising stock options

Close, but not quite the banana, however. Continue reading

The Worm in the Apple

 The blogosphere is buzzing with reaction to Jason Calacanis’s epic post on Apple’s uncompetitive practices. Basically, as concerns iPod, iTunes, switching off apps it doesn’t like or who it thinks are a competitive threat, Calcanis thinks that Apple is acting like a monopolist and should probably be investigated by the DoJ. His most telling points come in the comparison between the current behaviour of Apple and the ex-great monopolist Microsoft:

On iTunes:

Think for a moment about what your reaction would be if Microsoft made the Zune the only MP3 player compatible with Windows. There would be 4chan riots, denial of service attacks and Digg’s front page would be plastered with pundit editorials claiming Bill Gates and Steve Ballmer were Borg.

On Apple’s draconian apps policy for iPhone:

Imagine for a moment if every application on Windows Mobile or Windows XP had to be approved by Microsoft–how would you react? Exactly.

On banning other browsers on the iPhone

Apple was more than willing to pile on after Microsoft’s disasterous inclusion of Internet Explorer with Windows. In fact, what Apple is doing is 100x worse than what Microsoft did. You see, Microsoft simply included their browser in Windows, still allowing other browsers to be installed. In Apple’s case, they are not only bundling their browser with the iPhone, but they are BLOCKING other browsers from being installed.

The standard Apple response to all this is that the restrictions Apple places on its products are necessary to ensure the quality of the user experience, that Apple deserves to be paid for the innovations it has brought to the marketplace and the consumer freedom it has enabled to use things like the mobile internet, to make online music easy and fun to use etc. But these remain the classic arguments of all monopolists, and are identical to the ones Microsoft used back in the days it was being investigated.

Baruch has often thought of what would have happened had Apple actually won the market share wars of the early 1990s; its instincts are much more controlling than Microsoft’s. Would we really have had an open-source internet? Would we really have had all the innovation spawned by cheap and ubiquitous computing?

Needless to say, this is not being well received by the hordes of Apple aficionados, the self-confessed fanboys. Baruch is constantly amazed at the level of brand loyalty Apple has managed to instil in its punters. I certainly don’t feel the same way about my crappy old Toshiba (although I would be cross with anyone who disparaged my Subaru).

Count me firmly in the Calcanis camp on this. As every reader knows, I make no secret of my dislike of the company, for very much the same reasons Calcanis does. Reader Verec, in the comments attached to the last post, accuses me of “anti AAPL bias.” But “bias” is a loaded word. Is a well thought out position against something, a consistently held position, bias? For those utterly convinced of the righteousness of the other, the pro, side, it may appear so. And that is probably why it is generally very hard to have a proper conversation about Apple on the interblogs.

At the risk of throwing lighter fluid on the flames, I blogged this on Apple, almost 2 years ago:

. . . I do so very strongly dislike Apple as a company. They sell high quality hardware it is true, but so overpriced; you pay a premium to be unable to use 90% of the world’s software without running some other complex program to do so. I hate the cutsie-coo operating system and the self satisfied “pop” when you close a window. I find the advertising unbelievably irritating, with its “Think Different” slogan, which when you think about it is a pean to its lack of market share; if they had managed to sell more Macs than PCs would they be telling us to “Carry on Thinking the Same” to make us buy more Macs? More than that, I pity the ponytailed, smug, pseudo-individualist, and above all gullible Apple fanboys, who all believe they are part of some greater social movement representing god knows what but who are in fact the victims of some corporate succubus which cares not a jot for them except how much more they can milk them. And the fanboy’s anger at the Wintel axis ignores the fact that the only thing which kept the company afloat during the dark times was Microsoft’s charity; that and the need to pretend that Windows was not in fact a monopoly.

No, Apple is the antithesis of what a Spinozist technology company should look like: closed, not open systems; overly pleased with itself and arrogant; and its advertising and brand values appeal to the grossest of the Passions: envy, pride, confusion and fear. In their defence, the flip side of their arrogance is a certain appealing audacity. The company from time to time (but not as often as we think) creates attractive and innovative products. But net net they have to go in the Stupid Cartesian bucket.

It’s nice to finally have company. And now we have that out of our system, let’s hope that ‘s the last blogpost about Apple here for a while.

Apple fails the Cafe Table Test

So we got the new iPhone. Baruch predicted this February (long before anyone on the sell side opined about it) that the launch of iPhone 3 would spell the likely end of the good times for Apple in the smartphone space. They had run out of ideas, he said:

Apple can up-spec: it could add a better camera, a better processor, boost memory capacity, or fluff the OS somehow. At the same time it would cut the price of the old model. This is what they will probably do this summer.

Well, this is exactly what they did a couple weeks ago. And this weekend we see the debut of the new iPhone 3GS, S for “Super”, or “Speedy”, or maybe just  ”Something”. You get faster chips, more memory, a compass, and video recording.  This will set you back $200 for 16gig NAND, and $300 for 32 gigs, with the requisite 2 year contract from AT&T. Anything you ever wanted to know about iPhone 3GS you can read here.

Meranwhile the old iPhone gets a price cut, to $99 with 2 year contract in the US, and deeper into free in Europe (where it was already), with a cheaper contract: EUR44 in Germany for example where before I think it was EUR60. Canadians will get still screwed and pay more than anyone else for the same thing; just not quite as much as before.

But here’s the problem, which I hinted at in the link above: the dirty secret of high end handsets is that they are bought as much to impress as they are bought to be functional. Smartphones in 2009 have replaced the stereos of the 1980s as the arena where a certain type of male competition is decided. Early adopter nerd fanboys still imagine that they will become more attractive to the opposite sex with the latest smartphone, and pecking orders in their social circles are partially determined by the changing status of a never-ending flow of constantly higher-specced gadgets. This is why people camp outside Apple stores. They may be dying to finally be able to use cut and paste, hoping their lives will be suddenly fuller, but I submit they are equally keen to be the first in their urban tribe to flash the latest iPhone around in the blessed 2 weeks before anyone else they know can get one.

The problem of the iPhone 3GS is that it fails the cafe table test; can someone tell that you’ve upgraded by looking at it? No. It looks almost exactly the same. Apple is asking you to pay up to $200 extra for minor feature tweaks, when what most people really need to get for that kind of money is a phone that shows to women and men passing by your cafe table, handset ostentatiously displayed, that you are of high status, and possibly worth shagging, or sucking up to.

You laugh? Ask Ed Zander, the man who killed Motorola with the RAZR and its clones. Back in 2005, the RAZR phone was the only one a thinking, style conscious person could possibly buy, at least for a while. It was shocking in its thinness, its style, while retaining the specs of similarly priced, and now suddenly obsolete, thick handsets. They sold 100s of millions of RAZRs, while most mainstream models do well if they rack up 5-20 million units in their lifecycle. Then they made RAZR variants and updates, and cut the price of the RAZR; this didn’t go so well. The unique selling point of the RAZR was its style, the thin thing. The new RAZRs looked more or less like the old RAZRs, had slightly higher specs, but cost $100 to $200 more. There was no point trading up; sales of RAZR remained high, updates like the KRAZR and SCPL never took off. Meantime the competition was catching up; Nokia and Samsung were doing “thin”, but with better specs and pricing. Motorola had to keep cutting price to maintain volumes and scale and cram the channel to keep making its quarters and maintain its stock price, hoping that something would happen to break the vicious circle. But eventually revenues collapsed with ASPs, and sales channels, now stuffed with RAZRs they could no longer sell, swore off Motorola for life. Moto=toasto.

Motorola failed the cafe table test. Now Apple has given up on it as well. I think cost conscious punters are going to buy old iPhone and spurn 3GS. Meantime the opposition are catching up. Android offers at least a similar browsing experience, for cheaper. Samsung’s Omnia HD is a shit smartphone but looks like an iPhone, has touch screen and mega mega pixels on its camera, while the iPhone has only got 3 of them. The Pre has fanboys trembling with anticipation and Palm could sell loads of them if they could actually make any that work. Nokia is still crap at smartphones but is trying, very trying, and has hired a whole bunch of younger Finns to cover the conferences of the earth making noises about social networking. Apps, yes: iPhone has a huge lead. But it’s not even the first innings in that game, and Android has apparently an easier SDK and better developer economics. Eventually every manufacturer is going to carry the key apps that everyone uses, even if Apple may still own the long tail. And more and more of these machines look like iPhones, essentially the same big screen, rounded edges, with a couple of buttons at the bottom. 

So Motorola-isation is a clear and present danger for Apple here. This second half of 2009 is going to see the first big battle of well-supported heavyweight smartphones, and I am not sure that Apple has done enough in the 3GS to live up to expectations. They may have lost the ability to surprise. Old 3G iPhone is still better than most of the other machines out there, and at $99 it will sell like hot cakes, but soon it won’t be, and if they can’t migrate users to more expensive units, what are they going to to then? Getting off these operator exclusives could be a start.

We’re all individuals

Market Folly (HT Abnormal Returns of course) yesterday wrote an interesting post about the benefits for a promotional company management of having a “prominent investor”, a Buffet, a Paulson or some bigtime hedge fund operator to give his imprimateur of approval, viz:

It only takes one stamp, and poof, their image is revamped and a tiny sense of confidence is restored. That’s the power a prominent investor can have on a company’s market image. They can turn heads, begin to sway market sentiment, and start to change the negative perception. . .

Jay, MF’s proprietor, is quite right, of  course. Not so long ago one of Baruch’s stocks doubled on the day Warren Buffet took a stake in it, and for no other reason. But it is a regrettable tendency.

Baruch’s professional life is founded on the principle that markets are really not efficient and that inefficiencies persist. One of the way in which they do, I am convinced, is this burning desire people have to follow what they perceive to be ”smart money”. Baruch’s rule is never, ever, ever buy a stock just because someone else has. That doesn’t mean not being aware of who owns what; that’s often key information (and MF is invaluable for that), especially if you know they’re in trouble and their money is being taken away. And Baruch has to admit that after having done the work on a stock and finding Fidelity is following you in on it can give a certain gratifying warmth, and is often worth about 20%

But there are many ways in which following “Smart Money” into stocks in an unexamined way will get your faced ripped off. Here are just a few:

  • Timeframe: you have no idea how long that investor will be in the stock. He could only be holding out for a 30% gain for instance, and in the lag between when your hero got in and you found out about it, it might have gone up 20%. He may already be on his way out. If it’s gone down, he may have stopped it out already. And then why were you in it again?
  • Why is he actually in it? What if it is not an alpha position, rather  a hedge to offset a short, which is where your hero thinks he’s going to make his real money? What if he has offset it with an option position and is not, in fact, net long at all? Again, the disclosure that some guy has this stock on his books may mean very little. And think hard about why he may have told people he likes it? Pump and dump, baby.
  • What if your investing guru is not actually that smart? Howard Lindzon doubts that smart money actually exists, and I believe him. Buffett followers took a bath recently; anyone who followed disclosures in the big hedge funds last year lost money with them. By the time an investor has become one of “The Smart”, it’s often a very good time to get off the bus; these things move in cycles, as the Ancients knew well. I had a great year in 2007 and looked like a genius. If you had invested alongside my end 07 disclosed positions in 1H 08 you would not have been so pleased. Plus you ‘d have still been in as I was getting out. Hell, you’d have been buying the stocks I was selling!

Uncritically following other investors is not just intellectually supine, craven and inherently lazy, I think it is responsible for the “crowding” phenomenon which contributed to the collapse of hedge funds in 2008. Walk among their circles in mid 2008 and all you would here about was “Maverick’s big in X” or “Viking loves Visa” and in many cases this was enough for the others to get in too. Now, it’s all about avoiding “hedge fund hotels”, especially on the short side. Tracking others’ investments is downright unfashionable.

Basically, the message is, do your own bloody work, and lots of it. Stock market investing is a deeply deeply subjective game, and pretending it can be objective and labour-free is the path to leveraged explosions. It’s subjectivity is at the core of the whole pricing mechanism. You are smart money, or have the potential to be if you concentrate on what you know and can know with more work. If you can’t do your own work, invest in a fund or do something else with your money, real estate or hell, I don’t know, vintage cars or something.

Crook revisited

Crooked Timber (no pun intended harhar) get stuck into Clive Crook as well on the subject of torture, but is I think slightly unfair to the argument he makes. I don’t think Crook is defending waterboarding, or saying it is unimportant. “Waterboarding is shameful,” Crook says, “and one may leave it at that”. We should take him at his word.

No, Crook’s key idea is similar to Tyler Cowen’s, that there are potential costs of investigating torture that we should be aware of, and such are the depths, presumably, to which the US body politic has sunk, actual prosecutions in the US may result in the de facto legalisation of future torture undoing the progress that has been made in ending it. Special allowances must be made. Baruch’s response is: don’t worry, we know. The costs to the republic of inaction are worse, the risk is worth taking. Let’s investigate, if need be prosecute, and do it with open eyes.

Henry at Crooked Timber suggests in the comments to his post that Crook will be responding to his critics on this. Let’s hope so. I am intrigued whether he would still maintain investigations are a bad idea, were it somehow proven that waterboarding is torture and illegal? His argument seems to depend on the waterboarding of prisoners not being a crime. I think this is somewhat shaky ground.

One person who does seem to understand what is at stake is Spinozist Spanish judge Baltasar Garzon, who is going ahead with his own investigation of US torture. As Augusto Pinochet can attest, this guy is no joker. I think we can anoint him a Fellow Collegiant, Bento, don’t you?