MOOD OF IRAQI PEOPLE

From Daniel Drezner's blog... A Chicago Tribune interview of Yass Alkafaji, who went to Baghdad to "serve in the Coalition Provisional Authority as the director of finance for the Ministry of Higher Education."

"SENATE OKS FOUR-YEAR BAN ON NET ACCESS TAX"

By Declan McCullagh
Staff Writer, CNET News.com
April 29, 2004, 5:07 PM PDT

The U.S. Senate on Thursday voted to renew a four-year ban on taxes on Internet connections such as DSL and cable modems instead of a competing plan that would have made a moratorium permanent.

By a 93-3 vote, the Senate adopted a compromise proposal favored by state governments, which argued that a perpetual ban would deprive municipalities of vital tax revenue and amount to an unfair subsidy for telecommunications companies. (full article)

SANDY BERGER LAYS OUT A PREVIEW OF KERRY'S FOREIGN POLICY

Berger is John Kerry's foreign policy advisor. I don't agree with his world view or policies, so I might post up a critique of this article later. At least Berger is articulate and clear, and obviously Kerry is not reading from Berger's notes because he sounds like he doesn't know what his positions are or doesn't want to commit to any of them.

Foreign Policy for a Democratic President

By Samuel R. Berger
Foreign Affairs, May/June 2004

Summary
"By stressing unilateralism over cooperation, preemption over prevention, and firepower over staying power, the Bush administration has alienated the United States' natural allies and disengaged from many of the world's most pressing problems. To restore U.S. global standing--which is essential in checking the spread of lethal weapons and winning the war on terrorism--the next Democratic president must recognize the obvious: that means are as important as ends." (full article)

FREE SPEECH IS BEAUTIFUL, UGLY, AND IDIOTIC... WHO IS RENE GONZALEZ?
The Price of Freedom... Pat Tillman is a Hero

From James Taranto's Best of the Web Today. Below is a quote by Rene Gonzalez on the death of Pat Tillman. It's amazing how moronic and incredibly stupid some people are in the world today. I can accept people not agreeing with the war in Iraqi, hating President Bush, angered at American arrogance in our foreign policy, or even the simplistic thinking that allows some to chat "No blood for oil." But to call a man, who gave up his life to protect the freedom of others (whether you agree with the method or not) and who took a principled or moral approach to life (e.g. not swayed by money), "an idiot" and to say that he "got what was coming to him" reflects such a low-level of thinking it is disturbing that the University of Massachusetts in Amherst accepted him as a graduate student.

To make such a statement shows his ignorance in world history and the very nature that separates human beings from the rest of the animal kingdom. Mr. Gonzalez ignores that tyranny has only ended by force throughout history and freedom was always at the cost of human lives. Tillman obviously was not "defending or serving his all-powerful country from a seventh-rate, Third World nation," but freeing a nation from a sadistic dictator and fighting against terrorist without boundaries. If you have power as an individual or nation, you will become corrupted by holding too fastly and consumed by it until it rots your soul as with the Roman Empire and many individuals throughout history. Or you can see through a selfless eye the betterment of the world by spreading the gift of freedom because when you think about what we all take for granted it only taste much sweeter, and you are compelled to share it with others. Again, you might not agree with the manner in how this principle is carried out, but I believe you should respect, appreciate, and not ignore the value of it. It is not arrogance that leads most people to such acts, but joy and fullfillment. Only qualities such as indifference, laziness, fear, and selfishness would hold people back in sharing such a gift. America is called "the land of the free and home of the brave" because it has sought to spread that freedom to the world and truly knows the price of freedom.

Mr. Gonzalez ignores the higher qualities and principles that make us human and separate us from animals. When he questioned Tillman's intelligence in joining the army and forgoing millions of dollars, he placed us back to the lowest levels of human development. He assumes we should be satisfied with three meals a day, having a nice home and car, or even the higher calling to have an education. Maybe it is ultimately satisfying for him to have a position of power in teaching the youth of our nation, or corrupting their intellectual capabilities as he might one day. There are higher principles of sacrifice and selflessness that he forgets or doesn't know about or care to know about. These are the ideals that truly changed the world and continue to make it a better place to live. For every John F. Kennedy we need a Mother Teresa, for every Bill Gates we need a Cesar E. Chavez, for every Bill Clinton we need a Nelson Mandela... For every leader that made an impact in the world today in the spotlight or for their own gain (not negating their accomplishments and selfless acts), there were people that sacrificed their comfort, worldly success, or potential personal achievements for the greater good of mankind. Only later in life were people such as these recognized, and Pat Tillman is of the same fiber.

When I read such words from people like Rene Gonzales, I fully understand and believe the statistic that 20%-30% (forgot exact percentage) of pro wrestling fans believe that what they are watching is real. This is the same fiber that he is from.

Best of the Web Today, April 29th
Free speech is one of the glories of American democracy, but every now and then you listen to what people are saying and you wonder for a moment if it's all worth it. This is one of those days...

And one Rene Gonzalez, a graduate student at the University of Massachusetts in Amherst, weighed in on the combat death of Pat Tillman, the football star turned Army Ranger, in Afghanistan:

For people in the United States, who seem to be unable to admit the stupidity of both the Afghanistan and Iraqi wars, such a trade-off in life standards (if not expectancy) is nothing short of heroic. Obviously, the man must be made of "stronger stuff" to have had decided to "serve" his country rather than take from it. It's the old JFK exhortation to citizen service to the nation, and it seems to strike an emotional chord. So, it's understandable why Americans automatically knee-jerk into hero worship.

However, in my neighborhood in Puerto Rico, Tillman would have been called a "pendejo," an idiot. Tillman, in the absurd belief that he was defending or serving his all-powerful country from a seventh-rate, Third World nation devastated by the previous conflicts it had endured, decided to give up a comfortable life to place himself in a combat situation that cost him his life. This was not "Ramon or Tyrone," who joined the military out of financial necessity, or to have a chance at education. This was a "G.I. Joe" guy who got what was coming to him.

Cheers to UMass president Jack Wilson, who, the Boston Globe reports, issued a statement calling Gonzalez's remarks "a disgusting, arrogant and intellectually immature attack on a human being who died in service to his country."

In case you're still wondering if free speech is worth it, yes, it is. But there are times when it would be better if people had the wisdom to remain silent.

THE VILLAGE VOICE SPEAKS UP... KERRY MUST GO!

James Ridgeway gives some practical advice to Dems nationwide. True. At this rate, Kerry's just going to sink himself. Maybe the Bush administration will trip and fall, but that is a horrible strategy to hope and wait. It's too early for Hillary to run since she needs a few more years to build up real momentum. Dean is a loon, so Edwards seems like the best candidate. Where are you Bill Bradley? Anyway, I posted the whole thing since it was short... like that makes a difference with me.

John Kerry Must Go
Note to Democrats: it's not too late to draft someone?anyone?else

The Village Voice
By James Ridgeway
April 27th, 2004

WASHINGTON, D.C.? With the air gushing out of John Kerry's balloon, it may be only a matter of time until political insiders in Washington face the dread reality that the junior senator from Massachusetts doesn't have what it takes to win and has got to go. As arrogant and out of it as the Democratic political establishment is, even these pols know the party's got to have someone to run against George Bush. They can't exactly expect the president to self-destruct into thin air.

With growing issues over his wealth (which makes fellow plutocrat Bush seem a charity case by comparison), the miasma over his medals and ribbons (or ribbons and medals), his uninspiring record in the Senate (yes war, no war), and wishy-washy efforts to mimic Bill Clinton's triangulation gimmickry (the protractor factor), Kerry sinks day by day. The pros all know that the candidate who starts each morning by having to explain himself is a goner.

What to do? Look for the Dem biggies, whoever they are these days, to sit down with the rich and arrogant presumptive nominee and try to persuade him to take a hike. Then they can return to business as usual?resurrecting John Edwards, who is still hanging around, or staging an open convention in Boston, or both.

If things proceed as they are, the dim-bulb Dem leaders are going to be very sorry they screwed Howard Dean.

"DA VINCI CODE" DEFIES HUMAN NATURE & REASON

I mentioned a while back that I would write something on Dan Brown's "The Da Vinci Code," but I guess it slipped my mind and now laziness has set in once I came across the review below. So my ambitions for a lengthy, critical review has become a post of another and a few sentences more.

Anyways, like Mr. Miller below, I enjoyed the book, but not as immensely as the first half of my reading. As I became engrossed in the story, a little more than halfway through the book a pin punctured the air of excitement and interest for me. This pin wasn't the "hogwash" as Mr. Miller describe it because I accepted that the book would contain twists of history or another perspective on Christianity. It was fiction and I treated it as such. What let out the steam was the idea that the Catholic Church and believers of this faith would fiercely hold a secret that proved the foundation of its religion a great deception.

My gut reaction and question was, "Why would anyone pretend to live such a lie? Their lives would be meaningless and no one would want to live such a life."

As I thought about all the major religions, whether the basis of it is true or not (yes, to each his own. i am a biased christian believing there is only true savior and road), the core leaders (e.g. pastors, priests, rabbis, monks) and its devout followers believe it to be the truth. This is why you have martyrs, suicide bombers, and others willing to go to extremes for their religious beliefs even to the point of death. They truly believe in the core of their religious doctrine.

So why would the Vatican care so much about the "truth" of Jesus and Mary becoming public? When and if these leaders of the Catholic Church found out the dark secret of their savior, I guarantee you that their heads would spin and their hearts would be crushed. Money did not bind them to their life-long commitment of priesthood. Not fame, sex, or drugs. Power? Not initially at least for some. So for some abstract ideal of "good" or "truth," they would fight and go to extremes to protect a lie? I would understand it better if it was a reason based on financial wealth or gain, such as the Enron scandal.

Another aspect of human nature Brown assumes we will take for granted is our inability to keep a secret. So for hundreds of years, not one soul told or wrote down this great deception of the Catholic Church? The best recent example is when Charles Colson, President Nixon's "Hatchet Man" during the time of the Watergate scandal, stated that a group of the most powerful people in the world could not keep quiet and hold it to themselves even though their careers and the presidency was at stake. Brown's book ignores basic human qualities that have been proven before the storyline in his book. Far before the birth of Christ.

Anyway, if you do a little research whether sourced from Christian researchers or secular institutions, you will also find Brown's "evidence" on very shaky ground. It still is a decent book. Not great writing, but it keeps you going at least until the midpoint of the book so I would recommend it.


Code Breakers
"The Da Vinci Code" and its discontents.

THE WALL STREET JOURNAL
BY JOHN J. MILLER
Friday, April 23, 2004

The best thrillers are unputdownable--a word that many readers surely attach to Dan Brown's "The Da Vinci Code." It's difficult to ride a subway or walk through an airport these days and not see somebody engrossed in its page-turning tale of murder and conspiracy. In 13 months since publication, the book has sold more than seven million copies.

But partway through reading "The Da Vinci Code," I did put it down. Then I logged onto the Web and summoned an image of "The Last Supper," Leonardo Da Vinci's famous painting. I wanted to take a long and hard look at it, because Mr. Brown's plot turns on something Da Vinci supposedly portrays.

The novel's claim is startling: The person seated to the immediate right of Jesus, it says, is not John the Evangelist but Mary Magdalene, who, by the way, is God's daughter-in-law--i.e., the wife of Jesus. "Sophie made her way closer to the painting, scanning the thirteen figures," writes Mr. Brown at a moment of revelation in his story. "The individual had flowing red hair, delicate folded hands, and the hint of a bosom. It was, without a doubt . . . female."

Now, "The Last Supper" may be grainy and imprecise, but the most that might be said is that John looks vaguely effeminate, like a biblical-era metrosexual. For Mr. Brown, however, the John-is-really-Mary observation is a jumping-off point for far grander claims. One of his characters insists that "almost everything our fathers taught us about Christ is false." Did you know, for instance, that Jesus and Mary had a daughter?

If it sounds like hogwash, well, that's because it is--the purest fantasy. By now, however, the book has become more than a mere diversion--its amazing popularity has made it a cultural phenomenon that has spawned magazine cover stories, an ABC News special and the inevitable forthcoming movie. More important, there is something in Mr. Brown's cabalistic earnestness that urges readers to take his flight of imagination seriously. That is the book's vexing subtext: Maybe this is true. Mary Magdalene may not be the wife of Jesus, but Dan Brown is a kindred spirit of Oliver Stone.
So it comes as no surprise that a half-dozen publishers are now issuing books to crack the code, so to speak. What they share, other than a desire to capitalize on Mr. Brown's success, is a notion that "The Da Vinci Code" raises more questions than it answers and a conviction that readers of the novel will want to know more.

The best of the bunch is "Breaking the Da Vinci Code" by Darrell L. Bock, a professor at the Dallas Theological Seminary. Grounding his arguments in scholarship and logic, Mr. Bock is concise and persuasive on all the key points: No, Jesus was not married; no, Jesus did not have children; no, the Council of Nicea was not a sham. Mr. Bock shows that Mr. Brown's central contentions are based on evidence so thin that calling them conjecture would be a compliment.

The fundamental problem with "The Da Vinci Code" is that it subjects the traditional story of Jesus to unforgiving scrutiny, like an inquisitor who simply won't accept what his tortured victim is screaming at him. Then it proposes an elaborate thesis based on wide-eyed speculation, claiming that a few scraps of ancient writing--e.g., the so-called Gospel of Philip, a Gnostic text written in the third century--assert things that they barely even hint at. If this represents an assault on two millennia of Christian thought, as some have claimed, then the faithful can rest easy. They've survived Galileo and Darwin; they'll outlast Dan Brown.

"The Da Vinci Code" may even perform a useful service to true believers if it compels them to explore the roots of their religion. Whatever else the book has done, it has taught many people--accurately--that Mary Magdalene wasn't a prostitute. Others are reading biographies of Leonardo Da Vinci and studying "The Last Supper." This is not a bad thing.

Maybe there is a deeper matter as well, though Mr. Brown almost certainly doesn't intend it. Readers of "Paradise Lost" usually fall for Satan. That's not heresy but part of Milton's higher purpose, which is to show that we're all vulnerable to the glamour of evil. The whole point is to feel its pull and then reject it.

Likewise, "The Da Vinci Code" is a seductive tale--and a rollicking good one. The challenge is to suspend your disbelief while you're enjoying it, then to set it down and remember that you can't put your faith in everything you read.

Mr. Miller is a writer for National Review.

GOOGLE'S EMAIL UNDER FIRE

One view on the controversy surrounding Google's new email system that is about to launch. It provides 1GB of memory for free (i.e. Hotmail gives 2MB and Yahoo! gives 4MB) in return for targeted ads based on the user's email content. Privacy advocates are going nuts on this.

I've been beta testing the service (thanks, anne!... friend at google) and I really don't care about the ads. I don't think they will be intrusive moving forward and the ads are definitely worth 1 GB of memory... 1000MB! Also the email system has some cool functions. When I sent out a mass email to about 50 people yesterday requesting their cellphone numbers since I lost my cellphone and their numbers this past Saturday, it grouped all their responses and my responses together. Similar to having the whole "discussion" in a file cabinet within your inbox. To explain it better, my initial email, all their responses, and my replies were grouped into one line within my inbox. You click on that line and it opens up the whole string of emails, which you could read by clicking through an indexed layer of emails. Sort of like a library card catalog. Very cool. Anyway, the article I was talking about is below:

Gmail and its discontents

CNET News.com
By Declan McCullagh
April 26, 2004


The sharp reaction to Google's announcement of the Gmail service earlier this month underscored a deep divide in the tactics and strategies employed by Internet privacy activists.

Privacy groups like the Electronic Privacy Information Center in Washington, D.C., and London-based Privacy International denounced Gmail as an intrusion that must not be permitted to exist. (full article)

RUDY GIULIANI, AMBASSADOR TO THE U.N.?
From Best of the Web Today... James Taranto

Rudy Belongs at Turtle Bay
The position of U.S. ambassador to the U.N. is coming vacant, now that President Bush has appointed its current holder, John Negroponte, to the newly created post of ambassador to Baghdad. If President Bush wants to be bold, why doesn't he tap Rudolph Giuliani as Negroponte's replacement?

The New York Post floated the idea last week, and it deserves serious attention. Giuliani seems just the right man for the time--a time when America, the only country capable of doing the hard work of protecting Western civilization from Islamic terrorists, is constantly at risk of falling into the quagmire of U.N. diplomacy.

Not only would Giuliani be a bully-pulpiteer in the great tradition of Jeane Kirkpatrick and Daniel Patrick Moynihan, but he would bring the penetrating eye of a former prosecutor to the continuing Oil-for-Food scandal--which may well turn out to be the corrupt reason why countries like France and Russia fought so fiercely to keep Saddam Hussein's murderous dictatorship in power in Iraq. To be sure, some of Giuliani's critics, including our colleagues at The Wall Street Journal, are of the view that he was overzealous and unfair in prosecuting white-collar crimes. But that's all the more reason why he's a perfect fit for the U.N., which certainly doesn't suffer from an excess of prosecutorial fervor.

Apart from the president himself, it's hard to think of any more powerful spokesman and symbol for America's war on terror than Rudy Giuliani, and not only because of his inspired mayoral leadership after Sept. 11. Giuliani took a stand against terror even when it was unpopular. In 1995 he ordered security to eject Yasser Arafat from Lincoln Center, in an era when the terror boss was being feted at the White House and lavished with Nobel Peace Prizes.

The politics of a Giuliani appointment seem perfect for Bush as well. At the 1984 Republican National Convention in Dallas, Jeane Kirkpatrick gave a rousing foreign-policy speech in which she, a lifelong Democrat, denounced her party for abandoning its erstwhile policies of strength:

When the San Francisco Democrats treat foreign affairs as an afterthought, as they did, they behaved less like a dove or a hawk than like an ostrich--convinced it would shut out the world by hiding its head in the sand. . . .

When the Soviet Union walked out of arms control negotiations, and refused even to discuss the issues, the San Francisco Democrats didn't blame Soviet intransigence. They blamed the United States. But then, they always blame America first.

When Marxist dictators shoot their way to power in Central America, the San Francisco Democrats don't blame the guerrillas and their Soviet allies, they blame United States policies of 100 years ago. But then, they always blame America first.

The American people know better.

Imagine U.N. Ambassador Rudy Giuliani traveling across town to the Republican National Convention to deliver a speech on the "Boston Democrats," and you begin to see why this is such a brilliant idea.

DEMOCRACY BECOMING MORE SILENT IN HONG KONG
Beijing Tightening Its Fist... Reform Will Have to Wait

I guess democracy in China will take a little longer, and the tide of influence probably will not come from Hong Kong now.

China Rules Out Hong Kong 2007 Election

By MIN LEE
The Associated Press
April 26, 2004

HONG KONG (AP) - China's most powerful legislative committee ruled Monday that Hong Kong will not have direct elections for its next leader in 2007, crushing hopes in the Chinese territory for a quick move toward full democracy.

Under the ruling, the territory will be allowed to make changes to its electoral methods but only gradually, said Tsang Hin-chi, a Hong Kong delegate to the Chinese National People's Congress Standing Committee.

The decision, confirmed later by China's Xinhua News Agency, ruled out what many Hong Kong people have been demanding: the right to democratically elect a successor to the unpopular Chief Executive Tung Chee-hwa in 2007 and all lawmakers in 2008.

Tung is seen as one of the biggest impediments to Hong Kong's achieving democracy. The former shipping tycoon was appointed to his position by an 800-member committee that tends to side with Beijing.

In remarks carried on Hong Kong television, Tsang said the mainland's Standing Committee voted almost unanimously to approve its latest guidelines for Hong Kong democracy, with 156 votes backing the ruling and one abstention.

Tsang said the Chinese lawmakers had acted "according to Hong Kong's actual situation'' and that they had listened to Hong Kong public opinion.

Hong Kong lawmaker Fred Li accused Beijing of "dictating Hong Kong policy'' without regard to public opinion. Li said the decision violated Beijing's promise to give Hong Kong a great deal of autonomy when it was returned from Britain to China in 1997.

Ordinary Hong Kong residents now have no say in choosing their leader and they pick only some lawmakers, although Hong Kong's mini-constitution, the Basic Law, holds out the possibility of direct elections of the leader in 2007 and all lawmakers in 2008. The Basic Law sets out full democracy as an eventual goal but sets no timetable.

"We will not give up the fight for democracy,'' Yeung Sum, the leader of Hong Kong's opposition Democratic Party, said at a news conference.

Tung said he realizes Beijing's decision will upset many of Hong Kong's 6.8 million people, but he urged them to "be calm and rational.''

Full democracy remains Hong Kong's goal, Tung insisted, but he would not offer any timetable.

Xinhua said Hong Kong's electoral methods could be changed in time for the 2007 and 2008 elections, although direct elections have been ruled out.

The Standing Committee shocked Hong Kong earlier this month by issuing a binding ruling that any electoral reforms must be approved in advance by Beijing. Hong Kong's unpopular leader Tung then proposed a set of nine guidelines that any reforms should meet, including keeping China's views in mind.

While Hong Kong residents will directly elect 30 of 60 lawmakers in the September elections - up from 24 last time - the other 30 will be chosen by elite voters from special interest groups, such as business leaders, doctors and bankers.

DIABETES WILL DOUBLE BY 2030
From the American Diabetes Association... Check Out Their Site

Thought I should post this up since some of my family members have diabetes.

Study Finds Diabetes Will Double in World by 2030:
Predicts Rapid U.S. Increase That Greatly Exceeds Prior CDC Projections

ALEXANDRIA, Va., April 26 /PRNewswire/ -- The number of people with diabetes worldwide will continue to increase at record levels through 2030, with the greatest relative increase in prevalence expected in the Middle Eastern Crescent, sub-Saharan Africa and India, according to a study published in the May issue of Diabetes Care. Researchers predict the number of people with diabetes globally will actually double over the next three decades and that the United States will experience a far more rapid increase than previously expected.

"The human and economic costs of this epidemic are enormous," concluded the researchers, from the World Health Organization and universities in Scotland, Denmark, Australia. "A concerted, global initiative is required to address the diabetes epidemic."

The three countries with the highest prevalence are expected to remain India, China and the United States -- as they are today. This new study projects an even higher increase for the United States than a 2001 study by the U.S. Centers for Disease Control and Prevention. That study projected the number of Americans with diagnosed diabetes would reach 29 million by 2050; this study estimates that there will be 30.3 million Americans with diabetes by as early as 2030. The most important explanation for the difference in these figures is that the CDC estimates were based on diagnosed diabetes (and therefore did not include the 33-50% of all people with diabetes whose diabetes is undiagnosed). The new study includes people with both diagnosed and undiagnosed diabetes.

Italy and the Russian Federation are expected to drop from the top 10 countries with the highest prevalence; they will be replaced by Egypt and the Philippines, according to the study's projections.

While diabetes is expected to increase in developing countries, mortality from communicable disease and infant and maternal mortality are expected to drop during the next 30 years. The authors predict this change will lead to higher proportions of deaths from cardiovascular disease as well as a great incidence of other diabetes-related complications, which will be particularly marked in developing countries.

What's more, the authors conclude that their projections may be too low, because they are based upon the prevalence of obesity remaining stable worldwide. In fact, the prevalence of obesity has been climbing substantially in recent years, even among children. Obesity is the leading modifiable risk factor for type 2 diabetes and is associated with the increase of type 2 diabetes among children.

The researchers strongly urge a "wider introduction of preventive approaches" for diabetes, since studies over the past several years have found strong evidence that lifestyle changes (such as losing weight and increasing physical activity), along with improved pharmacological treatments, can help reduce the risk of developing diabetes by nearly 60 percent.


Diabetes Care, published by the American Diabetes Association, is the leading peer-reviewed journal of clinical research into the nation's fifth leading cause of death by disease. Diabetes also is a leading cause of heart disease and stroke, as well as the leading cause of adult blindness, kidney failure and non-traumatic amputations. For more information about diabetes, visit the American Diabetes Association web site or call 1- 800-DIABETES (1-800-342-2383).

CHINA AND KOREA'S TECH PARTNERSHIP CONTINUES

Another joint venture between a Chinese and a Korean company. Chinese companies are hungry for technology, knowledge, and management skills, and many of the sources are from Korea. I believe some of it stems from a historical bond and a common bitterness by some against the Japanese. From FierceWireless:

SK Telecom, China Unicom launch mobile Internet portal

SK Telecom and China Unicom today officially launched a new mobile Internet portal joint venture called UNISK. UNISK offers 2,700 different types of mobile content in five categories for the Chinese wireless market including graphics, games, and mobile chat. UNISK has marketing partnerships with China's three leading wired Internet portals, SINA, SOHU, and Netease. The company plans to launch 10,000 titles by the end of this year. UNISK provides content from South Korean content providers including Neomtel, Danal, Mobile-on, Cynet, Mdata, Widerthan.Com, and U-angel. SK Telecom and China Unicom founded the company earlier this year. SK Telecom owns 49 percent of the joint venture while China Unicom owns 51 percent.

KERRY FLIPPING AGAIN... TO THROW OR NOT TO THROW
War Medals Coming Up Again... What is the Question?

Little Green Footballs refers to Drudge's scoop on the truth about to Kerry's actions about to be revealed by ABC's Good Morning Amerca.

I wish the Dems had someone at solid on his statements and convictions, so it wouldn't make this year's election process seems so stupid and trivial. How dumb can you be to flip-flop so much throughout your career in the age of video and the Internet? A fair amount of my Dem friends aren't excited about Kerry. For them it's more a vote against Bush. Only if Edwards was a bit more seasoned or Bradley had legs, then it would be an interesting and stimulating contest.

"GOOGLE OPENS TOKYO RESEARCH LAB"

An article of interest to me since the software company I'm helping out has multiple R&D centers too. I'm just wondering how Google maintains effective communications between all these centers and how they divide or allocate research projects.

OKAY, ANOTHER AWESOME GUY AT ESPN: BILL SIMMONS

I forgot if I ever posted Bill Simmons stuff here or not, but if I didn't I should have. His columns regularly crack me up and this one on the NBA playoffs and Stephon Marbury are so true. Sorry, Stephon, but I'm a Chicago boy not a New Yorker. Gotta post this section up for my readers who are bball fans:


And since there isn't much else to talk about other than ...

1. Kings-Mavs (hasn't played out yet)
2. Duncan-KG (ditto)
3. The Lakers (double ditto)

...and I'm not nearly drunk enough to write an entire column about Eduardo Najera ...

... let's discuss the Knicks.

They had Manhattan buzzing as recently as two months ago. That's the way it works in New York. They make the classic panic trade for Marbury, look good for a week in January and naturally everyone starts thinking about the Lakers in June.

You can guess where I stand. Right after Isiah Thomas was hired last December, I predicted in The Magazine that he would run the team into the ground. This franchise was already headed nowhere -- no cap space, no All-Stars, little hope. It was a situation thatcried for patience. Whomever took over for the Artist Formerly Known As Scott Layden needed to blow everything up, create cap room and start over. In other words, the Danny Ainge Approach -- clean house, make some panic trades, ignore the cap -- couldn't possibly work here.

The Jerry West Approach seemed like a much better plan. Take your time. Stockpile assets. Only deal from strength. Think four years instead of four months. And most importantly, don't panic.

Isiah? He panicked.

Unable to wait even three weeks after moving into his new office, Isiah pulled a Jim Fassel and pushed his chips to the middle of the table, dealing his few tradeable assets (two coveted Europeans, two first-rounders and cash) for Marbury and Penny Hardaway -- two more ghastly contracts -- in the process, blowing his long-term cap flexibility to smithereens and insuring that the 2006 Knicks would look exactly like the 2004 Knicks.

Seduced by Steph's pedigree and anxious for a change -- any change -- New York fans embraced the trade. It was like the current Bachelor becoming enamored with Trish, the trashy, conniving, homewrecking model who looks stunning in a cocktail dress. You can have a million warning signs, you can even have a friend planted in the house telling you this girl is sleaze ... and you still can't help picking her for the Final Six. Just to see what happens.

And yes, there's something about Marbury's game. He always makes you feel like his team has a puncher's chance, that he can catch fire at any moment, maybe even take over an entire game, win a series by himself, carry you a couple of rounds. Even though it hasn't happened yet. And may never will. But that potential gets people talking about the team. Gets the arena buzzing before games. Gets people calling into the Fan. Gets those blue No. 3 "MARBURY" jerseys moving out of the Pro Shop like hotcakes.

With all this commotion, it was easy to forget that, if this was a Texas Hold 'Em Tournament, Isiah had just gone "all-in" after two hands. Knicks fans happily chugged the Kool-Aid, conveniently ignoring the fact that their GM just mortgaged the next 3-4 years for someone who ...

A. Hadn't won a single playoff series.
B. Was playing for his fourth team in eight years.
C. Monopolizes the ball.
D. Didn't get along in New Jersey with one of the best players on the Knicks (Keith Van Horn), which meant there needed to be a second trade.
E. Only played unselfishly last season (when he was gunning for a contract extension).
F. Ditched a once-in-a-lifetime situation in Minnesota with KG.

Seems like a pretty big gamble just to sell some tickets and make the back page of the Post, right?

Again, New Yorkers didn't care. Back in January, I remember discussing the deal with my Knicks fan friends, spelling out exactly what had happened, then listening to them respond with the same thing: I don't care, I'm just happy they're interesting again. It was like watching a buddy who hadn't gotten lucky for a few months suddenly fall in love with a stripper.

They felt differerently after Isiah hired Lenny Wilkens -- apparently Red Holzman was the second choice -- then gave Van Horn away for Thomas and Mohammed, a classic "I'll give you a quarter for two dimes" trade. This had evolved into a soft, rudderless team built around a shoot-first point guard, flanked by mediocre defenders and guys who couldn't rebound or contend shots. I'm not even sure they run any plays. When Lenny holds up one finger, I think he's signalling that he needs to pee.

Anyway, the inevitable losing streak followed, along with the questions about Isiah and Marbury, as well as the birth of a new face: The Isiah Thomas "If I Look Angry Enough When I'm Watching This Blowout Loss, Maybe People Will Forget That I Brought Most Of These Guys In" Face. Well, you did.

Hey, we know about Isiah, who burned bridges in Detroit and Toronto, bankrupted the CBA and failed miserably with a talented Indiana team. Pretty cut and dry. But what about Marbury? How do you explain last year's remarkable season in Phoenix, when he reached his ceiling as a player and seemed poised to finish his career with the Suns? How could someone fall from "Franchise Player" to "Trading Block" in less than seven months? Could he ever regain the magic?

That's why, with the obvious exception of KG, Marbury was the most interesting player in Round One. Nobody knew what to expect. As Pierce and the C's proved last spring, the right player and the right crowd can be a pretty dangerous combination in Round One. You never know.

Alas, the Nets looked better than ever. And the Knicks looked downright dreadful. Especially Marbury. He spent the first half of Game 2 launching jumpers, rarely driving to the basket or getting his teammates involved. In the second half, with the game slipping away, he started penetrating and setting up Kurt Thomas and Shandon Anderson -- yikes -- who predictably couldn't hit anything. When he tried to take over the game again, it was too late. It was a kooky performance, one of those games that reminded people why he's been traded multiple times. Even the TNT announcers were calling him out.

Back at MSG for Game 3, Marbury pulled the same schizo routine, displaying little of the toughness he showed in that Spurs series last spring. And yet the Knicks kept hanging around; you could sense the fans clamoring for Marbury to take over the game. Never happened. He missed two threes in the final minutes that would have brought the house down. And that was that. On Sunday, the Nets arrive at MSG with brooms.

Here's the kicker: Thanks to Isiah, this same Knicks team will return intact next season. And the year after that. They don't have any choice. Everyone makes big money. The only tradeable commodity on the team is Marbury, heading into his ninth year, and he isn't going anywhere. So Knick fans will spend two more seasons being tantalized by a potential superstar, someone who should be one of the better players in the league, but he isn't, and there really isn't a definable reason why.

Did Isiah screw the Knicks for the foreseeable future? I think so. It's a not-quite-a-playoff-team led by a not-quite-a-superstar, with no real way of turning things around in the next three years, and the wrong guy calling the shots to boot. Not exactly a recipe for success. Then again, you could say the same thing about the Celtics.

In fact, I think I just did.


Bill Simmons is a columnist for Page 2 and ESPN The Magazine, as well as one of the writers for "Jimmy Kimmel Live" on ABC

ENTREPRENEURISM ABROAD... FROM ALWAYSON
My Two Cents... Still a Ways to Go

Interesting interview and discussions at AlwaysOn on comparing entrepreneurism in the U.S. and abroad. I posted it up here with my quick reply and some other comments, but check out the rest of the interview and sign up for the AlwaysOn community if you're interested in the world of technology and business.

Here vs. There: Foreign-Born Entrepreneurs Compare
Watch out Silicon Valley, entrepreneurialism is alive and well—and out to eat your lunch—in other parts of the world.
NewsTeam | AO [Always On] | POSTED: 04.22.04 @10:45

Stone: In Silicon Valley we pride ourselves on having what we think is a unique blend of elements that makes starting companies so beneficial here: the availability of capital, the history of the Valley, and the tolerance of failure. In a splendid coincidence you are all foreign-born, so I'm curious to know if you think that you could start your companies today in your native countries?

Landan: You can. And the cool thing is that the unique combination of elements this place had for many years is now gradually being replicated in other places. We shouldn't fool ourselves that it is any other way. That just tells you what the situation is in Israel, which is my home country. Sometimes governments make good decisions, and in the early 90s the government of Israel had the insight to basically subsidize venture capital. That created a huge boom of investment, which was just amazing. Because the technical work force was already there, a lot of technologies that were incubated in the military industry were there, and the entrepreneurial spirit was there—what was missing was money.

The result is that—I might be wrong but based on my data—Israel is the country with the second or third largest number of public companies, and most of those are high tech companies. The number of high tech companies in Israel is significant, as there are only six million people there. I'm less familiar with other areas, but people have observed the Silicon Valley and realized how it works and are trying to replicate this. I believe the only thing to make Silicon Valley stand out for a long time is its proximity to the markets, which element you miss in remote foreign countries.

Kola: Could I have done what I've done here in India? It's a personal answer, for me, it's 'No, I don't think so.' But it is not a question of whether entrepreneurialism exists in India and can exist in India, the answer to that is yes. For me, it was only when I moved to Silicon Valley that I actually equated the stories of even the biggest tech companies [with] 'They are ordinary people, and if they can do it, I can do it.' And I think it happened to me in Silicon Valley, to be able to translate that to myself, to the competency, the ability, the desire, the ambition to do what I did. It's a path not taken, you can never speculate on that, but I don't think I could have done this in India.

Stone: There is so much fear now surrounding the migration of technology jobs to India. Do you think that's wrong-headed?

Kola: Stealing the manufacturing, so what's new about software? I think there will be something else that we innovate here and will be the brain trust of.

Magistri: I think Silicon Valley will remain an effective place. What made Silicon Valley was the dream of the startup, with example of HP, Sun, etcetera. They were all here, and they somehow attracted a given kind of people here. What is changing is that now some of these dreams are being planted worldwide.

Another fundamental shift that is happening here is that we have a lot to lose. If you look at what makes a startup effective it's that you're a small group of people with nothing to lose. Look at my company, InVision for my taste is becoming slower, it's moving at a lesser speed than two years ago because some of our energy is being allocated to defend what we have. In Silicon Valley there was so much wealth extracted from the marketplace during the Bubble. I believe there are quite a lot of people that are a tiny bit too comfortable and are spending too much time to protect what they have, to do another startup.

Therefore, I think we fit in an area where people still have the willingness to go after the startup, and the incentive is there, and there is nothing to protect. Israel is a good place—you see these wonderful companies that have three or four guys who are calling you three times a day because they want to do business. They want help, they want money, whatever else they want.

And the former Eastern Block countries have a very good school system. They are training people, the culture is still so-so, but there is willingness to do something. Some of the Asian countries. But there is a disclaimer, we have a lot to lose here. There is a lot of accumulated money here, and in my opinion, that is making us less willing to take a risk.


These excepts are from a panel discussion held at the Churchill Club earlier this year, when Newsweek's Silicon Valley correspondent Brad Stone talked to Vani Kola of Nth Orbit, Amnon Landan of Mercury Interactive, and Sergio Magistri of InVision Technologies. Read part one and part two.


Comments:

I believe the only thing to make Silicon Valley stand out for a long time is its proximity to the markets, which element you miss in remote foreign countries. "

"What is changing is that now some of these dreams are being planted worldwide."

The above two comments say it all. having markets is the key driver. The rest of the entrepreneurial ecosystem is already global or can be acesses remotely . The successful Indian & Chinese diaspora, the adventuring VCs, the local entrepreneurs are creating hot spots in Bangalore & Shanghai. Bangalore has on offer multitude of skills at very competitve terms , China has it's huge markets growing at a stupendous rate. But soon both will have both and ad all three (SV, Bangalore & Shanghai) will have markets, skills & capital.

"Could I have done what I've done here in India? It's a personal answer, for me, it's 'No, I don't think so.'"

What Vani Kola alludes to was still true till 3 years back , but is history now.

Ajay | POSTED: 04.22.04 @17:56
__________________________

Gentlemen, please stop thinking that all technology and money can be found in the Silicon Valley only.
There are so many talents elsewhere even in countries you would not think of. I appreciate Silicon Valley and I have been a student at Stanford University.

However, I have been an entrepreneur for many years and I think that I could start a business everywhere. Of course, my project would be different according to the place where I am. Some environments favor some specific projects. What I do not like in the Silicon Valley is the "success story syndrom". Being a successful entrepreneur does not necessarily mean that you have succeeded in building a big public company.

You could build a profitable small company and be very satisfied. Nobody would talk about you. But is-it what is important? What is important is to remain free and creative according to me. And this achievement is possible in any native country or anywhere in the world where there is at least a democracy.

Paul | POSTED: 04.24.04 @11:08
__________________________

Of course you can be an entrepreneur anywhere. This discussion is a matter of degrees and definitions. The entrepreneurial environments differ in each country with the amount of available capital, engineers, skilled management, exit avenues, and a host of other issues. Silicon Valley and much of the U.S. is naturally far ahead of the game because they've been through many more cycles, and the overly reported benefit of having the essential elements of strong research institutions, venture capital, and a deep talent pool.

I agree that countries such as China have the some of these elements, but if you dig deeper it is still very immature. How much smart money are backing these entrepreneurial efforts? Are they just looking for a quick flip like in the boom times? Do entrepreneurs have the legal and government infrastructure in their countries to support their efforts?

On the issue of talent, I would tend to disagree that many of these countries have sufficient talent pools. This is one big problem in China today. Not engineering talent, but management talent. I know from my native friends and relatives living there it's difficult to find solid managers there even if there is a inflow of Chinese nationals abroad with their Standford MBAs or 10 years at Intel, Virgin, or Nokia. This is even a problem in Korea which followed the U.S. during the boom times and created several entrepreneurial success stories, but for every success there were hundreds of failures and scandals. The same is happening in China and will happen if you listen beyond the headline success stories.

There is also the difficulty of being an entrepreneur in an underdeveloped market. If you already have deep capital pool, strong government connections, or close underworld friends :) then you don't have to deal with the hundred palms of greed. Even establish multi-nationals in China have to work with the problems of corruption and bribery to get many deals done, and such headaches as trying to clean up misconstrued booking of revenues or dealing with corrupt methods of competition against your company.

I believe it's up to strong leadership within the entrepreneurial community and established corporations to lead the charge for change in nations with lesser developed environments. Change to encourage and train more entrepreneurs, fair and just legal systems to protect investors and entrepreneurs, pushing for more government funding in R&D, etc.

BernardMoon | POSTED: 04.26.04 @01:52

JOHN KRUK... ESPN'S NEW BASEBALL ANALYST

John Kruk is hilarious. I remember watching him during interviews when he was a baseball player and he would always say something witty or funny. He's like the Charles Barkley of baseball. Anyway, he just started a column at ESPN's Page 2, so here is his second column which I enjoyed: Where's the sportsmanship?

PAT TILLMAN... AMERICAN HERO

I always thought it was honorable and a great example of patriotism and courage when Pat Tillman left his NFL career to join the Army in response to 9/11. Here's an article, Ex-NFL star Tillman makes ‘ultimate sacrifice’, and Powerline already has a few links up.

Also great posts at ESPN's SportsNation. Good article by ESPN's Adrian Wojnarowski.

SMART MOVES BY CHINA... CHANGES HARDLINE POSITION ON WI-FI

As I wrote before on this issue, I do believe it is better for China and its companies to not take the route of creating a closed technical standard for its Wi-Fi industry or any for this matter. The fruits of this move will be seen when Chinese companies start expanding beyond its domestic borders.


China, U.S. strike trade accord

By Richard Shim, Michael Kanellos and Evan Hansen
Staff Writer, CNET News.com
April 21, 2004

China is softening efforts to establish its own Wi-Fi security standard and will adopt stringent new piracy prevention policies as part of a broad trade and technology agreement with the United States, the two countries announced Wednesday.

Chinese government officials had set June 1 as a deadline for gear makers to include its Wireless Authentication and Privacy Infrastructure (WAPI) standard into products sold in China. The specification would allow the government to decrypt any communications by its citizens over wireless networks.

WAPI is not compatible with current Wi-Fi security standards. Enforcing the inclusion of WAPI into gear would have limited the number of manufacturers that could sell products in the Asian country, setting the stage for a high-profile technology battle between China and the United States.

According to sources close to the negotiations, China agreed that it will not implement WAPI by its announced deadline and will indefinitely postpone enforcement of the WAPI directive. In the meantime, the country will work to revise and perfect the standard in collaboration with the international standards group IEEE (Institute of Electrical and Electronics Engineers).

China's WAPI decision is one of several agreements announced Wednesday, after a high-level meeting between U.S. trade officials and China's Vice Premier Wu Yi in Washington, D.C., convened as part of the U.S.-China Joint Commission on Commerce and Trade. (full article)

WOODWARD'S BUSH BASHING

From The American Thinker.

Expense Or Not To Expense... Stock Options

This is a critical issue related to the future of America's growth that should be getting more attention. Of course I'm pro-stock options. What entrepreneur isn't? Even Max would agree as a bleeding liberal businessman. Here's Kevin Hassett's testimony before the House Committee on Financial Services:

The FASB Stock Options Proposal
Its Effect on the U.S. Economy and Jobs

By Kevin A. Hassett
Wednesday, April 21, 2004

Mr. Chairman, it is an honor to appear before you today to discuss the impact of options policy on publicly traded firms and the economy. I should say at the outset that my testimony will draw heavily on a recent publication that I coauthored with my colleague Peter J. Wallison.

Overview
Since the Enron collapse in mid-2002, the Financial Accounting Standards Board (FASB) has been pressed to require that companies include the hypothetical expense of their employee stock options in their Generally Accepted Accounting Principles (GAAP) financial statements.

Many lawmakers and commentators on financial matters have made public statements to the effect that employee stock options are a form of compensation, and the failure to show the cost of these instruments results in misleading financial reports. In response, it appears that the FASB is set to require expensing despite significant disagreement among professionals on how to calculate that expense. (full testimony)


UPDATE/MORE FROM KNOWLEDGE@WHARTON & AMERICAN VENTURE CAPITAL EXCHANGE:

Expensing Stock Options: Can FASB Prevail?

When the Financial Accounting Standards Board (FASB) recently announced it may require companies to recognize the value of stock option-based compensation by expensing the value on the income statement (current regulations permit footnote disclosure in financial reports), it appeared to be ready to resolve a contentious issue. But the proposal has generated a war of words, pitting heavyweights like Alan Greenspan and Warren Buffett – who favor the expense model – against powerful opponents like SEC Commissioner Paul Atkins and Louisiana Rep. Richard Baker, chairman of the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. The last FASB effort to require an options-expense treatment, back in 1994, foundered in the face of political and industry opposition that threatened the Board’s very existence. According to Wharton faculty and others however, FASB should be able to stand up to the pressure this time around.

Beginning in the 1990s, employee stock options – which generally give recipients the right to buy the related stock at a set price for a set period of time regardless of market fluctuations – appeared to be an easy path to wealth, as an estimated several thousand “Microsoft Millionaires” can testify. But critics charge that options also fueled corporate scandals like Enron Corp. and Worldcom Inc. by tempting executives to artificially pump up stock prices.

Some investors and others also argue that the underlying accounting treatment – which enabled companies to avoid expensing stock option-based compensation – is flawed because, for example, it gives some option-heavy sectors, like high-tech, a reporting edge over companies that utilize more traditional forms of compensation that are reflected on an income, or profit and loss statement (P&L).

Now a FASB Exposure Draft, Share-Based Payment, an Amendment of FASB Statements No. 123 and 95, seeks to “improve existing accounting rules and provides more complete, higher quality information for investors,” according to the Board. The comment period for the exposure draft ends June 30, and FASB plans to hold public roundtable meetings to gather additional input on the proposal.

“The Financial Accounting Standards Board wants companies to recognize the value of options used to purchase labor from employees,” observes Wharton accounting professor Wayne R. Guay. “Why should this be any different than issuing stock options for raw materials, supplies or other categories that are recognized as business expenses on the income statement when the items are used? Curiously, labor is the only item that’s not recognized.”

But not everyone agrees with that analysis. Rep. Baker, for example, recently said he was "significantly disappointed" over FASB’s plans, and planned to launch congressional moves to halt it, according to the Dow Jones Newswires service. And a January dispatch from Reuters reported that at an American Enterprise Institute think-tank conference, SEC Commissioner Atkins questioned the need to expense options, expressing concerns that the Board was moving towards the requirement for political reasons, instead of accounting ones. Atkins reportedly said, however, that he was speaking in a personal capacity, not an official one. In fact, according to published reports, Atkins’ boss, SEC Chairman William Donaldson, is in favor of expensing stock options.

Predictably perhaps, high-tech giants like Intel Corp. and Cisco Systems,, both of which have resisted calls to expense employee stock options, sounded an alarm over FASB’s proposal. In a recent proxy filing Intel urged shareholders to vote against a shareholder proposal to have the company expense the cost of all future stock options. Indeed the high-tech segment as a whole has traditionally argued that its earnings and competitive advantage could erode if the value of stock options – which have been heavily used to attract talent – were reflected on the P&L.

But even before FASB’s latest announcement, some cracks in the high-tech front were evident. Late last year for example, Microsoft modified its stock option compensation program to reward employees with actual shares of stock. At the time, some observers interpreted this as a tacit admission that management no longer expected huge run-ups in its stock price – and in fact Microsoft stock has declined from a peak of about $30 in late 2003 to about $25 in mid-April 2004. In addition, the company announced its intention to expense all equity-based compensation, including previously granted stock options. Another tech-based company, the online DVD rental service Netflix, also announced last year that it would expense options. Published reports quoted CFO Barry McCarthy as observing that the move gave the company “greater consistency” in its financial reporting.

FASB’s new proposal has the support of the “Big Four” CPA firms. In a joint letter dated March 17, addressed to Rep. Baker and to Rep. Paul E. Kanjorski (the ranking member of Baker’s subcommittee), the titans of the accounting industry framed their arguments in the context of a need for FASB’s continued independence. “We continue to support the view that the fair value of all employee stock options should be reported as compensation expense,” reads part of the letter, which is signed by the Big Four chairmen and CEOs. It goes on to urge Congress to continue its recognition of the “critical contribution of an independent FASB to the effective operation of the capital markets.”

Politics aside, high-tech companies have also expressed fears that a sudden shift to option-expensing could lead to precipitous plunges in their P&Ls, potentially triggering crippling declines in their stock prices – the very tool that they have used to attract and retain talent. But Wharton’s Guay dismissed those concerns, and a pair of high-profile studies appears to support his position.

“Stock options represent a compensation tool and if they are effective, one would expect companies to continue to use them, regardless of the reporting mechanism,” he argues. “Also, the dollar amount of option expense is generally disclosed in footnote format already, so institutional investors and others know it, and analysts already consider it. Several hundred firms are already expensing their options, and their stock prices do not appear to have suffered from the approach.”

A similar conclusion was reached by the Congressional Budget Office, which recently released a study of the potential effects of expensing stock options. Titled “Accounting for Employee Stock Options” and dated April 2004, the report notes, among other conclusions, that if companies “do not recognize as an expense the fair value of employee stock options, measured when the options are granted, the firms’ reported net income will be overstated.”

Further, while acknowledging the complexity involved in calculating the fair value of employee stock options, the CBO says that they “may be estimated as reliably as many other expenses.” Under the FASB proposal, the expense of a stock-option award would generally be measured at fair value at the grant date. While the Board does not specifically say how the options are to be valued, the proposal does mention two permissible methods: the widely used Black-Scholes-Merton formula and a lesser-known binomial model.

Finally, adds the study, recognizing the fair value of employee stock options as an expense on a company’s reports isn’t likely to negatively affect the national economy, since the information has already been disclosed in footnotes. However, notes the report, it “could make fair value information more transparent to less-sophisticated investors.”

Another study, focusing on 335 companies, was conducted by the global professional services firm Towers Perrin. It too determined that companies are not penalized when their stock options are expensed. “Once adjusted for general market movement, the average stock price of announcing companies does not show any significant change during the 300 trading days surrounding the declaration,” according to the report, which was released on March 31.

“What we can learn from this study is that accounting treatment needn’t drive management incentives,” says Gary Locke, a Towers Perrin principal and leader of the firm’s executive compensation consulting practice. “Rather, incentives should be designed to drive corporate performance.”

Guay adds that FASB’s global counterpart, the London-based International Accounting Standards Board, has already issued a standard requiring companies to reflect, in their income statement, the effect of stock options. “If special interests try to pressure the SEC or FASB, those bodies can always reply that this is the direction in which the rest of the world is moving,” he says. “We need to move along with other countries in this effort.”

In fact, he adds, the task of developing standard metrics to accurately value stock options may not be all that daunting. “Valuation issues will be important, but remember that financial markets already value certain types of stock options (typically puts and calls, which give an owner the right, but not the obligation, to respectively sell or buy a specified amount of an underlying security at a specified price within a specified time),” he observes. “The trick here is that these compensation-related stock options are not the same as publicly traded options, so vesting and other unique features could make the job a bit tougher. But so are other valuations, like pensions, which require estimates of how long employees will work at a company, and how long they will live. The value assigned to stock options may not be perfect, but it will be reasonable. And since the current P&L valuation of stock-option expense is zero, any kind of value is better.”


An End to Sweat Equity

American Venture Magazine
By Tim O'Malley
April 8, 2004

Employee stock options of an emerging growth tech company are irrelevant and worthless if a liquidation opportunity is never presented. Options provide more than a financial windfall, but justify hard work and stellar execution in maturing a business idea into a bountiful company. If the dedication does not present a liquidation opportunity, stock options are only worth the paper they are written on. Why then is the Financial Accounting Standards Board mandating expensing options?

The FASB is a private sector organization that establishes standards for accounting in the US. The SEC is their authority as well as the American Institute of Certified Public accountants. Both governing agencies are more inclined with public companies and their dealings, not the underlying issues of building a new company on limited cash reserves. (full article)

BLOOD FOR OIL?... NAW, IT'S CASH FOR OIL
And the Blood of the Iraqi People

So many of these articles and commentaries lately. Someone is going down in the U.N. Maybe Kofi Annan should just step down and let someone have a fresh start to reform the ineffective U.N. Anyway, here's the whole article by Pete DuPont:


Oil Is Not Well
Kofi Annan can run, but he can't Hyde.

THE WALL STREET JOURNAL
BY PETE DU PONT
Tuesday, April 20, 2004

"The U.N.'s mechanisms for controlling Oil-for-Food contracts were inadequate, transparency went by the wayside, and effective internal review of the program did not occur. . . . If the United Nations cannot be trusted to run a humanitarian program, its other activities, including peacekeeping, arms inspection regimes or development projects may be called into question."

--Sen. Richard Lugar, April 7

More than called into question. The United Nations' administration of the Oil-for-Food program was so ineffective, inadequate and corrupt that, in the words of OpinionJournal columnist Claudia Rosett, the U.N. "is an institution that should never be trusted to carry out missions requiring integrity or responsibility."

So should the U.N. be given control over Iraq's transition to a free and democratic nation, as John Kerry has demanded and President Bush is being politically pressured to do?

The U.N. began the Oil-for-Food program after the first Gulf War to provide humanitarian relief for the people of Iraq. Saddam Hussein was to sell Iraqi oil, two-thirds of the proceeds of which would be used to buy food and medicine, generate electricity, build houses and help the country recover. The U.N. would get a 2.2% fee on each barrel of oil sold.

But with Saddam running the program and the U.N. only pretending to pay attention, corruption quickly dominated the process. Saddam added a 20-cent kickback fee to every barrel sold, which soon became 30, then 50 and finally 70 cents a barrel. Add to that the profit from Iraqi oil smuggled to Syria, Turkey and Jordan, and kickbacks on the humanitarian materials shipped into Iraq, and Saddam was raking in as much as $2.5 billion each year in illicit revenue to build up his military, his palaces and his power. The U.S. General Accounting Office estimates Saddam's total illegal revenues from the Oil-for-Food program to have totaled more than $10 billion.

Why would the U.N. delegate total, unsupervised authority to run the program to Saddam? Perhaps because Iraq and the other nations whose companies were participating in the scam didn't want appropriate procedures and controls applied to their ventures. Teresa Raphael, the editorial page editor of The Wall Street Journal Europe, has seen a spreadsheet listing the companies Saddam had approved for oil purchases. It included 11 French middleman concerns, (150 million barrels sold to them), 14 companies in Syria (120 million) and dozens of Russian firms (more than a billion barrels), the president of Indonesia, the Palestine Liberation Organization, "the director of the Russian president's office" and former French foreign minister Charles Pasqua.

Most stunning is Benon Sevan, the U.N.'s assistant secretary-general, whom his boss, Kofi Annan, designated to run the Oil-for-Food program. Mr. Sevan was allocated 14 million barrels of oil and disposed of 7 million of them.

As all this information became public over the past year or so, U.N. lawyers refused to allow identification of the kickback firms; it was, they said, "privileged information which could not be made public." Mr. Annan then suggested "an independent high-level inquiry" to clean up the U.N.'s sordid image. Absolutely not, said France's U.N. ambassador, Jean-Marc de la Sabiliere, for the U.N. Iraqi accounts were managed by a French company, BNP Paribas. The Russians didn't much like the idea of an investigation either. Last Friday they blocked a Security Council resolution giving an investigating commission headed by Paul Volcker authority to conduct a complete investigation. All of which may explain why France and Russia so vigorously opposed the liberation of Iraq a year ago: They didn't want their very lucrative and very illegal kickback scheme to come to an end.

The Oil-for-Food program involves U.N. oversight of about $15 billion a year, by far the largest program it administers and more than five times the U.N.'s annual core budget. So the $10 billion at issue is not small time-graft, but big-time corruption.

Why, after Saddam Hussein invaded Kuwait and had been repulsed by U.S. and allied forces, would the U.N. have given him the power to manage the oil sale program, choose the agents, prevent the U.N. from viewing the agents' contracts, and set the price of oil? Perhaps because the French and Russians insisted upon it?

And why would the U.N. forbid Mr. Sevan to discuss the program he was responsible for running? He says there was no need for an investigation because nothing was wrong, and--incredibly--that it was not his responsibility to hold the Iraqi regime responsible for running an honest program because "we take our marching orders from the Security Council."

So why would any American think the U.N. should now run Iraq? Most Democrats and some Republicans are for it, the establishment media is for it, and Mr. Kerry wants a U.N. resolution to "turn the authority over to them."

But if Kofi Annan and the U.N are responsible for the corruption and the mismanagement of the Oil-for-Food program and the coverup of its illegalities, how can they be trusted to manage the government of Iraq? Won't Mr. Annan allow France and Russia (and others) to expand their less-than-honest behavior once the U.N. is fully in charge?

The House International Relations Committee is scheduled to hold hearings on all these matters. Chairman Henry Hyde feels much more strongly about U.N. corruption than his Senate colleagues do: he believes the Oil-for-Food program "represents a scandal without precedent in U.N. history," and so Mr. Annan's response "must be equally unprecedented."

Since the House appropriates the money that the U.S. contributes to the U.N.--about a quarter of its annual $1.5 billion base budget--Mr. Hyde might place the next quarterly U.N. check on his desk, to be exchanged for a full and accurate report on Oil-for-Food from Kofi Annan.

And then, depending on what we learn about the integrity of U.N. operations, we can decide what might be an appropriate role for the United Nations in Iraq and how we might be sure the international body fulfills it honestly.


Mr. du Pont, a former governor of Delaware, is policy chairman of the Dallas-based National Center for Policy Analysis. His column appears once a month.

IRAQI BLOGGERS... BETTER THAN THE MEDIA
The Beauty of Free Speech in Action

Great article and great blogs, so check them out!

Iraqis enjoy new freedom of expression on Web journals

By César G. Soriano
USA TODAY
April 20, 2004

BAGHDAD — A year ago, few Iraqis had ever had access to a computer, much less used it to communicate to the outside world. Now, Internet cafes seemingly dot every block in Baghdad, and new ones open often. That has led to a new phenomenon here: bloggers.

"We suffered for years under Saddam Hussein, not being able to speak out," says Omar Fadhil, 24, a dentist. "Now, you can make your voice heard around the world."

Hence, the blog. Short for "web log," a blog is a diary or journal posted on the Internet for all the world to read. E-mails can be sent to the blog, so it's also interactive.

Salam Pax's blog made him something of an international celebrity. Pax, the pseudonym of an Iraqi architect and translator, launched his blog in June 2002 as a way to correspond with his friend Raed Jarrar in Amman. What started as an e-mail exchange became one of the most gripping war diaries of the Internet age. Pax's journal describes the emotional pain caused by the U.S. military's attack on Baghdad a year ago.

His blog, dear_raed.blogspot.com, has been published as a book, Salam Pax: The Clandestine Diary of an Ordinary Iraqi. Pax, whose blog is among the most visited Iraqi sites, could not be reached for comment.

Fadhil's blog, iraqthemodel.blogspot.com, tells of his life and the lives of his two brothers. One brother also is a dentist, and the other is a pediatrician. "We wanted to help bridge the gap, not just between the U.S. and Iraq, but with the entire Islamic world," says Ali Fadhil, 34, the pediatrician. "The media is always taking a look at the bad stuff. We want to show the good progress in Iraq."

The brothers' blog is written with an unusually pro-American viewpoint, especially coming from three Sunni Muslims. Sunnis — among them, Saddam Hussein — dominated Iraq's majority Shiite Muslim population before the war.

"We get threatening e-mails from Palestinians and Arab-Americans who write, 'You are traitors. If I were in Iraq, I would shoot you,' " Ali says. Other e-mails accuse the brothers of being CIA agents who are writing from Washington, "as if the CIA didn't have anything better to do than run a blog," he says.

"My ideas are very shocking to people," Ali says. "I tell people I am a friend of America, a friend of Israel. Some of my colleagues at the hospital think I am an infidel. It's impossible to change a man's mind, but you can only make him consider other alternatives." (full article)

JOHN KERRY... WAR CRIMINAL
Flops Again on Past Comments... Amazing But No Bill Clinton

I meant to post this up a few days back, but just didn't get a chance to. From Powerline, here's Kerry walking on thin ice and breaking through a few times on "Meet the Press."


MR. RUSSERT: Before we take a break, I want to talk about Vietnam. You are a decorated war hero of Vietnam, prominently used in your advertising. You first appeared on MEET THE PRESS back in 1971, your first appearance. I want to roll what you told the country then and come back and talk about it:
(Videotape, MEET THE PRESS, April 18, 1971):

MR. KERRY (Vietnam Veterans Against the War): There are all kinds of atrocities and I would have to say that, yes, yes, I committed the same kind of atrocities as thousands of other soldiers have committed in that I took part in shootings in free-fire zones. I conducted harassment and interdiction fire. I used 50-caliber machine guns which we were granted and ordered to use, which were our only weapon against people. I took part in search-and-destroy missions, in the burning of villages. All of this is contrary to the laws of warfare. All of this is contrary to the Geneva Conventions and all of this ordered as a matter of written established policy by the government of the United States from the top down. And I believe that the men who designed these, the men who designed the free-fire zone, the men who ordered us, the men who signed off the air raid strike areas, I think these men, by the letter of the law, the same letter of the law that tried Lieutenant Calley, are war criminals.

(End videotape)

MR. RUSSERT: You committed atrocities.

SEN. KERRY: Where did all that dark hair go, Tim? That's a big question for me. You know, I thought a lot, for a long time, about that period of time, the things we said, and I think the word is a bad word. I think it's an inappropriate word. I mean, if you wanted to ask me have you ever made mistakes in your life, sure. I think some of the language that I used was a language that reflected an anger. It was honest, but it was in anger, it was a little bit excessive.

MR. RUSSERT: You used the word "war criminals."

SEN. KERRY: Well, let me just finish. Let me must finish. It was, I think, a reflection of the kind of times we found ourselves in and I don't like it when I hear it today. I don't like it, but I want you to notice that at the end, I wasn't talking about the soldiers and the soldiers' blame, and my great regret is, I hope no soldier--I mean, I think some soldiers were angry at me for that, and I understand that and I regret that, because I love them. But the words were honest but on the other hand, they were a little bit over the top. And I think that there were breaches of the Geneva Conventions. There were policies in place that were not acceptable according to the laws of warfare, and everybody knows that. I mean, books have chronicled that, so I'm not going to walk away from that. But I wish I had found a way to say it in a less abrasive way.

MR. RUSSERT: But, Senator, when you testified before the Senate, you talked about some of the hearings you had observed at the winter soldiers meeting and you said that people had personally raped, cut off ears, cut off heads, taped wires from portable telephones to human genitals and on and on. A lot of those stories have been discredited, and in hindsight was your testimony... (read the whole thing and Powerline's comments)

NEW BLOGGER FOR A BALANCED VIEW... MAX YOW
"Blah Blah Bernard Blah Blah" Changing to "Junto Boyz"... A New Direction

It's been a little over a year since I started blogging without an idea of where this was going to lead. I started it because I've always enjoyed writing, discussing my social and political views, telling life stories, and since I'm easily amused at myself and the world around me.

Now I want to take the blog in a new direction. To make it a nesting place for various views and perspectives on politics, business, and life. I believe if you don't challenge your own ideas and listen to other viewpoints then there is no heart or room for improvement or change for the better. I believe there is always a "better" and no "best" in the world, so complacency in life and ideas is the worst hindrance to progress and innovation.

I have invited a few of my close friends and those I respect to start writing for this blog. For the reasons stated above and anticipation that I will get busier as I take another step forward in life with my complete move back to the U.S. in May and as I transition into a new position, I thought this was the best time to implement these changes. I will still be the primarily blogger, but these new writers will contribute anywhere from a few times a week to once a month depending on their schedules.

We also decided to change the name from "Blah Blah Bernard Blah Blah" to "JuntoBoyz." As some of you might know, Benjamin Franklin formed a group of his friends dedicated to mutual improvement, so they would discuss and debate various issues and ideals of their time. Franklin described it as:

"I should have mentioned before, that, in the autumn of the preceding year (1727), I had formed most of my ingenious acquaintance into a club of mutual improvement, which we called the Junto; we met on Friday evenings. The rules that I drew up required that every member, in his turn, should produce one or more queries on any point of Morals, Politics, or Natural Philosophy, to be discuss'd by the company; and once in three months produce and read an essay of his own writing, on any subject he pleased. Our debates were to be under the direction of a president, and to be conducted in the sincere spirit of inquiry after truth, without fondness for dispute or desire of victory; and to prevent warmth, all expressions of positive opinions, or direct contradiction, were after some time made contraband, and prohibited under small pecuniary penalties."

Or the simple dictionary definition: "a group of persons joined for a common purpose"

The common purpose of this blog will be to inform our readers of various viewpoints and articles on politics, business, and life; engage in thoughtful and thought-provoking discussions; generate new ideas and spur new thinking; and to have fun and a few good laughs during the process.

The first new blogger is a close friend who I respect in many ways and someone that will tip the scales to the left... maybe too far left. Anyway, more about him:

Max Yow
Max heads international corporate development for a leading Internet company in Asia. He focuses on extending their presence and brand throughout the region through partnerships and acquisitions. He has a graduate degree in Political Science and undergraduate degree in Political Science and Mathematics. Max thinks everyone should learn arithmetic from first principles and begin a life-long study and appreciation of Godel's theorem in elementary school.

Max says he is without a doubt the smartest liberal that Bernard has ever met.

Max enjoys:
Sports... combative sports, sports you play with a ball, sports with no swimming, sports you can play while drinking and smoking (pool, darts, bowling, video games).

Music... jazz (bop and post-bop), hip hop, classical, all popular music before the late-70's, don't like country music.

*Note by Bernard: Though I despise his politcal views since he's even left of Ted Kennedy and is fluent in French, he has become one of my closest friends I've made during my stay in Asia. We bond because we both enjoy cooking and eating. We connect because we like to play video games, drink together, and debate each other until our emotions boil over.

COLUMBIA UNIVERSITY'S 250TH
New Face in Korean History for Me

Just got an email from my old graduate school on their 250th birthday celebration. This one was profiling various "Columbians Ahead of Their Time" and I came across a Korean woman, Helen Kim, who seemed to be an amazing individual... president of Ewha University, my mother's alma mata, and founder and publisher of The Korean Times, an English-language newspaper. Pretty cool.

"Freedom is not just a word here, not just a concept taken for granted. Its meaning is in the air we breathe, in our thoughts, in our hearts."

Helen Kim (1899-1970)
Educator, PhD 1931

Helen Kim broke down barriers for Korean women by expanding their educational opportunities. The first Korean woman to receive a doctorate, Kim transformed Ewha College, a women's school founded by an American Methodist missionary in 1886, into the largest women's university in the world, with more than 8,000 students by the time of her death in 1970. Graduating from Ewha in 1918, Kim took on the task of educating Korean women as her Christian mission. She became dean of the college in 1931 and president in 1939 - just before the eruption of World War II. She kept the school going despite wartime hardship and strict Japanese control of the curriculum and administration. In 1945, at war's end, Ewha College became Ewha Womans University. The outbreak of the Korean War less than five years later forced Ewha to evacuate its Sinchon campus and set up makeshift quarters in Pusan. While remaining Ewha's president, Kim served as South Korea's official government spokesman and as founder and publisher of The Korean Times, an English-language newspaper. After the armistice, Kim and the Ewha leaders rebuilt the campus, adding more schools and departments, and a hospital. When she retired as president in 1961, the University's enrollment stood at 7,000 undergraduate and 65 graduate students.

Kim attended Teachers College, Columbia University, in 1930 at the urging of Ewha's president, Alice Appenzeller, returning to Korea after completing her doctorate in 1931. In 1954, Columbia's Korean alumni gathered at a ceremony in Seoul to mark the University's bicentennial. The New York Times reported that Kim, the only women among the 30 attendees, was praised by her fellow alumni "for perpetuating the traditional policy of free inquiry, free speech and free press."

COOPERATE OR GO HEAD-TO-HEAD?
Depends on the Industry for Startups

Pretty good article.

Why Some Start-ups Choose Cooperation over Competition

Knowledge@Wharton
April 7, 2004

When faced with the challenge of commercializing its AIDS drug, Trimeris Inc., a small biotech company based in Durham, N.C., didn’t hire a sales force or sink money into marketing. Instead, it called in Hoffman-La Roche Inc., the Swiss pharmaceutical giant. In 1999, tiny Trimeris and burly Roche hammered out an agreement under which Roche agreed to put its production and marketing might behind Trimeris’ drug, called Fuzeon, in exchange for a piece of the profits. In January, the two companies announced that they were extending their partnership.

David Hsu, a Wharton management professor who specializes in studying entrepreneurship, says this sort of arrangement has become common in the drug industry. Small biotechs such as Trimeris innovate, creating promising drugs and vaccines, while big drug companies such as Roche look to partner with them, lending their heft to the biotechs’ promise.

In a co-authored paper entitled, When Does Start-up Innovation Spur the Gale of Creative Destruction, Hsu argues that this sort of cooperation belies the popular idea of technological innovation. In the usual formulation, start-ups sneak in with new products and swipe sales from incumbent leaders. As a result, the innovators grow, while the older companies stagnate, even shrink. That’s certainly been the case in the hard-drive industry, for example, and in online retailing.

But sometimes the market operates more benignly, with new entrants such as Trimeris cooperating with established players such as Roche. Suddenly, the gale of creation doesn’t look so destructive.

Understanding what leads some start-ups to choose cooperation over competition was the impetus for Hsu’s article, written with co-authors Joshua Gans at the University of Melbourne in Australia and Scott Stern at Northwestern University, and published in the RAND Journal of Economics. The researchers found that the likelihood of start-ups cooperating with established companies depends upon three factors: 1) the strength of the startups’ intellectual property rights; 2) whether they have relationships with intermediaries such as venture capitalists; and 3) whether their industry requires big investments in things such as manufacturing and distribution. To draw their conclusions, they surveyed 118 technology start-ups.

“In economic environments like the biotechnology industry – where patents are relatively effective in protecting [intellectual property rights], firms face high relative investment costs, and brokers are available to facilitate trade – start-up innovators tend to earn their returns from innovation through the market for ideas, acting as an upstream supplier of ‘technology’ rather than as a horizontal innovation-oriented competitor,” the authors write. “In contrast, when investment costs for the entrant are relatively low and the technological innovation is not protected by patents, as in the disk-drive industry, the disclosure threat tends to foreclose the ideas market. Start-up innovators in this environment are more likely to commercialize their innovations through product market competition.”

Intellectual property rights take many forms, the most obvious being patents. A patent gives its owner the exclusive right to commercialize an invention for a specified period. “Firms with at least one project-related patent are more than twice as likely to cooperate relative to those with no patents,” the authors write.

Patents protect start-ups from having their inventions stolen by incumbents. That, in turn, gives them greater leverage in negotiations. “Under cooperation, negotiating over the sale of an idea inevitably involves a disclosure risk, eroding the bargaining position of the start-up and reducing the incumbent’s willingness to pay,” the researchers explain. “Increasing the strength of [intellectual property rights] reduces the expropriation threat for either strategy, and thus it increases the absolute expected returns to start-up innovators.” Negotiations often lead to cooperative relationships such as joint ventures and even acquisitions.

It’s not only the small biotechs that have embraced the cooperative model of innovation, Hsu pointed out in an interview. Merck & Co., the giant drug maker based in Whitehouse Station, N.J., has made partnering a cornerstone of its strategy for bringing new drugs to the market. Two of its leading products – Fosamax, an osteoporosis drug, and Cozaar/Hyzaar, a hypertension medication – came to the company via license agreements.

Of course, negotiating, like marriage, requires a partner, and finding the right one can make the difference between happiness and divorce. But as a rule, start-ups aren’t well-suited to finding good partners. They tend to be small and thus stretched thin. What they need are matchmakers, that is, intermediaries such as venture capitalists, lawyers and accountants.

Intermediaries often specialize in particular industries, working mostly with, say, biotech or information-technology companies. As a result, they have a deep knowledge of the industry’s players; they know whether those players are looking for partners and whether they can be trusted in negotiations. Likewise, they can vouch for the value of a startup’s innovation and the ability of its founders. Hsu and his co-authors find that start-ups that work with intermediaries are more likely to choose cooperation over competition.

Finally, they find that start-ups will be less likely to cooperate if they have to devote a lot of money to gearing up to compete. “As the sunk costs of product-market entry increase, the gains from trade between start-up innovators and incumbents also increase, so start-ups will be more likely to forgo competition,” they point out.

For example, within the car manufacturing industry, an auto plant is massive and costly. The owner has to invest hundreds of millions of dollars before producing the first car. If a start-up develops a new motor, it therefore might be better off licensing its technology to an established carmaker rather than trying to build its own plant from scratch. The drug industry operates in much the same way. Bringing a new drug to market takes about a decade, and requires hundreds of scientists and safety and efficacy tests that last years. Once federal regulators deem a drug safe and effective, the manufacturer needs an army of sales people and a hefty marketing budget to reach out to doctors and their patients.

All this suggests that big, established players have a hefty advantage in making and selling drugs, except that they haven’t proved very good at developing new ones, at least not in the last decade. Biotech start-ups such as Trimeris have shown themselves to be more innovative, devising new drugs and techniques. And they have tended to license their inventions to big established players such as Roche. “The probability of cooperation is highest in biotechnology,” the researchers state.

What does all this mean if you are an entrepreneur with a company or a manager within a big, established firm? Ideally, it will help you pick the right path, cooperation or competition. But as Hsu points out, no formula fits all companies within an industry. Two of the best-known and biggest biotech companies – Amgen and Genentech, both based in California – partnered early on with established companies. But they invested the earnings from those partnerships in becoming fully integrated pharmaceutical companies.

“Not all biotechs earn their returns by partnering,” Hsu explains. “We’re not saying one thing is best for everyone. There’s variation in commercialization strategies. What we’re saying is, ‘This is the average behavior and here are the drivers.’”