The Economist has an excellent look at quantitative easing:

THE conventional arms have run out. Central banks in America and Britain have long since pushed interest rates to close to zero. On July 5th the European Central Bank (ECB) joined them, slashing its rate on deposits to 0% and its main policy rate below 1%. A different sort of arsenal is now being deployed. Unconventional monetary policy covers everything from negative interest rates—now on offer in Denmark—to a change in inflation targets, but “quantitative easing” (QE), the creation of money to buy assets, has proved to be the most popular weapon of this crisis.

Last month, NASA posted a promotion video of sorts for the Curiosity Mars rover, which is set to land on Mars August 6th. The video is very good and if you’re at all interested in it, you should watch it.

If you’re curious about what the rover is going to do, here’s more:

But Gale is no ordinary crater. Over eons, thin layers of sediment have accumulated at its center, forming a lumpy, striated mountain that towers three miles high, so high that its peak crests above the lip of the crater. The mountain’s rocky layers make up a geologic time capsule, a fine-grained record of Martian history that stretches back more than a billion years. If we could examine those layers up close, we could look deep into the Martian past, perhaps deep enough to see what the planet was like when it had an atmosphere and liquid water.

And we recently sent a super-futuristic robot there to do just that.

I hope science teachers are planning on using this as a way to explore astronomy and science generally. Although I was already fascinated by space, the Mars Pathfinder mission was endlessly interesting and motivating to me in elementary school.

Minxin Pei argues China is having difficulty transitioning to a more consumer-based economy because doing business in China is excruciatingly difficult:

But there is another explanation for China’s excessive export dependence, one that has more to do with the country’s poor political and economic institutions. Specifically, export dependence partly reflects the high degree of difficulty of doing business in China. Official corruption, insecure property rights, stifling regulatory restraints, weak payment discipline, poor logistics and distribution, widespread counterfeiting, and vulnerability to other forms of intellectual-property theft: all of these obstacles increase transaction costs and make it difficult for entrepreneurs to thrive in domestic markets.

By contrast, if China’s private firms sell to Western multinationals, such as Wal-Mart, Target, or Home Depot, they do not have to worry about getting paid. They can avoid all of the headaches that they would have encountered at home, because well-established economic institutions and business practices in their export markets protect their interests and greatly reduce transaction costs.

Solving this will require implementing the rule of law, rather than China’s autocratic, CCP-controlled system. As Pei argues, though, doing so will require the party to give up control of the state and society. Unless something dramatic changes, the CCP has no easy decision to make. China’s future could require them to lessen their grip, but their own future would be put in question.

Alex Massie on the War of 1812:

The truth is that the war, almost wholly forgotten in Britain today, was an act of needless aggression from which Madison and his party were fortunate to escape relatively unscathed. Madison was fortunate; not every president has had the good fortune of seeing his acts of greatest folly end so comparatively well.

Photojournalist Robert King writes about his first-hand experience of Syria’s horrors:

I’ve covered my share of wars, but I’ve never seen one where so many kids are getting hit. There were infants who were hit, and they’re changing their diapers on the operating table. I’ve never seen anything like this. I took that picture of a little girl with her intestines spilling out of her tummy. There was one kid, a six-year-old, who got hit by one of the snipers based in the town hospital. He was shot in two places, near the heart and the lungs. But he survived. I don’t think I can go hunting anymore, back home. When you hunt deer, you aim for the heart and lung. As the doctor said, “They’re shooting to kill.”

If you have any interest in what’s going on in Syria, it’s a must-read. And if you don’t have any interest, you should read it for that reason.

The Chinese government is censoring criticism of its economic policies ahead of their power transition:

Publicly controlled enterprises have become increasingly lucrative, generating wealth and privileges for hundreds of thousands of Communist Party members and their families. And in a clear sign of its position, the government has moved to limit public debate on economic policy, shutting out voices for change. While political reform has always been a taboo topic in China, in economics, from the late 1970s to the early 2000s, almost anything went, with powerful voices backing strong measures that challenged the status quo. But now, despite the rise of social media, fewer prominent voices within China are able to make the case for a systemic overhaul that would prepare the nation for long-term prosperity on sturdier foundations.

China is at a very important juncture that, I think, will be nearly as important as the transition after Mao’s death. It’s disconcerting that the party seems to be backsliding on reform.

Newspapers exist to inform readers about the news, about what’s going on in the world. That’s why we read them. After all, they are called newspapers, right?

No.

Well, sort of. And yes, in the past—the distant past—that was the case. But newspapers are no longer where people learn breaking news. There’s a very abundant supply of news. We can find out what’s going on from television, the radio and the web, and we’re already paying for those mediums. If all we want from “newspapers” (organizations which find news and report on it primarily using text) is to find out what’s going on, they have no reason for existing. Other mediums do that quicker and they do so at no additional cost.

The web both made that purpose redundant through an abundance of sources and undermined their business model by making distribution (comparatively) free. Producing a newspaper meant incurring very substantial costs, which meant charging a price for it, and therefore it was very easy to place a margin on top of cost. If someone wanted to read the day’s news, they had little choice but to purchase a newspaper. Newspapers were able to charge subscribers and advertisers (classifieds, businesses) because distribution was limited. For advertisers, then, the way to reach a mass audience was through newspapers. On the web, though, distribution is free, and places to advertise and ad space is almost unlimited, so sources for news abound, the price for it dropped all the way to zero, and the value of adverts plummeted, too.

I don’t think, though, that reading the day’s headlines was the newspaper’s only purpose. If that were the case, headlines with very small stories would be sufficient. The newspaper was a powerful medium because they could be a deep window into the world. They provided readers with a clear understanding of what’s going on in the world that’s worth knowing, meaningful insight to what’s important about each of those headlines, and the opportunity to learn about topics readers never would have sought out themselves. Coverage, insight, serendipity. All in one place, consistently.

Coincidentally, news on the web has a huge problem: the abundant supply (which eroded the newspaper’s business model) creates an overwhelming amount of noise. The web is very good for finding out what’s happening, but it’s an endless stream of news, never ending, never relenting, with little context. The web is good at breadth, but very bad at depth. There’s specks of gold scattered throughout, occasionally nuggets, but we have to search for them ourselves or rely on others to tell us. It’s easy to get lost in the stream.

That’s an opportunity. One that, if they’re willing to, newspaper-like organizations are particularly well-prepared to take advantage of.

Here’s what I envision.

A Newspaper For the Web

Here’s what it’s not:

• This won’t save newspapers burdened by huge production, distribution and administration costs. That’s over. That’s been over.
• This won’t re-create mass, paying audiences and expensive advertising rates for that audience. That’s over. That’s been over.
• This won’t allow the newspaper industry to regain its former size. That’s over. That’s been over.

Here’s what it is: an organization whose goal is to be the only place readers need to go to find out what’s going on that’s important (coverage) and what’s meaningful about news events and relevant issues (insight and context). Go deep on certain subjects (politics, technology, sports) and make their writing on it so good that anyone interested in the subject has no choice but to read it. Embrace the web, rather than resist it. General-interest articles are freely available, and verticals are gated but open to links. Publish links to terrific pieces from other sources, and do so as prominently as they do their original content.

Here’s the business model: rather than target a mass audience with advertisements and augment it with subscriptions, target audiences passionate about certain subjects with reasonable subscriptions and augment with advertising to mass audiences. Provide everyone with a collection of original reporting, in-depth reporting on topical issues, and links to must-read pieces from other sources that, together, provide coverage of news and insight into its meaning. Use the general-interest content, which is completely open to share, to build readership and funnel people toward the verticals. Allow subscribers to share articles.

Newspapers—by which I mean organizations which do original reporting on the news primarily through text, whether print or digital—cannot compete with cable news channels and websites at reporting breaking news. They try, but there’s no real advantage for them to do so. So they shouldn’t. The newspaper’s value is in explaining a story in detail, rather than the bare headline, and putting it in a context. It’s also in choosing what to report and write about. By only including what they believe is important and worth knowing about, they make it manageable for readers to comprehend the totality of a day’s news.

The newspaper’s value, then, is by slowing down when everything else has sped up. The web has a nearly unlimited number of sources publishing new news every second, and the result is that there is no understanding. We scan what’s new, move on to what’s then new after that, but we don’t stop and consider what any one event means. The newspaper solves that. It turns the torrential stream into a regular, daily update of what’s new in a realistic portion. There’s a finite amount of articles within each day’s edition, and because we know there’s an end, we can take the time to actually read and digest each article. The newspaper is a sort of daily review where you can take some time, relax and consider events. That’s incredibly powerful. It’s a sort of counterbalance to the web’s always-on, always-new, always-moving nature.

Newspapers have tended to focus on general-interest topics, with a few exceptions. I don’t think that should be true for this new incarnation. One of the web’s best attributes is that it allows people with similar interests to find each other. This also means it’s much easier to sustain publications on specific subjects that appeal to people who’re obsessed with it. In fact, this can be even more successful than appealing to a larger, mainstream audience because people who really care about a subject also care about publications doing a great job writing about their passion. They seek out those publications and they read them often.

They should go deep on specific subjects and make their publication indispensable to people passionate about it. There’s a remarkable lack of good subject-specific writing from large newspapers precisely because they are trying to target a larger audience. Think about it—for technology or science, the New York Times or Washington Post probably are not the first places you go. You might head to the Verge, Daring Fireball or other weblog-like websites before you head there for technology coverage. Those papers may break stories, but despite having excellent writers, they are responsible for much less insight into what’s going on in the industry than these tiny websites are.

Even for politics and international events—one of the New York Times’ main focuses—you might choose to head to the Atlantic or Politico first. That’s no accident; these publications are still in the breaking news business, rather than in the insight business. There’s no reason for that to be the case and, if they want to thrive over the next decade, I believe that needs to change. Why shouldn’t the Times have the best politics section in the business, the section that everyone in Washington has to read and goes to first? Why shouldn’t they have a fantastic technology section that doesn’t just report on the business landscape, but analyzes what’s going on so well that we all have to read it?

Along with quality reporting on events that tells me what’s important about the day’s news, I want to read cutting analysis about what companies like SpaceX and Nest are doing, what their visions are, and what that means. I want to read about how computing is rapidly shifting from the PC to mobile, touch devices to wearable computing to computers in everything. I want to read about how software is evolving on tablets and whether it’s making tablets (okay, the iPad) into a capable computer of its own. I want to read about what’s happening in biotechnology, what these companies are trying to achieve, and what that might mean.

This new paper, too, should embrace what’s powerful about the web. The web has an incredible assortment of great people doing wonderful writing on all subjects, and they should not be afraid of prominently linking to them when they find something that’s too good not to read. In fact, that should be one of their key functions—combing the web and finding the nuggets of gold that are worth reading and sending their readers to it, even if it’s a competitor. By doing so, they will create more value for their readers, and they’ll keep coming back, because they know it’s a place where they can be turned on to other great articles without doing the manual work of finding it themselves. They’ll trust the paper, because the paper respects them enough to send them away to other people’s work that’s worth reading.

Articles shouldn’t be hidden behind a pay wall, either. While doing so may push people to subscribe, I believe it actually undermines any subscriptions offered because it’s locked up. People don’t just want to read something, they want to share it. They want to email it, post it to Facebook and Twitter, or save it to Instapaper for later. When they come across something they love, they want to show it to other people and talk about it. When only they can see it, because only they subscribe, that’s impossible, and so they’re not going to subscribe. And that’s like hobbling yourself before a marathon, too, because when dedicated readers share your articles, they’re giving you the best kind of promotion—a genuine recommendation.

So general-interest articles should be absolutely open. I think the deep subject sections, though, should require a subscription, and should be behind a gate—but a very easy one to climb through. All articles won’t be accessible through the website or app, but can be read via a link with no limit. This means that to read it every day and read everything (as many people will want to do, if the writing is excellent), a subscription will be required, but subscribers will be able to share whatever they please, and other websites will have no issue linking to those articles. This isn’t so much a gate as a nudge to readers to subscribe.

This is sort of a reversal of the traditional newspaper business model, which is to charge a modest price for a subscription and make the majority of revenue through advertising from a mass audience. Rather, I think they should focus on reasonable subscriptions for excellent reporting and analysis on very specific subjects (technology, politics, science, international affairs, etc) that people in the field or passionate about it have to read, and using their general-interest reporting to build a readership, sell tasteful advertising that augments their subscription revenue, and exposes people to their really good subject writIng.¹

So that’s what I think newspapers should be: digital-only publications which give readers a slower, deeper and more insightful understanding of what’s going on, and provide the best writing on specific subjects around. And charge for it.

The New York Times

I want to write a bit about the New York Times because I believe that, of all newspaper or newspaper-like companies, they’re the closest to doing what I describe. Their original reporting is excellent—they do a very good job of diving into stories and into topical issues, better than everyone else by a significant margin—and they create meaning by limiting what they report on, too. Their iPad application is very, very good for browsing stories and reading them for extended periods, and feels much more like a newspaper than an application. It’s almost entirely content, headlines, text, images and video, and that’s a very good thing. Their pay wall, while overly restrictive, is also quite original and close to what I describe; it allows people to read a certain amount of articles for free each month and it is relatively transparent to incoming links from Google, Twitter and Facebook.

The Times, though, is still heavily targeted at a mass audience. They want regular readers to subscribe, and those subscriptions are very expensive. I believe this is a tremendous opportunity they’re missing. The Times has incredibly gifted journalists and resources, so there’s no reason they couldn’t make a “Times Politics” sub-publication and charge subscriptions for it. They have the talent and resources to turn something like that into a daily must-read for people in Washington and people obsessed with politics.

I think that’s what they should do. They can continue trying to get regular people to subscribe, too, but those subscriptions should be much cheaper—closer to $5 per month rather than $35, which it is currently. This should go along with sub-publications which charge more premium subscriptions but make it worth it for those interested.

If any of the old publications are going to succeed in the next decade, it’s going to be the Times. They have the reputation, the talent and, most important, the inclination to do things in a way that’s best for their readers. Their iOS applications show that. But they are being held back, I think, by the physical newspaper and distribution they are tied to, and by an odd cautiousness toward their new digital medium. They’ve done a terrific job with the iPad application, but they need to explore this new medium and embrace what’s good about it, rather than simply try to port the newspaper to the digital medium and wall off their content to subscribers. They’ve gone about half-way, I think, and done a very good job, but they need to embrace it and run with it. Don’t just put a foot in the pool and test the waters. Jump in and make waves.

Rather than treat their print business as a key part of their business, and try to make sure that their digital business doesn’t undermine it, I believe they need to undermine it as quickly as possible. Their print business—the physical costs associated with printing and distributing the paper, and the mental costs of sticking to a print-mindset and wanting to protect it—are holding the company back from fully emerging in this century as the most important publication in the world. While they can’t simply ditch the print business, I think their digital business should be protected and allowed to operate with a certain level of autonomy and freedom from intervention from other company interests.

Allow them to experiment. Allow them to create this century’s New York Times. Don’t be hesitant. Make waves, and turn the newspaper into something even more powerful, insightful and exciting for the decades to come.

1. It’s worth noting, too, that subscriptions may not be the only revenue they derive from their dedicated subject readers. Perhaps it will be a combination of a relatively cheap subscription and targeted, specific advertising. This could be particularly successful because by building a very dedicated audience around specific topics, they have a more exclusive audience for specific advertising. The rates received for it, then, could be significantly better than they receive for advertisements to the general audience. [↩]

The Times’s Wil Hylton has a terrific profile of Craig Venter, who helped map the human genome and is now working on creating synthetic life that can accomplish specific tasks:

Right now, Venter is thinking of a bug. He is thinking of a bug that could swim in a pond and soak up sunlight and urinate automotive fuel. He is thinking of a bug that could live in a factory and gobble exhaust and fart fresh air. He may not appear to be thinking about these things. He may not appear to be thinking at all. He may appear to be riding his German motorcycle through the California mountains, cutting the inside corners so close that his kneepads skim the pavement. This is how Venter thinks. He also enjoys thinking on the deck of his 95-foot sailboat, halfway across the Pacific Ocean in a gale, and while snorkeling naked in the Sargasso Sea surrounded by Portuguese men-of-war.

Save it to Instapaper and read it through. Bioengineering, or whatever you want to call this kind of work, is fascinating to me because of the incredible potential it holds—eliminating our dependence on fossil fuels, significantly reducing carbon emissions, making agriculture much more efficient—but also the potential for terrible unintended results. Synthetic viruses or bacteria could easily be used as a weapon, and viruses or bacteria intended for benign purposes could cause all kinds of unforeseen damage.

This kind of work is going to shape the coming decades and we need to begin considering it as much as we do more traditional forms of technology.

Jonathan Adler:

My argument is that the same general principles that lead libertarians and conservatives to call for greater protection of property rights should lead them to call for greater attention to the most likely effects of climate change.  It is a well recognized principle of common law that if company A is flooding the land of person B, it is irrelevant whether company A generates lots of economic prosperity for the local community (including B).  A’s action would still violate B’s property rights, and B would be entitled to relief of some sort.  By the same token, if the land of a farmer in Bangladesh is flooded, due in measurable and provable part to human-induced climate change, why would he be any less entitled to redress than a farmer who has his land flooded by his neighbor’s land-use changes? Property rights should not be sacrificed as part of some utilitarian calculus.

Space X’s Dragon capsule docked with the International Space Station today.

History. I can’t wait to see what this company accomplishes and what new barriers they break.

U.S. manufacturers are moving factories back to the U.S.:

Two-thirds of big US manufacturers have moved factories in the past two years, with the most popular destination being the US, according to a survey being released on Monday by Accenture, the consultants.

The report provides some of the first industry-wide empirical evidence of “reshoring,” the trend of jobs once outsourced to low-cost emerging economies being brought back to the US.

As labor costs decline as a percentage of total costs, gains from manufacturing in low-cost countries erodes. Those surveyed cited speed of fulfilling orders as one of the top reasons for moving factories back to the U.S.

China, of course, still has other advantages besides cost, but its manufacturing dominance will decline as it loses its low-cost advantage and as labor costs decline in importance.

Coursera provides online classes taught by professors from the country’s best schools—Stanford and Princeton among them, in a wide-range of subjects. Co-founder Daphne Koller explains:

“The universities produce and own the content, and we are the platform that hosts and streams it,” explained Daphne Koller, a Stanford computer science professor who founded Coursera with Ng after seeing tens of thousands of students following their free Stanford lectures online.

This has incredible potential. Imagine community colleges and universities where students receive lectures from the top people in the field, and the classes held are discussion or work-based. This could allow far-flung schools to be much, much more effective.

Arnold Kling:

Mauldin’s claim is that we are in what he calls the “endgame,” meaning that the Keynesian option of increasing government borrowing is no longer available to European countries. The only willing lenders are banks, which in turn need to be propped up, and ultimately they can only be propped up by printing money.

My take-away from Mauldin is that, contra the mainstream media narrative, the real dilemma in Europe is not fiscal–deciding whether to maintain government spending or not. The real dilemma is financial–whether to recognize losses and absorb defaults (by both governments and banks) or turn loose the monetary printing presses.

(Via Tyler Cowen.)

When a Foreign Ministry spokesman was asked to explain why Chen Guangcheng had been imprisoned in his own home, this was his reply:

“After Chen Guangcheng was released from prison, he is a free person as far as I know. He has been living in his own house,” Mr. Liu stated. Challenged on that, he responded: “That’s what you said. As far as I know, he’s living in his hometown.” He also deflected a spate of other questions about Mr. Chen and Liu Xiaobo’s wife, Liu Xia, mostly saying that China’s legal system ensures proper treatment of all citizens.

“That’s what you said.” Asked about a fact that every one is aware of, a fact whose validity is unchallenged, the Chinese government’s official position is to pretend it doesn’t exist. Rather than deal with the reality and therefore that the government imprisoned a man for concocted crimes and, when set free, imprisoned him again in his own home, the Chinese government pretends that isn’t the case.

That’s what an authoritarian government that tries to mold what people perceive as reality into something convenient for them looks like. That’s this government’s strategy for maintaining power—deny inconvenient truths, prevent people from learning of them (the Great Leap Forward, Cultural Revolution, Tiananmen Square, Liu Xiaobo, Chen Guangcheng), and focus people’s attention on what you want them to look at: economic growth and, when convenient, “meddling” from foreign aggressors.

And that’s why the Chinese government is so afraid of Chen. Here is a blind, self-taught lawyer who escaped cordons and fences around his home, went to the nation’s capital, and evaded police. He revealed the Chinese state—the all-powerful Chinese state—to be incapable of finding a blind man with an injured foot in Beijing. In one night, he undermined the government’s work to deny what they do to people who are inconvenient to them, and what has been done to people as a result of the nation’s one-child policy. In other words, he not only embarrassed the government, he threw their abuses back in their faces, and in the world’s face.

Chen Guangcheng, the blind Chinese lawyer who escaped house arrest and fled to the U.S. embassy in Beijing, has left the embassy for medical treatment and has been reunited with his family after U.S. negotiators received assurances from the Chinese government that Chen and his family would be safe and that he could continue studying law at a university.

Chen, though, now says he left the embassy due to threats to his family:

But in a telephone interview with The Associated Press from his hospital bed late Wednesday evening, Mr. Chen said American officials told him while he was under American protection that Chinese authorities had threatened to beat his wife to death unless Mr. Chen left the American embassy, and that Mr. Chen therefore left under coercion.

U.S. officials deny this and say that, instead, his wife would be sent back to Shandong, their hometown, by the Chinese government (and no one could offer her protection there) unless Chen left the embassy to see her. That may well be the case, but U.S. officials seem to be intentionally clouding the issue. Perhaps Chinese officials never explicitly threatened to beat his wife to death, but that doesn’t matter—sending her back to Shandong is threat enough, because once there, she will be under control of local police—the same local police which placed Chen, his wife and daughter under house arrest and beat him. Threatening to send her back with no protection is little different than explicitly threatening to beat her to death.

Chen has also now stated that he regrets losing American protection and now wants to leave China for safety abroad. Chen’s reversal seems contradictory, though, because when he arrived at the U.S. embassy last week, he was said to not want asylum, but rather assurances from the Chinese government of his safety and the safety of his family, which he has received. Moreover, while leaving the embassy for the hospital, Chen reportedly told Secretary of State Hillary Clinton “I would like to kiss you,” apparently in reference to her advocacy on his behalf and on the behalf of other human rights activists. Perhaps he simply wanted to thank her for her work, despite the circumstances of his leaving the embassy. That’s possible, but it seems to be a strange comment to make while leaving the embassy’s protection under duress.

Or perhaps Chen was threatened later, after arriving at the hospital and after U.S. officials had left. That seems plausible and would fit with the Chinese government’s interests: make promises for his safety and future so he’ll leave the embassy, and once he’s outside U.S. protection, make threats so he’ll shut up and the problem can go away. Of course, Chen kept talking, and did so to international media, no less, so who knows.

This story has taken a very strange turn, because Chen left the embassy so abruptly, his desires have apparently flipped and now U.S. officials are disputing his account of events. I hope the U.S. acted in good faith here, and I hope that if Chen and his family are now in danger, or will be in the future, the U.S. advocates on his behalf. As the days and weeks pass, media interest in this story will pass as well, and at that point the Chinese government could have the upper hand. And it is at that point they could place him under house arrest again, or some other kind of scheme to prevent him from making trouble. We can’t let that happen.