Coop's Corner

Long before I ever heard about personal computers, I was a huge fan of automobile design. When I was a kid, my room was jammed with miniature model cars I spent hours assembling, painting, and proudly putting on display.

So it was that my first real car was a second-hand Pontiac that could roar from 0 to 60 in no time flat. It got a whopping 7 miles to the gallon, but since gasoline cost around 75 cents a gallon (as my addled memory recalls), I hit the road as much as possible.

But as they say, that was then and this is now.

When I lived in New York City, I had little use for a car. (There's this thing back east called "mass transportation.") All that changed after moving to California, land of wide open highways and a train system worthy of your garden variety Third World basket case.) Over the years I had tracked the change in design trends and knew that SUVs and big muscle trucks were the rage. It wasn't until I began driving around every day in my Honda Civic that it hit home. Good green zealot that I was, I made a point of scowling at other drivers whenever a gas guzzler pulled up next to me. Needless to say, over the last decade, I've done a lot of scowling.

So let me confess that yes, I was quite pleased to see the price of oil shoot through the roof. In fact, I was even ecstatic to read reports of pain at the pump. The hell with my fellow citizen. The more expensive it cost to fill up, the happier I was. If wussy appeals to our common fellowship failed to do the trick, maybe, just maybe, a poke in their pocketbooks would convince the SUV crowd to mend its ways.

Of course, I was blaming the wrong party. People drive what car makers serve up. If the U.S. was turning into Hummer Nation, it was because of benighted technology design decisions made by clueless auto execs. They had gorged on fat margins from the manufacture of big vehicles at the expense of doing the environmentally right thing.

No more.

Earlier this summer, General Motors reversed its years-old dependence on trucks and big vehicles, committing to build an electric car in 2010. (Click here for an interview CNET News did with Wagoner about car technology and fuel efficiency.)

Unfortunately for GM and the rest of the Big Three, the chickens have come home to roost. GM and Ford continue to bleed big losses and there's concern the U.S. auto industry may not survive without federal intervention. Chrysler's not doing much better, looking for a buyer after talks with GM ended.

In the meantime, though, you have to wonder what they're smoking in Detroit. Take Ford, which introduced a 3-ton, 16-miles-per-gallon pickup called the F-150. Wasn't it less than a month ago that the Big Three had convinced Congress to agree to extend cheap loans--ostensibly to help them retrofit their plants to enable the production of more fuel-efficient vehicles?

Sigh.

And don't get carried away by the recent swoon in crude oil. Yes, prices have dropped from around $140 a barrel to the $60 level. However, that's more due to the (increasingly global) recession than to any structural changes. What's more, this is an impermanent state of affairs, according to a new report from the International Energy Agency warning that prices could hit $200 a barrel by 2030.

Maybe the Obama administration will conclude that it is in the national interest to bail out the nation's automakers. I'd hate to see one more American lose their job. But before sending another dime, let's at least agree that making more gasoline-swilling mega-vehicles will return Detroit to the brink.

Will Joe the Plumber's tax message resonate in Silicon Valley?

Joe Wurzelbacher, an Ohio plumber considering whether to buy a business, turned into an unlikely media star this week after he confronted Sen. Barack Obama over the Democratic presidential nominee's tax proposal.

Obama maintains that his plan would reduce personal income taxes on 95 percent of the wage earners in the United States. But after an Obama appearance at Holland, Ohio, Wurzelbacher told Obama that his tax plan would take money out of his pocket.

That was the beginning of Wurzelbacher's 15 minutes of fame. His name came up 26 times during Wednesday night's presidential debate between Obama and Sen. John McCain, who argued that a tax hike would slow any economic recovery and hurt job growth. McCain also said the tax plan would unfairly redistribute money earned by small businesses, essentially penalizing them for being successful.

Given their libertarian, government-get-out-of-my-way predilections, technology entrepreneurs would seem to have much in common with being penalized for their success. But the surface similarities only go so far.

For one, if you're making $250,000 a year in Ohio, you're living large. If you're earning that much in Silicon Valley (or other high-priced tech hotbeds like New York and Los Angeles), you're just middle class. And then you've got to worry about paying down that crazy mortgage. It's not as if start-ups are pleading to pay more in taxes. Instead, they have more pressing items on their agendas.

"At this stage in our business, we need to put our money into growth and innovation. We would benefit from the hiring credit we have heard about in Obama's plans. Access to health insurance is also much more important to us than a small change in that tax rate," said Mary Mangan, president of OpenHelix.

"I started going to a lot of entrepreneur events before I went out on my own. At every one of those events people asked me what I was going to do about health insurance. Not a single one of them ever asked me about taxes. In starting up a business you are just not making that much in the early days."

Most technology start-ups--particularly, those that receive funding--are going to be structured as corporations, which changes the tax structure. Someone in the position of "Joe the Plumber" would likely establish a Limited Liability Company or similar structure which would treat earnings as personal income.

I heard variations on that theme from many start-ups that confessed to being more anxious about how long it's taking to fix the nation's economic woes. What start-ups want to see is an economic policy that helps the economy recover rapidly.

"A quicker economic recovery will more than make up for a several hundred dollar increase in taxes my company will pay under Obama's plan," said Brett Klasko, the founder and CEO of Phinaz Media & Marketing. "As you can imagine, we have to fight a lot harder for each marketing dollar during rough economic times. A recovery will increase our revenue far beyond any potential increase in taxes."

Like most tech start-ups, Phinaz Media & Marketing doesn't provide health insurance to employees. Klasko believes that if Obama or McCain can lower health care premiums and provide a tax cut to small businesses that offer health care to their employees, he may be able to justify the cost of giving employees access to a company health plan.

"This would certainly increase morale and could, in turn, increase productivity," he said.

With the presidential campaign winding down, the speculation is getting ahead of the reality. First, Obama's not guaranteed victory on November 4. And in the event of an Obama presidency, we'd only know whether his tax policy was a success or failure months later.

But if the political scenario does indeed work out in Obama's favor, his team will encounter a different start-up landscape from the one the Democrats remember from the Clinton administration. The lean and nimble Web 2.0 companies that dot the tech constellation can easily move their operations to more tax-friendly venues if they deem the new team in Washington to be antibusiness.

"There other options for companies to set up businesses elsewhere," said Anthony Franco, president of EffectiveUI. "If the plan is to raise taxes on small businesses, there are options to go offshore...As an entrepreneur, it's something you'd take a look at it."

With globalization and broadband proliferation, start-ups are forging international linkages--whether in sales or software development. And as Franco noted, that presents opportunities should push come to shove.

"This is not about patriotism or whether I love this country," Franco said. "It's what makes sense for this business as an entity. It would take a significant amount for us to consider doing anything outside of the U.S. But what is also true is that if it costs you $1 million year in taxes to stay in the U.S. and you can operate (the business outside of the country) for $200,000, there are companies that would consider that."

Vint Cerf has come out in support of Barack Obama for United States president.

In a YouTube video he recorded, Cerf, Google's chief Internet evangelist, said he was supporting Obama primarily because of the Democratic candidate's position on Net neutrality.

Cerf commands wide influence throughout the technology world due to the role he played in the development of the Internet. Cerf co-designed the TCP/IP protocol with Robert E. Kahn. While at MCI, he oversaw the development of the world's first commercial e-mail service to be connected to the Internet.

Here's a transcription of what he had to say:

"The concern that some of us have is that broadband access to the Internet in the United States is not very competitive. There are two kinds of providers--the cable companies and the telcos--but often they don't actually compete with each other directly for services to consumers or to businesses that need access to the Net.

"The problem with this relatively uncompetitive environment is that those who control the broadband access to the Net may in fact introduce discriminatory practices that interfere either with competitors who are offering value-added services on the Net, or maybe they will interfere with consumers trying to get access to services all around the world who may actually be using those broadband facilities in order to reach the consumer from someplace else.

"We believe that the Internet should remain an open environment. It's vital to innovation. Companies like Google, and Yahoo, and eBay, and Amazon, and Skype, and so on, got their start without having to get permission from any ISP or any broadband provider to offer services. They simply acquired access to the Internet, put their services up and then made them available to the general public."

"We think that's the best way for the Internet to evolve, and I'm pleased to say that in the upcoming presidential elections, the two candidates have rather different views of this particular matter. Senator Obama in particular sees things the way I do, which is that the Net should remain open, fully accessible and providing access on a nondiscriminatory basis to people who want to offer new services on the network."

Must be the special circumstances regarding current events, but folks again are losing their minds in very public fashion--on the Internet.

Monday's New York Times ran a piece detailing how a fringe activist has helped spread the rumor that Barack Obama is a Muslim.

The press release was picked up by a conservative Web site, FreeRepublic.com, and spread steadily as others elaborated on its claims over the years in e-mail messages, Web sites, and books. It continues to drive other false rumors about Mr. Obama's background.

(And while I write these words, another e-mail arrived, asking in the subject line: "Does Obama fulfill Muslim prophecy?" and linking to one of the more insane videos that I've seen devoted to the topic.

I'd like to give my follow countrymen credit for being more discerning than to trust everything they read or view on the Internet as fact. (Although I'm still not sure what to make of the fact that the movie Beverly Hills Chihuahua is No. 1 at the box office.) Well, we are in the midst of the political silly season and you can discount some of what's going on as part of the quadrennial nonsense that gets tossed around during any presidential campaign.

But the tone of the junk mail flooding in the last couple of weeks is boiling over with rage--and it's not just directed against Obama's supposed effort to conceal his "real" identity.

In the aftermath of the market meltdown, the Anti-Defamation League reports a "dramatic upsurge" in "the number of anti-Semitic statements being posted to Internet discussion boards devoted to finance and the economy."

Here's a sampling of some of the pearls of wisdom the ADL found posted:

•  "(Jews have) infiltrated Wall Street and government and have ruined our country."

•  "What is a GS Jew? Goldman Sachs? Jews are greedy, rotten slime balls."

•  They (Jews) love money nothing else, no faith or religion can be so heartless to their victims."

•  That's how they work, they short the stock all the way making billions and then cover right it up sell (sic) and then taxpayers to the rescue and it is true all those institutions are ran by Jews ....

This is of a piece with the post-September 11 rumors about the Mossad reportedly issuing secret instructions to Jews not to go to work on the morning of the attacks on the World Trade Center. The latest story line focuses on the collapse of Lehman and "Jewish control of the banking industry and suggestions that Jews hold complete power over government and the financial services sector," according to the ADL..

It's easy to blame a lot of this on the spillover of rants commonly associated with Internet forums for white supremacists and neo-Nazis, making their way into more mainstream venues. Extremists always shout loudest during times of political or economic crisis. So it is that the latest conspiracy making the rounds details how "senior Jewish officials at the Lehman Brothers investment bank passed their clients' money on to three Israeli banks, with the intention of then escaping to Israel to enjoy the take without fear of extradition."

The stock market's sharp rebound on Monday notwithstanding, this remains a lousy economy and people are rightly scared. And with another couple of weeks to go before the nation chooses its next president, there's a lot more bile waiting to be spilled. Before we lapse back into something resembling normalcy, I fear that there are more days of rage ahead.

If you reside in Washington for any length of time, it's not long before you believe that the world revolves around the Beltway. The same can be said about Silicon Valley, where a similar fishbowl effect often fosters an exaggerated image of the high-technology industry's impact on the larger culture and society.

Even more so when it comes to gauging the political influence of the technology business on the fall presidential campaigns. You might think the Democrats and Republicans are eager to raise the banner on behalf of their friends in Silicon Valley. The assumption is that the two major parties will cater accordingly. After all, the industry has so much money to spend and all those political action committees, and they naturally want to get their rightful share. Right?

Not so fast.

Sure, the Democrats and Republicans are eager to court deep-pocketed donors. But the power broker image exists more in the minds of the people living between San Jose and San Francisco than it does with the movers and shakers guiding the Obama and McCain campaigns.

With the candidates hitting the road after the wrap-up of the political conventions, this much is certain: The resolution of policy issues like Net neutrality may be near and dear to folks from the likes of Cisco and Google. But neither Barack Obama nor John McCain plans to give impassioned speeches urging passage or rejection of this, or other pieces of, tech-related legislation over the next couple of months.

Earlier Monday, I spoke with my colleague Declan McCullagh on the CNET News Daily Debrief about where the tech agenda fits in with the two campaigns. Declan's back from covering the Democratic and Republican conventions for us where he had an extended opportunity to chat about technology policy with regulars from both parties. You can check out our conversation by clicking on the video link below.

"I can't remember a debate in which the only memorable moment was the audience's heckling of a moderator."

That's the opening line of Frank Rich's eminently entertaining essay in Sunday's New York Times on the recent Clinton-Obama debate.

Rich obviously missed the ruckus over Sarah Lacy's ill-fated interview of Mark Zuckerberg last month at the South by Southwest conference. That episode was well-chronicled elsewhere. Suffice it to say that Lacy wasn't at her best that evening and a crowd of nerds jumped ugly when their patience ran out. What followed was a week full of phony "bitchmeming" with the usual suspects flapping almost nonstop about the horror, the horror of it all.

Well, the world survived somehow (though really, some of you guys need to get a life). I still think Lacy got a raw deal. What's more, I wonder how many of those tut-tutters from the blog commentariat pushed away from their computers to pay attention when ABC co-anchors, Charles Gibson and George Stephanopoulos turned the recent presidential face-off into an unadulterated idiot-fest?

It was some kind of spectacle. The day after the debate, Obama rightly noted that it took 45 minutes before he and Clinton even began talking about a single issue that matters to the American people. "Forty-five minutes before we heard about health care, 45 minutes before we heard about Iraq, 45 minutes before we heard about jobs, 45 minutes before we heard about gas prices," he said.

Gibson and Stephanopoulos were so out of touch with what's going on in America that the post-debate reviews skewered their fatuous line of questioning. (Truth be told, I was this close to tossing a slice at the screen in disgust--but no way was I going to waste good pizza because of those clowns.)

Anyway, it's too bad that neither Gibson nor Stephanopoulos are geeks. In the aftermath of the Lacy-Zuckerberg encounter, there also was constructive discussion about how best to engage an audience. And that's where Twitter commanded recognition as a real-time tool of two-way communication.

Based on what the respective camps are saying, this is likely going to be it for the Clinton-Obama road show. The next televised debate will be between McCain and whoever gets selected at the summer Democratic convention. The anointed interviewers for that occasion will have an opportunity to include the public as part of a two-way conversation. If Gibson and Stephanopoulos do get another crack at prime time, they can redeem themselves.

At least the technology is available to help if they bother to log on.

Hillary Clinton is on to something but she's not thinking big enough.

On Wednesday, the Democratic presidential nominee wannabe issued another one of those insufferably boring candidate white papers on how she would improve the country as its 43rd president. The main news? Clinton wants to spend $7 billion to promote what she terms an "insourcing" agenda, offering a package of tax incentives and investments to companies that create jobs in America.

OK, nothing wrong with a little pork barrel action this time of the campaign season. And some of the ideas are not half-bad: So, for example, she favors:

•  At least 15 new "Innovation and Research Clusters" across the country

•  New "Insourcing Markets Tax Credit" to spur business investment communities facing global competition

•  $500 million annual investments to encourage the creation of high-wage jobs in clean energy manufacturing technologies

•  An increase in the existing R&D credit by 50% and the creation of a new 40% R&D credit for basic research

On the flip side, Clinton would end tax incentives that allow companies to ship jobs and capital overseas. She also wants to end the practice that lets companies defer paying U.S. taxes on income earned by their foreign subsidiaries. But the reforms offered by Clinton, Obama, and McCain are primarily focused on big companies. It's a page out of the Willie Sutton handbook of political nose-counting: you suck up to the places where the most votes are.

Apart from the big companies, however, the start-ups and entrepreneurs that provide the tech industry with its lifeblood must wonder why they don't get included in the conversation. It's not as if they can't use the help. With the VCs spooked by an increasingly gruesome economy, the days of easy money are over.

•  More venture capitalists are taking a magnifying glass to deals they previously would have funded. You want a new round of cash? Assume the position.

•  In the first three months of 2008, the number of VC-backed mergers and acquisitions f ell to an all-time quarterly low for the decade

•  The pace of VC investment in Web 2.0 companies has begun to decline. Might 2008 be the make-or-break year for many advertising-based start-ups?

I don't buy the end-of-the-world scenario that another mega-bust is on the horizon. Still, these are turbulent times and start-ups will get knocked around a bit before things calm down. Instead of being forced into ridiculous choices between political camps, they have more issues to attend to. Such as how to survive when times get tough. And they could use friends in high places--that is, assuming the folks in Washington will pay attention.

Any one of sound mind must be disappointed that Hillary Clinton hasn't yet put away Barack Obama. Or that Barack Obama hasn't yet put away Hillary Clinton.

Because it means both sides are going to drive us nuts up until the Democratic convention this summer.

I suppose that's a small price to pay to live in a republic. So since the spin-meisters from the competing Democratic camps are so hell bent on convincing the rest of us that God is on their side, here's a golden opportunity to use the Internet to advance the cause of civic education.

Check out what Dave Winer's been doing of late on his Web site where he's reposted a few MP3s of conference calls held by the Clinton and Obama campaigns with the press. When I first heard about the experiment, it triggered one of those "Duh, why not?" moments.

Good question. It makes all the sense in the world.

The two political parties are quite adept at using the Internet to promote their interests--especially when it comes to raising money or putting out position statements--let alone political hit pieces. There's no mystery any longer about how to use the Internet to reach voters. Democrats and Republicans can afford to hire the best Webmasters money can buy. So why not extend that expertise in the cause of better informing the citizenry? Call it a cyber-addition to Civics 101.

If there is a convincing reason why the political campaigns shouldn't automatically release raw recordings of press conferences, I haven't been able to come up with one. You put more information in the hands of the public and that will lead to more familiarity with the candidates and, in theory, at least, a more informed choice.

Maybe it's because I'm a news junkie that I so thoroughly enjoyed the grilling meted out by reporters to the campaign hacks. The farther these folks get from the television cameras, the more likely they are to let down their hair. At least that's been my experience as a working reporter. Let's hear what they say when confronted with someone more challenging than Larry King.

I suppose some bright bulb on the campaign staff might reason that's as good as any argument why to prevent the public from listening to the raw Q&A. Something along the lines of, 'Who wants to see sausage being made?' In this case, actually, I think the answer is that a lot of us would.

"Four years from now," Winer writes, "we'll look back at this in amazement that there was a day when campaigns hid their words and ideas behind the filters of the press."

Couldn't have said it any better than that.

Postscript: I received a call from Mark Memmott at USA Today to let me know that the paper has been posting audio from the conference calls at USA Today OnPolitics.

Kudos. Hopefully, it's a harbinger others will follow.