Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

08 January 2010

“Our gall is not like your gall.”


A lifelong nerd, I once liked Intel’s current series of chest-beating “mood” ads. What nerd wouldn’t thrill to cuddly blondes screaming like Beatlemaniacs at the sight of the rather homely inventor of the USB port? What aging nerd, like me, doesn’t smile when superimposing the gleaming, ultramodern, transparent dry board of the “Our jokes aren’t like your jokes” ad over the dusty, dingy blackboards of his memory? In our anti-intellectual, kill-all-the-experts culture, obsessed as it is with nitwit celebrities, any celebration of brains is a good thing, right?

Not necessarily.

It wasn’t long before I began to wonder why Intel would spend all that money advertising itself, rather than its products, and to the wrong audience. Viewers of the PBS Newshour don’t buy Intel’s chips. Only a tiny fraction of them would even know which end goes where on a circuit board. Engineers buy its products, and they do so on price and on performance specifications that most viewers of those ads couldn’t even begin to understand.

So what’s the point? Why in a down economy spend all that money on high-quality, impressive ads to people who don’t buy your products and never will?

I didn’t have to ponder long. Just weeks after the ad campaign began, the FTC filed suit against Intel for monopolizing and attempting to monopolize markets for various computer chips, including microprocessors and video processors. In an instant, the ad campaign made sense to me. Intel is preparing to fight the FTC in the court of public opinion, not the courts of law.

Then I remembered. A few years ago, an upstart chip maker named Advanced Micro Devices (AMD) had made a strong play for the low end of the PC chip market. It challenged Intel with good, solid chips that were not the fastest and most versatile but were competent, reliable and cheap. It extended the low-price end of PCs, including laptops, and made Intel fight for market share. Then slowly AMD faded, but not for any technical reason or product deficiency that I could discover by reading the industry or business press. It just seemed to lose steam.

Now the FTC claims that Intel did to AMD what Microsoft did to Netscape and tried to to do Real Player and others: tilt the playing field by using its monopoly power to bully suppliers, customers and intermediaries to push AMD off the field. These are not rivals making these accusations. They are trained and neutral professional lawyers and economists who have a million other things to do and no axe to grind.

This realization hit me pretty hard. Our nation has (or should I say “had”?) few stars of technological innovation as bright as Apple, Boeing and Intel. (Microsoft sold its soul to the devil over a decade ago. Just look at that famous video of Steve Ballmer after he took the helm. It’s enough to make a technically trained realist believe in possession and exorcism.)

Once, when I thought of technological leadership, I automatically thought of Andy Grove. A Hungarian refugee from Communism and Intel’s intellectual founder, he established the credo, “Only the paranoid survive.” What he meant was you don’t stop when you’re ahead, even far ahead. You keep innovating in products, science, technology and engineering. You keep pushing the envelope until no one can catch up.

I wonder what Andy Grove would think of an expensive PR campaign to confuse the public and maybe a jury and cover up dirty business tactics used to dispatch a smaller rival when innovation couldn’t.

I don’t mean to prejudge the case. Intel will have its day in court. But I can’t imagine Andy Grove, Bill Hewlett, David Packard, or any of the other justly venerated founders of Silicon Valley putting real money into that kind of amusing but vapid PR campaign.

For them, the only battle that mattered was on the circuit board and inside the semiconductors. Hewlett, in particular, was famous for creating the first hand-held digital scientific calculator. He approved the project and bet his nascent company on it without even doing a marketing study. He knew it would sell, because he was an engineer and knew thousands of others who hated the imprecision and inconvenience of their slide rules and wanted something better. He was right: that calculator became one of HP’s most successful products ever (although now you can get much the same functionality from Google through any browser).

But those giants are gone. Now we have lawyers, accountants and advertisers running businesses built by engineers. We have bankers and health insurers telling us that “products” that swindle buyers by repeatedly failing to produce what buyers reasonably expect are “innovations” that strengthen us, mostly by parting rubes from their money. We have Steve Jobs accused of backdating his stock options. We have the greatest aircraft company in human history caught in unethical shenanigans related to a tanker plane, which still has made no appearance after four years of legal wrangling. We have Boeing’s most advanced product ever two years late into production, and we have reports that significant engineering problems may have been concealed [subscription required].

“Our gall is not like your gall” is a cute title for this post. But the sad fact is that Intel is hardly alone. It is far from the first American industrial icon to turn to professional liars when reality bites. It is one of the last. With engineering paragons like Intel joining the sad pack, we are well on the way to becoming a nation that responds to unpleasant reality by denying it, rather than facing it. Just get the rubes to believe, and reality will go away!

The wonder is how slow people are to react to misconduct on a cultural level that, on a personal level, would win a swift rebuke. We all know how far lies like “I really do love you,” “I feel your pain,” or “The check is in the mail” get us. But somehow we expect slicker, subtler lies produced by professional liars to achieve a different result in a business or industrial setting.

They don’t. In the long run, businesses and cultures that rely on lies earn not love, nor fear, nor respect. Like Ahmadinejad, they earn scorn, pity and rage. The clock is ticking off the days before that sad fate applies also to us, in fighting climate change as in so much more.

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3 Comments:

  • At Thu Jan 14, 01:04:00 PM EST, Anonymous cjcalgirl said…

    Dear Jay, Again you impress! I realize that you are concentrating on corporate market greed here, but it struck me that politics and media also play major roles in this disservice to the American marketplace as well. Media should be alerting us to this manipulation, and our state and federal governments should be drafting laws to prevent monopolization of the markets. Kind of like the bust-up of Ma Bell as well as the strangulations effected prior to the Crash of '29. Can you comment on these correlations? Am I on track? Also, the affect of the WTO and World Bank.

     
  • At Thu Jan 21, 01:55:00 PM EST, Blogger jay said…

    Dear cjcalgirl,

    I’m happy that you’re still a loyal reader. I value every one, as I don’t have many.

    You’re absolutely right that the media bear a heavy load of responsibility for public ignorance of corporate greed and swindling of ordinary people. I haven’t commented much on that responsibility because I try to limit this blog to opinions and insights I haven’t seen elsewhere.

    Bill Moyers has been doing such an excellent job of commenting on all aspects of the decline of our media in the Internet age that I have little else to say. (The transcript of a recent set of interviews on precisely this topic is not yet up on the website, but look for it soon.) Moyers has also followed bankers’ subversion of our economy relentlessly, most recently in this fascinating piece.

    Many people today are disappointed that Obama has not brought about the radical changes in direction that they expected from his election. But their hopes for rapid, radical changes were unrealistic. Our nation is indeed like that proverbial ocean liner, which turns ever so slowly, and our culture, like others’, changes over decades or centuries, not months.

    What many who have lost faith in Obama forget is that he has already changed things for the better in so many small but important ways. Under Dubya, great TV journalists like Moyers and Brancaccio seemed to be holding their fire for fear that the ideologues whom Republicans installed in the Public Broadcasting System might fire them or cut their budgets. Now they have no such fears and are giving us no-holds-barred journalism that counters conventional wisdom and the herd mentality.

    Except for a few New York Times pundits, I haven't seen more courageous and penetrating journalism anywhere. And it’s all on TV, which still seems to be the dominant medium for people over 50.

    So all is not lost. There are some excellent journalists covering what is really happening, and they do have substantial media coverage. But you have to know where to look.

    Jay

     
  • At Thu Jan 21, 03:03:00 PM EST, Blogger jay said…

    Addendum:

    I found the TV feature on media. The reason I couldn't find it is that it was by Brancaccio, not Moyers. Here’s the link.

     

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