the middle of everything matters

I didn’t grow up in a traditionally religious household, but I did grow up in what I always felt was a fairly spiritual one, in so much as that “balance” and “harmony” were pretty core concepts. It wasn’t explicitly stated or anything (no crystals, no auras, nothing like that), but when I look back on it, it seems obvious. My parents loved a different thing about each season, each part of the day, and each part of their lives. They didn’t complain about being old, and they ignore what I thought because I was young. My dad read books about taoism and eastern religions, and my mom preached moderation so strongly, that once, after tirelessly nagging me to read a book for about two weeks one summer, actually made me stop and go outside when I got hooked on this as a little kid. It was all about moderation.

I grew up thinking this was normal, because my parents didn’t seem especially weird, or unsuccessful, and maybe it used to be normal, but increasingly, it’s not. Heck, maybe it’s even a Rhode Island thing, where exploitable, renewable resources like shellfish and tourists are such a critical part of the economy that if you don’t moderate, you die. But it seems like every problem society faces is related to the attitude that moderation is basically the equivalent of missed opportunity. You could have sold another hundred units. You could have launched in the first quarter. We could have killed Saddam the first time.

All those examples are, of course, true — it’s just that it seems like we used to look at the downsides of aggression (in business, or policy, personal finance, whatever) and weigh those into the whole pro-con calculus a lot more than we do today. Maybe that’s because the benefits from aggression are often immediate, and the costs deferred. You punch someone in the face who’s bothering you, and yeah, for a split second, it’s the greatest decision you’ve ever made. It’s only a few seconds later, when he gets up (or doesn’t), that you realize the downsides of “seizing the opportunity”.

The whole last decade seems to have been premised on this, except, like pretty much everyone in Arrested Development, none of us have actually learned anything. All these shortcuts are doing serious damage to infrastructure, both public and private, real and imagined, that we’ve heavily relied on for the last fifty years while we became the richest, most powerful, more free, and most secure country/culture/whatever in the world. Yes, Congress structurally gets in the way of potentially effective military action, but when you cut them out in the name of expediency, you wake up one day and are simultaneously fighting wars in Iraq, Afghanistan, Libya, and Yemen, and it’s not even lunch yet. Sure, it’d be great if we all owned houses, but only if we can afford them — shredding mortgage standards ended up costing us a lot more money than it made us in the aggregate, and now it’s a seemingly permanent drag on the economy. Companies merge or acquire each other to drive up the stock price, or because whoever is advising them is getting a transaction fee, and then end up eating the cost of Skype, or AOL, or everything Yahoo’s bought since 2002.

I know politicians have to do it, or think they have to do it, but personally, I’d find it refreshing if they didn’t spend so much energy kissing the middle class’ butt, and spent a little more explaining why a middle class is necessary to everyone else. The silent majority isn’t divinely inspired, or somehow morally justified to exist; but they are the backbone of a consumer economy that makes rich people a TON of money. In a healthy consumer economy, smart people can become rich people really fast — so fast, in fact, that marginal tax rates are the least of their concerns. They just want more potential customers. Go ahead, tax the Rockefellers and J.P. Morgans of the world at 60% for every dollar over a million they make, or whatever. They don’t really care, as long as they knew they’d be twice as rich as they were yesterday regardless, because providing services in bulk to the people makes them able to spend more money, and those guys were really, really good at getting people to spend that extra money with them. You have to be patient, of course. You have to care about tomorrow, or your kids carrying on your old-money, blue-blood traditions, or whatever it is that motivated Joe Kennedy to have one of his sons become the President. And maybe people — especially modern rich people — just don’t care about that kind of stuff anymore.

We got away with disregarding these historical fundamentals, economically, for quite a while thanks almost entirely to credit, which America revolutionized during the span of my lifetime into something that’s taken on a life almost entirely its own. But clever as we were, the bill still came eventually, and the economic malaise most people find themselves in — whether they were personally responsible or not — is essentially a result of that. But here’s the crazy part — business still doesn’t get it. They still think they can burn the candle at both ends, squeezing consumers while simultaneously relying on them to buy more than they’ve ever bought. In general, they’ve moved on from what used to be the middle class (where there’s no money anymore, hmm…), and into the new middle class, which used to be the upper middle class. It’s a much smaller group, but it’s also got a lot more money — enough for satellite radio, DVRs, and apps for their phones, in addition to gas and food and what have you. But the business approach? Exactly the same.

Don’t get too used to the “app for everything” era. In just a few years it could be over.

So said a group of mobile application masterminds on a panel moderated by Internet Week chairman David-Michel Davies Thursday.

“I think apps are dead in three to five years,” said Seth Sternberg, CEO and founder of Meebo, which connects people with their friends across the Web.

As the links between mobile devices and the cloud speed up, he added, applications won’t need to be stored locally to deliver a snappy experience. (via Daring Fireball.)

And why do we want to do that? Why do we want people to be online whenever they do anything on their phone?

It’s very hard to understand a unique user in each one of those app environments and so your ability to monetize against them, whether it’s for advertising or other types of models, becomes a lot more difficult,” said Shawn Gunn, head of strategic advertising for mapping and location data company Navteq. “You have much better targeting on the Web because you can kind of persistently track a user. . . . That’s a big challenge today in mobile.”

Ads, baby. They want to sell you even more stuff, which is fine, of course — it’s just that on the other end, you’re going to get squeezed into paying a huge premium for data. Which, of course, is irrelevant if you’re offline, but a massive problem if you’re supposed to be online whenever you do anything. I used to believe (until very, very recently) that the American business sector was capable of duking this kind of thing out with themselves, and coming to a reasonably productive conclusion. After all, the obvious answer here is to get everyone online as cheaply as possible, and watch the new economy explode into action as people (a) spend the money they’re saving in the market, and (b) have millions of new ways to spend it online. There’s no growth in capping what you can do with infrastructure; that’s the kind of thing we have the government for, and we try to avoid putting them in charge of growth industries for a reason. And hey, maybe this does get resolved; maybe Google or Apple or someone with a lot of cash throws their hands up at the lost opportunities and gets into telecom, despite the cost, simply as a means to provide better connectivity through which they can sell more products. Google did it with cell phones, didn’t they?

But I don’t know; you see it less and less. I would argue, in fact, that one of the main reasons Apple has kept it’s momentum going now for basically a decade, with no signs of slowing down, is because they’re the only company in the space that looks at things the old way — the way in which aggression is targeted, and accurate risk assessment is considered a necessary part of conducting business. I don’t think Microsoft calculated the risk of buying Skype at all, and I don’t think RIM calculated the risk of the entire last year at all either, although I’m sure they think they did. I think they were being stubborn and arrogant, and worse than that — lest you think I don’t realize how stubborn and arrogant Apple can be — I think they were being stubborn and arrogant for no particular reason besides it being the natural, personal proclivity of the people running them.

At any rate, this kind of thinking is everywhere, from damn-the-torpedoes policy making in DC and the states, to insane business mergers, to freaking football, where the owners are literally killing their employees and don’t care, not because they don’t think it’s bad for business, but because it probably won’t be bad for business for a while, and until then, it’ll be GREAT for business.

I don’t know if this qualifies as a theory, but the best explanation I’ve got for the whole thing is that there are just too many rich people involved — I mean really, really, crazy rich people, with so much money that nothing they actually do during the day realistically impacts their day to day standard of living. I don’t mind my Senators being rich (it’s occasionally a nice vaccination against direct corruption), but the House is supposed to be for the rabble, not just other rich people. In the military, a senior general makes about ten times as much as a private — which makes sense. CEOs often earn 300 times as much as their base employees, which means they’re basically doing the job because it’s fun, and that doesn’t usually lead to the best business decisions.

But to be clear, it’s not really about money — it’s about decision making, which is obviously impacted by money. And either way, it’s important, we used to be pretty good at it, and lately, we suck at it.

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