Dana Blankenhorn

Why Gas Prices Are Rising

It's not what you think. Drilling has nothing to do with it. Oil prices have little to do with it.

This is a story of conservation and content. The story is in the refineries.

The gas you use in winter is different from what you use in summer. It's different depending on where you live.

Gas used in the winter contains a lot of butane. Butane is cheap, but it turns to gas at about the melting point of water. That's why your gas cap has a “vapor lock” – it's trying to trap the gases in the gas in the tank, so they can be used, rather than blow away and be wasted.

What replaces butane in summer gas? Mainly ethanol. Alcohol. It can be made in the refining process, or it can be made in other ways. Ethanol costs more than butane. Some people pay as much as $250/gallon for it – if it's properly aged in the right barrels. But even the cheapest ethanol has a price higher than that of butane.

What Warren Buffett Doesn't Know

Warren Buffett won himself some headlines today with another call for newspapers to charge people for content. 

Newspapers grabbed this one eagerly but there's something neither they nor Buffett know.

They already do charge. All of them.

They charge you in time. The time it takes you to read anything is a real cost, to you. I can very much understand why you would resent anyone talking about charging you money for something you're already paying for, with your time, attention, and (assuming you believe what you read) credibility. I resent it, too.

Especially since, in the old print model, content was always free to begin with. The cost of the paper was never more than the cost of getting it from the printer to you. The cover price was split between the newscarrier (or newstand) and the truck that dropped piles of paper on the street (or driveway).

How were writers paid 20 years ago? Advertising. The ads that surrounded the content paid for the writers, the editors, the salesmen, the typesetting, and the printing. Not to mention the executives at the top of the tower and the profits that went to shareholders.

Project Takeover

Note: An edited version of this story appeared last week at Open Source Delivers.

 

---

We all know what happens when a big company comes in and takes over a popular open source project.

It's not pretty.

What happened to Java, OpenOffice and Solaris under Oracle was not pretty, but the community did all it could about it. Those projects had already been under a big company, Sun Microsystems, so Oracle's takeover was something in the natural order of things.

What we may soon see, however, what we're starting to see, are big companies taking on support of projects that already have a corporate sponsor. A small company devoted to the code that has been fighting to monetize it suddenly looks up and finds a giant hovering over it. The cat eating the mouse becomes food for the coyote.

Revolution Analytics recently found itself in this position. The corporate sponsor of the R big data language recently found out that Oracle will be offering support for R in its data center offerings.

David Smith, the company's vice president of marketing and community, doesn't feel like the cat before the coyote, however.

Portlandia Comes to Town

Last night I decided to honor my late friend Russell Shaw, who loved Portland from the moment he saw it in the late 1990s until his death in 2008, and attend a show based on Portlandia , a TV show I know he would have loved.

Portlandia, starring Fred Armisen and Carrie Brownstein, portrays Russell's Portland as nothing I've ever seen. It never rains in this Portland. All the people are quirky and individualistic, obsessed with small, personal things. Even when the personal things are broad – like the fate of the Earth – it's all still personal.

The show itself started at 11 PM in the Variety Playhouse, a converted movie theater near Little Five Points, which itself is like a tiny version of Portland plopped into Atlanta's intown. Fred and Carrie really had very little to offer – a few lame jokes, some video clips, a question-and-answer session. It was mainly a chance for fans of the show, mostly hipsters in their 20s and 30s, to see and get close to their heroes. (I hadn't seen so much white skin in Atlanta since Spamalot.)

A Growth Strategy

Think of this as Volume 16, Number 8 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

---

I have written a lot lately about how our politics are like those of 1972, and how economic policy drives the political train.

But how do you turn all that into a growth strategy? (To the right, the avatar of the last generation's growth, and its co-creator, Steve Wozniak.)

First, understand where growth will come from, after 2012. The War Against Oil will be a war of ideas, and theories, and tests of those theories in the form of start-ups. The nation that wins this future will have the best environment for not only creating ideas, but nourishing them, testing them, and discarding those that don't work.

My Latest At InvestorCandyTV

It's all on YouTube at InvestorCandyTV. 

I still think I have a face for radio and a voice for print, but people seem to be watching, so I'll keep talking. Here's my latest, on Electronic Arts:

 

Nixon and O.J.

Think of this as Volume 16, Number 7 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

---

They framed a guilty man.

That's what was famously said of O.J. Simpson after his acquittal (he eventually became violent again and is now in jail in Nevada). It meant they went so far in trying to convict a man they knew was guilty that they gave his friends a way to claim he wasn't.

The same may have been true of Richard Nixon.

Nixon was guilty. Yes, he became an enemy of democracy. Yes, he set up the plumbers and all the rest of it. Yes, he tried to cover up Watergate.

But in their zeal to convict him, humiliate him, throw him in jail, Americans also went too far. They mistakenly conflated what he believed with who he was. When Nixon came down, liberals thought his politics came down with him. They didn't. And, after Carter, liberals spent a generation in the desert paying for that mistaken assumption.

TCU

Almost 20 years ago Texas Christian University (TCU) faced a choice.

It was losing the cash cow of the Southwest Conference. It could accept that or double-down on athletics.

It chose to double-down. The school now has state-of-the-art facilities, a football coach making millions a year, and additions to its football stadium estimated to cost $100 million.

In doing this TCU tied its reputation to the behavior of 20 year old kids. So when some of those kids turn out to be using drugs common to 20-year olds, TCU is as shocked as Captain Renault.

TCU could have put its money into academics. It could have gone after some Pulitzer Prize winners, some Nobel Prize winners. It could have built great laboratories with the money it poured into athletics. It could have hired some real stars, the kind who draw great students, the kind who raise a school's academic standing.

TCU chose to put its reputation in the hands of 20 year old athletes instead. You reap what you sew.

The scandal here isn't just what the kids did. They will pay for it for the rest of their lives. The real scandal is the choice the TCU Administration made, one they continue to make, one far too many colleges and universities that could be great make every day.

There's your scandal. And throwing those kids under the bus won't wipe the stain from your hands, guys.

Validation

Think of this as Volume 16, Number 6 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

---

The hardest period for a new political thesis is the time of validation.

Getting into power is exciting. Staying in power is harder.

When a set of political assumptions are new, a new Thesis has to compromise on principles, to the annoyance of the base. These compromises don't bring the other side closer – they push it away. This bit of sketch comedy from Monty Python sums it up:

First Man: (holding up a newspaper) You see this? Nixon's had an asshole transplant!

Second Man: Did you see the stop press, there? The asshole's rejected him!

In the face of this scorn Nixon became just what his enemies perceived him to be, a megalomaniac, an enemy of democracy – small d. Watergate destroyed the man but (and this is the important part) it didn't destroy his ideas. It didn't change his party's strategy. Democrats mistook the rejection of Nixon, and Ford's pardon of him, for a mandate. Rather than leaning into the conservative wind, as he had done in Georgia, Jimmy Carter let his liberal sails out, and his party was grounded on the Reagan era's rocks.

Bitzio Bids For App Store Bit-ness

Not every interesting idea I see at Seeking Alpha (where I'm now the #1 writer on technology) is from the Fortunate 500, although that's what gets the clicks.

Some are in the "pink sheets," the penny stock listings where much is dross, but some nuggets can turn into gold.

Companies like Bitzio Inc., whose symbol is BTZO.

According to Bill Schonbrun, head guy (OK, CEO) , Apple doesn't really want to run an app store. That is, they don't want to be in the business of approving – or disapproving – every program that runs on its iPhones and iPads.

They just want their cut of anything that's sold.

To Schonbrun, this spells opportunity. Bitzio has created a system that lets anyone create a Web app, that runs in an as Javascript and HTML5, which Bitzio will then distribute and monetize through ads.