President Obama has no trouble making them! Well, except when they’re hard.

If it seems as though the world is moving faster than ever before, maybe that’s just because the White House is moving so slowly. To take an example at random, on Sept. 20, 2001, President Bush gave an address to a joint session of Congress about the war on terror. On Nov. 13, 54 days later, allied troops liberated Kabul. On Sept. 9, 2009, President Obama gave an address to a joint session of Congress in which he pointedly mentioned Afghanistan only as part of an illogical argument for massively higher domestic spending. Tomorrow, 83 days later, Obama will give another speech, this one on Afghanistan.

What a speech it will be! The New York Times gives a preview:

“It’s accurate to say that he will be more explicit about both goals and time frame than has been the case before and than has been part of the public discussion,” said a senior official, who requested anonymity to discuss the speech before it is delivered. “He wants to give a clear sense of both the time frame for action and how the war will eventually wind down.”

The officials would not disclose the time frame. But they said it would not be tied to particular conditions on the ground nor would it be as firm as the current schedule for withdrawing troops in Iraq, where Mr. Obama has committed to withdrawing most combat units by August and all forces by the end of 2011.

Officials of one allied nation who have been extensively briefed on the president’s plan said, however, that Mr. Obama would describe how the American presence would be ratcheted back after the buildup, while making clear that a significant American presence in Afghanistan would remain for a long while.

This is going to be stirring, isn’t it? With confidence in our armed forces, with the unbounding determination of our people, we will give a clear sense of both the time frame for action and how the war will eventually wind down! Let every nation know that we shall pay any price, bear any burden, to ratchet back our presence after the buildup! Either you are with us or you are with those who would fail to make clear that a significant American presence will remain, not just for a while but for a long while!

It sounds as though, after months of indecision, the president has finally resolved to be irresolute. It seems that his central strategic goal is to displease no one. Unless the speech turns out to be markedly different from what the Times leads us to expect–and let us hope it does–it will only reinforce the impression that he is a ditherer.

Last week Joel Achenbach of the Washington Post tried to rebut this stereotype. Here’s how his story began:

President George W. Bush once boasted, “I’m not a textbook player, I’m a gut player.” The new tenant of the Oval Office takes a strikingly different approach. President Obama is almost defiantly deliberative, methodical and measured, even when critics accuse him of dithering. When describing his executive style, he goes into Spock mode, saying, “You’ve got to make decisions based on information and not emotions.”

Obama’s handling of the Afghanistan conundrum has been a spectacle of deliberation unlike anything seen in the White House in recent memory. The strategic review began in September. Again and again, the war council convened in the Situation Room. The president mulled an array of unappealing options. Next week, finally, he will tell the American public the outcome of all this strategizing.

“He’s establishing his decision-making process as being almost diametrically the opposite of the previous administration,” says Lawrence Wilkerson, a retired Army colonel who served as Secretary of State Colin L. Powell’s chief of staff. Wilkerson, who teaches national security decision-making at George Washington University, says the Bush-Cheney style was “cowboy-like, typical Texas, typical Wyoming, and extremely secretive.”

This story appeared on page A1. That is, at the Washington Post, it is still front-page news that “the new tenant of the Oval Office,” who has been there for nearly a quarter of a term, is different from his predecessor. But actually, there’s a lesson here, for journalists and politicians alike. With Achenbach’s comments about Bush in mind, read this excerpt from the former president’s Jan. 10, 2007, speech announcing the surge in Iraq:

It is clear that we need to change our strategy in Iraq. So my national security team, military commanders and diplomats conducted a comprehensive review.

We consulted members of Congress from both parties, allies abroad, and distinguished outside experts.

We benefited from the thoughtful recommendations of the Iraq Study Group, a bipartisan panel led by former Secretary of State James Baker and former Congressman Lee Hamilton. In our discussions, we all agreed that there is no magic formula for success in Iraq. And one message came through loud and clear: Failure in Iraq would be a disaster for the United States.

It was a spectacle of deliberation unlike anything seen in the White House in recent memory. Or it would have been, if anyone remembered it. But no one does, because the stereotype of Bush as “cowboy-like” stuck. The stereotype of Obama as indecisive, detached and irresolute is sticking, too. Achenbach has made a manful effort to counter it, but let’s look at another passage from his piece and see how well he did:

Stephen Wayne, who teaches about the presidency at Georgetown, said: “He’s not an instinctive decision-maker as Bush was. He doesn’t go with his gut, he thinks with his head, which I think is desirable.” Referring to the Afghanistan decision, Wayne said, “I don’t think he is an indecisive person, I just think this is a tough one.”

The defense of Obama is that he’s not indecisive, he just has trouble making tough decisions. When decisions are easy, bang, he makes them just like that! Imagine him sitting in a diner:

Waiter: Would you like eggs for breakfast?

Obama: Yes, I most certainly would!

Waiter: How would you like them cooked?

Obama: Hmm, let’s see. Bush liked deviled eggs, so that’s out. Sunny-side up? No, wait! Scrambled–that way they’re cooked through, so the risk of food poisoning is less. Or I could compromise and have them over easy. Then again, there’s something to be said for hard-boiled . . . Gosh, this is tough . . .

You know what? I’ll let you know at dinnertime. I’m just gonna eat my waffle right now.

Achenbach’s eagerness to portray Obama’s vacillation in a positive light reinforces another stereotype: that of journalists as courtiers rather than critics of the “new” president.

James Taranto, Wall Street Journal

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Full article: http://online.wsj.com/article/SB10001424052748703939404574567780798946274.html

Arlen Specter would make it easier for terrorists to sue.

If you think it’s outrageous that Navy SEALs who helped capture one of Iraq’s most wanted terrorists now face court-martial on charges they roughed him up, just wait. It may get worse. Tomorrow morning, the Senate Judiciary Committee will hold a hearing on a bill introduced by Arlen Specter (D., Pa.) that would make it easier for terrorists to sue military and federal law-enforcement officials.

That’s not Mr. Specter’s intent, of course. It would, however, be the effect of a bill that only a trial lawyer could love: the Notice Pleading Restoration Act of 2009. If successful, it would undo a recent Supreme Court ruling that gave us this common sense standard: Before you can sue someone, you have to have a plausible claim they did something wrong.

Mr. Specter, a former trial lawyer, finds the plausibility standard onerous. The reason has to do with the discovery process. Rightly used, discovery allows lawyers from both sides to gain access to evidence—documents, email, depositions, etc.—that support their case. In practice it can be abused, as when lawyers use discovery to go fishing for a case they don’t have. And because compliance alone can be expensive and time-consuming, many companies find it cheaper to settle.

Greg Garre, a former solicitor general for the Bush administration who will testify at tomorrow’s hearing, puts it this way: “If passed and signed into law, the bill would drive a truck through the Supreme Court ruling and dramatically lower the standards for pleading lawsuits.”

When Mr. Specter introduced his bill in July, he said that insisting on plausible evidence before a lawsuit can proceed will “deny many plaintiffs with meritorious claims access to the Federal courts.” So he aims to reverse the standard: Unless the Court has absolute proof that a claim will not succeed, his bill would effectively waive it through. There may be another, less altruistic interest: At a time when Mr. Specter is in a tough primary fight in his new party, he needs all the generosity he can get from his supporters in the plaintiff’s bar.

The U.S. Chamber of Commerce naturally opposes the bill, saying it would impose a hefty “litigation tax” on American business and encourage frivolous lawsuits. But where do the terrorists come in?

The answer goes back to the original Supreme Court ruling this bill hopes to overturn. That case involved Javaid Iqbal, a Pakistani Muslim who was arrested in the days after Sept. 11, 2001, designated a person of “high interest,” and detained under restrictive conditions. After pleading guilty to criminal charges and serving time, he was released and sent back to Pakistan.

Once free, Mr. Iqbal filed a lawsuit against more than three dozen federal officials and corrections officers. That included everyone from the warden and the guards outside his cell to former Attorney General John Ashcroft and FBI Director Robert Mueller. The complaint alleged that Messrs. Ashcroft and Mueller discriminated against him based on race, religion or national origin.

The Supreme Court limited itself to the charges against Messrs. Ashcroft and Mueller. The ruling came down to this: While Mr. Iqbal was free to sue those who he says abused him, he needed to show his allegations were plausible. Writing for the majority, Justice Anthony Kennedy defined a plausible claim as “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”

That may not sound like much, but consider the alternative. We know that al Qaeda operatives are trained to claim abuse when they are captured. If Mr. Specter’s legislation succeeds, what is to prevent them from alleging all sorts of violations so they can go on discovery expeditions against, say, Gen. David Petraeus or Defense Secretary Robert Gates? And how would that affect the ability of these men to prosecute the war?

Justice Kennedy made this point when he wrote about the “heavy costs” imposed on government officials trying to do their jobs. These costs, he noted, “are only magnified when Government officials are charged with responding to, as Judge [Jose] Cabranes aptly put it, ‘a national and international security emergency unprecedented in the history of the American Republic.'”

As bad as this bill is, it’s an opportunity for Barack Obama. When he speaks at West Point this evening, he will ask for support for his new strategy for Afghanistan. With many Americans still reeling from the decision to try Khalid Sheikh Mohammed in federal criminal court, coming out strongly against the Specter bill would burnish the president’s war-fighting credentials—and limit al Qaeda’s ability to manipulate the courts.

It wouldn’t hurt that in so doing, the president would also be showing himself willing to stand up to a key Democratic constituency. Let’s hope he recognizes this bill for the gift it is.

William McGurn, Wall Street Journal

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Full article: http://online.wsj.com/article/SB10001424052748703939404574568130713843644.html

The surge in temp hiring is not a sign of a malfunctioning economy. It is the face of the future.

The White House is turning its nose up at last month’s spurt in temporary work—the one bright spot in an otherwise grim jobs report. It claims that such work is proof that the economy is still malfunctioning. The truth is that this surge in temporary workers is not only good news for the economy, it’s the future of the 21st century labor market. If Washington wants to jump start job growth for the 3.5 million white-collar workers who have lost jobs in this recession, it should start by scrapping the outdated legal and regulatory hurdles to temporary work.

I know something about this because I run a business that places talented individuals into temporary consulting and interim executive assignments. Amid the worst recession in decades, our business is up 70%. Yet there would be much more growth in this sector if Americans—from the White House down to the personnel department—stopped discriminating against temporary work as inferior or anomalous.

Today, demand for high-end temporary business talent is not focused on cost-cutting projects, as some might suspect. Instead, firms use temporary executives to drive innovation. In uncertain times, firms are simply more comfortable with deploying talent on a flexible basis.

Temporary work also boosts economic efficiency because not all executive roles require permanent staff. For example, one pharmaceutical company client took on a temporary marketing executive to help launch a new drug. The old way of doing this was to make a new permanent hire (or a small team) who would have been under-utilized after the launch. The availability of temporary staff who can get the job done quickly means that firms can rethink how work is organized.

Which brings us to another case for temporary work: Top business talent increasingly wants to work this way. In one situation, a VP-level executive we placed was developing his own new business. He valued the way a part-time senior role allowed him to support his family while he worked on his own project. For others, working in a series of temporary assignments may be their preferred full-time occupation.

Given the contribution that temporary work makes to the economy, it’s time Washington embraced it. Here are three things the feds could do immediately to make it easier for firms and executives to work this way:

First, the Obama administration should create a two-year “safe harbor” for independent professionals doing temporary work. Currently, the rules governing independent contractors are determined on a case-by-case basis and are subject to state law variations. This leaves risk-averse personnel departments wary of hiring temporary executives for fear that they could be reclassified as employees, saddling employers with liabilities. The solution is to create a two-year safe harbor provision that lays out a clear test for being classified as an independent contractor. The White House could streamline these rules, beginning with the IRS, if it made it a priority.

Second, Washington should apply any new employment tax subsidy to temporary jobs. There is much talk of a new jobs tax subsidy, but as it currently stands it would exclude temporary work. This is 20th century thinking. Any new subsidy should seek to boost temporary roles as well.

Third, the feds should let independent workers buy into the congressional health plan. A huge barrier to temporary employment for professionals who prefer to work this way is their inability to access group health coverage outside the permanent employment setting. Though Congress may pass health reform this year, the new insurance exchanges that would remedy this problem won’t come into play until at least 2013. Congress should allow temporary workers to buy into the congressional health plan until then.

As we reboot the great American jobs machine, it’s time to shelve outdated assumptions and accept that a portfolio of multiple assignments is what growing legions of companies and executives want. This new relationship between talent and firms isn’t a failure to be stigmatized, but the latest sign of our economy’s endless capacity for renewal and innovation.

Ms. Miller is the founder and CEO of the Business Talent Group. She served as a special assistant to President Bill Clinton from 1993 to 1995

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Full article: http://online.wsj.com/article/SB10001424052748703939404574567942566170348.html

Confident predictions of catastrophe are unwarranted.

Is there a reason to be alarmed by the prospect of global warming? Consider that the measurement used, the globally averaged temperature anomaly (GATA), is always changing. Sometimes it goes up, sometimes down, and occasionally—such as for the last dozen years or so—it does little that can be discerned.

Claims that climate change is accelerating are bizarre. There is general support for the assertion that GATA has increased about 1.5 degrees Fahrenheit since the middle of the 19th century. The quality of the data is poor, though, and because the changes are small, it is easy to nudge such data a few tenths of a degree in any direction. Several of the emails from the University of East Anglia’s Climate Research Unit (CRU) that have caused such a public ruckus dealt with how to do this so as to maximize apparent changes.

The general support for warming is based not so much on the quality of the data, but rather on the fact that there was a little ice age from about the 15th to the 19th century. Thus it is not surprising that temperatures should increase as we emerged from this episode. At the same time that we were emerging from the little ice age, the industrial era began, and this was accompanied by increasing emissions of greenhouse gases such as CO2, methane and nitrous oxide. CO2 is the most prominent of these, and it is again generally accepted that it has increased by about 30%.

The defining characteristic of a greenhouse gas is that it is relatively transparent to visible light from the sun but can absorb portions of thermal radiation. In general, the earth balances the incoming solar radiation by emitting thermal radiation, and the presence of greenhouse substances inhibits cooling by thermal radiation and leads to some warming.

That said, the main greenhouse substances in the earth’s atmosphere are water vapor and high clouds. Let’s refer to these as major greenhouse substances to distinguish them from the anthropogenic minor substances. Even a doubling of CO2 would only upset the original balance between incoming and outgoing radiation by about 2%. This is essentially what is called “climate forcing.”

There is general agreement on the above findings. At this point there is no basis for alarm regardless of whether any relation between the observed warming and the observed increase in minor greenhouse gases can be established. Nevertheless, the most publicized claims of the U.N.’s Intergovernmental Panel on Climate Change (IPCC) deal exactly with whether any relation can be discerned. The failure of the attempts to link the two over the past 20 years bespeaks the weakness of any case for concern.

The IPCC’s Scientific Assessments generally consist of about 1,000 pages of text. The Summary for Policymakers is 20 pages. It is, of course, impossible to accurately summarize the 1,000-page assessment in just 20 pages; at the very least, nuances and caveats have to be omitted. However, it has been my experience that even the summary is hardly ever looked at. Rather, the whole report tends to be characterized by a single iconic claim.

The main statement publicized after the last IPCC Scientific Assessment two years ago was that it was likely that most of the warming since 1957 (a point of anomalous cold) was due to man. This claim was based on the weak argument that the current models used by the IPCC couldn’t reproduce the warming from about 1978 to 1998 without some forcing, and that the only forcing that they could think of was man. Even this argument assumes that these models adequately deal with natural internal variability—that is, such naturally occurring cycles as El Nino, the Pacific Decadal Oscillation, the Atlantic Multidecadal Oscillation, etc.

Yet articles from major modeling centers acknowledged that the failure of these models to anticipate the absence of warming for the past dozen years was due to the failure of these models to account for this natural internal variability. Thus even the basis for the weak IPCC argument for anthropogenic climate change was shown to be false.

Of course, none of the articles stressed this. Rather they emphasized that according to models modified to account for the natural internal variability, warming would resume—in 2009, 2013 and 2030, respectively.

But even if the IPCC’s iconic statement were correct, it still would not be cause for alarm. After all we are still talking about tenths of a degree for over 75% of the climate forcing associated with a doubling of CO2. The potential (and only the potential) for alarm enters with the issue of climate sensitivity—which refers to the change that a doubling of CO2 will produce in GATA. It is generally accepted that a doubling of CO2 will only produce a change of about two degrees Fahrenheit if all else is held constant. This is unlikely to be much to worry about.

Yet current climate models predict much higher sensitivities. They do so because in these models, the main greenhouse substances (water vapor and clouds) act to amplify anything that CO2 does. This is referred to as positive feedback. But as the IPCC notes, clouds continue to be a source of major uncertainty in current models. Since clouds and water vapor are intimately related, the IPCC claim that they are more confident about water vapor is quite implausible.

There is some evidence of a positive feedback effect for water vapor in cloud-free regions, but a major part of any water-vapor feedback would have to acknowledge that cloud-free areas are always changing, and this remains an unknown. At this point, few scientists would argue that the science is settled. In particular, the question remains as to whether water vapor and clouds have positive or negative feedbacks.

The notion that the earth’s climate is dominated by positive feedbacks is intuitively implausible, and the history of the earth’s climate offers some guidance on this matter. About 2.5 billion years ago, the sun was 20%-30% less bright than now (compare this with the 2% perturbation that a doubling of CO2 would produce), and yet the evidence is that the oceans were unfrozen at the time, and that temperatures might not have been very different from today’s. Carl Sagan in the 1970s referred to this as the “Early Faint Sun Paradox.”

For more than 30 years there have been attempts to resolve the paradox with greenhouse gases. Some have suggested CO2—but the amount needed was thousands of times greater than present levels and incompatible with geological evidence. Methane also proved unlikely. It turns out that increased thin cirrus cloud coverage in the tropics readily resolves the paradox—but only if the clouds constitute a negative feedback. In present terms this means that they would diminish rather than enhance the impact of CO2.

There are quite a few papers in the literature that also point to the absence of positive feedbacks. The implied low sensitivity is entirely compatible with the small warming that has been observed. So how do models with high sensitivity manage to simulate the currently small response to a forcing that is almost as large as a doubling of CO2? Jeff Kiehl notes in a 2007 article from the National Center for Atmospheric Research, the models use another quantity that the IPCC lists as poorly known (namely aerosols) to arbitrarily cancel as much greenhouse warming as needed to match the data, with each model choosing a different degree of cancellation according to the sensitivity of that model.

What does all this have to do with climate catastrophe? The answer brings us to a scandal that is, in my opinion, considerably greater than that implied in the hacked emails from the Climate Research Unit (though perhaps not as bad as their destruction of raw data): namely the suggestion that the very existence of warming or of the greenhouse effect is tantamount to catastrophe. This is the grossest of “bait and switch” scams. It is only such a scam that lends importance to the machinations in the emails designed to nudge temperatures a few tenths of a degree.

The notion that complex climate “catastrophes” are simply a matter of the response of a single number, GATA, to a single forcing, CO2 (or solar forcing for that matter), represents a gigantic step backward in the science of climate. Many disasters associated with warming are simply normal occurrences whose existence is falsely claimed to be evidence of warming. And all these examples involve phenomena that are dependent on the confluence of many factors.

Our perceptions of nature are similarly dragged back centuries so that the normal occasional occurrences of open water in summer over the North Pole, droughts, floods, hurricanes, sea-level variations, etc. are all taken as omens, portending doom due to our sinful ways (as epitomized by our carbon footprint). All of these phenomena depend on the confluence of multiple factors as well.

Consider the following example. Suppose that I leave a box on the floor, and my wife trips on it, falling against my son, who is carrying a carton of eggs, which then fall and break. Our present approach to emissions would be analogous to deciding that the best way to prevent the breakage of eggs would be to outlaw leaving boxes on the floor. The chief difference is that in the case of atmospheric CO2 and climate catastrophe, the chain of inference is longer and less plausible than in my example.

Mr. Lindzen is professor of meteorology at the Massachusetts Institute of Technology.

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Full article and photo: http://online.wsj.com/article/SB10001424052748703939404574567423917025400.html

Climate change researchers must believe in the reality of global warming just as a priest must believe in the existence of God.

Last year, ExxonMobil donated $7 million to a grab-bag of public policy institutes, including the Aspen Institute, the Asia Society and Transparency International. It also gave a combined $125,000 to the Heritage Institute and the National Center for Policy Analysis, two conservative think tanks that have offered dissenting views on what until recently was called—without irony—the climate change “consensus.”

To read some of the press accounts of these gifts—amounting to about 0.0027% of Exxon’s 2008 profits of $45 billion—you might think you’d hit upon the scandal of the age. But thanks to what now goes by the name of climategate, it turns out the real scandal lies elsewhere.

Climategate, as readers of these pages know, concerns some of the world’s leading climate scientists working in tandem to block freedom of information requests, blackball dissenting scientists, manipulate the peer-review process, and obscure, destroy or massage inconvenient temperature data—facts that were laid bare by last week’s disclosure of thousands of emails from the University of East Anglia’s Climate Research Unit, or CRU.

But the deeper question is why the scientists behaved this way to begin with, especially since the science behind man-made global warming is said to be firmly settled. To answer the question, it helps to turn the alarmists’ follow-the-money methods right back at them.

Consider the case of Phil Jones, the director of the CRU and the man at the heart of climategate. According to one of the documents hacked from his center, between 2000 and 2006 Mr. Jones was the recipient (or co-recipient) of some $19 million worth of research grants, a sixfold increase over what he’d been awarded in the 1990s.

Al Gore wins the 2007 Nobel Peace Prize: Doing well by doing good?

Why did the money pour in so quickly? Because the climate alarm kept ringing so loudly: The louder the alarm, the greater the sums. And who better to ring it than people like Mr. Jones, one of its likeliest beneficiaries?

Thus, the European Commission’s most recent appropriation for climate research comes to nearly $3 billion, and that’s not counting funds from the EU’s member governments. In the U.S., the House intends to spend $1.3 billion on NASA’s climate efforts, $400 million on NOAA’s, and another $300 million for the National Science Foundation. The states also have a piece of the action, with California—apparently not feeling bankrupt enough—devoting $600 million to their own climate initiative. In Australia, alarmists have their own Department of Climate Change at their funding disposal.

And all this is only a fraction of the $94 billion that HSBC Bank estimates has been spent globally this year on what it calls “green stimulus”—largely ethanol and other alternative energy schemes—of the kind from which Al Gore and his partners at Kleiner Perkins hope to profit handsomely.

Supply, as we know, creates its own demand. So for every additional billion in government-funded grants (or the tens of millions supplied by foundations like the Pew Charitable Trusts), universities, research institutes, advocacy groups and their various spin-offs and dependents have emerged from the woodwork to receive them.

Today these groups form a kind of ecosystem of their own. They include not just old standbys like the Sierra Club or Greenpeace, but also Ozone Action, Clean Air Cool Planet, Americans for Equitable Climate Change Solutions, the Alternative Energy Resources Association, the California Climate Action Registry and so on and on. All of them have been on the receiving end of climate change-related funding, so all of them must believe in the reality (and catastrophic imminence) of global warming just as a priest must believe in the existence of God.

None of these outfits are per se corrupt, in the sense that the monies they get are spent on something other than their intended purposes. But they depend on an inherently corrupting premise, namely that the hypothesis on which their livelihood depends has in fact been proved. Absent that proof, everything they represent—including the thousands of jobs they provide—vanishes. This is what’s known as a vested interest, and vested interests are an enemy of sound science.

Which brings us back to the climategate scientists, the keepers of the keys to the global warming cathedral. In one of the more telling disclosures from last week, a computer programmer writes of the CRU’s temperature database: “I am very sorry to report that the rest of the databases seems to be in nearly as poor a state as Australia was. . . . Aarrggghhh! There truly is no end in sight. . . . We can have a proper result, but only by including a load of garbage!”

This is not the sound of settled science, but of a cracking empirical foundation. And however many billion-dollar edifices may be built on it, sooner or later it is bound to crumble.

Bret Stephens, Wall Street Journal

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Full article and photo: http://online.wsj.com/article/SB10001424052748703939404574566124250205490.html

In many ways, MySQL embodies the ideals of the populist software movement known as open source, in which a program’s creator releases it to the world free of charge, and legions of volunteers contribute improvements that are also freely shared.

The start-up company came out of nowhere, building a database application beloved by vibrant, young Internet companies. Logging in from homes scattered around the globe, its workers seemed more a part of a virtual commune than a corporate monolith, and they relished taking on proprietary software giants like Microsoft.

But like most open-source companies, MySQL’s sales, tied to support deals, never matched the astronomical number of downloads for its product, about 60,000 a day. In January 2008, the founders decided to sell the company for $1 billion to Sun Microsystems. And this year, Sun agreed to sell itself to Oracle, which makes database software aimed at larger companies and tougher jobs, for $7.4 billion.

Now, disagreement over the value of MySQL — both as a stand-alone entity and as part of a big company — lies at the heart of a bitter public battle between Oracle and the European Union over the Sun acquisition. The fight illuminates a larger truth about open-source companies: their societal and strategic importance far exceeds their financial value as operating businesses.

European regulators view MySQL as sort of a database of the people, a low-cost alternative to Oracle’s costly proprietary products. The regulators worry that Oracle may stop improving MySQL in favor of protecting its core traditional products, and customers will lose an important option in the database market.

Neelie Kroes, Europe’s competition commissioner, wants open-source software to be available.

“In the current economic context, all companies are looking for cost-effective I.T. solutions, and systems based on open-source software are increasingly emerging as viable alternatives to proprietary solutions,” said the European Commission’s competition chief, Neelie Kroes, in a recent statement. “The commission has to ensure that such alternatives would continue to be available.”

Oracle, meanwhile, insists that it will continue to develop MySQL and other Sun technologies. Oracle’s chief executive, Lawrence J. Ellison, contends that MySQL serves a different part of the database market than Oracle’s main products do — an assessment supported by many analysts. One main incentive for Oracle to keep improving MySQL is that the program serves as a bulwark against Microsoft’s SQL Server database, which challenges Oracle’s products on the low end.

“The commission’s statement of objections reveals a profound misunderstanding of both database competition and open source dynamics,” Oracle said in a statement.

To Ms. Kroes’s point, there is an open-source alternative, and usually a pretty good one, to just about every major commercial software product. In the last decade, these open-source wares have put tremendous pricing pressure on their proprietary rivals. Governments and corporations have welcomed this competition.

Whether open-source firms are practical as long-term businesses, however, is a much murkier question.

The best-known open-source company is Red Hat, which produces a variant of the Linux operating system for server computers. Like most of its peers, Red Hat offers a free version of its base product and relies on selling support services and extra tools for revenue. In its last fiscal year, which ended in March, the company’s revenue rose 25 percent to $653 million, and it reported net income of $79 million.

But Red Hat is a rare case. “There’s only one company making real money out of open source, and that’s Red Hat,” said Simon Crosby, the chief technology officer at Citrix Systems, which acquired the open-source software maker XenSource for $500 million in 2007. “Everyone else is in trouble.”

The enduring appeal of open-source software revolves more around its disruptive nature than blockbuster sales.

As long as there has been software, there have been some people eager to share and improve it for the common good. The rise of the Internet made such sharing easier than ever, enabling people the world over to work together on projects outside the confines of a formal corporate structure.

Open-source software has thrived and played a prominent role in the building of the Internet’s infrastructure. Many companies rely on Linux-based computers and Apache Web server software to display their Web pages. Similarly, the Mozilla Firefox Web browser has emerged as the most formidable competitor to Microsoft’s Internet Explorer.

The grass-roots nature of open source has led advocates to view the projects as a populist foil to proprietary software, where a company keeps the inner workings of its applications secret.

But in the last decade, open-source software has become more of a corporate affair than a people’s revolution.

In some cases, dominant technology companies have used open-source projects as pawns. Google, for example, has needled Microsoft by providing financial support to the nonprofit Mozilla Foundation, which oversees of the development of Firefox. I.B.M. has been a major backer of Linux, helping to raise it as a competitor to Microsoft’s Windows and other proprietary operating systems.

Many of the top open-source developers are anything but volunteers tinkering in their spare time. Companies like I.B.M., Google, Oracle and Intel pay these developers top salaries to work on open-source projects and further the companies’ strategic objectives.

In the last three years, there have been five big acquisitions in which a major technology company bought an up-and-coming open-source company for many times its annual revenue. Sun, for example, bought MySQL for about 10 times its revenue, while Citrix bought XenSource for more than 150 times its revenue, according to people familiar with the companies’ sales.

Most recently, VMware, the leading maker of virtualization software, brought SpringSource for $420 million, or about 20 times its annual sales.

“A lot of these guys were getting close to an I.P.O., but they elected to go the acquisition route instead,” said Michael Olson, the chief executive of Cloudera, an open-source start-up. “A lot of open-source firms are one-product companies, and it’s hard to build a long-term, successful business that way.”

The larger technology companies have tended to buy these one-trick ponies for strategic purposes. With its core server business declining, Sun hoped it could piggy-back on MySQL’s momentum with Internet companies. In SpringSource, VMware acquired a company that had cultivated deep interest with software developers and helped VMware diversify beyond its virtualization roots.

“VMware took into consideration that which money can’t buy, which is a critical mass of adoption,” said Peter Fenton, a venture capitalist at Benchmark Capital, who has been involved in some fashion with many of the large open-source deals. “SpringSource’s main product was the equivalent of a best-selling novel.”

Citrix took perhaps the biggest risk of all, paying a huge premium for XenSource in the hopes of disrupting VMware’s position in the virtualization market.

“I don’t think Citrix would ever say it paid too much,” Mr. Crosby said. “Citrix leaped to the forefront of a whole software category. The ability to talk credibly about virtualization is worth a huge amount in its own right.”

Meanwhile, the ideal of an independent open-source giant has faded.

Mr. Fenton said that many open-source advocates had once hoped Red Hat would scoop up the top open-source start-ups, keeping these crown jewels out of the hands of proprietary software makers. But the company failed to go after other open-source companies initially and later could not afford to pay the high prices offered by larger companies.

“You could make the case there was a window of opportunity to do that three to five years ago,” Mr. Fenton said. “That opportunity has gone away. And it’s hard to put Humpty Dumpty back together again now.”

Ashlee Vance, New York Times

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Full article and photo: http://www.nytimes.com/2009/11/30/technology/business-computing/30open.html

Dave Ramsey

Dave Ramsey looks nothing like a televangelist. He’s a little on the short side, neither fat nor thin, and he wears jeans and a sports jacket, not a shiny suit and an oily smile. With his goatee and what’s left of his graying hair trimmed close to his head, he looks mostly like what he is—a well-groomed, middle- to upper-middle-class American professional. But when he runs out onstage and starts dispensing financial advice, you realize that he could have been a great preacher.

On a fine summer day at the end of August, I paid $220 for front-row seats on the floor of a minor-league hockey rink in Detroit, just to hear Ramsey talk for five hours. The ostensible topic: getting your financial life in order. Afterward, my fiancé, who grew up in the Bible Belt, called me to ask what I’d thought.

“I think I just attended my first prayer meeting,” I told him.

There was, of course, a great deal of talk about money, and what to do with it. But the format was more tent revival than accounting seminar, with the first 90 minutes or so mostly devoted to Ramsey’s personal story of ruin and redemption. We heard how, during the second half of the 1980s, a young Ramsey built up a multimillion-dollar real-estate empire—then lost it all as the bank got nervous and called his loans, ultimately forcing him and his wife into bankruptcy. How, searching for help in his hour of need, he turned to the Bible and discovered Proverbs 22:7: “The rich rule over the poor, and the borrower is slave of the lender.” At that moment, he told an audience so hushed that we could hear the ice squeak, Ramsey decided to never borrow another dollar again.

By all accounts, he hasn’t—a commitment that many business owners would like to catch him out on, since his disciples routinely shun lucrative financing deals at car dealerships, furniture stores, and electronics warehouses. The merchants’ loss is Ramsey’s gain: he has become rich spreading his debt-free gospel. The Dave Ramsey program got traction in evangelical churches, which are still one of the biggest distribution networks for his 13-week video program, Financial Peace University. Ramsey is not the first evangelical to sell financial advice to his co-religionists, of course. Jim Sammons, Crown Financial Ministries, and others all offer similar messages to get out of debt, tithe, and so on—not to mention the far more numerous proponents of the so-called prosperity gospel, who encourage consumption rather than restraint because they believe that God will shower the faithful with riches (see “Did Christianity Cause the Crash?,” page 38).

But although other evangelical financial advisers flourish mostly within their religious communities, Ramsey has made himself the breakout act, bringing his basic message to the wider world. His programs are available in high schools and on military bases, and Ramsey himself can be heard through his daily radio show, his nightly Fox Business broadcast, his Web sites, his live events, and his many books, including a special line of children’s stories. His company, the Lampo Group, now has hundreds of employees.

Ramsey offers some investment advice (much of which would have struck horror in my business-school professors), but for most of his followers, the main attraction is a simple program: give 10 percent of your income to charity, save 15 percent for retirement, build up a sizable emergency stash and a college fund for your kids, and above all, stop borrowing money. Ramsey devotees pay cash for everything they can. They are allowed only one exception to the no-more-debt rule: a 15-year fixed-rate mortgage. He is so serious about shunning debt that his Web site takes only debit cards; try to pay with a Capital One Visa, and the system rejects the card, then tut-tuts at you. These simple, austere, unbreakable rules are, as Ramsey likes to say, “the advice that God and Grandma gave you.”

Most things sound a lot crazier from the outside, and so once I’d decided to write about the friendly, slightly bombastic man on the television screen, I thought I should try his program, as outlined in his book The Total Money Makeover. At the beginning of August, I had dutifully sat down with Peter, my fiancé, to draft a budget. Once we’d given every dollar a name (as the book puts it), I drove to the bank and withdrew 1,800 of them. Huddled over the wheel to hide this stupendous wad of cash from prying eyes, I doled out the money among various envelopes for groceries, parking, entertainment, clothing, and so on, as recommended by Ramsey—and, funnily enough, by my grandmother, who invented a nearly identical system to manage my grandfather’s meager earnings from delivering groceries during the Great Depression.

When you pay for something with a credit card, or even a debit card, you can easily spend a few extra dollars here and there. But as Ramsey explained—while waving a handful of hundred-dollar bills to illustrate the point—if you have to actually hand over some of your dwindling cash supply, you tend to ponder every purchase. That impulsive latte buy becomes a little less enjoyable when every time you haul out your wallet, a quavering voice inside your head asks, “You want to send Uncle Abe away?” And sure enough, though we thought we’d budgeted conservatively for just the necessities, we nonetheless finished the month with extra money in every envelope.

It’s also hard to spend cash, because so many people look at you funny when you try. The very first day, I spent almost 20 minutes trying to check out in the “better dresses” section of a department store. The saleslady stared at the hundred-dollar bill in her palm as if I’d just handed her an eel. After a series of plaintive looks at my obviously card-free wallet, she started stabbing at the cash-register keyboard with a sort of bleak despair. To my immense surprise and relief—and clearly, also to hers—the cash drawer eventually opened.

Ramsey calls this “being weird.” The phrase came up over and over again in his five-hour spiel, always punctuated with the same rejoinder: “Normal is broke.” During our first month on the Dave Ramsey program, I was startled to find out how true this is. When I described my project, a really shocking number of people, many of them married professionals with good incomes, confessed that they had no control over their money.

They aren’t much different from most of America. According to a recent survey from CareerBuilder, six of every 10 workers “always” or “usually” live paycheck to paycheck. Affluent, educated people do a little better, but they certainly aren’t immune—three in 10 of those with salaries above $100,000 also report that they’re spending it as fast as they make it.

In fact, in some ways, education makes living above your means easier. In business school, my fellow students and I became big fans of the idea of “consumption smoothing,” as laid out in the work of economic luminaries like Milton Friedman and Laurence Kotlikoff. At least as we read it, the theory told us to do what we wanted, which was to spend money on stuff we didn’t quite need. After all, we’d be making good money when we graduated, so why not borrow a little against that future income to buy a car or go to Cancún?

Ramsey could have told me why not, but I doubt I would have listened; it’s a lesson you can perhaps learn only firsthand. I graduated into the teeth of the 2001 recession $100,000 in debt. My six-figure job offer evaporated when the consulting firm fell on hard times. It took me two years to find a permanent job, and when I did, that job was in journalism, which paid about a third of what I’d been expecting.

Just like me, our nation has experimented with the “educated” overuse of leverage, aka debt. Homeowners who believed that they would have been fools to rent when a mortgage-interest tax deduction was available have poured their savings and their hearts into homes they are now losing to foreclosure. M.B.A.s are shuttering the companies they leveraged to the hilt as they chased tax deductions and higher returns. Even our politicians speak of deficit spending as a sort of investment opportunity. In industries from autos to housing, even as the private sector has retreated to repair its balance sheets, the government has dangled money it has borrowed in front of potential buyers to tempt them to further purchases.

Debt magnifies our fortunes, whichever way they’re going. When incomes are rising, debt helps us live even better. When incomes are falling, fixed debt payments can push us into the abyss. If you have substantial assets, you can lose a lot more than your sterling FICO score in a bankruptcy, and bankruptcy makes it hard to save, or start over. Even if you don’t go bankrupt, debt payments make it difficult for you to accumulate wealth, or to take the kind of risks that can make your life better, like switching jobs, starting a business, or getting married. And of course, if everyone takes on too much leverage at once, the whole system can collapse.

Really, we know all this. We knew it before. Just as G. K. Chesterton once remarked of Christianity, the Grandma Plan hasn’t been tried and found wanting, so much as found difficult and left untried. It’s hard to make a collective decision to delay gratification—and even harder to “get your grandma on” when everyone else is out charging the good life to MasterCard.

After all, many people who got caught out in the housing bubble didn’t exactly want to take out an adjustable-rate mortgage with a 3 percent down payment. But there was no other way they could afford even a modest-size house in a decent school district. Houses were being priced, not on some notion of intrinsic value, but on the maximum payment that likely buyers could afford. As other buyers and many bankers became more willing to take absurd risks, even previously prudent consumers felt they had to follow suit. They couldn’t get “weird” without sacrificing their children’s education.

Dave Ramsey has little patience with this sort of argument. Some of his most scathing mockery is reserved for people who take out loans to pay tuition at an expensive private college. No school, he avers, is so much better than the local college that it’s worth gambling with your financial future.

There’s some evidence that he’s right about this; a study by the economists Stacy Berg Dale and Alan Krueger famously found that students who were accepted by schools with high average SAT scores, but chose to go somewhere else, earn about the same as those who actually attend the higher-ranked school. But there is also evidence to the contrary; and what nice upper-middle-class family is willing to, well, gamble with their child’s financial future?

This may be why Ramsey and the other evangelists for a debt-free existence have thrived most in a subculture that offers something even more sacred than a Harvard education. Though Ramsey’s television and radio shows have attracted a large secular audience, his hard-core followers still seem to be overwhelmingly evangelical. Ramsey closed his talk in Detroit with a sober lecture on taking care of yourself mentally, physically, emotionally, and of course, spiritually. “Bluntly,” he said, “I’m talking about this man named Jesus, and if you don’t know him, you need to be introduced.” The arena erupted in a joyous roar.

Though I did take the audio CD of Ramsey’s personal witness being handed out free at the exit, I’m afraid that Jesus and I aren’t really any better acquainted than we were before. Nonetheless, Ramsey has made a convert out of a secular journalist with one of the pricey M.B.A.s he likes to poke fun at. I have never felt as serenely in control of my finances as I have during these months of knowing that every single dollar is where it is supposed to be: either in the bank, or on a well-chaperoned date with our envelope organizer. The process has been surprisingly painless but, even more surprisingly, pleasant.

Of course, both my fiancé and I have already acquired our expensive educations and a pair of decent cars. We don’t have any kids, we don’t own a home, and it won’t hurt us to rent a few extra years until we have paid off the last of our student loans and can afford a 20 percent down payment on a house. It is easier for us to be weird than for most of our peers.

On the other hand, Americans aren’t going to fix our national financial problems until a lot more people decide to drop out of the “normal” competition to see who can borrow the most money in order to bid on a fixed number of homes in affluent school districts and places at selective colleges. You don’t need to be a Christian to look for a better way. Even an unbeliever knew enough to listen up when he saw the bright light on the road to Damascus.

Megan McArdle is The Atlantic’s business and economics editor, and the editor of the business channel at theatlantic.com.

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Full article and photo: http://www.theatlantic.com/doc/200912/mcardle-ramsey-debt