More interesting business news that flew a bit under the radar in the past few weeks:

Nano, Nano

Apple’s iPod nano is a very cool product, and appears to be flying off the shelves. It’s also the latest improvement to an exceptional information theft device:

The iPod’s large capacity and ability to connect easily to a computer and transfer data rapidly via a Universal Serial Bus — known commonly as a USB — or FireWire port make it potentially more useful in information theft, said Abe Usher, founder of Sharp Ideas, an IT consulting firm in Centreville, Va.

“The iPod has wide adoption, is overlooked by security, and has large storage space,” Usher told UPI in an e-mail.”CDs and floppy disks are not ‘as dangerous’ because they lack the space that an iPod has, and carrying a stack of CD-ROMs around is more conspicuous than carrying an iPod.”

Usher recently sought to demonstrate the iPod’s potential for corporate information theft by writing a program for the device that automatically copies all the documents from a computer as soon as the device is connected.

Meanwhile, in the Land of Microsoft….

…. Major job outsourcing to Mainland China (bolds are mine), and evidence of pressure from the Chinese government:

Microsoft is on track to outsource more than 1,000 jobs a year to China, according to blistering evidence released yesterday in Microsoft’s increasingly nasty spat with Google over an employee who jumped ship in July.

In a revelation that highlights the complexity of China President Hu Jintao’s visit to Seattle and Microsoft on Monday, legal filings detailed claims of how Microsoft had offended the Chinese government by not outsourcing as many jobs as promised to Chinese technology vendors.

Chief Executive Steve Ballmer visited China in 2003 and promised to step up the pace, from $33 million worth of work a year to $55 million a year, according to a statement by Kai-Fu Lee, a former vice president who left to work for Google in July. Lee was charged with smoothing over relations with China and finding jobs that could be shifted to Chinese contract workers.

“At the time of my departure, MS was on track to outsource over 1,000 jobs a year to China,” he said in a court declaration. A Microsoft spokeswoman said the company has transferred some projects to China “in order to free up teams here for other work.”

I hope that last sentence is true, and not just because it means Microsoft’s US headcount won’t go down. Maybe the “freed up” people will help the wizards of Redmond get their next operating system (recently renamed Vista) out before the 21st Century ends, and maybe it won’t be the virus-friendly, spyware-enabling, user-hostile security nightmare that Windows is.

Equal-time Update: (Via MacWorld) Symantec, which has a bit of self-interest in these matters, says that Mac users are “operating under a false sense of security” ….. “Symantec’s latest Internet Security Threat Report, published Monday, found evidence that attackers are beginning to organize for attacks on the Mac operating system.” Fine, nothing wrong with vigilance, and I sure won’t claim that the Mac OS is inherently safer (some will). But the Windows problems have victimized unsuspecting users for years and years, have gotten no better, and are primarily due to how the OS was designed.

Lack of Refinement

Stephen Moore notes that Katrina caused temporary gas price and supply problems because we seem to think it just sort of, y’know, comes right out of the pumps, sort of the way kids think money just comes out of an ATM machine:

A new oil refinery has not been built in the United States since 1976. During that time, our gasoline use has increased over 25 percent. The nation’s 149 existing refineries have been running at maximum capacity trying to meet record demand and, as a result, not only do we import oil, we actually have to import 10 percent of our daily gasoline from refineries overseas.

If Rita is as serious as it appears, a bigger gas-price spike may be on the way.

Not a Polish Joke

Have you heard the one about the migrating Polish plumbers?

They “fly” to most EU countries, except France, which they “fly” through on the way to Great Britain (HT EU-Serf):

Euro MPs of every political persuasion yesterday called on all European Union countries to copy Britain and welcome Polish plumbers and other East European workers.

Other EU member states, notably France, could learn from the example of Britain, where an influx of 100,000 Poles has only fuelled growth, the MEPs said.

French panic about cheap labour from the East is based on “scaremongering” and myths, according to the first study of the phenomenon since eight ex-Communist states joined the Union last year. The new report, presented in the European parliament yesterday, found that almost 500,000 Poles had now found work in the EU with the largest numbers reaching Germany, Britain, Italy, Holland and Ireland.

…. It did not mince words about the yawning gap between French public opinion and reality. The report concluded that migration flows to France were “marginal”.

In Britain alone, almost 100,000 Poles have signed on with the Home Office-run Worker Registration Scheme, which tracks job takers from the eight former Communist nations: Poland, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Slovakia and Slovenia. Even Ireland, with its far smaller population, registered 36,856 Polish workers between May 2004 and July 2005.

Unveiling the report in Strasbourg, the British Green MEP, Jean Lambert, said: “Far from being overwhelmed by Polish plumbers (or any nationality), we see workers from new member states filling jobs in shortage areas, doing work others won’t do and making a valuable economic contribution.”

Note that this an example of immigrants who play by the rules and help an economy, in stark contrast to the flood of illegals streaming into the United States.

There is no limit to the (please, let’s call it by its correct name) politically opportunistic greed (HT Porkopolis), and no better way to destroy the goodwill of the rest of the country:

Louisiana’s lawmakers submitted a $250 billion wish list to Congress yesterday, asking the federal government to cover everything from rebuilding communities to killing mosquitos and paying homeowners’ mortgages in the aftermath of Hurricane Katrina.

At this moment, part of me wants the City of New Orleans to be totally evacuated once and for all, and then be allowed to slide right into the Gulf. We might get off spending less that way.

Assuming 2.5 million affected Louisianans, Porkopolis calculates the wish list as $100,000 per affected person. I believe the correct number of truly affected Louisianans may be closer to 1 million; if so, it’s really on the order of a quarter million dollars per person…just in Louisiana.

Memo to Porkopolis: Not everyone in the 31 counties was adversely affected in a significant way by Katrina.

Memo to Mary Landrieu and Louisiana pols: Shut, up, already.

Assuming equivalent damage in other affected states, I suppose their wish list could be about the same in amount, and would be make the grand total Gulf Coast wish list about $500 billion. But note that Mississippi, which may have suffered just as much damage (attempts to find a breakout of MS vs. LA damage have so far been unsuccessful), has not submitted a request.

This outrageous bid for open-ended federal dollars should, but probably won’t, end the debate over continuing government-funded terrorism insurance which is set to expire at the end of the year. Can you imagine how big the requests from the Mary Landrieu types would be if a dirty bomb killed 50,000 people, levelled half of a city, and made half of a state temporarily uninhabitable? If forced to pay up on terrorism insurance, the government would literally go broke, and it would set the stage for the supposedly unthinkable (coup, insurrection, revolution, etc).

There has to be a point at which people simply have to accept that “stuff happens.” I personally think $62 billion was past that point. The Louisiana politicians’ $250 billion wish list is an insult to the rest of the country.
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UPDATE: Club for Growth says that the $250 billion request is on top of, and separate from, the $62 billion Congress has already appropriated.

UPDATE 2, September 27: Proving that Louisiana’s pols have managed to alienate everyone, including their usually sympathetic friends in the liberal press, a Washington Post editorial (”Louisiana’s Looters”; requires registration) rips away:

THE NATION is at war. It is mired in debt. It has been hit by floods and hurricanes. In the face of this adversity, congressional leaders have rightly dropped proposals for yet more tax cuts, and some have suggested removing the pork from the recently passed transportation bill. But this spirit of forbearance has not touched the Louisiana congressional delegation. The state’s representatives have come up with a request for $250 billion in federal reconstruction funds for Louisiana alone — more than $50,000 per person in the state. This money would come on top of payouts from businesses, national charities and insurers. And it would come on top of the $62.3 billion that Congress has already appropriated for emergency relief.

Like looters who seize six televisions when their homes have room for only two, the Louisiana legislators are out to grab more federal cash than they could possibly spend usefully. For example, their bill demands $7 billion for rebuilding evacuation and energy supply routes, but it also demands a separate $5 billion for road building and makes no mention of the $3.1 billion already awarded to the state in the recent transportation legislation. The bill demands $50 billion in community development block grants, partly to get small businesses going, but it also demands $150 million for a small-business loan fund plus generous business tax breaks. The bill even asks for $35 million for seafood marketing and $25 million for a sugar-cane research laboratory. This is the equivalent of New York responding to the attacks on the World Trade Center by insisting upon a federally financed stadium in Brooklyn.

Previous Post: Elliot Spitzer: Sore Loser, Legal Tyrant
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OpinionJournal.com is great, but I really wish the Wall Street Journal would makes its editorials available without a subscription for at least a week. There are days when those editorials have more underrported news than the New York Times has in an entire day’s paper.

This is one of those days. First, on France’s crazy “labor protections” and protectionism. Now this (yup, requires subscription), on New York Attorney General and gubernatorial wannabe Elliot Spitzer’s latest adventure, where the target strikes back (bolds are mine):

J. & W. Seligman & Co., an asset-management firm, recently asked a federal court to enjoin Mr. Spitzer from further investigating its mutual fund fees, an area of regulation historically reserved to the federal Securities and Exchange Commission. But just as interesting is how Mr. Spitzer came to look at Seligman’s fees in the first place. According to the complaint, the Attorney General was using the fee issue to coerce Seligman into caving into his demands in a separate probe.

That investigation had to do with market timing, the practice of trading quickly in and out of a fund in order to take advantage of “stale” prices. Market timing isn’t illegal, but since stale-price trading benefits some investors at the expense of others, many funds have shunned it as a bad business practice.

That includes Seligman, which in 2003 terminated an agreement with a brokerage firm that had briefly been market timing several Seligman funds. Seligman informed its independent directors and conducted an investigation. Seligman disclosed what had happened and made financial restitution to funds affected by the market-timed trades. And it did all of this voluntarily, without the prodding of regulators.

Yet none of this good behavior counted for much with Mr. Spitzer, who seems never to have heard the phrase “prosecutorial discretion.” In 2003 Mr. Spitzer began one of his legal crusades against market timing and late-trading, and several large investment companies agreed to atone for their sins by reducing their mutual fund fees. Never mind that fees have absolutely nothing to do with market timing, or that by dictating private-sector prices Mr. Spitzer was behaving like some economic commissar.

To its credit, Seligman was a holdout. It was reluctant to pay more to settle with Mr. Spitzer when it had already compensated its own fund investors. As a smaller firm, it also had less cash to pay Mr. Spitzer to go away. Meanwhile, the AG kept increasing his settlement demands, including the preposterous requirement that Seligman turn over its fee-setting to an outsider (presumably responsible to Mr. Spitzer). So Seligman just said no.

A normal prosecutor — that is, one who recognizes limits on his power — would then either drop the case or go to court. Mr. Spitzer typically finds courtrooms inconvenient, however. So according to the Seligman complaint, the “Defendant [Mr. Spitzer] then threatened that, if Seligman did not accept its required conditions, Defendant would expand its investigation from frequent trading into what it termed ‘excessive’ advisory fees.” In other words, Mr. Spitzer made an offer he thought Seligman couldn’t refuse. Within days everyone from independent directors to its principal shareholder were hit with subpoenas. Some requested up to seven years of documents about Seligman’s advisory fees.

Seligman has now responded by going to court itself, questioning Mr. Spitzer’s legal authority to do any of this. Congress invested the SEC with the power to oversee mutual fund fees — for the simple reason that at least in this area investors are best served by companies working under uniform rules rather than the political agendas of 50 different state attorneys general.

…. Yet in standing up to Mr. Spitzer, the company is doing its business peers and the rule of law a favor. Unquestioned by a media that live off his news leaks, and unchallenged by businesses afraid of retribution, Mr. Spitzer has expanded his power to usurp the legitimate roles of elected officials and federal regulators. Kudos to Seligman for blowing the whistle.

Can you imagine what Spitzer might be like if he ever gains the power inherent in the New York Governor’s office?

This would be funny if it weren’t true (requires subscription):

If you thought starting a business in France was difficult, try closing one.

Last month, a French court ordered Nestlé to reopen an unprofitable factory shut down in June. Apparently, the Swiss food giant hadn’t met all of France’s labor law requirements — even though it had offered the 427 workers in question early retirement schemes or jobs in other Nestlé plants in France.

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I am pleased to report that, barring a last-minute snafu of some sort, I will be attending the sneak preview of “Serenity” on Tuesday, September 27, and will post a review late that night or early Wednesday morning, depending on blogging and/or note-taking conditions in the theater.

For those of you who don’t know, “Serenity” is the “first” full-length movie based on the Scifi Channel’s “Firefly” series (see UPDATE below for more pertinent facts). The advance buzz and “Firefly” viewer anticipation of this movie is probably as great, if not greater, than the interest in “The X-Files” movie when it came out in 1998.

I have seen about a half-dozen of the “Firefly” episodes and have been very impressed with and entertained by the series’ premise, characters, and plot lines. It is following the Scifi record of carrying great original series such as current hits Battlestar Gallactica, Stargate Atlantis, and Stargate SG-1. Its quality is on a par with those series and the older classic Babylon V in the 1990s (which appeared on other networks).

If you are a blogger, you can attempt to get into a sneak preview screening near you by going here (HT Instapundit via Ace).

“Serenity” Synopsis:

Joss Whedon, the Oscar® – and Emmy – nominated writer/director responsible for the worldwide television phenomena of BUFFY THE VAMPIRE, ANGEL and FIREFLY, now applies his trademark compassion and wit to a small band of galactic outcasts 500 years in the future in his feature film directorial debut, Serenity. The film centers around Captain Malcolm Reynolds, a hardened veteran (on the losing side) of a galactic civil war, who now ekes out a living pulling off small crimes and transport-for-hire aboard his ship, Serenity. He leads a small, eclectic crew who are the closest thing he has left to family –squabbling, insubordinate and undyingly loyal.

Other artwork can be found here. Movie trailers in various formats are here.

From a business perspective, having bloggers attend the sneak preview is a shrewd move, especially given that many movie critics tend to be unimpressed with the science-fiction genre, no matter how well done.

This should be fun.
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Sidebar: It looks like there will be a second “X-Files” movie, based on this comment from Gillian Anderson and this interview with David Duchovny. Anderson’s indicated timeline for filming to start is late 2006, much later than Duchovny’s interview guess.
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UPDATE: More facts on “Firefly,” from one who knows: The TV series was cancelled, apparently in 2002, and “Serenity” is an attempt not only to have a successful movie but to revive the series. Fourteen episodes were filmed, and ten (or eleven, according to Amazon) aired. All fourteen episodes are available in a DVD set.

A surfer who lost an arm in a shark attack yet still competes at the highest level:

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With all the huffing and puffing about identity theft: Guess who still has to carry around cards with Social Security numbers on them to get services or to function at work? (reproduced in full because of brevity)

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