Thursday, September 27, 2012

Virtual schmirtual — the virtual wallet wars are a bust so far

The Wall Street Journal today reports what those of us who care about these things already know: There isn't a huge, pent-up demand for virtual wallet technology among consumers. Retailers are fired up and ready to go (in some cases, only half-heartedly), but customers aren't taking advantage of this new tech much yet.

Or at all. Consumer use of Near field Communication -- NFC, which beams payment information to a credit-card terminal — still looks very much like a novelty in the wild. Every one of the handful of times I've paid with a virtual wallet it has been then first time the cashier has seen it used. I am talking Home Depot, Radio Shack, Duane Reade. It's not scientific, of course, but it is still extraordinary. These are places that do a lot of transactions.

Starbucks is a big exception; they pioneered a rudimentary method which involves scanning barcodes stored on your smartphone. This is the same method Apple has now introduced with its foray into the virtual wallet, Passbook. And even though Starbucks has now paired with Square, they will still be doing it the old-fashioned way for a while, by continuing to scan codes rather than take advantage of the presence awareness which, under Pay with Square, identifies you, the customer, and your payment information on file, the second you walk into the place.

That's because Starbucks has discovered that, even in a low-tech application, paying with your phone is an easy habit to acquire: I will walk past places that probably make at least as good a cup of coffee as (and are far less crowded than) Starbucks just so I don't have to endure the inconvenience of using cash or a credit card. Your phone (or even your small tablet) is much easier to produce than your real wallet, and then produce something from that, and put away change, or shown the cashier your physical card ...

When authentication proceeds you, everybody wins. This would seem to be an even bigger win for the small business person. Alas ...

Just as troubling is that smaller storefronts which actually could benefit from this -- and convey a special brand of street cred at the same time -- also seem to be curiously behind the curve. I encounter virtual wallet tech in small establishments almost never.

Get ready for more unscientific anecdotes. One very hip establishment I know actually signed up for Pay with Square -- but hasn't set it up for months. This is a growler place, where you'd imagine a clientele hip to every cutting edge trend, not just the one of bringing home fresh beer in a bottle you supply.

But no. "You're the only person who asks for it," they tell me, each of the three times I've been there over three months, as they scramble to look for (and fail to even find) the Square dongle that is Plan B, which would at least let me pay with a physical credit card.

My iPhone notifies me as I approach the store that I am now ready to Pay with Square. That remains news to the proprietor.

I used Google Wallet in a major drug store chain the other morning (as an aside, the part of the credit-card terminals that indicate they are NFC enabled were all covered with ads. Sigh.) The transaction was not smooth. It needed a lot of coaxing, elongating what would have been a much faster sale if I had just used my darn credit card.

I thought the cashier was annoyed, and was prepared to meekly apologize for trying to pay so geekily. "That was cool," she said, intoning in that lower register that always conveys sincerity rather than sarcasm. I self-deprecatingly replied it would have been much cooler if it had worked the first time. "That was cool," she repeated.

Maybe there is hope for this. I sure hope so. This is one geeky tech that could easy go mainstream. But it hasn't yet, and the vendors are ahead of their customers, by a country mile. That's worrisome.

Wednesday, September 26, 2012

Master and Commander

The problem with "The Master," The Paul Thomas Anderson film I really disliked, for those who have asked:

The protagonist really should be "The Master," the Paul Seymour Hoffman character. But it's not -- the character at the center of this self-indulgent maelstrom is the Joachin Phoenix character, Freddie Quill.

This needed some serious script doctoring.

Monday, September 24, 2012

TaxiCab Confessions

It's too easy, of course, to make too much of those pearls you hear from the mouths of babes (the small child variety, please), the mailman or a cab driver.

But I think I heard the rationale that older, blue collar white guys will find to vote for Obama, in sufficient numbers.

"I just don't believe him," the driver said today, referring to Romney in a rambling discussion about politics and his charges (black-car drivers LOVE to drop names of the people who've been in the back seat). "I don't like Obama either, but we have him ... so you know ..."

And there you have it.

TurboTax Romney

Two things I don't get about Romney's self-defense of his tax situation:

1) A rate of 14% is "fair" because the funds being taxed — capital gains — have already been taxed on the corporate level.

Huh? Capital gains are on realized profits from the sale of real property. If I buy a share of stock for $10, and I sell it for $15, my capital gain is $5. And if I held that share for more than a year, I am taxed at a rate of 15% on that $5, not an whatever rate my earned income is subject to.

But, who paid a tax on the any of this before I did? Or, looked at in reverse: Every dollar is taxed by the person or entity which owned it at one time. My employer pays taxes on the money his company earns, then pays me from what's left over. I pay tax on that, and spend some at the supermarket. The supermarket pays tax, and its employees ... and so on.

The fact that someone pays tax on that dollar upstream is as irrelevant as the fact that someone will pay tax on that dollar downstream. My paid tax on that dollar doesn't subsidize the supermarket. Why should a company's dividend to me be taxed any differently? And if you want to encourage long-term holding (a fine idea) you can penalize a short-term owner with a higher tax, rather than offering a discount for a long-term capital gain.

2) A lower capital gains rate is justified because it motivates investment and thus growth

Doesn't any capital that a taxpayer keeps or is returned motivate investment and growth, potentially? Isn't that, in fact, the blanket argument for lowering taxes across the board? What special magic does money earned from investments have over money earned from work? Would there be less investment if the capital gains rate was equal to that for earned income?

Yes? Then where would that money go?

The truth is that the public market is only one way to find money to back or grow one's business — the vast majority of businesses are not publicly-traded companies. Mostly seed money comes from friends and family initially, and, if you lucky then early-stage investors, angels and assorted venture capitalists. But none of this is public market money.

The biggest source of investment capital comes from a business itself. And the biggest source of capital for a business is receipts — money the buying public pays for goods and services.

Every time I try to get my head around tax, economy and public policy I end up in the same place: Business invests not when it has money, but when it has customers. The greatest spenders are in the middle class, which is the largest demographic in any developed nation. Make life as easy as you can on these folk, and your country thrives.

It's not hard. As Bill Clinton said, it's arithmetic.

Monday, September 3, 2012

Marathon Man

In this age of moral equivalence, your inner bad guy is relentlessly held against you — until I do the same thing. And then I get to say a) I am no worse than you, and b) You did it first. It's a push.

So it is that GOP VP candidate Paul Ryan's fact-challenged convention speech is judged on one set of criteria, and his malapropisms on another. On the former, well, he's Romney's running mate, these are the campaign's talking points, and he's just doing his job — reinforcing the message sanctioned by the top half of the ticket. On the latter, well, those are just "Bidenisms."

But then in what seemed like a relaxed moment Ryan inexplicably exaggerated his performance in a marathon some 20 years ago. Yes, one's memory does play tricks, but as these things go (especially for a P90X boot camp guy) claiming you ran a sub three-hour marathon when in fact it took you more than four hours (worse than Sarah Palin's PB, but I digress) takes a little explaining.

The explanation was simple enough, and homey: Oops. Ryan said he got some ribbing around the dinner table, especially from a brother who reminded the candidate that he has the best marathon time in the family.

We could just chalk this up to the kind of loose talk that, frankly, Biden has become rather well known for. But we shouldn't.

For on thing, Biden doesn't lie about himself. Well, not since the 1988 presidential campaign when he plagiarized the speech of a British politician. Biden's MO is to step in it with peculiar word pictures that even his harshest critics don't think are calculated, like suggesting Romney will put a black audience back in chains, and expressing awe of Obama's (ahem) big stick.
Ryan's excesses are more, shall we say, personal. He's a deficit hawk who's namesake budget — the one which made him famous outside the beltway — doesn't balance the budget for decades. He's a budget pragmatist who'd cut revenue by giving disproportionate relief to upper incomes, re-engineer important components of the safety net like Medicare, but whose blueprint can't be scored because it lacks accounting specificity.

And then there is the haplessness of the long distance runner.

I've never run a marathon, but I have done a bicycle century. It wasn't 20 years ago, but 10. I don't remember my exact time, but I have not convinced myself I completed the course in the time of an elite athlete. These are memorable events — they are physically grueling, take hours to complete and are far outside one's daily routine.

Ryan is lying about Obama's adjustment to welfare, and he is telling a peculiar half truth about the president's cut to the growth of medicare (a cut he assumed for his own ambiguous budgeting — and, when, exactly, did Republicans not want to cut Medicare, including Romney and Ryan, today, now?)
These are both matters of fact, as is one's marathon time. But somehow I can't believe Ryan was telling a whopper about his running prowess. Even though the alternative is worse. All kidding aside, a numbers guy who who won't do budget numbers and gets his marathon number wrong is at best careless and cavalier, not wonky.

What we are seeing in Ryan is a sort of Palin redux: A person with the appearance of seriousness and achievement whose principals are platitudes that won't bear up under great scrutiny. And there is no greater scrutiny than in a presidential campaign.

The Democratic attack on Ryan will be — in the Rovian tradition of turning an enemy's strength into his weakness — that Ryan isn't serious, or meticulous. And it will stick now because of a silly boast about an insignificant event before he even entered politics.
Lying on a seemingly unimaginable scale is par for the course in presidential politics now, of course. Republicans touted Bush 43's foreign affairs and defense acumen even though the United States suffered the worst attack in the nation's history on his watch, started a pointless war in Iraq and could not figure out how to win the peace in Afghanistan. Republicans, in this election cycle, are pretending things are worse now than on Jan. 20, 2009, when the stock market was severely depressed, credit markets were frozen and the country was shedding 800,000 jobs a month.

There's little defense when liars can't be shamed. But watch for the Democrats to neutralize Ryan by casting him as just another pit bull, not a philosopher in the league of Obama, Clinton — or even Biden.