Clunky Flow

The news.

Facebook, once again, got smacked on the wrist by its userbase.

Zuckerberg has indicated that the swift and negative reaction to their recent efforts to amend the terms of service had helped him realise it was now time to deal with this.

Facebook plans to prevent this happening again.

They’ve presented their plan as ‘Facebook opens discussion on a ‘bill of rights’ for the governance of their userbase.’

What this really means:

The reality is that this intervention will affect the SOCIAL DYNAMIC on Facebook in a very significant way.

This intervention will:

1. Defuse ‘Stop Energy’.
2. Clear the way for ‘Forward Motion’.

More on ‘Stop Energy’ and ‘Forward Motion’.

‘Stop Energy’:

Most types of collective action organize around ‘Stop Energy’. Facebook users have mobilised and engaged in ‘Stop Energy’ to great success time and again. Its the only effective power available to the users of Facebook. Or any large-scale informally organised collective.

Rerouting ‘Stop Energy’ into a pseudo-democratic consultation process will effectively quench its power. As an act of political hegemony if would be described as the employment of a bureaucracy to make power seem remote and tiresome to engage in for the typical user on any particular issue.

‘Forward Motion’:

”Forward Motion’ is very difficult to initiate or progress in informally organised collectives.

However, ‘Forward Motion’ is the raison d’etre of formal organisations and firms. Facebook, like any other formal organisation is a lean, mean and very effective machine at mobilising ‘Forward Motion’. Naturally, Facebook will leverage this ability to drive forward the Facebook agenda.

Political hegemony:

At large scale, collective action is best mobilised by a simple coordinating signal.
And best extinguished by efforts at large-scale collective conversation.
Facebook now reroutes collective action into collective conversation.

Its a master-stroke of a political hegemony.
Its a classic ‘bait-and-switch’.

Nice stroke, Facebook.

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I proposed the simple idea of ‘internet only’ ‘new banks’ back here in “My friend the economist and my dumb question.”

Since then Buiter, Stiglitz, Soros and Romer have proposed similar schemes. New banks: Did I get the scoop? Did you hear it here first?

But the really good news is that Marc Andreesen is now pushing the idea.
Why is this good news?
Well, Marc Andreessen could carry this idea.

Andreessen’s got all the right credentials ie he is a wunderkind of the industry of wealth-creating technological innovation and has none of the wrong ones ie he is not of the wealth-destroying financial innovation industry.

And Obama and Andreessen are already personally acquainted.

Can Andreessen carry this simple idea to move Obama? I hope so.

And I hope it can be done in time to demonstrate the Irish leaders that there is a smarter and simpler way.

Talk about ‘new banks’ 50 minutes in. Transcript below. But note that as always Andreessen give great value entire way through.

Good banks, bad banks, doesn’t matter. What we need are new banks. And I actually think what we need — and I think the valley can play a role in this, I think there should be a new wave of financial institutions that should be created from scratch today. And they should take the role.

So instead of trying to unwind some big bank that’s underwater, and hundreds of billion dollars insolvent, let’s create a whole bunch of new ones.

And by the way, let’s have them all be new and online.

So instead of having all this infrastructure and all these old systems and these ATM’s and all this stuff, let’s do purely online, purely Internet banks.

Purely virtual, much lower cost structure.

Because it’s going to take — even if you can figure out a way to fix the old banks, it’s going to take a long time. I mean it is a very complicated and involved process. They are deeply broken in very fundamental ways.

Create a new bank. I mean a bank is a simple concept. You can create a bank in software.

2 Comments »

I wrote about my idea of ‘My friend the economist and my dumb question‘ here on 23rd January.

I’m now in very good company.

From Willem Buiter at the Financial Times on January 29, 2009 “The ‘Good Bank’ Solution”

There is an alternative solution to the problem of valuing the toxic assets. It would not involve nationalising the existing banks. Instead the state would create one or more new ’good’ banks - all state-owned and state-funded to begin with.

From Nobel economist Joseph Stiglitz on 02 Feb 2009 at Davos. “Let banks fail” reported in the Telegraph.

“the government should allow every distressed bank to go bankrupt and set up a fresh banking system under temporary state control rather than cripple the country by propping up a corrupt edifice”.

From George Soros on 04 Feb in the WSJ “We Can Do Better Than a ‘Bad Bank’ “

… about $1.5 trillion is likely to be required to recapitalise the existing banks properly. This money could be leveraged a lot more effectively if most of it were injected into the new good banks, unencumbered with the toxic waste of the existing banks.

From Paul Romer in the WSJ on 06 Feb “Let’s Start Brand New Banks”

Everyone agrees that the United States urgently needs a few good banks. Turning bad banks into good banks is a difficult and risky way to get them. It’s simpler and safer to start entirely new banks.

And from Willem Buiter again at the Financial Times on 08 Feb “Good Bank/New Bank vs. Bad Bank: a rare example of a no-brainer” rounding up the ongoing discussion:

I claim no authorship or originality for the ‘good bank’ proposal. The idea is obvious and no doubt was floating around the blogosphere and elsewhere as soon as the magnitude of the insolvency disaster in the banking sector became apparent.

The US, the UK and several other continental European countries are at risk of emulating Ireland, where the government first guaranteed all the liabilities of the banks (other than equity) and only after that began to nationalise the banks. This leaves the Irish government today in the not too enviable position of having to choose between sovereign default and bleeding the tax payer and the beneficiaries of normal public spending to make whole all the creditors of the banks.

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How to make a mug of Guy Kawasaki. And all his friends.

In three easy steps.

For all you haX0rs. Here’s the sxoop.

Step 1: Enter his name (” guykawasaki “) here.

Step 2: Click on Grrrr…GET THE MUG!

Step 3: Crack your knuckles in satisfaction. You’ve just made a mug of Guy Kawasaki. And all his friends.

Bonus step: Put the kettle on.

For the l33ts among you who want to know more. Check http://bit.ly/4Beq6l http://tinyurl.com/bf9tum and Top 5 twitter applications

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