Bogeyman De Jour

Holman Jenkins, Jr. from the Opinion Journal notes the extreme irony of Microsoft leading the antitrust charge against Google in the corridors of Washington, DC. He also points out that Google is heading down the same road that Microsoft did - not that of antitrust violation, but of questionable business decisions.

That Microsoft is leading the lobbying charge against Google's pending acquisition of DoubleClick is ironic for a lot of reasons, particularly this:

"It is difficult to imagine that in an open society such as this one with multiple information sources, a single company could seize sufficient control of information transmission so as to constitute a threat to the underpinnings of a free society. But such a scenario is a realistic (and perhaps probable) outcome."

Those words come from a famous 1995 brief by an imaginative Silicon Valley attorney that kicked off the Microsoft antitrust wars. Though the dread forecast today is the same, the bogeyman has changed. Now it's Google…….

…….What Google and Microsoft do have in common could be called the curse of network effects, namely network costs.

Microsoft continues to pour billions into Windows, adding features most users don't know exist, while spending millions of man-hours to remain "backward compatible" with thousands of aging programs and devices used by ever shrinking numbers of customers.

Google, for its part, spends billions to refine its search engine while adding acres and acres of servers to catalog the world's ever widening surplus of ever less-interesting Web pages.

Combined with DoubleClick, Google could create an ever more compendious record of what users do on the Web. But even given the declining cost of storage, would this mountain really yield commensurate value in helping the company target users with ads they might respond to? Probably not. The devil theory depends on the likely mistaken idea that collecting and storing information on Web users has increasing, rather than diminishing, returns.

The two companies are similar in another way. Like Microsoft, Google has shown a Howard Hughes-like propensity to throw money in every direction in a quest to secure its privileged existence.

In Microsoft's case, think Xbox, the Zune music player, MSNBC, the MSN Internet service, as well as countless startup acquisitions that disappeared into the Redmond maw never to be heard from again. Lately Microsoft has decided the Web business of the future is advertising. Hence the $6 billion aQuantive acquisition.

A lack of realization that both companies were uniquely lucky to be in the right place at the right time with the right product. Both companies are trying to make lightning strike twice and are losing focus in the process. Certainly, Google has considerably less of a lock on its market than Microsoft does. But it is scattering its attention all over the marketplace just as the folks in Redmond have.

Have Some Compassion For The English Language

That is George Will's plea to Democratic presidential candidates in his column today. He's talking about the mad, Through the Looking Glass twisting of words that today's politicians engage in regularly. That bad habit is the rule of the day for some Democrats.

SCHIP is described as serving "poor children" or children of "the working poor." Everyone agrees that it is for "low income" people. Under the bill that Democrats hope to pass over the president's veto on Thursday, states could extend eligibility to households earning $61,950. But America's median household income is $48,201. How can people above the median income be eligible for a program serving lower income people?

Politics often operates on the Humpty Dumpty Rule (in "Through the Looking Glass," he says, "When use a word, it means just what I choose it to mean — neither more nor less"). But the people currently preening about their compassion should have some for the English language.

Clinton's idea for helping Americans save for retirement is this: Any family that earns less than $60,000 and that puts $1,000 into a new 401(k)-type plan would receive a matching $1,000 tax cut. For those earning between $60,000 and $100,000 the government would match half of the first $1,000. She proposes to pay for this by taxing people who will be stoical about this — dead people — by freezing the estate tax exemption at its 2009 level.

A conservative case can be made for something like Clinton's proposal. It is a case for reducing the supply of government by reducing demand for it, and doing so by giving people ownership of enlarged private assets as a basis for their security. It is a case for raising the nation's deplorable saving rate and simultaneously encouraging the nation's economic literacy and temperance by giving more people a stake in equities markets.

Will points out that Hillary Clinton was against investing in private equity before she was for it. When George Bush proposed much the same plan, Clinton stridently opposed it, calling it a "risky scheme." Now, magically, it is the greatest idea since sliced bread. Will goes on to point out the way John Edwards is butchering the real meaning of the words, making them mean what he says they mean, in Iowa.

John Edwards, too, has puzzling ideas. For the entertainment of Iowans, he has reinvented himself as a 19th-century Kansan — Mary Elizabeth Lease, the prairie populist who urged farmers to "raise less corn and more Hell." In August, Edwards urged an Iowa audience to throw off Washington's yoke: "We need to take the power out of the hands of these insiders that are rigging the system against you."

As Will wryly points out, Iowa is getting a bonanza of subsidy money for its agricultural sector in the form of ethanol subsidies. Everyone would love to have things rigged against them that way. I pointed out a few days ago that words have lost all meaning. Will corrects me. They have not lost meaning, they just mean something else entirely, depending on who's talking - and when they're saying it.