G4
EZ
EE
KLMNO When high-tech luxury looks more like a commodity
ROB PEGORARO Fast Forward
G
adgets can’t stay exciting (oftenanotherwordfor “scary”)
forever.As the
costs of componentsdeflate and manufacturers jointhemarket, competingdevices bothget better andgrowmore alike. Inthisway, ahigh-endluxury
canbecome anear commodity— withnoneedfor carefulparsing of specificationsheets andno point inbragging about the purchase afterward. Sometimes, the evolutionary
cycle is evenmore cruel:Acertain species of gadget canlose its reasonfor existencewhen another breeddoes its job better. Youcansee these trends at
work inthree categories of formerly excitingdevices, all of whichhave become considerably easier to buy—assuming you want to invest inthemat all.
Cameras Nowthatnearly everyphone
has a camera,do youneeda camera that’snot aphone?Yes— for actionshots, long exposures, distant shots andindoor photography, among other jobs thatphone camerasdopoorly. Themost important advantage
a camera retains over a camera phone isnotmoremegapixels of resolution—anumber youcan ignorewhencomparing cameras —but a feature onmost butnot allmodels calledoptical image stabilization. This allows the camera to
dampenout vibrations andtake clear shots evenwhenthe shutter’s openfor as long as an eighthof a second.Digital image stabilization, inwhichthe camera processes the image to remove evidence of jitter, is cheaper but doesn’twork aswell.
JOCK FISTICK/BLOOMBERG
As gadgets evolve ever more quickly, it’s hard to know what to buy. But this featurewillmake its
way to smartphones at some point. The same goes for another
temporary advantage of cameras: automaticmode selection, in whichthe camerapicks the right settings for a shot automatically. (For instance, itwill switchto macro-focusmodewhenyou point it at a subject a fewinches away). Itwill beharder,however, for
phones tomatchthe lenses of cameras.Evencheappoint-and- shootmodels offer zoomlenses withat least a 4x reach;many also havewide-angle capabilities that you’ll appreciatewhenyoudon’t have to backupasmuchto get the scene inthe frame. (“Ultrazoom” cameras canoffer
20x or farther telephoto capabilities, but thenyouno longerhave adevice youcanfit in
yourpocket.The same goes for expensivedigital SLRs thatdon’t make sense for casual photographers
anyway.Both types of camera shouldcontinue todowell among enthusiasts and pros.)
SUNDAY, DECEMBER 12, 2010
HELP FILE
Q:When I run aWeb search in Safari, I keep getting sent to other sites, some sketchy-looking.
A: A reader sent in this report— along with, helpfully enough, the solution he found. The flaw was not malware or
a misconfiguration on hisMac, as fruitless troubleshooting at an Apple Store demonstrated. But, he wrote, his 13-year-old
nephew outsmarted the Genius Bar on this one. The boy checked the settings on his AirPort wireless router and discovered that the AirPort’s password hadn’t been changed from the default—allowing somebody to log in and change its domain- name system setting to a malicious Russian operation. DNS maps addresses like
apple.com to their underlying Internet Protocol addresses. Losing it essentially breaks the Internet. The nephew changed the
Onthe otherhand, youhave to
consider one areawhere smartphones shutdowncameras, bothstill andvideomodels such asCisco’sFlip: sending and sharingphotos andvideos onthe
go.For cameras to act like that, they’dhave to becomemuchmore likephones intheir ownright, withwireless-data andsocial- networking features tomatch.
MP3 players This category looks ripe for
retirement andreplacement by phones.Evenif smartphones and simpler “featurephones” lack the elegance andease ofApple’s iPod, they’reusually goodenoughfor everydayuse. Itdoesn’thelpthat the iPod
itselfhas lost the appeal ithadin prior
seasons.Thenewest version of the iPodShuffle andiPodNano disappointedme, especially the
Nano.The iPodTouchis a lot better but alsomore expensive. OnaMac,where you
presumably alreadyhave all your music inApple’s iTunes, aniPod does offer the simplest setup.Or youcouldflipthat sentence
aroundandnote thatApplehas givenitself anadvantage byblocking otherdevices from syncing to iTunes. InWindows,Microsoft
provides a roughequivalent of the iPod-iTunes combinationwithits ZuneHDplayer (a sleek but aging devicewithanHDRadio tuner that gets some interesting extra HD-only stations, suchas WAMU’s bluegrass channel) and Zune software. But itsWindowsMediaPlayer
will sync to just about anydevice, phones included. Considering that youpretty
muchhave to carry arounda phone andmight aswelluse that to listentomusic, it’shardto write a scenario inwhichthe dedicatedMP3player sticks aroundexcept at the lowendof themarket.
GPS receivers The same story iswriting itself
forGPSnavigationunits. If you have a smartphone—especially anAndroiddevice, onwhich turn-by-turn, traffic-sensitive navigationcomes freewith
Google’s ownsoftware—youcan usuallyskiptheGPS receiver. Manufacturers ofGPSunits
have triedto keepupby bundling free traffic-data
services.That’s a smartmove ontheirpart anda featureworthlooking for if you do get one (perhaps because you don’tuse a smartphone).But you shouldallowfor thepossibility that yourGPSunit’s servicemight endat somepoint; ithas happenedbefore. Youcanalso expect to getmap
andsoftwareupdatesmuchless oftenthana smartphone’s navigationsoftware. Meanwhile, smartphoneGPS
apps that storemapdata, suchas those available for the iPhone, get aroundtheneedtohave a wireless signal—andendone advantage ofGPSunits. These things canhave a future
inspecializeduses; think of the GPS receivers optimizedfor hiking or fishing.But onthe road, thededicatedGPS receiver is nearing its exit.
robp@washpost.com
DNS server to a safe address (your provider’s will be fine, or you can use a third-party alternative like the free OpenDNS or Google Public DNS) and switched the router password as well. Sound unlikely? It can
happen—you can easily find this kind of report at troubleshooting sites, and earlier Post reports have described it as well. If you haven’t changed your router password from the default, consider this your reminder to do so.
Q: Has anything changed with Google Calendar and time zones?
A: On Tuesday, Google added time-zone support to Calendar. As I griped here in April, such
a basic feature should have been in GCal long ago. But this belated implementation (including the flight-friendly option of different zones for an event’s start and end) is easy enough to use: Just click the “Time zone” link on an event’s details page.
Six lessons revealed by Obama’s tax-cut deal with Republicans EZRA KLEIN
klein from G1
appropriate to spend while the economy is weak and then repay when it’s strong, but then, I didn’t just get elected to Con- gress by promising to rein in spending. 2) Obama is better at the in-
side game than the outside
game.Sarah Palin likes to ask the president “how that hopey- changey stuff” is going. The an- swer, it seems, is that the chang- ey stuff is going well, but the hopey stuff is proving more trou- blesome. Obama might have campaigned in 2008 as the inspi- rational newcomer who had no patience for the broken ways of
Washington, but he has governed like aWashington veteran with little patience for inspired out- siders. In health-care reform, in the stimulus, in financial regula- tion and in the tax-cut deal, Obama has been a tough negotia- tor able to move his agenda through a gridlocked Congress— but he has not been able to en- thuse Democrats or inspire pop- ular support for his initiatives. He has been prickly when ques- tioned about it. 3) And he’s not over health-
care
reform.Among the presi- dent’s most passionate moments during the post-deal news con- ference was his long, impromptu scolding of dissatisfied progres-
sives who’re making this into “the public option debate all over again.” Obama went on to com- plain that liberals were so fo- cused on the public option that they lost sight of the rest of the health-care bill—which was much larger. And he’s right about that. But it’s also time for him to get over it. 4) Republicans really, really,
really care about tax cuts for rich
people.Many Democrats had been operating under the theory that Republicans would simply obstruct everything Dem- ocrats attempted, as that was the best way to make Obama a one- termer. At least when it comes to tax cuts for very wealthy Ameri-
cans, that’s not true. Republicans agreed to far more in unemploy- ment insurance and stimulus proposals than anyone expected, and sources who were involved in the negotiations agree that the mistake Democrats made going in was underestimating how much Republicans wanted the tax cuts for the rich extended. 5) It’s still Ronald Reagan’s
world, at leastwhen it comes to
taxes.The Sturm und Drang over the tax cuts for the rich obscured the Democrats’ massive capitula- tion on the tax cuts for everyone else. Even the party’s liberals had accepted Obama’s argument that the tax cuts for income of less than $250,000—which includes
the bulk of the Bush tax cuts— should be permanently extend- ed. Another way of saying that is Democrats had agreed that the Clinton-era tax rates were too high. If you put it to most Demo- crats that way, they’d protest vig- orously. The economy boomed under Clinton, and the Demo- cratic Party is proud of the efforts it made to balance the budget. But Democrats are so terrified of being accused of raising taxes that they’ve conceded to the Bush tax rates for 98 percent of Americans. 6)We need tax reform, now
more than ever. The end result of this deal is going to be an even weirder tax code than we have
now—and the one we have now is pretty weird.We’re extending old tax cuts and credits and add- ing newones. Some of those may be extended further. Businesses won’t want to see deductions for investments expire, and workers won’t want to see the payroll-tax cut expire, and the super-rich won’t want to see the tax exemp- tion for estates up to $5 million expire. There are so many con- stituencies fighting for so many breaks that the only hope we’re going to have when we actually do need to reduce the deficit— which isn’t yet, but will be soon —is to start from square one on the tax code.
kleine@washpost.com Bush’s tax-cut tactician runs down the numbers BY EZRA KLEIN Glenn Hubbard is dean of the
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Columbia University Graduate SchoolofBusinessandcoauthorof “Seeds of Destruction: Why the PathtoRuinRunsThroughWash- ington, and How to Reclaim AmericanProsperity.” From2001 to 2003,Hubbard served as Presi- dent GeorgeW. Bush’s first chair- man of the Council of Economic Advisers. During that time, he was instrumental in designing the Bush tax cuts. I called him to askwhat he thought of their limit- ed extension, and the deal Repub- licans cut to secure it. A lightly edited transcript of our conversa- tionfollows:
Ezra Klein: The tax cuts you
helped develop look likely to be extended for at least two years. Are you happy about it? Feel vindicated?
Glenn Hubbard: I valued my
time with President Bush. I think cutsincapitalgainsaregoodlong- term policy. But I think a tempo- rary extension is right. Iwouldn’t support a permanent extension.
Why not? Therearetwointerestingques-
tions. One is the size of govern- ment,andthesecondis theproper structure of the tax code. I only support extending the tax cuts until we can decide those ques- tions — which I think will be by 2012. If the public says we want a government that’s at the size of the one in the Obama budget, we can’t have taxes at the Bush level. We have to repeal all of themand more. As for the ideal structure of
the tax code, tomymind, thereare elements of it intheBushtax cuts, but I’d like to see a reformed systemthat emphasizes low rates but broadens the base.
TheBushtaxcutsweredevel-
oped during a time of surplus, though they came into effect during a recession. Are they a goodfit for thecurrentmoment, when we have a weak economy and a high deficit? Or would we be better off with tax cuts that are more specific to these con- ditions?
You should set tax policy for
your views about the long term, not to try and time the business cycle. The Bush tax cuts had a positive cyclical effect when they came out, but thatwas by chance, as you
note.Much of the 2001 and 2003tax cutsare verypro-growth, but some aren’t. The child tax credit, the 10 percent bracket, they aren’t. But they’re the popu- lar ones. And the parts that are very pro-growth are the least po- litically popular: the high-income cuts, the dividend and capital gains.
Why are those considered
more pro-growth? The argu- ment you often hear, particular- ly when it comes to stimulus, is that a low-income worker will spend a dollar quickly while a high-income worker won’t, and so tax cuts focused on low-in- come Americans make more sense.
That’s precisely themistake in
logic. President Bush made this mistake and then President Obama made it. You shouldn’t think about propensity to con-
sume, or stimulate. You need to thinkaboutwhichtaxpolicy leads to better growth. The problem with the consumption argument is that it misses the decisions high-income people make. If you asked me whether a low-income person would have a higher pro- pensity to consume than a busi- ness owner, I’d say probably. But the business owner isn’t solving a consumption problem, but an in- vestment and hiring problem. So those are different decisions. And as a matter of economic theory, distortions in tax rates rise with the level of tax rates. So a change inahighratemattersmore thana change in a lowrate.
But you look at the Aughts
and it’s hard to say that it was a very good economy. Wages were stagnant for most Ameri- cans, even as growth was rela- tively healthy. Doesn’t that sug- gest that simply maximizing growth without worrying about distributionmay not be the way to go in the tax code?
That’s exactly the right ques-
tion. The Aughts were a period like the ’90s when productivity growth was relatively high and the question is, why didn’t wages rise with it? And the answer is they did and didn’t. If you look at compensation, they pretty much rosewithproductivity.Butmoney wages didn’t. And the reason was high and growing health-care costs. That’s why we need to look at long-termproblems. If youlook at stagnatingmoneywages inthat period, they’re more about rising health-care costs than the tax code.
So when you do look at the
tax code, what are the princi- ples that you think should drive reform?
First,youneedtofigureout the
size of government. After that,we want to maximize economic
growth.Andweneedadjustments to be borne by the most well-off among us. So if you want low marginal rates, for growth, you’ll need to ask for sacrifices from upper-income people on some- thing else. That something else could be phasing out deductions that benefit themor reducing the growthinentitlementbenefits for them.
And what’s your perspective
on the estate tax? My lens as aneconomistwould
beefficiency.Estatetaxesarecapi- tal taxes, and the optimal capital tax is zero.But thatwon’t happen. So I’d say a high exemption and a low rate makes sense. The estate tax is not an efficientway to effect wealthy people. It would make more sense to solve the entitle- ment problemon their backs.
Andtheotherelementsof the
deal?Thepayroll taxcutandthe deductions for business invest- ment?
That’s the ironic part. Before
Obama even took office, many Republican economists, includ- ing myself, suggested payroll tax cuts and investment incentives. And Obama didn’t do it. But now they’re back. I’d have been bolder than hewas,with a bigger payroll tax cut and putting it on the em- ployer side, to do more on job creation.
kleine@washpost.com
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