MAKING SENSE TO TALK ABOUT ‘THE INTERNET’ IN 2012

Five simple reasons: Apple, Google, Amazon, Facebook, and Microsoft.

Bruce Sterling (flickr/webmink, with some fiddling).

Many people use, as a kind of shorthand, The Internet to mean a wide variety of things related to this series of tubes. The Internet could mean the culture made and distributed on the Internet, the LOLCATZ, memes, etc. (“The Internet loves this kind of stuff.”) The Internet could mean the infrastructure itself, its speed and distribution. (“The Internet is so sloooow right now.”) The Internet could mean the industry that builds it, the consumer and B2B companies that effectively own all the quasi-public spaces through which we traipse. (“The Internet wants to disintermediate blahblahblah.”) And there are a thousand other times when we find it easier to say, “The Internet does” or “It feels like the Internet is” or whatever rather than attempt to identify the specific actors of the play.

And maybe that was helpful. Maybe in such a distributed system it makes sense to use “The Internet” as a stand-in for causal agents that seem to inhere in the network without belonging to any individual node. Maybe it’s like a mob or a gatheration of starlings; the dynamic relationships between the individuals turn out to be more important than the things themselves.

But in 2012, that way of talking, if it was ever helpful, is no longer.

And there are five reasons for that: Apple, Google, Amazon, Facebook, and Microsoft. Now, when we say, “The Internet” or “smartphones” or “computers” we usually mean something shaped by one of these entities, or all of them.

At least that’s how Bruce Sterling is thinking about things. In his annual conversation with Jon Lebkowsky on the WELL about the state of the world, he classed in “The Stacks,” as he called them, with “some interest groups of 2013 who seem to be having a pretty good time.”

Stacks.  In 2012 it made less and less sense to talk about “the Internet,” “the PC business,” “telephones,” “Silicon Valley,” or “the media,” and much more sense to just study Google, Apple, Facebook, Amazon and Microsoft.  These big five American vertically organized silos are re-making the world in their image.

If you’re Nokia or HP or a Japanese electronics manufacturer, they stole all your oxygen.  There will be a whole lot happening among these five vast entities in 2013.  They never compete head-to-head, but they’re all fascinated by “disruption.”

What will the world that they create look like? Here’s what I think: Your technology will work perfectly within the silo and with an individual stacks’s (temporary) allies. But it will be perfectly broken at the interfaces between itself and its competitors.  shanghai apartment for rent lakeville shanghai shanghai serviced apartments apartment shanghai for rent lakeville shanghai rent shanghai for rent lakeville.That moment where you are trying to  do something that has no reason not to work, but it just doesn’t and there is no way around it without changing some piece of your software to fit more neatly within the silo?

That’s gonna happen a lot: 2013 as the year of tactically broken bridges.

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GREAT MONTESSORI SCHISM

The divisive history of the popular school system, and what it teaches us about education and change

Students gardening at a Berlin Montessori school, 1930. (Wikimedia Commons)

True to its nature as an essentially religious institution, the kindergarten has undergone schisms, been rent with heresies, has been divided into orthodox and heterodox, into liberals and conservatives, although the whole body of the work has gone constantly forward, keeping pace with the increasing modern preoccupation with childhood.

Dorothy Canfield Fisher, A Montessori Mother, 1916

I have fond memories of my Montessori preschool and kindergarten. Every day was like a be-bop performance — there were structures, but the players got to improvise within them. A typical Montessori day — in an American Montessori school, at least — includes large chunks of time for students to explore the classroom. Nobody told us how to play with our toys, or when. There were occasional moments of inspired weirdness (burning incense when we learned about ancient Egypt; making fake whale blubber out of marshmallows), but our teachers were sweet, the atmosphere was lovey-dovey, and I didn’t have any concept of the quasi-religious fervor that can underlie alternative education theories.

Then, a few years ago, I wound up doing some in-depth research into the history of Montessori in the U.S. The infighting I turned up may say more about the true believers of alternative education in general than it does about Montessori in particular.

At least when it comes to early education, Montessori is in some ways the least alternative of the alternative education methods. Students play with carefully designed toys that a parent can easily see leading to more abstract concepts. Golden beads that teach her to count! Little round weights that introduce volume and shape! Shoe-tying! Pouring juice! This makes Montessori palatable to parents like mine, who would have allowed me to go feral sooner than send me to a Waldorf preschool to make woodcrafts and learn about Geist.

MORE ON ALTERNATIVE EDUCATION

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In the U.S., Montessori has two major accrediting bodies that, together, accredit or affiliate with around 4,000 schools. The first — Association Montessori Internationale (AMI) — was founded by Maria Montessori in 1929 in order to perpetuate her own work. Montessori started her first school, the Casa dei Bambini, in a Rome tenement in 1907. Over time, she developed a comprehensive system for teaching children through middle school, and left notes that suggested a way to adapt her ideas at a high-school level. Montessori subscribed to constructivism, a theory of education that says students do better if we let them piece together how the world works by moving through it themselves than if we deliver knowledge top-down.

Today, the organization she founded is considered the “orthodox” wing of Montessori teaching. AMI touts the continuity of instruction across its schools, and its resistance to fads. If your child switches instructors, he’ll still be taught the same way. If you move, you can be assured that your new AMI school will use the same pedagogy. Short-lived trends in education won’t affect how your kid learns. You’ll know exactly what you’re getting.

Here’s the problem, as some Montessori teachers saw it, even in the 1950s: Sometimes those short-lived trends aren’t short-lived, and sometimes they are not trends. As we discover more about learning, or as the times change, does the way we teach kids have to change as well? Traditionalist Montessori said no: Don’t mess with the teaching method if it’s working well. Some Montessori teachers weren’t satisfied with that answer.

In 1953, Nancy McCormick Rambusch, an American teacher, went to an education conference in Paris, where she first encountered the Montessori method. After training in Britain, she returned to the United States to open a Montessori school in Greenwich, Connecticut. Up until that point, Montessori had taken off in countries around Europe, but unlike other imported European methods like Waldorf, it hadn’t made much of a dent in the U.S.

That’s because, in the early 20th century, some prominent American educators had actively discredited the Montessori method. The American philosopher and educator John Dewey, and his student William Heard Kirpatrick, thought Montessori’s program stifled creativity and focused too much on the individual. Kirpatrick went on a campaign against the Montessori method in the 1920s, attacking it in a popular pamphlet. His criticisms helped keep Montessori scarce in the U.S. for about three decades.

But on the cusp of the 1960s, things were changing. Rambusch’s efforts, beginning in the late 1950s, represented a fresh attempt in a few decades to introduce Montessori to the U.S. This time, it stuck, and some of the credit is probably due to her idea that the method needed to be modernized. In an influential book, lectures, and her own work as a teacher, academic, and school administrator, Rambusch focused on bringing contemporary American ideas about education into the Montessori method, creating a form of blended Montessori.

At one point in 1959, Rambusch became the U.S. representative of the AMI. In 1960, she foundedthe American Montessori Society, which was an American affiliate of the larger organization. But she began to fall out with Mario Montessori, Maria’s daughter and the keeper of her legacy, over the reforms Rambusch wanted to make to Montessori pedagogy.

The AMS today describes the schism between it and the AMI this way:

AMS insisted that all teacher educators have a college degree so that the coursework could, potentially, be recognized by state education departments. AMS also broadened the curriculum for teachers and sought to forge inroads into mainstream education by offering Montessori coursework in traditional teacher preparation programs.

Mario Montessori disagreed with these changes, and in 1963 AMI and AMS parted ways. The two organizations have since reconciled their differences, and now enjoy a collegial relationship of mutual support and respect.

That elides a lot of history. In 1967, AMS sued AMI over the right to exclusively use “Montessori” as a descriptor of their schools in the U.S. They lost – the U.S. Patent Office ruled that the name was a generic descriptor of a type of schooling (which means that other, non-accredited schools are allowed to use it, too). The AMS’s changes, and its flexibility with pedagogy, helped Montessori make inroads as a public-school teaching method. But hostilities continued between the two groups. As the above summary suggests, the groups competed from the 1970s to the 1990s for official recognition. shanghai apartment for rent lakeville shanghai shanghai serviced apartments apartment shanghai for rent lakeville shanghai rent shanghai for rent lakeville.Today, AMS and AMI seem to agree that their fight over methods was unproductive. The two organizations have made it up, and now trumpet their work together. Still, the conflict between the two wings of Montessori raises an important question. Should teaching methods modernize as society changes? Or should they stick, like AMI did, with a method that has worked for decades?

On balance, it’s not clear that one answer is right or wrong — except maybe when it comes to dealing with changes in technology. On that score, at least, it looks like old-school AMI may be a good thing. Recent research suggests that a decrease tactile play has hurt the development of children’s motor skills. If that’s the case, the constructivist approach of old-school Montessori may make a good antidote, fake whale blubber and all.

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THE EXTRAVAGANT MELODRAMA OF LES MISERABLES

Is Tom Hooper’s adaptation of the beloved musical exhilarating or exhausting? Maybe, both?

Universal

I dreamed a dream in time gone by, in time gone by so very…slowly.

The words (at least the first eight of them) are from the fallen Fantine’s mournful aria in the first act of Les Misérables. In Tom Hooper’s new cinematic adaptation of the beloved musical, the song is sung by Anne Hathaway, and your response to it will likely be a good barometer of your response to the film overall. Hathaway gives it everything she has, beginning in quiet sorrow before building to a woebegone climax: she gasps, she weeps, she coughs. If you are blown away by the scene—as many will be; it will almost certainly earn Hathaway her first Oscar—this may be the film for you. If, however, like me, you feel that its poignant, plaintive beginnings give way to an overwrought, ostentatious conclusion—well, you have a long 157 minutes ahead of you.

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Largely faithful to the stage version, Hooper’s Les Miz is an extravagant melodrama, at once openly ambitious and almost touchingly earnest. As anyone who’s seen the film’s oddly infomercial-like theatrical trailer will be aware, Hooper has taken the innovative step of having cast members sing their numbers live on film, rather than lip-synching to pre-recorded tracks. It’s a genuine breakthrough: As the performers lift their voices, the camera holds them in intimate closeup; the experience is about as close to live theater you’re likely to find onscreen.

Alas, like so many innovators, Hooper falls rather too much in love with his innovation. The second or third time we watch a face fill the screen with notes tender or tragic, the effect is genuinely arresting. The 22nd or 23rd time…

Hugh Jackman and Russell Crowe star as Victor Hugo’s ages-old antagonists: Jean Valjean, the saintly ex-con, and Javert, the pious, obstinate policeman intent on returning him to prison. The actors offer a fascinating contrast in styles. Jackman is a veteran of musical theater, with a Tony (and an Emmy for hosting the Tonys) under his belt; Crowe is an actor one doesn’t generally envision singing at all—unless it’s in a pub, with several pints under his belt. But Jackman appears slightly confounded by the possibilities of Hooper’s up-close cinema; like Hathaway (who also has a strong voice), he often seems as though he’s trying a little too hard to act his way through his songs, with slightly disappointing results. Crowe, by contrast, though possessed of a thin, reedy instrument (indeed, one presumes because of it), focuses intently on his singing and somewhat outperforms his humble gifts. There is an odd, unexpected dignity to the sight of a man so obviously out of place and yet trying so hard to make the best of it.

Hooper has cast members sing their numbers live on film rather than lip sync. Alas, like so many innovators, Hooper falls rather too much in love with his innovation.

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Amanda Seyfried plays Cosette, daughter of doomed Fantine and adopted daughter of Jean Valjean; and Sacha Baron Cohen and Helena Bonham Carter lend the proceedings a Sweeney Toddish air as the comically villainous M. et Mme. Thenardier. But the greatest treats on offer are Samantha Barker as Eponine (also doomed, life in 19th century Paris being no picnic), and especially Eddie Redmayne as Marius, whose lament-filled “Empty Chairs at Empty Tables” is the best number in the film.

Like Hugo’s famously commodious novel, Hooper’s film begins in 1815 and concludes in the proletarian rebellion of June 1832, with the intervening years stuffed full of love and loss, hardship and hauteur, ardent revolution and heartbreaking defeat. Javert stares out at Notre Dame from the roof of the Conciergerie; the proletarian rebels crawl about the towering, moldering Elephant of the Bastille (a painful reminder, no doubt, to Baz Luhrmann that he’s not the only director who can kill off his pretty heroines with tuberculosis). The music ebbs and swells as the story rolls through its epic climax and into an extended denouement of such hokey theatricality—featuring the ascent and descent, respectively, of its principal antagonists—that it might better have been viewed from a distance, so viewers could focus on the music rather than on Jackman’s old-man makeup.

Les Misérables is a big, impressive film, and committed fans of the musical are likely to have their affections reaffirmed. The less devout, however, may conclude that in t

DON’T ASK, DON’T DWELL: THE ONE, BIG RULE FOR GIVING A BOOK AS A GIFT

Give it, and then hush.

AP Images

My grandmother Adele loved culture and was generous with its gifts. She took me to museums, restaurants, ballets. She showered me with trinkets from her travels around the world. But I can only remember her giving me one book—a book that, to this day, I have not read.

When I was a child, she presented me with her own favorite childhood volume: Hans Brinker; or, The Silver Skates. Thick enough to mean a substantial story with chapters, the volume had hard, shiny gray covers with the title embossed in blue letters on the spine. The creamy pages had ragged edges. Inside were old-fashioned pen and ink illustrations depicting Hans, his friends, and whatever it was they did.

My grandmother was thrilled to share this book with me. She even adorned the title page with her proud script. It was the first book inscription I ever received, a rite of passage all its own. Then she waited.

I tried to read it. I adored reading, and would dive into a new batch of books from the library all at once. But something about Hans Brinker; or, the Silver Skates just wouldn’t let me in. The story was set in Holland, a long time ago. It felt dull and alien—even though I was a fan of classics of other times and places like Little House on the Prairie and All of a Kind Family. With Hans Brinker, I simply read the first pages over and over. I could not progress. My brother even showed solidarity by giving it a try. He couldn’t get into it, either.

Standing on a bookshelf in our living room among favorites like The Phantom Tollbooth, Harriet the Spy, To Build A Fire—and of course the complete works of Judy Blume—the book was like a crack in the sidewalk. Something to avoid. It rebuked me for not being interested, for not trying hard enough, for disappointing my grandmother.

The book started to blend in, almost forgotten, until Adele inquired. Had I read it? Did I like it? Always determined, she wanted to know the answer. I would make some kind of excuse, feel bad, and open it again, hoping for a new reaction. The book weighed on me. After all, I was the kind of kid who was plagued by the empty pages of a child’s diary, another gift. (Ambivalent writer even then.) Duty drove me to record at least a few events of my elementary-school days, but not most—a failure eclipsed only by my inattention to boring Hans.

Years passed and finally Adele and I both accepted that I would never read Hans Brinker; or, The Silver Skates. Eventually I cleared the book from the shelf. The Hans Brinker experience led me to formulate a rule that I’ve lived by ever since: Do not inquire about a book given as a gift. Don’t ask, despite your desire to discuss it, to feel validated, to grow closer. The desire for such connection is what imbues book-giving with special meaning—and increases the recipient’s capacity to be a letdown.

The guilt dynamic is basically the same as for all gifts, though. If the giver doesn’t have the pleasure of seeing or hearing about the gift being enjoyed, and asks whether it is, then the recipient—unless she can truthfully say “yes”—either has to admit to not liking the present, or else lie on the spot. Neither is pleasant. So, no noodging.

Do not inquire about a book given as a gift. The recipient—unless she can truthfully say “yes”—either has to admit to not liking the present, or else lie on the spot. Neither is pleasant.

The rule can be hard to follow. A while back I gave a book that I cherish á la Adele’s Brinker to a young relative. I admonished myself to commend my beloved A Tree Grows in Brooklyn, and then stand back. Indeed, the response was silence. Then there was the friend who, I was sure, actually needed the virtuoso media critique Within the Context of No Context. But he barely opened the copy I gave him. We’re so close that I couldn’t help a bit of “didn’t you…?”—then re-embraced the Rule. And now that the world of readers includes a little niece and nephew, my adherence is challenged anew. There’s plenty of favorite reading that could be pressed on them.

Those inspired to live by the “don’t ask” approach to book-giving would do well to embrace a corollary: Do tell, if you like a book that was a present. Make it a point to say so. Especially if the giver does you the favor of pretending to have forgotten. Remembering to bring it up lends cosmic equilibrium to the Rule.

Looking back at Hans Brinker; or, The Silver Skates today, a familiar aversion washes over me. Published in 1865 by Mary Mapes Dodge, the story still resides in the pantheon of children’s classics. Disney even saw fit to make a movie version a century later. Apparently my reaction is not everyone’s. I don’t know what made the text so uninviting. I just didn’t like it.

I only remember giving my grandmother Adele one book, too. She was always a reader, though she became voracious in her later years as my grandfather’s health declined and she craved escape. For her birthday, I thought a fine novel would be a fitting present.

It was the late ’90s, when Francisco Goldman published The Ordinary Seaman to good reviews. This novel had a mix of characteristics Adele would appreciate: it was new and fresh to her, the critics approved, and it seemed highbrow and worldly.

But apparently my choice also missed the mark. Life was tougher, and she no longer had the patience for literary novels.

I didn’t ask after the book. I didn’t have to. Direct as ever, Adele brought it up one day. “I’m sorry,” she said. “I just couldn’t get into it.”

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NOT THE ONLY GUN-CONTROL OBSTACLE— REPUBLICANS

AP PHOTO/JACQUELYN MARTIN/MIKE GROLL

Chicago Mayor Rahm Emanuel and Sen. Kirsten Gillibrand of New York have both done about-faces on gun control.

Correction: A previous version of this story misstated the state Sen. Mary Landrieu represents. It is Louisiana.

President Obama’s call for Congress to show the “courage” to consider new gun-control laws was aimed at Republicans, but he faces challenges with members of his own party who have a history of cowering from the gun debate.

The shooting deaths of 20 children and six adults at a Connecticut elementary school last week exposed how divided Democrats have been on gun control. It also demonstrated that, along with the current president, Democrats have failed to champion reforms after previous acts of mass violence. While Republicans held the line on gun control, Democrats largely ducked, ever since they ratified the assault-weapons ban in 1994 and saw their majority in Congress disappear.

Gun-control advocates face familiar challenges in keeping Democrats unified. The most vulnerable Democratic senators in 2014 hail from rural states where hunting is popular and guns are ubiquitous: Mark Begich of Alaska, Mary Landrieu of Louisiana, Mark Pryor of Arkansas, Kay Hagan of North Carolina, Max Baucus of Montana, Tim Johnson of South Dakota, and Jay Rockefeller of West Virginia. (Sen. Joe Manchin, D-W.Va., who was staunchly pro-gun during his 2010 and 2012 campaigns but now says he’s open to a debate, is not up for reelection for another six years. Same with Joe Donnelly of Indiana, who is also reconsidering his opposition to gun control as he transitions from congressman to senator and doesn’t face another election until 2018.)

The evolutions underscore how polarized the country is over gun control. Republicans, many of whom hail from rural, gun-owning states and districts, and the smaller number of Democrats that represent like-minded parts of the country, are responding as much to their constituents as to the powerful National Rifle Association lobby when opposing measures that come before Congress.

“There’s no question that the leadership of the party made a conscious decision years ago to walk away from the issue at all levels,” said Democratic lobbyist Steve Elmendorf, a top Capitol Hill adviser when the assault-weapons ban passed. “They figured they weren’t getting any credit for it, and they were getting hurt. I do think the situation [in Connecticut] could change that.”

The changing political calculus for some Democrats on gun control is starkly exemplified by Chicago Mayor Rahm Emanuel, who recently boasted that he “stood by [Bill] Clinton’s side” as a top adviser when he signed the 1994 assault-weapons ban.  But years later, Emanuel helped elect numerous pro-gun candidates–and bragged about their Second Amendment bona fides–as he spearheaded the Democratic takeover of Congress in 2006. He was President Obama’s chief of staff in 2010 when the Brady Campaign to Prevent Gun Violence handed the administration an “F” for expanding gun rights and failing to reinstate the assault-weapons ban. Now, in the wake of the tragedy in Newtown, as the mayor of a city plagued by gun violence, Emanuel is touting the ban once again.

Another prominent Democrat, Sen. Kirsten Gillibrand of New York, underwent an even more dramatic conversion. As a member of the House representing a Republican-leaning upstate district in 2008, she voted to repeal a law that banned semiautomatic weapons in the District of Columbia and required gun owners to register their weapons and store them unloaded, with trigger locks. She earned an “A” rating from the NRA. Even as gun-control advocates complained about her January 2009 appointment to the Senate, she told a newspaper reporter that she kept two rifles under her bed. “If I want to protect my family, if I want to have a weapon in the home, that should be my right,” she said.

The makeover of the congresswoman from a conservative district to the senator of a liberal state began the next day, when staff said that the rifles were removed. Later that year, with the help of two former critics–New York Mayor Michael Bloomberg and Rep. Carolyn McCarthy, D-N.Y.–she sponsored legislation to crack down on illegal gun trafficking. The NRA downgraded her to an “F.” “She sounded like Annie Oakley, and now she’s somebody different,” complained her Republican challenger in 2010. Days after the shootings in Connecticut, she wrote a newspaper column pushing her gun-trafficking bill and other restrictions.  “Congress has ducked a serious national debate over commonsense gun laws for too long,” she wrote.

In the column, she describes meeting the parents of a slain 17-year-old in Brooklyn, N.Y., shortly after her Senate appointment and the near-shooting death of her friend, Rep. Gabrielle Giffords, D-Ariz., in 2011. “Her former congressional district did not experience the same issues of gun violence,” explained her spokesman, Glen Caplin. “For the last four years, as a statewide representative, Senator Gillibrand has been highly focused on solving the problems of the entire state, including gang and gun violence.”

Asked if she still owned the two rifles, Caplin said, “I’m not going to get into this.”

A shift in public opinion could offer political cover. A new Pew Research Center poll finds that, by 49 percent to 42 percent, limiting gun ownership is viewed as more important than protecting gun owners. The survey marks the first time since Obama’s election that more Americans prioritized gun control over gun rights.

“We’re getting so many calls from state capitals and Capitol Hill, it’s overwhelming,” said Brian Malte, spokesman for the Brady Campaign to Prevent Gun Violence. “This feels like it could be a tipping point.”

It’s been nearly two decades since President Clinton pushed the assault-weapons ban, strategically attached to a sweeping anticrime bill and a 10-year expiration date. The House passed it by only two votes, and even Democrats who voted no feared it would brand their party as antigun.

“We knew it was a politically devastating vote at the moment it passed,” said Patrick Griffin, who served as Clinton’s director of legislative affairs. “They cleaned our clock in 1994. You can’t ascribe all of that to guns, but it was a factor.”

Guns were blamed again in 2000 when Democratic nominee Al Gore lost one of the closest presidential elections in history to Republican George W. Bush. As vice president, Gore backed the assault-weapons ban and cast a tie-breaking vote for a 1999 background check law. Just one more gun-friendly, Southern state–Arkansas, West Virginia, or even his home state of Tennessee–could have delivered the presidency to Gore, even without Florida.

Six years later, a handful of pro-gun candidates, including Joe Donnelly and Brad Ellsworth of Indiana, Heath Shuler of North Carolina, and Jason Altmire of Pennsylvania, helped Democrats take back the House. Once again, other factors contributed to the election results–the heated immigration debate, political scandals, and the unpopularity of the war in Iraq–but the success of pro-gun Democrats reinforced the party’s wariness of gun limits.

Anxious to protect their moderate members and the president’s reelection prospects, Democrats shied from high-stakes gun votes even after massacres at Virginia Tech and Fort Hood (although Republicans seized the House anyway in 2010), and after slayings at a meet-and-greet hosted by Rep. Giffords and in a movie theater in Aurora, Colo. “It’s never been a simple Democrat versus Republican issue. It’s much more complicated than that,” Griffin said.

A former top aide to Obama and on Capitol Hill, Jim Papa, said that Republicans beholden to the gun lobby deserve the lion’s share of the blame for inaction on gun control.

“There has always been an overwhelming amount of Democratic votes for gun control and practically zero support from the other party, and the responsibility falls on the Democrats?” he asked. “Opponents of gun control have confused the issue, confused assault weapons with hunting rifles, so there is peril for people who believe in one and not the other. The NRA successfully equated sensible, popular gun-safety legislation with taking away your shotgun.”

But even when Democrats controlled both legislative chambers during Obama’s first two years in office, they passed and he signed laws allowing visitors to carry loaded, concealed guns to national parks and permitting Amtrak passengers to stow guns in checked baggage. The assault-weapons ban was never taken up during Obama’s first term, which was consumed with trying to revive the economy, pass health care reforms, and end the wars in Iraq and Afghanistan.

“You don’t have an infinite amount of time and goodwill, and you have to pick some priorities,” said Griffin, the former Clinton aide. “Postelection, after this horrific event, maybe there’s a moment when we can come to common ground.  I’m not convinced of that, but it looks better than ever.”

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JUST TWO CHINESE COMPANIES IPO-ED IN THE US THIS YEAR

The coming buyout and delisting of Chinese digital advertiser Focus Media, announced this week, caps off a bad year for US-listed Chinese companies. Focus Media said on Dec. 19 that it had agreed to a $3.7 billion offer from a consortium of private equity funds. It is the latest and one of the largest Chinese companies to delist from US exchanges after a string of accounting scandals in 2011 have all but erased confidence in these mainland companies.

But to borrow a favorite diplomatic phrase of the Chinese government, the deal might actually presage a win-win (and win) situation for China’s domestic stock exchanges, Chinese companies struggling for funding, and private equity investors looking for a way into China.

The move for the Shanghai-based company (which makes ads for electronic screens in elevators, office buildings and grocery stores in China) is proof there could be a third way for Chinese companies to find capital—avoiding unfriendly US exchanges and strict Chinese listing requirements. The almost 400 Chinese companies listed on the New York Stock Exchange and the Nasdaq have seen their share prices plunge over the past two years. New companies have not been welcome: The number of Chinese IPOs in the US has gone from 41 in 2010 to 12 in 2011 and in 2012 there have only been two—YY Inc and flash-sale website Vipshop Holdings.

Foreign private equity funds, stymied by endless Chinese regulations and local competitors, are increasingly using buyouts of US-listed companies as a backdoor into Chinese investments. Foreign investors are restricted from sectors deemed “strategic” by the government and private equity funds operating in China have recently come under more regulation in how they source money in their funds. In terms of size, the Focus Media buyout could prove a breakthrough; until now, take-private deals have mostly been below $1 billion. Other recent de-listings via private equity groups include Shanda Interactive, one of the earliest Chinese internet companies to list, AsiaInfo-Linkage and Harbin Electric.

The trend of US-listed Chinese companies going private is likely to continue, especially as an auditing spat between the US and China threatens more companies with delisting. If this is the case, China will see more Chinese companies return home where they may eventually list on domestic stock markets. That should give pent up investor demand more options and also boost the appeal of Chinese stock markets, which have been passed over by major companies who opted to list on the more prestigious US exchanges.

Finally, it’s a win for Focus Media. In 2011, the company was accused of overstating the number of screens in its ad network and also overstating the value of its assets.It was hard work to wrangle together the investment consortium, but in the end the deal is getting done. Focus Media will be bought by a company that will then be partly owned by Focus’s CEO Jason Jiang, one of China’s most famous entrepreneurs. The consortium of investors includes Carlyle and three Chinese banks, among others, who will take on more than $1 billion in debt in the transaction. The deal should be completed in the second quarter of next year.

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Fiscal Cliff Questions, Answered

Is a deal still possible? Can John Boehner survive as speaker? Why did he try this Plan B idea, anyway? A guide to what to expect in the weeks ahead.

Disaster on Capitol Hill! Fiscal cliff chaos! Trying to sort through the disorder that erupted in

Congress Thursday night? Here's a handy FAQ.

 What just happened? House Speaker John Boehner couldn't get Republicans to vote for a tax increase.

His "Plan B" consisted of a pair of bills: one containing spending cuts, the other allowing taxes

to rise only on incomes over $1 million. The spending-cut bill squeaked through early Thursday

evening with zero Democratic votes. That was a sign that the tax-hike bill, which would be harder

for Republicans to support, was in danger. Boehner gathered his members in the Capitol, recited the

alcoholic's serenity prayer, and announced that he was pulling the bill because it didn't have the

votes. The House has gone home for Christmas, and possibly for the year.

 What did Boehner think he was doing, anyway? "Plan B" was a risky gambit intended to create leverage

for the GOP by putting the ball back in the court of President Obama and Senate Democrats. The idea

was that Senate Majority Leader Harry Reid would be forced to take up the $1 million tax hike bill

and alter it to his liking, which would mean getting Democrats to agree to an alternate tax-hike

threshold. Would it be $250,000, which Reid barely got through the Senate over the summer with 51

votes, one of whom has since died? Would it be $400,000, which Obama had tentatively agreed to in

negotiations with Boehner? Would it be $1 million, which Senate Democrats previously also approved

in a symbolic vote, and which House Minority Leader Nancy Pelosi called for back in May? The debate

and division would be on the Democratic side, and Republicans' recalcitrance and disarray would be,

at least temporarily, out of the spotlight.

 Why didn't it work? Both Republicans and Democrats refused to go along. Boehner had reason to believe

he could round up the votes. He has spent months currying favor with his often-unruly caucus; many of

the 2010 freshmen and Tea Party conservatives have cooled in temperament since the overheated days of

the debt-ceiling fight a year and a half ago; the November election (and plenty of polls) provided a

lesson in where the public stands; the House conservatives who opposed the plan had no clear

ringleader; even Grover Norquist, author of the no-taxes pledge signed by most GOPers, endorsed

Plan B. But other conservative activists, such as the national Tea Party group FreedomWorks, organized

against it. Congressmen's offices were flooded with calls from angry constituents. Republicans from

conservative districts feared primary challenges. Boehner also may have thought he'd get a handful

of Democratic votes, but the White House, Reid, and Pelosi immediately announced their strong opposition

to Plan B, and Pelosi aggressively organized her members against it. And so Boehner's plan went down

in flames, leaving him weakened, his party discredited, and the nation a step closer to the fiscal cliff.

 Now what happens? In the not-so-encouraging words of Boehner at a Friday news conference, "God only

knows." But as everybody takes a few days off for Christmas -- and many senators head to Hawaii for

the funeral of the late Senator Dan Inouye -- there's some hope that the hiatus will clear people's

heads. Boehner says he has not stopped talking to Obama. The stock market also wasn't freaking out in

reaction to the House meltdown early Friday, though it dipped slightly -- a sign that going closer to

the cliff, or even briefly over it, might not immediately tank the economy.

 Doesn't this prove nothing can ever pass the GOP-led house? Nope, for two reasons. First, any compromise

plan would presumably have some Democratic support. With that on his side, Boehner wouldn't need the

unanimous GOP vote he sought for Plan B. Second, once Jan. 1 comes and tax rates for everyone automatically

go up, anything Congress votes on becomes a tax cut rather than a tax hike. That could be a far easier sell

for even conservative Republicans.

 Is Boehner in danger? The speaker is badly damaged, with his own constituents -- his Republican caucus --

as much as anyone. He must run for reelection as speaker on Jan. 3, and though any revolt is embryonic

right now, the grumblings are likely to grow. As one GOP House insider told me after Thursday's

debacle: "He just lost the respect of the caucus. No one thought he was capable of fucking this up like

this."

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ZACHARY KARABELL–WHO’S AFRAID OF CPI CHAINED ?

The fiscal cliff debate hangs on an arcane fix for measuring inflation. Both sides should know way we measure inflation is arbitrary and flawed, by nature.

Reuters

 As the fiscal cliff talks evolve and devolve, the latest spat has been whether the arc of federal spending should be curtailed by changing the way that we assess costs. The proposal from the White House is to switch the way cost-of-living adjustments are made for Social Security benefits. Rather than pegging those to the Consumer Price Index as currently calculated, these would be pegged to a “chain-weighted” Consumer Price Index, which would save as much as $125 billion in additional benefits over the next decade.

 Sounds wonky, and it is. But so is much of how the federal government accounts for spending, and these metrics intimately shape what we spend, how we spend, and how we think about the present and the future. The primary measure of inflation, the Consumer Price Index (CPI) uses a fixed basket of goods that resets periodically. Chained CPI uses a basket of goods that adjust more fluidly to account for what statisticians and economists call “the substitution effect.” A fixed basket of goods is easier to calculate: just define the basket and then measure the price changes. But in the real world, people don’t passively accept changing prices. They change their behavior. The price of gas goes up? People drive less; they carpool more; they buy more fuel-efficient cars and consume less gas. The price of a domestic flat screen television goes up? They buy a less expensive import. In short, people don’t necessarily bear rising costs passively; they react and shift to maintain their standard of living. The traditional CPI index doesn’t capture that.

 For all its wonkiness, the proposal to change the benchmark used to determine Social Security and various other benefits has engendered attacks from all points on the political spectrum: the left assails it as a backdoor technicality that will increase burdens on the elderly and the less well-off;the right scoffs that Obama’s proposals don’t constitute true deficit or spending reduction but are simply accounting tricks, and the media treats it as politics as usual with the cynical corollary that because almost no one understands what these rules are, it makes it easier to enact them.

 Despite ample media scrutiny over the past week, it’s safe to say that this debate is about as arcane as it gets. Almost no one knows the difference between CPI and chained CPI, even if for years the Bureau of Labor Statistics has been compiling multiple varieties of the index, which serves as a proxy for the rate of inflation. One variant is the chained index. There are others, including a special index for cost-of-living for the elderly and for CPI minus the volatile effects of energy and food (known as Core CPI). All of these use quarterly surveys of 7,000 families about prices paid for 211 different consumer goods in 38 different regions, for a total of 8,018 data points. That is how we assess inflation: whether those data points are going up or down, month-to-month. Every two years, that basket of goods and their weight in the index is adjusted.

 Long before the current imbroglio, there have been questions about how inflation is calculated. Statisticians have understood the issues about “substitution effect” for years. In fact, they understood that when these indices were created. In the 1920s, Irving Fisher of Yale argued that the “ideal index” of prices would be a blend of fixed baskets of goods and something that captured how behavior changes in real time. The problem is that the fixed basket is easier to calculate and less costly. That is what the BLS adopted in the 1940s and what has been the standard ever since. In turn, Social Security benefits were pegged to the index, with cost-of-living adjustments based on what the official CPI reported.

 Now comes the White House saying: ‘Hey, let’s base those increases not on CPI as it emerged in the 1940s but on “chained CPI.”‘ Overall, the chained CPI or any chained index that accounts for how people react to higher prices tends to report less “inflation,” hence the $125 billion in savings.

 The proposal has plenty of precedents. The BLS in 2002 began calculating an alternate CPI (called the C-CPI-U), a chained CPI, which is precisely the metric that the president now suggests. It did so after decades of criticism that its methodology was too brittle and did not capture prices as they are actually experienced and then offset by consumer behavior. In fact, in the 1990s, the Federal Reserve under then Chairman Alan Greenspan decided to base its interest rate decision more on what is known as the Personal Consumption Expenditure Deflator reported by the Bureau of Economic Analysis in the belief that it better captured actual inflation than the CPI.

 So if your head is spinning with all of the acronyms, let alone the inside-baseball methodology, the larger point is that this thing we call “inflation” has never been a simple number. Few people over the past decades believe that inflation has been truly tamed. The headline numbers say that inflation has been increasing at a modest 2 to 3 percent for the past two decades, but most people believe that the cost of living has been much greater. They experience daily the gap between their needs, wants and income. Inflation as a statistic, however, is not concerned with those challenges. It is an attempt to measure prices systemically, and not whether Mr. Smith in Tulsa is managing to balance his expenses and income.

 Ever since the Great Inflation of the 1970s, however, inflation has been a metaphor for whether the country is thriving. Clearly – whether this is acknowledged or not – there has been a gap between the expenses many people must bear and the organic ability of the country to grow and meet those needs. Whether that is any greater than it was in the 1950s – the supposed high point of the American century when as much as a quarter of the population lived in poverty – well, that is another question.

 What the proposals this week do reveal, however, is how often our understanding of the world is based on official statistics that are themselves limited. Numbers like CPI were never seen by their inventors or by their compilers as absolutes that perfectly answer pressing social questions such as what is a living wage and what is the basic cost of living for an average family. Their flaws were understood from the get-go, and government statisticians have been tinkering with them for decades, fully aware that they are arbitrary and limited.

 In essence, these statistics have always been subject to revision. They have always been arbitrary markers attempting to answer thorny issues of whether our economic system is stable and providing people with the means to meet or exceed basic needs and then some. There is nothing sacrosanct about the current measures, and no sacred cows are at risk with the president’s proposal to adjust the CPI to reflect a more fluid measure. It may be inside baseball; it may strike many as yet another cynical way to make future costs evaporate and leave the consequences to those least able to bear them. But in truth, these proposals open up a wealth of possibilities to alter our current spending trajectory with the full knowledge that much of what we take for granted is based on numbers that we invented only a few decades ago and which have always been limited, provisional and subject to improvement. Chained CPI? Bring it on.

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