Alzheimer's Cure and the Collapse of Old Media
Florida’s perfect subtropical winter is beginning to fade, unfortunately. On the way are days like ovens and hurricanes from the coast of Africa. Ah, well.
I’ve just returned home from Baltimore, where I met with some of Agora Financial’s leading lights. I felt especially privileged to do so because many other financial organizations have been holding emergency investor conferences recently. Most are playing catch-up to Agora Financial, which nailed the current crisis.
The wall of denial in the financial industry regarding the debt has been unbreachable for years. For the most part, people like Agora Financial’s Bill Bonner and Addison Wiggin have been ignored by the mainstream. Most analysts, unfortunately, pretended that banking and money policies didn’t matter.
That’s all changed now. So many major banking institutions are functional zombies that those who warned about macroeconomics are no longer brushed off as reactionary paranoids. Short-term portfolio values have gone down with the banks. Analysts who believed that irresponsible government would have no impact on their portfolios are now revealed for the fools they were. Personally, by the way, I began warning about government meddling in the banking system in the mid-’80s in my columns for USA Today and elsewhere.
Unfortunately, the current administration’s bailout is a cure worse than the disease. The Bush deficits, rightly criticized by Democrats just a few years ago, have been quadrupled. According to the Congressional Budget Office, they’ll fall to triple the size of the Bush deficits in 10 years. This is a larger problem than the subprime mortgage meltdown.
I was pleased to see that the eminent futurist Juan Enriquez of the Harvard Business School “gets it.” The impact of the radical increase in spending will be to move the entitlement crisis much, much closer to the present. He predicts the date of meltdown as 2017.
Fortunately, Dr. Enriquez sees an avenue of escape, as I do. He calls it the “reboot,” but he is really just talking about the transformational technologies I’ve been telling you about. These technologies, ranging from cellular engineering to robotics, have the potential to save our collective butts and make you rich enough to buy that private island you’ve had your eye on.
Prior to the bailout, I was confident that the reboot would come well before entitlements consumed our entire budget, precipitating an intergenerational political crisis. Now, however, it’s clear that we’re in a race. If transformational technologies are brought to market quickly enough, huge components of our current budget will simply disappear.
Take, for example, just one biotech example: Alzheimer’s disease. Estimates are that AD costs the U.S. at least $100 billion annually. Throw in cures for late-stage renal failure and cancers, along with longer productive life spans, and we’ll be in the black again.
Speaking of Alzheimer’s, Dr. Mark A. Smith is, in my opinion, the foremost authority on AD today. A renowned research scientist from Leicester, England, he is executive director of the esteemed American Aging Association. He is also the editor-in-chief of the critically important Journal of Alzheimer’s Disease.
More importantly, he saw and warned 20 years ago that Big Pharma’s focus on amyloids as the cause of AD was wrong. Today, we know that the billions of dollars spent trying to treat amyloid plaque buildup in the brain have been spent largely vain. Now proven right, Smith has joined forces with Anavex. He told me, in fact, that Anavex appears to be the only company that is pursuing the correct path to curing AD, and recent tests have borne out that statement.
Turning our attention to communications, we see that Apple has allowed Skype to offer an iPhone app. This means that iPhone users can make free phone calls from any Wi-Fi hot spot.
The iPhone is by no means the first phone to utilize Voice over Internet Protocol (VoIP). More sophisticated phones have had the capability for years. When a technology reaches the iPhone, however, it has gone mainstream.
So why are we still paying phone companies for phone calls? To a 3G phone with a mobile Internet connect, a phone call is the same as a picture of Angelina Jolie or a forwarded e-mail joke. It’s the Web connection that provides the value, not the dialing technology.
VoIP is basically software, so it offers options that old-style hardware switching simply cannot. It is also free beyond basic connections charges. There are no long-distance or country charges on the Web.
The phone companies, of course, have been fighting VoIP tooth and nail. Their business model is obsolete and they know it. Only Apple’s massive clout has allowed this small and long-delayed step forward. Nevertheless, iPhone users are already learning how to use the feature well. The Skype app transitions between Wi-Fi and AT&T almost seamlessly.
Old-school phone companies are, therefore, doomed. Only those that become full-blown ISPs will survive. If the past is any indication, current phone companies will resist the inevitable for so long that upstart ISPs and technologies will leapfrog the dinosaurs.
Speaking of dinosaurs, newspapers continue to collapse as I predicted. Bankruptcies have hit Philadelphia papers as well as the Journal Register chain. The Rocky Mountain News shut down and Hearst has turned the Seattle Post Intelligencer into a smallish Internet site. The San Francisco Chronicle is in a death spiral and the Minneapolis Star Tribune has filed for Chapter 11. The Miami Herald and the Boston Globe are teetering.
I suppose I ought to have more sympathy for those who work at those papers. In truth, however, I welcome their collapse. I left policy research, in fact, to help Jim Barksdale and the Netscape crew destroy the old media monopoly on information dissemination.
The mainstream media has done enormous damage by aligning itself with only one side of the political debate. On the one hand, journalists who are unable to solve even basic mathematical equations gave inordinate coverage to climate change hysterics. On the other hand, they refused even to cover myriad warnings that Congress, Fannie Mae and Freddie Mac were taking our financial institutions over a cliff. It’s conceivable that if not for that tribal media bias, we wouldn’t be in the shape we are in now.
Incidentally, I would be just as opposed to an incestuous monolithic media run by the right. It wasn’t, however, and the creative destruction of old media is a necessary part of our economic recovery. No matter what your political affiliation as old institutions fall, new ones will arise — making fortunes for those who know they’re coming.
They are not, however, always obvious. The collapse of newspapers is accelerating the trend toward online news sources. If owners of these decrepit businesses had been thinking, they would have leapt at The Kindle when it emerged. The New York Times, for example, could cut its delivery costs in half by abandoning paper and giving all subscribers new Kindles.
Kindles are only the tip of the convergence iceberg, though. The next generation of mobile devices will combine the features of Kindle, netbook, iPhone and more. We already own several companies that hold key patents in this media evolution. We’ll be adding more in the future.
May 1, 2009