It was time for pie last night. Here’s what we made: lemon meringue, a childhood favorite of mine.

Our children are different, of course. One didn’t like the meringue, the other found the filling too tart. But they’re capable of making chocolate chip cookies on their own, so all is fine.

No takers on the kale, however.

Not as boring as it looks

Black-hat exploits are now bought and sold in well-developed, if illegal, underground markets.

Once hacking might have been mildly subversive, in an amusing, stick-it-to-the-man kind of way:

[Hacking is] a brand of disobedience that both expresses dissatisfaction with the status quo and does something to change it.

But those days are gone. Botnets are freely available for hire, East European gangs offer thousands of newly stolen credit card numbers every day, and hackers trade code, resources and trash talk through bulletproof underground forums. And why not? There’s real money there. A couple months ago researchers discovered a single, click-fraud-generating botnet earning $6 million per month.

Lately free market principles have extended into the security arena. So-called “zero-day exploits” are vulnerabilities in major platforms like Windows or Chrome, prized because so long as they remain unknown and unpatched, attackers can use them for significant intrusions. Once upon a time, someone who discovered a problem in the code might boast to his friends (very rarely her friends) or announce it at a hackercon. Now? — they sell it, sometimes at auction, for prices that can range into the $000,000′s:

This trade in zero-day exploits is poorly documented, but it is perhaps the most visible part of a new industry that in the years to come is likely to swallow growing portions of the U.S. national defense budget, reshape international relations, and perhaps make the Web less safe for everyone.

That’s right, the customers aren’t other criminals — they’re governments. And this raises some interesting questions.

In the nineteenth century, to deal with rats, several cities tried offering bounties. Inevitably, opportunists soon began breeding rats to cash in, making the problem worse. (This dynamic is also known as the Cobra Effect, for reasons you can imagine.)

Incentives are quickly skewed, in other words. And if the NSA (for example) is out there buying up zero-day exploits for six figures, cash, no questions asked … who’s to say we won’t see many more ZDE’s being produced?

I suppose it’s better than people shooting each other, but gee, I wish the government could find better ways to spend our money.

If only it were so easy

You go into a store, and before you can even browse, there’s a long questionnaire to fill out. Gender, children’s names and ages, mortgage balance, TV viewing history, annual salary, who you voted for last election, favorite liquor, date your dog died, number of times you have sex/month and preferred positions. Is that a little too intrusive?

Yet every time you click on a well-funded website, there’s a good chance they have access to every one of those data points — even the last one, if you’re witless enough to sign up for this service. Everyone has been tracking what you do, online and offline, for years. Now they’re putting it all together, into vast, permanent archives that know, well, everything about you.

Facebook is partnering with data giants including Epsilon, Acxiom and Datalogix to allow brands to match data gathered through shopper loyalty program to individual Facebook profiles, much like it’s done previously with marketers’ customer data from their CRM databases …

Everyone kind of knows this, but prefers not to think about it because, well, what can you do, really? Got to be online, you don’t have any choice. It’s just how the world is today.

Not! In fact, there are several simple steps you can take to keep the details of your life private, even while shopping, browsing and Facebooking as much as always.

Anonymity is part of the solution, but a small part — you can’t buy stuff anonymously, for example, and what use is an anonymous social-network profile? The key is to make it hard for them to aggregate your data. They might know someone has a reservation for Gay Days Anaheim, and someone else is a staffer for Todd Akin, and someone else has streamed every single iCarly episode — but they don’t have to know it’s all one person.

(1) Clear your browser’s history, constantly.

You can’t just turn cookies off, or flash cookies or web beacons or all the rest — no modern websites would actually run. What you can do is erase all the tracking codes each time you close the browser (instructions here). Sure, you’ll have to log into a few sites again each time you come back, but that’s little trouble.

(2) Selectively disable javascript.

Lots of very intrusive prying is done with third-party scripts. A browser extension like NoScript or NotScripts puts you back in control. In addition, it can be stunning the first time you click into, say, The Atlantic, and discover just how many analytics and marketing companies you’ve never heard of are sucking up your data.

(3) Turn off your modem every night.

If you have dynamic IP service, like most home-broadband customers, this is critical. Your IP address uniquely identifies your internet connection. Even if you diligently follow steps 1 and 2 above, all the data hoover has to do is track your IP — which is, obviously, associated with all your online activity. But if you simply turn off the modem, you’ll get a new IP assigned next time, and the chain is broken. (Plug all your computer equipment into a surge-protected power strip, and there’s a single switch to flip at bedtime. Not only does this turn off wifi, so your teenagers can’t websurf in the middle of the night, it can cut your electric bill by $100/year.)

(4) Use a dedicated browser for Facebook.

Facebook is the most powerful and, for its size, most aggressive manifestation of the data hoover. Once you’re logged in, it keeps track of everything you do online. Simply clicking a “Like” button on some soda company’s homepage, for example, dumps your history into Facebook’s maw. But! If you use one browser and one browser only for Facebook (for me, it’s Opera), FB can’t see what you do over in IE for Firefox or whatever.

If you must use Gmail (see next tip) or other Google services, running them exclusively and by themselves in Chrome would be a good idea too.

(5) Stay out of the cloud.

For some people this will be the least practical suggestion. The convenience of storing all your data on remote servers is hard to beat … but the downsides are large. First, you’ve locked yourself into one provider, forever. Think it’s hard to switch banks? Ten years from now, try moving a decade’s worth of email, photos, documents, downloads, music and everything else to a different system. Won’t happen. Your commitment to Google or Apple or whomever is going to last longer than the average marriage.

More importantly, Apple or Google or whomever is free to look through your stuff. All of it, unless you’re paranoid enough to use encryption, in which case you’re way beyond this post anyway. Would you let perfect strangers page through your datebook? Study your checking account? Read all your correspondence, marking what they find interesting?

I have an iPhone, sure. But I synch it directly to a local computer (using BirdieSync). Computer files, meanwhile, are backed up first to an external hard disk and then, for the important ones, to a private folder on a hosting provider. Serious DIYers can set up their own service using open-source software. You don’t need the cloud.
 

Those are the basics. I also recommend disposable email addresses and single-use credit card numbers like ShopSafe. Offline, go ahead and use store loyalty cards — but make up entirely false information. For the really sensive stuff online, go through Tor.

You can’t cover your tracks, not really. But you can muddle them, and muddle them enough to make it not worth the data hoover’s effort.

For me, it’s worth it.

We don’t take Visa

James Surowiecki and Ezra Klein have columns up discussing the US shadow economy, and the fact that it seems to have been growing lately: to two trillion dollars annually.

Yipes! Two trillion dollars?? That’s a heck of a lot of cash under the table, no?

It sure is. For one thing, that means people are evading about $500 billion in taxes — money that either law-abiding taxpayers make up, or that adds to the deficit. On the other hand, we’re certainly not Greece, as Surowiecki points out, with more than a fourth of its tax revenue lost to evasion.

But this got me wondering about how the US compares with other countries. Conveniently, Friedrich Schneider has done all the legwork in a recent paper.

The first observation is that two trillion dollars works to $47,793 for every man, woman and child in the US. Whoa geez — most people don’t even make that much! In fact, the BLS reports that the average wage is $45,790. So what’s going on?
 

                   Click to enlarge

Much of the activity is illegal — drugs, prostitution, racketeering and all the rest. Dominated by organized crime, this sector is estimated to be $1.1 trillion annually. Of the rest, Schneider says that 2/3 of the remainder (or $600m) is “undeclared” — waiters not reporting their tips, for example — and 1/3 is “underreported,” which means companies not telling Uncle Sam all they made so as to reduce their taxes.

Given that the average waiter makes $20,710, however, Schneider may have his percentages reversed. Add up all the unlicensed burrito vendors, part-time hairdressers and off-the-books roofers you can find, and you still won’t get close to $600 million. The conclusion has to be that much of the problem is companies fiddling their books.

But back to the original question: how do we compare internationally? About average, as it happens. Austria and the Netherlands have the smallest proportion of their economies underground; Bulgaria and Romania the largest. Perhaps that confirms some stereotypes. But the relationship may be simpler, as a scatterplot of GDP per capita vs. shadow activity suggests:

It turns out that the more developed an economy, the better behaved its citizens are. Which kind of makes sense — the more money you have, the less likely you are to cheat. (Although Wall Street does seem to be an exception.) The US is right on the trendline.

Not matter what, though, two trillion dollars of economic activity is off the books — unseen, unsupervised, unregulated, untaxed. Libertarians should be thrilled.

The long tail

 
In 2012, the average e-book earned its author less than 300 dollars.

And that’s the average, pushed higher by a small number of very, very successful books. The median result is likely even lower.

Now, this figure is an estimate. Though the 800-pound gorilla — that would be Amazon — sells the vast majority of e-books, the company is extremely secretive about actual numbers. Individual authors can see their results, but aggregate figures? You might as well ask for the President’s nuclear launch codes.

Now and then Jeff Bezos lets slip a small, isolated data point. The most recent was in January, when he noted that ebook sales had risen 70% — but was that unit sales or revenue? And what was the total? No further details.

Nonetheless, we can use a range of data from disparate sources to come up with a good guess. I’ve detailed these sources, assumptions and calculations below. If you’re interested, take a look and see what you think.

Of course, many ebooks aren’t intended to make much money. Forget free books, which are left out of these calculations entirely (include them, and the average would drop even lower). But other types of books will never see big sales: assembly-line reprints of out-of-copyright “classics,” auto-generated Kindle spam, vanity publications, one-offs intended as lecture-circuit lagniappes, and so forth.

Still, at $300 each, you’d have to publish 48 books per year just to make minimum wage — if you could write them in all in your waking hours.

Amazon, by the way, is doing just great in this model. A couple dollars per book isn’t much for the individual author, but with two million titles out there, the money adds right up for them.

And maybe that’s why they’re so closed-mouthed about the numbers.

Methodology & Sources

Amazon dominates, so we’re going to look at just Amazon ebooks. Given the fungible nature of the marketplace, however, there’s little reason to think results would vary with B&N, Apple and the others included.

This is complicated, so I’m including the spreadsheet here, if you’d like to follow along.

First, we calculate the US share of worldwide book sales. 2012 global figures aren’t out yet, but 2011 is good enough; it probably hasn’t changed enough to affect the proportion substantially. So: 2011 book sales were $27.2bn (Association of American Publishers, AAP) and US sales were $6.7bn (also AAP), for a US share of 24.6%.

2012 US book sales were $7.1bn (AAP), and we can extrapolate for a 2012 worldwide number of $28.8bn.

Key assumption: The problem with all “official” statistics is that they miss independent, self-published books. AAP’s figures rely on reporting from approximately 1,000 publishers; Bowker tracks ISBNs, which many self-publishers don’t bother registering (they use Amazon’s ASIN number instead). However, I’m going to assume that the significant difference is in e-books — ie, that self-published printed books are an immaterial part of the total.

So let’s figure out how much money Amazon made from “officially counted” printed books. Bowker Market Research reports that AMZN has a 27% market share, of a total pie that is 78% printed (non-ebook). Applying these percentages to the total $28.8bn above, we estimate Amazon’s total (worldwide) 2012 revenue from printed books at $6.07bn.

Now, one of the very few statistics Amazon actually reports is “total media sales,” and in 2012 they amounted to $19.9bn. However, this figure includes DVDs, CDs, music and streaming media. To determine what all this non-book stuff adds up to, we need …

Another Assumption: That the ratio of “home entertainment” (as this category is known) to “books” revenue is the same nationally and at Amazon. After all, why not? Amazon is probably the biggest player in both anyway — except for streaming, which is dominated by Netflix. So let’s remove the streaming revenue. According to the Digital Entertainment Group, total US home entertainment sales were $18bn in 2012. Of that, “almost 30%” was digital distribution, or $5.4bn, leaving $12.6bn net.

Separately, Netflix streaming revenue in 2012 was $3.6bn. Removing that from total streaming — the $5.4bn we just just calculated — leaves $1.8bn for everyone else. How much of that did Amazon have? Let’s call it 1/3, assuming that Hulu, a larger player, makes twice as much as Amazon [see Note]. That leaves AMZN with $0.5bn. Could be a few hundred million more or less, but that won’t make much difference to the final results.

OK, so total media sales for all companies (less streaming) is $12.6bn. That’s 1.77 times US book sales (of $7.1bn), or expressed another way, 63.9% of the of media sales (including books but not streaming). Applying this ratio to AMZN’s $19.4 (media sales less streaming), we find that everything in Amazon’s figure that isn’t books equals $12.4bn.

Thus total Amazon book sales in 2012 are estimated at the difference, or $6.98 billion.

Meanwhile, remember that we determined Amazon’s printed-book revenue to be $6.07bn. Subtract that from total book revenue of $6.98bn, and we’re left with their 2012 Kindle book revenue: $910 million.

Take a second to marvel at the number. Once more:

2012 Amazon ebook revenue: $910 million

Amazon NEVER even hints at this, and we figured it out! Amazing! (if I say so myself.)

Moving on, there are currently 1,933,163 ebooks in the Kindle store. Limit the search to “free ebooks” and we find 59,720. For the purposes of this analysis we need to ignore the free books, so that means a total of 1,873,443. Divide this into total revenue (again, $910m) and we get an average revenue per Amazon ebook in 2012 of $484.

The last step is to estimate out how much the authors are making from these sales. What we need to know is how many of those 1.87m titles are priced under $2.99 (35% royalty) vs. $2.99 and up (70% royalty). I just counted the number of <$2.99 books in the Kindle Top 100: 28. This is higher than last year (21) which makes sense, given increased downward pressure on prices; let's call it 25 percent. Do a little arithmetic, and we see that of that average $484, the author is getting $297.
 

Note: If book sales are tricky, determining Amazon’s streaming revenues is even harder. Many (most?) customers watch streaming video under their Prime membership, rather than pay-per-view. Proper cost accounting would allocate the appropriate portion of Prime membership fees to media sales. Does Amazon do this? Who the hell knows? That’s waa-a-ay more detail than is available in their public financials. Fortunately, as mentioned, the exact figure doesn’t matter much. You can run your own sensitivity analysis on the spreadsheet if you want.

                   He got it right

 
Why do otherwise good writers put really, really bad slang into the dialogue of their characters?

There’s an obvious answer, which is that the writer has no idea at all how people really talk in the subgroup that he (yes, the culprit authors are usually male) is describing. Sometimes the result is almost funny, like when some 25-year-old kid tries to channel an elderly woman. But usually the reader can only cringe.

And this is especially true when white, middle-aged men try to write “street.”

I’m not going to name names here, but not long ago I was reading a new novel from an established, well-regarded crime novelist, whose books I almost always enjoy. But then his black villain used the word … honky.

Honky??? My god, that was “hip” slang like sixty years ago!.

I couldn’t read a page further. Ugghh.

Some authors do it right. Richard Price is great at slang, and it’s worth noting two things: first, he locates his stories in a precise time and place, usually a few years behind the present, so he can use the speech current then. (George Pelecanos also does this, very effectively.) Second, he will simply make up words. “Juxing,” used frequently in Lush Life, might be one (there’s an interesting discussion of the question here).

But for everyone else, here is a list of examples. Unless your setting is, say, 1965 mid-America, do not ever, ever put one of these words* into your black characters’ dialogue:

jive-ass bitch
hood
bust a cap in yo ass
bangin
benjamins
crib
funky
phat

Etc. Not sure? Here’s a simple rule:

If you can find the word in Urban Dictionary, no. It’s too late.

The one, interesting exception to this might be “cool.” Remarkably, for a word that apparently entered the lexicon in the 1930′s, it is still in use, and still, well … cool. Sometimes.

Otherwise, stick to what you know. Your readers will appreciate it.

*And don’t try to write “ebonics,” either. Your characters will sound stupid, and so will you.

Cocaine and bankers seem always to be in the spotlight. Last year Business Insider compiled a summary of recent headlines:

A former Lloyds banker was caught with $15 million worth of cocaine on his yacht … Former Bear Stearns CEO Jimmy Cayne allegedly kept an antacid bottle full of cocaine at his desk … Banker David Firth was caught dealing cocaine at his desk at the Barclays offices

And so on.

Old news — but nonetheless an interesting juxtaposition with another story, featured in The Nation this week. In twenty years the drug testing industry has exploded, and a majority of Americans are now subject to random (and not so random) urine tests, hair sampling, and even more invasive exams:

By 2006, 84 percent of American employers were reporting that they drug-tested their workers. Today, drug testing is a multi-billion-dollar-a-year industry. DATIA represents more than 1,200 companies and employs a DC-based lobbying firm, Washington Policy Associates. Hoffmann-La Roche’s former consultant, David Evans, now runs his own lobbying firm and has ghostwritten several state laws to expand drug testing. Most significant, in the 1990s Evans crafted the Workplace Drug Testing Act for the American Legislative Exchange Council (ALEC), of which Hoffmann-La Roche was a paying member. Laying out protocols for workplace drug testing, the bill—which has been enacted into law in several states—upheld the rights of employers to fire employees who do not comply with their companies’ drug-free workplace program.

Over the past decade, lobbyists like Evans have focused on what a DATIA newsletter recently dubbed “the next frontier” — schoolchildren.

Not to mention people receiving public assistance. Seven states already mandate drug testing for TANF recipients, and two dozen more are considering it — along with making unemployment insurance conditional as well.

Okay, but the emphasis seems misplaced. The idea of some desperately poor, laid-off retail clerk smoking a joint on the weekend may offend some legislators, but really, what harm is he doing? Certainly nothing like, oh, I dunno … cratering the world economy, evaporating hundreds of billions of dollars of wealth, and causing prolonged global recession that has thrown millions and millions of ordinary workers out of work.

A truck driver can only crash his truck. A rogue trader can crash an entire financial system.

If you’re going to drug-test janitors and burger-flippers, it’s only sensible to drug-test those who can really do some damage. We’ll know these legislators are serious when they start making CEOs, bankers and hedge fund managers pee in a cup too.

See? It’s a CAT. Now you have to link to this post

We’re making it a quiet day around here. The radio’s off. No obsessive news-checking. My wife can’t go to work because her office is inside the crime-scene perimeter. Maybe I’ll do some reading.

Some reading about reading, in fact. The latest Scientific American has a good article summarizing current research on how people’s brains read on screens, compared with old-fashioned printed paper. To someone old-fashioned and cranky [ahem] the results are not surprising:

Most screens, e-readers, smartphones and tablets interfere with intuitive navigation of a text. Many old and recent studies conclude that people understand what they read on paper more thoroughly than what they read on screens … Students who read on paper learned the study material more thoroughly more quickly; they did not have to spend a lot of time searching their minds for information from the text, trying to trigger the right memory—they often just knew the answers.

Other researchers have suggested that people comprehend less when they read on a screen because screen-based reading is more physically and mentally taxing than reading on paper.

The article describes several aspects of e-reading that make it more difficult — navigation, lack of tactile interaction, even “effort,” the idea that many people subconsciously regard screens as less serious than books and therefore put less energy into them.

While I find these suggestions convincing, I’m actually not sure that the question is answered. For most of the current generation, yes, screen reading will probably always be less effective than paper. (“Current” includes today’s teenagers, by the way, who still overwhelmingly prefer books to e-books.)

But that is because of how we learned to read: on paper. Reading is a wholly artificial activity; it has no analogue in the natural world of our forebears. Only in the last, say, two hundred years has literacy become widespread. The brain requires years of training and practice to learn to interpret these small, arbitrary marks.

And it is therefore entirely unsurprising that having trained our brains to read one way, including physical rewiring in the cortex, trying a new method doesn’t work as well. Having spent years or decades learning to read on paper, the transition to screens is simply fraught.

But the next generation — they’re a different story. It only makes sense that when people learn to read electronically from the very beginning, their e-reading skills and comfort level will be superior to printed material. The big crossover hasn’t happened yet, but only because screen reading is still so new. Heck, E-Ink was barely getting started 10 years ago, and only in the last three years have e-books seen widespread adoption.

The shift is slow, but it’s inevitable.

Cut me off at your peril

Owning weapons is apparently all about freedom. Riding bicycles is also about freedom — open roads, wind in your hair, no gasoline required. Politically and ideologically, however, the two pastimes don’t often come together.

Well, almost never:

But leaving aside this kind of safe, family-friendly activity, bikes and guns do have one interesting parallel: how they’re made.

US sales of guns were about $12 billion last year; bicycles, $6 billion. 99 percent of bicycles were imported (almost all from Taiwan), while most US weapons were made here at home.

Okay, maybe it’s stretching a point — really I’m talking about that last one percent of bikes. These are built in specialty shops, by artisans assembling on one frame at a time, using metal-working tools and not-very-complicated shop equipment. More than a hundred of these artisanal facilities are in business in the US.

Likewise, US gun manufacturing is dominated by small businesses, building them by hand. The largest maker, Sturm Ruger & Co, has only 17% of the market. New England alone has 450 licensed manufacturers, according to a story in yesterday’s Boston Globe.

The blue dots make bombs & grenades, too

Small-scale, local manufacturing — it’s like something from the nineteenth century. And interestingly, from a historical perspective, the connection is even stronger:

Building bicycles in existing manufacturing facilities [in the later nineteenth century] became commonplace. In New England, bicycle manufacturing was often taken up by arms makers and sewing machine companies …

The same kind of work, creating two very different kind of products. When we see something like this:

… it’s just closing the circle.

Sod off, Shell

Western oil companies, in cahoots with Nigeria’s corrupt kleptocracy, extract oil from the Delta. Local residents, whose country has been ravaged by spills and environmental devastation, extract oil from the pipelines. While kidnappings of oil workers get the press, an impressive, entirely illegal infrastructure has arisen alongside the authorized drilling.

Thieves drain an estimated 60,000 barrels of oil a day from Shell’s local joint-venture, according to company estimates. Volumes of oil stolen from Shell and other oil companies in Nigeria have reached a total of 150,000 barrels a day, or 7.5% of the country’s crude-oil production, Shell says, citing a United Nations figure. It estimates the illicit trade is bigger than the combined gross domestic product of West Africa’s Togo and Sierra Leone.

This is a far cry from villagers with pails at a tanker crash — the opportunistic origins of the trade. Shell tried sinking the pipelines underwater to prevent tapping, but that hasn’t worked:

Jacob Mandi says he failed to find work with Royal Dutch Shell PLC in Nigeria’s oil-rich swamps. So now the 25-year-old ocean diver earns a rich living stealing crude oil from pipelines … Mr. Mandi, drawing lines on a sandy beach, describes how he dives into the cool waters of the vast Niger Delta to puncture and siphon oil from Shell pipelines deep in its creeks. The bulk of the pilfered sweet crude is loaded onto ships bound for foreign countries.

But the gangs have moved up the value chain, too, setting up backwoods refineries to process the crude oil and then selling the lighter-grade, more expensive fuels they produce.

No EPA oversight, no OSHA inspections

The entire project of West African petroleum is a colossal fiasco at all levels — except for the oil majors and local officials who reap the profits, and, I suppose, for the consumers who benefit by cheap pump prices. You have to admire the persistence and ingenuity of the local “drillers,” who work just as hard and under far more risky conditions than the official employees. But that wouldn’t seem to justify the damage being left behind.