Showing posts with label PortlandPhoenix. Show all posts
Showing posts with label PortlandPhoenix. Show all posts

Wednesday, March 19, 2014

Portland vs. Her People: Fighting over the possible futures of Maine's largest city

Published in the Portland Phoenix

Beneath the deep rifts of disagreement about how Portland should grow, change, and develop, there lies one underlying point of concord: The city is increasingly attractive to a wide range of people and businesses, and therefore is uniquely poised to have options about how its future will be built. And there’s another, related area of agreement: Nearly all the players in the ongoing land-use disputes in the city (including municipal leaders) share a list of goals, which include more housing that is more affordable, preservation of historic assets, celebration of unique attributes of the city’s landscape and architecture, and the pivotal importance of energizing the downtown — including but not just maximizing use of open space.
But when faced with choices about how to achieve those goals, Maine’s largest city has of late suffered a gigantic split, between City Hall and the people themselves. And most of these conflicts are similar in one root element: This city, which all agree is lucky to have so many options, has leaders who do not behave as if they have any choice at all. To the frustration of the citzenry, the City Council and the Planning Board often run off with the first partner who asks for a dance.
Sometimes there’s no real controversy, as with the new hotels sprouting around the downtown, the $60-million renovation of the Eastland Park Hotel, or the $110-million redevelopment of Thompson’s Point. But when there is disagreement, a pattern has emerged: citizen outcry builds, corporate interests flex their muscles, the city stands its ground, lawsuits swirl, and the future of Portland gets decided not through a participatory process ending with a majority vote, but in adversarial courtroom hearings before a judge who will make a decision alone.
The most notable issues exemplifying this pattern are the potential sale of Congress Square Plaza, the repurposing of the former Williston-West Church, and the massive Federated “Midtown” housing development in Bayside (see sidebar, “Timelines”). All three have been subjected to long, contentious hearings before the City Council and the Planning Board, as well as several lawsuits, which the city has a track record of losing (see “Legally Blind,” by Al Diamon, February 28).
The projects are different in their details, but looking at their processes is revealing, and worrying. There are interdependent problems, and even if they are solved, the three projects at the center of the current storms are likely lost to litigation forever. That said, a closer look at what ails Portland could help us avoid future maladies.
Diagnosis #1: Bad timingThe first, and perhaps truly the biggest, underlying problem is not a lack of citizen involvement. Ask anyone — board member, citizen, or reporter — who was at any of the multi-hour municipal meetings about these projects.
It’s that the involvement comes too late in the process to really make a big difference. Planning Board member Jack Soley puts it best: “At the eleventh hour it’s difficult to give public testimony as much weight as it is earlier in the project....Their voice will carry more weight at the early stages.”
Projects that come before the Planning Board have already been reviewed by city planning staff, and often outside experts, such as traffic engineers and stormwater engineers, but there’s still lots of time to make changes. Soley, a developer himself (the hotel on Fore Street is his) whose father is notorious Old Port landlord Joe Soley, says the Planning Board tries “to improve on what the developer has brought to us,” within the standards set by the City Council’s ordinances.
While citizen input is always welcome, earlier is better. Projects can take months to move through the Planning Board, during which time the board has typically requested — and received — many changes from the developer. By the end of the process, the members can find themselves in a bind if new public objections arise, or if citizens ask for additional changes to aspects of the project the board has already addressed.
“To a developer, it might cost a tremendous amount of time, money, and resources to make those changes,” after the company has typically invested a great deal already. The end is “a really difficult time to go backwards,” Soley says. “There’s a point at which it’s unfair.”
Which leaves one last option, where the Midtown project has ended up: “At the eleventh hour the only way to stop [a project] is litigation,” he says.
Mayor Michael Brennan agrees with Soley about getting citizens involved up front, and notes his surprise at the anti-Midtown outcry after more than a decade of discussions about Bayside. “If there were some type of opposition you would have expected it long before” the very end of the process, he says.
However, if the Planning Board’s attitude in this regard seems to favor developers over public concerns, that may be by design. Board members are appointed by the City Council, who are “very developer-friendly,” says Frank Turek, a leader of Friends of Congress Square Park, which leads him to ask (rhetorically) of the Planning Board “a basic philosophical question: What do you do that’s best for the people?”
Soley counters that the Planning Board works hard to fix, not kill, flawed projects, but ultimately when faced with imperfection, must “make our best judgement for what makes sense for the city of Portland.”
Diagnosis #2: InsecurityBut what city leaders think is best can differ significantly from what residents believe. Charles Remmel, one of the plaintiffs in the Williston-West case, and the first president of the Western Prom Neighborhood Association when it was founded in the 1970s, says city leaders should “have a little more faith in how the city will develop,” rather than thinking “if they don’t do [a proposed project] right now, it’s the end and we’ll never get another chance.”
“Portland has enough vibrancy” to attract good development, Remmel says, citing the city’s thriving food and entertainment scene, which he says has flourished “in spite of” city officials’ efforts.
When faced with these developers’ ideas, “Portland’s insecurities come into play,” Remmel says. City leaders often are “so insecure” that they approve the first thing that comes along. “They don’t have enough faith in themselves.”
Regarding Williston-West specifically, he says city officials were so worried about the future of the building if it lay dormant for too long that they eagerly embraced “the first guy who comes in,” even though that meant offices and a performance space in the middle of residences, and despite a lack of parking. (He says any parallels between fears for Williston-West and the St. Lawrence Church on Munjoy Hill, which did lay vacant and ultimately deteriorated until it needed to be demolished, are weak at best, because of different neighborhood environments.)
With Congress Square, he says, the city was afraid it would never have the money or the civic interest to improve it, so when a developer proposed the idea that involved selling off public land in the heart of the Arts District, officials leapt at the chance.
And with Midtown, the official thought line was, “We’re afraid if we don’t approve this, we’ll never get an opportunity like this ever again,” Remmel says. So the city raised the allowable building height in that area, and made other changes to accommodate the plan, rather than, for example, turning it down and waiting for one that made more sense for Portland.
Housing advocate and urban-issues blogger Christian MilNeil says the Congress Square situation and the Williston-West proposal are similar: “Those were really developer-driven. The developer came in with a proposal and that became the plan.”
(Former councilor John Anton, who was the only person to vote against both the Williston-West and Congress Square decisions, declined to comment for this story, saying he left public office “to get my life back” and didn’t want to get involved in current issues, nor revisit old ones.)
But MilNeil says the Midtown project was different, the result of a 15-year planning process. “You can’t really blame the developers for following the city’s plan,” he says. “The developers really were proposing something that was faithful to the city’s vision,” a development with an active street level, retail shops, and lots of housing.
Diagnosis #3: Resistance to changeBrennan says those are the city’s goals — his particular focus is “initiatives and proposals that are going to bring people to the downtown, galvanize the downtown, revitalize the downtown” — and says officials are balancing “a number of competing objectives,” including the city’s historic feel and overall aesthetics. 
Citizens who have risen up to oppose some of these developments have “different objectives,” he says.
When asked why some projects got a green light with barely a whisper, and others ignited firestorms, Brennan as much as throws up his hands.
“You get to a point where you’ve tried to compromise,” he says. “You just get to a point where you fundamentally have disagreements.”
Remmel agrees with that assessment: “Planning means to me you have a long-term idea” rather than being “focused on project approvals,” he says, arguing that city officials “are basically project-oriented. I don’t think they think in the same way the neighborhoods do.”
“A lot of these arguments are really about disruptive effects in a neighborhood,” Remmel notes. He admits, though, that what might count as disruption for him is fine for others, and vice-versa. He is confident, for example, that the Williston-West building could easily be converted into high-end residences by a developer who would protect the building’s historic facade. But Portland Landmarks, which protects the city’s architectural heritage, is against splitting up the beautiful interior of the sanctuary.
“It’s not a church anymore,” Remmel says. He’s right, but that statement alone doesn’t directly suggest any single course of action.
And that’s where MilNeil, a commissioner of the Portland Housing Authority, comes in. First, he observes, “cities change. It’s pretty much the definition of a city.” And second, he posits a clear dichotomy: “If the city doesn’t change architecturally, we’re going to change demographically.”
He’s speaking of the proposed Midtown towers, but the point is just as valid about putting a business in the residential West End: Either we have more and denser housing of all kinds, or the city prices out lower-income residents.
For his part, MilNeil puts social values over aesthetic ones. “I’d much rather preserve our city’s egalitarianism and embrace changes to our skyline,” he says.
Diagnosis #4: Class ConflictWhile on the one hand, MilNeil says, “it’s great that we’ve become such a successful city,” with merchants, restaurants, and a vibe that’s attractive to wealthy people; on the other hand he wonders, “Where are we going to put all the rich people who are going to move here?”
And with housing in short supply, and prices on the rise, where will the people the newcomers displace live?
“The rich people are just going to crowd out the working-class and middle-class people,” MilNeil predicts, unless the city undertakes major efforts to “make room for the people who want to live here and need to live here.”
Peter Monro, a landscape architect who is a leader of Keep Portland Livable, the group leading the opposition to Midtown (and suing to block it), says the city has it backwards. Rather than building downtown housing and an industrial park on the outskirts of the city, he says the city should have “good paying jobs at the heart of it,” which will in turn encourage spin-off developments to house those workers and cater to their shopping needs and desires.
His perspective is, he readily admits, that of an urban designer who lives in a historic-landmark home in a historic neighborhood district in the West End. He has a specific vision for how development should occur in Portland, and says the city does too, in its zoning and planning ordinances.
MilNeil, though, says Monro is looking at the wrong problem. Observing Monro’s West End residence and the fact that other plaintiffs in the anti-Midtown suit live in upscale housing too, he is blunt: “They’re homeowners so they’re not really aware of Portland’s housing shortage . . . and they don’t see it in their neighborhoods.”
As a result, he says, their opposition rises from a lack of an appropriate sense of urgency about an issue the city has been working on for more than a decade. “In their privilege they think they have the right to overturn 15 years of neighborhood-planning efforts,” he says.
Now, he says, because of Monro and his allies — and their lawyers — “this whole Bayside Vision is on hold.”
Diagnosis #5: Too many lawyersPart of the conflict does boil down to lawyers, of course. “If you can hire enough lawyers and kill any project you want,” which makes it harder for all developers, MilNeil says — including the Portland Housing Authority and Avesta, a non-profit developing affordable housing.
In fact, MilNeil questions Monro’s claims of pure motives. “I don’t think they’re out to win the lawsuit, actually,” MilNeil says, citing a Press Herald opinion column from November 2013, in which Monro was quoted saying it didn’t matter if he won the case in the end.
“We think the delay may be a deal breaker (for the developer),” the paper quoted Monro saying. “The power to delay is the power to destroy.”
Monro vigorously denies the charge, saying “we’re in it to change that project,” and rattling off several very specific changes he would like to see in the Midtown project (a lower parking garage allowing a wider, lower residential tower, for example). “This is not about delay.”
Ensuring the city followed the proper legal process is indeed important; Monro observes that the recent court rulings suggest that’s not a strength at City Hall. Noting that the courts must weigh heavily the fact that the city has the right to govern itself, Monro sees Portland’s recent losses as evidence something is very wrong: “Even with a bias in their favor they can’t win.”
What some — including Monro and Brennan — see as part of the checks-and-balances system, others, such as MilNeil, see as elitist. “As a city we should not be resolving all these contentious debates by lawsuit,” he says. “It’s not democratic.”
The only people who get to sue if they see an outcome they don’t like are rich people who can afford to hire lawyers, he says. “A courtroom is not a public process. It’s rich people fighting against each other.”
In the balance hang more than a few important questions.
For MilNeil, the key is renters’ futures. If Midtown’s developers have to modify their project to make it smaller or shorter, those changes will cost money, MilNeil says, on top of the relatively fixed
remediation costs for cleaning up the former railyard. With fewer tenants available to cover those costs, rents go higher — which is the opposite of MilNeil’s goal.
For Brennan, the suits boil down to the city’s sovereignty. Particularly with regard to the Congress Square petition and upcoming vote, he asks, “Is everything that the City Council does subject to a petition drive or a referendum?”
For Turek, it’s about taking on problems head-on. “All over the country cities are realizing that if we invest directly in public parks, we’ll get a lot more economic benefit” than selling the space and hoping development spreads, he says.
And for Monro, the effort is about holding back City Hall’s eagerness to grow. “They want population and tax base,” he says. “They’re looking for as many Empire State Buildings as they can get.”
Diagnosis #6: Being overwhelmedIt is possible that at least some of the popular resistance is because many areas of Portland are changing rapidly at the same time.
Brennan calls this period in Portland’s history one of “unprecedented development and development opportunities in the city,” saying there is “a lot of pent-up demand due to the recession” that started in 2008 and kept bankers and builders laying low, waiting for better times. Now, he observes, projects are being proposed throughout the city, including on High Street and India Street, as well as the working waterfront.
“There seems to be development every place we turn,” he says.
Listing off nearly a dozen active projects, Soley echoes that sentiment: “If you look at almost every corner of the city, there is substantial development going on.” With a tone of wonder audible in his voice, he says, “this is one of the most spectacular periods of development in the history of Portland.”
And that era is only continuing. The redevelopment of Franklin Street could open many acres of developable land in the heart of the city, which could be worth as much as $1 million per acre, a real-estate analyst told the Portland Press Herald.
As we plot that area’s future, we hope these lessons help Portlanders — both in and out of City Hall — reflect on one question, as Brennan posed it: “Is this development reflective of where we want to go as a city?”

*Williston-West Church*
Summer 2011
 Williston-West Church merges with Immanuel Baptist Church and moves worship to High Street. The beautiful, historic Williston-West Church is sold to Frank Monsour, an Australian businessman who proposes converting the parish house into residential space and office space for up to 14 of his employees; a future concept is to convert the sanctuary into either a community hall or a performing-arts venue.
May 2012 The Planning Board hears nine hours of public testimony, and entered into the record 97 letters and a 140-signature petition opposing the idea, according to the Forecaster’s report of that meeting. Objections relate to the city’s comprehensive plan, which protects the residential character of the West End neighborhood (and other parts of the city). Putting a business in the middle of an upscale residential area seems to run counter to the overall plan.
June 2012 Fifty people, about half in favor and half opposed, speak to the City Council during a two-and-a-half-hour public hearing, the Portland Press Herald reports. The council votes 6-3 to approve the plan, which involves a zoning change to allow the business (opposing were John Anton, John Coyne, and Cheryl Leeman).
July 2012 Twelve neighbors sue Monsour and the city, asking a Superior Court judge if the city went too far in changing the property’s zoning.
December 2013 The ruling is that the rezoning did violate the comprehensive plan, and that the building did not need a specially brokered deal to protect it, given the city’s strong historic-preservation ordinance. The city is planning to appeal that ruling to the Maine Supreme Court.
*Federated’s Midtown project*
 The city issues the Bayside Vision, calling for more housing and larger, taller buildings in the area, including the former railyard in the center of the neighborhood. The plan also recognizes a related need for a city-funded parking garage.
July 2011 The city agrees to sell 3.25 acres, the former railyard, to the Federated Companies for $2.3 million, with an agreement that any development would include a parking garage paid for in part with $9 million in federal money passed through the city.
Fall 2012 Federated unveils a $150-million plan to build 675 apartments in four 15-story towers, plus two parking garages with more than 1000 spaces, and more than 90,000 square feet of retail space.
Fall 2013 After nearly a year of hearings before the Planning Board and City Council, including ordinance changes allowing buildings to be as tall as 165 feet throughout the parcel, public opposition arose (see “Curb Appeal,” by Deirdre Fulton, November 22, 2013).
January 2014  The Planning Board approves the project. Two members of the board, Jack Soley and Bill Hall, say they don’t like aspects of it, but vote in favor because it meets the city’s ordinance requirements.
February 2014 Keep Portland Livable sues the city, saying the process did not properly respect the city’s own planning documents.
*Congress Square Plaza*
 City Council creates the Congress Square Redesign Study Group. After about three years of meetings, the 15-member body was no closer to an idea than they had been at the start.
November 2011 RockBridge Capital, the new owner of the Eastland Park Hotel (now renovated and reopened as the Westin Portland Harborview) proposes buying the plaza to erect an event center (see, among other coverage, “Congress Square’s Controversial Facelift,” by Deirdre Fulton, May 24, 2013).
May 2013 The city Parks Commission says the council should consider not just the status quo and the frequently revised RockBridge proposal but other ideas “such as a re-designed park in the same space, a fully designed smaller plaza, and other building or architecture options.” (See “Getting (Congress) Square to Work,” by Jeff Inglis, August 16, 2013, and “Reimagining Portland,” by Calvin Dunwoody, August 24, 2012.)
September 6, 2013 Friends of Congress Square, which had objected to the proposed sale for months, asks the city to allow the circulation of a petition for a citizen initiative to amend the city’s land bank, making protected land harder to sell, and adding 35 parcels to the Land Bank list, including Congress Square.
September 13, 2013 The city refused to issue petitions, arguing that the ordinance it proposed conflicted with city ordinance and state law barring initiatives and referenda on administrative and financial issues.
September 16, 2013 The City Council votes 6-3 (John Anton, Kevin Donoghue, and David Marshall opposed) to sell 9500 square feet, about two-thirds of Congress Square Plaza, to RockBridge Capital for $524,000.
September 25, 2013 Friends of Congress Square Park sues the city to force it to issue the petitions.
November 2013 A judge orders the city to issue petitions, which were finally released for circulation the day before Election Day. While the city planned to appeal, the Friends collected signatures at the polls, ultimately turning in 4250, far more than the required 1500.
March 2014 The City Council approved the petition’s question for the June ballot, but also moved to enact a slightly different ordinance that would add almost exactly the same properties to the protected Land Bank (with the notable exception of Congress Square), but with more modest protections against their potential sale.
April 2014 The Maine Supreme Court will hear the city’s petition-issuing appeal in early April, and is expected to rule shortly thereafter, in time to allow or block the June election.

Thursday, March 6, 2014

Press Releases: Beyond politics

Published in the Portland Phoenix

Today’s US media environment might well seem extremely gay-friendly. American mainstream media consumers saw a fair amount of coverage of anti-gay discrimination in Russia in the lead-up to, and during, the Winter Olympics in that country (read more on this topic on page 10); there was relatively little outcry when President Barack Obama selected several gay former Olympians to represent the United States in the audience. Johnny Weir both dressed and behaved flamboyantly on NBC’s nightly figure-skating broadcasts. Heck, even marriage equality gets little more than ho-hum headlines these days as this vital civil-rights issue continues its progress around the country.
But there is still much more to be done, and last weekend, a one-day conference at Colby College in Waterville sought to explore what, and how.
Called “Queering the Media,” the event, put together by members of Colby’s all-inclusive LBGTQ-plus-allies support group The Bridge, appeared to be less about news-media coverage and more about modern culture, as described by organizers Andy Kang and Sonja Hagemeier.
The intent was that “‘queering’ would be a relatively broad and very widely interpreted term,” Kang says. Looking at “how the media portrays or represents, or tries to represent, or fails to represent, people who don’t fit into mainstream culture” is important, he says, because it can help remind consumers of that information that other viewpoints and experiences exist.
This is important in Maine particularly, says Hagemeier, because “a lot of people think of Maine as really isolating, especially for queer people.” She spoke in almost mystical tones about Portland, a place she has heard is “very very queer friendly,” while observing that it is only slowly that “people are getting used to the idea” in other parts of Maine.
Their conversations at the conference, including presentations by students and current and former Colby faculty, as well as noted queer scholar Jack Halberstam, covered athletic environments, video games, and churches’ roles in social-justice efforts. That’s certainly a departure from most coverage of LGBTQ issues in Maine’s mainstream media. In those outlets, Kang says, queerness is not treated culturally. Instead, “all these topics seem much more politically charged.”
That’s a lesson many Maine journalists could take to heart regarding not only gay culture but other aspects of Maine’s shifting demographics. Somali immigrants, for example, are interesting at times other than just when they’re running for political office or being attacked by anti-immigration activists. The same goes for people of other cultures and backgrounds.
>> Farewell This will be my last Press Releases column; managing editor Deirdre Fulton will take over starting next month. I’ll leave you with a few goals to hold the Maine media to in the coming year:
1) Ask candidates for electoral office (at all levels) hard questions about specific issues, rather than allowing the candidates themselves to set the discussion agenda — thereby neatly avoiding any controversial issues or having to actually take positions on important questions of the day.
2) Allow politicians to change their minds. But don’t let them pretend they didn’t, nor that their new position is functionally the same as the old one. People grow, learn, and change. Expecting people to hold the exact same positions and beliefs forever in effect demands that people remain as misguided and unenlightened tomorrow as they were yesterday. But, when public figures change their minds, they should be able to, and asked to, explain why and how that happened.
3) Lastly — and this is to everyone, whether you work in the media or not — remember that government works for us. We own the desks and filing cabinets in City Hall and the State House, and the documents stored in them. We own the computers and the servers in government offices, and the information stored on them. If a government official wishes to keep something secret, she must prove that she is legally allowed to do so. The burden is not on us as the public to force openness on government, but on government — and its (our) workers — to lay themselves and their records open in exchange for the privilege of serving with the public trust.

Never Again Dept.: Learning from FairPoint's disasters

Published in the Portland Phoenix

Two bills before the Maine legislature seek to pry lessons from the hard time FairPoint has had taking over the former Verizon landline operations in Maine since 2009. Both step up government oversight, in hopes of preventing future debacles.
The first, LD 1761, could in fact be called the “FairPoint: Never Again” bill. It reads like an admission that the Public Utilities Commission’s process around the FairPoint-Verizon takeover was a disaster.
It would require state regulators to review all mergers and sales of companies earning more than $50 million a year not just to the standard of “doing no harm” to Maine consumers (incidentally, a standard current PUC chairman Tom Welch admits the FairPoint deal did not meet — a pity he wasn’t on the PUC when the deal was being considered) but rather such a deal must offer a “net benefit” to Mainers.
It would also specifically require regulators to consider any proposed deal’s impact not just on consumers and ratepayers, but also on workers at the company involved, as well as the state’s overall economic-development goals.
The move specifically anticipates the possibility that FairPoint might be looking for a buyer. “The hedge funds that own FairPoint are looking for an exit strategy,” says Matt Schlobohm, executive director of the Maine AFL-CIO. Unions are key proponents of this bill because of its enhanced consideration of the labor force in deals involving utility companies, which are often unionized, as FairPoint is.
If FairPoint does plan to sell — and there is a handful of potential buyers, mainly regional landline companies — “we’re not well prepared to get a good outcome” for Maine, Schlobohm says.
He fears a repeat of the FairPoint deal, in which regulators approved a deal that was questionable at best (see “A Bad Idea Triumphs,” by Jeff Inglis, February 29, 2008), with certain conditions imposed, but then over time waived many of those conditions one by one (such as benchmarks for rolling out higher-speed Internet service to more customers in Maine). 
“Why would the state not want to have more leverage” when dealing with big companies that have outsize impacts on Maine, both as utilities providers and major employers, Schlobohm asks.
The second bill is even more directly aimed at FairPoint itself. This one, LD 1479, could be called the “Oh No You Don’t, FairPoint” bill. It secures legislative oversight, review, and approval of any PUC ruling in response to FairPoint’s recent request for $67 million in support from Maine telecom consumers to subsidize its service to rural Mainers with no other options for phone connectivity. That amount would be paid by raising the Maine Universal Service Fund surcharge on all telecommunications bills (including Mainers who do not use FairPoint’s services) by as much as $5 per line per month. (See “FairPoint Wants Bigger Subsidies, From All Mainers,” by Jeff Inglis, January 3.)
And it comes at a time when FairPoint’s stock price is recovering — largely because of the prospect it may resume issuing dividends. Investors are certainly clamoring for that to happen; dividends were curtailed in the original deal by order of state regulators, and ultimately done away with because the company couldn’t afford them.
“There’s a pattern here,” says Schlobohm. “The company seeks resources . . . they figure out where to get them . . . they’re sent very quickly to Wall Street.”
While he admits this may not be the case now, he observes that “there’s not much trust built” between FairPoint and Mainers.
The union does support the idea of having phone service available to every Maine home, but is not sure that FairPoint’s request is the best or most efficient way to achieve that.

Thursday, February 27, 2014

The online chef: Hungry for restaurant-quality scallops at home, one writer turns to YouTube

Published in the Portland Phoenix

A couple years back, I decided I wanted a new challenge in the kitchen. I love eating scallops at restaurants, and wanted to learn to make them myself. It turns out that home-cooked scallops are crazy-easy, super-delicious, and far cheaper than if you get them when you’re dining out.
But they’re intimidating: How do you get that crispy crust without burning the delicate mollusks? And how do you get them done just medium-rare in the middle, so they’re moist and flavorful, not rubbery and bland?
Recalling a previous year’s cooking lesson from Gordon Ramsay (he taught me how to cook delicious, tender scrambled eggs), I went to the same place I’d found Gordon: YouTube.
It’s truly surprising how much teaching is available on YouTube — and cooking lessons are no exception. I searched for scallops and came up right away with a 2008 video made by Bill King, who was then the executive chef at McCormick and Schmick’s seafood restaurants. (Searching for clams, mussels, oysters, or any other shellfish is similarly rewarding.)
King had a mouthwatering recipe for pan-seared scallops with sweet Thai chili and udon noodles. The video’s production value wasn’t that great, but I wasn’t there for a visual spectacle. The images and audio were clear, the instructions simple and basic, and the demonstration smooth.
I watched it, took notes, and watched it again. Then I went out and bought the ingredients: sweet Thai chili sauce, sesame oil, fresh sea scallops, and a couple packages of precooked udon noodles. (You can also get uncooked ones and make them yourself, just like pasta. I went for the easier option.)
It didn’t cost much; in fact, the scallops, which are so often expensive in restaurants, were under $7 for a solid handful that would serve two. (King’s example included three large scallops; I sometimes opt for four if they’re smaller.) The udon-noodle packets were a dollar apiece. The bottles of chili sauce and the oil were a few dollars each, but they’d keep and be available when I made more scallops later. Sure, it was more expensive than a couple of hamburgers, but not far off the price of steak, and much cheaper than lobster for two (even at today’s sea-bottom prices).
All that remained was to emulate a chef with formal training and decades of experience, in my own kitchen.
It didn’t quite work out the first time. Heeding King’s suggestion to have a very hot skillet, I ended up giving everything a nice layer of carbon. But I was learning, and I could see where I had gone wrong by comparing what happened in my pan with what happened in the video. I knew where I’d gone astray; in fact, I had indeed feared I was burning the noodles and the scallops while they were cooking. I hadn’t jumped in to lower the heat or stop the cooking earlier because I was on my first trial run and taking the directions very seriously.
I would not make that mistake again. It turns out — shocker! — that getting the cooking temperature right is crucial to preparing seafood properly (and, yes, other food too). My pan had been too hot, and I had left the noodles and scallops in the too-hot pan for a bit too long.
Still, I enjoyed the flavors, and was able to craft a plan for improving my performance next time.
And that’s perhaps the crucial rule of taking cooking lessons from YouTube: Test it out before you’re on the spot. If you’re cooking for a family gathering, or even just a hot date, don’t have that be the first time you’re trying to follow a video. Do it a couple times, even several, until you get it right.
Sure enough, a few days later, I was back at the seafood counter, buying more scallops, and then into the Asian section to grab some udon.
That time, I got the noodles right, but undercooked the scallops — I was too afraid of burning them and took them off the heat early. But I rescued them by returning them to the heat. (The removal-and-return to the pan meant the golden-brown crust wasn’t perfect, but I was making progress.)
It took a few more times — and a bad experiment cooking on a different stove at a friend’s house — before I felt confident in being able to make this dish reliably. And even now, I occasionally let them cook too long or too short, and have to make do with a substandard dish.
But it’s in my own home, with friends and family, and vastly cheaper than dining out. So I eat with relish! 

Make them yourselfHere’s the recipe; watch the video at:
>>Three to four sea scallops per person
>>One packet of pre-cooked udon noodles per person
>>Thai sweet chili sauce
>>Sesame oil
>>Pat the scallops dry with a paper towel and then put them in a bowl with a small amount of Thai chili sauce atop each scallop, and a thimble-full or two of sesame oil apiece. Gently mix them with tongs or a spoon, to coat evenly. Set aside.
>>Heat a skillet on medium heat (ignore the video’s recommendation to have it very hot!), and lighly coat the pan with vegetable oil.
>>Put the udon noodle cakes in — only as many as will fit comfortably. Don’t pack them too close together. Now, don’t move them.
>>Cook them for 3-5 minutes, until you can see a golden-brown crust forming on the underside. You can peek carefully if you want to, or just flip them over and cook on the other side as well.
>>While they’re cooking on the second side, put a dab of the chili sauce on top, as well as a drop or two of sesame oil.
>>When they’re cooked through (they become more translucent and flexible), remove them from the heat and set them aside.
>>Wipe the pan with a dry paper towel, just to remove any debris or residue from the noodles.
>>Now return the pan to the heat (still medium) and put the scallops in.
>>Here’s the trick to getting the right crust on the scallops: Don’t touch them once they’re in the pan. Let them sit right where they are, sizzling, for about 2 minutes. (Three minutes if they’re much thicker than an inch.)
>>Then flip them over, revealing the very nice crust, and cook them for another two minutes on the other side.
>>Remove from the pan, and serve immediately.

Wednesday, February 12, 2014

Labor Relations: Blacklisting companies that ship work overseas

Published in the Portland Phoenix

Seeking to protect nearly 20,000 Maine jobs from being sent overseas, labor and union activists lobbied the state legislature last Thursday, with solid support and some modest, but expected, opposition. The bill they supported, LD 1710, would pressure companies that have customer-service call centers in Maine to keep their work in the United States.
Sponsored by Troy Jackson, a Democratic senator from Allagash who is running to replace Congressman Mike Michaud (who is himself running to replace Republican Governor Paul LePage), the bill would require call-center companies to notify the state before relocating call centers from Maine to foreign countries. (It does not require notification if a company moves elsewhere in the US.) And it would require all state-agency call centers to be in Maine.
Notification would have negative effects beyond bad publicity. The bill declares all companies that send Maine call-center jobs overseas ineligible for any “direct or indirect state grant, state guaranteed loan or tax benefit” for a period of five years after
the relocation.
Companies that, at the time of relocation, were receiving state benefits would have to repay to state coffers the unused amounts.
A recent union-conducted tally found 19,470 call-center jobs in Maine, with an average annual wage of $31,500, according to Jenn Nappi, assistant business manager of the International Brotherhood of Electrical Workers Local 2327, which represents most FairPoint employees in Maine.
FairPoint, which has about 900 unionized call-center workers in Bangor, Portland, and South China, is not the largest such company in Maine. That firm is LL Bean, which has about 2000 call-center staffers in Portland, Bangor, and Lewiston. Other major call-center players, according to the union research, are Bank of America with nearly 1000 people between Belfast and Brunswick, T-Mobile with 520 people in Oakland, and TD Bank with 500 in Auburn.
Companies often move call centers in search of low-cost labor: In 2009, the Baldacci administration’s economic commissioner John Richardson said Maine’s low wage levels should be considered by call-center firms (see “Maine — the India of the United States?” by Jeff Inglis, at
In 2011, Carbonite, a Boston-based data-storage company, brought 150 call-center jobs from India to Lewiston. But other companies have gone the opposite direction: In February 2012, Bank of America closed a call center in Orono, laying off 200 people. Nappi and the IBEW say those jobs likely went to other Bank of America call centers in the Philippines.
And in September 2013, Sykes Enterprises, a Florida-based helpdesk company, closed a Wilton call center, laying off 150 people. The company has nearly 60 call centers in 25 countries, the IBEW says.
Some of these companies, including T-Mobile, have received tax incentives and other state support in exchange for promises of increased hiring.
“We’re constantly allowing all these companies to have all these great breaks, but we don’t require anything of them,” Nappi says.
There is, however, a possible loophole in the draft law, which allows state aid to go to a company that offshores work if not doing so “would result in substantial job loss in the State or harm the environment.”

Thursday, February 6, 2014

Press Releases: Unleash the beef

Published in the Portland Phoenix

I’ve got some beefs with the Maine media. The state’s Freedom of Access Act is meant to be used by all Mainers, for all sorts of reasons. But the press has historically been fickle about which issues they’ll issue those requests about.
Of course, the press should have — and did — demand access to the so-called Alexander report, the $1 million hatchet job a conservative crony of Republican Governor Paul LePage did in order to justify failing to expand health-care coverage to tens of thousands of Mainers.
But what about a case described as “the second federal probe into serious allegations against Governor LePage’s administration,” in which “it’s been nine months since these allegations were first made and we know that documents have been destroyed, the FBI is now involved and favoritism may have been played”? No freedom-of-information requests there.
At least not from the media; those quotes are from Ben Grant, chairman of the Maine Democratic Party, explaining why his organization last week made FOAA requests for correspondence between the LePage administration and Department of Health and Human Services and Maine Center for Disease Control officials relating to shredding of documents used to justify the awarding of $4 million in public-health grants.
This is even more galling because it was a press inquiry for public records that started the whole affair. The Lewiston Sun Journal’s inquiry into CDC grants led to the shredding of supporting documents, according to whistleblower complaints filed by former Maine CDC worker Sharon Leahy-Lind.
But rather than dig to the bottom of the affair itself, the Sun Journal has left the opportunity for what should be straight-up investigative news coverage to become politicized by the involvement of the Maine Dems.
This is a disservice to Mainers, who expect their media outlets to engage in investigation without partisanship. Now the press coverage will not be about whether the governor ordered the shredding, but the Republican administration’s response to the Democrats’ request, and the political gamesmanship and tit-for-tat that ensues.
>> Even more craven and spineless were the reporters called to an off-the-record meeting with LePage on January 27. According to Press Herald State House reporter Steve Mistler’s account, the administration didn’t invite the Press HeraldSun Journal, or the Bangor Daily News’s bureau chief, though apparently another BDN reporter was there.
My problem isn’t with the selective invitation, which is just another example of the governor’s longstanding ill-will toward the press. I’m disappointed that only one of the reporters who was there appears to have objected to the off-the-record nature of the discussion.
When public officials speak on issues to reporters, Mainers have an expectation — of both the public servants and the press — that they should be able to hear or read what was said. This sort of control of access and information has been decried at the highest levels of the media world, against restrictive White House Press Office policies under both George W. Bush and Barack Obama. It has no place there, and none here in Maine either.
>> My last beef isn’t with a reporter, but a politician fearing questioning. It’s a national story that after the State of the Union address last week, New York Republican Congressman Michael Grimm reacted badly to being asked by television reporter Michael Scotto about a federal probe into his campaign’s fundraising activities.
After storming out of the interview, Grimm returned and was caught on camera threatening Scotto, saying “I will throw you off this fucking balcony,” and “I will break you.” Grimm’s non-apology apology claimed he expects “a certain level of professionalism and respect” from reporters. This is very much like the threatened violence and claimed appeal to standards of decency that LePage has at times used when criticizing reporters for doing their jobs well (i.e. asking questions that make politicians uncomfortable and demanding public accountability).
In case it’s not clear, here’s the official notice from the media to all who serve the public: Transparency is part of the job, not a luxury. If you don’t like it, don’t get elected or take a job with a government agency. It’s as simple as that, and we’ll brook no beefs about it. 

Congressional hopefuls: Maine candidates respond to SOTU

Published in the Portland Phoenix

In his State of the Union address last week, President Barack Obama laid out several initiatives for the coming year, focusing on boosting educational and economic opportunities for workers, and suggesting that his administration has felt the public backlash against the use of drones at home and abroad, as well as National Security Agency dragnet surveillance of all Americans.
Every member of Congress issued a statement that was widely publicized, with his or her reaction to the president’s speech; Maine’s delegation was no exception. What you didn’t hear elsewhere, though, is the perspective from those seeking to take their seats in Washington. The overall message: Partisanship is alive and well in Maine, too.
US Senate candidates
Shenna Bellows, Democrat
 The former executive director of the American Civil Liberties Union of Maine supports Obama’s call to raise the minimum wage to “at least $10.10,” though she notes that Obama’s move only affects workers on federal contracts, and only takes effect in 2015. But she criticized his “lack of a commitment to stop the controversial NSA spying program,” saying he “spoke of the need for privacy without talking about specific measures” to ensure it for all Americans. She also called out Obama’s rhetoric on protecting workers and the environment, contrasting those comments with his administration’s secretive negotiations about the Trans-Pacific Partnership, which leaked documents show is heavily biased in favor of corporate interests.
Erick Bennett, Republican The conservative political consultant who was convicted of domestic assault on his wife in an incident during which a police report says he threatened to kill her was critical of Obama, saying the government had spent too much money on the Affordable Care Act, and so much on the economic bailout that “we could have given a million dollars to every man, woman, and child in this country. That would have eliminated poverty and many other problems we face.” The economy is so bad, he said, that “there are plenty of Americans such as myself that will take whatever work they can to avoid starving.” But he objected to Obama’s proposals to raise workers’ income and provide additional savings methods, saying they were misusing the role of government. And he complained that the latest agreement with Iran, in which that country will for the first time open its nuclear facilities to outside inspectors, was “a bad deal” because it only lasts six months.
US House, 1st District candidates
Isaac Misiuk, Republican
 The former retail manager and real-estate agent now studying at the University of Southern Maine echoed a popular conservative talking point when he said he “would have liked to hear [Obama] apologize for lying” about people’s ability to keep their health-insurance plans under the Affordable Care Act. He also said it was unfair to ask “the rich to pay more in taxes” than those less well off. He also defended the 40-plus Republican-led US House votes to reverse the ACA, saying the president “has forgotten that Congress holds the ability to repeal laws.”
Richard Murphy, Independent The Army National Guardsman and property manager said the speech showed Obama “will continue to ignore traditional checks and balances found in the United States Constitution,” and criticized the president for “spending millions of taxpayer dollars on vacations when those who contribute to his salary and fund every trip he takes cannot afford to take a vacation themselves.” Murphy said he agreed with the president’s “list of topics of things that needed to be addressed,” but disagreed with Obama on how to go about it, saying the president is “out of touch with American taxpayers.”
US House, 2nd District
Emily Cain, Democrat
 The state senator from Penobscot County says many of Obama’s ideas “require more detail before knowing what their full impact would be,” but nevertheless says several ideas “have great potential.” One of those is the move to raise the minimum wage for some; Cain calls for Congress to raise the minimum wage for everyone. She also praised the president’s call for gender equity in pay. But she expressed concern that “Congress has proven itself to be polarizing and stubborn at times. That attitude gets us nowhere and does nothing to help the people they are elected to serve.” 
Troy Jackson, Democrat The Aroostook County logger and state senate majority leader state specifically praised Obama’s call to raise wages for federal contract employees. “Many in Congress don’t understand how important a living wage is because they have never had to struggle in a minimum wage job.” Jackson backs raising the minimum wage “to a living wage for all people,” not just federal contractors.
Alden Smith, Democrat The US Navy veteran (and current Navy reservist) agrees with Obama that jobs will go where there is high-quality infrastructure, and supports investment in Maine to attract new business. He supports raising the minimum wage: “The choices between heat and food will be eased a bit. I am sorry to see that the same raise is not applied to our elderly and our disabled veterans.” He supports ending the US military presence in the Middle East, but wants to ensure the Veterans Administration “is structured and equipped to meet the needs of our veterans in the coming years.”
Bruce Poliquin, Republican The former state treasurer was not directly reachable, but posted on Twitter and Facebook his reactions, which included agreeing with the president that “the poor and middle class have been left behind.” Poliquin asked “why opportunities have been shrinking during [Obama’s] economic ‘recovery.’” He objected to “a wasteful spending binge that has piled up an additional $5 trillion of debt with no plan to pay it off,” saying that Obama has “raised taxes on American families and the companies that employ them to among the highest in the industrialized world.”
Kevin Raye, Republican The former state senate president and co-owner of Raye’s Mustard Mill says he is “deeply troubled by the President’s vow to use Executive Orders to circumvent the will of the people’s elected representatives. The President sets a tone and, unfortunately, his divisive approach exacerbates the dysfunction that has become such an impediment to America’s ability to solve problems.”
Blaine Richardson, Independent The retired Navy captain and construction-business owner says Obama “made it very clear . . . that he is unwilling to work with the Congress to progress his agenda. This shows that he is no longer willing to maneuver within the traditional checks and balances found in the United States Constitution.” He heard Obama promote “more big government,” including “more regulations, more laws, more sanctions and more American involvement overseas.”

Thursday, January 30, 2014

The rise of e-currencies: How bitcoins and their ilk could save — or destroy! — the world

Published in the Portland Phoenix and the Providence Phoenix

Bitcoins, and other e-currencies along similar lines, are all the rage these days — and everyone’s talking about them as if they know what bitcoins actually are, or do, or something. It won’t surprise you to learn that most people know only part of the picture, and most of those hardly understand the part they know.
In fairness, bitcoins are a challenging concept to understand. But we here at the Phoenix are always up for a challenge, so we’ll break it down for you. First, we’ll have an explanation of what bitcoins are, what they’re not, and what they make possible. Then we’ve assembled a set of arguments that explain how and why bitcoins are both the end of the world as we know it, and the next step to saving the world we love so well.
A useful point to start is to note that the word bitcoin, when used with a lowercase b, refers to the units of currency; when capitalized, Bitcoin refers to a software and the Internet-based communications methods used to track and exchange them. There are also other e-currencies, such as litecoin; all of them use the basic structure and concepts underlying the Bitcoin system, and differ only in the most arcane of technical details. They’re also not nearly as popular, nor as widely accepted — in part because bitcoins got there first.
Something from nothingDuring, and in the wake of, the 2008 financial crisis, the institutions we had relied on to ensure economic stability turned on us. Several deeply concerning and fundamental facts about the world’s currency became widely apparent:
>>Banks can’t be trusted Not only are they often working in opposition to their depositors’ best interests, but they gambled with other people’s money, lost, and then asked for government bailouts to pay off the debt.
>>Governments can’t be trusted Rather than protecting their people’s interests, governments sometimes see their citizens as just another cash source. In March 2013, faced with an impending economic collapse, the government of Cyprus confiscated 10 percent of all the money held in accounts in that country’s banks.
>>And anyway, money’s value is imaginary Governments, including the United States, can create massive amounts of new money out of thin air, and give it to whomever they want (usually the banks, as opposed to the people). This has always been true, but politicians and other financial experts no longer seem to worry that regular people object.
>>Still, money is an inescapable, integral part of our daily lives It’s a very flexible medium of exchange, which I can accept in remuneration for (to pick an example) my reporting and writing and spend in a grocery store in exchange for food.
Some people had expressed those concerns long before the 2008 meltdown; afterward, more people understood them much more clearly.
Out of these problems came a seemingly simple solution: Create another currency, not beholden to a government, and find a way to store it safely without banks.
Of course, it turns out those are two very hard things to do, while still preserving the confidence and security we expect from a monetary system. The most difficult problem is how to prevent counterfeiting — which is of course far easier with a digital item than a physical one (as the movie and music industries have learned, to their dismay).
Government currency — and even most other alternative currencies (such as time-dollars) — have a centralized authority that can verify the authenticity of money. In the United States, it’s the Federal Reserve. Replacing this system with another one that also required central authority and verification made the whole exercise moot. The real goal was to decentralize verification, while still ensuring nobody copied e-currency and, effectively, spent it twice.
In late 2008 and into 2009, a person or group going by the name of Satoshi Nakamoto proposed a system called Bitcoin, offering a solution to the double-spending problem that was ingenious for its simplicity: The central authority keeping track of transactions should be the public at large, and the ledger should be available online to all who asked.
But that created another pair of questions: How to get the hundreds, even thousands, of different computers storing their own copies of the ledger to agree on when to update it, and what changes to add when updating?
Bitcoin offered an elegant solution to this problem, too. Whenever anyone wants to spend a bitcoin, they broadcast that intent to the network of ledger-keepers via the Internet. As each request comes in, each ledger-keeper computer checks its copy of the official record, to ensure that the spender’s identity is valid, that she actually has the correct amount available, and that she hasn’t spent it elsewhere already. If it looks good, each ledger-keeper adds the transaction to its own list of approved transactions that need to be added to its ledger in the next update. The ledger-keepers communicate about their individual approved lists; if a majority of them agree, the transaction is finalized and added to the shared official ledger. These checks and updates happen in computer software and encrypted communications across the Internet, and take only a few minutes.
Adding strength to this system is the fact that anyone can install the software on their computer to make it a ledger-keeper, receive their own copy of the ledger, and contribute to validation and verification of transactions. The ledger itself is fully public, showing which accounts sent how many bitcoins to which other accounts, and when.
Of course this raises the question of privacy. One of the things people like about physical cash is that it’s not particularly traceable. Bills have serial numbers, but most people don’t pay attention to those details, and it would be terribly hard to track any substantial sum. (See for an example of trying to track dollar bills’ physical movements.)
Because it’s so central to our lives (we don’t typically want to broadcast which doctors we go to, how often, nor how much we pay them, for instance) privacy is also a cornerstone of traditional electronic payments: We trust the merchants and banks to keep our information away from wrongdoers. (The recent, and ongoing, revelations about card-system hacking at Target offer a warning against being too trusting that way.) At the very least, though, merchants and banks don’t publish their transactions online for all to see.
But that is exactly what the Bitcoin system proposed doing.
Satoshi Nakamoto had a solution for this, too: Every account would have a pseudonym in this new currency system, and everyone could create and use as many accounts (and pseudonyms) as they wanted. The ledger would store the pseudonyms of the sender and receiver (not their real identities), and the ledger-keeping software would confirm through secure encrypted communication that the people using those pseudonyms were the people who had created them, by comparing digital signatures stored when the account was created against the digital signature presented during a transaction. (For those who wish to dig deeper into how a publicly available ledger can store a signature in a way that is truly secured so only one person can sign it, look into public-key cryptography. There’s enough reading online to occupy the rest of your days.)
This seemed to solve all the problems that had faced digital currency: quick and easy transaction approvals, protection against counterfeiting and double-spending, privacy protections for buyers and sellers, and avoidance of a central authority that could steal everything on a whim.
The next trick was getting people to actually use it.
Bit-miningIn 2009, Satoshi Nakamoto released a software program, also called Bitcoin, that for the first time allowed users who installed it on their computers to begin operating as ledger-keepers on the fledgling Bitcoin network. The software was open-source, meaning anyone who wants to can read the actual programming code it uses, which lets tech-savvy types check to ensure the software does only what it says it does, and nothing else nefarious or bothersome (such as stealing your passwords or using your computer to send spam emails).
To encourage broad distribution of the software, and most importantly, large numbers of copies of its ledger, the system includes a reward for those people who offer their computers to serve as ledger-keepers. At the moment, those people receive, on occasion (based on an extremely complicated mathematical formula), some new bitcoins. This process is somewhat confusingly called “mining,” which is meant to evoke the idea that by doing some work (keeping the ledger, checking new transactions, and updating the ledger), new bitcoins are discovered, as one might mine a precious metal.
At any given moment, the number of ledger-keepers varies. People connect their computers to the internet and disconnect them; people turn off the Bitcoin software and turn it back on again. The system doesn’t care, as long as there are several connected, and there are lots.
It’s an analogy of convenience, and only works to a point; we advise not getting too caught up in mining or ledger-keeping. (If you’re a programmer with thousands of actual dollars just lying around, there’s plenty to learn and do along those lines; if not, best not to worry, but instead to know that large numbers of independent, security-minded, anti-fraud experts have checked out the system and been satisfied that it’s safe and secure, protected by the principles of mathematics that underlie computer cryptography and secure transmission of information. Also, it’s useful to know that when the rare problems have been found, they’ve been fixed quickly, easily, and without harm to innocent parties.)
Now, and increasingly into the future, those who spend the time, energy, expertise, and real-world expense (in electricity and computing power) to keep the ledger are paid not by “mined” bitcoins — the 21-millionth and final bitcoin will be mined in about the year 2140 — but by small fees added on top of ordinary everyday bitcoin transactions. There are somewhere around 12 million bitcoins in circulation right now.
Once the network was established, with several copies of the transaction ledger in place and the ledger-keeper programs communicating with each other, it became possible to actually spend bitcoins. That’s where you come in — and where the promise and problems all begin.
Money by numbersA bitcoin is, in reality, nothing more than a few pieces of electronic data. You can do silly things like print them out on pages of paper, or engrave them into metal (and people have), but their only useful form is electronic.
There are, for all practical purposes, only two ways to get bitcoins. First, you can buy them, in online exchanges that will take your dollars and give you bitcoins, the same way you might give your dollars to a bank in exchange for euros or yen before an overseas trip. (The exchange rate varies, just like those other currencies; its highest ever was in December, at over $1200 per bitcoin. The current price is around $800, though you can buy smaller increments without purchasing an entire bitcoin.)
Second, you can sell a product or service that’s desired by people, and accept bitcoins as payment. (You’ll likely have to accept other forms of payment too, just like stores that take cash, checks, and credit cards.) When you have a customer who wants to buy using bitcoins, you accept the payment. Simple as that. Among the major players already accepting bitcoins are online retail giants Tiger Direct and; so does the Sacramento Kings basketball team. EBay is considering accepting bitcoin bids and payments.
(The aforementioned “mining” is the third way to get bitcoins, and it’s extremely technical, expensive, and not particularly accessible to regular people. I’ve tried it, wouldn’t recommend it, and it’s generally accepted as appropriate only for techie types with a lot of actual dollars (and time) on their hands. Think of this system as the equivalent of the US Mint — it makes the actual physical money and enables a particular economic system, but we don’t know how and shouldn’t try it at home. There is one significant difference: Only a finite number of bitcoins can ever be made, unlike the almighty unlimited dollar.)
To truly understand how the Bitcoin system works, and where its strengths and weaknesses lie, we have to look at the mechanics of how money changes hands.
First, there’s the cash method, which is obvious. I give you a dollar bill, and you give me something I want in exchange. It’s immediate, private (nobody other than the two of us know it happened), and secure (you and I have both looked at the bill and agree it is a real dollar and not counterfeit). It also has the potential to be anonymous; even if you know the face of the person you handed a dollar to at the toll plaza, you have no idea what their name is, and they don’t know you either. If you ran into each other tomorrow, you probably wouldn’t recognize each other.
Next is the electronic method, which includes checks, credit cards, wire transfers, and pretty much everything else. In that situation, I have account data (sometimes printed on a check or magnetically encoded on a credit card) that connects me to a pile of dollars held electronically in a bank somewhere. I give you that information and the authorization to deduct one dollar from that pile, in exchange for which you give me something I want.
It seems simple, and is often instantaneous, but it’s actually very complicated  — and expensive. When I swipe a debit card at a store, for example, the merchant’s machine has to read the code and transmit it securely to a central authority, which checks its database to see which bank I’m with, and then contacts that bank to ask if I have a dollar available in my pile. The bank isn’t going to answer that question for just anyone — it should only answer it for me or people I authorize — so it needs to be sure the request is coming from a legitimate user. This can be done a few ways, one of which is to ask for my PIN code, which I have established secretly with the bank in advance. I enter my PIN, which is then transmitted and verified, and then my bank responds by saying (I hope) that I do have a dollar available. Because it has received authorization from me (in the form of my PIN), my bank also sends a message along telling the store that it will transfer the dollar to the merchant’s account.
The cost adds up. Each of those steps takes electricity; some of them require specific equipment (the card-swiper, PIN-entry device, for example); others require high-speed data networks. Of course, the banks charge for their services, and for playing the middle-man in this transaction. And since every step is recorded electronically, it’s hard to keep transactions untraceable or anonymous.
The Bitcoin system throws all of that away, leaving an interaction much more like the cash transaction, but handled electronically — making it unnecessary to carry around large amounts of cash, as well as enabling transactions across distances.
Bitcoin will destroy the worldGovernments don’t like cash; it’s hard to trace, anonymous, and secure. Digital cash (which is essentially what bitcoins are) is even worse: It can travel instantly anywhere, and lacks things like serial numbers that can allow tracking, even after the fact.
Financial writer Cameron Keng posted on the charge that “Bitcoin represents more of the same short-sighted capitalism that got us into this mess, minus the accountability.” (Of course, the accountability was laughable.)
Software engineer and writer Alex Payne has called the Bitcoin system “a marriage of dubious technology and questionable economics wrapped up in a crypto-libertarian political agenda,” which encompasses pretty much all of the criticisms of bitcoins.
He’s not talking about the time-tested technology of public-key cryptography, which the Bitcoin system uses to verify identities. Rather he’s expressing concern about the nature of the public ledger and the software by which it is maintained and updated. It is true that this arrangement is entirely new — it is, in fact, the major breakthrough of the Bitcoin system. And it’s true that it has flaws: In August 2010, someone figured out a way to spend the same coin multiple times; that counterfeiting attempt was detected, stopped, and reversed, but it does suggest there may be other vulnerabilities yet undiscovered.
The economics question is based on the concept of “money supply,” which is a tool by which centralized economies influence key aspects of their markets, such as interest rates. When the US Federal Reserve wants to lower interest rates, for example, it creates money out of thin air and then offers it cheaply to banks. If it wants to raise interest rates, it takes money out of circulation.
New York Times economics writer Paul Krugman wrote that having a currency with a limited total supply of money encourages hoarding, not spending, because scarcity makes the currency more valuable. (This is true, but it ignores the fact that bitcoins are almost infinitely indivisible into fractions far smaller than pennies, so while the total supply of money is limited at the top, it is effectively unlimited in terms of how many people can have, use, and exchange bitcoins.)
The “crypto-libertarian political agenda” Payne scorns calls attention to the perspective of some bitcoin fans: Because it’s new, because it’s independent of governments, and because it’s Internet-based, some people have expressed hope that bitcoins will help them avoid taxation, regulation, or other outside meddling. Libertarian-in-chief Ron Paul has called bitcoins potential “destroyers of the dollar,” and plenty of libertarian types are excited about the idea of a currency that is not tied to any particular government.
Regulators in the United States and elsewhere are paying attention, and issuing statements about how they will treat bitcoins. (It varies significantly by country;  the United States said it would pay attention when dollars and bitcoins started to be interchanged — which is already happening, thereby beginning to attract government scrutiny.) Of course, government regulation and taxation helps pay for things like roads and fire departments, as well as limiting crime.
And oh yes, the crime. An online site called Silk Road is perhaps the poster child for the sort of crime made easier by verifiable (but anonymous) transactions over the Internet between total strangers. A clearinghouse for all sorts of illegal drugs, it was shut down by the FBI late last year; bitcoins were its currency. There is also a site that purportedly allows people to commission assassinations and pay via bitcoin. And of course there are plenty of other examples of ways bitcoins can be used nefariously.
There are other weaknesses: Transactions in bitcoins are not reversible in the way credit-card charges can be disputed and reversed. Of course refunds are possible, but only from the person you gave the money to. If an item is not as advertised, or never arrives, there is no third party available to handle a complaint or refund a buyer’s money.
And there are the costs. Running the ledger-keeping computers takes electricity, and the more computers are part of the network, the more it will require. It’s a fair claim, but usually avoids the fact that government money systems are also expensive: Pennies, for example, cost more than two cents each to mint. Printing dollars is more cost-effective: each new $100 bill costs just over 12 cents.
Of course, all this technology means bitcoins are not quite as populist as supporters might have you believe. Sure, they’re not beholden to governments, but to even use one you have to install a program on your computer to store and track your bitcoin holdings; when you do that, you’ll encounter all kinds of notices and alerts telling you that if you lose or forget the password to your Bitcoin-holding account, the bitcoins themselves will be lost forever, These are not the sorts of messages that embolden non-tech-savvy types to continue and engage with the system.
Bitcoin will save the worldDespite all of those problems and potential downfalls, there is a lot of promise, much of it based on a key distinction, made by money-technology writer David Wolman (a college friend of mine) in Wired magazine: There are two ways to use the word bitcoin.
First is as a unit of currency and exchange, as in “This item costs 1.2 bitcoins.”
And there is significant promise in this arena. Chris Dixon, a venture-capitalist investor in Silicon Valley, notes that the payment industry is massive, with people paying $500 billion a year in fees just to move their money from one place to another. Distributing the work of handling transactions, and reducing identity fraud in the bargain, could substantially reduce those fees.
For most people, bitcoins would be an easy intermediary. They could buy bitcoins with dollars, send the bitcoins somewhere else cheaply, and the recipient would convert the bitcoins into their own local currency. Using the Bitcoin system would solve the problems of high-cost transactions that sometimes take days to process, especially in the massive sector that is remittances to developing countries from workers in developed countries who send huge chunks of their earnings home.
For people who worry about government overreaching its power a bit more, it solves the problem of having someone else control their money, with the ability to seize or freeze it. And using bitcoins could help avoid the issues that arose when major payment-processing companies were pressured by the US government to stop transferring funds to WikiLeaks, in an attempt to deprive that whistleblower organization of financial support.
As several security researchers have pointed out — and a goodly number of self-appointed investigative teams have proven — Bitcoin is not anonymous. In fact, it’s barely pseudonymous. After the feds shut down Silk Road, the site’s bitcoins were consolidated in one account. Since all the transactions are public, it didn’t take much effort to go from reading the FBI media announcements saying 26,000 bitcoins had been seized, to checking the ledger to watch as a brand-new account suddenly filled up with just that amount.
(This led to a hilariously ironic development: Because all the transactions are public in the ledger, and because there’s an option to send a message with a payment, all sorts of anti-government types started sending the feds tiny amounts of bitcoin — yes, giving the feds their money, just for the privilege of sending them a rude message.)
But beyond these financial advantages, there is another way to think about, and use, Bitcoin.
The Bitcoin system is, Wolman writes, “more than just a currency; it’s an open-source protocol.”
Marc Andreesen, co-author of the very first web-browser program and now a venture capitalist, wrote recently in the New York Times that Bitcoin is a major development, solving a longstanding problem: “how to establish trust between otherwise unrelated parties over an untrusted network like the Internet. The practical consequence of solving this problem is that Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”
And they are just being explored. Trumpeted by Wired as an “NSA-Proof Twitter,” a new system called Twister has emerged, combining the encryption and identity confirmation of Bitcoin with the peer-to-peer connection-management system of BitTorrent (which allows multiple computers to exchange information rapidly and efficiently over the Internet) to create a vastly distributed social network that cannot be taken down by malicious governments or corporations. This would be a great boon to people in places like Iran or San Francisco, where authorities have shut down access to Twitter in an attempt to quell public protests. Other uses are just being imagined now, and will no doubt be developed and tested soon.