There's going to be a lot of controversy and confusion nationwide on October 30 when stimulus reports from states are made public on recovery.gov. The reported numbers for "jobs created or retained" will be particularly contentious since they will be much lower than the job forecasts by state which used to be posted on recovery.gov (I can't find them in the new and excellent redo of the site) and the total reported by the states won't come close to the total jobs forecast to be created by the stimulus bill (aka American Recovery and Reinvestment Act or ARRA).

Actually, the numbers SHOULDN'T match but that's tough to explain. Nevertheless, in the interest of transparency, I'll try an explanation here.

Unless you're tapping lightning bolts, electricity isn't a source of energy – it's a way of transporting energy from where it's generated to where it's used. So, when we have to decide whether it makes sense to use electricity for an application like lighting, transportation, home heating, or something else, we have to know where that electricity is coming from, what fuel is used to make the electricity, and what it's going to cost to use electrically-transported energy versus an on-site energy source like oil.

For lighting we've decided not to use kerosene and candles (other than for camping and romance). For transportation we did have lots of electric trolleys but they got replaced by diesel busses and gasoline cars. Oil was cheap and sticking to wired routes was limiting. Now importing oil is an economic and strategic risk; battery technology is better than ever before; electronic controls are cheap; CO₂ emissions are a concern; and electricity is close to making a comeback in transportation.

Grants.gov kept crashing on August 14, the deadline for submitting applications for broadband stimulus funding; not to worry, the feds extended the deadline by six days – and even then had to allow submission of attachments to the application on CD by mail since their systems weren't yet stable by the new deadline.

Nevertheless Vermont organizations managed to file a set of applications which, if funded in the entirety, will leave less than 10,000 homes out of 242,000 without access to broadband AND will give us a very good start on attacking other obstacles to broadband use like lack of computers, training or money. The goal of SmartVermont, our overall plan for discretionary stimulus money, is not just universal broadband availability; it's universal adoption so that applications like e-health, e-education, and e-energy (smart grid) can depend on broadband connections in every Vermont building on the electrical grid.

Last Friday Governor Jim Douglas (R-VT) and Senator Pat Leahy (D-VT) cosponsored and appeared at a workshop for Vermonters on the American Recovery and Reinvestment Act (aka ARRA aka "the stimulus bill"); 700 people came and more would have if there had been more room available at Champlain College. There were lots of questions, of course; some of which there were answers for and others which will have to wait for answers.

The question which sticks in my mind is one a woman asked me in the hall: "was the economic stimulus bill a good idea?"

Democrats want Federal bankruptcy judges to have the authority to reduce the balances outstanding and/or rates on residential first mortgages in the same way that these judges can already reduce outstanding payments and balances on almost all other forms of debt, and Republicans are opposing the legislation required to make this change. In my humble (and usually Republican) opinion, the Democrats are right and actually, aren't going far enough. This strange treatment of these mortgages, first legislated in 1979 as one of many often-misguided attempts to making housing more affordable even for those who couldn't afford a house, is a key cause of the logjam, which is preventing the home mortgage toxic security mess from working itself out.

Banks already can negotiate reduction in principal with homeowners and sometime do, and the chances of repayment go up when the equity isn't underwater. An owner can make a rational decision to sell if he or she doesn't owe more on the mortgage than the house would bring on the market. However, financial experts say that many current mortgages can't be renegotiated because the creditors are split into mind-bewildering tranches of differently securitized investors who have no way, or desire, to reach an agreement. Bankruptcy can cut this Gordian knot and let the mortgages be "marked to market" not only on the books of the banks but also on the books of the homeowners.

Stephen King's novella UR will be available exclusively on Kindle for at least a while as part of the introduction of Kindle 2. Mainstream content by famous authors is unlikely to stay exclusive to the device, but this marketing approach gives a hint of what's to come. Many of us will "need" Kindles because the content we want is available on them first or because Kindle – and perhaps a set of Kindle-compatible readers – are the only place we can get certain content. Physical books won't die away – especially because they can be produced without huge inventory cost using print on demand (POD).

This is partly wishful thinking on my part, as I'm hoping that Kindle and devices like it, will become an alternate road to publication for new authors and will diminish the gatekeeper function of mainstream publishers. Hits, in most cases, will still require clever marketing, celebrity, and/or luck. Chris Anderson has written famously about how Amazon's (AMZN) "endless shelf" supports the long tail of books which would otherwise be out of print and out of distribution because they didn't make the sales cut for brick and mortar book stores. It makes sense that Kindle and the like will support an even longer tail – books, which never would have been published at all except that they can be published and distributed at almost no cost (except the writing!) because they're only published electronically.

Cloud computing isn't just for little guys anymore. Both local hosting businesses and MIS-managed computer centers are likely to disappear into the clouds in the next couple of years. Small is NOT beautiful in host computers anymore. Amazon (AMZN), for example, CAN do it better and cheaper than you can.

For years, many of us have been hosting our applications with local hosting companies. Sometimes this has meant buying a computer and having it in a cage at the hosting service, while other times this means renting real or virtual computers from the hosting service. Usually it is necessary to buy as many computers or commit to as much capacity as may be needed to service your worst (or best!) case peak. If you own the computers, you have to replace them when they become functionally obsolete.

We have too many financial institutions and too many people working in the financial trades. "Saving" banks is an even worse idea than saving car manufacturers. "Dusting ourselves off" means taking our losses and moving on; even the losses we incurred in the most recent round of bank bailouts. Sure, we need credit and capital; we just don't need so many people and institutions slicing, dicing, securitizing and providing it.

The goals of bank bailouts have become surrealistic. Check the logic in this paragraph from a New York Times story about the U.K.'s plan for an expanded bank bailout:

Fiat won't accept a 35% stake in Chrysler unless the U.S. adds another $3 billion to the $4 billion we've already "lent" to the "U.S." automaker, according to a story in the Wall Street Journal. Fiat isn't going to put any money of its own in, of course; no one in their right mind would. Cerberus Capital Management, currently owner of 80.1% of Chrysler isn't putting money in; Daimler owns the rest but values it at zero.

So, without our putting additional money in, the owners can't even give away shares in the company; that means its current value must be somewhere south of zero. Since this is the case, please remind me why we're planning to put more money in?

Today's parable is the one about the master who gave each of three servants some talents and what they did with said talents. In times of monetary deflation, burying the talents in a bushel basket turns out to be the right answer - and that's a problem.

Tuesday's post argued that deflation might be the new normal for much of the economy – just as it has been the norm for high tech at least since Moore's law took effect. I also argued that deflation might not be as bad as many economists make it out to be despite the fact that it is usually associated with recessions and depressions.

Deflation has been the rule in high tech ever since I first programmed a multi-million dollar IBM 7090 forty-seven years ago (which had less computing power than my current $100 watch). We high-techies have learned that we have to double the usefulness of what we sell every 18 months if we want to charge the same number of consumer dollars for our products. In most cases we haven't been able to keep up with the relentless progression of Moore's law (the amount of computing power you can get for a dollar doubles every 18 months) and prices have fallen.

Maybe we should all learn to live with deflation.

Bobbie Johnson, technology correspondent for The Guardian, was kind enough to quote me along with Vint Cerf (nice to be in good company) on the importance of building an online economy and an online government. Vint said: "You know how they say opportunity lies on the edge of chaos? Maybe that's going to be true here too."

So far our telecommunications infrastructure has largely been privately built and financed. Why should that change now? It's unusual for government to do anything as well as the private sector.

GM is bailing out private equity firm Cerberus Capital Management while waiting for its own bailout from the rest of us. The details are in a barely-noticed filing with the SEC (which is not, of course, responsible for the accuracy or content of such filings).

On December 9, 2008, General Motors Corporation ("GM") and GMAC LLC ("GMAC") agreed on a temporary basis to adjust GMAC's terms for making advance payments to GM for wholesale financing of vehicles sold to GM dealers. GM typically has an increase in its inventory levels in advance of the year-end shut down and this adjustment will help finance purchases of this inventory. Ordinarily, GMAC pays GM the invoice amount for a vehicle shipped by GM to a GMAC financed dealer on the first business day after the shipping date. Beginning on December 9, 2008, GMAC will be obligated to pay GM the invoice amount when such amounts are due from dealers. As a result of this change in payment terms, GMAC will be able to defer payment until December 30, 2008 of up to $1.5 billion in cash due to GM. During the shipping period GM will have a security interest in the financed vehicles.

Build to order should be the distinguishing specialty of the North American car industry, which is located in the heart of the world's greatest car market. You should be able to get the exact car you design on the Web within a week of placing your order. There's no way in the world that overseas manufacturers could compete with that.

Modern technology can translate a Web order to factory instructions easily. Computer assemblers like Dell have done that for a long time and even given spot incentives to people to order over-stocked rather than under-stocked components.

Dash Express, the GPS with GPRS communication for automatic pooling of real-time traffic reports and a truly open application API, is one of the coolest products I've ever owned; it clearly points the way to not only the future of not getting lost but also the next stage of mobile communication and crowd-sourced data. Dash Navigation, the company behind it, recently laid off 65% of its workforce, according to Eric Shonfeld on TechCrunch, and has had to make radical and perhaps fatal alterations to its business plan.

Dash Navigation invented a radical mating of wireless and GPS technology. Existing GPS systems like those from Garmin (GRMN) are closed systems, so Dash built and distributed its own hardware to provider consumers a way to buy its clever technology. The company made its platform open so that outside developers could add value to this cool device. It raised a significant amount of venture capital from first tier VC firms Kleiner Perkins and Sequoia, and got excellent product reviews.