Below is a chart on several key players, some relevant data, and what I think I might try to do:

	Roberto Luongo Age: 30 Salary:  $6.75mm Expires:  2010 W-L:33-13-7 GAA: 2.34
It becomes quite difficult to solidify a reputation as the best goalie in the league when you continually play for dog teams that can’t perform in the playoffs.  This team (and every team you’ve played for) leans far too heavily on your unique talent but east of Cambie street you get very little respect in this league.Giving you the captaincy (even without the C sewn on) was a bullshit PR move and could only have served to cause you to lose focus and get off the bead of what it is that you do so well.  Get back to being “just” the greatest goalie ever, stick with us through some changes, and for emotional balance leverage the two guys you have in your own back yard that have lots of mental toughness and carried weak teams through the playoffs:  Richard Brodeur and Kirk McLean.  The armchair GM would be happy to hire them as consultants to focus on the mental aspects of your play.
	Mattias Ohlund Age: 32 Salary:  $3.5mm Expires:  2009 25 points
I think we’re going to lose you to an East Coast team in bidding this summer. Vancouver fans don’t respect your contribution enough.  I think you’ve had a tough couple of years trying to fit into the Vigneault system, which has required you to take too many penalties and lose focus from your offensive play.I don’t want to lose your grit, but the budget’s tight.  I’d like to sign you to a multi-year contract at your present salary, but I doubt you’d go for that considering who’s been calling.  So I would hope to keep you here with a two-year at $2.5mm — and it’ll be hard to find room under the cap for that.  You’re a franchise player.  Stay here 3-4 more years and we’ll retire your jersey, give you a shot at a cup with some rebuilding, and you can play in front of the home crowd for Sweden in 2010.
	Sami Salo Age: 35 Salary:  $3.5mm Expires:  2011 25 points
What, are you made of porcelain?  We need you to play a whole season.  Please ensconse yourself in bubble wrap and suspend yourself with bungee rope in a lcoked room between games.  We’d like the keys to your Porsche — we’ll be sending a driver in an armoured, padded vehicle with a 7-point safety harness to pick you up for games from now on.If you can put together a full season you’re awesome — but we can’t keep backfilling you.  Fans love you.  I like saying your name with a Squire Barnes lisp.  What the hell: you can’t go anywhere, we’re not trading you… get out of my office and back to the gym (though please pick up some tensor braces and make sure you stretch thoroughly in order to prevent injury or strain).  Please do not buy a Segway or any two-wheeled vehicle.
	Taylor Pyatt Age: 27 Salary:  $1.575mm Expires:  2009 19 points
You are six-feet four, and you weigh 235 lbs.  In today’s NHL that is neither lean enough to be fast, nor thick enough to be tough.  You’re a UFA this summer.  I don’t understand why Vigneault continues to throw you on the ice in critical situations — end of the game, power plays, penalty kills, etc.  You are almost always behind the play.You were a healthy scratch several times in the past two years.  You are being given chances to showcase your skills (probably because we were hoping to trade your ass) but you’ve really let us down.  19 points in 69 games, especially given the guys you’ve played with, means you haven’t been a factor at all.You have NO grit, speed, nor puck-handling dexterity.Happy to let you go — but if you want to stay here 1) figure out what kind of player you are, 2) hire a personal trainer and develop this summer, and 3) we’ll pay you $1M on a one-year contract.  Sorry about your tragic loss, but this is a business.
	Mason Raymond Age: 23 Salary:  $833.33K Expires:  2010 (RFA) 23 points
In your case, I don’t think the stats have told the story.  You’re a hungry, fiery player with grit and I feel that AV has completely underutilized you.  For a 6’0 guy to be the team’s fastest skater is impressive.  You’ve gotten your feet wet in the league, you played your way onto this roster, and you’ve tasted the playoffs.  Now you need to play your way up to the second line.  I think you could be huge as a forechecker and your hands are awesome.This is your sophomore NHL summer.  You’re only 165 lbs. soaking wet.  Would like to see you bulk up without losing speed, just to prevent you from getting knocked around too much.  Work on the upper body, not just the legs, and eat a sandwich once in a while.  You’re great kid, now get out of my office so I can deal with the next guy.
	Willie Mitchell Age: 32 Salary:  $3.2mm Expires:  2010 23 points
Hockey loves the hometown boys.  Port McNeill is pretty close to Vancouver.  Check.OK somebody liked you last summer and gave you a pretty rockin’ deal despite a weak season.  This year you did a lot better, so she time is right to keep that momentum and own the zone.  At times this year I watched you and you seemed to have your head in the clouds, crossing over inexplicably and floating the puck when a slap-pass was required.  Your turnover stats look pretty bad.  You are, though, a big part of the breakout.  If Ohlund goes this summer, you’re a huge part of the defensive corps and the younger kids will be looking to you for leadership.  At times you seem disinterested in defensive play.  Get angry in September and find your grit.Step up, and we’ll renew next summer — no probs.  Want you to finish your career here.
	Alex Burrows Age: 28 Salary:  $2mm Expires:  2010 51 points
You have played your way onto every team throughout your career.  With 52 points in 82 games you have really delivered in 2008-2009, particularly since AV has not always played you on top lines.  You’re probably the fittest player on the team, and a role model for guys making twice your salary.Your unique attribute is your work  ethic.  You need some bulk up top, because when you eventually settle into second line left-winger status you’re going to get tossed around like a bean bag.  I think you’re going to look like the bargain of the century in two years.  We’ll get you a speedy centre to get things going.
	Kyle Wellwood Age: 25 Salary:  $998K Expires:  2009 27 points
I’ve known and played with a lot of guys like you who never got the chance to play in The Show.  You’re immensely, naturally gifted as a player but as a teenager it always came so easily to you that you never really developed a work ethic.  After a few years with the Leafs you became a guy constantly on the bubble, and nowadays that is what is driving you.Wake-up call:  We signed you and put you on waivers (for no really good reason) last year after you failed the fitness test, and nobody even called.This is it.  I’ll sign you right now for $800K for a year because I know I’m the only guy who’ll take a chance.  You’re still on the bubble.  We saw flashes of brilliance this year, but you’re still falling behind.  That’s OK if you use this summer as your time to train like crazy, make me a liar, and come back to camp in lean and mean shape with some speed that can match those hands.  Keep skating all summer.
	Mats Sundin Age: 38 Salary:  $7mm Expires:  2009 28 points
You’re no Neidermeyer.  You’ve proven that you can’t sit out half the season and expect to compete in the NHL.  You came back from semi-retirement old and slow and not nearly pissed-off enough.  You hoped the Sedins and Luongo would carry you to your ring but we did not get the leadership on the ice I’d expect to see from a guy who’s been a consistent 70-80 point-getter for 10 years — and one that we paid $4 million bucks for.So yes, this is goodbye.  There’s no role on this team for you, but I think you knew that.  I always knew you were a summer rental.  See you at the retirement press conference, and enjoy the flight back to Sweden.  And when the Rangers call?  Don’t do it.  You’ll smear your glorious Leafs legacy (choke).
	Ryan Kesler Age: 24 Salary:  $1.75mm Expires:  2010 59 points
When we originally signed you, we thought you were the next Trevor Linden.  It hasn’t exactly been an easy path, and so you were often on the bubble.  This past year you really shined.  What I’d like to see you deliver is a 75-80 point season in 2009/2010 as a center.  If so, you could be our future and we’ll hit you with a contract at least as sweet as your wild-eyed three-year, $2.475-million entry level contract a few years ago.Time to step up and deliver on the promise that we saw when we passed up Mike Richards and Corey Perry for your ass.  I’d like to think you could be the captain of the team but not yet.  One more season like this year’s and we’ll talk about it when you’re up next sumer.  You play better when you’re hungry.  You ought to be a second-line centre by now.
	Kevin Bieksa Age: 27 Salary:  $3.75mm Expires:  2012 43 points
This was the best year of your career, despite a couple of injuries that had us leery.  You’ve showed real toughness at times and delivered 43 points offensively which made you the top-scoring D-man on the team.We have however noticed your defensive play suffering.  You’ve made some brutal bets on the pinch and lost, creating momentum-killing 2-on-1s and leading to some highlight reel goals for other teams.  Luongo can only do so much to cover for a defenseman who’s not even in the play.  Additionally, while we like your grit, we hate your timing.  Pitchforking that guy in Game 5 vs. Chicago with 6 minutes to go almost definitely cost us a Game 7.Clean it up and work on your D game and you’ll be worth every penny.
	The Sedins (H D) Age: 28 Salary:  $3.58mm Expires:  2009 82 points each
You each got 82 points this year — one each per game — with no injuries.  Once again, you were absent for much of the playoffs.  You need to understand that people will key in on you and work with the Right Winger we give you.  Because you are a package deal, any team that signs you to a big contract is going to mortgage their whole future to do so.  I know the Rangers will call. Anyone who can sign you both won’t be able to field a very good team beyond your line.We have invested a lot in you and consider you to be franchise players.  I would match any offer up to $4mm each and for 3-4 years, but above that I’m pretty hamstrung by trying to surround you with the league’s best goalie and a strong D.  But ANYONE who signs you at your presumed asking price, given that there are two of you, will be challenged to surround you with a talented team.
	Alain Vigneault2007 Jack Adams award winner 2007/08: 39-33-10 2008/09: 45-27-10
Some coaches are able to work their magic in the locker room, some do it by running perfect practices, and others do it behind the bench.  In the regular season great practices, and solid locker room and off-ice leadership keep teams healthy, prepared, and in-the-game.  In the playoffs, though, coaches do their work behind the bench.As this was your first career NHL playoff run as a coach, I guess we can’t be too harsh with you for losing.  I have to be honest — watching what happened in Chicago, where the Hawks clearly changed the entire complexion of the play without any adjustment or response from the Canucks — I wanted to fire you.  But then, reflecting on the stats of the regular season, I think we just need to develop you and get you some help.Speaking of which…
	Trevor Linden Requires no introduction.
Hey Trev, ‘sup?  Feeling refreshed after a year off, freed from the shackles of watching Naslund flail as a Captain and watching the NHLPA eat itself alive trying to maneouvre with that weasel Gary Bettman?We miss you.  Fans still show up to games wearing #16 jerseys.  You cast a long shadow, my friend, and rumour from some former Canucks players has it that even thought you didn’t wear the “C” these last few years in Vancouver, you were.  Suffice to say:  You cast a long shadow.Within the next 16 months, Ryan Walter or Rick Bowness will be moving on.  I’d say you’re a shoo-in for Assistant Coach.  The salary sucks, but face it — you bleed blue and green.
	Cody Hodgson Age: 19 Salary:  $875K Expires:  2011
I think we made the smart decision growing you slowly this year, sending you to the Battallion, letting you play on Team Canada in the Canada-Russia series, and now pulling you up to the Moose.  Your play has been exceptional — now you know what it’s like to spread your wings and rock the ice and be a dominant force.Next season please arrive at camp prepared to play in the NHL.  Speed and dexterity are your biggest assets, and you’re big enough not to get tossed around.  Toughness and grit will have to come over time.  You’d make a great roommate for Burrows — only you’re a little more talented than Burrows — because he’ll keep you focused on your fitness and work ethic.  Don’t let this go to your head, we’ll give you a lot of PP ice time next year, probably playing on the Right Wing.
	Marian Gaborik MINNESSOTA Age: 34 Salary:  $3.2mm Expires:  2009
Wanted:  RIGHT WINGER who can hold his own with the Sedins, stand in front of the net when he has to, and wire shots top-corner while hapless defensemen chase the Swedes around in the corners.  Hey Marian, know anybody?Oh that’s right… your pal Pavol is on the Canucks, hit 53 points, and will be here til summer 2010.  Unless of course we can’t attract you as a free agent this summer, in which case we’re going to trade his ass (he nets a $4 million salary).  Since your injury makes you a bit of a risk, I’ll throw $3.5mm on a one-year contract to you but would discuss anything up to $4.0mm on a two-year deal.  If the latter, then you’ll be riding to games in the bubble van with Sami Salo.We’ll try you with the Sisters, and if that doesn’t work out I’m sure you’ll enjoy spinning around the ice with Demitra.  And hey, Willie’s here too… you remember him?
	Ossi Vaananen Age: 28 Salary:  $1mm Expires:  2009
I checked my magic 8-Ball: “future hazy”.  Will re-sign for 2 years at $875K.  Otherwise, seeya.  Thanks.  See you in September.  PS – there are too many vowels in your name.
	Alexander Radulov Age: 22 Salary: $919K Expires: 2009
Ok now, if ever there is a Russian player destined for first-line greatness in the NHL, it is 22-year-old Alexander Radulov.  He is, though, the centre of a huge controversy between the NHL and the Russian Kontinental Hockey League.  Last year, though he was signed to a pithy $1mm contract with the Predators, he ended up inking a three year deal worth $13mm with the KHL’s Salavat Yulaev Ufa.  This contract was signed days before a treaty agreement was reached between the NHL and KHL regarding transfer of players. The Russians view this as payback for the yanking of Ovechkin and Malkin, among a host of others, into the NHL from domestic clubs. What’s happened to the Preds now is essentially what might have happened to the Canucks had they not been able to lure Bure overseas after picking him so many years ago.  This summer, the stage is set for a Battle Royale between the NHL and the KHL’s Alexander Medvedev — the outcome of which might mean Radulov’s return to the National Hockey League as an unrestricted free agent.  This will be THE story of the summer.
	Maxim Afinogenov Age: 29 Salary: $3.5mm Expires: 2009
Building on the Russian Right-Winger theme:  Hey Max!  How would you like to play with the twins?  I know things have been sucking in Buffalo lately.  You need a change of pace!  Your scoring is off, but I think you’ve got potential.I’d throw you a three-year, $3.0mm bone to head over to Vancouver where the ladies will love ya, the Sedins will pass to you, and you can head back up the roster to the first line and net around 75+ points.  Sound good?  Sign here.

Going back over this post, I have committed the Canucks to around $50mm, give or take $2mm.  For instance I’d obviously be happy to say goodbye to Pyatt were Afinogenov to be lured to the team.  But with a cap of $56.7mm next season for team salaries, that leaves very little room and I have filled 15 of 23 roster spots.

According to HockeyBuzz O’Brien, Bernier, Rypien, and Hansen are also key free agents this year.  They will be demanding salary bumps and presently the four of them account for about $4.5mm all in.  Add to that Edler’s $3.25mm salary, Demitra’s $4mm, and various odds & ends, and that’s another $9mm unaccounted for in my planning.

The reality is that the Canucks are not going to be able to strengthen the roster substantially from within the Free Agency market.  The youth movement, as Chicago has evidenced, where underpaid young players overperform, is where teams get a solid strategic advantage these days. This places heavy emphasis on Hodgson to crack the lineup and be a dominant player in 2009-2010, as the Canucks don’t have much else under development.

That said, a couple of things happened this past year:  1)  Salaries inflated across the board, but teams are seeing revenue decline, and 2) The economy collapsed, and the NHL started talking about lowering the cap in the next few years.  This will see teams being far more conservative in their offers to Free Agents, which will be enhanced by the frankly startling diversity of talent that is set to hit the market in June.

So:  Will Ohlund take a pay cut to stay with the only NHL team he has ever known?  Will Bernier (and other teams) recognize that he’s not worth $2.5mm yet?  Will Hank and Daniel bankrupt the team that has developed them into Top 20 players by making a big cash grab, or would they like a shot at the cup?  If they reach for a $6mm salary each, as some suspect, the twins and Luongo alone could account for more than one third of the team’s salary cap at nearly $20mm.

Mike Gillis has a real problem.  If few or none of these situations plays in his favour, then I suspect it’ll be 5 or more years before they have a team in contention… and they’ll have to do something the Canucks are rarely successful at doing:  developing a group of players from the draft into top-line players right away.  It could be a very long winter indeed, even by Vancouver fans’ standards.

… all of which underpins the fact that, strong or not, this was probably Vancouver’s best chance at a Stanley Cup for the past 15 years, and at least the next 5.

SMS costs in Canada are already disproportionately high versus the unrealistically high costs for SMS across the entire wireless industry. This article suggests that SMS costs are, in the aggregate, 4x higher than getting data from the Hubble space telescope. Global SMS revenues are larger than the Hollywood movie, music and video game industries combined.

The quote from the Telus spokesperson is hilarious:

“The growth in text messages has been nothing short of phenomenal,” wrote Telus spokeswoman Anne-Julie Gratton in an e-mail to The Globe and Mail, “This volume places tremendous demands on our network and we can’t afford to provide this service for free any more.”

The same article refers to the latest statistics from the Canadian Wireless Telecommunications Association that pegs the number of text messages sent in Canada at more than 45.3 million per day. According to recent reports from IEMR the number of wireless subscribers in Canada was 20.4 million in 2007, and wireless subscribers in the UK (which has roughly double the population of Canada) for the same year numbered 71.7 million. Sweden, with a third of the population of Canada’s has better than half as many subscribers. Canada is trending remarkably behind nearly every comparable western nation.

These stats are great, in that they illustrate the problem with subscriber growth that shareholders and analysts are presently appreciating. There’s clearly something wrong with the wireless business in Canada, and it’s not something that the recent spectrum auctions are likely to quickly address.

Allow me to translate Ms. Gratton’s TelecomSpeak in a way that more accurately reflects what went down in the boardroom:

“The growth in text messages has been nothing short of phenomenal,” said Telus’ Business Development Manager, “This is an unprecedented opportunity to exact greater revenue from the customer base without spending a penny on service development!”

The Canadian wireless market has been infantilised by the greed and short-sightedness of our wireless carriers and the mismanagement of our asleep-at-the-wheel regulators. Whereas (according to Wikipedia) the average user in the Philippines sends 10-12 text messages a day, doing some quick math from the stats above reveals that the average Canadian use of text messaging is far lower at 2-3 messages per day.

Still, this 45.3 million SMS messages per month business must be creating a stress on the Telus service network, you’d think. Right?

Well, if you send 45.3 million SMS messages all at the maximum size of 140 characters, you’ll get almost 6 Gigabytes in total storage volume – or, roughly the size of the hard drive I had on my IBM Thinkpad in 1999. That’s a lot of data to store (in 1972, that is). At the end of the day, this means that the entire Canadian SMS relay network has to be able to sustain about 144Kb/s of data transfer (thanks to Gersham for helping me with the math). My Mac Mini has a 1GB/s ethernet interface and is ultimately connected to a (for Canada anyway) smokin’ 30MB/s internet pipe this means that I could personally store-and-forward all of Canada’s SMS traffic myself via my Novus broadband in Yaletown, and it would have limited impact on my BitTorrenting.

SMS uses the signaling overlay path of wireless carrier networks, and from the wireless perspective SMS messages ride in the carrier byte packet. As such it costs the network exactly nothing and uses no bandwidth that isn’t already in use — traffic load is the same on the network even if no SMS messages are being transferred. The networks themselves need to invest in this infrastructure anyway, so there is perhaps an added provisioning and data processing impact created by SMS for wireless carrier network planners, but it is not substantial.

For TELUS to suggest that this traffic is in any way meaningfully impactful to their operating costs suggests that either they’re lying, or perhaps they should go back to operating mechanical switches.

This is a cash grab. Pure and simple. But then, you knew that…

Rumours that they’re nosing around in other cities are probably based on the fact that the Swedish kick-off discussions are still preliminary and that the NHL is exploring other possibilities. Earlier reports had them starting the season in Prague. I doubt this means they’d do this on any real scale, with a bunch of teams in a bunch of cities, but most likely another one-off like they did in London and, earlier, Japan.

However, I’ve now heard and read the Swedish rumours from a bunch of sources including my friend JR (who forwarded the Swedish piece). So this seems a little more solid than the others.

If you squint a little, that’s kind of how professional hockey began, more than 125 years ago, in the ponds and rinks of Ottawa and Montreal. Ironically it was in Buffalo where the beautiful game captivated the imagination of my favourite author, F. Scott Fitzgerald, inspiring him to become a sports writer. Even with more than 45 minutes of delays for snow clearing, hole patching, and refreezing, it was a great game which took hockey back to its roots. I think that’s an important point.

Dan Barnes, an Edmontonian, gloats that this happened first at the 2003 Heritage Classic in Commonwealth Stadium, and it’s a very good article outlining the motivations and tribulations that led to that successful effort at an outdoor game. He also advocates some other changes and innovations for the NHL season schedule.

Before I read his article I had opined a few days ago to Rhys that the NHL needs to take it on the road more often. This year the season opened between Stanley Cup winners the Anaheim Ducks and the L.A. Kings in the hockey hotbed of London, England in an event which garnered more buzz on this side of the Atlantic than it did in the UK. Leading up to that game, something (I think) more significant happened… the Kings played two exhibition games in Austria against Austrian League champions Red Bull Salzburg, and against Sweden’s First Division team Farjestad.

You can bet those two squads were up for a game against an NHL team, even one whose roster was as weak as that of the LA Kings. And you can bet Austrian fans (and those that drove from Munich and nearby in Switzerland) were treated to some great (though exhibition) play. But did the NHL do anything to promote those games? Did they even learn anything from the experiment?

Not likely. And you probably won’t see a lot of these again, except for yet more outdoor games in big football stadiums with lots of fans, in the same cities teams usually play in. Here’s a key problem: Unlike any of the other of the top 10 professional sports leagues on this earth, NHL teams are primarily financed from gate revenues at the stadium. Whereas, ticket sales are pure gravy for teams in other sports, which make most of their money from broadcast licensing and avertising, these dollars at the ticket counter the meat for NHL clubs. This means that when a team sacrifices those revenues to play elsewhere, they generally lose money.

The only reason the London game happened at all was that Kings owner Philip Anschutz also owns O2 Arena, and so was able to move the cash around his various enterprises. But for that little tidbit you’d be unlikely to have seen the game there.

In 1997 and 1998 the NHL opened the season with two games each in Japan in the run-up to the Nagano Winter Olympics. Although the League declared these a success there is some evidence that they were expensive, under-supported, economic failures — and the second of these series practically ruined the San Jose Sharks’ season, resulting in the league’s longest consecutive road trip. That has made Bettman’s promise to continue the initiative difficult to fulfill.

I’m not sure that developing a fan base in Japan particularly benefits the NHL. One thing that helps an audience identify with the players is seeing people who are like them. Unfortunately, the best the NHL could offer up to Japanese fans at the time was Paul Kariya.

Moreover, the problem with these being regulation league games (for points) is that these far-flung contests have to be woven into the NHL schedule. And after playing them, teams have to make the journey back to the US and Canada, adjust to pretty considerable JetLag, and hit the ice again for a real league game within 24-48 hours. This doesn’t exactly encourage them to want to sign up.

Watching the Spengler on TV and reading Paul Romanuk’s excellent blog on the tournament reminds me that there really is something special about how professional hockey is conducted in Europe. Having played there and seen how fans react to the teams and vice-versa, it’s reminiscent of what I can only presume to have been the case during the heyday of the NHL, through the 1950s, 60s, and 70s.

You may have noticed that 30% of the players in the NHL are European, but not one of them is from the UK. In fact outside of England’s foundering attempts to create a successful hockey league, Europe has a well-supported hockey community and Sweden, Switzerland, Russia, the Czech Republic, Germany, Italy, and Denmark all have vibrant professional hockey leagues with many fans. So why not support them, and in the process pull more fans to a direct interest in the NHL?

There’s already a revolving door for players between the NHL and leagues like the DEL … why not one for the fans as well? By my observation the relationship between hockey fans in Europe and the NHL is at best superficial. When the Washington Caps made German-born Olaf Kolzig their #1 goaltender, plenty of German hockey fans went out to buy Capitals jerseys with his name on the back… but are they staying up late to watch games? Ordering an NHL channel on digital cable (if there is such a thing)? Picking their favourite players for hockey pools? Not likely.

The Exhibition season for the NHL is actually rather half-hearted. Fans generally aren’t as enthusiastic about the games because the teams field the B-squads, holding their celebrities in reserve for conditioning and in fear of injury. They are also rarely broadcast on television, and as far as selling tickets goes, teams fill the seats for these throw-away games by stacking the games into full and partial seasons’ ticket packs and with give-aways .. for many teams there’s little to no honest profit in the Exhibition season.

But there is one nice thing about Exhibition games … as the LA Kings proved, you can pretty-much do whatever you want and as a bonus, you can stagger and schedule them vis-a-vis the regular season however you’d like. Some teams see the exhibition season as a necessary evil … I see it as a potential problem-solver.

My Modest Proposal is to therefore do two things during the Exhibition season, giving each team the choice of either:

1. Exhibition games in small North American towns with able support for a larger-scale game (ie. 5000+ seats in a hockey arena). Unfortunately this is too early in the winter for elaborate outdoor games. … or …
2. Exhibition play against Tier 1 club teams in Europe, perhaps a road trip consisting of 4-5 games each with a 3-day layover prior to the season start. Share the gate revenues with them (some play in NHL-sized arenas) to cover costs.

This would be a fabulous way to enhance the dialog between fans in Europe and NHL teams, and also to support the small communities which couldn’t support an NHL team (in Mr. Bettman’s opinion) but which still have rabid fan bases built around AHL, University, or Junior hockey teams. Again, this doesn’t detract from the success of those smaller-market teams but likely adds enough water to the tide to float all boats.

Let’s not kid ourselves that big-stadium outdoor games like the Heritage Classic and today’s effort in Buffalo really do anything to enhance the market for the game. Similarly I think it could be argued successfully that both experiments in Japan and in London were not cost-effective in enhancing the league’s market reach.

If the goal is making more money on an exciting winter event, fine. Let’s embrace these pond hockey games as novelties, for sure, and by all means keep doing it (teams report making more money doing so, so within reason I say fill your boots).

But if the goal is expanding the revenue from the league and growing beyond simply operating on gate receipts, let’s also work toward a schedule that does something to enhance the game and its growth; that brings in a new active global fan base; that invigorates the game with a dash of European flavour. There is natural affinity there, and a largely untapped market.

Let’s work toward growing the sport and fostering an exchange with the European leagues that will enhance the game both on and off the ice; and which also respects the contribution made by thousands of communities around the globe that contribute players to this game.

Begin forwarded message:

> From: bitbitch
> Date: Wed Sep 3, 2003 4:50:45 PM US/Pacific
> To: FoRK
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>
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>
>
>
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>
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> the exit ramp for sperm. The injection coats the vas with a clear
> polymer gel that has a negative and positive electric charge. Sperm
> cells also have a charge, so the differential charge from the gel
> ruptures the cell membrane as it passes through the vas, stopping the
> sperm in their tracks before they can even start their journey to the
> egg. RISUG doesn’t affect the surrounding tissues because they have no
> charge.
>
> Compared to the other male contraceptive choices currently available
> — abstinence, withdrawal, condoms, and vasectomies — RISUG is a
> whole new ballgame. In fact, Guha and others believe, the
> contraceptive promises to be even better than the choices available to
> women. Guha enumerates six advantages of his invention:
>
> * First, neither sexual partner has to interrupt the throes of
> passion to use it — no more running to the bathroom and fumbling
> with various ointments and plastics.
>
> * Second, the process, once it is refined and approved, will be
> completely non-surgical. /Whew,/ say a lot of men.
>
> * Third, it’s long-lasting. According to Guha, a single injection
> can be effective for at least 10 years.
>
> *
>
>
> Fourth, after testing RISUG on more than 250 volunteers, neither
> Guha nor other researchers in the field have found side effects
> more worrisome than a slight scrotal swelling in some men
> immediately following the injection. This swelling goes away after
> a few weeks. Compare that to the Pill, which even today can cause
> health problems ranging from severe migraines to blood clots.*
>
> <http://www.gristmagazine.com/grist/maindish/
> schulman081303.asp#toronto>, who says men’s attitudes toward
> contraception are changing. “In Canada, 10 years ago, it used to be
> tubal ligations [the more-invasive female equivalent of a vasectomy]
> to vasectomies were performed at a ratio of 2 to 1. Now that number is
> reversed.” Weiss believes a lot of men would prefer a procedure that
> wasn’t permanent. And, he says, RISUG is the most promising male
> contraceptive out there.
>
>
>
>
> Still, there’s been a lot more media fervor over the possibility of a
> male version of the Pill — even though its potential side effects for
> men include everything from liver damage and prostate problems to what
> is referred to in the literature as gynecomastia. Translation: Men
> growing breasts.
>
> Weiss thinks RISUG is preferable. “The only people who should be
> excited about the male Pill are pharmaceutical companies,” he said. He
> believes so much money has been poured into researching the Pill
> because pharmaceutical companies want something consumers will have to
> buy again and again — as opposed to an inexpensive, one-time
> injection. In the U.S., a decade of the female Pill costs about
> $3,600. RISUG would be dramatically less expensive, while
> pharmaceutical companies would have to pay $25 million to $40 million
> to bring it to market.
>
> But from the consumers’ point of view, RISUG could be a godsend during
> the approximately 30 years the average person spends trying not to
> cause a pregnancy. It would mean fewer women getting cancer from the
> Pill or having their uteruses perforated by an errant IUD. It would
> mean fewer men having to choose between the risk of a burst condom or
> the permanence of a vasectomy.
>
> And in the developing world, RISUG would mean much more.
>
> *This Little Injection Went to Market …*
>
> “Realize that overseas there just aren’t decent options,” said Elaine
> Lissner, director of the Male Contraception Information Project. “By
> the time condoms arrive there, they’re cracked by the heat. Poverty
> and lack of medical follow-up are a problem. You can’t use a diaphragm
> if you don’t have clean running water. You can’t use an IUD if no
> medical treatment exists if something goes wrong. You can’t use the
> Pill if it’s too expensive.”
>
> In the developing world, RISUG’s price tag could be brought down to
> about $22, the price at which Guha and Indian Drugs & Pharmaceuticals
> Ltd. (the largest Indian drug company) are planning to market it in
> India. This makes RISUG potentially affordable by even the world’s
> poorest.
>
> Studies have shown that when couples in the developing world start
> having fewer children, both the health and literacy of the children
> improve, and mothers are more likely to survive long enough to raise
> their kids. Moreover, families with fewer children have less impact on
> the natural world, because they are not as desperate for firewood,
> water, and bush meat.
>
> This “less children/healthier environment” connection has become so
> clear that wildlife organizations have started to team up with
> family-planning groups in biodiversity-rich areas of the world. In the
> Montes Azules Biosphere Reserve in Mexico, Conservation International
> is working with Mexfam to slow the clearing of the forests as well as
> to offer people there the option of reproductive health care.
>
>
>
>
> Inevitability, talk of providing contraceptives to people in
> developing countries raises allegations of racism — but there’s a
> huge difference between forced eugenics and offering people the choice
> to control their own fertility. According to Save the Children, 72
> percent of Sweden’s population has access to contraceptives; why
> shouldn’t the same choices be available in Niger? With the world’s
> population growing by 77 million people per year, access to
> contraceptives is not something the industrialized world can continue
> to hog.
>
> So far, what’s holding up the potential marketing of RISUG outside of
> India is safety testing. Although the Indian medical community
> maintains that its safety testing is better than that of the U.S.,
> Jeff Spieler, chief of research at USAID’s Office of Population and
> Reproductive Health, said, “The pre-clinical toxicology testing in
> India [on RISUG] was weak.”
>
> Lissner agreed that some of the older studies should be redone, but
> given the near-perfect record of RISUG so far, she noted, “If I were a
> man, I’d feel safer having RISUG injected than eating non-organic
> fruit.”
>
> RISUG will probably soon be marketed in India, but the U.S. will play
> a critical role in determining its use elsewhere in the developing
> world. Grants from U.S. agencies, corporations, and nonprofits spur on
> a significant portion of the world’s research. But, said Waller of the
> University of Illinois, “If funds from the U.S. are paying for another
> country’s research, then the research has to be already approved by
> the FDA. Otherwise it looks like we’re using the rest of the world as
> experimental subjects.” Thus, lack of interest in RISUG by the U.S.
> helps delay its use around the world.
>
> Meanwhile the developing world waits.
>
> As Lissner said, “Every month we delay means thousands more women
> dying in childbirth, more families in poverty from too many children,
> and more women dying in attempted abortions.”
>
>
> *[Correction, 14 Aug 2003: This article originally stated that birth
> control pills can cause ovarian cancer. In fact, studies show that the
> Pill can protect women against ovarian cancer.]
>
> *[Correction, 18 Aug 2003: This article originally stated Ronald Weiss
> is based in Toronto. He is based in Ottawa.]
>
>

Wireless and Web Buzz Again as Wifi Catches On Tue May 13, 4:09 PM

/By Christopher Noble/

PARIS (Reuters) – Landgrabbing and takeover frenzy are again dominating technology headlines as if the Internet bubble had never burst and giving old buzzwords a new lease of life.

At the center of it is WiFi, a technology that allows users of laptop computers and other gadgets to access the Internet without the usual struggle with wires and mismatched phone jacks.

France, late to the party, is now jumping aboard with a series of announcements in the last few days.

The race is on around the world to roll out WiFi access points known as “hotspots,” which for some entrepreneurs offer the prospect of turning mobile Internet access into revenue.

Each wireless (news <http://us.rd.yahoo.com/DailyNews/manual/*http://search.news.yahoo.com/search/news?p=%22wireless%22&c=&n &yn=c&c=news&cs=nw> – web sites <largest hotspot in France. A consortium of companies is now putting a WiFi network in the French capital’s subway stations and bus stops.

The stupid network: Why I’m not sold…yet There may yet be a place for special packet treatment, and the silicon to do it

By Scott Mace, SERVICENETWORKS.com

You know things are bad in the Internet industry when the best-sounding idea out there is David Isenberg’s call for the return to or acceptance of his vision of the Internet as an all-IP-based “stupid network” – a network designed only to move packets from one place to another with no special treatment of special traffic.

It’s a seductive theory at this point in time. Let’s look at the evidence:

* Manufacturers and operators of “smart” networks – networks designed to treat some telecomm traffic, such as voice or video, better than other traffic – have taken an absolute drubbing financially. The Quality of Service Forum (for which I edited the last few white papers) is a distant memory. Multicast technology remains an academic curiosity, and traffic to the IP Multicast Mailing list has been fairly light of late. (This Web site hosts the list, and it is still the preeminent mailing list regarding multicast in the world.)

* Service providers have yet to roll out special-treatment packet delivery services to any large extent (a notable exception of late is anti-spam services). Instead, they’ve been turning to other techniques, such as route optimization and content delivery networks (caching plus monitoring), or simply overprovisioning their networks, providing surplus bandwidth at all but peak times. (I don’t consider services as VPNs to be special treatment. Although the packets are encrypted, they are otherwise treated just like other packets).

* Bandwidth costs continue to plunge. The fiber glut continues unabated. Predictions of the glut’s demise were predicated on Internet traffic growth estimates which themselves turned out to be false. (Listen to my interview with Andrew Odlysko for details.)

* Managing prioritized traffic in the end-to-end Internet is still too expensive and complicated, despite a surge of research and development aimed at putting the necessary software in silicon and baking it into switches and routers.

* The technology used to develop smart networking equipment is evolving too quickly and the state-of-the-art renders existing solutions obsolete overnight. This is not a solid basis upon which to invest in such equipment for a physical network which cannot be upgraded very often.

* The human engineering and management expertise needed to manage and optimize smart networks is in short supply and will remain so.

These arguments are powerful enough to sweep away most thoughts of implementing smart networking any time within the next few years. So why aren’t I buying the theory hook, line and sinker?

I won’t argue that anything listed above should compel any service provider or carrier to rush out and install smart networking gear. But conversely, I also know that carriers who have spent enormous fortunes installing such smart gear as voice switching equipment won’t rush away from that investment eagerly to embrace dumb networks.

Clearly, the pendulum will swing far in the direction of stupid networks. I expect the traditional telecom companies to continue to put up a front of championing smart networks for voice, while at the same time, inside these companies, they hollow out their infrastructure from the core, placing dumb networks with overprovisioned resources there and moving the intelligence to the edge – all very quietly.

At the edge (where, as Isenberg says, IP packets are broken apart and applications read and utilize the contents of the packets), I certainly would like to be able to prioritize my Internet traffic. If I’m involved in a critical data upload, I still want to surf the Web, but I want to be able to take away bandwidth from the Web surfing process and give to the critical process. The gear and software to do this exists today and there are many success stories in the enterprise arena, especially where a high-latency, low-bandwidth WAN is in place.

I also want route optimization and the ability to grab additional bandwidth on demand as needed, and I believe the technology for this exists too. There is an opportunity here for service providers to automate these processes and make them available in a seamless fashion to customers.

The most interesting action that Isenberg has taken in the course of his stupid network crusade was his October 21 call (with a few distinguished friends) for the FCC to allow the legacy telecommunications companies to fail. If they aren’t allowed to fail, the “hollowing out” I refer to above will take place at a much slower pace – for instance, the telcos will continue to slowly depreciate obsolete “smart network” equipment which should be written off as quickly as possible (bankruptcy would do it really quick) – and as a result the build-out of IP-based stupid networks will take years longer – years the United States may not have to stay competitive with a world where some stupid networks are being built out by governments in a fashion Al Gore could appreciate, the result being that the U.S. is now trailing Estonia in its rate of high-speed, always-on (“broadband”) Internet adoption, among other countries.

And yet, there are some questions that swinging to a stupid-network model raise, that give me just enough pause to avoid becoming another one of Isenberg’s troops. These questions include:

* What do we do about IP-based distributed denial-of-service attacks? In my interview with him this week, Isenberg admits that stupid networks are more vulnerable to DDoS attacks than smart networks are. In a world where all critical applications including telephony are collapsed onto a single pipe, some fancy redundancy will be necessary to thwart DDoS, raising the overhead costs of a stupid network. For this reason alone, it would be worth attending next week’s SERVICE NETWORKS / ISPCON conference, to hear three different views about how DDoS attacks can be pre-empted.

* How will carriers grab market share in any fashion other than speed or price? Providing “five nines” or more of service may become less compelling if all a customer has to do to insure a reliable pipe is to “buy as many nines as you want” as Isenberg puts it, by having redundant connections open to the Internet. As bandwidth becomes even more of a commodity, thanks to Moore’s law it will be less and less profitable.

* Isenberg’s solution is to treat it like other money-losing infrastructure: the highways, the airlines, the airports, Amtrak. In other words, let governments build and operate the Internet as a key national infrastructure. Isenberg touts a public/private partnership in Sweden, but the heavy hand of government is there as well. Can the United States stomach that sort of government role in this day and age? More importantly, must it? It’s one thing to build sewers and roads, but these facilities aren’t effectively made obsolete overnight by technology. Can the same be said about Internet carrier equipment? Maybe the government ends up owning only the conduit, but as wireless comes on strong, might even conduit in the ground be worth less than it is today?

* Wireless spectrum may eventually be reallocated into smaller and smaller pieces that can be shared by smart radios at the edge, but today’s regulatory reality is that spectrum remains scarce, a fact that 802.11 radio users are likely to run up to in a hurry with the exponential growth of that technology. The Open Spectrum movement might change that, but it’s got its work cut out for it.

* Firewalls exist to filter traffic far away from edge devices. Yet, in Isenberg’s perfect stupid network, a firewall exists only on the edge device itself. This to me seems as nonsensical as expecting every edge device to be able to combat a DDoS attack by itself. (Imagine if G.W. Bush’s IPv6 cell phone address ever got out.) Whether the unwanted content is spam, adult content, or malicious code, it’s evident that firewalls somewhere inside the edge of the network, which peek not just at packet headers but somewhat deeper inside the packet, serve a valuable purpose. Any stupid network which throws them out or expects to shrink them into each device is imagining a technological future beyond what I can foresee.

* I’ve often written about how smart networks and QoS are needed to carry the low-latency “killer apps” of the future – everything from videoconferencing to immersive applications ranging from telepresence to gaming to simulations – and along the way, they will break the monopoly held by legacy content distribution networks such as the TV networks. But Isenberg says the killer apps of the Internet have already arrived – email and the Web among them. Are we content to let the others struggle without special network consideration until bandwidth is virtually free? That’s a pretty poor return-on-investment for Internet2.

The answers to these questions elude many. For the past four years I’ve examined the potential of smart networks for the Internet (not just voice), to optimize a resource I considered scarce at bottlenecks. All the time, others such as George Gilder have argued, to limited effect, that bandwidth was becoming free and we will simply add more bandwidth everywhere any time we need it. The truth remains somewhere in between. By examining stupid networks more closely, I too am joining the ranks of those who believe that bandwidth may be too cheap to meter. And yet, some vast surge of silicon innovation may yield a solution which sweeps away all the concerns about the high overhead of metering bandwidth, or the lack of human skills to manage such systems. As always, the pendulums in technology swing back and forth.

Last week, my colleague David Kopf gave some advice to service providers which could be a saving grace in the short term: get your own data center facilities in order. As improbable as it may seem, Web hosting could emerge from the current downturn as the one area of business where service providers and carriers can make a buck, if they work hard, keep it simple and figure out how to maximize their use of an Internet which remains, for the time being, pretty stupid. So, the other SERVICE NETWORKS / ISPCON panel that I recommend to you would be Next-Generation Web and Application Hosting: Distinguishing Hype from Reality.

One thing is for certain: the world isn’t waiting for answers to my questions or Isenberg’s. Every day, in the proving grounds of Wall Street and world economies, technologies, businesses and even national infrastructures are being tried, tested, and many are found wanting. The important thing is to keep asking the tough questions, and not to let any one factor, least of all mere campaign-contribution-stoked politics, dictate the answers.

———–

*Hockey 2002: Go north, young man – and woman*

December 25, 2002

By Daren Smith SportsTicker Hockey Editor

JERSEY CITY, New Jersey (Ticker) – It’s been almost a decade since a Canadian team captured the Stanley Cup. But make no mistake, Canada was the center of the hockey universe in 2002.

Canada reclaimed its hockey supremacy during two rollercoaster weeks in February in Salt Lake City.

The 2002 Winter Games did not begin well for a country that had gone a half-century since its last Olympic men’s hockey gold medal. Canada was whipped by Sweden in its first game, looked unimpressive in a win over Germany and settled for a tie with the Czech Republic to complete the preliminary round.

That did not sit well with the folks back home. So Team Canada general manager Wayne Gretzky pulled a page from his nation’s rich hockey history and launched into a vitriolic defense of the team that conjured memories of Phil Esposito’s sweat-drenched plea during the 1972 Summit Series.

“I just felt that the team was feeling a little bit stressful, a little bit tight, and I just felt I had to step forward and get all the focus off the guys and turn the focus in a different direction,” Gretzky explained later.

The pieces began to fall into place as the Canadians edged Finland, 2-1, then blitzed overmatched Belarus, 7-1, to earn a spot in the gold medal game. Tiny Belarus had pulled one of the great upsets in Olympic hockey by eliminating the Swedes.

Awaiting Canada was the United States, the only unbeaten team in the tournament. History appeared to rest with the Americans, who were unbeaten in 24 consecutive contests on U.S. soil.

But Gretzky had a secret weapon. Before the Olympic tournament began, ice maker Trent Evans, an Edmonton native, buried a “loonie” – a $1 Canadian coin – under the faceoff circle at center ice.

“The Greeks built good luck hero statues of Hercules and Adonis, the Irish have the Blarney Stone and four-leaf clovers and the Canadians have the Salt Lake Loonie,” Hockey Hall of Fame curator Phil Pritchard said.

The loonie earned a spot in the Hall of Fame thanks to Canada’s 5-2 victory in the gold medal game.

Eight months after leading the Colorado Avalanche <“>http://sports.yahoo.com/nhl/players/7/7/> scored two goals and set up two others for Canada. He got the go-ahead goal on the power play with 1:41 to go in the second period, assisted on Jarome Iginla <.”>http://sports.yahoo.com/nhl/players/6/686/>. “Winning the gold kind of reassures Canada.”

Two days before the Canadian men ended their drought, the women avenged their only loss in major international competition with a 3-2 triumph over the United States.

The U.S. defeated Canada to win the inaugural women’s hockey gold medal four years earlier in Nagano. But Canada got even on American soil.

Hayley Wickenheiser, the Gretzky of Canadian women’s hockey, put her team in front just over four minutes into the second period, and Jayna Hefford scored the back-breaker just a second before period ended.

The NHL took off nearly three weeks to allow its players to participate in a second straight Winter Games. Once the break was over, the Detroit Red Wings <“>http://sports.yahoo.com/nhl/teams/car/> in five games.

The turning point was Game Three, when 41-year-old Igor Larionov <“>http://sports.yahoo.com/nhl/players/2/260/> also retired.

But the Red Wings don’t rebuild, they reload. Free agent Curtis Joseph <“>http://sports.yahoo.com/nhl/teams/ott/> at $95 million, Calgary Flames <“>http://sports.yahoo.com/nhl/teams/edm/> at $86 million.

Those are the teams with the most to lose as the league struggles to reach 2003-04, when its collective bargaining agreement with the NHL Players Association expires.

And that’s the story that figures to dominate the headlines as hockey begins the new year.

———–

I contend that there is something fundamentally wrong with a society where Jack Welch (a smart and fair guy, by any measure, and an exceptionally good leader) makes $123 million per year in total compensation and tens of millions of people in America live in abject poverty. How can we continue trying to build a functional society until we start to connect these two examples?

I was particularly struck when I saw Kenneth Lay, nearly a year ago, leaving a parkade in his brand new G-Class Mercedes. I thought: “that prick has devastated the retirement incomes of hundreds of thousands, maybe millions, of people, forced others into financial ruin, and here he is rolling around in a $100,000.00 truck wearing immaculately-tailored suits.” What’s more despicable is that he, and people like him, are not even conscious that this is wrong, or of why we should be offended.

But speaking from an economic perspective, a nation is built on the backs of the middle class. It was the participation of the Middle Class, which for the first time began to invest directly in securities as their major investment plan, that made the economic boom of the late 90s happen, and it is the Middle Class that provides the tax basis that sustains a nation. Many of the top US-Headquartered multinationals either don’t pay ANY income tax or receive subsidies from the government. And many of their CEOs are able to shelter most of their income and keep one step ahead of the IRS.

Pats on the back to the NY Times for taking this stand. It is NOT an Envy Politic. It IS Class Warfare. It is the sustainability of the world economic system that is at stake, for we are in danger of sliding towards a sort of global Corporate Feudalism that will ultimately be our ruin.

As America is effectively taking over the world, their society shows a test case for Bush Sr.’s “New World Order”, which we will all someday be living under.

I urge you to read this in full..

-Ian.

——– http://www.nytimes.com/2002/10/20/magazine/20INEQUALITY.html

October 20, 2002 For Richer By PAUL KRUGMAN

I. The Disappearing Middle When I was a teenager growing up on Long Island, one of my favorite excursions was a trip to see the great Gilded Age mansions of the North Shore. Those mansions weren’t just pieces of architectural history. They were monuments to a bygone social era, one in which the rich could afford the armies of servants needed to maintain a house the size of a European palace. By the time I saw them, of course, that era was long past. Almost none of the Long Island mansions were still private residences. Those that hadn’t been turned into museums were occupied by nursing homes or private schools.

For the America I grew up in — the America of the 1950’s and 1960’s — was a middle-class society, both in reality and in feel. The vast income and wealth inequalities of the Gilded Age had disappeared. Yes, of course, there was the poverty of the underclass — but the conventional wisdom of the time viewed that as a social rather than an economic problem. Yes, of course, some wealthy businessmen and heirs to large fortunes lived far better than the average American. But they weren’t rich the way the robber barons who built the mansions had been rich, and there weren’t that many of them. The days when plutocrats were a force to be reckoned with in American society, economically or politically, seemed long past.

Daily experience confirmed the sense of a fairly equal society. The economic disparities you were conscious of were quite muted. Highly educated professionals — middle managers, college teachers, even lawyers — often claimed that they earned less than unionized blue-collar workers. Those considered very well off lived in split-levels, had a housecleaner come in once a week and took summer vacations in Europe. But they sent their kids to public schools and drove themselves to work, just like everyone else.

But that was long ago. The middle-class America of my youth was another country.

We are now living in a new Gilded Age, as extravagant as the original. Mansions have made a comeback. Back in 1999 this magazine profiled Thierry Despont, the ”eminence of excess,” an architect who specializes in designing houses for the superrich. His creations typically range from 20,000 to 60,000 square feet; houses at the upper end of his range are not much smaller than the White House. Needless to say, the armies of servants are back, too. So are the yachts. Still, even J.P. Morgan didn’t have a Gulfstream.

As the story about Despont suggests, it’s not fair to say that the fact of widening inequality in America has gone unreported. Yet glimpses of the lifestyles of the rich and tasteless don’t necessarily add up in people’s minds to a clear picture of the tectonic shifts that have taken place in the distribution of income and wealth in this country. My sense is that few people are aware of just how much the gap between the very rich and the rest has widened over a relatively short period of time. In fact, even bringing up the subject exposes you to charges of ”class warfare,” the ”politics of envy” and so on. And very few people indeed are willing to talk about the profound effects — economic, social and political — of that widening gap.

Yet you can’t understand what’s happening in America today without understanding the extent, causes and consequences of the vast increase in inequality that has taken place over the last three decades, and in particular the astonishing concentration of income and wealth in just a few hands. To make sense of the current wave of corporate scandal, you need to understand how the man in the gray flannel suit has been replaced by the imperial C.E.O. The concentration of income at the top is a key reason that the United States, for all its economic achievements, has more poverty and lower life expectancy than any other major advanced nation. Above all, the growing concentration of wealth has reshaped our political system: it is at the root both of a general shift to the right and of an extreme polarization of our politics.

But before we get to all that, let’s take a look at who gets what.

II. The New Gilded Age The Securities and Exchange Commission hath no fury like a woman scorned. The messy divorce proceedings of Jack Welch, the legendary former C.E.O. of General Electric, have had one unintended benefit: they have given us a peek at the perks of the corporate elite, which are normally hidden from public view. For it turns out that when Welch retired, he was granted for life the use of a Manhattan apartment (including food, wine and laundry), access to corporate jets and a variety of other in-kind benefits, worth at least $2 million a year. The perks were revealing: they illustrated the extent to which corporate leaders now expect to be treated like ancien regime royalty. In monetary terms, however, the perks must have meant little to Welch. In 2000, his last full year running G.E., Welch was paid $123 million, mainly in stock and stock options.

Is it news that C.E.O.’s of large American corporations make a lot of money? Actually, it is. They were always well paid compared with the average worker, but there is simply no comparison between what executives got a generation ago and what they are paid today.

Over the past 30 years most people have seen only modest salary increases: the average annual salary in America, expressed in 1998 dollars (that is, adjusted for inflation), rose from $32,522 in 1970 to $35,864 in 1999. That’s about a 10 percent increase over 29 years — progress, but not much. Over the same period, however, according to Fortune magazine, the average real annual compensation of the top 100 C.E.O.’s went from $1.3 million — 39 times the pay of an average worker — to $37.5 million, more than 1,000 times the pay of ordinary workers.

The explosion in C.E.O. pay over the past 30 years is an amazing story in its own right, and an important one. But it is only the most spectacular indicator of a broader story, the reconcentration of income and wealth in the U.S. The rich have always been different from you and me, but they are far more different now than they were not long ago — indeed, they are as different now as they were when F. Scott Fitzgerald made his famous remark.

That’s a controversial statement, though it shouldn’t be. For at least the past 15 years it has been hard to deny the evidence for growing inequality in the United States. Census data clearly show a rising share of income going to the top 20 percent of families, and within that top 20 percent to the top 5 percent, with a declining share going to families in the middle. Nonetheless, denial of that evidence is a sizable, well-financed industry. Conservative think tanks have produced scores of studies that try to discredit the data, the methodology and, not least, the motives of those who report the obvious. Studies that appear to refute claims of increasing inequality receive prominent endorsements on editorial pages and are eagerly cited by right-leaning government officials. Four years ago Alan Greenspan (why did anyone ever think that he was nonpartisan?) gave a keynote speech at the Federal Reserve’s annual Jackson Hole conference that amounted to an attempt to deny that there has been any real increase in inequality in America.

The concerted effort to deny that inequality is increasing is itself a symptom of the growing influence of our emerging plutocracy (more on this later). So is the fierce defense of the backup position, that inequality doesn’t matter — or maybe even that, to use Martha Stewart’s signature phrase, it’s a good thing. Meanwhile, politically motivated smoke screens aside, the reality of increasing inequality is not in doubt. In fact, the census data understate the case, because for technical reasons those data tend to undercount very high incomes — for example, it’s unlikely that they reflect the explosion in C.E.O. compensation. And other evidence makes it clear not only that inequality is increasing but that the action gets bigger the closer you get to the top. That is, it’s not simply that the top 20 percent of families have had bigger percentage gains than families near the middle: the top 5 percent have done better than the next 15, the top 1 percent better than the next 4, and so on up to Bill Gates.

Studies that try to do a better job of tracking high incomes have found startling results. For example, a recent study by the nonpartisan Congressional Budget Office used income tax data and other sources to improve on the census estimates. The C.B.O. study found that between 1979 and 1997, the after-tax incomes of the top 1 percent of families rose 157 percent, compared with only a 10 percent gain for families near the middle of the income distribution. Even more startling results come from a new study by Thomas Piketty, at the French research institute Cepremap, and Emmanuel Saez, who is now at the University of California at Berkeley. Using income tax data, Piketty and Saez have produced estimates of the incomes of the well-to-do, the rich and the very rich back to 1913.

The first point you learn from these new estimates is that the middle-class America of my youth is best thought of not as the normal state of our society, but as an interregnum between Gilded Ages. America before 1930 was a society in which a small number of very rich people controlled a large share of the nation’s wealth. We became a middle-class society only after the concentration of income at the top dropped sharply during the New Deal, and especially during World War II. The economic historians Claudia Goldin and Robert Margo have dubbed the narrowing of income gaps during those years the Great Compression. Incomes then stayed fairly equally distributed until the 1970’s: the rapid rise in incomes during the first postwar generation was very evenly spread across the population.

Since the 1970’s, however, income gaps have been rapidly widening. Piketty and Saez confirm what I suspected: by most measures we are, in fact, back to the days of ”The Great Gatsby.” After 30 years in which the income shares of the top 10 percent of taxpayers, the top 1 percent and so on were far below their levels in the 1920’s, all are very nearly back where they were.

And the big winners are the very, very rich. One ploy often used to play down growing inequality is to rely on rather coarse statistical breakdowns — dividing the population into five ”quintiles,” each containing 20 percent of families, or at most 10 ”deciles.” Indeed, Greenspan’s speech at Jackson Hole relied mainly on decile data. From there it’s a short step to denying that we’re really talking about the rich at all. For example, a conservative commentator might concede, grudgingly, that there has been some increase in the share of national income going to the top 10 percent of taxpayers, but then point out that anyone with an income over $81,000 is in that top 10 percent. So we’re just talking about shifts within the middle class, right?

Wrong: the top 10 percent contains a lot of people whom we would still consider middle class, but they weren’t the big winners. Most of the gains in the share of the top 10 percent of taxpayers over the past 30 years were actually gains to the top 1 percent, rather than the next 9 percent. In 1998 the top 1 percent started at $230,000. In turn, 60 percent of the gains of that top 1 percent went to the top 0.1 percent, those with incomes of more than $790,000. And almost half of those gains went to a mere 13,000 taxpayers, the top 0.01 percent, who had an income of at least $3.6 million and an average income of $17 million.

A stickler for detail might point out that the Piketty-Saez estimates end in 1998 and that the C.B.O. numbers end a year earlier. Have the trends shown in the data reversed? Almost surely not. In fact, all indications are that the explosion of incomes at the top continued through 2000. Since then the plunge in stock prices must have put some crimp in high incomes — but census data show inequality continuing to increase in 2001, mainly because of the severe effects of the recession on the working poor and near poor. When the recession ends, we can be sure that we will find ourselves a society in which income inequality is even higher than it was in the late 90’s.

So claims that we’ve entered a second Gilded Age aren’t exaggerated. In America’s middle-class era, the mansion-building, yacht-owning classes had pretty much disappeared. According to Piketty and Saez, in 1970 the top 0.01 percent of taxpayers had 0.7 percent of total income — that is, they earned ”only” 70 times as much as the average, not enough to buy or maintain a mega-residence. But in 1998 the top 0.01 percent received more than 3 percent of all income. That meant that the 13,000 richest families in America had almost as much income as the 20 million poorest households; those 13,000 families had incomes 300 times that of average families.

And let me repeat: this transformation has happened very quickly, and it is still going on. You might think that 1987, the year Tom Wolfe published his novel ”The Bonfire of the Vanities” and Oliver Stone released his movie ”Wall Street,” marked the high tide of America’s new money culture. But in 1987 the top 0.01 percent earned only about 40 percent of what they do today, and top executives less than a fifth as much. The America of ”Wall Street” and ”The Bonfire of the Vanities” was positively egalitarian compared with the country we live in today.

III. Undoing the New Deal In the middle of the 1980’s, as economists became aware that something important was happening to the distribution of income in America, they formulated three main hypotheses about its causes.

The ”globalization” hypothesis tied America’s changing income distribution to the growth of world trade, and especially the growing imports of manufactured goods from the third world. Its basic message was that blue-collar workers — the sort of people who in my youth often made as much money as college-educated middle managers — were losing ground in the face of competition from low-wage workers in Asia. A result was stagnation or decline in the wages of ordinary people, with a growing share of national income going to the highly educated.

A second hypothesis, ”skill-biased technological change,” situated the cause of growing inequality not in foreign trade but in domestic innovation. The torrid pace of progress in information technology, so the story went, had increased the demand for the highly skilled and educated. And so the income distribution increasingly favored brains rather than brawn.

Finally, the ”superstar” hypothesis — named by the Chicago economist Sherwin Rosen — offered a variant on the technological story. It argued that modern technologies of communication often turn competition into a tournament in which the winner is richly rewarded, while the runners-up get far less. The classic example — which gives the theory its name — is the entertainment business. As Rosen pointed out, in bygone days there were hundreds of comedians making a modest living at live shows in the borscht belt and other places. Now they are mostly gone; what is left is a handful of superstar TV comedians.

The debates among these hypotheses — particularly the debate between those who attributed growing inequality to globalization and those who attributed it to technology — were many and bitter. I was a participant in those debates myself. But I won’t dwell on them, because in the last few years there has been a growing sense among economists that none of these hypotheses work.

I don’t mean to say that there was nothing to these stories. Yet as more evidence has accumulated, each of the hypotheses has seemed increasingly inadequate. Globalization can explain part of the relative decline in blue-collar wages, but it can’t explain the 2,500 percent rise in C.E.O. incomes. Technology may explain why the salary premium associated with a college education has risen, but it’s hard to match up with the huge increase in inequality among the college-educated, with little progress for many but gigantic gains at the top. The superstar theory works for Jay Leno, but not for the thousands of people who have become awesomely rich without going on TV.

The Great Compression — the substantial reduction in inequality during the New Deal and the Second World War — also seems hard to understand in terms of the usual theories. During World War II Franklin Roosevelt used government control over wages to compress wage gaps. But if the middle-class society that emerged from the war was an artificial creation, why did it persist for another 30 years?

Some — by no means all — economists trying to understand growing inequality have begun to take seriously a hypothesis that would have been considered irredeemably fuzzy-minded not long ago. This view stresses the role of social norms in setting limits to inequality. According to this view, the New Deal had a more profound impact on American society than even its most ardent admirers have suggested: it imposed norms of relative equality in pay that persisted for more than 30 years, creating the broadly middle-class society we came to take for granted. But those norms began to unravel in the 1970’s and have done so at an accelerating pace.

Exhibit A for this view is the story of executive compensation. In the 1960’s, America’s great corporations behaved more like socialist republics than like cutthroat capitalist enterprises, and top executives behaved more like public-spirited bureaucrats than like captains of industry. I’m not exaggerating. Consider the description of executive behavior offered by John Kenneth Galbraith in his 1967 book, ”The New Industrial State”: ”Management does not go out ruthlessly to reward itself — a sound management is expected to exercise restraint.” Managerial self-dealing was a thing of the past: ”With the power of decision goes opportunity for making money. . . . Were everyone to seek to do so . . . the corporation would be a chaos of competitive avarice. But these are not the sort of thing that a good company man does; a remarkably effective code bans such behavior. Group decision-making insures, moreover, that almost everyone’s actions and even thoughts are known to others. This acts to enforce the code and, more than incidentally, a high standard of personal honesty as well.”

Thirty-five years on, a cover article in Fortune is titled ”You Bought. They Sold.” ”All over corporate America,” reads the blurb, ”top execs were cashing in stocks even as their companies were tanking. Who was left holding the bag? You.” As I said, we’ve become a different country.

Let’s leave actual malfeasance on one side for a moment, and ask how the relatively modest salaries of top executives 30 years ago became the gigantic pay packages of today. There are two main stories, both of which emphasize changing norms rather than pure economics. The more optimistic story draws an analogy between the explosion of C.E.O. pay and the explosion of baseball salaries with the introduction of free agency. According to this story, highly paid C.E.O.’s really are worth it, because having the right man in that job makes a huge difference. The more pessimistic view — which I find more plausible — is that competition for talent is a minor factor. Yes, a great executive can make a big difference — but those huge pay packages have been going as often as not to executives whose performance is mediocre at best. The key reason executives are paid so much now is that they appoint the members of the corporate board that determines their compensation and control many of the perks that board members count on. So it’s not the invisible hand of the market that leads to those monumental executive incomes; it’s the invisible handshake in the boardroom.

But then why weren’t executives paid lavishly 30 years ago? Again, it’s a matter of corporate culture. For a generation after World War II, fear of outrage kept executive salaries in check. Now the outrage is gone. That is, the explosion of executive pay represents a social change rather than the purely economic forces of supply and demand. We should think of it not as a market trend like the rising value of waterfront property, but as something more like the sexual revolution of the 1960’s — a relaxation of old strictures, a new permissiveness, but in this case the permissiveness is financial rather than sexual. Sure enough, John Kenneth Galbraith described the honest executive of 1967 as being one who ”eschews the lovely, available and even naked woman by whom he is intimately surrounded.” By the end of the 1990’s, the executive motto might as well have been ”If it feels good, do it.”

How did this change in corporate culture happen? Economists and management theorists are only beginning to explore that question, but it’s easy to suggest a few factors. One was the changing structure of financial markets. In his new book, ”Searching for a Corporate Savior,” Rakesh Khurana of Harvard Business School suggests that during the 1980’s and 1990’s, ”managerial capitalism” — the world of the man in the gray flannel suit — was replaced by ”investor capitalism.” Institutional investors weren’t willing to let a C.E.O. choose his own successor from inside the corporation; they wanted heroic leaders, often outsiders, and were willing to pay immense sums to get them. The subtitle of Khurana’s book, by the way, is ”The Irrational Quest for Charismatic C.E.O.’s.”

But fashionable management theorists didn’t think it was irrational. Since the 1980’s there has been ever more emphasis on the importance of ”leadership” — meaning personal, charismatic leadership. When Lee Iacocca of Chrysler became a business celebrity in the early 1980’s, he was practically alone: Khurana reports that in 1980 only one issue of Business Week featured a C.E.O. on its cover. By 1999 the number was up to 19. And once it was considered normal, even necessary, for a C.E.O. to be famous, it also became easier to make him rich.

Economists also did their bit to legitimize previously unthinkable levels of executive pay. During the 1980’s and 1990’s a torrent of academic papers — popularized in business magazines and incorporated into consultants’ recommendations — argued that Gordon Gekko was right: greed is good; greed works. In order to get the best performance out of executives, these papers argued, it was necessary to align their interests with those of stockholders. And the way to do that was with large grants of stock or stock options.

It’s hard to escape the suspicion that these new intellectual justifications for soaring executive pay were as much effect as cause. I’m not suggesting that management theorists and economists were personally corrupt. It would have been a subtle, unconscious process: the ideas that were taken up by business schools, that led to nice speaking and consulting fees, tended to be the ones that ratified an existing trend, and thereby gave it legitimacy.

What economists like Piketty and Saez are now suggesting is that the story of executive compensation is representative of a broader story. Much more than economists and free-market advocates like to imagine, wages — particularly at the top — are determined by social norms. What happened during the 1930’s and 1940’s was that new norms of equality were established, largely through the political process. What happened in the 1980’s and 1990’s was that those norms unraveled, replaced by an ethos of ”anything goes.” And a result was an explosion of income at the top of the scale.

IV. The Price of Inequality It was one of those revealing moments. Responding to an e-mail message from a Canadian viewer, Robert Novak of ”Crossfire” delivered a little speech: ”Marg, like most Canadians, you’re ill informed and wrong. The U.S. has the longest standard of living — longest life expectancy of any country in the world, including Canada. That’s the truth.”

But it was Novak who had his facts wrong. Canadians can expect to live about two years longer than Americans. In fact, life expectancy in the U.S. is well below that in Canada, Japan and every major nation in Western Europe. On average, we can expect lives a bit shorter than those of Greeks, a bit longer than those of Portuguese. Male life expectancy is lower in the U.S. than it is in Costa Rica.

Still, you can understand why Novak assumed that we were No. 1. After all, we really are the richest major nation, with real G.D.P. per capita about 20 percent higher than Canada’s. And it has been an article of faith in this country that a rising tide lifts all boats. Doesn’t our high and rising national wealth translate into a high standard of living — including good medical care — for all Americans?

Well, no. Although America has higher per capita income than other advanced countries, it turns out that that’s mainly because our rich are much richer. And here’s a radical thought: if the rich get more, that leaves less for everyone else.

That statement — which is simply a matter of arithmetic — is guaranteed to bring accusations of ”class warfare.” If the accuser gets more specific, he’ll probably offer two reasons that it’s foolish to make a fuss over the high incomes of a few people at the top of the income distribution. First, he’ll tell you that what the elite get may look like a lot of money, but it’s still a small share of the total — that is, when all is said and done the rich aren’t getting that big a piece of the pie. Second, he’ll tell you that trying to do anything to reduce incomes at the top will hurt, not help, people further down the distribution, because attempts to redistribute income damage incentives.

These arguments for lack of concern are plausible. And they were entirely correct, once upon a time — namely, back when we had a middle-class society. But there’s a lot less truth to them now.

First, the share of the rich in total income is no longer trivial. These days 1 percent of families receive about 16 percent of total pretax income, and have about 14 percent of after-tax income. That share has roughly doubled over the past 30 years, and is now about as large as the share of the bottom 40 percent of the population. That’s a big shift of income to the top; as a matter of pure arithmetic, it must mean that the incomes of less well off families grew considerably more slowly than average income. And they did. Adjusting for inflation, average family income — total income divided by the number of families — grew 28 percent from 1979 to 1997. But median family income — the income of a family in the middle of the distribution, a better indicator of how typical American families are doing — grew only 10 percent. And the incomes of the bottom fifth of families actually fell slightly.

Let me belabor this point for a bit. We pride ourselves, with considerable justification, on our record of economic growth. But over the last few decades it’s remarkable how little of that growth has trickled down to ordinary families. Median family income has risen only about 0.5 percent per year — and as far as we can tell from somewhat unreliable data, just about all of that increase was due to wives working longer hours, with little or no gain in real wages. Furthermore, numbers about income don’t reflect the growing riskiness of life for ordinary workers. In the days when General Motors was known in-house as Generous Motors, many workers felt that they had considerable job security — the company wouldn’t fire them except in extremis. Many had contracts that guaranteed health insurance, even if they were laid off; they had pension benefits that did not depend on the stock market. Now mass firings from long-established companies are commonplace; losing your job means losing your insurance; and as millions of people have been learning, a 401(k) plan is no guarantee of a comfortable retirement.

Still, many people will say that while the U.S. economic system may generate a lot of inequality, it also generates much higher incomes than any alternative, so that everyone is better off. That was the moral Business Week tried to convey in its recent special issue with ”25 Ideas for a Changing World.” One of those ideas was ”the rich get richer, and that’s O.K.” High incomes at the top, the conventional wisdom declares, are the result of a free-market system that provides huge incentives for performance. And the system delivers that performance, which means that wealth at the top doesn’t come at the expense of the rest of us.

A skeptic might point out that the explosion in executive compensation seems at best loosely related to actual performance. Jack Welch was one of the 10 highest-paid executives in the United States in 2000, and you could argue that he earned it. But did Dennis Kozlowski of Tyco, or Gerald Levin of Time Warner, who were also in the top 10? A skeptic might also point out that even during the economic boom of the late 1990’s, U.S. productivity growth was no better than it was during the great postwar expansion, which corresponds to the era when America was truly middle class and C.E.O.’s were modestly paid technocrats.

But can we produce any direct evidence about the effects of inequality? We can’t rerun our own history and ask what would have happened if the social norms of middle-class America had continued to limit incomes at the top, and if government policy had leaned against rising inequality instead of reinforcing it, which is what actually happened. But we can compare ourselves with other advanced countries. And the results are somewhat surprising.

Many Americans assume that because we are the richest country in the world, with real G.D.P. per capita higher than that of other major advanced countries, Americans must be better off across the board — that it’s not just our rich who are richer than their counterparts abroad, but that the typical American family is much better off than the typical family elsewhere, and that even our poor are well off by foreign standards.

But it’s not true. Let me use the example of Sweden, that great conservative bete noire.

A few months ago the conservative cyberpundit Glenn Reynolds made a splash when he pointed out that Sweden’s G.D.P. per capita is roughly comparable with that of Mississippi — see, those foolish believers in the welfare state have impoverished themselves! Presumably he assumed that this means that the typical Swede is as poor as the typical resident of Mississippi, and therefore much worse off than the typical American.

But life expectancy in Sweden is about three years higher than that of the U.S. Infant mortality is half the U.S. level, and less than a third the rate in Mississippi. Functional illiteracy is much less common than in the U.S.

How is this possible? One answer is that G.D.P. per capita is in some ways a misleading measure. Swedes take longer vacations than Americans, so they work fewer hours per year. That’s a choice, not a failure of economic performance. Real G.D.P. per hour worked is 16 percent lower than in the United States, which makes Swedish productivity about the same as Canada’s.

But the main point is that though Sweden may have lower average income than the United States, that’s mainly because our rich are so much richer. The median Swedish family has a standard of living roughly comparable with that of the median U.S. family: wages are if anything higher in Sweden, and a higher tax burden is offset by public provision of health care and generally better public services. And as you move further down the income distribution, Swedish living standards are way ahead of those in the U.S. Swedish families with children that are at the 10th percentile — poorer than 90 percent of the population — have incomes 60 percent higher than their U.S. counterparts. And very few people in Sweden experience the deep poverty that is all too common in the United States. One measure: in 1994 only 6 percent of Swedes lived on less than $11 per day, compared with 14 percent in the U.S.

The moral of this comparison is that even if you think that America’s high levels of inequality are the price of our high level of national income, it’s not at all clear that this price is worth paying. The reason conservatives engage in bouts of Sweden-bashing is that they want to convince us that there is no tradeoff between economic efficiency and equity — that if you try to take from the rich and give to the poor, you actually make everyone worse off. But the comparison between the U.S. and other advanced countries doesn’t support this conclusion at all. Yes, we are the richest major nation. But because so much of our national income is concentrated in relatively few hands, large numbers of Americans are worse off economically than their counterparts in other advanced countries.

And we might even offer a challenge from the other side: inequality in the United States has arguably reached levels where it is counterproductive. That is, you can make a case that our society would be richer if its richest members didn’t get quite so much.

I could make this argument on historical grounds. The most impressive economic growth in U.S. history coincided with the middle-class interregnum, the post-World War II generation, when incomes were most evenly distributed. But let’s focus on a specific case, the extraordinary pay packages of today’s top executives. Are these good for the economy?

Until recently it was almost unchallenged conventional wisdom that, whatever else you might say, the new imperial C.E.O.’s had delivered results that dwarfed the expense of their compensation. But now that the stock bubble has burst, it has become increasingly clear that there was a price to those big pay packages, after all. In fact, the price paid by shareholders and society at large may have been many times larger than the amount actually paid to the executives.

It’s easy to get boggled by the details of corporate scandal — insider loans, stock options, special-purpose entities, mark-to-market, round-tripping. But there’s a simple reason that the details are so complicated. All of these schemes were designed to benefit corporate insiders — to inflate the pay of the C.E.O. and his inner circle. That is, they were all about the ”chaos of competitive avarice” that, according to John Kenneth Galbraith, had been ruled out in the corporation of the 1960’s. But while all restraint has vanished within the American corporation, the outside world — including stockholders — is still prudish, and open looting by executives is still not acceptable. So the looting has to be camouflaged, taking place through complicated schemes that can be rationalized to outsiders as clever corporate strategies.

Economists who study crime tell us that crime is inefficient — that is, the costs of crime to the economy are much larger than the amount stolen. Crime, and the fear of crime, divert resources away from productive uses: criminals spend their time stealing rather than producing, and potential victims spend time and money trying to protect their property. Also, the things people do to avoid becoming victims — like avoiding dangerous districts — have a cost even if they succeed in averting an actual crime.

The same holds true of corporate malfeasance, whether or not it actually involves breaking the law. Executives who devote their time to creating innovative ways to divert shareholder money into their own pockets probably aren’t running the real business very well (think Enron, WorldCom, Tyco, Global Crossing, Adelphia . . . ). Investments chosen because they create the illusion of profitability while insiders cash in their stock options are a waste of scarce resources. And if the supply of funds from lenders and shareholders dries up because of a lack of trust, the economy as a whole suffers. Just ask Indonesia.

The argument for a system in which some people get very rich has always been that the lure of wealth provides powerful incentives. But the question is, incentives to do what? As we learn more about what has actually been going on in corporate America, it’s becoming less and less clear whether those incentives have actually made executives work on behalf of the rest of us.

V. Inequality and Politics In September the Senate debated a proposed measure that would impose a one-time capital gains tax on Americans who renounce their citizenship in order to avoid paying U.S. taxes. Senator Phil Gramm was not pleased, declaring that the proposal was ”right out of Nazi Germany.” Pretty strong language, but no stronger than the metaphor Daniel Mitchell of the Heritage Foundation used, in an op-ed article in The Washington Times, to describe a bill designed to prevent corporations from rechartering abroad for tax purposes: Mitchell described this legislation as the ”Dred Scott tax bill,” referring to the infamous 1857 Supreme Court ruling that required free states to return escaped slaves.

Twenty years ago, would a prominent senator have likened those who want wealthy people to pay taxes to Nazis? Would a member of a think tank with close ties to the administration have drawn a parallel between corporate taxation and slavery? I don’t think so. The remarks by Gramm and Mitchell, while stronger than usual, were indicators of two huge changes in American politics. One is the growing polarization of our politics — our politicians are less and less inclined to offer even the appearance of moderation. The other is the growing tendency of policy and policy makers to cater to the interests of the wealthy. And I mean the wealthy, not the merely well-off: only someone with a net worth of at least several million dollars is likely to find it worthwhile to become a tax exile.

You don’t need a political scientist to tell you that modern American politics is bitterly polarized. But wasn’t it always thus? No, it wasn’t. From World War II until the 1970’s — the same era during which income inequality was historically low — political partisanship was much more muted than it is today. That’s not just a subjective assessment. My Princeton political science colleagues Nolan McCarty and Howard Rosenthal, together with Keith Poole at the University of Houston, have done a statistical analysis showing that the voting behavior of a congressman is much better predicted by his party affiliation today than it was 25 years ago. In fact, the division between the parties is sharper now than it has been since the 1920’s.

What are the parties divided about? The answer is simple: economics. McCarty, Rosenthal and Poole write that ”voting in Congress is highly ideological — one-dimensional left/right, liberal versus conservative.” It may sound simplistic to describe Democrats as the party that wants to tax the rich and help the poor, and Republicans as the party that wants to keep taxes and social spending as low as possible. And during the era of middle-class America that would indeed have been simplistic: politics wasn’t defined by economic issues. But that was a different country; as McCarty, Rosenthal and Poole put it, ”If income and wealth are distributed in a fairly equitable way, little is to be gained for politicians to organize politics around nonexistent conflicts.” Now the conflicts are real, and our politics is organized around them. In other words, the growing inequality of our incomes probably lies behind the growing divisiveness of our politics.

But the politics of rich and poor hasn’t played out the way you might think. Since the incomes of America’s wealthy have soared while ordinary families have seen at best small gains, you might have expected politicians to seek votes by proposing to soak the rich. In fact, however, the polarization of politics has occurred because the Republicans have moved to the right, not because the Democrats have moved to the left. And actual economic policy has moved steadily in favor of the wealthy. The major tax cuts of the past 25 years, the Reagan cuts in the 1980’s and the recent Bush cuts, were both heavily tilted toward the very well off. (Despite obfuscations, it remains true that more than half the Bush tax cut will eventually go to the top 1 percent of families.) The major tax increase over that period, the increase in payroll taxes in the 1980’s, fell most heavily on working-class families.

The most remarkable example of how politics has shifted in favor of the wealthy — an example that helps us understand why economic policy has reinforced, not countered, the movement toward greater inequality — is the drive to repeal the estate tax. The estate tax is, overwhelmingly, a tax on the wealthy. In 1999, only the top 2 percent of estates paid any tax at all, and half the estate tax was paid by only 3,300 estates, 0.16 percent of the total, with a minimum value of $5 million and an average value of $17 million. A quarter of the tax was paid by just 467 estates worth more than $20 million. Tales of family farms and businesses broken up to pay the estate tax are basically rural legends; hardly any real examples have been found, despite diligent searching.

You might have thought that a tax that falls on so few people yet yields a significant amount of revenue would be politically popular; you certainly wouldn’t expect widespread opposition. Moreover, there has long been an argument that the estate tax promotes democratic values, precisely because it limits the ability of the wealthy to form dynasties. So why has there been a powerful political drive to repeal the estate tax, and why was such a repeal a centerpiece of the Bush tax cut?

There is an economic argument for repealing the estate tax, but it’s hard to believe that many people take it seriously. More significant for members of Congress, surely, is the question of who would benefit from repeal: while those who will actually benefit from estate tax repeal are few in number, they have a lot of money and control even more (corporate C.E.O.’s can now count on leaving taxable estates behind). That is, they are the sort of people who command the attention of politicians in search of campaign funds.

But it’s not just about campaign contributions: much of the general public has been convinced that the estate tax is a bad thing. If you try talking about the tax to a group of moderately prosperous retirees, you get some interesting reactions. They refer to it as the ”death tax”; many of them believe that their estates will face punitive taxation, even though most of them will pay little or nothing; they are convinced that small businesses and family farms bear the brunt of the tax.

These misconceptions don’t arise by accident. They have, instead, been deliberately promoted. For example, a Heritage Foundation document titled ”Time to Repeal Federal Death Taxes: The Nightmare of the American Dream” emphasizes stories that rarely, if ever, happen in real life: ”Small-business owners, particularly minority owners, suffer anxious moments wondering whether the businesses they hope to hand down to their children will be destroyed by the death tax bill, . . . Women whose children are grown struggle to find ways to re-enter the work force without upsetting the family’s estate tax avoidance plan.” And who finances the Heritage Foundation? Why, foundations created by wealthy families, of course.

The point is that it is no accident that strongly conservative views, views that militate against taxes on the rich, have spread even as the rich get richer compared with the rest of us: in addition to directly buying influence, money can be used to shape public perceptions. The liberal group People for the American Way’s report on how conservative foundations have deployed vast sums to support think tanks, friendly media and other institutions that promote right-wing causes is titled ”Buying a Movement.”

Not to put too fine a point on it: as the rich get richer, they can buy a lot of things besides goods and services. Money buys political influence; used cleverly, it also buys intellectual influence. A result is that growing income disparities in the United States, far from leading to demands to soak the rich, have been accompanied by a growing movement to let them keep more of their earnings and to pass their wealth on to their children.

This obviously raises the possibility of a self-reinforcing process. As the gap between the rich and the rest of the population grows, economic policy increasingly caters to the interests of the elite, while public services for the population at large — above all, public education — are starved of resources. As policy increasingly favors the interests of the rich and neglects the interests of the general population, income disparities grow even wider.

VI. Plutocracy? In 1924, the mansions of Long Island’s North Shore were still in their full glory, as was the political power of the class that owned them. When Gov. Al Smith of New York proposed building a system of parks on Long Island, the mansion owners were bitterly opposed. One baron — Horace Havemeyer, the ”sultan of sugar” — warned that North Shore towns would be ”overrun with rabble from the city.” ”Rabble?” Smith said. ”That’s me you’re talking about.” In the end New Yorkers got their parks, but it was close: the interests of a few hundred wealthy families nearly prevailed over those of New York City’s middle class.

America in the 1920’s wasn’t a feudal society. But it was a nation in which vast privilege — often inherited privilege — stood in contrast to vast misery. It was also a nation in which the government, more often than not, served the interests of the privileged and ignored the aspirations of ordinary people.

Those days are past — or are they? Income inequality in America has now returned to the levels of the 1920’s. Inherited wealth doesn’t yet play a big part in our society, but given time — and the repeal of the estate tax — we will grow ourselves a hereditary elite just as set apart from the concerns of ordinary Americans as old Horace Havemeyer. And the new elite, like the old, will have enormous political power.

Kevin Phillips concludes his book ”Wealth and Democracy” with a grim warning: ”Either democracy must be renewed, with politics brought back to life, or wealth is likely to cement a new and less democratic regime — plutocracy by some other name.” It’s a pretty extreme line, but we live in extreme times. Even if the forms of democracy remain, they may become meaningless. It’s all too easy to see how we may become a country in which the big rewards are reserved for people with the right connections; in which ordinary people see little hope of advancement; in which political involvement seems pointless, because in the end the interests of the elite always get served.

Am I being too pessimistic? Even my liberal friends tell me not to worry, that our system has great resilience, that the center will hold. I hope they’re right, but they may be looking in the rearview mirror. Our optimism about America, our belief that in the end our nation always finds its way, comes from the past — a past in which we were a middle-class society. But that was another country.

Paul Krugman is a Times columnist and a professor at Princeton.

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