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Monday, December 20, 2010

Flashback: Citizens Councils Touted

'Racial Integrity,' 'Christian Love And Segregation'


Let's take a further look at the Citizens Council, the Civil Rights-era segregationist group that was recently praised by potential presidential candidate Gov. Haley Barbour (R-MS) -- for keeping order, he said, by deterring Ku Klux Klan activity during the civil rights movement.
Here is a Council newspaper from 1956, based in Jackson, Mississippi (which is roughly 40 miles from Barbour's hometown of Yazoo City). The paper includes such headlines as: "Christian Love And Segregation"; "Council Movement Spreads As Nation Reacts to Danger"; "Negroes Taking Over"; "Baptists Rap Mixing" (note: In 1950's American English, "rap" in this context meant to harshly criticize, similar to "blast" in a headline now); "Rape In Germany," warning of alleged rapes of German women by African-American soldiers; "Lady Veteran Raps Hospital Mixology"; and "Enemy Made Large Gains In 1955."
We located the copy through the University of Tennessee.
(Click image to enlarge.)
There is also a political cartoon, "The Aerial Rights Division," showing black crows saying "Mix!" "Mix!" as they stand ready to barge in on some white birds' nest, with the white birds aghast at the concept. An accompanying short essay explains how birds keep to their own species and do not mix with other kinds of birds. (This would seem to imply that black people might be some other species than homo sapiens.)
In addition, via Miami University, here is a road sign that the group had posted in 1964, which was seen by civil rights workers touring the state as part of the "Freedom Summer" voter-registration campaign:
The sign bears the group's message: "States Rights - Racial Integrity."
The Citizens Councils were founded in Mississippi in 1954, in protest of the Brown v. Board of Educationdecision that declared public school segregation to be unconstitutional. The councils were dedicated to political activities opposing civil rights, notably boycotts of pro-civil rights individuals -- including a famous instance by the group in Barbour's town. It was distinguished from the Klan by the public self-identification of its members, and its image of suits and ties as opposed to white robes and nooses.
In a profile in the Weekly Standard, Barbour recalled the group in positive terms:
"You heard of the Citizens Councils? Up north they think it was like the KKK. Where I come from it was an organization of town leaders. In Yazoo City they passed a resolution that said anybody who started a chapter of the Klan would get their ass run out of town. If you had a job, you'd lose it. If you had a store, they'd see nobody shopped there. We didn't have a problem with the Klan in Yazoo City."
In an interview with me earlier, Barbour's spokesman insisted that the governor is not a racist.

“ARMEY: WE HAVE TO RAISE THE DEBT CEILING ”

Date Published: December 15, 2010

Publication: CNBC.com
Author: Lori Ann LaRocco
There used to be a joke that went like this. Two guys were sitting in a bar talking politics. "So what party do you support," one fellow asked. "I'm not a supporter of any organized political party," the other fellow said. "Me neither," said the first guy. "I'm a Democrat."
These days both the Democrats and Republicans seem to be fracturing under the weight of the government's budget deficit, taxes, and the still stymied economic recovery. I decided to speak with the Godfather of the Tea Party, Former House Majority Leader Dick Armey. FreedomWorks, his organization, has been a vocal supporter on the extension of the tax cuts. I asked him about the division within the Democratic Party and the Republican Party when it comes to taxes.
DA: The Democrats crack me up. They are fiscally conservative when it comes to cutting taxes or even in this case, avoiding a tax increase because they see the government is losing money and to them its all about the government. But it's not really. Being "fiscally conservative" is a line they can bend. Because the fact of the matter is at the same time they want to increase spending and resist any efforts to cut spending. So the fact of the matter is that we are avoiding a tax increase.
If you use dynamic analysis, you find that the tax increase would result in a reduced level of federal revenues because of the negative impact the tax increases would have on the economy. I find a lot of confused thinking going on here. I'm not as concerned as the Democrats confusion as I am with the confusion going on with the Republicans and Conservatives because you expect Democrats to be confused because they are not deep thinkers.
LL: I was going to bring up the division among some members in the Tea Party on this tax cut.
DA: I believe in a dynamic model while others believe in a static model. When Representative Michele Bachmann (R-MN) says she can't vote for these tax cuts because she believes it will result in an increase in the deficit and she's a purist on the deficit, essentially she is denying supply side economists which, ironically, was the argument when they asked for a positive reduction in taxes. It seems to me, there are a lot of people allowing their too quick reactions to lead them to their decision.
LL: What's your message to your fellow GOP and Tea Party members who are divided on this issue?
DA: My message is the same since Kennedy in 1962 (when I was a young economics student at the time) as well as during the time of Ronald Reagan in 1982. If you cut taxes you encourage growth in the economy which results in higher revenues. If in fact the economy is struggling and you allow taxes to go up what you have done is administer a sleeping pill on the economy. Why would you let this economy be subjected to a knock out pill when it is struggling to get back on its feet? For the life of me, I just don't get it.
LL: Wilbur Ross recently told me he thinks the Bush Tax Cuts should be made permanent. Do you agree?
DA: Of course they should be. I thought so when we passed them in the first place ten years ago but the fact was there was a bizarre rule in the Senate that made it impossible for the Senate to pass a permanent reduction in taxes. I'd love to see a permanent reduction in the rates, but you can't get it, so take what you can. Soon you will have a new Republican majority in the House, you'll have probably have a Republican majority in the Senate in two years, and you'll probably have a Republican President in two years so that will be the time to start talking about permanence.
LL: The President recently spoke about reforming the U.S. tax code. What would you like to see done?
DA: Flat tax is the answer. The Democrats want to keep the multi-tier tax system and to keep it more progressive. They want to keep the double taxation on capital earnings and they want to take away the mortgage deduction and tax exemption of health insurance. So basically, what the Democrats want to do is they want to simplify the code by taking away things that are beneficial to the taxpayer and effectively raising the rate. But, if you to rationalize the tax system in America and make it a system that is no longer counterproductive to economic performance than to do a flat tax.
LL: Extending the unemployment insurance has been a sticking point for some GOP and Tea Party Members. Is this just lip flap right now? Surely they must be happy with this compromise?
DA: At the end of the day, the Democrats can take the unemployment extensions and pass them with more than a few Republican votes, so essentially the inclusion of the unemployment extension in the Bush Tax Cuts deal is essentially a placebo to Obama's base. Republicans should not think that somehow they gave in on the extension of unemployment insurance. The Democrats are capable of passing it without this tax bill.
LL: FreedomWorks is in favor of this tax cut extension and there are Tea Party members who are very vocal in opposition. Do you think this leaves the Tea Party open up to criticism that they are not united and have strayed from their message?
DA: No, not at all. If I wanted to be entertained by intra-party splits and confusion, I would be more concerned about with what's going on within the Democratic Party. Things are being said by members in regards to this President on public airwaves that I would never even say in private. The grass-roots movement of the Tea Party has a broad, diverse point of view. The one thing that holds us together is our opposition to big government. The Democrats, if they want to say there is now a wide diversion in the point of view among members of a grass-roots movement while they ignore the fact that their own elected office holders are saying the most toxic things about this President is absurd.
LL: What are your thoughts on Speaker Pelosi? Her statement on the Bush Tax Cuts was noncommittal. Were you surprised she retained her leadership position for the next Congress?
DA: I think she has a lot of confusion going on right now.There is a lot of anger and people are upset on her side. Fundamentally she is a left-wing, big government type of person. That's the language she knows but they are not speaking that language right now in Congress. So now she is trying to figure out what to say in this new world being defined by these conservative activists.
Remember how the President explained that the people who are disagreeing with him are doing so because they were scared? He said when they get scared, they get confused, and when they get scared and confused, they disagree with me. I think Nancy Pelosi is scared and confused.
LL: Do you think the President will address the deficit next Congress?
DA: Remember when Al Gore got all excited about the lock box? I said, wait a minute, that's our gimmick! I think the President will use the language but other than the language of income redistribution, the President doesn't really much understand any language of public policy. I'm sure he'll talk deficits and so on, but at some point he's going to get back to his fundamental belief in building a bigger government to create a larger private sector. He still believes the public sector carries the private sector.
LL: Next year the debt ceiling will be voted on. Do you think the GOP in the House should make it a single vote instead of lumping it into the budget? Should the debt ceiling be raised?
DA: I would make it a separate vote and put it this way when voting in favor to raise the debt ceiling: We have to raise the debt ceiling because of the prolific spending habits of past Congresses and of course we are the new Congress that will change those patterns. But we are required to do this now in order to avoid a national fiscal calamity. But this will be the last time and we will get our House in order. 

“JOHN BOEHNER'S TEA PARTY NIGHTMARE”

Date Published: December 19, 2010

Publication: The Daily Beast
Author: Benjamin Sarlin
The incoming House speaker rode a Tea Party wave into the majority, but a debt-limit vote as early as next month could cost him their backing. Benjamin Sarlin on the battle that can’t come soon enough for Democrats.
Rep. John Boehner owes no small part of his imminent promotion to the speaker’s office to the Tea Party, whose support he courted early and often en route to a landslide takeover of the House. But he may lose that support before he’s even begun to wield his new power.
The movement scored one of its first major substantive victories this week, rallying Republican lawmakers against a $1.3 trillion stimulus over its inclusion of $8 billion worth of earmarks—many of which they had proposed themselves. That surprise success means the new Congress will have to work out its budget quickly upon arrival, setting up immediate fights with a White House ready to go to war to protect health-care funding and head off any spending cuts that could undermine the economic stimulus package it negotiated as part of this month’s tax compromise. Expectations will be sky high for the new majority to slash the budget, and Republicans’ relatively modest proposals in their Pledge to America may not be enough to cut it with the activist base, many of whom were critical of its limited scope.
“Tea Partiers and small-government conservatives expect to see major legislative action right away next year,” Matt Kibbe, president of FreedomWorks, said in an email. “Make no mistake, the new Congressional Freshman Class was elected to control and reduce the size and scope of government.”
The coming vote on the debt limit promises to be even more contentious. The federal government will run out of money early next year unless more borrowing is authorized, and even the most extreme budget slashing proposals out there will still means deficits for at least the medium term. A failure to pass the bill could spark a financial crisis, shut down the government, and turn big business against the GOP, making it a must-pass measure. But it’s also a bill that’s easy to demagogue, as the many Republicans who attacked incumbent Democrats for their votes on increasing the debt limit on the campaign trail discovered this year. The Republican caucus voted unanimously against the last increase in the debt ceiling, and a number have already signaled they won’t authorize another once they’re in the majority. After two years of heated rhetoric on the issue, Boehner is already warning conservatives to cool it.
“This is going to be probably the first really big adult moment for the new Republican majority,” Boehner told The New Yorker in a recent interview. “You can underline ‘adult.’ And for people who’ve never been in politics it’s going to be one of those growing moments. It’s going to be difficult, I’m certainly well aware of that. But we’ll have to find a way to help educate members and help people understand the serious problem that would exist if we didn’t do it.”
Kibbe said the House in January has to prove immediately that it is serious about spending—for example, by joining Sarah Palin in embracing Rep. Paul Ryan’s (R-WI) Social Security- and Medicare-slashing budget plan—if it wants to keep the Tea Party’s support through the vote.
“If nothing is done on the part of the newly elected members of Congress and the first major vote is raising the debt limit, that would be unacceptable,” he told The Daily Beast. “If conservatives make any kind of concessions, there will have to be proof by legislation passed that this situation is not going to happen again. A budget would have to be drafted that is substantially smaller than previous years.”
Many liberal commentators were upset with the White House for not including an increase of the debt ceiling in its tax compromise, but some Democratic lawmakers are giddy at the prospect of forcing Republicans to share responsibility for the deficit. Harry Reid said recently that he wanted the GOP to finally have a “buy-in on the debt.” Many believe Democrats will be on more favorable ground politically than during the Obama-McConnell compromise, unrestrained by the time limit of a lame duck session and able to slam Republicans as deficit hypocrites for their recent support of more than $800 billion in budget-busting tax breaks.
“You don’t want to let them off the hook; it would be a favor to the Republicans they have not earned,” Rep. Barney Frank (D-MA) said of the debt-limit fight. “The majority party has some responsibilities, and I think they should have to confront the unreality of what they have committed themselves to.”
Rep. Jim McDermott (D-WA) said Democrats should use the moment as a “leverage point” to demand concessions in exchange for their debt limit votes while Boehner squirmed to corral his own members.
“The come-to-Jesus vote in the House of Representatives is going to be the debt limit,” he said. “Right now you have people prancing around saying, ‘I’m going to cut, I’m going to cut, I’m going to cut...and I’m not going to raise the debt limit.’ OK, fine.”
Some moderate Republicans have raised the notion that the wave of incoming conservative lawmakers might move to the center in the majority.
“In almost every instance, responsibility to govern brings about change in attitude,” Sen. Bob Bennett (R-UT), who lost his party’s backing in favor of a Tea Party candidate this year, told The Daily Beast in a recent interview.
And even Amy Kremer, president of the influential Tea Party Express, suggested that there may indeed be more room for compromise with the movement than some expect. “We understand that Democrats still control the White House and the Senate,” she said.

Benjamin Sarlin is the Washington correspondent for The Daily Beast and edits the site's politics blog, Beltway Beast. He previously covered New York City politics for The New York Sun and has worked for talkingpointsmemo.com.

“WILL THE REPUBLICAN LEADERSHIP FACE A TEA PARTY REBELLION?”

Discontent Boiling Over Tax Cuts Bill and House GOP Committee Leadership Positions

Date Published: December 20, 2010
Publication: ABC News
Author: Huma Khan
The new Congress hasn't been seated yet but signs of a rift are already beginning to emerge between Republican leaders and Tea Party groups who were a driving force propelling many unknown candidates to victory last month.  
From the tax cuts extension bill to the food safety legislation to Republican selections for key House committee leadership posts, Tea Party leaders have expressed outrage at what they perceive is a continuation of the same old Washington-style politics.
"In addition to the 'backroom deal' tax compromise, last week, through their appointments to chairmanships of the Energy and Commerce and the Appropriations committees, they [House Republican leaders] sent a clear message that despite an electoral victory driven by the Tea Party movement and fueled by public disgust with incumbents, Washington is back to business as usual," Tea Party Patriots founders Jenny Beth Martin and Mark Meckler wrote in a scathing op-ed in Politico.
The Tea Party dissent on tax cuts was clear in the House, where the movement's supporters like Rep. Michele Bachmann, R-Minn. -- founder of the Tea Party caucus -- voted against the bill. Sen.-elect Rand Paul of Kentucky said he would lean against voting for it if he were in office, while Tea Party darling Sarah Palin called it a "lousy deal."
The Tea Party's discontent, however, hasn't gone unnoticed. As they were assailed on the tax cuts front, the GOP leadership quickly distanced themselves from the 1,924-page, $1.1 trillion omnibus spending bill filled with $8.3 billion worth of earmarks. Many Republicans initially supported the bill and were in fact responsible themselves for many of the earmarks, including the top two pork projects.
"On the omnibus bill, [Senate majority leader] Harry Reid didn't have the votes and I think that's a testament to the strength and the power of the movement," Amy Kremer, chairwoman of the Tea Party Express, a critical player in the 2010 midterm elections, told ABC News. "The Tea Party movement is alive and well and it's still engaged and we're going to hold these people's feet to the power."
With the new Congress yet to be seated, it remains unclear how closely the Republican leadership can align their interests with that of the Tea Party movement.
But it is clear that the GOP leadership may have to shrug off some of its traditional ways of doing business.
Pressured partly by the Tea Party, many Republican lawmakers have already disavowed earmarks, saying they won't put any pork projects in bills even though they could lose millions for projects in their home districts and states.
"It's going to be a question of how seriously does the Republican leadership take the power base that's now taking their seats in Congress in January," Meckler told ABC News. "If they take it seriously and if they govern according to the mandate that the American people have given them, then I think it'll be fine. If they don't, then you're going to see a lot of in-fighting. You're going to see freshmen who are putting up a serious fight and ultimately you will see a bit more house cleaning in 2012."
The Tea Party movement emerged as a powerful force in the 2010 election cycle, helping elect members of Congress across the country, from Tim Scott in South Carolina to Mike Lee in Utah. Even though the election is over, leaders of the Tea Party movement say their work is not yet done.
"We are their probation officers," Kremer said of newly elected members of Congress.
"We've heard these people talk the talk for the past 12 months or however long during campaign season while they were running for office," Kremer said. "Now it is their time to walk the walk and we want to see it happen. And if they don't do what they said they were going to do we will remember in 2012, and it's not that far away."
In fact, preparations for 2012 have already begun in earnest. Red State's Erick Erickson published a list of potential Tea Party targets in 2012 on his popular blog. The conservative blogger advises his readers to not get all giddy about people like Sen. Olympia Snowe, R-Maine, or Sen. Scott Brown, R-Mass., who hail from moderate states, but instead target more middle-of-the-road Republicans like Sen. Bob Corker, R-Tenn., and Sen. Orrin Hatch, R-Utah "as we have a much greater certainty of both beating them in primaries and also winning the general election."
There is still a lot of "house cleaning" to be done in 2012, Meckler warns.
"We don't consider this to be an electoral cycle movement. This is a long-term approach to taking the country back to its founding principles. We expect it will take us a long time to clean up the mess," he told ABC News.
FreedomWorks, an umbrella organization for Tea Party groups, launched www.StopPorkSpending.com where people can monitor their senators' and representatives' votes on spending bills.
Tea Party Patriots is planning to launch next year an index rating of how members of Congress voted, in an effort to continue serving as the "watchdog" for the American people, Meckler said. 

Tea Party Nation Founder:

 Let's Get Rid Of The 'Socialist' Methodist Church


Tea Party Nation founder Judson Phillips has a dream: "No more Methodist Church."
blog post on his Tea Party Nation page says that on Friday he walked by the United Methodist Building in Washington D.C., which had a sign that said, "Pass the DREAM Act." Phillips wrote: " I have a DREAM. That is, no more United Methodist Church."
Phillips explains that he was formerly a member of the church, but he left because it's "the first Church of Karl Marx," and "little more than the "religious" arm of socialism."
"The Methodist church is pro-illegal immigration," he continues. "They have been in the bag for socialist health care, going as far as sending out emails to their membership "debunking" the myths of Obamacare. Say, where are the liberal complaints on the separation of church and state?"
"In short, if you hate America, you have a great future in the Methodist church," he says.
Phillips has recently argued that it's a "wise idea" to only let property owners vote. He's also defended an email he wrote calling for supporters to help "retire" Rep. Keith Ellison (D-MN) because "he is the only Muslim member of congress."

Rap News 6 - Wikileaks' Cablegate: the truth is out there


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thejuicemedia | December 17, 2010 |  likes, 116 dislikes
Juice Media Rap News, with Robert Foster. Episode 6 of the Investigative Rap Journalism has dropped: December 2010 and Cablegate has burst open. With a steady trickle of Diplomatic communiques leaking out every single day, the Book of Revelations is expanding dramatically. In all the hubbub, the global community is forced to ask questions of its leaders. At the same time, perhaps a stronger focal point for international attention is the Wikileaks leader, the elusive Julian Assange, whose impact on the global scene is testing the limits of freedom of the press. How will governmental representatives from North America, Europe and the Middle East react to having their dirty laundry leaked? Is it all just an insidious Blue Beam Psi-Ops plot hypnotically seeded by MK Ultra, the Rhodes Scholars and the TriLateral Commission? Will the world ever be the same again? Join your affable host Robert Foster, as he executes a rhyme inquisition on some of the key players in the Wiki-saga. It's diplomatic Rhym-aggedon...

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Find out more about: Wikileaks website: http://wikileaks.ch/
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CREDITS: Many thanks to the following people for lending their superb skills and/or expensive equipment to the making of this episode. Our designer, Zoe Tame for spending hours creating all the original artwork, backgrounds and vectors. Jos (DJ Treats) and Mat Soulem (Intricuts Productions) for help with the cable-intruder segment. Rosie for Hillary makeup and Alex mask; Angela, Ellen and Zoë for their dazzling appearances; Lucy for voiceover. Thanks also to Mr. T & Reagan for equipment use. And, as usual, our gratitude to Mama Wolf for her ongoing support.

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SUBTITLES: Huge thanks - once again - to Siltaar and Koolfy @ La Quadrature du Net IRC channel for creating the English and French captions. Muito obrigado, AthenasBR for rhyming Portuguese captions. Thank you Higon, for Japanese captions: ありがとう; Pavol, for rhyming Czech subtitles; Vanja for Serbian subtitles. Martin S. for Bulgarian translation;

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House GOP: Cut Gov't Spending By 20 Percent Despite Economic Impact

Brian Beutler | December 20, 2010, 11:39AM




This week, Congress is expected to continue funding the government at current levels through early March -- at which point a newly Republican House of Representatives will get to take an axe to the federal budget. Naturally, they're promising dramatic cuts in non-defense spending.
"I don't know what's going to happen here today, or tomorrow, or Sunday in terms of how we keep the government funded," said soon-to-be House Speaker John Boehner at his weekly press conference last week. "But what I can tell you is all you have to do is go to the Pledge to America and we outline pretty... clearly that we believe that spending at '08 levels is more than sufficient to run the government."
Cuts at that level would have an impact on more than departmental budgets.
The 2008 benchmark appeals to the conservative base because it predates big spending items like the stimulus bill. But it would constitute a severe reduction in spending, to levels well below those proposed by President Obama and even Senate Minority Leader Mitch McConnell.
"if you look at non-security, then it's about $88 billion, or about 20 percent below what's in the omnibus [spending bill]," says Jim Horney, a fiscal policy expert at the Center on Budget and Policy Priorities. The omnibus spending bill, which would have funded the federal government through September 2011, died in the Senate last week -- a victim of the anti-earmark hysteria that's overcome the GOP. But Boehner says earmarks weren't the only problem with the package.
"I think the spending levels were totally out of control," he said.
That's an implicit rebuke of McConnell, who basically set the overall price tag of the bill at $1.1 trillion.
If you carve out the non-defense items, according to Horney, you'd have to reduce the size of the federal government by one-fifth to return to 2008 spending levels.
"If you look at all the non-security programs, and say you can live without a fifth of this, that's a huge change," Horney says.
It's not just a problem for federal agencies themselves, which would have to slash staff and learn to operate almost overnight in a much leaner environment. It would also counteract the stimulative effects of the tax package that just passed the House and Senate.
"To the extent that if you cut discretionary funding for 2011 and 2012 deeply, that's going to offset the beneficial effect of the tax legislation that just passed," Horney adds. "That would have a very, very negative effect on the economy."
The macro impact of the GOP's plan would be distinct from the hands-on ways they might -- or might not -- direct spending. If they don't want to identify $88 billion in spending cuts, they can pass yet another continuing resolution to fund the government at slashed levels and let the executive branch sort out how to make that work. Boehner says he'd prefer to pass 12 separate appropriations bills, which would force them to single out programs and offices -- but would also allow them to hack away at the health care law by denying the Department of Health and Human Services funds they'll need to implement it.
That will be a challenge, though. "I've never seen them go through, and talk account by account, about what they would propose," Horney says.

Bernie Sanders Autotune - "Stay Today" (Filibernie Mix)


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Can Virginia Ban Gays in Its Military?


On the heels of DADT's repeal, one lawmaker is asserting his state's rights over soldiers...and everything else.

Microsoft's Cracked Windows:

 How The World's Technology Juggernaut Lost Its Buzz And Became The 'Underdog'

First Posted: 12-16-10 04:55 PM   |   Updated: 12-17-10 01:44 PM

Facebook's chief executive Mark Zuckerberg recently took the stage at a joint press conference alongside another large technology company. He described his partner using a once-unthinkable designation.
"The thing that makes Microsoft a great partner for us is that they really are the underdog," Zuckerberg said. "Because of that, they're in a structural position where they're incentivized to just go all out and innovate."
Microsoft as underdog. At the beginning of this decade, this description would have been ridiculous, like referring to the Yankees as an unsung, longshot baseball club. From the spread of personal computing through the dawn of the World Wide Web, its software governed the desktops of more than nine in ten desktop computers. Microsoft was so dominant that it became a symbol of monopoly power run amok, supposedly snuffing out innovation. Its rivals affixed pejorative labels like "Death Star" and "Evil Empire," accusing Microsoft of exploiting its control of the desktop to smother any and all potential competitors. Antitrust authorities in Washington and Brussels pursued a veritable crusade to break Microsoft into bite-sized pieces.
"Back in the 80s and 90s, Microsoft was seen as invulnerable," says Howard Anderson, a senior lecturer at MIT's Sloan School of Management.
But now, after a lost decade that has seen its fortunes sag in multiple businesses, this same company is--not without justification--referred to affectionately as the underdog by the head of a Web business that did not even exist when Microsoft first developed an Internet browser. A Newsweek columnist recently dismissedMicrosoft as no longer a source of fear in the technology world, but rather "a bit of a joke." Nearly ten years ago, a newspaper had declared Microsoft a step away from "world domination."
How did such a seemingly indomitable enterprise lose its formidable grip on the marketplace? Are Microsoft's best days now behind it? Can it recover its former glory (if not its notoriety) in the twenty-teens?
Microsoft's conspicuous slide attests to the tenuous nature of power and supremacy in the Internet age, and the degree to which the product itself--technology--can radically reshape business models, creating new markets for upstarts and opening pathways around previously insurmountable gatekeepers. In an era in which innovation is perhaps more important than ever, Microsoft's experience illustrates how nothing is really certain for anyone. 

To be sure, Microsoft remains huge and powerful. It stands as the second-largest technology company on earth after Apple in terms of market capitalization. It boasted record sales of $62.5 billion in the 2010 fiscal year. Still, it has clearly lost much of its luster, suffering through a decade pockmarked by a series of spectacular disappointments made all the more frustrating by the glittering ascents of rivals such as Apple and Google.
For Microsoft, failures and missed opportunities have recently come to outshine its many successes. There was the delay--and disaster--of Microsoft's Windows Vista operating system, widely considered one of the worst tech debacles of the decade. The software that came to market months behind schedule was panned by frustrated customers who found the too-expensive upgrade bloated, slower than its predecessor, and incompatible with hardware. There was its failed attempt to purchase Yahoo, which rebuffed many months of advances in what became a humiliating spectacle, depriving Microsoft of a crucial expansion into Web searching. There was Microsoft's new line of Kin smartphones--a D.O.A. product the company killed just 48 days after launch. There was Microsoft's disappointing effort to launch a digital music player, Zune--which has proven no match for Apple's iPod--and its failure, thus far, to produce a credible rival to the iPad, even though Microsoft led the way with a "trailblazing" tablet PC in 2001.
Seven years ago, Microsoft still controlled 35 percent of the market for software running mobile phones, but that share has since slipped to 15 percent. Internet Explorer, the Web browser whose dominance put Microsoft cross-wise with federal antitrust authorities, recently dipped below 50 percent of the market.
All of this has diminished the biggest number of all: After reaching a peak market capitalization of $642 billion in September 2000, Microsoft's worth has been sliced in half.
These reversals have occurred even as Microsoft has spent astronomic sums on research and development--$8.7 billion in the last year alone. Microsoft has also lost ground in key areas in which the Redmond giant had viable contenders well before the competition. Microsoft saw the potential of television in the mid-1990s with WebTV, years before companies like Apple and Google took up the battle for the living room.
In short, changing appetites of the marketplace, technological evolution and questionable decision-making inside Microsoft itself have combined to accomplish what antitrust regulators never did: rolling back the company's dominance and opening the terrain for newer, nimbler entrants.


Captive To Its Own Monopoly
In the telling of many technology experts, many of Microsoft missteps and stumbles are, ironically, the direct result of its very successes and core strengths. Its stranglehold on the desktop, while hugely profitable, helped turn Microsoft into an out-of-shape competitor focused on defending turf rather than scoring new hits. In seeking to maintain its dominance on the desktop, it failed to anticipate and plan for the spread of computing to mobile phones, handheld computers, the cloud, and Web-based services delivered by companies such as Google. Now, people can write documents, run spreadsheets and browse the Web without indulging any Microsoft software, steering right around the software giant.
"The fundamental challenge for Microsoft is that it is trying to protect an enormously profitable core franchise at a time in which alternative means of achieving same results put the core franchise at risk," says David Yoffie, a professor of international business administration at Harvard Business School.
Microsoft declined requests for comment.
For a time, Microsoft's size, market share, and clout meant it was large enough to smother challengers.
"If there was a market someone wanted that Microsoft had, Microsoft would roll over them," says Anderson, the Sloan School of Management professor.
Most famously, when Netscape offered a Web browser for free, Microsoft bundled Internet Explorer with Windows, effectively inserting it smack on to the screen of the vast majority of the world's desktop computers. Suddenly, Microsoft controlled the primary gateway to the Web, with all the attendant opportunities.
But this mode of building new markets by tying new products to Windows sowed a monopolistic culture inside Microsoft, one that has proven damaging in a swiftly changing marketplace. As the company focused its energies on defending its grip on the desktop (not to mention defending itself against high-profile lawsuits aimed at curbing its power), it was slow to develop new products to serve changing ways of computing, such as relying on the Web-based software that has been central to the rise of its competitors.
"It has an executive team that had not truly lived in a world of competition for perhaps a decade, and its performance in the years between 2000 and 2010 have showed this," says George Colony, CEO and chairman of Forrester Research, a technology and market research firm. "Essentially, the company had no competition for a decade and so it became out of shape and not ready to truly compete."
The trouble for Microsoft is that its core business is so huge that it indeed warrants defending. Its Windows operating system and Office suite of applications together generated around 60 percent of Microsoft's sales in the 2010 fiscal year. But time and again, Microsoft's focus on defending these areas appears to have come at the expense of timely strategic thinking about how to expand into promising new areas.
Web searching, for example, seemed in the 1990s like a niche service that could be found anywhere. Many companies failed to realize that search could be turned into the immensely profitable business that Google has proven it to be, using it as a way to attract Web surfers who could then be pointed toward other experiences including services that Microsoft previously dominated, from e-mail to instant messaging to digital calendars.
Many observers argue that Microsoft has never recovered from the departure of its co-founder, the visionary and fierce Bill Gates. He was so adept at steering the behemoth he's proved all but impossible to replace. His successor, Steve Ballmer, who became chief executive in 2000, has by many accounts fallen short, failing to match Gates' technical expertise and foresight. 

While Gates was a coder, Ballmer is known as a numbers cruncher, a math and economics major at Harvard, where he first met Gates. Without Gates' tech knowledge, some say, Ballmer has been unable to see the competitive opportunities and threats ahead.
Ballmer is "a brilliant Wall Street tactician," says the futurist Mark Anderson. "However, he couldn't program an Xbox game. He doesn't have that tech background."
Ballmer famously scoffed at the iPhone when it first launched. "There's no chance that the iPhone is going to get any significant market share," he told a television interviewer when Apple's now-ubiquitous smartphone was first released. Today, Apple owns nearly one-fourth of the market for software powering smartphones, while Microsoft has only one-tenth, according to ComScore, a marketing research firm.
An ongoing survey of over 1,000 Microsoft employees by review website Glassdoor.com concluded that 50% did not approve of Ballmer's performance as CEO, even though the company reported record revenue in the 2010 fiscal year.
Like perhaps any major company, Microsoft has also struggled to manage an increasingly enormous and fragmented operation, one with over 88,000 current employees worldwide and five major business units. In the telling of many insiders, internal politics and power struggles have often stifled innovation and thwarted coordinated action.
"A lot of time the phone division doesn't even know what the Windows division is doing," says Mary Jo Foley, a technology journalist and author of Microsoft 2.0: How Microsoft Plans to Stay Relevant in the Post-Gates Era.
In an op-ed in the New York Times published earlier this year, a former Microsoft vice-president, Dick Brass described the company as "a dysfunctional corporate culture in which the big established groups are allowed to prey upon emerging teams, belittle their efforts, compete unfairly against them for resources, and over time hector them out of existence."

The Found Decade?
Whatever happens next, at the dawn of a new decade, Microsoft appears set for a significant makeover. In recent years, as its many of its core businesses have suffered, the company has come to be seen as a predominantly business-focused enterprise, the supplier of software and services to major American companies. Many consumers have disdained Microsoft as an unsexy brand encountered primarily at work, while giving their leisure time over to the sleek realm of Apple, Google, and Facebook.
Now, Microsoft aims to change that, regaining the engagement of the American consumer even as it attempts to build on its strong legacy in the enterprise.
Microsoft chief research and strategy officer Craig Mundie says he believes the firm's way forward is to speak directly to the consumer, a strategy no doubt informed by Apple's success in getting parents, students, designers, and others to crave its white and silver devices.
"Apple has shown that if you don't focus on the consumer in this market, there's enormous risk," Yoffie says.
But many experts are dubious that Microsoft can pull off such a transition.
"Apple builds fanatics," says MIT's Anderson. "Microsoft builds people who are sullen, but not mutinous. Their DNA is large organizations, operating systems, and applications. Their DNA doesn't understand design and the consumer mind."
Microsoft's failure to see the opportunities that Apple handily seized upon hardly means it is doomed in the consumer space. HP, Sony, Nokia, and Research in Motion are just a few of the titans that missed what the Cupertino company anticipated and developed, from the rise of apps to the demand for a digital storefront for music. Some would even have bet on Apple's demise, a sign of just how much a technology company is capable of changing course--Dell founder and CEO Michael Dell said of Apple in 1997 that his advice to the then-ailing firm would be to "shut [...] down and give the money back to shareholders."
In its strange new incarnation as the underdog, Microsoft is adopting a different set of habits than those embraced by Microsoft, the overlord of yore--a cultural shift that may lead to greater innovation.
"The lost decade of Microsoft is propelling them forward now to be more daring," says Colony.
Zuckerberg, the famously youthful chief of Facebook, said he enjoyed partnering with the Microsoft because--in contrast to its days as an entrenched monopolist--the company is "just trying to rapidly gain share by doing awesome stuff that no one has talked about doing before."
In mobile, for instance, Microsoft has demonstrated a willingness to start from scratch. Microsoft's new Windows Phone 7 mobile operating system, with its trademark homescreen made up of colorful square tiles looks little like the competition and has drawn critical praise as fresh and unique. Its latest versions of Internet Explorer and Windows, and its search engine, Bing, all stand as major improvements over their predecessors.
By some accounts, Microsoft's efforts at refashioning itself have already reaped dividends. Its new mobile phone software is the product of a previously unmanageable cross-company collaboration in which the Zune, Xbox and browser teams all worked together to create an operating system that felt unified and consistent for the user. Microsoft has also scored points with Kinect, its new controller-free gaming peripheral that allows users to play games just by moving their body, which has been praised as the "future of gaming" and sold faster than the iPad during its first month on the market.
But the positive reviews mean nothing unless the customer buys in. The mobile phone now stands as the single most important venue for Microsoft in the consumer space, the place that will determine whether the company goes down as an atrophied giant or can rise anew.
The Pew Research Center's 2010 Mobile Access survey found that 40% of adults in the U.S. now use their mobile phone to go online, compose email, or instant message--a number that will almost certainly swell.
"Phones are do or die for Microsoft," says Foley.
Microsoft's deep pockets make it impossible to dismiss Windows Phone 7's prospects. The company is trying to woo developers with free phones and cash--they offered game-maker PopCap $100,000 to create marquee apps--and are investing a reported half-a-billion dollars in a blowout marketing campaign.
As the iPad solidifies its place in the technology landscape, and as other tablet computers proliferate, Microsoft will need to catch up in that sphere as well--a painful reality for a company that launched its first tablet computer almost a decade ago.
According to research from Strategy Analytics, Apple controlled 95% of the tablet market in the third quarter of 2010. There's also Google to contend with, as a host of new tablets and laptops running its Android and Chrome operating systems will be coming to the market over the next several months. While the last decade witnessed the browser wars, the coming decade will see Microsoft battle to be the operating system of choice across the slew of new devices that have come into play: phones, tablets, and TVs.
Some argue that Microsoft's aim for the consumer's affection is bound to fail, while distracting the company from its only viable mission: building on its already dominant position in the American workplace.
"If I were Steve Ballmer, I'd be doubling down on enterprise," says Foley. "That's where they're strongest and that's where they make their money."
Microsoft is hardly turning its back on the corporations that have been so good to it for so many years. It has been refining a range of offerings intended to tempt corporate IT departments, such as Azure, a cloud computing service that launched earlier this year and has attracted clients like eBay and the Department of Agriculture, and SharePoint, a line of business software products that has been Microsoft's fastest-growing ever.
But the giant is clearly gearing up for a major run to recapture the masses--this time, not by dint of its monopolistic grip on the desktop, but by the force and appeal of its innovations, another phrase not frequently uttered in connection with the company back in its halcyon days.
The only certainty is this: Microsoft will be around in a major way if for no other reason than the dollars at play.
"They have more money than God," says MIT's Anderson.