Tuesday, December 31, 2013

Will It Be a Paul Krugman-Type New Year's Celebration in Oakland?

The San Francisco Chronicle reports:
Oakland wouldn’t be Oakland if it didn’t celebrate the end of the year with a protest, or in this case two.

The folks over at Occupy Oakland have put out the call to gather at Frank Ogawa Plaza at 9:30 p.m. New Year’s Eve for a march to the North County Jail on Sixth Street downtown. Organizers won’t be going quietly either, as participants are encouraged to bring “friends, noisemakers, fireworks” to “bring the noise to inmates.”[...]On New Year’s Day, there will be a vigil from noon to 4 p.m., at the Fruitvale BART Station to commemorate the fifth anniversary of the fatal shooting of Oscar Grant by a BART police officer. The event is being billed as a celebration with live music and a guest appearance by Ryan Coogler, director of the movie “Fruitvale Station.”

The Oakland Police Department will have extra patrols downtown and throughout the city Tuesday night, according to spokeswoman Johnna Watson. Officers will be working to “facilitate the protests and marches” as well as staying on the lookout for amateur fireworks and celebratory gunfire, which have become problems during New Year’s celebrations in Oakland.

Although she wouldn’t say exactly how many extra officers will be working, Watson did say the “majority” of the force will be on the streets.
Will broken windows, a Krugman favorite to "spur the economy," be part of the protests?

Why We Sing 'Auld Lang Syne' On New Year's Eve.

TodayIfoundOut.com has the story:
This tradition is mostly thanks to Guy Lombardo and the Royal Canadian Band. While their work is largely unknown to those born in the last few decades, the band has sold over 300 million records to date. Guy Lombardo himself has three stars on the Hollywood Walk of Fame, and he was once the “Dick Clark” of New Years before Clark and his “New Year’s Rockin’ Eve,” attempting to appeal to younger audiences, started supplanting “Mr. New Year’s Eve,” Guy Lombardo.

It was in 1929 that Guy Lombardo and his band took the stage at the Roosevelt Hotel in New York City on New Year’s Eve. Their performance that night was being broadcast on the radio, before midnight Eastern-time on CBS, then after on NBC radio.

At midnight, as a transition between the broadcasts, the song they chose to play was an old Scottish folk song Lombardo had first heard from Scottish immigrants in Ontario. The song was Auld Lang Syne.

Previous to this, there are several documented instances of others singing this song on New Year’s Eve, going all the way back to the mid-nineteenth century, but it wasn’t anywhere close to the staple it would soon be after Lombardo’s performance.

2014: Will the Rich Go on Strike Against Pope Francis?

CNBC reports:

Pope Francis' critical comments about the wealthy and capitalism have at least one wealthy capitalist benefactor hesitant about giving financial support to one of the church's major fundraising projects.

At issue is an effort to raise $180 million for the restoration of St. Patrick's Cathedral in New York being spearheaded by billionaire Ken Langone, the investor known for founding Home Depot, among other things.

Langone told CNBC that one potential seven-figure donor is concerned about statements from the pope criticizing market economies as "exclusionary," urging the rich to give more to the poor and criticizing a "culture of prosperity" that leads some to become "incapable of feeling compassion for the poor."

Langone said he's raised the issue more than once with Cardinal Timothy Dolan, archbishop of New York, most recently at a breakfast in early December at which he updated him on fundraising progress.

"I've told the cardinal, 'Your Eminence, this is one more hurdle I hope we don't have to deal with. You want to be careful about generalities. Rich people in one country don't act the same as rich people in another country,' " he said[...]

Dolan told CNBC that he had heard from Langone and said, " 'Well, Ken, that would be a misunderstanding of the Holy Father's message. The pope loves poor people. He also loves rich people.'"

Paul Krugman: Hide Thy Enemy

By, Chris Rossini

As 2013 comes to a close, it's a good time for the words "Let's count".

How did you do?...."Let's count".

Did you hit your goals?..."Let's count".

In the battle of ideas, it's good strategy to "know thy enemy". Here at EPJ, we don't shy away from the opposition. In fact, we link to, critique, and tear them apart every single day. We aren't afraid of letting our readers know about "Keynesianism" or "Behaviorialists" or "MMTers" or "Bleeding-Heart Libertarians".

Dive right in!

How are you supposed to beat the other side, if you close your eyes and ears to their ideas? Further, what does it say about your ideas (and your belief in them) if you do?

Well, how does Nobel-prize winning economist Paul Krugman handle opposing ideas, specifically those that pose the greatest threat to his Keynesian-world view?

"Let's count".

In 2013, Paul Krugman mentioned:

Murray Rothbard: 0 posts
Ludwig Von Mises: 1 post
Austrian Economics: 3 posts

Krugman's major statement (in 365 days) on Austrian Economics: "Austrian economics very much has the psychology of a cult."

In a whole year? That's the big statement?

Why doesn't Krugman pick apart Austrian Economics on a daily basis? Why doesn't he link to Mises.org or EPJ, so that his supporters can see what they're up against?

Is Krugman afraid of Man, Economy & State?
Is he afraid of Human Action?
Is he afraid that his readers will find a gold mine of literature?

What's Krugman afraid of? What does he not want his readers to know?



Chris Rossini on TwitterFacebook & Google+

The One, Two, Three Punch: How Youth Will Get Screwed in 2014

1. Increasing minimum wage laws in many cities and states will make more youth unemployable, as  the mandated minimum wage will be greater than the marginal revenue product of many youth.

2. Increasing regulations will continue to suffocate many 20-somethings from becoming entrepreneurs, as the costs to meet new regulations will be prohibitive.

3. Obamacare will increase the cost of healthcare insurance for the healthy youth well over what free market insurance would cost.

Avik Roy writes:
And make no mistake: on average, sicker and older people will fare far better under Obamacare than healthy people will. According to an analysis I conducted with colleagues at the Manhattan Institute, older, sicker individuals will benefit most from Obamacare’s exchange subsidies. On the other hand, in many parts of the country, healthier Americans—especially younger ones—will see their premiums double or triple under the law.

White House Won't Release Obamacare Demographic Information

By Avik Roy

On Sunday, the Obama administration announced that a total of 1.1 million Americans have signed up for health insurance coverage on Obamacare’s federally-run exchange at Healthcare.gov. While that number falls well short of the administration’s original expectations, it is a big step up; as of the end of November, only 137,204 individuals had “selected a marketplace plan” on the state and federal exchanges combined. But the Centers for Medicare and Medicaid Services continue to conceal critical data regarding actual enrollment in the exchanges—data that will tell us whether or not Obamacare’s insurance marketplaces will ever end up functioning as they were intended.

First off, CMS won’t tell us how many people have actually enrolled in exchange-based coverage. As a reminder, you aren’t actually enrolled in a health plan unless the insurer has received your premium payment for the first month of coverage. Previously, we heard that only around 5 to 15 percent of SAMPs—people who have “selected a marketplace plan,” in CMS lingo—had actually enrolled in coverage.

In addition, in November, one of CMS’ top IT officials, Henry Chao, testified before Congress that the administration has yet to build the system needed to pay the insurers.

The most important thing CMS won’t tell us is the proportion of healthy people, as opposed to sick people, who are signing up for exchange-based coverage. If too many sick people sign up, and not enough healthy people, the average health spend per enrollee will increase, leading to higher premiums that are increasingly unaffordable for average Americans.

Read the rest here.

Mark Levin Wants To Play Russian Roulette With The Constitution

By Ben Swann

Many are starting to question the extremely hard push from many so-called self-proclaimed conservative talk show hosts regarding Mark Levin’s push for a Constitutional Convention. To many of us, it seems that the only time these talk show hosts (Limbaugh, Hannity, etc.) join together in this manner is when there is a time to bring Americans into another unconstitutional war or when it’s time to persuade Americans that  they should support another self-proclaimed “conservative” candidate that believes that the U.S. Constitution is a living document that can be altered without regard to the laws of the Constitution.

So why is it that so many are being called on by self-proclaimed conservative leaders to promote a Con Con (also known as an Article 5 Constitutional Convention)? As cruel as they are, the leaders are often heard pulling on the heart strings of Americans by claiming that that this is a way to immediately put an end to things such as abortion, American flag burning, and an unbalanced federal budget. Mark Levin, leader of the push for a Con Con, pulls on the heart strings of Americans without warning them of the real dangers of a Constitutional Convention. He does this by telling Americans that the Constitution will only be reasonably amended because we can “trust” conservative Republicans to do what is right for us at an Article 5 Constitutional Convention.

Read the rest here.

Coming in January: The Hayek List Emails

Someone was kind enough to send me a series of emails that was part on an online discussion group, known as the "Hayek List."

Participants included Walter Block, Richard Ebeling, Stephan Kinsella, Steve Howritz, Peter Boettke, Roger Garrison and others. At times the exchanges really rock. I am going to try and get permission from various members of The List to publish their emails and hope to publish them in a series, over coming weeks.

I have already received permission from Walter Block to publish the emails he contributed to exchange. In a separate email, he explained to me what got the back and forth started:
 To sum it all up, I wrote that those responsible for the min wage ought to be considered criminals, and dealt with accordingly. Horwitz said that with friends of libertarians like me, we're in trouble. I, and Stephan asked him to explain. He refused.
But the exchange goes well beyond a discussion of the criminality of those responsible for the minimum wage and touches on the mainstream view of Austrian economics, the best strategy to advance Austrian economics, Walter Block's university days etc.

There is some meaty stuff here, I hope most of the participants allow me to post their emails.


Spotted: Google Glass Wearing BART Rider

I spotted my first Google Glass wearing person, yesterday in San Francisco on BART.


All-Time-High House Prices in 10 of top 50 Metro Areas


House prices are up more than 13% from their 2007 high in Oklahoma City and by more than 6% in the Denver metro area. Prices are back to all-time highs in 10 of the nation’s 50 largest metropolitan areas, according to a Wall Street Journal analysis of price data from Zillow.

Prices are within 5% of their previous peak in San Jose, Calif.; Nashville, Tenn.; and Dallas.

 Prices are up 40% from their prior highs in Palo Alto, Calif., which is just 50 miles from San Pablo, a working-class suburb north of Oakland. Values there are still 54% below their peak. While 38% of all Bay Area ZIP Codes are back above their prior peaks, prices in another 18% are more than 25% below their previous highs, according to the Zillow data.

Nearly every ZIP Code in Oklahoma City's metro area is at a record high or within 5% of the previous high, according to the Journal analysis. Values in more than 60% of ZIP Codes in five other metro areas—Tulsa, Okla.; Buffalo, N.Y.; Rochester, N.Y.; Austin and Denver—have reached new highs.




Global Warming Scientists Forced to Admit Defeat...

The Daily Mail reports:

Chris Turney, a climate scientist and leader of the expedition, was going to document 'environmental changes' at the pole. n an interview he said he expected melting ice to play a part in expedition.

They went in search evidence of the world’s melting ice caps, but instead a team of climate scientists have been forced to abandon their mission … because the Antarctic ice is thicker than usual at this time of year.

The scientists have been stuck aboard the stricken MV Akademik Schokalskiy since Christmas Day, with repeated sea rescue attempts being abandoned as icebreaking ships failed to reach them.
Now that effort has been ditched, with experts admitting the ice is just too thick. Instead the crew have built an icy helipad, with plans afoot to rescue the 74-strong team by helicopter[...]

Australian icebreaker Aurora Australis was unable to reach them because it was not strong enough to break through.
A top-of-the-range Chinese icebreaker, the Snow Dragon ('Xue Long'), was deployed earlier in the week, and hoped to reach the ship by saturday.
However just after midnight on Friday it too got stuck just six nautical miles from the ship

Here's video from when there was still hope the Chinese ice breaker would be able to make to the ship for a rescue.

Top Ten Posts at EPJ in 2013

These posts received the most traffic at EPJ in 2013

1. Liberty Slipping: 10 Things You Could Do in 1975 That You Can't Do Now

2. 11 States That Have More People On Welfare Than Working

3. The Nightmare Ahead: 19 US Cities Have More Public Workers per Resident than Detroit

4. Jesse Benton on Mitch McConnell: "I'm sorta holding my nose for 2 years"

5. The Man Who Bought One Million Dollars Worth of Nickels

6. Bernanke: I'm Clueless About Gold

7. IT IS TIME: Move Your Money Out of the US Banking System

8. The 30 Day Reading List that will Lead You to Becoming a Knowledgeable Libertarian (On the list for the second year in a row!)

9. When Will the Final Collapse of the US Economy Occur?

10. Is Bitcoin Money?: What Economists Have To Say

Walter Block Responds to Wenzel Comments on Bitcoin

Dear Bob:


Thanks for asking me about this matter. My substantive reactions to your comments are below. But, first, before I get to that, I just wanted to say that I am in 99.9999… agreement with you on matters of Austro libertarianism. And VERY enthusiastically so. I regard your Economic Policy Journal as a no-holds-barred, magnificent, courageous publication, and I am honored to play a small but significant role in it, given my many contributions to it, and your kindness in covering and promoting my thoughts on a large number of topics. I think there are only two issues in political economy where we disagree, this one, bitcoin, and intellectual property. In other words, I have a much closer overlap with you than I do with other people I admire, such as Ludwig von Mises, Murray Rothbard, Hans Hoppe, Ron Paul, all scholars I revere, since I disagree with them on many more issues than I do with you. Also, I think it important that we air our differences on all these issues. How else are we, imperfect creatures that we are, going to get that one millionth of an inch closer to the proverbial Truth? While I’m at it, let me say this: I greatly appreciate your bravery in taking on the powers that be both within, and outside of, the Austro libertarian movement.


Best regards,


Your friend, Walter


Does Anyone Really Use Bitcoin as Money?

I see that Dr. Walter Block has made some initial comments, over at Circle Bastiat, about Bitcoin.

The main focus of his comments is with regard to Bitcoin and the regression theorem. While I do think this is an interesting topic, a few byproducts of Block's discussion of Bitcoin and the RT have caught my eye.

First, Block
writes:

Probably, the govt will soon blow this out of the water with regulations, taxes.
I agree. Both China and India have provided examples of how this could occur with their recent shutdown of Bitcoin activity. While many argue that Bitcoin is beyond the reach of governments, daily commercial transactions are not. China and India have simply made it illegal for businesses to deal in Bitcoin at the daily transaction level. Beginning and end of story.

Bitcoin at present is not a threat to Master Card, Visa or American Express. Despite all the hype, there remains very few Bitcoin transactions at the retail level. If Bitcoin ever appears to become a threat to the major current day transaction processors such as MC, V and AE, you can be sure teams of lobbyists will descend on Capitol Hill to nudge Congress into some type of regulations on transactions that will cripple Bitcoin as a method of transacting business, the type of regulations that China and India have already implemented. It can be done.


<< I fully agree with you on this.


A second point made by Block is this:

More than just a few people treat it [Bitcoin] as a money.
I'm not sure this is the case. From my perspective, people treat something as money when they think in terms of that item and are willing to enter into fixed contracts with that item. In the US, dollars are money and we daily enter into all kinds of transactions with dollars, instant transactions and longer term contractual transactions.

This is not going on with Bitcoin, though it may appear that it does. We have seen a small town sheriff say he wants to get paid in Bitcoin, but he is surely not thinking in terms of Bitcoin. His salary is fixed in terms of dollars, and each month depending upon the price of Bitcoin, he will receive payment converted to bitcoins. BUT, he is getting a fixed dollar value of income. Both Virgin Airways and Overstock have announced that they are going to accept Bitcoin, BUT both are setting prices in terms of dollars and asking for Bitcoin payments at the time of the transaction based on the fixed dollar price, not a fixed amount of bitcoins. Both VA and O also appear to be converting immediately (or plan to convert immediately in the case of O) their bitcoin receipts to dollars.

In other words, no one is pricing things in terms of a fixed Bitcoin price, the way things are priced every day in terms of dollars. In my view, this means that Bitcoin is not being used as money, but is being used more like a gyrating American Express travelers check. If the day ever comes when prices are set in terms of fixed amounts of bitcoins, and people are willing to take their wages in terms of fixed amounts of bitcoins, then, in my view, we can say that people are treating Bitcoin as money. This is not occurring now.


<< Here we disagree a bit. It is my understanding that money is defined as a generally accepted means of final payment. In my view, it is not a necessary part of this definition that people think in terms of any given money. For example, when I go to a foreign country, where I’m going to be for only a few days, I certainly don’t think in terms of the local money. Yet, of course, it is money and I use it as such, but awkwardly so. Here’s an analogy: I think in terms of Fahrenheit, not Centigrade. People in Canada are more accustomed to the latter. But, both are of course valid ways of measuring temperature.  Ditto for English measures of weight, distance, versus the metric system. Not everyone has to think in any of these terms for them to be functioning. But is bitcoin generally accepted? Of course not. At least not yet. But, to me, it is an empirical question of whether it one day would be generally accepted, if the government kept its mitts of, which is unlikely in the extreme exactly as you say. Still, it is an interesting question. My own prediction on this is that it depends on just how badly the Fed continues to screw up. If very badly, then, long before we get to Zimbabwe or Germany in 1923, bitcoin might well become money. (Although, probably, the Canadian dollar, or the Euro, would come into play instead.) Then there is the continuum issue (Block and Barnett, 2008). Suppose that the number of people now using bitcoin doubles, and then doubles again. How much “doubling” must there be before we can call it a money, or a medium of exchange? I think there is no clear unambiguous answer to this question. It is sort of like asking, what is the right age of consent for statutory rape laws? Is it 15? 16? 14? 17? We can perhaps say that all of these ages are reasonable, and that clearly four, five, six, twenty two, twenty three, are not. The former ages are way too young, the latter too old. But, there is no one right answer, I think, that can be logically deduced from libertarian principles. In the free society, the private courts would decide matters like that.

Block also states that
I’m not aware of any formal discussion of this [Bitcoin and the regression theorem] in the literature.
I would argue that part of Murray Rothbard's critique of Hayek's support for denationalized money applies to Bitcoin (See: Murray Rothbard: Bitcoin is a Crank Scheme)
<< Here we have another disagreement. I do see your point about an analogy between Hayek’s cockamamie constructivist scheme (Block, 1999) and bitcoin; indeed, there are strong similarities. But there is a disanalogy too. For example, no one ever used Hayek’s “ducat” where at least some people use the bitcoin. Surely, that’s a pretty important distinction. By the way, Murray never said that “Bitcoin is a crank scheme.” He only said that of Hayek’s proposal. This does not mean that Murray was infallible, or that I am here guilty of employing the fallacious argument from authority. As I say above, I do disagree with Murray on some issues, but not regarding his brilliant evisceration of Hayek’s monetary crankism.
Bob, I hope this is of some help to you. I am honored that you would seek my opinion on this important issue.

Stay tuned, I am going to ask Prof. Block to respond to my thoughts.


References:
Block, Walter E. 1999. “The Gold Standard: A Critique of Friedman, Mundell, Hayek, Greenspan from the free enterprise perspective,” Managerial Finance, Vol. 25, No. 5, pp. 15-33, http://giorgio.emeraldinsight.com/Insight/viewContainer.do?containerType=Issue&containerId=13529; http://www.mises.org/etexts/goldcritique.pdf


Block, Walter and William Barnett II. 2008. “Continuums” Journal Etica e Politica / Ethics & Politics, Vol. 1, pp. 151-166, June; http://www2.units.it/~etica/ ; http://www2.units.it/~etica/2008_1/BLOCKBARNETT.pdf

Wenzel comments:

With regard to point 2:

I would argue that everyone thinks in terms of a money all the time. The reason in a foreign country one needs to use the local currency is because that is the currency people in that country think in terms of---even more so than the local language, it is necessary to transact in the local currency. In modern civilization, everyone thinks in terms of some currency. If you are in a foreign country, what happens is that you are converting in your head the exchange ratio of the currency in that country to the currency in which you think, to get a sense of what the exchange means. It is not the case that you are not thinking in terms of a money. You are thinking in terms of the money you know, always.


I would further argue that if you spent any serious length of time in a country, you would start thinking in terms of that money, perhaps becoming a bi-monetary thinker. I would argue that at present NO ONE thinks in terms of Bitcoin, anywhere. When a Bitcoin transaction is conducted, both parties are translating the transaction into the money and price structure they know. Therefore, Bitcoin is not money. I believe that at the core of money there is the necessity that one understand the broad value of goods a money can buy. When people start saying, "Oh that costs x bitcoins," without doing an additional calculation in their head to a money, that is an important step to Bitcoin becoming money. 

" Then there is the continuum issue (Block and Barnett, 2008). Suppose that the number of people now using bitcoin doubles, and then doubles again. How much “doubling” must there be before we can call it a money, or a medium of exchange?? 

I don't believe this is the important question or more correctly sufficent question to call something a money. Many people use travelers checks, and they are generally accepted, but the checks are not money. The important question to me remains are people thinking and understanding value in terms of Bitcoin--of course, the money has to be generally accepted also in a given geographic, or some other defined area. I believe both conditions are necessary.

More on point 2:

"My own prediction on this is that it depends on just how badly the Fed continues to screw up. If very badly, then, long before we get to Zimbabwe or Germany in 1923, bitcoin might well become money. (Although, probably, the Canadian dollar, or the Euro, would come into play instead.)"

I agree with this, though my fear remains that regulations would come in to block Bitcoin use at the public retail level at such time (or even before such time).


As to point 3:

I would argue that Murray, in a manner, anticipated Bitcoin when he wrote in the referenced piece:

The problem, as Hayek's mentor Ludwig von Mises used to point out, is that we might issue these notes to our heart's content, but that nobody (except perhaps a few misguided friends or relatives) would take them.

Admittedly, this is a bit of a stretch, but I believe it shows that Murray understood that an invented currency could be passed around among a group of friends. My stretch of this is my belief that Murray would consider the tech/libertarian Bitcoin fans a modern day internet equivalent of a friends group, similar to the "misguided friends or relatives" group that he mentions.

If you accept my strecth, then I think all the rest of Murray's argument applies to Bitcoin.

Treasury Secretary Lew to Launch New Year with Some Global Plotting

The U.S. Treasury has announced that Secretary Jacob J. Lew will travel to Europe January 6-8, 2014 for discussions with his international counterparts on economic developments in Europe and policies "to boost global growth and promote financial stability."

On Tuesday, January 7, the Secretary will arrive in Paris, France for meetings with French President François Hollande and Finance Minister Pierre Moscovici. In the evening, Secretary Lew will travel to Berlin, Germany.

On Wednesday, January 8, Secretary Lew will meet with German Finance Minister Wolfgang Schäuble in Berlin. In the afternoon, he will travel to Lisbon, Portugal for meetings with Portuguese Prime Minister Pedro Passos Coelho, Deputy Prime Minister Paulo Portas and Finance Minister Maria Luís Albuquerque.

Secretary Lew will return to Washington, DC the evening of January 8, 2014.

Monday, December 30, 2013

5 Richest Cities in the U.S.

There should be no question that, unfortunately, government is playing a bigger and bigger role in the economy. Washington D.C., home of those who feed off the federal government, is now ranked number 2 in terms of median income.

Video here.

How Far You Could Travel Across the U.S. in One Day, from 1800 to Present

File under: The amazing gains in our standard of living.


Knockout Game Gone Super Wild Resulting in Broken Ankle, Cracked Ribs, Knocked Out Tooth, Concussion



The Charllotesville Weekly reports:

A couple’s late night stroll on the Christmas-lit Downtown Mall turned to terror in the early morning hours of Friday, December 20, when they were brutally assaulted by three men in what appears to have been a random act of violence.

Even though one of the victims, Jeanne Doucette, managed to take photos that appear to show the assailants as they kicked and pummeled her boyfriend Marc Adams to unconsciousness, Charlottesville Police still do not have any suspects. Doucette says there were other witnesses to the crime, which allegedly occurred just outside the Wells Fargo building at around 1am as she and Adams walked from Miller’s to Rapture, and she is baffled as to why the police haven’t shared her images more widely with people who could have seen the suspects earlier in the evening.

“I cannot understand why they didn’t let people know what happened,” said Doucette, who still bore injuries from the assault when she met for an interview a week later. “Those pictures might have prompted some tips.”

The images she captured are blurry but nonetheless appear to corroborate her account of the night’s events, including the brutality of the beating, during which she says the assailants joked and laughed, even stopping to hug in the midst of the onslaught.

Doucette said the assault occurred after she and Adams, both 39, had met for a drink at Miller’s after Adams finished his shift as chef for a downtown food cart. They headed east up the Mall toward Rapture to end their night with music, when Adams tripped and fell in front of Derriere de Soie lingerie store, a block from Miller’s. As he was getting up, a man approached quickly, said something that Doucette couldn’t make out, and kicked Adams while he was on the ground, before being joined by his friends who beat Adams severely, breaking his ankle, cracking ribs and knocking out one of his teeth.

The grainy photos that Doucette took with her phone (posted below story) show the faces and clothing worn by the three alleged assailants, all black males. Doucette estimated the men were approximately  6’ tall and in their mid-20s or early 30s. In one photo, Adams is lying on his back on the Mall with a man looming over him. Doucette said the man was kicking Adams when she took the picture. In another picture, a large man in a black coat and light colored shirt appears to be moving towards Doucette’s camera as Adams is on his knees in the background.

While Doucette suffered bruising to her head and tearing of the cartilage in her ear, Adams bore the brunt of the men’s aggression, sustaining broken bones and a concussion that he said has robbed him of any memory of the incident and its immediate aftermath.

Flooded with fear and adrenaline, Doucette said, she reacted quickly after the assault began, confronting the first assailant.

“I came up and pushed him away and said, ‘What are you doing?’” she recalled.

The incident escalated when the man responded by striking her.

“The guy hits me repeatedly in the ear,” she said. “My earring was stabbing me in the head over and over.”

Two other men soon joined in the beating, Doucette said, and while they primarily focused on Adams, a local musician who at 5’5″ and 140 pounds was outsized and outnumbered, they would occasionally strike her.

“When he’d tell them to stop hitting me, they’d hit me twice,” said Doucette, who is 5’2″.

Read the rest here.

Life in the Emerging American Police State: What’s in Store for Our Freedoms in 2014?

By John W. Whitehead

     “Those who cannot remember the past are condemned to repeat it.”—George Santayana, The Life of Reason, Vol. 1

In Harold Ramis’ classic 1993 comedy Groundhog Day, TV weatherman Phil Connors (played by Bill Murray) is forced to live the same day over and over again until he not only gains some insight into his life but changes his priorities. Similarly, as I illustrate in my book A Government of Wolves: The Emerging American Police State, we in the emerging American police state find ourselves reliving the same set of circumstances over and over again—egregious surveillance, strip searches, police shootings of unarmed citizens, government spying, the criminalization of lawful activities, warmongering, etc.—although with far fewer moments of comic hilarity.

Weisenthal's Useless Rocks

By, Chris Rossini

Joe Weisenthal, the gold-hating "Stalwart" at BusinessInsider, was able to squeeze in one more anti-gold pitch before the end of 2013.

Gold is finishing down for the year for the first time in a decade, and in his signature hyperbolic style, Weisenthal says:
Everyone in the world should be happy about this development.
While the average American & European struggles, Weisenthal says we're in the clear:
The US is doing okay, the European crisis is over, and there aren't major fears of a hard landing in China. For now there's no strong reason to think the global financial system could collapse.
Let's put it this way. With all the money-printing, QE's, and stimulus packages that have littered the economic world, the only thing the digit manufacturers can point to is another artificial stock market boom that (using some BI lingo) NOBODY cares about. The rest is just an ever-growing pile of malinvestments, artificially enriched cronies, and a lot of economic pain for the common man.
A secondary effect of lower gold prices is that there's less urgency to spend labor and energy digging up gold from the ground. Watching people spend lots of resources to dig up useless rocks is a sad thing for the world, so lower prices has a nice knock-on benefits.
Now...there are plenty of physical objects on this Earth that are sitting around in desolate areas, and providing no utility to acting man. Those deserve the label "useless". Gold, on the other hand, is held by individuals all over the world, and not because of "tradition".

People, despite their government educations, know the drill. Government money always fails, without exception. You'll never see an individual sweeping gold into a sewer:


One must also wonder....if gold is just a bunch of "useless rocks" why write about it at all? Does the top brass at BusinessInsider tell The Stalwart to cover useless things? Perhaps they say: "Go write about useless rocks for our readers. And do it incessantly."
But the real reason we should be happy with the gold crash is that it proves the worth of the corpus of economic knowledge we've built up over all these years. If large government deficits and QE had resulted in hyperinflation and gold going to $10,000 then we'd pretty much have to do the drawing board in terms of what we know about the economy, and how we can prevent future crisis. The fact that the gold fever popped is a demonstrate that contra the angry-Austrian, hard-money cranks, the conventional view of the economy is more-or-less correct.
Ok, that paragraph is loaded with good stuff.

First, Weisenthal assumes that after hyperinflation, his ilk would just have to go to "the drawing board" and figure out how to "prevent a future crisis". I wouldn't be so confident. Keynesianism is running on fumes.

Maybe, just to be safe, I would suggest Joe and the gang have a few cardboard boxes on hand. And make sure to leave behind the poster. It'll act as a centerpiece for the new decor:


It's good the Stalwart got one more anti-gold piece in. The window for publishing such nonsense is quickly closing.


Chris Rossini on TwitterFacebook & Google+

The NSA Has Nearly Complete Backdoor Capability to Access Apple's iPhone

Reports the Daily Dot:

The U.S. National Security Agency has the ability to snoop on nearly every communication sent from an Apple iPhone, according to leaked documents shared by security researcher Jacob Appelbaum and German news magazine Der Spiegel.

An NSA program called DROPOUTJEEP allows the agency to intercept SMS messages, access contact lists, locate a phone using cell tower data, and even activate the device’s microphone and camera.


According to leaked documents, the NSA claims a 100 percent success rate when it comes to implanting iOS devices with spyware. The documents suggest that the NSA needs physical access to a device to install the spyware—something the agency has achieved by rerouting shipments of devices purchased online—but a remote version of the exploit is also in the works.

Appelbaum says that presents one of two possibilities:

“Either [the NSA] have a huge collection of exploits that work against Apple products, meaning they are hoarding information about critical systems that American companies produce, and sabotaging them, or Apple sabotaged it themselves,” Appelbaum said at the Chaos Communication Conference in Hamburg, Germany.

(ht Micah Armantrout)

How Detroit Went Broke


A solid analysis from the Detroit Free Press that notes:
For this report, the Free Press examined about 10,000 pages of documents gathering dust in the public library’s archives. Since most of those documents have never been digitized, the Free Press created its own database of 50 years of Detroit’s financial history. Reporters also conducted dozens of interviews with participants from the last six mayoral administrations as well as city bureaucrats and outside experts. Among the highlights from the review:

■ Taxing higher and higher: City leaders tried repeatedly to reverse sliding revenue through new taxes. Despite a new income tax in 1962, a new utility tax in 1971 and a new casino revenue tax in 1999 — not to mention several tax increases along the way — revenue in today’s dollars fell 40% from 1962 to 2012. Higher taxes helped drive residents to the suburbs and drove away business. Today, Detroit still doesn’t take in as much tax revenue as it did just from property taxes in 1963.

■ Reconsidering Coleman Young: Serving from 1974-1994, Young was the most austere Detroit mayor since World War II, reducing the workforce, department budgets and debt during a particularly nasty national recession in the early 1980s. Young was the only Detroit mayor since 1950 to preside over a city with more income than debt, although he relied heavily on tax increases to pay for services.

■ Downsizing — too little, too late: The total assessed value of Detroit property — a good gauge of the city’s tax base and its ability to pay bills — fell a staggering 77% over the past 50 years in today’s dollars. But through 2004, the city cut only 28% of its workers, even though the money to pay them was drying up. Not until the last decade did Detroit, in desperation, cut half its workforce. The city also failed to take advantage of efficiencies, such as new technology, that enabled enormous productivity gains in the broader economy.

■ Skyrocketing employee benefits: City leaders allowed legacy costs — the tab for retiree pensions and health care — to spiral out of control even as the State of Michigan and private industry were pushing workers into less costly plans. That placed major stress on the budget and diverted money from services such as streetlights and public safety. Detroit’s spending on retiree health care soared 46% from 2000 to 2012, even as its general fund revenue fell 20%.

■ Gifting a billion in bonuses: Pension officials handed out about $1 billion in bonuses from the city’s two pension funds to retirees and active city workers from 1985 to 2008. That money — mostly in the form of so-called 13th checks — could have shored up the funds and possibly prevented the city from filing for bankruptcy. If that money had been saved, it would have been worth more than $1.9 billion today to the city and pension funds, by one expert’s estimate.

■ Missing chance after chance: Contrary to myth, the city has not been in free fall since the 1960s. There have been periods of economic growth and hope, such as in the 1990s when the population decline slowed, income-tax revenue increased and city leaders balanced the budget. But leaders failed to take advantage of those moments of calm to reform city government, reduce expenses and protect the city and its residents from another downturn.

■ Borrowing more and more: Detroit went on a binge starting around 2000 to close budget holes and to build infrastructure, more than doubling debt to $8 billion by 2012. Under Archer, Detroit sold water and sewer bonds. Kilpatrick, who took office in 2002, used borrowing as his stock answer to budget issues, and Bing borrowed more than $250 million.

■ Adding the last straw — Kilpatrick’s gamble: He’s best known around the globe for a sex and perjury scandal that sent him to jail and massive corruption that threatens to send him to prison next month for more than 20 years. The corruption cases further eroded Detroit’s image and distracted the city from its fiscal storm. But perhaps the greatest damage Kilpatrick did to the city’s long-term stability was with Wall Street’s help when he borrowed $1.44 billion in a flashy high-finance deal to restructure pension fund debt. That deal, which could cost $2.8 billion over the next 22 years, now represents nearly one-fifth of the city’s debt.

With all the lost opportunities over decades, with Detroit’s debt mounting, with the housing crash and Great Recession just over the horizon, 2005 turned out to be the watershed year.
The full report is here. 

Don't Fear 'Deflation,' Unless Caused by Government

Richard Ebeling emails:

I have a new article on the news and commentary website, "EpicTimes" on, "Don't Fear 'Deflation,' Unless Caused by Government."

I argue that the general fear of "deflation" -- a general fall in the level or scale of prices -- is misplaced when brought about by cost efficiencies and productivity increases that expand the quantity of goods produced at lower costs of production, since producers are then able to sell more at lower prices for all in the society to gain through a rise in the real value of what their money can buy.

Deflation only has "negative" effects when in the face of dynamic change sellers of resources and labor serves are not willing to adapt and adjust their prices and wages to new market conditions, or when governments plan or institutionally bring about through central banking a decrease in the quantity of money in the economy.

When governments get out of the way, and markets are sufficiently competitive and flexible in the face of market change, "deflation" is almost always an indication of a growing and improving economy with rising standards of living for all in society.

http://epictimes.com/article/262503/dont-fear-deflation-unless-caused-by-government

WARNING 60- and 40-Watt Incandescent Light Bulb Production Ends January 1

Government regulations forced the phasing out 100- and 75-watt light bulbs in 2012 and 2013 respectively. However, the elimination of 60- and 40-watt bulbs will have a much greater impact on U.S. consumers because they are the two most popular bulbs on the market, according to the electronics industry research firm IMS Research.

So what will you be able to use as an alternative? CFL bulbs.

Keep in mind what Karen de Coster wrote in July 2012:
Is it any surprise that a team of researchers have found that compact fluorescent light (CFL) bulbs are a health hazard?
“Despite their large energy savings, consumers should be careful when using compact fluorescent light bulbs,” said Professor Rafailovich. “Our research shows that it is best to avoid using them at close distances and that they are safest when placed behind an additional glass cover.”
Stories from last year indicated that the green-government bulbs release carcinogenic chemicals and toxins in addition to frying your skin. Thus the reason for the EPA’s warnings for cleaning up a toxic spill in your home. It’s just another reason I keep a good stock of human-friendly incandescent bulbs.

Drudge: High Suspicions That Latest NSA Story Is Actually a Big Leak -- by the Agency!



If this is a government leak, what does this suggest about Snowden's leaks, which provide no knew information that a careful observer of the news didn't already know?

French ‘Millionaire Tax’ Is On

France’s Constitutional Council gave the go-ahead on Sunday to the government’s so-called millionaire tax, to be levied on companies that pay salaries of more than 1 million euros a year, reports NYT.

NYT continues:
It was originally intended as a 75 percent tax to be paid by high earners on the portion of annual income exceeding €1 million, or roughly $1.37 million, but the council rejected it last year, saying it was unfair. France’s top administrative court later said that 66 percent was the legal maximum for individuals.

The Socialist government has since reworked the tax to levy it on companies instead, raising the ire of entrepreneurs.

Under its new design, which the council found constitutional, the tax will be a 50 percent rate on the portion of wages above €1 million in 2013 and 2014.

Including social contributions, the rate will effectively remain about 75 percent, though the tax will be capped at 5 percent of a company’s turnover.

The tax is expected to affect about 470 companies and a dozen soccer teams.
Ultimately, all taxes end up being charged against the factors of production, including labor. Companies may technically pay the tax but they will, in general, simply bid less for services, thus costing the high earners.

The Constitutional Council, a court comprising judges and former French presidents, can annul laws if they are deemed to violate the constitution.

Bombings in Russia Follow Saudi Threat to Attack Russia



Twin blasts targeting a train station and a trolley bus in the city of Volgograd which killed at least 31 people follow a threat by Saudi Arabia to attack Russia using Chechen terrorists if Moscow did not withdraw its support for President Assad in Syria, reports Infowars.

Infowars continues:
While the media has concentrated on the threat such groups pose to February’s Winter Olympics in Sochi, no scrutiny has been given to a warning issued by Saudi Prince Bandar bin Sultan back in August when he told Vladimir Putin that Saudi Arabia would activate the Chechen terrorist groups it controls to target Russia if Moscow refused to abandon its support for Syrian President Bashar Al-Assad.
As we reported at the time, the threat was made during a closed-door meeting between Prince Bandar and Putin at the beginning of August.
According to a transcript of the comments made during the meeting by Middle Eastern news agency Al Monitor, Bandar made a series of promises and threats to Putin in return for Moscow withdrawing its support for Assad in Syria.
“I can give you a guarantee to protect the Winter Olympics next year,” Bandar allegedly stated, adding, “The Chechen groups that threaten the security of the games are controlled by us.”
Bandar made it clear that his position was supported by the US government.
This “guarantee” to stop the Chechens from attacking the Sochi Olympics was also obviously a veiled threat that if Russia did not abandon Assad, terrorist attacks would be given the green light.
Given that Russia did not abandon Assad and indeed virtually single-handedly prevented a US military strike on Syria, much to the chagrin of Saudi Arabia which is the primary supplier of anti-Assad rebel jihadists, are we to believe that the Volgograd bombings are evidence of Bandar following through on his threat?

NBA Player Photographed Doing “The Nazi Salute in Reverse”

On the right, NBA star TonyParker  doing the quenelle with comedian Dieudonne, backstage after a Dieudonne performance.


It's called the “quenelle,”  a gesture described as “the Nazi salute in reverse,” Roger Cukierman, the leader of an umbrella group of French Jewish organizations, told Reuters.

In a photo, NBA star Tony Parker is seen using the gesture with French comedian Dieudonne, who invented the hand signal, according to NyPo. Dieudonne is a known supporter of former Iranian President Mahmoud Ahmadinejad’s views on the State of Israel, says NyPo. His film, “The Anti-Semite,” was banned from the Cannes Film Festival last year.

The Simon Wiesenthal Center is asking Parker to apologize after multiple French newspapers posted pictures of Parker doing the “quenelle."

“As a leading sports figure on both sides of the Atlantic, Parker has a special moral obligation to disassociate himself from a gesture that the government of France has identified as anti-Semitic,” Rabbi Abraham Cooper, Associate Dean of the Simon Wiesenthal Center said, according to The Algemeiner.

The call for the apology comes just one day after French soccer star Nicolas Anelka displayed the same gesture after scoring a goal for West Bromwich of the English Premier League.

UPDATE

 Parker has issued a statement apologizing.

“While this gesture has been part of French culture for many years, it was not until recently that I learned of the very negative concerns associated with it,” Parker said in the statement. “When l was photographed making that gesture three years ago, I thought it was part of a comedy act and did not know that it could be in any way offensive or harmful.

“Since I have been made aware of the seriousness of this gesture, I will certainly never repeat the gesture and sincerely apologize for any misunderstanding or harm relating to my actions. Hopefully this incident will serve to educate others that we need to be more aware that things that may seem innocuous can actually have a history of hate and hurt.”

Ron Paul: Raising Minimum Wages Appeals to Those Who Do Not Understand Economics

Government Policies Hurt Low-Wage Workers
By Ron Paul

Fast-food workers across the county have recently held a number of high profile protests to agitate for higher wages. These protests have been accompanied by efforts to increase the wages mandated by state and local minimum wage laws, as well as a renewed push in some states and localities to pass “living wage” laws. President Obama has proposed raising the federal minimum wage to ten dollars an hour.

Raising minimum wages by government decree appeals to those who do not understand economics. This appeal is especially strong during times of stagnant wages and increased economic inequality. But raising the minimum wage actually harms those at the bottom of the income ladder. Basic economic theory teaches that when the price of a good increases, demand for that good decreases. Raising the minimum wage increases the price of labor, thus decreasing the demand for labor. So an increased minimum wage will lead to hiring freezes and layoffs. Unskilled and inexperienced workers are the ones most often deprived of employment opportunities by increases in the minimum wage.

Minimum wage laws are not the only example of government policies that hurt those at the bottom of the income scale. Many regulations that are promoted as necessary to “rein in” large corporations actually hurt small businesses. Because these small businesses operate on a much narrower profit margin, they cannot as easily absorb the costs of complying with the regulations as large corporations. These regulations can also inhibit lower income individuals from starting their own businesses. Thus, government regulations can reduce the demand for wage-labor, while increasing the supply of labor, which further reduces wages.

Read the rest here.

The Overstock CEO on Bitcoin

Like I said in my post, Does Anyone Really Use Bitcoin as Money?, Bitcoin is more like a gyrating American Express travelers check than money.

Overstock CEO Patrick Byrne told Fortune:
I'm not investing in bitcoin. I'm just saying we'll accept it. I don't have any opinions on its value, and I don't even know how one would go about finding that out beyond just looking it up everyday and what it's trading at. Overstock accepting bitcoin shouldn't be read as an endorsement or a view that the value of it is going to go up. We're not going to be holding any bitcoin -- it's just a medium of exchange.
Byre is not an economist but he has a pretty could take on Bitcoin, though I would argue that Bitcoin is not a medium of exchange, at this point, but a receipt for a fluctuating quantity of dollars, dollars being the medium of exchange.

Paul Krugman's Old College Roommate on Bitcoin

Krugman writes:

My old college roommate John R. Levine, who was a techie before anyone knew such creatures existed (let alone that they would rule the world), sends me a note about Bitcoin that confirms some of my own suspicions[...]
My current guess is that the Bitcoin bubble will collapse when there is some bad news, e.g., a regulator demands registration of Bitcoin wallets, people try and cash out, and find that that while it’s easy to buy bitcoins, it’s much harder to find people willing to buy back nontrivial amounts, very hard to collect the sales proceeds, and completely impossible without revealing exactly who you are.
Levine also touches on a point that I really hadn't thought much about before. Bitcoin is really a majority rule currency---which is very scary when you take into consideration what majority rule has brought to the forefront in general public policy. Levine writes:
Bitcoin has its decentralized blockchain which is a very clever recasting of the problem so that the state of the “bank” is whatever the majority of bitcoin miners agree that it is. 
So in other words, it is false when Bitcoin advocates claim there is no central planner. It is actually mob rule by Bitcoin miners and if I understand this correctly probably by Bitcoin holders, if a majority call for a change in protocol! But changes can certainly be made at the mining level.Very, very, very, different than gold, where there truly is no central control. Gold is gold. It has specific characteristics that a majority can never change.

Who knows what mad dog changes to Bitcoin could be advocated in the future. For those who doubt that changes can occur, note that there has been technical changes already made to Bitcoin. From Bitcoin stack exchange:
It has been changed in the past. For example, the version message was updated. It was carried out by basically saying: "Okay, on this and this date, the protocol will be changed" and giving enough time for non-standard clients to update. Then, at a predefined time all clients updated their protocol version internally and started communicating in the normal way.

Sunday, December 29, 2013

The Future Samsung Sees for You

You will definitely know the temperature outside.

Robert Reich & The Cookie Jar

By, Chris Rossini

Several days ago, Robert Reich took out his red, white & blue Obamacare pom-poms and began his cheer:
Whatever happened to American can-do optimism? Even before the Affordable Care Act covers its first beneficiary, the nattering nabobs of negativism are out in full force.
Bet you didn't know that 'America's can-do attitude' applies to government redistribution heists, did you? Well now you know. The original liberty-minded American has fallen quite far indeed.
If the past is any guide, some fixes will probably be necessary – but so what?
"So what" rolls off the tongue very smoothly when the planners deal with other people's money and livelihoods. So what? Who cares?
What needs fixing can be fixed. And over time we can learn how to do it better.
Oh sure...the cakewalks in Iraq & Afghanistan have cost a cool Trillion ($$$). Has the government "learned how" to remake Arabs into Americans? After a Trillion ($$$)? Will they "learn how" with another Trillion?

Of course not...but "so what"?
If enrollments are lower than anticipated, the proper response is to keep at it until larger numbers are enrolled.
What if Microsoft "kept at it" with the Zune until "larger numbers" bought it? What if Blockbuster Video kept open 9,000 locations until "larger numbers" came through the doors?

So what?

Government doesn't have to worry about that stuff. It can just turn on its magic faucet, and more taxpayer casheesh will flow like water. Just keep at it!

Reich then goes into the government trophy case:
CHIP, the Children’s Health Insurance Program, got off to a slow start in 1998...

Richard Nixon’s Supplemental Security Income program of 1974 – designed to standardize welfare benefits to the poor — was widely scorned at the time...

When George W. Bush’s Medicare Part D drug benefit was launched, large numbers of low-income seniors had to be switched from Medicaid. Many needed their prescriptions filled before the switch had been completed, causing loud complaints...
Even Social Security — the most popular of all government programs — had problems when it was launched in 1935.
So you see...government scams are just like The Little Engine That Could. You just have to "keep at it," and ignore the "nattering nabobs."

After strolling passed the trophy case, Reich makes his way into the Master Cockpit. He explains all of the buttons that can be pushed by the Master:
If young people don’t sign up for the Affordable Care Act in sufficient numbers and costs rise too fast, other ways can be found to encourage their enrollment and control costs. If there aren’t enough doctors initially, medical staffs can be utilized more efficiently. If employers begin to drop their own insurance, incentives can be altered so they don’t.
He's got it all figured out baby!

I think a really good fable is in order here.

There's a story about a monkey that sticks his hand into a jar of cookies. The monkey grabs as big a handful of cookies as he can. But when he tries to pull the hand out, he can't get it passed the neck of the cookie jar.

The stubborn monkey would not let go of any of the cookies, and no matter how hard he tried, he couldn't get his hand out of the jar. So in trying to take more than what was possible to remove, the monkey was left crying with nothing!

Now let's see how that story applies to the planners.

Let's imagine a jar filled with POWER. And let's make the jar gold-plated (just for fun). Someday, a politician is going to stick his hand into the golden jar of POWER and he's going to have quite the fistfull. It'll consist of Social Security, Medicare, CHIP, SNAP, ObamaCare, a Military Empire, and lots of other creations of POWER.

As the politician tries to take his hand out of the jar, he's going to get stuck at the neck. Economic law will not permit him to take his hand out! He could push whatever buttons he wants, and dictate whatever thoughts come to his mind, but the hand is not coming out. And like the monkey, there's no way the politician will let go of any of the POWER. He's going to "keep at it".

Also like the monkey, the politician (and all the people that believed him) will be left crying with nothing!

That's how the story of government always ends.


Chris Rossini on TwitterFacebook & Google+

The Forbes' Original Takedown Of Jordan Belfort The 'Wolf Of Wall Street'

Brian Solomon writes:
Martin Scorsese’s “The Wolf Of Wall Street” is a raucous bacchanalia of sex, drugs, and money on Wall Street that focuses on the excesses of Jordan Belfort’s career at over-the-counter brokerage house Stratton Oakmont. Scorsese and lead actor Leonardo DiCaprio seem less interested in the true facts of Belfort’s life and actual details of his securities crimes than in showing off more and more lewd behavior. But the movie does correctly feature one of the first public takedowns of Belfort and Stratton Oakmont in a 1991 issue of Forbes magazine.

While staff writer Roula Khalaf (now foreign editor at the Financial Times) didn’t coin the phrase “The Wolf Of Wall Street,” she did call Belfort a “twisted Robin Hood who takes from the rich and gives to himself and his merry band of brokers.” Khalaf describes the business model as “pushing dicey stocks on gullible investors” and noted the already growing challenges from federal investigators.
You can read the complete original article here.

Noam Chomsky, The Salon Interview: Governments are power systems, trying to sustain power

Noam Chomsky is very bad on economics and social policy in general, but he does have decent insights about the surveillance state. During a Salon interview he had this to say:
Q: This year’s revelations about the scope of surveillance state activity are certainly not the first major leaks you’ve seen draw scrutiny on government spying. Is there something particular or unique, in your view, about the NSA revelations?
In principle it’s not an innovation, things like this have been going on for a long time. The scale and the incredibly ambitious character of the surveillance and control is something new. But it’s the kind of thing one should expect. The history goes back a long way. So, for example, if you go back a century ago, right after the U.S. invasion of the Philippines — a brutal invasion that killed a couple hundred thousand people — there was a problem for the U.S. of pacification afterwards. What do you do to control the population to prevent another nationalist uprising? There’s a very good study of this by Alfred McCoy, a Phillippines scholar at Unviersity of Wisconsin, and what he shows is that the U.S. used the most sophisticated technology of the day to develop a massive system of survelliance, control, disruption to undermine any potential opposition and to impose very tight controls on the population which lasted for a long time and many ways the Phillippines is still suffering from this. But he also points out the technology was immediately transferred home. Woodrow Wilson’s administration used it in their “red scare” a couple years later. The British used it, too.
Q: Do you think revelation about sprawling surveillance has prompted much significant self-reflection from the American public about the workings of our state apparatus and our use of technology?
Governments are power systems. They are trying to sustain their power and domination over their populations and they will use what means are available to do this. By now the means are very sophisticated and extensive and we can expect them to increase. So for instance, if you read technology journals you learn that in robotics labs for some years there have been efforts to develop small drones, what they call “fly-sized drones,” which can intrude into a person’s home and be almost invisible and carry out constant surveillance. You can be sure that the military is very much interested in this, and the intelligence systems as well, and will soon be using it.
We’re developing technologies that will be used by our own governments and by commercial corporations and are already being used to maximize information for themselves for control and domination. That’s the way power systems work. Of course, they’ve always played the security card. But I think one should be very cautious about such claims. Every government pleads security for almost anything it’s doing, so since the plea is predictable it essentially carries no information. If after the event the power system claims security, that doesn’t mean it’s actually a functioning principle. And if you look at the record, you discover that security is generally a pre-text and security is not a high priority of governments. If By that I mean the security of the population — security of the power system itself and the domestic interests it represents, yes, that’s a concern. But security of the population is not.