Category Archives: Technology

Wake Up When The Alarm Clock Goes Off…

…or you just might find yourself supporting the American Socialist Party:

For years the masses have told you that if you snooze you lose. You never believed them. You held your head high and slept in whenever you wanted to, always without fear of loss. Well, dear friends, the times have changed. The ingenious sages at ThinkGeek Labs(TM) have finally created the Ultimate weapon against snoozing – the Sn?zNL?z(TM). People who enjoy sleeping in are cowering in fear all across the globe – it’s finally true, when you snooze, you lose!

ThinkGeek, it sounds great! But how does it really work?
Glad you asked….it’s quite simple actually. The Sn?zNL?z uses the very complex psychological phenomemon known as ‘HATRED’. Basically it’s human nature to wish harm upon your enemies. Similarly, it’s human nature not to give your enemies gobs of cash so that they can grow big and dominate the world with their totally wrong, stupid and invalid point of view. ThinkGeek realized that. That’s why everytime you hit the snooze button, the Sn?zNL?z will donate a specified amount of your real money to a non-profit you hate. The problem of sleeping in is solved.

And it’s easy to setup and use too! Just plug your Sn?zNL?z in and either connect it to your network via the RJ45 jack on the back, or via WiFi (WPA supported) if available. Then simply configure via the embedded web browser configuration utility. From here it’s a snap. Simply select your online banking institution from the list of supported banks (currently over 1600 are supported). Supply your login information and then select your favorite HATED charity or non-profit from the included lists (over 6200 currently supported). Then plug in your donation amount per snooze incident ($10 or more), set the time, and alarm, and voila, instant time profit!

I’ll admit, I’m usually guilty of the snooze button mentality. I compensate by setting the alarm earlier than necessary, so that I know I have extra snooze time in the morning. Some people, on the other hand, will hit snooze until they’re late for work (or whatever else they’re supposed to do in the morning). I’m sure this would be quite a good incentive to stop that behavior!

Government Influence Of Science — Mandating Losers

Democrats seem to want the federal government to invest huge sums of money in development of alternative energy sources. tarran, last year, pointed out that government has all the wrong incentives and thus often picks the most politically-palatable technologies, not the most effective.

This is currently occurring in Britain, a nation which has gone down the same path towards ethanol as the United States. What’s interesting is where the opposition is currently coming from– the greens:

Yet even as their star has risen at Westminster, biofuels have been raising doubts among greens. Friends of the Earth and Greenpeace, two environmental-lobbying groups, have given warning that biofuels may not be as eco-friendly as they seem. On January 14th a more august body took a similar line. The Royal Society, Britain’s national science academy, published a report that analysed the bewildering range of biofuels on the market. It concluded that, thanks to carbon emissions from fertilisers and processing, some biofuels may cause more climate change than petrol. That raises the risk of a spectacular official own-goal: if targets encourage people to use the wrong sort of fuel, transport may get dirtier, not cleaner. The Royal Society wants ministers to specify targets not for biofuel consumption but for greenhouse-gas reduction. The government says it may do that after 2010.

I’ve pointed out that in the US, we have a system where we subsidize corn and tax sugar. This is a situation where our ethanol mandate distorts the market by raising the price of corn, raising the price (and reducing the supply) of food crops, raises the price of fuel, and if Greenpeace is correct, doesn’t even improve the environment. Why does this occur? Because corn producers vote and lobby Washington, while sugar producers are largely foreign, and thus cannot vote for politicians in Congress.

Government and science don’t mix.

California Slightly Backs Down On Thermostat Issue

Last week, I posted about California’s proposed Big Brother Thermostat proposal, where they were planning to mandate that all new thermostats allowed the state utility companies to shut off your A/C if it was an “emergency”. They’ve backed down on this one, but only slightly:

As initially proposed, these programmable thermostats would have deferred in emergencies to a radio signal from utilities, wresting control from customers.

After public protests, Chandler said the commission staff has suggested letting customers choose whether to accept the emergency control.

“The consumer or customer can override the emergency control,” with the change, Chandler said.

However, the thermostat will still include a radio control component that utilities could use with consumers’ consent. That component will be a mandatory part of the thermostat, which can’t be removed by the consumer.

Critics say they fear that requiring new homes to include a radio-controlled thermostat will make it easier to enforce mandatory controls later.

Fundamentally, nothing has changed. They still have decided to take control of your thermostat, and I think the critics’ point is quite valid. This isn’t the end of the road. When major power grabs don’t work, you take minor power grabs. The destination doesn’t change, only the length of the step.

What I said last week doesn’t change. If you get stuck with one of these thermostats, disable it. And even though they’ve softened their position, you should still contact your representative. We all know that this is but one step on a defined path for the regulators, and it is still important to let them know you’re not fooled.

Federal Driver’s Licenses: The Government’s New Plan To Screw Up Your Life

The brainiacs who’ve made air travel almost as fun as a 10-hour Coca-Cola enema have unveiled their new master plan for creating an efficient security system…federally mandated drivers licenses for everybody under the age of 50, which all states will be forced to comply with by 2011, whether they’re capable or doing so or not, if the Department of Homeland Security gets its way.  The rationalization for this plan, of course, is the same as that for any authoritarian program…a centrally mandated, controlled, and issued driver’s license will make it more difficult for con artists, drug traffickers, illegal immigrants, or terrorists to gain access to identification that could compromise our security. 

What goes unsaid, of course, is that such a program will inevitably make it more difficult for everyone else to get a driver’s license as well.  Do you like the two-hour wait at your state DMV every time you have to renew your driver’s license?  You can bet it’s going to be longer once every application has to run through a federal database that’s responsible for processing 50 times as many applications which will need to be cross-checked against watchlists of known terrorists, criminals, or illegal aliens.  Considering how flawlessly this approach has worked for the FAA with their no-fly lists, I’m finding it a little hard to believe that the process will run more efficiently or effectively than it does now, or that you’ll be getting your new driver’s license back on the same day that you’ve applied for it (as you can now).  Especially since the systems and processes the feds use to cross-reference are notoriously buggy.

Of course now if you go to the DMV and the computers are down, the inconveniences are relatively minimal.  You may have to come back the next day and endure another two hour wait, and you have to be a bit more careful about any traffic violations lest you get busted for driving on an expired license but you’ll generally be able to go about your life relatively freely.  Under the feds’ new program, however, if you aren’t able to procure your license for reasons beyond your control, or if you’re actually denied a license you won’t be able to enter a federal building, board an airplane, open a bank account, buy a gun, vote, verify your identity when using a credit or debit card, or do anything else that’s significantly affiliated with the federal government.  Basically, the Real ID program will effectively strip anyone who doesn’t have a federally-issued ID card of their citizenship or ability to even function in everyday society.

Perhaps the people who oppose Real ID are being unfair and overly paranoid, but considering that the Bush’s new Czar of Homeland Security, Michael Chertoff, issues absolute gibberish like this…

“We worked very closely with the states in terms of developing a plan that I think will be inexpensive, reasonable to implement and produce the results,” he said. “This is a win-win. As long as people use driver’s licenses to identify themselves for whatever reason there’s no reason for those licenses to be easily counterfeited or tampered with.”

…to explain his position, somehow I don’t think that their fears are that insane, especially since the creation of an identification card that cannot be forged is about as likely as the ability to corporeally exist without occupying space.  And spending the better part of ten years watching my own little section of the federal government (the U.S. Army) screw up even the most basic of background checks has led me to believe that the feds are generally incapable of handling and should rarely, if ever, be entrusted with this sort of authority.

Update:  A commenter who expanded on this on his own site raised one very valid point that I think merits highlighting: 

It’s funny.  They keep calling it a “driver’s license,” but they never mention anything about driving.

Update 2:  Apparently 17 states have already objected to the Real ID plan. 

I Can’t Think Of A Catchy Title

I suppose the best way to describe myself would be to say that I have a problem with authority. I’ve always disliked when people told me what to do, even as a young child, and I’ve always preferred to find my own path through life and make my own decisions, even if it occasionally went against the conventional wisdom and sometimes worked to my short-term disadvantage. My dad said I inherited it from him, but that I’ve taken it to a whole new level. When I was young I wanted to be a journalist, until I got to college and realized that journalism was less about the search for objective truth than it was about writing the stories that best suited your employer’s interests, whether they were true or not (which didn’t sit well with me at all). So I drifted aimlessly through a couple of years of college as an indifferent (often drunk) student, unsure of what to do with myself until one of my fraternity brothers gave me a copy of “The Fountainhead” and I got hooked on the ideas that success and a refusal to conform to societal standards were not mutally exclusive, and that the greatest evil in the world was society and government’s failure to recognize or accept individuality and individual freedom as a strength, not a weakness. So I threw myself into studying politics and history, worked in a few political campaigns after college, had some success, and thought about doing a career in politics until I realized that most of the people I knew who had never had a career outside of politics had no comprehension of how the real world actually worked and tended to make a lot of bad, self-absorbed decisions that rarely helped the people they claimed to be representing.

That didn’t sit well with me either, so I decided to put any thoughts of going into politics on hold until I’d actually had a life and possibly a real career, and I spent the next couple of years drifting between a series of random yet educational jobs (debt collector, deliveryman, computer salesman, repo man, dairy worker) that taught me the value of hard work, personal responsibility and the financial benefits of dining at Taco John’s on Tuesday nights (2 tacos for a buck) when money got tight.

After awhile, however, the desire to see the world (and the need for a more consistent and slightly larger paycheck) convinced me to join the Army, where I spent ten years traveling around the world on the government dime working as an intelligence analyst. I generally enjoyed my time in the military, despite the aforementioned problem with authority (which wasn’t as much of an issue in the military as many people might think it would be), and I got to see that the decisions our political leaders make were sometimes frivolous, often ill-informed, and always had unforeseen repercussions down the road…especially on the soldiers tasked with implementing those decisions. I was fortunate enough to spend most of my 10 years in the military doing jobs I enjoyed, traveling to countries that I always wanted to see (Scotland is the greatest place in the world to hang out, Afghanistan is very underrated) and working with people I liked and respected, until I finally decided that at 35 it was time to move into a job where I didn’t have the threat of relocation lying over my head every two or three years, where I didn’t have to worry about my friends being blown up, and where I didn’t have to work in any capacity for George W. Bush.

I work now for a financial company in Kansas where I’m responsible for overseeing, pricing and maintaining farms, commercial and residential properties, mineral assets, insurance policies, annuities, etc. In my spare time I like to read books on economics, history, and politics (I’m preparing to tackle Murray Rothbard’s “Man, Economy & State” and Von Mises’ “Human Action”…should take me about a year at the rate I’m currently finishing books), watch movies, and destroy posers on “Halo 3″ (where I’m signed in under “UCrawford” for anyone interested in taking a shot at me some time). I used to play rugby until age, inconsistent conditioning, and a string of gradually worsening injuries finally convinced me to quit. I’m a rabid fan of the Kansas Jayhawks in general and their basketball and football programs in particular and I’m also a devoted fan of the Kansas City Chiefs and Royals. I’m also fond of going online and debating/picking fights with people on the merits of the philosophy of individual freedom…sometimes to the point of being an asshole (but hopefully a reasonably well-informed asshole). I’ve been a big fan of The Liberty Papers ever since finding it online, I respect the body of work they’ve put out, and I’m honored that Brad Warbiany invited me to join his jolly band of freedom fighters. So cheers, Brad, and to everyone else I look forward to reaching consensus or locking horns with you in the near future.

Is Your Air Conditioner Working? Not In California!

Occasionally there are changes coming down the pipe that even non-politicos don’t like. Usually, the only ones that draw ire from the “average” citizen are those that are widespread and hit close to home.

California has proposed a policy that so neatly fits both categories that people like my wife (a probable Obama voter!) respond in shock and disbelief. From their Energy Commission’s newly-proposed rules about your thermostat (PDF, see pages 63-64):

(c) Thermostats. All unitary heating and/or cooling systems including heat pumps that are not controlled by a central energy management control system (EMCS) shall have a Programmable Communicating Thermostat (PCT) that is certified by the manufacturer to the Energy Commission to meet the requirements of Subsections 112(c)(1) and 112(c)(2) below:

1. Setback Capabilities. All PCTs shall have a clock mechanism that allows the building occupant to program the temperature set points for at least four periods within 24 hours. Thermostats for heat pumps shall meet the requirements of Section 112(b).

2. Communicating Capabilities. All PCTs shall be distributed with a non-removable Radio Data System (RDS) communications device that is compatible with the default statewide DR communications system, which can be used by utilities to send price and emergency signals. PCTs shall be capable of receiving and responding to the signals indicating price and emergency events as follows.

A. Price Events. The PCT shall be shipped with default price-event offsets of +4°F for cooling and -4°F for heating enabled; however, customers shall be able to change the offsets and thermostat settings at any time during price events. Upon receiving a price-event signal, the PCT shall adjust the thermostat setpoint by the number of degrees indicated in the offset for the duration specified in the signal of the price event. The PCT shall also be equipped with the capability to allow customers to define setpoints for heating and cooling in response to price signals as an alternative to temperature-offsetting response, as described in Reference Joint Appendix JA5.

B. Emergency Events. Upon receiving an emergency signal, the PCT shall respond to commands contained in the emergency signal, including changing the setpoint by any number of degrees or to a specific temperature setpoint. The PCT shall not allow customer changes to thermostat settings during emergency events.

If for any reason the state-regulated utilities deem that there is an “emergency”, they can do anything they want to your air conditioner or heater, and the thermostat gives you NO ability to override the setting. It doesn’t matter if you’ve got an elderly person sweltering in the summer heat in the central valley who cannot handle a few hours in extreme temperatures, you cannot change the thermostat. Of course, this isn’t new technology. In fact, the utilities were offering discounts to those buyers who voluntarily installed these thermostats. But I’m guessing either not enough people were adopting them for the nannies in Sacramento, or the utilities got tired of TOO MANY people adopting the technology, and wanted it mandated so they wouldn’t have to offer discounts.

Now, this is all an effort to mitigate the effects of high power draw in the hot summer months, when people are running their air conditioners. In the past, these situations have resulted in rolling blackouts and much political strife from the constituents. Those of us who have some economic sense and a history of California would point out that most of the woes this is intended to solve are the unintended consequences of California’s royally incompetent regulation and “de”regulation of their energy sector. Screwy regulatory hurdles, NIMBYism, and lobbying have resulted in a system which has completely destroyed any semblance of a market, and artificially limited increases in supply which might have kept electricity plentiful and prices low. Instead of fixing the problem, they’re simply adding another layer.

There’s still time to put a stop to this. If you live in California, contact the “process administrator” of these proceedings, Chris Gekas. Or your local legislator. Any complaint needs to be registered by January 30th, or this thing will go through without a problem.

Of course, there’s always the chance that it will go through anyway. If that occurs, my plan is good old-fashioned civil disobedience. If my next home has one of these installed, I will order a thermostat from out-of-state or– given that I’m an electrical engineer– find a way to disable the radio. The State of California may mandate this sort of idiocy, but it’s too bloated and inefficient to enforce it (once you get through an initial building inspection), so I would recommend others do the same. When the rest of the state is sweltering through a hot summer day without A/C, those of us who still value freedom can invite our neighbors over and explain to them the folly of big government.

Hat Tip: Cafe Hayek
Also See: The American Thinker

Naughty Or Nice? Santa & The FBI Want To Know!

It’s often said that if a politician or newsmaker wants to make sure something gets swept under the rug, they’ll ensure it drops on a Friday afternoon. That way, the media gets distracted by other stories by the time Monday rolls around, and they can hope that it gets reported without fanfare.

So what does it mean when a story about government surveillance drops the Saturday before Christmas? It means you should pay extra-special attention:

The FBI is embarking on a $1 billion effort to build the world’s largest computer database of peoples’ physical characteristics, a project that would give the government unprecedented abilities to identify individuals in the United States and abroad.

Digital images of faces, fingerprints and palm patterns are already flowing into FBI systems in a climate-controlled, secure basement here. Next month, the FBI intends to award a 10-year contract that would significantly expand the amount and kinds of biometric information it receives. And in the coming years, law enforcement authorities around the world will be able to rely on iris patterns, face-shape data, scars and perhaps even the unique ways people walk and talk, to solve crimes and identify criminals and terrorists. The FBI will also retain, upon request by employers, the fingerprints of employees who have undergone criminal background checks so the employers can be notified if employees have brushes with the law.

“Bigger. Faster. Better. That’s the bottom line,” said Thomas E. Bush III, assistant director of the FBI’s Criminal Justice Information Services Division, which operates the database from its headquarters in the Appalachian foothills.

The goal is a permanent surveillance state, where you know neither how much information they’ve got on you, have no recourse to get a clear answer, and you never know who is or isn’t watching. It’s Big Brother, circa 2008.

I guess Santa’s not the only one with a list.

Web Sites “Fined” For Gambling Advertising

Web giants to settle gambling allegations

The U.S. attorney in St. Louis announced the settlements Wednesday with Microsoft Corp., Yahoo Inc. and Google Inc., which she accused of selling ads that steered U.S. Web surfers to offshore gambling websites. The Justice Department considers publishers of such gambling ads to be accessories to a crime.

Without admitting or denying liability, the three companies agreed to forfeit millions of dollars they took in from the suspect ads, and Microsoft and Yahoo vowed to run public service campaigns warning young people that online gambling is illegal.

All three Internet companies said they had stopped accepting gambling ads in 2004, more than six months after the government warned magazine publishers that similar ads were illegal.

So they did not participate in online gaming, they simply hosted ads (that until told otherwise, they believed to be legal). Ads for a service that allows adults to consensually engage in peaceful commerce, commerce that is legal in Vegas, California, Atlantic City, Alabama, and on countless riverboats and Indian reservations throughout this nation. Then, when told the ads were illegal, they stopped within several months and haven’t engaged in the behavior since.

And for this, they’re forced asked to pay Danegeld to the Feds, as well as run ad campaigns “informing” the public that online gambling is illegal. I guess I can’t blame them for settling. It may not be right, but I’m sure it’s a lot cheaper for them than going to bat against the feds, who have the advantage of writing all the rules in the first place. This probably shouldn’t be considered a fine, rather it’s “protection money” against the racketeers in D.C.

And it’s not going to stop:

She said her office was continuing to investigate whether other forms of promotion, such as the sponsorship of televised tournaments by a poker company affiliate, were “artifices to promote illegal gambling” and therefore illegal.

Any guess as to what her investigation will find– and whether it depends on how deep the pockets are of the subject of investigation?

Should Oil Producers Embargo America Again? The Democrats And Republicans Seem To Think So

In 1973, OPEC announced an embargo of oil sales to countries whose governments had supported Israel in the Yom Kippur war. In the U.S. this precipitated a major economic crisis as the U.S. government attempted to ration gasoline and control production and sale through a regime of price controls. The U.S. Central bank also embarked on an inflationary spree in an attempt to “stimulate ” the economy. Just as in the Great Depression, the result was a combination of inflation and economic stagnation, known as “stagflation.”

Today, nearly every presidential candidate is calling for something called “energy independence”, which amounts to an attempt to reenact the embargo, although this time it would be the U.S. government turning back oil shipments instead of the Saudi Government. This suicidal course is supposed to insulate the economy from high energy prices and to promote attempts to mitigate global warming. However, rather than insulating the economy from higher energy prices, these measures will have the perverse effect of making the high energy prices we face today more devastating and permanent.

Energy is merely a factor of production; one of many inputs that are converted into a more valuable product or service. Because energy is one of the most important inputs into most manufacturing processes, consumers of energy tend to be very price-conscious; attempting to get the most ergs for their dollar. However, unlike a person shopping at a grocery store, they can’t easily switch from oil to natural gas as easily as a consumer switches switches from buying eggs and bacon for their breakfasts to buying oatmeal. Once a factory or some other piece of heavy equipment or facility is designed to use on particular energy source, switching to another source is either very expensive or impossible. Thus, the largest consumers of energy look at not only the current price of energy products, but also at the long term trends. They try to lock in suppliers to long term contracts. They study the long term availability of the various sources and try to predict what the supply situation is like.

This desire for predictability forces energy producers to focus on keeping prices low and stable, if they want to attract customers. Because there are so many consumers of energy who will pick a supplier and stick with that supplier for a long period of time, and because these customers strive to understand their supplier’s business in great detail, the sources of energy that they choose to consume tend to be the most stable and cheapest sources then available, generally energy from oil or other petroleum products.

The plans being promoted by the politicians attempt to force American businesses to consume not the cheapest forms of energy, but rather more expensive and less economical forms of energy. They take one of four forms:

The Manhattan Project

Most programs call for the U.S. government to take money from tax-payers and to spend it on scientific research and engineering development to develop new sources of energy, or to make the consumption of new energy sources more “efficient”.

The problem is that these R&D programs will be funded by a political process and not necessarily based on criteria of which programs are most likely to bear fruit on a reasonable time-scale. The R&D that is expected to provide a payoff is already being done by investors or companies that expect to make a mint if they are the first to market with more efficient, less costly mechanisms that satisfy the demand for energy. The works that are not already being done, for the most part, are boondogles with an insufficient probability of a positive return. Essentially, the money confiscated and redirected to this research will necessarily displace investments that would otherwise be made in more profitable or less risky ventures. Thus, these programs are guaranteed to be as big a waste of money as other forays of the government into R&D such as nuclear power plant design and space exploration.

For my theory on why this is so, see my article Government Funding of Science: Inherently Susceptible to Junk and Superstition.

Subsidies for ‘local’ energy sources

Most plans involve subsidies for energy sources that do not use imported oil, things like wind-mills, ethanol and other ‘sustainable’ forms of energy. Essentially, these alternative sources of energy exist, but are so much less economical than imported oil, that nobody seriously uses them. The government’s plan is to subsidize these alternates so that the price demanded from people who are purchasing them is competitive with that of the hated imported oil. There is, of course, one problem with that: TANSTAAFL.

The subsidies must be paid by taxpayers, the same people who, for the most part, are consuming the subsidized energy. The result? The tax-man boosts the cost of energy to higher levels than we currently pay for “imported oil”. If the high cost of gasoline is painful, the cost of ethanol enhanced gasoline will be much more painful. In the end, this is the equivalent of treating the pain caused by a patient’s sore muscles by beating him up.

Subsidies for increased fuel efficiency

The rationale for this scheme is that if we could reduce the amount of fuel consumed, the price of the fuel would go down. However, it assumes that consumers want more efficient vehicles or factory equipment, but are powerless to influence manufacturers and producers to make more efficient machinery. This is, of course, poppycock. People balance fuel efficiency with many other criteria in making their choice. In times of bountiful, cheap energy, they may decide that a vehicle of large mass and carrying capacity is what they want. Increased efficiency generally comes at the expense of cost, or reduced performance in some other area.

Again, the principle of TAANSTAFL applies. By mandating that all products have a certain degree of efficiency, these plans essentially are forcing consumers to forgo other wants, or pay higher prices to purchase equipment that meets their needs.

Paying for Externalities

Currently it is in fashion to blame combustion of fossil fuels for causing a warming of the Earth. Of course, the change in climate causes people to bear costs in the form of reduced crop yields or loss of land to the sea etc. Many of these plans attempt to ‘mitigate’ this damage either through additional taxes levied on fuel consumption or from cap-and trade schemes. Both ideas suffer from flaws:

The rationale for remedying externalities through taxation is thus: Let us say that every gallon of gasoline burned in the U.S. causes $0.25 worth of damage to everybody on Earth. A tax of $0.25 is levied on each gallon of gasoline that is purchased or produced and the money is then spent to compensate the people suffering the damage.

Of course, the reality is quite different. The funds rarely are spent to reimburse injured parties, assuming that the injured parties can even be identified. Rather the funds are apportioned through a political process. A glaring example of this is, for example, the use of tobacco settlement money to pay for athletic programs in government schools as opposed to reimbursing Medicare for the costs of caring for ill smokers.

Cap and trade schemes have their own sets of problems. Under such a scheme, the state sells or issues permits to individuals or businesses permitting them produce X amount of pollution. The owners of these permits are then free to sell permits to those who wish to buy the right to pollute. There are two basic problems unique to these schemes:

First, there is the question of how many permits to issue? Of course, there will be a conflict between those who favor more permits and those who favor a reduction in the numbers of permits that are issued. The process for setting the number of permits will be a political one, and as such only loosely coupled with the actual number of permits that is appropriate, assuming that the number of appropriate permits is even calculable.

Secondly, there is the question of who gets the permits? If the permits are given away, then the state will have to ration the permits it issues. The distribution of permits will again be a political process with connected individuals and organizations being granted a windfall of permits that they can then sell at a great profit. Alternately, if the permits are sold, typically by auction, then once again the problems associated with the state levying taxes to repair externalities will manifest themselves.

Do We Need a National Energy Policy?

To me, the answer is a resounding NO! We no more need a national energy policy than we need a national food policy or a national entertainment policy or a national clothing policy.

The fact is that those who consume energy are already driven by reasons of frugality and profitability to seek the least expensive and most cost-efficient forms of energy out there. In order to prevent people from using oil, the state must force people to pay more for oil than they ever would under a volatile free market scheme. This means that in order to ensure energy the U.S. government must, in effect, force an embargo upon its subjects. Under international law, it is considered an act of war for one nation’s navy to blockade another nation’s sea trade. The fact that U.S. politicians are attempting to carry out such an act of war on their own people – worse that a significant portion of the U.S. population thinks this is a good idea – is quite disheartening.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Why Capitalism Is Not Anti-Environment

To obtain shellfish, it’s often required dredging the sea floor. That’s a particularly nasty proposition, because it destroys reefs harboring complex ecosystems. And at the same time, it’s not particularly energy-efficient, and the damage done tends to also damage the shellfish recovered. However, a new type of non-invasive dredge is changing that (at least for scallops):

However, in one case—scallop trawling—Cliff Goudey of the Massachusetts Institute of Technology reckons he has a solution. He and his team have designed a dredge that can dislodge scallops without touching the seafloor.

The dredge has several hemispheric scoops in place of the toothed bar. As it is pulled along, the scoops direct water downward. That creates a series of gentle jets that can shuffle the scallops from their resting places—but the streams of water are not powerful enough to damage the benthic zone’s long-term tenants. And the scoops swivel out of the way if they encounter anything solid, so the dredge does not destroy such protuberances. Best of all, from the fisherman’s point of view, it takes less effort to float a dredge on water jets than it does to drag it across the uneven surface of the seabed. That makes Dr Goudey’s new device a more fuel-efficient way to fish than the traditional method.

Having assessed a prototype both in a laboratory tank and in the sea off the coast of Massachusetts, Dr Goudey was recently invited by the University of Wales to test his invention against a traditional dredge. New and old designs were dropped from the stern of a trawler and towed across the seabed off the Isle of Man. They each caught the same number of scallops. The new dredge, though, damaged the catch much less than the traditional one.

Most of what humans do is considered damage to the environment, at least by the strongest of environmentalists. And unfortunately, with the old dredging technique, they have somewhat of a point. There was very little way to capture the externality of damage done to the environment. So the environmentalists resort to their only tactic: ban it immediately.

But look at what happens when the market is able to innovate? They find a better way of doing it. It catches the same number of scallops, so it’s just as effective. It uses less energy, so it makes more money. And even better, it causes less damage to the scallops, so they can likely be sold for a higher price (earning more money). So fishermen make more money, the environment is not damaged, and consumers get higher-quality scallops. We’ve all become richer– due to capitalism.

House Passes SAFE Act — Do You Feel Safer?

Have a small business offering wifi access? Have a home wireless connection that you’ve not secured? Well, consider yourself “deputized”. You may not know how to even track your who is using your internet connection, but you may soon be legally required to do so:

What’s SAFE? It stands for the Securing Adolescents From Exploitation-Online Act, and its reach could be unprecedented. Namely, it holds that anyone offering any public electronic communications service (including an open Wi-Fi connection or internet kiosk) must create a sort of dossier on anyone they suspect might be viewing child pornography over their network and submit it to the government. (Presumably the culprit would have to be caught in the act; the bill doesn’t really say.) The service provider will also have to maintain an archive of all the suspect’s files for use as evidence.

It sounds bad at first, but the definition of child pornography in this case is especially surprising. Per Cnet’s Declan McCullagh, the definition of such images include those featuring fully-clothed children in “lascivious” poses and even drawings of such obsenity. (That would include the popular form of hentai anime.)

Failure to comply could result in a first-offense fine of $150,000 and $300,000 after that. That means every library, coffee shop, and even private homes that offer open wireless access could face crushing penalties if they don’t eavesdrop on their clientèle. In other words: The government wants you to do its dirty work and play Big Brother on its behalf. Creepy.

Yep. You’d better know what people are using your internet connection for, or you might be in trouble. The government doesn’t have the time nor resources to catch criminals on their own, so you need to do it for them!

Personally, while this might get a lot of airtime, I wouldn’t worry too much about it. A government too incompetent to catch criminals on their own will most likely be too incompetent to catch you if you don’t understand that someone is using your internet connection for nefarious purposes. I’d say that I don’t care and would continue to offer free wi-fi, but I’ve kept my own connection secure just as general principle since I’ve had it, so it doesn’t affect me much.

Oh, but one little bit takes the cake on this one:

Additionally scary: This legislation never received a committee vote or public hearing and was never made available for public review. Way to sneak one past the goalie, Congress!

I don’t know what’s more sad… The fact that Congress often passes bills like this (without review), or the fact that the original author didn’t quite realize that Congress often passes bills like this. After all, they want to make sure you don’t get any crazy hentai through your connection to the series of tubes.

Hat Tip: Doug
» Read more

Why Is Ron Paul Slipping On Intrade?

I’ve long been a fan of Intrade, as I’ve pointed out here, here, and here. I’ve noted that Ron Paul, for quite some time, has been trading higher on Intrade than he’s been polling.

But something recently changed, and rather inexplicably. When the Ron Paul advocates raised $4.2M in one day, I expected to see a big bump in his share price on Intrade. But it didn’t happen. Instead, from his peak of about a 9 share on that day, he’s now slipped to roughly 5.5. Why?

Looking at the top candidates, I see that Giuliani has increased share at the expense of Romney, and McCain has held roughly constant. The only explanation that I can see is a surge by Huckabee. Huckabee has become the media darling as a dark horse candidate, and it seems the evangelicals are backing him pretty forcefully. Since they’re both dark horse candidates, I could see traders making a move towards Huckabee rather than Paul. The only other explanation I can see is that perhaps traders were expecting Paul’s money position to lead to poll results, which doesn’t seem to have materialized.

But perhaps I’m missing something. I know there are a lot of people who read this blog that are passionate about Ron Paul. Feel free to offer your own analysis in the comments, because I’m somewhat baffled.

A Small Win For Privacy

Amazon user data request dropped

Federal prosecutors have withdrawn a subpoena seeking the identities of thousands of people who bought used books through online retailer Amazon.com Inc., newly unsealed court records show.

The withdrawal came after a judge ruled that the customers had a 1st Amendment right to keep their reading habits from the government.

“The [subpoena’s] chilling effect on expressive e-commerce would frost keyboards across America,” U.S. Magistrate Judge Stephen Crocker wrote.

“The subpoena is troubling because it permits the government to peek into the reading habits of specific individuals without their knowledge or permission,” Crocker wrote. “It is an unsettling and un-American scenario to envision federal agents nosing through the reading lists of law-abiding citizens while hunting for evidence against somebody else.”

In the days of warrant-less wiretaps, and PATRIOT act concerns that the feds may be snooping on your public library records, it’s nice to see that someone is still willing to step up and protect the rights of individuals.

It’s a small step, but at least it’s a step in the right direction.

Law Enforcement Using Cell Phone Location Technology

Yesterday, the Washington Post reported on an alarming increase in the use of cell phone tracking technology by federal law enforcement:

Federal officials are routinely asking courts to order cellphone companies to furnish real-time tracking data so they can pinpoint the whereabouts of drug traffickers, fugitives and other criminal suspects, according to judges and industry lawyers.

In some cases, judges have granted the requests without requiring the government to demonstrate that there is probable cause to believe that a crime is taking place or that the inquiry will yield evidence of a crime. Privacy advocates fear such a practice may expose average Americans to a new level of government scrutiny of their daily lives.

Such requests run counter to the Justice Department’s internal recommendation that federal prosecutors seek warrants based on probable cause to obtain precise location data in private areas. The requests and orders are sealed at the government’s request, so it is difficult to know how often the orders are issued or denied.

But some of those requests have become public, and they show that law enforcement agents are relying on a standard far below probable cause to justify their access to technology that essentially acts as a personal GPS tracking device:

In a stinging opinion this month, a federal judge in Texas denied a request by a Drug Enforcement Administration agent for data that would identify a drug trafficker’s phone location by using the carrier’s E911 tracking capability. E911 tracking systems read signals sent to satellites from a phone’s Global Positioning System (GPS) chip or triangulated radio signals sent from phones to cell towers. Magistrate Judge Brian L. Owsley, of the Corpus Christi division of the Southern District of Texas, said the agent’s affidavit failed to focus on “specifics necessary to establish probable cause, such as relevant dates, names and places.”

Owsley decided to publish his opinion, which explained that the agent failed to provide “sufficient specific information to support the assertion” that the phone was being used in “criminal” activity. Instead, Owsley wrote, the agent simply alleged that the subject trafficked in narcotics and used the phone to do so. The agent stated that the DEA had ” ‘identified’ or ‘determined’ certain matters,” Owsley wrote, but “these identifications, determinations or revelations are not facts, but simply conclusions by the agency.”

Instead of seeking warrants based on probable cause, some federal prosecutors are applying for orders based on a standard lower than probable cause derived from two statutes: the Stored Communications Act and the Pen Register Statute, according to judges and industry lawyers. The orders are typically issued by magistrate judges in U.S. district courts, who often handle applications for search warrants.

In one case last month in a southwestern state, an FBI agent obtained precise location data with a court order based on the lower standard, citing “specific and articulable facts” showing reasonable grounds to believe the data are “relevant to an ongoing criminal investigation,” said Al Gidari, a partner at Perkins Coie in Seattle, who reviews data requests for carriers.

Another magistrate judge, who has denied about a dozen such requests in the past six months, said some agents attach affidavits to their applications that merely assert that the evidence offered is “consistent with the probable cause standard” of Rule 41 of the Federal Rules of Criminal Procedure. The judge spoke on condition of anonymity because of the sensitivity of the issue.

While some judges appear to be holding law enforcement back on this issue, the majority are rubber-stamping the warrant requests, and law enforcement is responding by relying upon the technology in an increasing number of cases.

That cell phone in your pocket may not be watching you, but it can tell Big Brother where you are.

The Free Market In Action – The Giant Retailers Begin To Buckle

If you purchased a newspaper in the past week or so, you might have noticed a bunch of circulars advertising post-Thanksgiving sales. The stores publicize these sale prices in an attempt to attract customers for what is known as “Black Friday,” the day after Thanksgiving which, by custom, is one of the largest shopping days of the year. These circulars are important; even if the prices are not truly the lowest in the market, the perception of low prices will attract customers. And, in the days when comparing prices across many differently organized and formatted circulars was arduous, retailers could take comfort in the fact that the circular would bring in customers.

Unfortunately for retailers, the rise of the Internet made this practice dangerous: people started setting up websites that reorganized the sales information and allowed people to compare offers easily across stores an multiple product lines. This put the store owners in a quandary; they want to publicize prices to attract customers, but if the bargain hunting becomes easier, they will have to really slash prices to attract customers and their bottom lines will get tighter.

This gave rise to a new Thanksgiving tradition, the lawsuit against price comparison websites:

For the last several years, Wal-Mart Stores and other large chains have threatened legal action to intimidate Web sites that get hold of advertising circulars early and publish prices online ahead of company-set release dates. The retailers’ threats rest upon some dubious legal arguments, however, which may be the reason they haven’t shown a keen interest in actually going to court over the issue.

Wal-Mart has been among the most aggressive retailers in trying to cow consumer Web sites. Last month, it sent a cease-and-desist letter to BFAds.net, a site devoted to publishing Black Friday ads. Wal-Mart sent the letter even before BFAds had published Wal-Mart’s sale prices, so the cease-and-desist letter would be more properly called a “don’t even think about it” letter.

This year, however, retailers are unusually desperate to get bodies into their stores since the consensus is that this year will be an “off” year for retail sales. This desperation has prompted many chains to not attack the bargain hunting websites but to cooperate with them:

This holiday season, chains large and small quietly handed over their circulars to Web sites like Bfads.net and Gottadeal.com to ensure that millions of deal-hungry shoppers see their discounts well before the day known as Black Friday, traditionally the biggest shopping day of the year.

Over the past few weeks, Home Depot, Pacific Sunwear, CompUSA and OshKosh B’Gosh each supplied the sites with an advance copy of its ads, according to the chains and the sites’ owners.

In fact, some retailers even went so far as to check to ensure that their circulars had been published on Bfads.net, contacting the website’s founder when they didn’t see their sales listed on the website.

There are some firms that truly have the lowest price on some set of one or more goods. To these firms, websites life Bfads.net are not the enemy, but rather a powerful and free advertising tool. These firms are embracing these websites, and attracting the bargain hunters into their stores. And, since these bargain hunters tend to be mavens whose recommendations can drive tens, hundreds, or even thousands of people to a store these cooperating firms are ensuring banner years for themselves.

Even the officers of big, bad Wal-Mart recognize this. One even wrote a letter to the owner of Bfads.net, thanking him for bringing customers to Wal-Mart:

“I checked out your site today and yesterday and we pulled some traffic reports — great job … Almost over 43,000 clicks just yesterday alone. … Thanks for giving us a nice write-up on your front page. Keep up the great work!”

This is the essence of the free market. People who depend on the voluntary business of customers must excel at satisfying their customers’ needs to thrive and prosper. While most merchants would love to pay little and charge dearly for their wares, only the ones who charge the least dearly will be able attract the customers they need.

Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages. – Adam Smith, The Wealth of Nations

So, as you sit down for what is hopefully a nice feast, please remember to give thanks to the wonderful human invention, the one that has allowed our species to spread across the Earth and to enjoy lives that are anything but short and brutal, the concept known as the Free Market.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

The Violence Against Non-State Backed Currencies

Yesterday, agents of the FBI raided the offices of NORFED and, according to an email sent by its founder, confiscated all their assets:

Dear Liberty Dollar Supporters:
I sincerely regret to inform you that about 8:00 this morning a dozen FBI and Secret Service agents raided the Liberty Dollar office in Evansville.
For approximately six hours they took all the gold, all the silver, all the platinum and almost two tons of Ron Paul Dollars that where just delivered last Friday. They also took all the files, all the computers and froze our bank accounts.
We have no money. We have no products. We have no records to even know what was ordered or what you are owed. We have nothing but the will to push forward and overcome this massive assault on our liberty and our right to have real money as defined by the US Constitution. We should not to be defrauded by the fake government money.
But to make matters worse, all the gold and silver that backs up the paper certificates and digital currency held in the vault at Sunshine Mint has also been confiscated. Even the dies for mint the Gold and Silver Libertys have been taken.
This in spite of the fact that Edmond C. Moy, the Director of the Mint, acknowledged in a letter to a US Senator that the paper certificates did not violate Section 486 and were not illegal. But the FBI and Services took all the paper currency too.
The possibility of such action was the reason the Liberty Dollar was designed so that the vast majority of the money was in specie form and in the people’s hands. Of the $20 million Liberty Dollars, only about a million is in paper or digital form.
I regret that if you are due an order. It may be some time until it will be filled… if ever… it now all depends on our actions.
Everyone who has an unfulfilled order or has digital or paper currency should band together for a class action suit and demand redemption. We cannot allow the government to steal our money! Please don’t let this happen!!! Many of you read the articles quoting the government and Federal Reserve officials that the Liberty Dollar was legal. You did nothing wrong. You are legally entitled to your property. Let us use this terrible act to band together and further our goal – to return America to a value based currency.
Please forward this important Alert… so everyone who possess or use the Liberty Dollar is aware of the situation.
Please click HERE to sign up for the class action lawsuit and get your property back!
If the above link does not work you can access the page by copying the following into your web browser. http://www.libertydollar.org/classaction/index.php
Thanks again for your support at this darkest time as the damn government and their dollar sinks to a new low.
Bernard von NotHaus
Monetary Architect

For those of you not familiar with the Liberty Dollar, the architect intended them to compete with Federal Reserve bank notes. They currency takes many forms:

  • Specie in the form of silver and gold coins,
  • Bank notes backed by gold and silver in their vaults (in other words every bank note promising redepmption by an oz worth of silver has an oz of silver sitting in their vaults)
  • Electronic or digital money, again backed by specie in their vaults

Each bank note and coin was stamped with a suggested exchange rate with U.S. dollars. This exchange rate was far higher than the value of the metal in the coins, $15.00 USD worth of silver in a coin stamped with a $20.00 exchange rate. The company bent over backward to get treasury department approval and to comply with U.S. currency laws.

So why were they raided? Brian Doherty of reason magazine reports:

I’ve seen a copy of a Nov. 9 seizure warrant on an Asheville, NC, address, not available online, claiming that Liberty Dollars at that address are forefeitable for being connected with money laundering and mail fraud. I have not read the entire 38 page warrant, nor am I 100 percent certain it is connected with the actions in Evansville today, but given that the Indianapolis FBI referred me to the U.S. Attorney in North Carolina, probably so, and that multiple raids were planned or executed re: the liberty dollar.
The warrant explains that the FBI from Aug 2005 to July 2007 were “conducting undercover operations to determine the legality of the American Liberty Dollar currency.” The warrant also notes that von NotHaus sold an undercover agent a Liberty Dollar T-shirt, and that the agent observed von NotHaus driving a 1999 Cadillac Deville. It doesn’t take a trained federal agent to connect the dots here, I suppose. In other words: What-th-what-th-What?

This came after the U.S. Mint made dark warnings that people doing business in this currency were breaking the law.

Furthermore, NORFED is not the first currency backer to be so attacked. Last December, e-gold was also raided, by agents claiming to be going after money launderers.

Is this some plot to shore up the shaky Federal Reserve system by outlawing competition? I don’t think so, namely because government economists all believe that their system is a good stable one. I truly think they believe their propaganda.

The problem is that a system of commodity currency allows someone to do business anonymously. These systems were consciously designed to preserve people’s wealth from the depradations of misguided governmental monetary policy. This protection inherently makes monitoring the flow of money more difficult for government officials. It attracts people who distrust the government, a significant number of which whose fear is based on the victimful crimes they commit. This institutional distrust, in turn, engenders a hostility in modern law-enforcement who are understandably suspicious of people who distrust them.

In the end, it is quite clear to me that it is the hostility of these law-enforcement officers which is the problem. Confusing suspicion of the state with criminal intent, they are convinced that these institutions that have criminals as customers are in fact conspiring with the criminals. So they shut them down, ruining the guilty and the innocent indiscriminately. There is nothing precluding the FBI from reviewing e-gold or Norfed’s records while the firms continue to do business. Shutting them down is as absurd as shutting down the Motel 6 down the road, because it was the preferred resting place of mobsters visiting town.

Neither Norfed nor E-gold are defrauding anyone. Their fees might be a little high, but everyone doing business with them knows what the costs are going to be up-front. The reason that they are being raided and attacked is, in the end, a political one, hostility amongst law enforcement, perhaps egged on by some of the more conventional financial institutions seeking to knee-cap competition. As such, these raids should be condemned.

Update:

Ron Paul Radio interviews von NotHaus, who claims that the FBI agent in charge told him that the Department of Justice ordered the confiscation of all assets because the currency was illegal:

http://www.ebacherville.com/cgi-bin/uploaded/FINAL-LibertyDollarNotHaus11152007.mp3

Update II:

The search & seizure warrant have been posted by NORFED:

The search warrant orders the seizure of all records, all printing equipment, computer hardware and media, devices used to manufacture the coinage and notes, and somewhat sinisterly membershiplists of all Liberty Dollar Regional Currency Officers, Liberty Dollar Associates, Merchants who have registered themselves as accepting Liberty Dollars, and any individuals that have purchased the currency.

The seizure warrant states that

American Liberty Dollar and/or Hawaii Dala currency and/or percious metals of gold, silver, copper , platinum or other substance and Unites States currency are forfeitabls to the United States under 18 USC  §  982 (a)(1) because it is property involved in, or traceable to, money laundering, in violation of 18 U.S.C. § 1956 and 1957; under 18 U.S.C. USC  §  982 (a)(3) because it is, or is traceable to, gross receipts and proceeds obtained, directly and indirectly, as a result of mail fraud, in violation of 18 U.S.C. § 1341 and wire fraud, in violation of 18 U.S.C. § 1343. Authority for this warrant is provided by 18 U.S.C. § 981(b) and 21 U.S.C. § 853(f)

This is very interesting:

18 U.S.C. §  981(b) states:

       (b)(1) Except as provided in section 985, any property subject to
forfeiture to the United States under subsection (a) may be seized
by the Attorney General and, in the case of property involved in a
violation investigated by the Secretary of the Treasury or the
United States Postal Service, the property may also be seized by
the Secretary of the Treasury or the Postal Service, respectively.
(2) Seizures pursuant to this section shall be made pursuant to a
warrant obtained in the same manner as provided for a search
warrant under the Federal Rules of Criminal Procedure, except that
a seizure may be made without a warrant if –

        (A) a complaint for forfeiture has been filed in the United
States district court and the court issued an arrest warrant in
rem pursuant to the Supplemental Rules for Certain Admiralty and
Maritime Claims;
(B) there is probable cause to believe that the property is
subject to forfeiture and –

          (i) the seizure is made pursuant to a lawful arrest or
search; or
(ii) another exception to the Fourth Amendment warrant
requirement would apply; or

(C) the property was lawfully seized by a State or local law
enforcement agency and transferred to a Federal agency.

(3) Notwithstanding the provisions of rule 41(a) of the Federal
Rules of Criminal Procedure, a seizure warrant may be issued
pursuant to this subsection by a judicial officer in any district
in which a forfeiture action against the property may be filed
under section 1355(b) of title 28, and may be executed in any
district in which the property is found, or transmitted to the
central authority of any foreign state for service in accordance
with any treaty or other international agreement. Any motion for
the return of property seized under this section shall be filed in
the district court in which the seizure warrant was issued or in
the district court for the district in which the property was
seized.
(4)(A) If any person is arrested or charged in a foreign country

    in connection with an offense that would give rise to the
forfeiture of property in the United States under this section or
under the Controlled Substances Act, the Attorney General may apply
to any Federal judge or magistrate judge in the district in which
the property is located for an ex parte order restraining the
property subject to forfeiture for not more than 30 days, except
that the time may be extended for good cause shown at a hearing
conducted in the manner provided in rule 43(e) of the Federal Rules
of Civil Procedure.
(B) The application for the restraining order shall set forth the
nature and circumstances of the foreign charges and the basis for
belief that the person arrested or charged has property in the
United States that would be subject to forfeiture, and shall
contain a statement that the restraining order is needed to
preserve the availability of property for such time as is necessary
to receive evidence from the foreign country or elsewhere in
support of probable cause for the seizure of the property under
this subsection.

Now, what is interesting is that there is supposed to be a hearing, wherein a person can hear the claim and attempt to rebut it, unless:

(3) A temporary restraining order under this subsection may be entered upon application of the United States without notice or opportunity for a hearing when a complaint has not yet been filed with respect to the property, if the United States demonstrates
that there is probable cause to believe that the property with respect to which the order is sought is subject to civil forfeiture and that provision of notice will jeopardize the availability of the property for forfeiture. Such a temporary order shall expire not more than 10 days after the date on which it is entered, unless extended for good cause shown or unless the party against whom it is entered consents to an extension for a longer period. A hearing requested concerning an order entered under this paragraph shall be held at the earliest possible time and prior to the expiration of the temporary order.

while  21 U.S.C. § 853(f) permits seizure of property without a trial:

 (f) Warrant of seizure

The Government may request the issuance of a warrant authorizing
the seizure of property subject to forfeiture under this section in
the same manner as provided for a search warrant. If the court
determines that there is probable cause to believe that the
property to be seized would, in the event of conviction, be subject
to forfeiture and that an order under subsection (e) of this
section may not be sufficient to assure the availability of the
property for forfeiture, the court shall issue a warrant
authorizing the seizure of such property.

There’s only one problem – the law is one that pertains to Food and Drugs.  Obviously, NORFED is not involved in drug trafficking.

I am not a lawyer, so I could be wrong, but I seem to remember that the forfeiture process under the FDA statutes is far less burdensome to the state, and the odds are more heavily stacked against the defendant.  Is the Federal Governemnt violating its own rules by seizing property that falls under the money-laundering statutes using the process for narcotics related seizures? Doug?

It also seems to me that von NotHaus is giving some very bad legal advice.  A class action lawsuit will go nowhere – becasue the claimants will have no standing.

The laws for money-laundering related seizures permit “innocent owners” to file claims with the government.  If they jump through the right hoops, they may get their property back.  The courts will reject any class action lawsuit and instead require people to prove their claims through the regular channels.

More worryingly, the law for narcotics related seizures has no provision for innocent owners, at least that I could find.

Furthermore, the narcotics statute has this littlegem:

(k) Bar on intervention
Except as provided in subsection (n) of this section, no party
claiming an interest in property subject to forfeiture under this
section may –
(1) intervene in a trial or appeal of a criminal case involving
the forfeiture of such property under this section; or
(2) commence an action at law or equity against the United
States concerning the validity of his alleged interest in the
property subsequent to the filing of an indictment or information
alleging that the property is subject to forfeiture under this
section.

Basically, the people who own liberty dollar notes will have to petition the government for redemption of the silver, prove that they did not break the law, to have any hope of getting their money back.

The suit will be costly in time and money, and unless you are sitting on a huge pile of NORFED notes not worth your time.

I think NORFED has just been killed.  Even if the seizure is eventually found to have been unjustified under the law, and the staff be found innocent of any wrongdoing, NORFED is out of business.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

The Efficacy Of Prediction Markets

As I’ve pointed out, I’m a believer in prediction markets. For me, though, it’s more of an intuitive expectation that markets (i.e. revealed preference) are likely to be more accurate than stated preference. The question has come up with Doug, who isn’t yet a believer in prediction markets, as to whether there is any empirical evidence on how reliable prediction markets are.

So I went looking, and found a nice paper titled Interpreting Prediction Market Prices as Probabilities (PDF). I recommend following the link and reading the whole thing, but if you’re not interested, the first paragraph of the conclusion tells you what was discovered (emphasis added):

An old joke about academics suggests that we are often led to ask: “We know it works in practice, but does it work in theory?” This paper arguably follows that model. As discussed above, a variety of field evidence across several domains suggests that prediction market prices appear to be quite accurate predictors of probabilities. This paper suggests that this evidence is easily reconcilable with a theory in which traders have heterogeneous beliefs that are correct on average.

There are several concrete examples given, but as a football fan and occasional gambler, I know how difficult it is to predict football games. Last year, I tracked college games as if I were betting on the games, and against the spread I had a surprisingly good 62.5% record. That’s enough to beat Vegas, but the odd thing is that it was still only about an 80% record straight up picking winners and losers. So to read the below made me a believer in prediction markets:

For this reason we turn to two rather unique datasets. The first was provided to us by Probability Football, an advertising-supported free contest that requires players to estimate the probability of victory in every NFL game in a season.17 Including the pre-season and playoffs, this yields 259 games in the 2000 and 2001 seasons and 267 in 2002 and 2003. On average we observe the probability assessments of 1320 players in each game, for a total sample size of 1.4 million observations. Contestants are scored using a quadratic scoring rule; they receive 100 – 400(w – q)2, points where w is an indicator variable for whether the team wins and q is the stated probability assessment. Truthfully reporting probabilities yields the greatest expected points, a fact that is explicitly explained to contestants.
The top three players receive cash prizes. While these rank-order incentives potentially provide an incentive to add variance to one’s true beliefs, it turns out that given the number of games in a season, this incentive is small. For instance, in 2003, two mock entrants to this contest that simply used prices from TradeSports and the Sports Exchange (a sports-oriented play-money prediction market run by NewsFutures.com) as their probabilities placed seventh and ninth out of almost 2,000 entrants.

Such ideas are fairly simple. As a personal test, if any readers are in offices where you participate in weekly football pools, try a “system” of picking instead of your own intuition, and see how you do. For example, I’ve seen college pick’em pools where you assign a “confidence” rating to your picks for winners. A simple system would be to take the favorite in every game, and assign the confidence ratings to the teams in order of the largest spread to the smallest spread. You may not always have the best weeks, but I would postulate that over the season, you’re going to be in very good shape.

But the key here is that when you’re looking at various ways of determining probability, no method is 100% accurate. Prediction markets, though, have certain features that make them more likely to be accurate than many other “conventional” methods of evaluating probability, like polls. For that reason, and especially now that I have found empirical evidence to support my earlier intuition, I am more and more comfortable in my use of Intrade’s numbers over those of Gallup or Pew Research.

The Man Behind The Haul And The Future Of Politics

The Politico has an interesting profile today of the man behind Ron Paul’s record November 5th money haul, and it says a lot about how the internet has changed politics:

Trevor Lyman came from nowhere this week to earn a spot in fundraising lore by engineering a reported $4 million day for Ron Paul’s dark horse Republican presidential campaign.

But the 37-year old political novice from Miami Beach isn’t done yet.

(…)

The co-owner of a company that promotes musicians on the web, he saw a video online proposing someone gather pledges from Paul’s legions of Internet followers, to be contributed through Paul’s campaign website on Monday, Nov. 5

He bought the domain name ThisNovember5th.com and launched the site Oct. 18.

“There’s no officialness about it in any sense. It’s just a website that said ‘hey let’s all donate money on this day,’” Lyman said. “And once the banners were in place and people could start spreading links, it just propagated virally. And that’s really it.”

Paul campaign spokesman Jesse Burton said the campaign did not coordinate with Lyman but was aware of his efforts, which Paul piggybacked on as Nov. 5 approached.

“We learned about this through the Internet,” Benton said. As for Lyman, he said “I don’t know who the guy is, but I do know that he launched this website and I think that he was the original idea behind it, so kudos to him.”

Lyman said the goal was to get 100,000 people to pledge $100 each, for a total of $10 million, “so we did fall short, but I’m still very happy with what we did.”

As well he should be. What happened on Monday is both a measure of the ferocity, for lack of a better word, of Ron Paul’s support and a measure of the extent to which the traditional political channels are becoming increasingly less relevant. Is it likely that 2008, or even 2012, will see the traditional political system eclipsed ? No, not when candidates Clinton, Obama, and Giuliani can raise tens of millions of dollars easily; but it’s a sign that the days of the traditional political campaign are slowly coming to an end.  What will replace it is unclear, but it’s likely to be something that the people in power can’t directly control, and that can only be a good thing.

The article notes that Lyman is planning another fundraising effort for December 15/16 to coincide with Bill of Rights Day and the anniversary of the Boston Tea Party. He discounts the suggestion that it will be a repeat of November 5th, but I wouldn’t discount the possibility at this point.

Technology vs. The Dictators

As events in Pakistan continue to unfold, one thing is clear, the old dictator’s tool of shutting down the independent media isn’t working anymore:

KARACHI (AFP) – Blocked by the government and facing harsh curbs, Pakistan’s private television channels have turned to the Internet to reach viewers starved of news about the state of emergency in the country.

Authorities took cable broadcasters off the air on Saturday evening when they first started to report that military ruler President Pervez Musharraf was about to impose an emergency — which he did minutes later.

Since then most Pakistanis have faced either blank screens or the sanitised news broadcast by state television — a black hole that helped fuel rumours on Monday that Musharraf had himself been ousted by the army.

But the independent stations have hit back with Internet streaming and satellite broadcasting.

“News is a contraband item in Pakistan now and it is being sold on the black market,” Imran Aslam, the president of Geo Television, the country’s most widely watched cable news channel, told AFP.

Geo sent an SMS to cellphone users on Sunday telling them to log onto its website (www.geo.tv) to get live transmission. Another channel, ARY One, sent out a similar email (www.arydigital.tv).

“Technology has progressed beyond (the government’s) imagination and we believe this is the best time to put new media into operation,” said Aslam, whose channel is running an on-screen counter showing the time elapsed since the emergency began.

He added that there had been a “rush on Internet log-ons” since Musharraf imposed emergency rule.

There are between three and five million Internet users among Pakistan’s 160 million-strong population, service providers say, up from less than one million in 2001.

A small percentage of the population, yes, but I’m sure what you find is that each person accessing the forbidden news on the Internet is sharing that information with others. It might not trickle out to the entire population, but enough people will know what’s really going on to make Musharraf’s efforts to clamp down on any news not vetted by the state a failure from the beginning.

Once again, this reinforces an idea that George Orwell would have found strange. Rather than making the state stronger, technology actually weakens dictatorial control, because it makes it impossible for the state to control what their citizens see and hear about what is going on around them. And without control over the flow of information, the very legitimacy of the state itself comes into question.

Forget Big Brother, say hello to Google.

Internet Free From Taxation For 7 More Years

God help us if Hillary is elected…

Congress approves Internet-tax moratorium

The House unanimously approved a seven-year extension of a moratorium on Internet-access taxes, which the Senate passed last week. The move cleared the way for President Bush to sign it before the current ban expires Thursday.

For consumers, the legislation largely maintains the status quo: No Internet-access taxes except in the nine states that were grandfathered when the ban was first put in place in 1998. California is not among them.

The legislation applies only to Internet-access taxes, not to sales taxes for online purchases. But it addresses a concern by many lawmakers, technology companies and Internet-service providers that consumers could see the same itemized taxes on their Net-access bills that now appear on their phone and TV cable bills. A monthly phone bill can include as much as $10 in taxes.

“This legislation will help keep the cost of Internet access down so that all individuals can continue to use the great informational tool that is the Internet,” Rep. Lamar Smith (R-Texas) said. He and other lawmakers said the legislation would give telecommunications companies the certainty they needed to continue investing in the infrastructure to extend high-speed Internet access throughout the country.

I suppose it’s needless to say that I’m happy about this development. It seems that the proponents of the moratorium were asking for a permanent ban, but even a 7 year extension is a victory, as the longest extension they’d previously secured was 4 years.

However, I saw one interesting piece of the puzzle here, that was, to reuse a word, quite puzzling:

For the young technology industry, the lengthy extension is a legislative victory that shows its clout has grown in Washington during the last decade. Still, the industry continues to have trouble when facing a formidable lobbying opponent.

In this case, it was state and local governments, which were concerned that they could lose the ability to tax phone and TV services as more consumers get them delivered over the Internet. Governors and local officials, who have strong ties to many members of Congress, successfully derailed the push for a permanent ban and got the definition of Internet access changed to make clear that phone and TV services delivered online are taxable. Many state and local governments depend on money from taxing those services.

Very interesting. One can likely make the argument was that the previous taxes on phone service and television lines were related in some way to the government granting monopolies to the providers of those services, and/or related to the infrastructure involved. I’m not sure of the whole history of how telephone and television service taxes arose, but I can’t see them being sold to the public as if using a telephone or watching television were– by themselves– taxable activities.

But that apparently is the argument that must be made to support such an exemption. The telephone service and television service, when provided through the internet, is clearly a component of internet access. To create this exemption, the Governors & states must be arguing that talking on the telephone or watching television– by themselves– are taxable activities regardless of the media over which the signals are delivered.

Let that sink in for a minute. I think the initial concern was the loss of an existing revenue stream to state governments. But in the long term, what are the implications of such an exemption?

Groups such as the National Governors Assn. and the California Assn. of Counties said they knew of no governments planning to tax Internet access, but they argued that a permanent ban would make it difficult to change the definition in the future to avoid exempting other taxable services.

In a change pushed by Sen. Ron Wyden (D-Ore.), the legislation also clarifies that services related to Internet access, such as instant messaging, e-mail and personal online storage, are not taxable.

Aha! Clearly this is the camel’s nose in the tent, a way to create the precedence for exemption of services and open the door to taxing them in the future. It may be such that “internet service” in the future remains tax-free, but I highly doubt that the services provided over the internet will remain free from taxation.

The internet tax is highly unpopular. After all, this is a service that we’ve all been enjoying tax-free for years, and for governments to all of a sudden offer to increase the price of the service through taxation is one that doesn’t go over too well in American homes and offices. But as long as something remains tax-free, politicians can’t sleep at night, and they’re constantly dreaming up ways to get their claws in. Call this a success in that the moratorium was extended, but keep a wary eye on where things go from here, or you’ll soon find that your “tax-free internet service” seems to involve sending a lot of money to your state capitol and to Washington DC.

From Taxicab Freedom In Minneapolis To Central Planning In NYC

Earlier, Doug posted a story about an expansion of freedom in the taxicab market in Minneapolis. It seems that someone finally asked why it was necessary to set an arbitrary limit on the number of cabs operating in the city, and that someone was able to muster enough power to end the restriction.

Perhaps NYC might take it as a suggestion. NYC, of course, is one of the most restrictive taxi markets in the country. Virtually every portion of the taxicab business is regulated. The number of taxi “medallions” is limited to roughly 13,000, generating a competitive market where the cost of said medallion on the secondary market is into six figures. Of course, artificial scarcity is known to rise prices, so fares are also tightly regulated, to ensure that drivers cannot take advantage of the limit by raising rates. And on top of that, there are a host of other regulations on their operation, to the extent that taxi drivers in New York have very little control over how they execute their job. As with most regulations, it doesn’t really benefit the consumer, and often does not benefit the drivers, but is a big boon to the regulators and to the taxi companies who own the medallions.

So is NYC looking at reducing the restrictions, like Minneapolis? No! In fact, they recently decided to add another little wrinkle. Each cab will need to be outfitted with an information terminal with such features as GPS, credit-card services, and perhaps other services such as news, video, advertisement, and information on local attractions.

I can tell you, as someone who is familiar with these terminals, they’re not cheap. Even outside of the normal cost of installing the terminals, there are maintenance and replacement costs. The terminals have an LCD with touchscreen, and I’m sure the number of drunk and/or unruly passengers who put a fist or foot through the screen will make the total cost of ownership quite high on the cab owners. On top of those concerns, each transaction using a credit card will include a service charge to the company handling the transaction. Who will pick up all these costs? Well, the cabs cannot raise their rates, so the passengers won’t cover it. And the city certainly isn’t footing the bill. So who gets it? The cabbies themselves, of course! And let me tell you, they’re understandably not happy about it:

Taxi drivers angry about a new rule requiring the installation of global positioning systems and credit card machines in cabs are planning a second one-day strike in six weeks on Monday.

The city was preparing for the strike by the Taxi Workers Alliance by instituting a contingency plan that lets drivers pick up multiple passengers and charge zone-based fares.

The touch-screen monitors, which are being phased in as yellow cabs come up for inspection, let passengers pay by credit card, check on news stories, map their taxi’s current location and look up restaurant and entertainment information.

The alliance, which claims to represent about a fifth of the city’s 44,000 licensed cab drivers, opposes the technology, saying the 5 percent surcharge on each credit card transaction amounts to a wage cut and the GPS device allows cab companies to track drivers.

Furthermore, the alliance claims the technology doesn’t work properly.

As a consumer and a technology buff, I love the idea of information terminals in these cabs. But as an advocate of freedom, I am most certainly not in favor of forcing cabs to take the technology, and not in favor of them being unable to adjust their pricing to cover the additional level of service they’re offering.

But in NYC, what I want as a consumer doesn’t matter. What level of service cabbies want to offer doesn’t matter. The market has been replaced by the wishes, desires, and mandates of the New York Taxi & Limousine Commission. Freedom has no place in this brave new world.

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