The Market’s Glorious Resurrection of Mystery Science Theater 3000

The Market’s Glorious Resurrection of Mystery Science Theater 3000

The Market's Glorious Resurrection of Mystery Science Theater 3000

Almost 20 years after being canceled, comedy series Mystery Science Theater 3000(MST3K) has returned.

During its original run in the 90s, MST3K earned a cult following by doing what pop culture does best, namely, taking a mundane idea and elevating it to an art form.

For MST3K, the idea was to build a show around a favorite pastime of movie fans: mocking cheesy movies. The concept seems simple today, but thirty years ago it was groundbreaking, all the more so because the cast of MST3K was really good at it. Yet despite winning many fans, the show was never a favorite of the networks that aired it, which were often unsatisfied with the ratings and therefore eager to control its creative direction.

The revival of MST3K is a testament to the devotion of “MiSTies” around the world. But it’s more than that: it’s also a way to explain how markets work, and other economic science facts.

Crowdfunding Puts Consumers in Control

First, entrepreneurs can use markets to satisfy our most mysterious, scientific, and theatrical wants. In the case of MST3K, there wasn’t an obvious desire for a new season, and certainly not enough to attract the attention of the major networks. There seemed to be only a small, devoted, and mostly decentralized fan base that lacked a clear way to signal the value of a revival to investors.

Yet there actually was enough support, but the producers needed the market to show it. That’s why they turned to crowdfunding to gauge interest in the project. Rather than waste time and money cold-calling networks looking for investments, creator Joel Hodgson and his team asked the fans to vote with their wallets.

 

And so they did: the “Bring Back MST3K” Kickstarter campaign, launched in November 2015, and shattered many previous fundraising records, ultimately grossing over $5.7 million. Eighteen months later, the fans have season 11, this time via Netflix.

Privately Funding the Arts

Like Kickstarter, Netflix is closer to a free-market model than many of the oversized networks that dominate the industry. These privileged, cartelized companies are increasingly threatened by platforms like Netflix and Amazon Prime, which have largely succeeded by taking big risks on seemingly obscure or impossible projects.

Second, the success of the MST3K Kickstarter hints at a deeper point: the arts can be privately funded. When people are convinced an artistic venture has merit, they’re happy to support it—and most art forms require far less investment than a TV show.

Entrepreneurs excel at finding an audience, however niche or dispersed, and the arts are no exception. Crowdfunding can even provide public goods. But too often, calls for public funding of the arts are calls for art that doesn’t create value for anyone but the artists. Of course, public organizations do fund some art projects that appeal to large audiences, but to the extent that those audiences feel strongly about them, they should be willing to support them. There’s no need to force others to pay and then funnel the money through a public bureaucracy first.

Third, using the market to fund the arts benefits creators and audiences, and hurts no one. People support MST3K because they love it. But people who don’t like the show aren’t obliged to pitch in, or even to pay attention, much less sacrifice to their money or viewing time to a show that doesn’t interest them. Contrast this to public programming such as PBS, which delivers one-size-fits-all content at taxpayer expense. That’s the beauty of the market: it doesn’t punish people for having different tastes. My enjoyment of a show like MST3K doesn’t stop others from enjoying art that they like. Publicly-funded art, on the other hand, always involves favoring some tastes at the expense of others.

The Market is the Ultimate Judge

Finally, the market is uncertain. Even successful entrepreneurs can’t be sure consumers will always want what they have to offer. And the fact is, MST3K’s return is not by itself a signal of success: we have to wait and see if fans continue to watch and support the show and if it can capture a new audience, to know whether their money was well-spent.

The creative minds behind the show are bearing this uncertainty, and will profit or lose according to the strength of their artistic judgments—ultimately, the market makes it possible for entrepreneurs to create value, but it can’t guarantee it.

The return of MST3K is a great example of the democracy of the market. And it’s only one of many shows to be resurrected after an untimely cancellation. These revivals are a way for fans to get more of what they love, but they’re also good for artists, who get another chance to create art the way they want.

Welcome back, Mystery Science Theater 3000!

Matthew McCaffrey

Matthew McCaffrey is assistant professor of enterprise at the University of Manchester and editor of Libertarian Papers.

This article was originally published on FEE.org. Read the original article.

Enter (September 1984)

Enter is a computer magazine that was targeted towards kids and published by Children's Television Workshop (later Sesame Workshop). What computer loving kid could resist a cover with the Enterprise on it? While it did have some gaming content its emphasis was on education, including programming and general computer use. It covered all of the popular computers of the day that you might find in a home including the Commodore 64, VIC-20, TI-99/4A, TRS-80, Apple II, the Atari 8-bit line, PCs (DOS), Coleco Adam, Timex and possibly others. The September 1984 issue includes:

Features

• The Empire's Computer Secrets - This article is pretty nifty bit of history. Part of it is an interview with Ed Catmull, at the time responsible for many of the computer effects in early Star Trek and Star Wars movies among others. He would later become co-founder of Pixar. In the image below (from this issue of Enter), Ed can be seen showing of some of the computer equipment being used for movie making circa 1984. This article also covers the game coming out of Lucasfilm including Ballblazer and Rescue On Fractalus, both initially developed on Atari 8-bit computers.

• Rock on the Road - An article about how computers are used to control light shows for various concerts including those of Genesis, Duran Duran, The Police, The Jacksons, ZZ Top, Culture Club, and Van Halen among others. Some specific equipment is covered including Var-Lites which were first used by Genesis.

• The Write Stuff - An overview of the word processing software available for different computers along with their capabilities. Software covered includes Apple Writer IIe (Apple IIe), Atariwriter (Atari 8-bit computers), Bank Street Writer (Apple, Atari, Commodore 64, DOS), Cut & Paste (Apple IIe, IIc, Atari, Commodore 64, DOS), Easy Script 64 (Commodore 64), Electric Pencil (TRS-80 Models III and IV), Homeword (Apple, Atari, Commodore 64), Leading Edge (DOS), Letter Wizard (Atari), Oniwriter (Commodore 64), Quick Brown Fox (Apple, Atari, Commodore 64, VIC-20, DOS), Smartwriter (Coleco Adam), The Write Stuff (Apple II, DOS), and Wordvision (DOS).

• Portable Power - An overview of a few of the newer portable computers available at the time. These include the Epson HX-20, NEC 820, Radio Shack Model 100 (I had one of these for a while), and the Olivetti M-10. These weren't like today's notebooks. They were typically all in one units with a built-in 4 to 8 line black and white LCD screen above the keyboard.

• The Making of an Arcade Game - Behind the scenes at Bally Midway factory in Franklin Park, Illinois. This shows the process of assembling a Spy Hunter arcade machine.

• Contest #4 - A contest involving renaming computer parts in which you could win an Apple IIc.

Departments

• Feedback - Readers respond to a previous article about software piracy, a very hot topic at the time.

• Bits - The news section, this month featuring: the Pac-Van, a mobile arcade that holds 25-30 games that could be rented for birthday parties and such; two students hack the electronic scoreboard at the Rose Bowl; Plaqueman, a new game from Home Computer Software; a sheep shearing robot...and more.

• Ask Enter - Readers ask about compatibility, how disks work, if games are bad for your TV, and more.

• Random Access - A high school student complains that while her school does a good job teaching computer programming, that doesn't mean that you know how to actually use a computer.

• User Views - Game Reviews
  • The Seven Cities of Gold (Apple II, Commodore 64, Atari) - A graphical adventure game by Electronic Arts that features the exploration of North and South America through 400 years of history.
  • Pitfall II: Lost Caverns (Atari 2600, ColecoVision/Adam, Atari 5200, Atari computers, Commodore 64, DOS) - A sequel to Pitfall. This was an excellent game for the time that I had for my Commodore 64.
  • James Bond: 007 (Atari computers, ColecoVision, Commodore 64, Atari 2600) - An action game by Parker Brothers based on scenes from four different Bond films.
  • Gumball (Apple, Atari) - An action/puzzle game in which you must catch different colored gumballs in the correct cart.
  • Bump 'N' Jump (Intellivision) - A port of the arcade classic that is part race part destruction derby.
  • Bruce Lee (Commodore 64, Apple II, Atari) - Work your way through the fortress with your martial arts prowess.
  • Zaxxon (Commodore 64) - An excellent conversion of the classic arcade shooter.
  • Boulder Dash (Atari, Commodore 64, DOS) - Somewhat like Dig Dug but with its own unique twists.

• Software Scanner - Various software reviews.
  • Run for the Money (DOS) - A game in which you have to fix your spaceship but its more about business planning than anything.
  • Peripheral Vision (Commodore 64, Atari, DOS) - Drawing software that works with a light pen.
  • Flight Simulator II (Commodore 64, Apple, Atari) - The original Flight Simulator was written for DOS based machines. The sequel is really an enhanced version of the original for various other 8-bit computers.
  • M-SS-NG L-NKS (Commodore 64, Atari) - An educational fill in the blanks puzzle game featuring classic literature.
  • Coco-Notes (Atari, Commodore 64) - Compose songs by catching notes.

• Newsbeat - The latest in computer news, featuring the new Commodore 16 and Plus 4; the new Okimate 10 dot-matrix printer; various robots and robot software; new software including Breakdance, Archon II, and more; the Atari 780 Prosystem; the MindLink system; and voice controlled laser discs.

• Showbeat - Including a preview of a new movie featuring Atari computers, Cloak & Dagger. This movie starred Henry Thomas (Elliot from E.T.). While some will no doubt argue that this was no E.T., it was a movie I loved as a kid and probably had a bigger impact on me.

• Pacesetters - An article about One on One featuring Larry Bird and Dr. J as well as the 17-year old programmer that wrote it.

• Connections - Info on a Commodore 64 music contest, BBSes, new Timex hardware and software, and where you might find out of print books.

• Pencil Crunchers - A maze created with the help of a computer (Apple II) and a computer related crossword puzzle.

• Next - What's coming up next month ('Life On-Line', 'Computers Go To College', and more).

Programming

• BASIC Training - Featuring Micro Mind Reader, a type in program that can read your mind for Apple, Adam, Atari, IBM, TRS-80 Color Computer, and Timex Sinclair.

• BASIC Recommends - A recommendation for a BASIC programming book: 'More BASIC: A Guide to Intermediate-Level BASIC Programming'

...and more!

X-Files Season 11 Confirmed! 10 More Episodes Coming

The truth is out there for at least 10 more episodes. The X-Files Season 11 will arrive some time later this year, or in early 2018, Fox confirmed. The fact that they’re offering fans a larger episode count than we got with Season 10, which only had six episodes, is a good sign.

“Iconic characters, rich storytelling, bold creators — these are the hallmarks of great TV shows. And they are some of the reasons why The X-Files has had such a profound impact on millions of fans worldwide,” David Madden, president, Fox Broadcasting Company, said in a statement. “Chris’ creativity, along with the brilliant work of David and Gillian, continue to propel this pop culture phenomenon, and we can’t wait to see what fresh mysteries Mulder and Scully uncover in this next chapter of The X-Files.”

Even before The X-Files returned in 2016 to strong ratings, the narrative over at Fox seemed to be that Carter, Anderson, and David Duchovny had a greenlight for more episodes or another “event series” if they wanted it.

Trump Just Imposed a New Tax on Lumber

Trump Just Imposed a New Tax on Lumber

Trump Just Imposed a New Tax on Lumber

There are a lot of news reports today about Trump’s decision to impose stiff tariffs on American companies (home builders) who buy Canadian lumber, here is a sample: “Trump slaps first tariffs on Canadian lumber,” “Tariff on Canadian lumber sends a stern message,” “Trump Administration To Impose 20 Percent Tariff On Canadian Lumber,” and “Trump slaps duty on lumber from Canada.” In each case, those news reports miss a few very critical points: a) Canadian lumber doesn’t pay the tariff, b) Canadian lumber companies won’t pay the tariff, and c) American lumber-buying companies (mostly home builders) will pay the tariff, which will be passed along to home buyers in the form of higher new home prices. Therefore, it’s more accurate to report that Trump has just slapped stiff 20% tariffs (lumber taxes) on the American people, not Canada.

I’ve taken the liberty of making some edits to the New York Times article “In New Trade Front, Trump Slaps Tariffs on Canadian Lumber” to reflect more accurately the viewpoint of the American consumer and American lumber-buying companies (home builders), and expose tariffs for what they really are: price-raising, job-killing, prosperity-destroying trade policies that involve the government-sanctioned “legal plunder” of Americans (home buyers and home builders in this case) by domestic producers (domestic lumber producers):

New Title: “In New Trade Front, Trump Slaps Stiff Import Taxes on American Home Builders Buying Canadian Lumber”

WASHINGTON — The Trump administration announced on Monday that it would impose new tariffs taxes on Americans who purchase Canadian softwood lumber imports, escalating a longstanding conflict with America’s second-largest trading partner.

The Commerce Department determined that Canada had been improperly generously subsidizing the sale of American companies who buy softwood lumber products to the United States from Canada, and after failed negotiations to keep lumber prices internationally competitive, Washington decided unfairly to retaliate against American lumber buyers with tariffs of 3 percent to 24 percent. The penalties (taxes) imposed on Americans will be collected retroactively on imports dating back 90 days.

The decision came days after President Trump complained bitterly on behalf of U.S. dairy farmers about Canada’s dairy trade practice of slashing their milk prices (to the great benefit of Americans, especially the poor), and the tariffs on Americans signaled a harsher turn in his relationship with Canada the American people even as he seeks to renegotiate the North American Free Trade Agreement. While he has often assailed China, Mexico and others for their trade practices, he seemed to have forged a strong relationship with Canada’s prime minister, Justin Trudeau.

The United States lumber companies and Canada have been rivals and at odds over softwood lumber in one form or another since the 19th century, with the current dispute tracing back to 1982. The United States imported $5.7 billion in softwood lumber last year alone, mainly for residential home building. Raising prices on imported Canadian lumber by 20 percent will likely lead to higher prices for new homes, and could slow home building and lead to layoffs for U.S. construction workers.

Therefore, the tariffs taxes on American home builders buying Canadian lumber are likely to be opposed by American homebuilders, who say they raise the cost of new houses for American home buyers. A study last year by the National Association of Home Builders found that a 15 percent tariff tax on American home builders buying imported lumber would increase new home prices by 4.2 percent and cost 4,666 full-time construction jobs.

When will the public finally come to understand these basic economic facts about trade protectionism and tariffs?

1. Tariffs are simply taxes on imports, and those taxes are paid for by Americans, not foreigners. In this case, Canadian lumber producers aren’t paying the 20% tariff/tax, American lumber buyers (home builders) pay the tax on imported lumber from Canada, and those taxes on lumber are eventually paid for by American home buyers.

2. Tariffs on imported lumber might help protect, save or create jobs in one US industry (lumber producers), but will destroy more jobs in other US industries (construction in this case).

3. US producers only engage in rent-seeking to use government force to be protected against foreign rivals when foreign competitors (Canadian lumber producers in this case) offer lower prices to Americans than domestic producers. That’s why it’s called “protectionism” — it’s protection for high-cost domestic companies against low-cost foreign competition.

4. It shouldn’t really matter why foreign producers are better able to serve American consumers with lower prices than domestic producers. If China “manipulates” its currency to offer Americans lower prices that otherwise would be the case, that policy provides net benefits for Americans. If Canada “unfairly” subsidizes its lumber producers, that’s a form of foreign aid, and a gift from the citizens of Canada to the citizens of the United States. If we wouldn’t complain about free lumber from Canada, we shouldn’t complain about low lumber prices that might be subsidized by Canadian citizens.

5. Protectionism should be seen for what it really is: Trade policies that favor domestic producers over consumers, raise taxes and prices for Americans, and in the process destroy jobs and prosperity. In other words, it’s a sure formula to make a country poor, not great.

Bottom Line: To paraphrase a comment Milton Friedman once made about minimum wage laws, trade protectionism is a monument to the power of superficial thinking. Superficial and short-sighted because it ignores the complexities and dynamics of world markets, and ignores all of the unseen, delayed and hidden costs of trade protectionism that will make the American economy weak again, not great again.

Republished from AEI.

Mark J. Perry

Mark J. Perry is a scholar at the American Enterprise Institute and a professor of economics and finance at the University of Michigan’s Flint campus.

This article was originally published on FEE.org. Read the original article.

Electronic Gaming Monthly (August 1997)

Source: Electronic Gaming Monthly - Issue Number 97 - August 1997

In August 1997 the Saturn, PS1 and Nintendo 64 were the newest consoles. EGM was still also covering the Super Nintendo and the Genesis which were nearing their last days. Contents of this issue includes:

Departments

• Insert Coin - A look back at the last 9 years of EGM as well as upcoming changes.

• Press Start - The latest news in the video game world. This month, Sega and Bandai cancel plans for a merger; Sega announces price cuts for the Saturn (as low as $149); Ghost in the Shell comes to DVD; rumors of an upcoming Nintendo 64 game featuring characters Banjo and Kazooie; Singletrac, a formerly PlayStation only developer, announces an agreement to develop games for the Nintendo 64; launch of the 64DD disk drive add-on for the Nintendo 64 is delayed until March 1998 (not that it would ever make it to the U.S.); Tobal 2 U.S. release cancelled; Earthworm Jim 3 announced for the PlayStation, Nintendo 64 and PC; Interact debuts The V3 Racing Wheel; rumors of Resident Evil for the Nintendo 64; and much more.

• Top 10 - Takin the number one spots this months according to EGM editors... Overall: Air Combat 2; PlayStation: Air Combat 2; Nintendo 64: Star Fox 64; Saturn: Shining The Holy Ark

• Gaming Gossip - Rumors this month include information about Dural, Sega's new 64-bit console; Sony's new dual analog controller coming soon; new games for the PlayStation including Exodus, Messiah, a James Bond game and a new music game; Namco's new System 33 arcade board which will host a new Ridge Racer game and a new fighting game among other; a new 3D based arcade board from Capcom which will host Street Fighter IV; Rampage for the Nintendo 64; and more.

• Protos - A look at upcoming but as yet unfinished games including:
  • • Aerofighter Assault (Nintendo 64)
    • MK Mythologies: Sub-Zero (PlayStation, Nintendo 64)
    • Resident Evil (Sega Saturn, PlayStation)
    • Dragonball GT (PlayStation<)
    • Youngblood (PlayStation)
    • Reboot (PlayStation)
    • Clock Tower (PlayStation)
    • Felony 11-79 (PlayStation)
    • Beast Wars (PlayStation)
    • Deathtrap Dungeon (PlayStation)
    • Violent Seed (PlayStation)
    • Freakin' Fast (PlayStation)
    • Ghost in the Shell (PlayStation)
    • Bravo Air Race (PlayStation)

• Review Crew - Reviews of the following games:
  • Air Combat 2 - This air combat game for the PlayStation gets EGM's Game of the Month.
  • Shining The Holy Ark - A must have Saturn owners that are RPG fans.
  • Machine Hunter - A scrolling shooter for the PlayStation that fans of Loaded would probably enjoy.
  • Lethal Enforcers 1 & 2 - An arcade accurate translation of an older light gun shooter for the PlayStation. Graphics have not been updated though and it gets old fast.
  • Xevious 3D - A nifty 3D update of an arcade classic for the PlayStation. I prefer the original though.
  • Raystorm - A solid vertical shooter for the PlayStation.
  • Poy Poy - A simply but fun multiplayer action game for the PlayStation.

• Trick of the Trade - A code that gives you everything you need in Turok: Dinosaur Hunter; how to enable stage select and expert mode in Buster Brothers Collection; hidden cars in Peak Performance; a variety of cheat for Triple Play 98 and Bug Too!; level select and "cheat kill" in Wing Commander IV; free play, invincibility and more in War Gods; easy mode for Brahma Force; a variety of cheat codes for Descent Maximum; a cheat menu for Independence Day; Invincibility in Doom; a cheat menu in Die Hard Trilogy; and much more!

• Team EGM - Featuring various sports games including Madden NFL '98 for the PlayStation, Multi Racing Championship for the Nintendo 64, NCAA Football '98 for the PlayStation, NHL Powerplay '98 for the PlayStation, Top Gear Rally for the Nintendo 64 and more.

• Interface - Letters from readers about Nintendo's Project Atlantis, rent to own PlayStations, Japanese Saturn games, The City of Lost Children, Final Fantasy VII, the 64DD, and more.

Win Big!

• Star Fox 64 - All you had to do for this contest was send in a postcard. Prizes included a Nintendo 64, Star Fox 64, Rumble Paks, Nintendo 64 controllers, and more.

Special Features

• Peacetime Programmers - The relationship between defense company simulators and the latest games.

• Star Wars: Masters of Teras Kasi - A Star Wars fighting game for the PlayStation. It sounded like such a cool idea but the execution was lacking. As fighting games go, it turned out to be pretty lousy.

• Psygnosis - Featuring the latest games from this developer: G-Police is a pretty good Blade Runner-esque 3D action game; Colony Wars is another solid game featuring Wing Commander like space combat; Formula 1 '97 is a sequel to their previous Formula 1 game; Overboard is described here as a cross between Gauntlet and Micro Machines; Psybadek is a free roaming 3D adventure game; Rascal is another such game that falls roughly into the same category; finally we have Shadow Master, a first-person 3D shooter in which you pilot a ship through enclosed areas (reminds me at least in concept of Descent).

• Polygonal Pinup - A biography of Laura Croft.

• The Year of the Show - An overview of all the video game related shows around the world throughout the year.

Next Wave

• Dungeons & Dragons Collection (Saturn) - Includes both Tower of Doom and Storm Over Mystaria. These were originally arcade games and play like a cross between Final Fight and Golden Axe.

• Sky Target (Saturn) - Ported from Sega's Model 2 arcade hardware, this game is a bit reminiscent of After Burner II.
• MDK (PlayStation) - A goofy and violent 3D 3rd person shooter that was originally developed for the PC. MDK was long rumored to stand for "Murder, Death, Kill".

• Machine Hunter (PlayStation) - A one or two-player top down action shooter.

• Poy Poy (PlayStation) - A sort of 3D Bomberman.

• Resident Evil Director's Cut - Because you can never have too much Resident Evil...

• Street Fighter 2 Collection (PlayStation) - A nice collection for Street Fighter II fans including Super Street Fighter II, Super Street Fighter II Turbo, and Street Fighter Alpha 2 Gold.

• Lethal Enforcers 1 & 2 (PlayStation) - These lightgun classics are reviewed elsewhere for the Saturn.

• One (PlayStation) - This 3D action game explores what happens if you wake up full of rage with a metal gun where your arm used to be...

• Jersey Devil (PlayStation) - A 3D cartoon adventure but the name reminds me of the X-Files episode.

Hoggetowne Medieval Faire 2013 – Just Desserts

Hoggetowne Medieval Faire 2013 – Just Desserts

Just Desserts at the Hoggetowne Medieval Faire in Gainesville, Florida.

States Introduce Dubious Anti-Pornography Legislation to Ransom the Internet

More than a dozen state legislatures are considering a bill called the “Human Trafficking Prevention Act,” which has nothing to do with human trafficking and all to do with one man’s crusade against pornography at the expense of free speech.

At its heart, the model bill would require device manufacturers to pre-install “obscenity” filters on devices like cell phones, tablets, and computers. Consumers would be forced to pony up $20 per device in order to surf the Internet without state censorship.  The legislation is not only technologically unworkable, it violates the First Amendment and significantly burdens consumers and businesses.

Perhaps more shocking is the bill’s provenance. The driving force behind the legislation is a man named Mark Sevier, who has been using the alias “Chris Severe” to contact legislators. According to the Daily Beast, Sevier is a disbarred attorney who has sued major tech companies, blaming them for his pornography addiction, and sued states for the right to marry his laptop.  Reporters Ben Collins and Brandy Zadrozny uncovered a lengthy legal history for Sevier, including an open arrest warrant and stalking convictions, as well as evidence that Sevier misrepresented his own experience working with anti-trafficking non-profits.

The bill has been introduced in some form Alabama, Florida, Georgia, Indiana, Louisiana, New Jersey, North Dakota, Oklahoma, South Carolina, Texas, West Virginia, and Wyoming (list here). We recommend that any legislator who has to consider this bill read the Daily Beast’s investigation.

But that’s not why they should vote against the Human Trafficking Prevention Act. They should kill this legislation because it’s just plain, awful policy.  Obviously, each version of the legislation varies, but here is the general gist.

Read EFF's opposition letter against H.3003, South Carolina's iteration of the Human Trafficking Prevention Act. 

Pre-installed Filters

Manufacturers of Internet-connected devices would have to pre-install filters to block pornography, including “revenge porn.” Companies would also have to ensure that all child pornography, “revenge pornography,” and “any hub that facilitates prostitution” are rendered inaccessible. Most iterations of the bill require this filtering technology to be turned on and locked in the on position, by default.

This is terrible for consumer choice because it forces people to purchase a software product they don’t necessarily want. It’s also terrible for free speech because it restrains what you can see. Because of the risk of legal liability, companies are more likely to over-censor, blocking content by default rather than giving websites the benefit of the doubt.  The proscriptions are also technologically unworkable: for example, an algorithm can hardly determine whether an item of pornography is “revenge” or consensual or whether a site is a hub for prostitution.

To be clear, unlocking such filters would not just be about accessing pornography.  A user could be seeking to improve the performance of their computer by deleting unnecessary software.  A parent may want to install premium child safety software, which may not play well with the default software. And, of course, many users will simply want to freely surf the Internet without repeatedly being denied access to sites mistakenly swept up in the censorship net.

A Censorship Tax

The model bills would require consumers to pay a $20 fee to unlock each of their devices to exercise their First Amendment rights to look at legal content. Consumers could end up paying a small fortune to unlock their routers, smartphones, tablets, and desktop computers.

Data Collection

Anyone who wants to unlock the filters on their devices would have to put their request in writing. Then they’d be required to show ID, be subjected to a “written warning regarding the potential dangers” of removing the obscenity filter, and then would have to sign a form acknowledging they were shown that warning. That means stores would be maintaining private records on everyone who wanted their “Human Trafficking” filters removed.

The Censorship Machine

The bill would force the companies we rely upon to ensure open access to the Internet to create a massive censorship apparatus that is easily abused.

Under the bill, tech companies would be required to operate call centers or online reporting centers to monitor complaints that a particular site isn’t included in the filter or complaints that a site isn’t being properly filtered. Not only that, but the bill specifically says they must “ensure that all child pornography and revenge pornography is inaccessible on the product” putting immense pressure on companies to aggressively and preemptively block websites to avoid legal liability out of fear of just one illegal or forbidden image making it past their filters. Social media sites would only be immune if they also create a reporting center and “remain reasonably proactive in removing reported obscene content.”

It’s unfortunate that the Human Trafficking Prevention Act has gained traction in so many states, but we're pleased to see that some, such as Wyoming and North Dakota, have already rejected it. Legislators should do the right thing: uphold the Constitution, protect consumers, and not use the problem of human trafficking as an excuse to promote this individual’s agenda against pornography.

Source: States Introduce Dubious Anti-Pornography Legislation to Ransom the Internet | Electronic Frontier Foundation

Taxes Are Worse than You Thought

Taxes Are Worse than You Thought

We are quickly approaching the deadline for filing (and paying) our federal and state income taxes (extended to April 18 this year because of Emancipation Day), and that means it’s time for my annual post at tax time to help put things in perspective.

1. Some Historical Perspective. “In the beginning” when the US federal income tax was first introduced in 1913, it used to be a lot, lot simpler and a lot easier to file taxes; so easy in fact that it was basically like filling out your federal tax return on a postcard.

For example, page 1 of the original IRS 1040 income tax form from 1913 appears above. There were only four pages in the original 1040 form, including two pages of worksheets, the actual one-page 1040 form above, and only one page of instructions (view all four pages here). In contrast, just the current 1040 instructions for 2016, without any forms, runs 106 pages.

Individual federal income tax rates started at 1% in 1913, and the maximum marginal income tax rate was only 7% on incomes above $500,000 (more than $12 million in today’s dollars). The personal exemption in 1913 was $3,000 for individuals ($72,850 in today’s dollars) and $4,000 for married couples ($97,000 in today’s dollars), meaning that very few Americans had to pay federal income tax since the average income in 1913 was only about $750. The Tax Foundation has historical federal income tax rates for every year between 1913 and 2013 here for tax brackets expressed in both nominal dollars and inflation-adjusted dollars.

2. Tax Graphic of the Day (above). Some more historical perspective…

3. Opportunity Cost. In a 2012 report to Congress (most recent data available), the National Taxpayer Advocate estimated that American taxpayers and businesses spend 6.1 billion hours every year complying with the income tax code, based on IRS estimates of how much time taxpayers (both individual and businesses) spend collecting data for, and filling out their tax forms. In addition, Americans will spend an estimated $10 billion for the services of tax preparation firms and $2 billion on tax-preparation software programs like TurboTax that still require many hours of time.

The amount of time spent on income tax compliance – 6.1 billion hours – would be the equivalent of more than 3 million Americans working full-time, year-round (or 2.1% of total US payrolls of 145.9 million). By way of comparison, the federal government currently employs 2.8 million full-time workers, and Wal-Mart, the world’s largest private employer, currently employs 2.2 million workers worldwide and 1.3 million workers in the US (both full-time and part-time). At the current average hourly wage of $21.90 an hour, the dollar value of the opportunity cost associated with tax filing would be more than $131 billion, slightly more than the 2016 GDP of Washington, D.C. ($127 billion).

As T.R. Reid pointed out recently in a New York Times op-ed, it really doesn’t have to be that way. For example:

In Japan, you get a postcard in early spring from Kokuzeicho (Japan’s IRS) that says how much you earned last year, how much tax you owed, and how much was withheld. If you disagree, you go into the tax office to work it out. For nearly everybody, though, the numbers are correct, so you never have to file a return.

4. Tax Progressivity. And just how progressive is the US federal income tax system? Very, very progressive, see the chart above showing average effective tax rates by various income groups in 2014 (most recent year available). That pattern of income tax progressivity explains why almost all federal income taxes are paid by the top income groups (see next few items).

5. Tax Progressivity and Tax Burden. According to the most recent IRS data, the federal income tax shares by six different income groups are displayed in the chart above. Almost all federal income taxes (97.3%) are paid by the top 50%, more than 2/3 of income taxes are paid for by the top 10% and nearly 40% of taxes are paid by the top 1% of taxpayers. For all of the criticism and negative publicity the “Top 1%” get, I’d like to personally thank that group this year at tax time for shouldering such a disproportionate share of our collective tax burden. It’s a form of “disparate impact” on the 1% that we all benefit from! So, I say “Thank You Top 1%” from all of us in the bottom 99% for your valuable and significant contribution to our nation’s tax burden.

 

6. Tax Burden of the Top 1% vs. the Bottom 95%. The chart above gives us another perspective on the tax burden of the top 1% over time, and compares the tax share of that group to the tax burden of the bottom 95% in every year between 1980 and 2014 (most recent year available). In 2014, the top 1% earned 20.6% of the total income reported to the IRS and paid 39.4% of all federal income taxes collected ($543 billion). The bottom 95% of US taxpayers earned 64% of total income (almost three times as much as the top 1%) and paid only 40.5% of the total income taxes collected ($550 billion). So once again, to the 1.395 million taxpayers in the top 1%, I say “Thank You” for paying almost as much in federal income taxes in 2013 as the 132.6 million taxpayers in the bottom 95% by income.

7. Bowling vs. Taxes. Speaking of the progressivity of income taxes, here’s a thought about the way we tax income vs. the way we score bowling. Under the scoring rules of bowling, you get rewarded, not penalized, for being successful. If you get a spare, the scoring system rewards you by adding the pins from the next ball into the current frame, and if you get a strike you get rewarded by adding your next 2 balls into the current frame.

Under our progressive income tax system with seven tax rates in 2015 increasing from 10% to 39.6%, you get penalized, not rewarded, for being successful, productive and entrepreneurial, because the more you earn, the higher the tax rate you pay. The top marginal income tax rate has been as high as 91% in the 1950s and 1960s, and 70% in the 1970s. If we scored bowling the way we tax income, we would subtract, not add pins for a spare or strike, i.e., penalize successful bowling. If we taxed income the way we score bowling, we would have lower, not higher, tax rates on our most successful income-earners.

8. Coincidence? Why are Tax Day (April 15) and Voting Day (first Tuesday in November) so far apart? Couldn’t we move Tax Day to the first Monday in November, or Voting Day to the first Tuesday following April 15?

9. What’s in a Name? Why do we call the IRS a “service?” Couldn’t it have been named a department like Labor, a bureau like the BLS or the FBI, a commission like the FTC, an administration like FDA, an agency like EPA, etc.?

10. 20 Inspirational Quotes about Taxes from Forbes, here are a few good ones:

“The taxpayer: that’s someone who works for the federal government, but doesn’t have to take a civil service examination.” – Ronald Reagan

“We have what it takes to take what you have.” – Suggested IRS Motto 

“It is a paradoxical truth that tax rates are too high today and tax revenues are too low, and the soundest way to raise the revenues in the long run is to cut the tax rates.” – John F. Kennedy

I am proud to be paying taxes in the United States. The only thing is I could be just as proud for half of the money.” – Arthur Godfrey

“A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money.” – G. Gordon Liddy

Happy Tax Day!

Republished from AEI.

Mark J. Perry

Mark J. Perry is a scholar at the American Enterprise Institute and a professor of economics and finance at the University of Michigan’s Flint campus.

This article was originally published on FEE.org. Read the original article.

The Bill of Rights at the Border: Fifth Amendment Protections for Account Passwords and Device Passcodes

This is the third and final installment in our series on the Constitution at the border. Today, we’ll focus on the Fifth Amendment and passwords. Click here for Part 1 on the First Amendment or Part 2 on the Fourth Amendment.

Lately, a big question on everyone's mind has been: Do I have to give my password to customs agents?

As anyone who’s ever watched any cop show knows, the Fifth Amendment gives you the right to remain silent and to refuse to provide evidence against yourself – even at the border. If a CBP agent asks you a question, you can tell them you choose to remain silent and want to speak to an attorney, even if you don’t have one retained yet. That choice may not stop CBP agents from pressuring you to “voluntarily” talk to them, but they are supposed to stop questioning you once you ask for a lawyer. Also, beware that government agents are permitted to lie to you in order to convince you to waive your right to remain silent, but you can be criminally prosecuted if you lie to them.

CBP agents are unlikely to advise you that you have this choice because the government generally argues that such warnings are only required if you are taken into “custody” and subjected to a criminal prosecution. And at least one federal court of appeals has determined that secondary inspection – the separate interview area you get referred to if the CBP officer can’t readily verify your information at the initial port of entry – doesn’t qualify as “custody.”

But you don’t have to be in custody or subject to a criminal prosecution before you choose to invoke your Fifth Amendment rights to remain silent or to object to being deprived of your property without due process of law. For example, the Second Circuit Court of Appeals has held that a person’s request for an attorney is enough to invoke the privilege against self-incrimination, even at the border.

And that privilege includes refusing to provide the password to your device. For example, in 2015, a Pennsylvania court held that you may properly invoke the Fifth Amendment privilege to avoid giving up your cell phone passcode – even to an employer’s phone – because your passcode is personal in nature and producing it requires you to speak or testify against yourself.

Some courts have been less protective, overriding Fifth Amendment protections where the information sought is a so-called “foregone conclusion.” In 2012, a Colorado court ordered a defendant to provide the password to her laptop, only after the government had obtained a search warrant based on the defendant’s admission that there was specific content on her laptop and that the laptop belonged to her. On appeal, the Eleventh Circuit clarified that the government "must [first] show with some reasonable particularity that it seeks a certain file and is aware, based on other information, that . . . the file exists in some specified location" and that the individual has access to the desired file or is capable of decrypting it.

So, Fifth Amendment protections do apply at the border, and they protect your right to refuse to reveal your password in most circumstances. That said, individuals passing through the border sometimes choose to surrender their account information and passwords anyway, in order to avoid consequences like missing their flight, being made subject to more constrictive or prolonged detention, or being denied entry to the US.

As we have noted in our Digital Border Search Whitepaper, the consequences for refusing to provide your password(s) are different for different classes of individuals. If you are a U.S. citizen, CBP cannot detain you indefinitely as you have a right to re-enter the country. However, agents may escalate the encounter (for example, by detaining you for more time), or flag you for heightened screening during future border crossings. If you are a lawful permanent resident, agents may also raise complicated questions about your continued status as a resident. If you are a foreign visitor, agents might deny you entry to the country entirely.

But whatever your status, whether you choose to provide your passwords or not, border agents may decide to seize your digital devices. While CBP guidelines set a five-day deadline for agents to return detained devices unless a CBP supervisor approves a lengthier detention, in practice, device detentions commonly last many months.

Source: The Bill of Rights at the Border: Fifth Amendment Protections for Account Passwords and Device Passcodes | Electronic Frontier Foundation

Antic (September 1986)

Antic - Volume 5, Number 5 - September 1986

Antic was a magazine for Atari 8-bit computers named after the ANTIC chip which was primarily responsible for the graphics in those machines. For a brief time in part of 1985 and 1986 Antic also covered the Atari ST until an ST specific magazine was published.

The September 1986 issue focuses on weather and includes:

Features

• Weather Maps From Space: For Atari 8-bit and ST computers - While getting satellite and radar images from the internet is trivial today, that wasn't always the case. However, with this type-in program, a short-wave radio, and a simple interface (instructions to build provided) you could download satellite images in real-time all the way back in 1986.
• Weather Facsimile Worldwide: From satellites to ships at sea - This article describes how the WEFAX system for distributing weather satellite imagery works and various scenarios in which it is used.
• Music Studio: Music for 8-bit Ataris and STs - Review and overview of Activision's Music Studio music composition software available for both 8 and 16-bit Ataris.
• Build The WEFAX Interface - Instructions for building an interface from your shortwave radio to your 8 or 16 bit Atari computer for the purposes of decoding WEFAX signals.
• New Owners Column: Lesson 6: Subroutines - Tutorial for using subroutines in BASIC (GOTO and GOSUB), including some type-in examples.
• WEFAX Decoder - This is the actual type-in program to decode WEFAX signals retrieved using your Atari, short wave radio and interface.
• BASIC Tracer - This is a BASIC type-in program for Atari 8-bit computers that provides a debugging tool to display the line number of the program currently being executed.
• Where The Weather Comes From - An inside view of the National Weather Service Forecasting Office in Redwood City, California.
• Weather Calculator - A type-in program that, along with a thermometer, can convert Celsius to Fahrenheit, find relative humidity, estimate the cloud base and wind chill factor, and predict sunrise and sunset times for any date.

ST Resource

• ST WEFAX Decoder - The Atari ST version of the satellite image decoder.
• The Manager - Review of this relational database management system for the Atari ST.
• ST Product News - News about new releases for the Atari ST including Financial Cookbook by Electronic Arts (personal finance program), Cards by MichTron (play various card games), STCalc (spreadsheet program), and much more.
• Megamax - Review of this advanced C compiler for the Atari ST.

Departments

• I/O Board - Letters from readers including questions about the COMP command, printing the Atari Fuji symbol, RAMDISK on the 1040ST and more.
• Product Reviews - Reviews of Atari Planetarium, Microflyte ATC Joystick, MicroLeague Baseball, Star Raiders II, and Compute Your Roots (genealogy software).
• New Products - New products mentioned include Super Reevekey (utility program for creating custom keypad layouts for the Atari CX85 10-key numeric pad), CRT Magnifier (anti-glare magnifier for CRT monitors), Rite Notch (a device that lets your control write protecting disks with or without the presence of a notch), Checkbook Plus (budgeting software), Stylewriter (printer interface), Action Annex BBS System (to run your own BBS on your Atari 8-bit computer), MIDI Editor (MIDI software for the Atari 130XE), 221 B Baker Street (Sherlock Holmes themed text adventure).

...and more!

This State Really Doesn’t Want Its Residents to Know the Law

This State Really Doesn't Want Its Residents to Know the Law

A “legitimate” government cannot exist without first deriving its power from the consent of the governed.

This pillar of classical liberalism is so integral to the Lockean vision of a free society, it has historically been recognized as one of the central issues that caused the American colonists to rise to action, and mutually pledge their lives, fortunes, and sacred honors to declaring independence from the world’s most powerful government.

But there is more to the maxim of “government by consent” than just the idea of a representative legislature. In order for individuals to be punished for breaking a law they’ve tacitly “consented” to, they must first understand that there is a law in which to be broken.

Unfortunately, one Georgia resident has learned the hard way that governments have a history of keeping citizens in the dark and then punishing them for breaking crimes they were unaware existed.

Arbitrary Rule

It is difficult to imagine what it might be like to live under a dictatorship, where laws are created and passed in secret, and citizens are left in the dark, hoping they are not guilty of violating whatever new statute was just enacted behind closed doors.

However, while the above scenario may be an extreme case, to some extent this is exactly what is currently happening across the country.

Just weeks ago in Florida, a father spending spring break on the beach with his family was fined $25 dollars for using metal sand tools on Panama City Beach, a law he had no idea he was breaking.

When this long-time resident of Panama City Beach asked law enforcement if he could see the actual text of the statute he was breaking, the officer on the scene immediately called for backup and threatened the father with jail time.

This is, unfortunately, not an isolated instance of the state penalizing individuals for breaking laws they did not know they were committing, and then denying these citizens the right to actually see these legal codes firsthand.

By allowing the state to punish individuals for an act committed without foreknowledge of wrongdoing or any proof of criminal intent, the entire justice system loses one of its primary components of the right to due process. After all, how can one commit a crime they had no knowledge they were committing? How is this a manifestation of rule by consent?

In Georgia, the potential to become an accidental criminal is rather high, since residents aren’t even allowed to see copies of legal code without first applying for a license and paying a hefty fine to the state. And even then, what residents are provided with doesn’t exactly explain the law in full.

An Unconventional Hero

Carl Malamud, founder of public.research.org, has been giving Georgia lawmakers a run for their money for years. As a long-time open records advocate, Malamud has dedicated his time to ensuring that the people of Georgia have access to every single law in the state, including the annotated copies, something that has recently gotten him into hot water with the state.

For students of the law or anyone doing legal research, annotated copies of legal texts are extremely helpful as they provide further insight into each law. Annotations may include a backstory or judicial opinion regarding the law and will often cite which laws preceded and followed the law in question. All this information is extremely valuable to those defending themselves against the state.

Unfortunately in Georgia, in order to gain access to the complete and official compilation of the state’s laws, residents, like Malamud, are required to pay the state $1,207.02 for access to a hardcopy version. The state has promised to unveil a more “affordable” version that can be printed from LexusNexus for only $400 (what a bargain).

As an activist who believes that every person should have access to the laws they allegedly consented to follow, Malamud has spent countless hours scanning copies of the annotated version Georgia’s law. He then copied those annotated files to USB drives, which were then sent out to local lawmakers as well as other prominent members of the community.

Each USB drive was sent in an envelope with an enclosed letter which stated:

"Access to the law is a fundamental aspect of our system of democracy, an essential element of due process, equal protection, and access to justice.”

Of course, recipients of Malamud’s envelopes were given fair warning of its contents just by glancing at the colorful packages, as each contained the words: “UNIMPEACHABLE,” on the front and featured pictures Georgia peaches and American flags and the phrase, “code is law.”

However, some of the government recipients of Malamud’s letter were less than impressed.

In a written response sent to Malamud, chairman of Georgia's Code Revision Commission, Josh McKoon stated:

"Your unlawful copying... Infringes on the exclusive copyright of the state of Georgia, Accordingly, you are hereby notified to CEASE AND DESIST ALL COPYRIGHT INFRINGEMENT."

When Life Gives you Peaches...

While this seems almost too far-fetched to believe, the government of Georgia was so infuriated that Malamud would dare disseminate annotated copies of the law for others to read, they pursued legal action against his organization, public.research.org.

Malamud was ordered to destroy all physical files and remove all information regarding the annotated law from his organization’s website within ten days, or face legal consequences.

While the state of Georgia had already “won” in the legal sense, it continued to pursue legal action against Malamud, suing him in federal court.

The state of Georgia claims that there is no substance to Malamud’s complaints since technically the law is already available to the public for free online.

Malamud has, in turn, questioned the state of Georgia’s definition of “free,” since before even the non-annotated legal codes can be viewed online, users must agree to a list of restrictions as well as agree to two separate terms of use.

Among these terms is a stipulation that states that any of the information found is prohibited from being copied and cannot be cited in any newspaper or “articles.”In other instances, those wishing to view the law must even apply for a license.

Unfortunately for Malamud, the judge ruled in favor of the state of Georgia.

When it comes to intellectual property laws, the federal government is prohibited from copyrighting texts, such as laws, for example. However, states are allowed to copyright text, especially if a private company is involved—like LexusNexus.

Since LexusNexus, a private company, provided the annotations for the state online, the judge viewed these additional notes as “value added material” and not necessary to the understanding of the law and thus, found Malamud in violation of the Copyright Act.

But the judge didn’t stop his criticism of Malamud there. Adding insult to injury he accused Malamud’s website of engaging in commercial copying of materials—various laws— which is illegal for a non-profit organization like Public.Resource.Org.

The state has also continued to go after Malamud and his organization for any other offense they can manage to find. Recently Malamud was served with an injunction as a result of what one source calls, “publishing technical and scientific standards that have been incorporated into laws.”

Consent Is a Two-Way Street

The term consent itself implies that something has been agreed upon by two or more persons acting of their own free will.

In criminal law,  this means that a law cannot actually be broken if the accused had no foreknowledge that the act in question was in fact, illegal. However, if citizens are prohibited from accessing the law, how are they to know when they may be breaking a law?

The legal principle known as mens rea, Latin for “guilty mind,” explains that for guilt to be determined, criminal intent must first be demonstrated.

In other words, unless the individual in question had foreknowledge of the law they are accused of breaking, they cannot be held responsible for its violation.

To punish an individual for breaking a law of which they had no prior knowledge would be contrary to a political system built on the precept of consent by the governed.

And yet, in spite of our nation’s tradition of rule by consent, the state of Georgia has gone to extreme lengths to keep its own state laws hidden from the people, and has even gone after those who have attempted to give this information to the people.

As of now, all the legal text in question has been removed from Malamud’s site and has instead been replaced with the following:

“Your access to this document, which is a law of the United States of America, has been temporarily disabled while we fight for your right to read and speak the laws by which we choose to govern ourselves as a democratic society. To apply for a license to read this law, please consult the Code of Federal Regulations or applicable state laws and regulations for the name and address of a vendor... Thank you for your interest in reading the law."

Brittany Hunter

Brittany Hunter is an associate editor at FEE. Brittany studied political science at Utah Valley University with a minor in Constitutional studies.

This article was originally published on FEE.org. Read the original article.

Everything You Need to Know about Dollar-Denominated Cryptocurrencies

Everything You Need to Know about Dollar-Denominated Cryptocurrencies

A well-known obstacle to the greater popularity of Bitcoin as a medium of payment is the high volatility of its exchange value. This volatility results from its built-in quantity commitment: because the number of Bitcoins in existence stays on a programmed path, variations in the real demand to hold Bitcoin must be accommodated entirely by variations in its unit value. When demand goes up, there is no quantity increase to dampen the rise in price; and vice-versa for a fall in demand.

Not surprisingly, several cryptocurrency developers have thought of creating a cryptocurrency with a price commitment–namely a pegged exchange rate with the US dollar–rather than a quantity commitment, in hopes of greater popularity. The aim is to create a system in which dollar-denominated payments can be made with the ease, security, and low cost of Bitcoin payments, but without the exchange-rate risk.

New Digital Assets

The development of “Blockchain 2.0” platforms has enabled the launching of a variety of new digital assets, including such dollar-pegged (and euro-pegged and gold-pegged) currencies. As we will see, the histories of early (2014-2016) dollar-pegged cryptocurrencies show a series of flops. But one project, Tether, has become a late-blooming success.

Tether had $55 million in circulation as of March 29, 2017, making it the #13 largest cryptocurrency. To keep this size in perspective, a brick-and-mortar US institution with $55 million in deposits is a tiny bank or a mid-size credit union, and Tether is currently only 1/300th the size of Bitcoin.

The Tether white paper explains in more detail the motivation for developing a dollar-pegged cryptocurrency by listing advantages to individuals using it for dollar-denominated transactions rather than using dollars held in “legacy bank” accounts:

• Transact in USD/fiat value, pseudonymously, without any middlemen/intermediaries
• Cold store USD/fiat value by securing one’s own private keys
• Avoid the risk of storing fiat on [cryptocurrency] exchanges–move crypto­fiat in and out of exchanges easily
• Avoid having to open a fiat bank account to store fiat value

In sum, “Anything one can do with Bitcoin as an individual one can also do with” a dollar-pegged cryptocurrency, namely, “avoid credit card [or debit card] fees,” maintain greater privacy, “remit payments globally” more cheaply, and access blockchain financial services.

But what is the claimed advantage over using Bitcoin? It is the expectation of wider acceptance in payments, because of the advantages to merchants of accepting a dollar-pegged cryptocurrency over accepting Bitcoin in a US-dollar-dominated economy:

• Price goods in USD/fiat value rather than Bitcoin (no moving conversion rates/purchase windows)
• Avoid conversion from Bitcoin to USD/fiat and associated fees and processes

The Flops

First we consider the projects that have flopped. Three projects were launched in September 2014: CoinoUSD, NuBits, and BitUSD. Their pegging mechanisms were different, and are difficult to describe briefly (partly because they were not all entirely transparent), but two common features are important to note.

• The rate-pegging mechanisms were not programmed into a source code, like Bitcoin’s quantity commitment, but relied on non-programmed policy actions by a trusted central authority.
• None used the traditional currency pegging method of having the issuer hold reserves in physical dollars or dollar-denominated debt securities. (On the NuBits mechanism see this critique by a BitUSD promoter. On the BitUSD mechanism see this critique by the CoinoUSD developer.)

We can examine the fortunes of each project by looking at its price and “market capitalization” (value-in-circulation) history on the cryptocurrency tracking site CoinMarketCap.com.

CoinoUSD

CoinoUSD, which began trading in December 2014, was developed by a for-profit payments firm called Coinomat and built on the blockchain of the NXT cryptocurrency. (In November 2014 NXT was the #6 cryptocurrency with a market cap of $19 million; currently it ranks #38 with a market cap around $13 million.)

CoinoUSD reached a market cap plateau of $2.7 million in early 2016, but shut down in early 2016, due to a “payout glitch” that flooded customers with free CoinoUSD units, making it impossible to maintain the exchange value at $1. Coinomat announced a reboot in which the erroneous payout would be reversed and said, “NXTUSD will replace CoinoUSD completely, and enhance it,” but this appears not to have happened. Since then it has had a market cap of zero, and its webpage at the Coinomat site declares it “disabled until further notice.”



NuBits

The history of NuBits, also a for-profit enterprise, shows that it gained only a similarly small market foothold. Its market cap plateaued early on below $2.5 million, and since April 2015 has remained below $1 million. In June 2016 NuBits had a devaluation crisis, with the price falling to 20 cents. Its rate-pegging intervention mechanism, despite claiming many layers of reinforcement, was not robust and failed.

Although the price later returned to par, today NuBits shows very little market activity. Since January 2017 the market cap has hovered around only $135,000, with daily trading volume in the neighborhood of $2,000.



BitUSD

BitUSD is built on the blockchain platform of the cryptocurrency BitSharesX. Its highest market cap plateau was around $1 million soon after introduction, but it fell to below $200,000 in April 2015 and is currently less than $110,000.



BitUSD uses a novel pegging system that so far has proven robust. A piece promoting BitUSD emphasizes that “the bitUSD is an asset that is not backed by real dollars in someone’s bank account.” (It claims this a virtue: “We cannot trust anyone to hold and secure a physical asset so that people can redeem it eventually. History has repeatedly shown: It doesn’t work!” In fact, history shows the major banks in unhampered banking systems routinely justifying the public’s trust by redeeming their liabilities on demand for decades. Paypal works on the same supposedly non-working model, backed by Paypal’s dollar deposits at Wells Fargo Bank.)

By contrast, BitUSD are created through collateralized forward currency contracts. The network provides an escrow service that credibly ensures repurchase (or “redemption”) of the BitUSD at or near par. Someone who wants to acquire BitUSD, say in order to buy from a seller who prefers a dollar-denominated medium of exchange, offers a contract: so many BitShares (hereafter BTS) for a certain amount of new BitUSD.

Under the BitShare network rules, the acquirer must not only pay at the outset in BTS but also agree to post collateral in BTS equal to the value of the bid. If the bid is accepted by another network participant, explains the BitUSD white paper, “the collateral and purchase price are held by the network until the BitUSD is redeemed” by some third party repurchasing it. The acquirer of BitUSD thus puts 200% collateral into a contract “that only allows access to these BTS when the BitUSD are paid back.” In effect the acquirer is shorting the dollar price of BTS.

Note that the new BitUSD units are initially 200% collateralized not in dollar-denominated assets, but in BTS. If BTS fall 25% or more against the dollar, such that the value of the BTS collateral declines to 150% or less of the value to be repaid, under the network rules redemption can be compelled by any BitShares miner who “enforces a margin call.” (It should be noted that to enforce the collateral rules, the BitShares network relies on trusted human agents to inform it about the current $ price of BTS.)

The system then “uses the backing BitShares to repurchase the BitUSD…thereby redeeming it.” Conversion back into dollars is thus not always at the initiative of the holder, as it is for a holder of ordinary demandable bank liabilities. Instead, a BitUSD holder faces a risk of “forced settlement.” If the value of BTS falls so quickly “that the margin is insufficient, then the market price of the BitUSD may fall slightly below parity for a short time if there is insufficient demand for BitUSD relative to the supply of sellers.”

The white paper concludes: “The critical thing to understand is that BitUSD is an asset used to hedge a position in BitShares against changes in the price of USD and is not supposed to have an exact 1:1 exchange rate with USD.” A close look at the chart indeed shows that the price of 1BitUSD has not been exactly $1. It has vibrated around $1 but has not experienced any lasting devaluation. Nonetheless, its clientele has declined and is currently small. No doubt this reflects in part the declining popularity of BTS, its market cap having fallen from more than $60 million in September 2014 to around $15 million today.

The Success: Tether

Now to the success story. Tether was launched in February 2015. In contrast to the previous contenders, as the chart shows, it started slowly and has grown in market cap. The series of discrete steps in its market cap path indicates that there have been a series of large purchases.

The most recent step, on Wednesday, March 29, 2017, raised the value in circulation to $55 million from $45 million. Logically these are not speculative position-takings because there are no capital gains to be had so long as the price per tether remains solidly pegged (or “tethered”) to $1. And Tether has in fact successfully maintained a steady peg throughout its history with only one small and brief blip. The steps are presumably big acquisitions for transaction use. Transactions volume in recent weeks has been running mostly in the neighborhood of at $20-40 million per day.



Tether transfers are executed using the Bitcoin blockchain. Tether’s pegging mechanism is also not programmed into a source code, but it is the traditional one: the issuer holds dollar-denominated reserve assets and pledges to redeem Tethers on demand. (Euro-Tethers have recently been introduced, but I focus here on dollar-Tethers.)

According to the official FAQ, “Tether Platform currencies are 100% backed by actual fiat currency assets in our reserve account. Tethers are redeemable and exchangeable pursuant to Tether Limited’s terms of service. The conversion rate is 1 tether USD₮ equals 1 USD.”

The parent Tether firm, in other words, operates like a currency board: It holds 100%+ dollar-asset backing, and passively swaps Tethers for dollars and back again. Like a currency board, it can earn interest income by holding some of its dollar-denominated assets in interest-bearing form.

The Tether white paper reveals that Tether’s dollar reserves are currently held in accounts at two major Taiwanese commercial banks: Cathay United Bank and Hwatai Bank. (Why these particular banks? “They also provide banking services to some of the largest Bitcoin exchanges globally,” they are okay with Tether’s business model, and they are experienced at compliance with Know-Your-Customer and Anti-Money-Laundering regulations.)

It adds that “additional banking partners are being established in other jurisdictions” to reduce political risk of the accounts being frozen. Tether is thus not a “100% reserve” institution in the sense of a money warehouse holding 100% literal cash reserves (which would mean Federal Reserve notes in a vault).

How does a potential purchaser of Tether verify the 100% backing claim? The website declares: “Our reserve holdings are published daily and subject to frequent professional audits. All tethers in circulation always match our reserves.”

A web page does give dollar values for assets and liabilities but does not identify the auditors or provide copies of the audit reports, so the claim of being “fully transparent” is somewhat exaggerated. The transparency is as great as that of historical note-issuing banks, however. And perhaps the important test of trustworthiness is that Tethers have in practice been redeemed every day at par for about two years.

Competition as a Market Referendum

Dollar-pegged cryptocurrencies, by contrast to Bitcoin, separate blockchain-secured payments from the speculative holding of an irredeemable private currency. Thus they provide a potential window for learning how much of the demand for cryptocurrencies is transactional, and how much is speculative.

The competition among dollar-pegged cryptocurrencies provides something of a market referendum on the relative credibility of alternative pegging arrangements. The much larger size achieved by Tether suggests (though not definitively, because other factors are also in play) a popular verdict that its pegging mechanism is more credible than those of CoinoUSD, Nubits, or BitUSD. It will be interesting to watch Tether’s progress from this point on and to observe whether its model is copied by other entrants.

Reprinted from the Cato Institute.

Lawrence H. White

Lawrence H. White is Professor of Economics at George Mason University and The Freeman contributor.  He previously taught at New York University, the University of Georgia, and the University of Missouri – St. Louis. He is a member of the FEE Faculty Network.

This article was originally published on FEE.org. Read the original article.

Review: Popful Mail (Sega CD)

Popful Mail is another action RPG by Working Designs, the same company that released the Lunar and Vay games, among others. The Sega CD didn't have a huge number of games and many of them are FMV crap but if you were a fan of the Working Designs' action RPGs then it was a must have system, at least until Working Designs started developing these games for the PlayStation a few years later. Working Designs did a great job of exploiting the strengths of the Sega CD (massive storage for the time) to create lengthy RPGs with a good amount of nicely done animated sequences and voice acting.

I never got the impression that the oddly named Popful Mail was as good as the Lunar series but it is still a great game and it is a hard (expensive) game to come by today for the Sega CD. Above is a short review of the game from the May 1995 issue of Sega Visions and as you can see, it is all positive.

Popful Mail was also released on the Super Famicom, PC Engine CD and Windows platform but these were Japan only releases with no English translation. If you wanted the English version, the Sega CD was and remains the only way to get it.

The X-Files is back again (sort of) with new spin-off

The X-Files is back again (sort of) with new spin-off


It seems you may have to listen to the skies on this occasion, as David Duchovny and Gillian Anderson will lend their voices as Mulder and Scully for a new audio spin-off on Audible.


The X-Files: Cold Cases will be set before the events of the recent revival series, providing more backstory on the events we saw.


Pre-order now!

Woodrow Wilson Made the World Unsafe for Democracy

Woodrow Wilson Made the World Unsafe for Democracy

Woodrow Wilson Made the World Unsafe for Democracy

This week is the 100th anniversary of President Woodrow Wilson’s speech to Congress seeking a declaration of war against Germany. Many people celebrate this centenary of America’s emergence as a world power. But, when the Trump administration is bombing or rattling sabers at half a dozen nations while many Democrats clamor to fight Russia, it is worth reviewing World War One’s high hopes and dire results.

Lies, Censorship, and Poison 

Wilson was narrowly re-elected in 1916 based on a campaign slogan, "He kept us out of war." But Wilson had massively violated neutrality by providing armaments and money to the Allied powers that had been fighting Germany since 1914. In his war speech to Congress, Wilson hailed the U.S. government as "one of the champions of the rights of mankind" and proclaimed that "the world must be made safe for democracy."

American soldiers fought bravely and helped turn the tide on the Western Front in late 1918. But the cost was far higher than Americans anticipated. More than a hundred thousand American soldiers died in the third bloodiest war in U.S. history. Another half million Americans perished from the Spanish flu epidemic spurred and spread by the war.

In his speech to Congress, Wilson declared, "We have no quarrel with the German people" and feel "sympathy and friendship" towards them. But his administration speedily commenced demonizing the "Huns." One Army recruiting poster portrayed German troops as an ape ravaging a half-naked damsel beneath an appeal to "Destroy this mad brute."

Wilson acted as if the congressional declaration of war against Germany was also a declaration of war against the Constitution. Harvard professor Irving Babbitt commented in 1924: "Wilson, in the pursuit of his scheme for world service, was led to make light of the constitutional checks on his authority and to reach out almost automatically for unlimited power." Wilson even urged Congress to set up detention camps to quarantine "alien enemies."

Wilson unleashed ruthless censorship of any criticism. Anyone who spoke publicly against military conscription was likely to get slammed with federal espionage or sedition charges. Possessing a pamphlet entitled Long Live the Constitution of the United States earned six months in jail for a Pennsylvania malcontent. Censorship was buttressed by fanatic propaganda campaigns led by the Committee on Public Information, a federal agency whose shameless motto was "faith in democracy... faith in fact."

The war enabled the American equivalent of the Taliban to triumph on the home front. Prohibition advocates "indignantly insisted that... any kind of opposition to prohibition was sinister and subversively pro-German," noted William Ross, author of World War 1 and the American Constitution. Even before the 18th Amendment (which banned alcohol consumption) was ratified, Wilson banned beer sales as a wartime measure. Prohibition was a public health disaster; the rate of alcoholism tripled during the 1920s.

To punish lawbreakers, the federal government added poisons to industrial alcohol that was often converted into drinkable hooch; ten thousand people were killed as a result. Professor Deborah Blum, the author of The Poisoner's Handbook, noted that "an official sense of higher purpose kept the poisoning program in place."

Hell's Dirtiest Work

The war provided the pretext for unprecedented federal domination of the economy. Washington promised that "food will win the war" and farmers vastly increased their plantings. Price supports and government credits for foreign buyers sent crop prices and land prices skyrocketing. However, when the credits ended in 1920, prices and land values plunged, spurring massive bankruptcies across rural America. This spurred perennial political discontent that helped lead to a federal takeover of agriculture by the Roosevelt administration in the 1930s.

World War One was ended by the Treaty of Versailles, which redrew European borders willy-nilly and imposed ruinous reparations on Germany. One of Wilson’s top aides at the peace talks, Henry White, lamented: "We had such high hopes of this adventure; we believed God called us and now we are doing hell’s dirtiest work."

Wilson had proclaimed 14 points to guide peace talks; instead, there were 14 separate small wars in Europe towards the end of his term–after peace had been proclaimed. Millions of Irish Americans were outraged that, despite Wilson’s bleatings about democracy, Britain brutally repressed Ireland during and after the war. The League of Nations, which Wilson championed in vain, was so smarmily worded that it could have obliged the U.S. to send troops to help Britain crush the burgeoning Irish independence movement.

The chaos and economic depression sowed by the war and the Treaty of Versailles helped open the door to some of the worst dictators in modern times, including Germany’s Adolf Hitler, Italy’s Benito Mussolini, and Vladimir Lenin–whom Wilson intensely disliked because "he felt the Bolshevik leader had stolen his ideas for world peace," as historian Thomas Fleming noted in his 2003 masterpiece, The Illusion of Victory: America in World War 1.

Despite winning the war, Wilson’s Democratic Party was crushed at the polls in both 1918 and 1920. H.L. Mencken wrote on the eve of the 1920 election that Americans were sickened of Wilsonian "idealism that is oblique, confusing, dishonest, and ferocious."

Have today’s policymakers learned anything from the debacle a century ago? Wilson continues to be invoked by politicians who believe America can achieve great things by warring abroad. The bellicosity of both Republican and Democratic leaders is a reminder that Wilson also failed to make democracy safe for the world.

Reprinted from USA Today.

James Bovard

James Bovard is the author of ten books, including Public Policy Hooligan, Attention Deficit Democracy, and Lost Rights: The Destruction of American Liberty. Find him on Twitter @JimBovard.

This article was originally published on FEE.org. Read the original article.