National Security Agencies Are Evading Congressional Oversight

National Security Agencies Are Evading Congressional Oversight



Last week, federal officials from several spy agencies engaged in a full court press in Washington, spinning facts before media outlets, flooding Capitol Hill with lobbyists, and bringing lawmakers to the National Security Agency's (NSA) Ft. Meade headquarters to feed them selective information about their unconstitutional mass surveillance activities. Predictably omitted from these conversations are the many Americans from across the political spectrum who have raised concerns, ranging from constitutional and commercial to security-related, that have rightfully dogged federal mass surveillance efforts since their revelations—not in official proceedings, but rather by whistleblowers—in 2005 and 2013.

Rather than embrace bipartisan calls for long overdue and constitutionally necessary limits, executive officials have instead chosen to shoot the proverbial messengers, vilifyingwhistleblowers and building new programs to prevent others from ever coming forward. Last week’s meetings included claims that particular examples of mass surveillance proved useful, ignoring its repeated failures. While the appearance of security may be comforting to some, NSA veterans have identified discarded programs that, relative to their replacements, reportedly did a better job of protecting national security while also protecting the privacy of Americans by encrypting data collected within the U.S. and requiring a warrant for investigators to access it.

Meanwhile, too many members of Congress from each of the major parties remain excessively deferential to the intelligence community, despite Congress mustering a bipartisan majority to enact preliminary reforms in 2013 and the House approving even more sweeping changes in their wake. Even though the scheduled expiration of a key statute—Section 702 of the Foreign Intelligence Surveillance Act (FISA)—looms mere months away, congressional committees have yet to hold hearings to get beyond executive talking points and begin actively investigating the underlying facts.

Originally enacted in the 1970s to restrain domestic surveillance, the history of the FISA statute is revealing in itself. Its genesis was a wide-ranging congressional investigation that dramatically uncovered a series of previously secret programs that, instead of promoting security, were carefully tailored to undermine constitutionally protected dissent. Alarmed at wide-ranging executive abuses behind a wall of secrecy, Congress enacted reforms that included the creation of a secret court, and insisted on regulations by the Department of Justice to further curtail the FBI's 40-year assault on democracy in the form of COINTELPRO: its infamous Counterintelligence Programs.

Since then, the Justice Department regulations have been watered down periodically, while FISA was ultimately flipped on its head. Most recently, FISA was amended in 2009 to legalize a series of mass surveillance programs begun under the Bush administration in direct violation of the governing statue at the time, as well as constitutional limits. The continuation of these programs under the Obama administration granted them the appearance of bipartisan legitimacy despite their clear and continuing unconstitutionality.

In the past, concerns about mass surveillance have extended across the political spectrumand around the world. Under the Trump administration, those concerns have grown increasingly pressing, given the president's seeming disregard for constitutional limits on executive power, and potential willingness to politicize surveillance to serve his own political ends.

Given those concerns, and the crucial congressional role of checking and balancing the federal executive branch, Congress should aggressively exercise its oversight responsibilities. But there are structural barriers to doing so. Many members of Congress on key congressional committees, for instance, lack qualified staff wielding adequate security clearance to rebut talking points peddled by self-serving executive officials.

Beyond structural impediments, many members of Congress have been willing to settle for mere assurances from executive officials, rather than insist upon reviewing evidence proving that mass surveillance effectively protects security, and that the government’s systems adequately protect the rights of innocent Americans. Representatives poised to do more include Democrats and Republicans whose constituents may enjoy opportunities to politically force their hands.

Only by investigating mass surveillance operations can Congress uncover the underlying facts. Such an investigation would be crucial in helping establish the need for long overdue constitutional limits.

In particular, because agencies including the NSA and FBI have relied on legal loopholes and secret interpretations for which they have grown notorious, one crucial requirement is for backdoor searches of Americans to be first justified by a judicial warrant. While that process does not impose a significant operational burden on agencies, it does prevent the kinds of documented abuses that agency employees and contractors have already committed, which include stalking former lovers using the government's powerful spying tools.

Congress should also ensure that intelligence information is used exclusively to protect national security, instead of polluting the criminal legal system with raw intelligence that inherently fails to meet the standards required for evidence to be admitted in court. Congress should not allow powerful military-grade surveillance programs to be used for purposes like routine criminal law enforcement or tracking down undocumented immigrants.

Congressional oversight of the intelligence agencies should also address issues beyond data collection. In the past, intelligence agencies have undermined attempts by Americans to ensure their own privacy, including by intercepting router shipments and planting covert firmware. Accordingly, Congress must adopt measures to protect encryption and encryption standards from erosion by national security agencies. A restriction along these lines would also serve business interests, which have vocally decried losses amounting to billions of dollars driven by clients making the rational decision to buy encryption devices from other sources.

Finally, Congress must restore the opportunity for a robust public debate about these issues. That requires reforming the state secrets privilege and fixing the broken classificationsystem described as “dysfunctional” by the former official who administered it. All too often, overclassification keeps policymakers and the public in the dark, and enables a bipartisan war on whistleblowers from whom congressional committees have learned the truth.

Regardless of what Congress does this fall, advocates will continue to challenge the constitutionality of mass surveillance in the courts, where we have sought for over a decade to invoke the rule of law to restore limits on executive authority. Congress is currently considering surveillance policy, and we urge Congress to legislate limits to safeguard constitutional rights. If enough policymakers are pressed by informed and alarmed constituents, Congress will hopefully finish the job it already started.

Source: National Security Agencies Are Evading Congressional Oversight

India’s Demonetization Effort Has Demonstrably Failed

India’s Demonetization Effort Has Demonstrably Failed



Dormant for a while, the debate over India’s demonetization program of last fall has been revived by new evidence. The new evidence on note returns and GDP vindicates the critics and has the defenders in strategic retreat.

What Happened

To recap: On November 8, 2016, India’s Prime Minister Narendra Modi shocked the nation by announcing the immediate “demonetization” of the two largest rupee currency notes (Rs 500, worth about $7.50, and Rs 1000, worth about $15). Noteholders would have only 50 days to turn them in for new Rs 500 and Rs 2000 notes. The move, Modi promised, would sharply penalize holders of unaccounted “black money,” namely tax evaders, bribe-takers, professional criminals, and terrorists. Their currency hoards would become worthless — a welcome one-time wealth loss — or they would expose themselves to detection by trying to swap or deposit large batches. Anyone depositing a large sum in old notes would face scrutiny by tax authorities.

In order to keep the move a surprise (the better to catch the black money holders), new notes to replace all the discontinued notes had not been printed in advance. The canceled notes represented 86% of the currency in circulation, and more than half of M1 (currency plus checking deposits), India having a highly cash-intensive economy with half the population unbanked. As criminals were far from the main users of currency, the impact was unavoidably felt well beyond the black-money set. A serious currency shortage immediately arose, with predictable consequences. Honest wage laborers in the huge cash economy went unpaid, honest construction projects came to a standstill, honest shopkeepers saw sales dry up, and honest businesses failed. Honest people wasted billions of hours waiting in queues to exchange old notes for the trickle of new notes.

As Shruti Rajagopalan and I noted in November last year, there was also a fiscal angle: for every billion of old rupee notes not turned in (for fear of being scrutinized), the government could issue a replacement billion and pocket it as one-time seigniorage revenue. For example:

If 20% of the old notes are never turned in, the government’s revenue windfall is up to Rs 2.9 trillion ($42.5 billion).

The destruction of the private wealth of non-redeeming old-note holders, combined with the revenue windfall to the government, makes the currency policy effectively a large capital levy, a massive one-shot transfer of wealth from the private to the public sector.

We speculated: “The wealth transfer to government may help to explain Prime Minister Modi’s enthusiasm for the currency cancellation and re-issue, despite its likely ineffectuality against black money.”

Economically literate defenders of demonetization have been fewer than critics. The most prominent defenders have been the well-known trade economist Jagdish Bhagwati of Columbia University together with his former students Vivek Dehejia and Pravin Krishna, and with his Columbia colleague Suresh Sundaresan.

The Defense

In a December 2016 piece in the prominent Times of India, Bhagwati, Krishna, and Sundaresan (hereafter BKS) praised the demonetization program as “a courageous and substantive economic reform that, despite the significant transition costs, has the potential to generate large future benefits.” BKS recognized that “the process is inconvenient, and subjects many households to hardships,” but thought it worthwhile for “potentially increasing transparency and expanding the tax base and revenues to the government from taxes and surcharges.” The fiscal angle was foremost: since “unaccounted deposits will be taxed, this will yield a windfall for the government permitting large increases in social expenditures.” In addition, it would promote a “switch into digital transactions” and “put a major dent in counterfeiting.”

In an Op-Ed published on December 27, Bhagwati, Dehejia, and Krishna (hereafter BDK) defended the demonetization program entirely on the grounds that it would impose an effective capital levy. It was, they wrote, “a policy designed, in effect, as a one-time tax on black money.” They noted that the government’s revenue gain would not come just from replacing unreturned notes. Under “voluntary disclosure” rules promulgated after the initial announcement, depositors of old notes who acknowledged their holdings as illegitimate would also pay: “deposits of unaccounted money will be taxed at 50% — with a further 25% taken by the government … as an interest-free loan for a period of four years.” Thus there would be a one-time fiscal gain to the government not only from notes never returned, but also from notes returned under such terms.

BDK proposed the size of the revenue gain as a sufficient criterion for judging the success of the program: “at least from the perspective of its effectiveness in dealing with the black money issue, success has to be measured by the sum of tax revenue generated [from the 50% tax on acknowledged black deposits] and black money destroyed [i.e. revenue from replacing unreturned notes].” For the sake of illustration, they supposed (calling it an “estimate”) “that one-third [Rs5 trillion] of the approximately Rs15 trillion in demonetised notes is black money.” Then if by the end of the turn-in period “Rs1 trillion is unreturned, as is believed, and we further assume that only half of the remaining Rs4 trillion of black money that is returned falls within the tax net, the net gain works out to Rs1 trillion of black money destroyed and 50% times 2 trillion = Rs1 trillion in tax revenue.” With such a total fiscal gain of Rs2 trillion, “the government could reasonably claim this as a successful outcome.”

In a commentary on the BDK piece, Rajagopalan and I pointed out that, from the economist’s point of view, the costs of any measure must be taken into account before judging it worthwhile or efficient. What matters is effectiveness per unit cost. Unlike the earlier BKS piece, BDK had simply neglected the costs incurred in collecting revenue or suppressing black money through demonetization. We noted a think tank’s estimate of Rs. 1.28 trillion in losses during the transitional period from expenses of printing new notes, lost income of those waiting in queues, additional costs to banks tied up with exchanging currency, and (the largest item) lost business sales due to the currency shortage. It was then too early to replace the estimate of lost business with measured effects on GDP, but we noted that one percentage point of lost annual growth equals Rs1.45 trillion. These costs need to be set against the revenue. Even if the revenue were as high as Rs2 trillion, collecting it at a deadweight cost of 64% or more would be a very bad bargain.

Doesn’t it matter that the transfer, in this case, is coming from bad actors whose welfare one may disregard? No. In the above reckoning, as in standard tax analysis, the pure wealth-transfer losses of taxpayers don’t figure in the deadweight loss calculation, which only counts the costs associated with extracting the transfer.

BDK had noted in passing the argument “that the short- to medium-run economic impact post 8 November will be contractionary” due to a “temporary liquidity shortage induced by an insufficiently fast replacement of old notes with new notes.” But they dismissed on theoretical grounds that “this is not necessarily the only outcome possible.” Government could avoid a currency shortage by promptly providing new notes, they reckoned. This was a very odd line to take seven weeks into demonetization, given that the government was not in fact providing new notes sufficiently fast, and when the evidence of currency shortage was plain to see. Alternatively, they proposed, hoarded currency could come out from under mattresses, be deposited in banks, and actually expand M1 “via the classical money multiplier.” This was an odd line to take given that expansion of deposits (even should it happen) would not remedy the currency shortage being suffered by the unbanked half of India’s population.

In March 2017, Bhagwati was quoted by the Indian newspaper Firstpost making the surprising claim in an email interview that demonetization had actually promoted economic growth: "On the effects of demonetisation on growth, I should say that I was the one economist who had argued (with my co-authors), from first principles, that demonetisation would increase, not diminish, growth. And that is exactly what appears to have happened." The factual basis for saying that it appeared to have happened was not clear.

In a March 30 piece, BDK cited a new 2016Q4 GDP report as showing that GDP had suffered “only a modest dip … of roughly half of a percentage point” below pre-demonetization projections. This was not an increase in growth. But they counted it a victory compared to “the economic disaster that the critics had imagined.”

The Evidence Against

The debate over demonetization was revived this month (September 2017) after the Reserve Bank of India finally announced the count of returned currency. It announced that 99 percent of the discontinued notes, Rs 15.28 trillion out of Rs 15.44 trillion, had been returned. As Vivek Kaul has noted, “The conventional explanation for this is that most people who had black money found other people, who did not have black money, to deposit their savings into the banking system for them.”

The trivial size of unreturned currency, of course, obliterates BDK’s projection of a government seigniorage windfall.

What about BDK’s other projected source of revenue, the 50% tax on acknowledged black deposits? Whereas in BDK’s scenario, black currency holders would make Rs2 trillion in voluntary-disclosure deposits, which would yield Rs 1 trillion in revenue, the actual collections under the scheme were reported in April at Rs 23 billion, or 2.3% of the BDK-imagined sum. Such paltry revenues mean that demonetization, from the fiscal perspective, was all pain and no gain.

The accumulating evidence on economic growth, meanwhile, has become damning. Between July and September 2016, India’s GDP grew 7.53 percent. Between January and March 2017 it grew 5.72 percent. Former head of the Reserve Bank of India Raghuram Rajan, now returned to the University of Chicago, links the drop to demonetization: “Let us not mince words about it — GDP has suffered. The estimates I have seen range from 1 to 2 percentage points, and that's a lot of money — over Rs2 lakh crore [i.e. trillion] and maybe approaching Rs2.5 lakh crore." Kaul adds that GDP does not well capture the size of the informal cash sector, where the losses from demonetization were greatest.

In response to the RBI report and GDP data, and to their credit, BDK have substantially retreated from claims of success to what can be regarded as the claim that there is still a chance to break even. They have recently written:

First off, it must be conceded that if demonetisation is to be judged narrowly on the basis of the triple rationale originally advanced … , it would at best be unclear if it could be accounted a success. For, little black money was literally “destroyed” and there is scant evidence that the policy had much if any impact on counterfeiting or terror finance.

Although they acknowledge that they “overestimated the quantum of black money that would ultimately be unreturned” and thus overestimated the seigniorage gain, they still contend that the “money deposited into bank accounts can also generate fiscal gain, as these will invite the scrutiny of tax officials.” For about two-thirds of the deposits of old currency by value, even though no admission was made and thus no 50% tax was paid, the sums deposited were large and “are mostly open to scrutiny by tax officials.” Thus it is conceivable that tax investigators may eventually squeeze taxes and fines out of them, and it is premature to rule this out.

Conceivable, but unlikely. The investigatory capacity of the tax authority is finite and it already has its hands full, as Vivek Kaul spells out in detail.

BDK concede: “Should, however, the government fail in identifying and taxing black money deposits in any significant quantity, we can all conclude that demonetisation will have failed in achieving its primary goal.” Welcome as this reasonable concession is, the converse does not follow: whether even significant eventual revenue counts as success depends on how it compares to the sizable costs of demonetization. A deadweight burden of less than 100% seems highly unlikely.

BDK add an odd coda. They acknowledge transition costs in the program actually followed, but suggest that it could have been otherwise:

in principle, had demonetisation occurred without transition costs — for instance, if old notes could have been seamlessly converted or deposited within a few days after 8 November, or if demonetisation had been pre-announced to occur with a lag, allowing time for an orderly remonetisation — there could only have been largely upside gain without any downside cost.

It is hard to square this with BDK’s earlier statements that demonetization without secrecy would have been pointless because it would not have caught out the black money holders. Are BDK saying that if the aim had been merely to introduce new notes with better anti-counterfeiting features, the Modi government’s demonetization program was an unnecessarily costly way of doing it? Well yes, the critics have said that all along. High transition costs were a feature and not a bug of the dramatic scheme to penalize black money by surprise.

Reprinted from Alt-M

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.

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Stan Lee at MegaCon 2017 in Orlando

58 Human Rights and Civil Liberties Organizations Demand an End to the Backdoor Search Loophole

58 Human Rights and Civil Liberties Organizations Demand an End to the Backdoor Search Loophole



EFF and 57 organizations, including American Civil Liberties Union, R Street, and NAACP, spoke out against warrantless searches of American citizens in a joint letter this week demanding reforms of the so-called “backdoor search” loophole that exists for data collected under Section 702.

The backdoor search loophole allows federal government agencies, including the FBI and CIA, to, without a warrant, search through data collected on American citizens.

The data is first collected by the intelligence community under a section of law called Section 702 of the FISA Amendments Act of 2008, which provides rules for sweeping up communications of foreign individuals outside the United States. However, the U.S. government also uses 702 to collect the communications of countless American citizens and store them in a database accessible by several agencies.

EFF and many others believe this type of mass collection alone is unconstitutional. The backdoor search loophole infringes American rights further—allowing agencies to warrantlessly search through 702-collected data by using search terms that describe U.S. persons. These terms could include names, email addresses, and more.

This practice needs to end. And a proposal before Congress to require warrants on backdoor searches used only in criminal investigations—as recently reported by the New York Times—does not go far enough.

As EFF, and several other organizations, said in an Oct. 3 letter:

“Applying a warrant requirement only to searches of Section 702 data involving ‘criminal suspects,’ is not an adequate solution to this problem. Most fundamentally, it ignores the fact that the Fourth Amendment’s warrant requirement is not limited to criminal or non-national security related cases.”

Further, carving out a warrant requirement solely for criminal investigations ignores the broader umbrella term under which the FBI conducts many searches—that of “foreign intelligence.” Because the FBI conducts investigations with both criminal and foreign intelligence elements, the agency could predictably bypass backdoor warrant requirements by ascribing their searches to foreign affairs matters, rather than criminal.

Warrantless searches of American communications may especially impact those communities that may be speaking frequently to family outside of the United States of which have historically faced unjust surveillance. As we wrote: “Existing policies make it far too easy for the government to engage in searches that disproportionately target Muslim Americans and immigrants with overseas connections based merely on the assertion of a nebulous ‘foreign intelligence’ purpose.”

These searches are happening. In 2016, the CIA and NSA reported they conducted 30,000 searches for information about U.S. persons. That number does not include metadata searches by the CIA, a related problem that can also be fixed by Congress before Section 702 sunsets in December.

Backdoor searches of 702-collected data about U.S. citizens and residents should require a warrant based on probable cause. Congress can protect the rights of countless Americans by closing this loophole.

Read the full letter.

Source: 58 Human Rights and Civil Liberties Organizations Demand an End to the Backdoor Search Loophole | Electronic Frontier Foundation

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Stan Lee at MegaCon 2017 in Orlando

Catalonia Shows the Danger of Disarming Civilians

Catalonia Shows the Danger of Disarming Civilians



Since the tragic murder of 59 peaceful concertgoers in Las Vegas Sunday, I’ve heard well-intentioned Americans from all political corners echoing heartbroken and tempting refrains:

Can’t we just ban guns?

Surely we can all get together on the rocket launchers.

Things like this would happen less often.

We have enough military.

While victims were still in surgery, some took to television and social media to criticize the “outdated” and “dangerous” Second Amendment to the Constitution. They have lived so long in a safe, stable society that they falsely believe armed citizens are a threat to life and liberty for everyone.

Those who claim to see no necessity or benefits of individual gun ownership need only look to the rolling hills of Catalonia, where a live social experiment is currently unfolding.


Unarmed Patriots

Just hours before an alleged lone gunman opened fire from the Mandalay Bay casino, the citizens of a small region surrounding Barcelona, Spain, cast a vote for their regional independence. Catalonia’s citizens have a unique language, culture, and history, and consider Spain a neighboring power, not their rightful rulers. So as America’s Continental Congress heroically did (and as Texans and Californians occasionally threaten to do) Catalonia wished to declare independence and secede.

Polling stations in Catalonia were attacked by heavily armed agents of the state with riot gear and pointed rifles. Spanish National Police fired rubber bullets and unleashed tear gas canisters on voters, broke down polling center doors, disrupted the vote, and destroyed enough ballots to throw results into serious doubt.

Exceedingly few of those would-be patriots were armed.


In Spain, firearm ownership is not a protected individual right. Civilian firearms licenses are restricted to “cases of extreme necessity” if the government finds “genuine reason.” Background checks, medical exams, and license restrictions further restrict access. Licenses are granted individually by caliber and model, with automatic weapons strictly forbidden to civilians. Police can demand a citizen produce a firearm at any time for inspection or confiscation. Spain has enacted, it would seem, the kind of “common sense restrictions” American gun-control advocates crave.


But of course, that doesn’t mean that Spanish citizens don’t buy guns. In fact, Spanish taxpayers maintain an enormous arsenal of weapons, which are all in the hands “professional armed police forces within the administration of the state, who are the persons in charge of providing security to the population.”


Those agents of the state weren’t “providing security to the population” of Catalonia on Sunday — they were pointing guns at would-be founding patriots who had challenged the rule of their oppressors.


“If somebody tries to declare the independence of part of the territory — something that cannot be done — we will have to do everything possible to apply the law,” Spain’s justice minister said in a public address.  While many polling places were closed or barricaded, 2.3 million voters (90% in favor of independence) were permitted to vote, he claimed, “because the security forces decided that it wasn’t worth using force because of the consequences that it could have.”


The consequences of a government using force to control those it is sworn to protect must be high. When citizens are armed, the consequences for tyranny rise and its likelihood falls.


Armed Tyrants

Americans have grown too trustful of the State, too ready to assume bureaucrats have only our best interests at heart. Even with a maniacal man-child in the Oval Office, many are seemingly eager to turn over individual liberty to those who promise to manage our lives for us. The United States was designed to be the smallest government in the history of the world, with no standing army, and little right to intrude in the private activities of its citizens. Instead, we have the most powerful and intrusive government in human history, with 800 permanent military bases in 70 countries, unfathomable firepower, and staggering surveillance capabilities. Unchecked abuses of power are routine and tolerated.

67 federal agencies, including the IRS and the FDA, have military weapons, according to the OpenTheBooks Oversight Report The Militarization of America. Among the most intrusive programs, including the Department of Homeland Security and the Transportation Safety Authority, do not disclose their weaponry budget.

The number of armed government officials with arrest and firearm authority has doubled since 1996. The US now has more armed “civilian” federal officers (200,000+) than US Marines (182,000). The IRS spends millions of taxpayer dollars annually on pump-action shotguns, AR-15 rifles, riot gear, and Special Forces contractors to train thousands of “special agents” in targeting American citizens.

Local police, sheriffs, and state troopers have also been armed to wage war against American citizens.  Battlefield weapons are being given to state and local police, allegedly to combat drug trafficking and fight terrorist threats at local pumpkin festivals. Military SWAT-style raids are used to serve search warrants for low-level drug possession, not hostage situations. Relatives and neighbors of alleged criminals have had government guns held to their children’s heads. Violations of civil rights, including illegal searches and the seizure of money and property without evidence of any crime, are commonplace.   

Law enforcement requests military equipment directly from the Pentagon’s war-fighting machine: tanks, machine guns, rocket launchers, tear gas, camouflage, shields, and gas masks.  Military equipment is often purchased with civil asset forfeiture slush funds to bypass legislative appropriations challenges.

The high percentage of civilian law enforcement who are military veterans (one in five, by some estimates) compounds the cultural risks of treating average Americans like enemy combatants.


Showdowns between civilians and heavily armed agents of the state in Ferguson, Baltimore, the Oregon Wildlife Refuge, and at various other political protests across the country should remind us that gun control advocates won’t be reducing the number of guns so much as shifting them all into either federal or criminal hands.

The senseless murder in Las Vegas is a frighteningly familiar tragedy. But don't say "Americans shouldn't be allowed to buy guns" when what you mean is "citizens should only be allowed to buy guns for their rulers."

Laura Williams

Dr. Laura Williams teaches communication strategy to undergraduates and executives. She is a passionate advocate for critical thinking, individual liberties, and the Oxford Comma.

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

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Spencer Wilding (Darth Vader) at MegaCon 2017.

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Spencer Wilding (Darth Vader) at MegaCon 2017

Spanish PM Pulls a Lincoln on Catalan Secession

Spanish PM Pulls a Lincoln on Catalan Secession



In the wake of Catalonia’s referendum on independence, Spanish Prime Minister Mariano Rajoy continued to argue, as he had in the weeks leading up to the vote, that any attempt by Catalans to become an independent state violates "the indissoluble unity of the Spanish nation, the common and indivisible homeland of all Spaniards."

Americans watching with interest could hardly have missed the similarity to U.S. President Abraham Lincoln’s first inaugural speech, in which he declared, “It is safe to assert that no government proper ever had a provision in its organic law for its own termination.”

The difference is Lincoln was doing just what he said he was doing, “asserting.” His novel theory had no basis in the words of the U.S. Constitution itself and contradicted both the Declaration of Independence and the ratification statements made by three states, including Virginia, who all reserved the right to secede from the union as a condition of ratification.

The Catalonia Conundrum

Prime Minister Rajoy’s statement, on the other hand, was not based in theory. He was quoting directly Article 2 of the Spanish Constitution, which contains the provision Lincoln had to invent. But Rajoy wasn’t quoting the whole Article, which reads,

The Constitution is based on the indissoluble unity of the Spanish nation, the common and indivisible country of all Spaniards; it recognises and guarantees the right to autonomy of the nationalities and regions of which it is composed, and the solidarity amongst them all.

Jumbled together in that one paragraph are the same conflicting pressures which exploded into civil war in 19th century America and continue to smolder under the surface today. On one hand is the recognition that diverse cultures within the union have a natural right to govern themselves as they see fit, without having their political decisions overridden by politicians in a distant capitol who don’t share their values, have no local stake in the community and, in Catalonia’s case, don’t even speak the same language.

But at the same time, the Spanish Constitution expressly states what Lincoln argued was implied: whether that natural right is respected or not, secession won’t be tolerated. Upon ratifying their respective constitutions, it is as if the governments the Americans and Spaniards created became the character Sonny in A Bronx Tale, who said just after locking the door of his tavern on the troublemaking bikers, “Now, youz can’t leave.”

There is also the related question, publicly debated by Edmund Burke and Thomas Paine during the French Revolution, of whether any one generation can bind future ones into a political arrangement in perpetuity. Burke, widely recognized as the father of British-American conservatism, said it could. Rejecting the idea that governments are formed to secure natural rights, Burke took the conservative position that only long-standing institutions can protect Man from his own barbarous nature.

Paine took the position established in the Declaration of Independence that the people have a right to alter or abolish their governments when they failed to secure or became “destructive” of their natural rights. Interestingly, this question is even more at the center of the Catalonia controversy than it was during the French Revolution or American Civil War.

Unlike the French peasants or Confederate states, Catalans themselves are divided on whether they want independence from Spain. Yes, the Confederate states had many of the same differences with Washington Catalonia has with Madrid: They were net taxpayers, meaning they paid more in taxes to the general government than they collected in benefits. They were culturally different, not quite so much linguistically, but certainly so in every other way. And they had a history of self-governance, even while part of the British Empire, that by the time of the Civil War was hundreds of years old.

The chief difference between the two conflicts is the absence of a single, defining issue around which the forces for secession can rally. Sadly, that issue for the Confederacy was slavery, although all the other grievances were part of the fuel which burst into flame. For Catalonia, there are only those longstanding grievances, which continue to smolder. And so, unlike the Confederate states’ secession conventions, a Catalan vote on independence in which most eligible voters participated would likely be very close. It may even fail.

But even if all eligible voters in Catalonia participated in a referendum and those opposing independence won a narrow electoral victory, would that really resolve anything? What about those over two million Catalans, roughly half the voting population, who had effectively withdrawn their consent to be governed by Madrid?

Democracy in the Digital Age

The Industrial Age was an age of consolidation, politically and economically. It mobilized people into factories to produce the economies of scale that raised the living standards of most of society. Similarly, the whole world consolidated into nation-states that brought together very large interest groups, who voted together largely in their perceived economic self-interest. If you were a factory worker in a union town, you voted with the union. If you were a farmer or a financier, you voted accordingly.

It was an age that naturally lent itself to democracy.

The Digital Age is leading in precisely the opposite direction. Economically and politically, it is a decentralizing force. Instead of driving to a big box retailer to purchase an item of clothing, consumers can now order them from Amazon on their phones, while sitting on their patios.

Similarly, the politics of one’s geographic region are beginning to lose their dominance over political sensibilities. While geography still matters more than anything else, there is an undeniable trend towards identifying politically with those in one’s social media networks, rather than merely in one’s city or state. It doesn’t take much imagination to look ahead a few decades and wonder whether geography will matter at all in a completely digital world, where even large-scale manufacturing has given way to the decentralizing influence of 3D printers or some new technology.

In such a brave new world, national or regional majorities based on geographical boundaries will seem far less legitimate to more autonomous individuals plugged into global networks, perhaps no longer needing even to travel to an office or factory to work. And resentment will continue to grow exponentially as geographically-based governments override what those individuals perceive as their own natural rights to liberty and to keep the fruits of their labor, instead of having them redistributed at the whim of politicians whose rule is based on regional majorities who may seem as alien to those people of the future as Washington seems to Iowans today.

As exciting as individual secession sounds in theory, last weekend’s events in Spain should remind us that governments have only one response to noncompliance with their rule: force. And just as in 19th century America, there is still plenty of support for governments to stamp out secession movements with violence. One can only hope the technological advances of the next several decades are accompanied by at least some small advances in wisdom.


Tom Mullen


Tom Mullen is the author of Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty and the Pursuit of Happiness? and A Return to Common  Sense: Reawakening Liberty in the Inhabitants of America. For more information and more of Tom's writing, visit www.tommullen.net.

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

Spencer Wilding (3)

Spencer Wilding at MegaCon 2017

Deputy Attorney General Rosenstein’s “Responsible Encryption” Demand is Bad and He Should Feel Bad

Deputy Attorney General Rosenstein’s “Responsible Encryption” Demand is Bad and He Should Feel Bad

Deputy Attorney General Rod Rosenstein delivered a speech on Tuesday about what he calls “responsible encryption” today. It misses the mark, by far.

Rosenstein starts with a fallacy, attempting to convince you that encryption is unprecedented:

Our society has never had a system where evidence of criminal wrongdoing was totally impervious to detection, especially when officers obtain a court-authorized warrant. But that is the world that technology companies are creating.

In fact, we’ve always had (and will always have) a perfectly reliable system whereby criminals can hide their communications with strong security: in-person conversations. Moreover, Rosenstein’s history lesson forgets that, for about 70 years, there was an unpickable lock. In the 1770s, engineer Joseph Bramah created a lock that remained unpickable until 1851. Installed in a safe, the owner could ensure that no one could get inside, or at least not without destroying the contents in the process.

Billions of instant messages are sent and received each day using mainstream apps employing default end-to-end encryption. The app creators do something that the law does not allow telephone carriers to do: they exempt themselves from complying with court orders.

Here, Rosenstein ignores the fact that Congress exempted those app creators-“electronic messaging services”- from the Computer Assistance for Law Enforcement Act (CALEA). Moreover, CALEA does not require telephone carriers to decrypt encryption where users hold the keys. Instead, Section 1002(b)(3) of CALEA provides:

(3) Encryption. A telecommunications carrier shall not be responsible for decrypting, or ensuring the government’s ability to decrypt, any communication encrypted by a subscriber or customer, unless the encryption was provided by the carrier and the carrier possesses the information necessary to decrypt the communication.

By definition, when the customer sends end-to-end encrypted messages—in any kind of reasonably secure implementation—the carrier does not (and should not) possess the information necessary to decrypt them.

With his faulty premises in place, Rosenstein makes his pitch, coining yet another glib phrase to describe a backdoor.

Responsible encryption is achievable. Responsible encryption can involve effective, secure encryption that allows access only with judicial authorization. Such encryption already exists. Examples include the central management of security keys and operating system updates; the scanning of content, like your e-mails, for advertising purposes; the simulcast of messages to multiple destinations at once; and key recovery when a user forgets the password to decrypt a laptop.

As an initial matter, “the scanning of content, like your e-mails, for advertising purposes” is not an example of encryption, “responsible” or otherwise. Rosenstein’s other examples are just describing systems where the government or another third party holds the keys. This is known as “key escrow,” and, as well explained in the Keys Under Doormats paper, the security and policy problems with key escrow are not only unsolved, but unsolvable.

Perhaps sensitive to the criticisms of the government’s relentless attempts to rename backdoors, Rosenstein claims “No one calls any of those functions a “back door.” In fact, those capabilities are marketed and sought out by many users.” In fact, critics of backdoors have fairly consistently called key escrow solutions “backdoors.” And any reasonable reader would call Google’s ability to access your email a backdoor, especially when that backdoor is used by unauthorized parties such as Chinese hackers.

Such a proposal would not require every company to implement the same type of solution. The government need not require the use of a particular chip or algorithm, or require any particular key management technique or escrow. The law need not mandate any particular means in order to achieve the crucial end: when a court issues a search warrant or wiretap order to collect evidence of crime, the provider should be able to help.

This is the new DOJ dodge. In the past, whenever the government tried to specify ‘secure’ backdoored encryption solutions, researchers found security holes – for example, rather famously the Clipper Chip was broken quickly and thoroughly.

So now, the government refuses to propose any specific technical solution, choosing to skate around the issue by simply asking technologists to “nerd harder” until the magical dream of secure golden keys is achieved.

Rosenstein attempts to soften his demand with an example of a company holding private keys.

A major hardware provider, for example, reportedly maintains private keys that it can use to sign software updates for each of its devices. That would present a huge potential security problem, if those keys were to leak. But they do not leak, because the company knows how to protect what is important.

This is a fallacy for several reasons. First, perfect security is an unsolved problem. No one, not even the NSA, knows how to protect information with zero chance of leaks. Second, the security challenge of protecting a signing key, used only to sign software updates, is much less than the challenge of protecting a system which needs access to the keys for communications at the push of a button, for millions of users around the globe.

Rosenstein then attempts to raise the stakes to near apocalyptic levels:

If companies are permitted to create law-free zones for their customers, citizens should understand the consequences. When police cannot access evidence, crime cannot be solved. Criminals cannot be stopped and punished.

This is a bit much. For a long time, people have had communications that were not constantly available for later government access. For example, when pay phones were ubiquitous, criminals used them anonymously, without a recording of every call. Yet, crime solving did not stop. In any case, law enforcement has been entirely unable to provide solid examples of encryption foiling even a handful of actual criminal prosecutions.

Finally, in his conclusion, Rosenstein misstates the law and misunderstands the Constitution.

Allow me to conclude with this thought: There is no constitutional right to sell warrant-proof encryption. If our society chooses to let businesses sell technologies that shield evidence even from court orders, it should be a fully-informed decision.

This is simply incorrect. Code is speech, and courts have recognized a Constitutional right to distribute encryption code. As the Ninth Circuit Court of Appeals noted:

The availability and use of secure encryption may … reclaim some portion of the privacy we have lost. Gov’t efforts to control encryption thus may well implicate not only the First Amendment rights … but also the constitutional rights of each of us as potential recipients of encryption’s bounty.

Here, Rosenstein focuses on a “right to sell,” so perhaps the DOJ means to distinguish “selling” under the commercial speech doctrine, and argue that First Amendment protections are therefore lower. That would be quite a stretch, as commercial speech is generally understood as speech proposing a commercial transaction. Newspapers, for example, do not face weaker First Amendment protections simply because they sell their newspapers.

The Department of Justice has said that they want to have an “adult conversation” about encryption. This is not it. The DOJ needs to understand that secure end-to-end encryption is a responsible security measure that helps protect people.

Source: Deputy Attorney General Rosenstein’s “Responsible Encryption” Demand is Bad and He Should Feel Bad | Electronic Frontier Foundation

Spencer Wilding (2)

Spencer Wilding (2)

Spencer Wilding (1)

Spencer Wilding (1)



Spencer Wilding at MegaCon 2017

The US Rejected Obamacare in 1918

The US Rejected Obamacare in 1918

 

The US rejected Obamacare in 1918. What a difference a mere hundred years makes! US voters rejected mandatory health insurance, or Obamacare, at the turn of the last century. It took supporters almost another century, but they finally won.

For a quarter century before WWI, many of the nation’s young people went to Germany to complete their college education and returned determined to recreate the US in the image of socialist Germany. Richard Ely was one. He founded the American Economic Association for that sole purpose. He and economist Irving Fisher would lead the drive for universal, mandatory health care insurance.

At the time, middle class and wealthier Americans paid a fee each time they visited a doctor. But the fees were too high for the working poor who instead organized into mutual aid societies to help each other with medical costs. Known as lodges, such as the Elks, or secret societies such the International Order of Odd Fellows (IOOF) or the Freemasons, or just fraternal organizations, mutual help societies existed for centuries. They followed the ancient guild practices of mutual aid to craft members. David T. Beito beautifully writes their history in his book From Mutual Aid to the Welfare State: Fraternal Societies and Social Services 1890-1967, published by the University of North Carolina Press in 2000.

Socialists became wary of lodges, or fraternal societies, partly because of their secret passwords and handshakes. But the societies developed those for security purposes because they suffered from fraud by non-members wanting to cash in on the benefits. Two centuries ago an IOOF chapter in one state couldn’t easily contact another out-of-state chapter to confirm the membership of someone who wanted aid. The passwords and handshakes solved the problem.

In the earliest day, the lodges offered burial insurance because poor people were terrified of suffering the indignities of a pauper’s burial. Later, they added healthcare and life insurance, built orphanages and hospitals, and provided pensions. The Shriners branch of the Freemasons still maintain children’s hospitals. Without the lodges, most members could not afford to pay fee-for-service doctors and would otherwise go without medical care. Readers who want to know how medical care should operate and what is wrong with today’s system should read Mr. Beito’s book.

Medical Establishment Attack on Mutual Aid

The medical establishment began attacking the lodges as early as the 1890s because the lodges would contract with doctors for a flat fee per year per member to provide medical care for lodge members. The practice, known as “capitation,” is making a comeback with the federal government as a means to restrain the explosive growth in the costs of medical care. Lodges usually contracted with doctors from private medical school

The Case Against Overcriminalization

The Case Against Overcriminalization

Lavrenti Beria, the infamous head of the Soviet secret police under Joseph Stalin, supposedly once said, “Show me the man and I’ll show you the crime.” In the Soviet Union, the regime could always find some crime to pin on anyone it chose to target.

As a general rule, it would be silly to equate the modern United States with a mass-murdering totalitarian state. But in this one respect, the two regimes are more similar than we would like them to be.

Because of the vast scope of current law, in modern America the authorities can pin a crime on the overwhelming majority of people, if they really want to. Whether you get hauled into court or not depends more on the discretionary decisions of law enforcement officials than on any legal rule. And it is difficult or impossible for ordinary people to keep track of all the laws they are subject to and to live a normal life without running afoul of at least some of them.

Discretion and the Rule of Law

This sad state of affairs is deeply at odds with the rule of law. Whatever else that concept means, it surely requires that ordinary people be able to readily determine what laws they are required to obey, and that whether or not you get charged by authorities depends more on objective legal rules than the exercise of official discretion. Unfortunately, neither holds true in the United States today.

Several recent developments highlight these painful truths. President Trump’s controversial decision to end the Deferred Action for Childhood Arrivals program is one of them. Whether or not some 800,000 people will be subject to deportation ultimately depended on the whims of one man. Additional cases in point include conservative claims that President Barack Obama underenforced a variety of federal laws and liberal fears that Trump is “sabotaging” Obamacare by failing to fully enforce key provisions of that legislation.

Few serious political observers are naive enough to believe that presidential decisions on any of these issues were primarily dictated by the neutral application of objective legal principles, as opposed to the political agenda of the administration in power at the time.

There is much to criticize in both Obama’s and Trump’s approaches to legal issues. But the problem goes well beyond the flaws of any particular politician. The real threat to the rule of law is inherent in the enormous scope of discretion possessed by the executive in a system where there are so many legal rules that almost everyone has violated some of them, and it is not possible for law enforcement to target more than a small fraction of the offenders.

It’s Likely That You Too Have Committed a Crime

Scholars estimate that the vast majority of adult Americans have violated criminal law at some point in their lives. Indeed, a recent survey finds that some 52 percent admit to violating the federal law banning possession of marijuana, to say nothing of the myriad other federal criminal laws. If you also include civil laws (which, though theoretically less severe than criminal laws, often carry heavy fines and other substantial penalties), even more Americans are lawbreakers.

The federal government today regulates everything from light bulbs to toilet flows. There is even a federal regulation making it a crime to advertise wine in a way that suggests it “has intoxicating qualities.” The percentage of lawbreakers goes up even further if we include state and local laws and regulations as well as federal ones.

For most people, it is difficult to avoid violating at least some laws, or even to keep track of all the laws that apply to them. For example, it is almost impossible for small businesses to fully obey all the byzantine regulations that apply to them, for home and apartment owners to fully comply with every part of the complex building codes and zoning restrictions that apply in many jurisdictions, or for almost anyone to ensure perfect compliance with our hyper-complicated tax code.

Ignorance of the law may not be a legally valid excuse. But such ignorance is virtually inevitable when the law regulates almost every aspect of our lives and is so extensive and complicated that few can hope to keep track of it.

Most Americans, of course, never face punishment for their lawbreaking. But that is true only because the authorities lack the resources to pursue most violators and routinely exercise discretion in determining which ones are worth the effort. Unless you are very unlucky or enter the crosshairs of law enforcement for some other reason, you may well be able to get away with a good deal of low-level lawlessness.

In this way, the rule of law has largely been supplanted by the rule of chance and the rule of executive discretion. Inevitably, political ideology and partisanship have a major impact on the latter. For example, federal law enforcement priorities are very different under Trump than they were under Obama.

Interpretation and Enforcement

Even the law itself is often interpreted differently, depending on who is in power. Under the doctrine of “Chevron deference,” federal agencies have very broad discretion to interpret and reinterpret the laws they enforce, so long as the agency’s view is “reasonable.” The result is that the law can change substantially whenever a Republican administration replaces a Democratic one, or vice versa – even if Congress does not pass any new legislation.

As Supreme Court Justice Neil M. Gorsuch puts it, an agency can “reverse its current view 180 degrees anytime based merely on the shift of political winds and still prevail [in court].” The enormous scope of federal regulatory law enables agencies to exercise extensive discretionary authority over many aspects of the economy and society.

Some will argue that the answer to these problems is simply to enforce every law to the hilt, without any favoritism or discretion. But the enormous scope of current law – and the vast number of violators – make it impossible to do that. Apprehending and prosecuting more than a small fraction of lawbreakers would require a virtual police state and probably bankrupt the government, to boot.

Some conservatives argue that Obama’s systematic use of executive discretion in the case of his DACA and Deferred Action for Parents of Americans immigration policies is especially problematic, far worse than “case by case” discretion. I am skeptical of such claims for reasons outlined here and here.

The difference between systematic and “case by case” discretion is more a matter of degree than kind. But even if such distinctions have greater merit than I believe, eliminating policies such as DACA would still leave enormous executive discretion in place. Even in the absence of formal, systematic orders from above, officials necessarily make choices about which lawbreakers to target, and those decisions are likely to be influenced by ideological and political considerations.

Often, such discretion will systematically treat some types of offenders more leniently than others, even in the absence of a formal directive to do so. For example, federal authorities have long chosen to ignore nearly all illegal marijuana possession (and most other illegal drug use) on college campuses. Lots of prominent politicians – including several recent presidents – have benefited from that forbearance. The feds are often less forgiving in other settings.

Reduce the Scope and Complexity of Law

We might also be able to reduce executive law enforcement discretion if the Supreme Court were to abolish Chevron deference, as Gorsuch rightly advocates. But even if that happened, federal agencies would retain a great deal of discretionary authority to decide which lawbreakers to go after. That is unavoidable so long as the scope of federal regulation remains as enormous as is currently the case. And, in practice, judges would still often defer to agencies’ interpretations of complex regulatory laws on which bureaucrats seem to have greater expertise than the judges do. For these reasons, law enforcement priorities would continue to shift – sometimes drastically – whenever partisan control of the White House changed hands.

The only way to make major progress toward establishing the rule of law would be to greatly reduce the scope and complexity of legal rules. In a world where the scope of law is strictly limited, officials might have sufficient resources to go after a much larger percentage of lawbreakers. And if the law were limited to those areas where there was a broad consensus that the conduct in question should be illegal, there would be less incentive for officials to engage in selective enforcement based on the priorities of the party in power. If federal or state authorities engaged in such shenanigans with respect to laws that enjoyed widespread bipartisan support, they would risk provoking a major political backlash.

There is no way to completely eliminate executive discretion over law enforcement or to make the law completely transparent to laypeople. But cutting back on the amount and complexity of law can help us make progress toward those goals.

Of course, it may be we do not value the rule of law enough to sacrifice any other objectives to strengthen it. The laws on the books are not there by accident. Most were enacted because they were supported by majority public opinion, influential interest groups or some combination of both.

Perhaps we just do not care about the rule of law enough to eliminate any substantial number of current laws and regulations – especially those supported by our side of the political spectrum. The rule of law may be less important to us than the rule of men whose agenda we like. If so, we might have more in common with Lavrenti Beria than we like to think.

Reprinted from The Washington Post.

Ilya Somin


ILYA SOMIN is Professor of Law at George Mason University. His research focuses on constitutional law, property law, and the study of popular political participation and its implications for constitutional democracy.

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

Amiga World Tech Journal (October 1991)

Amiga World Tech Journal (October 1991)

Europe Can Only Afford Its Welfare State by Heavily Taxing the Non-Wealthy

Europe Can Only Afford Its Welfare State by Heavily Taxing the Non-Wealthy

I argued last year that leftists should be nice to rich people because upper-income taxpayers finance the vast majority of the American welfare state according to government data. Needless to say, my comment about being “nice” was somewhat sarcastic. But I was making a serious point about the United States having a very “progressive” fiscal system. The top-20 percent basically pay for government and those in the bottom half are net recipients of that involuntary largesse.

I also pointed out a huge difference between the United States and Europe. Governments on the other side of the Atlantic impose much higher burdens on lower-income and middle-class taxpayers.

Here’s some of what I wrote:

…the big difference between the United States and Europe is not taxes on the rich. We both impose similar tax burden on high-income taxpayers, though Europeans are more likely to collect revenue from the rich with higher income tax rates and the U.S. gets a greater share of revenue from upper-income taxpayers with double taxation on interest, dividends, and capital gains (we also have a very punitive corporate tax system, though it doesn’t collect that much revenue). The real difference between America and Europe is that America has a far lower tax burden on lower- and middle-income taxpayers. Tax rates in Europe, particularly the top rate, tend to take effect at much lower levels of income. European governments all levy onerous value-added taxes that raise costs for all consumers. Payroll tax burdens in many European nations are significantly higher than in the United States.

So does this mean European politicians don’t like ordinary people?

I could make a snarky comment about the attitudes of the political elite, but I’ll resist that temptation and instead point out that taxes in Europe are much higher for the simple reason that government is much bigger and that means some segment of the population has to surrender more of its income.

But here’s the $64,000 question that we want to investigate today: Why are European governments pillaging lower-income and middle-class taxpayers instead of going after the “evil rich” and “greedy corporations”?

Part of the answer is that there aren’t enough rich people to finance big government. But the most important factor is the Laffer Curve. Politicians can impose higher tax rates on upper-income taxpayers and companies, but that doesn’t necessarily translate into higher revenue. Simply stated, well-to-do taxpayers have considerable ability to earn less income and/or report less income when tax burdens increase, and they do the opposite when tax burdens decrease.

That’s true in the United States, and it’s true in European countries such as Sweden, France, Russia, Denmark, and the United Kingdom.

So even if politicians want to fleece upper-income taxpayers, that’s not a successful method of generating a lot of revenue.

Which is why a shift from a medium-sized welfare state (such as what exists in the United States) to a large-sized welfare state (common in Europe) means huge tax increases on ordinary taxpayers.

I’ve made this point before, but now I have some additional evidence thanks to a new report from the Organization for Economic Cooperation and Development. The Paris-based bureaucracy is probably my least-favorite international organization because of its advocacy for statism, but it collects and publishes lots of useful statistics about fiscal policy in the industrialized world.

And here are three charts from the new study that tell a very persuasive story (and a depressing story for ordinary taxpayers).

First, we can see how the average tax burden has increased substantially over the past 50 years.



And who is paying all that additional money to politicians?

As you can see from this second chart, income tax revenues have become a less-important source of revenue over time while social insurance taxes (mostly paid by lower-income and middle-class taxpayers) have become a more-important source of revenue.



The third chart shows the evolution of the value-added tax burden. This levy takes a big bite out of the paychecks of ordinary people and the rate keeps climbing over time (and if we looked just at European governments that are part of the OECD, the numbers are even more depressing).



Now let’s put this data in context.

The United States now has a medium-sized welfare state financed mostly by upper-income taxpayers.

But because of dramatic demographic changes, we are doomed to have a large-sized welfare state. At least that’s what will happen if we don’t reform entitlement programs.

And if we leave policy on auto-pilot and there’s a substantial increase in the burden of government spending, it’s simply a matter of time before politicians figure out new ways of taking more money from lower-income and middle-class taxpayers.

Yes, they may also impose higher rates on “rich” taxpayers, but that will be mostly for symbolic purposes since those levies won’t generate substantial revenue.

Last but not least, don’t forget that European fiscal burdens will mean anemic European economic performance.

Reprinted from Intentional Liberty

Daniel J. Mitchell


Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

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

The War on General-Purpose Computing Turns on the Streaming Media Box Community

The War on General-Purpose Computing Turns on the Streaming Media Box Community

For most of the lifetime of Kodi since its release as XMBC in 2002, it was an obscure piece of free software that geeks used to manage their home media collections. But in the past few years, the sale of pre-configured Kodi boxes, and the availability of a range of plugins providing access to streaming media, has seen the software's popularity balloon—and made it the latest target of Hollywood's copyright enforcement juggernaut.

We've seen this in the appearance of streaming media boxes as an enforcement priority in the U.S. Trade Representative's Special 301 Report, in proposals for new legislation targeting the sale of "illicit" media boxes, and in lawsuits that have been brought on both sides of the Atlantic to address the "problem" that media boxes running Kodi, like any Web browser, can be used to access media streams that were not authorized by the copyright holder. We've also seen it in the big TV networks' vehement, sometimes disingenuous opposition to the U.S. law and regulations that mandate effective competition in the cable set-top box market.

The difficulty facing the titans of TV is that since neither those who sell Kodi boxes, nor those who write or host add-ons for the software, are engaging in any unauthorized copying by doing so, cases targeting these parties have to rely on other legal theories. So far several legal theories have been used; one in Europe against sellers of Kodi boxes, one in Canada against the owner of the popular Kodi add-on repository TVAddons, and two in the United States against TVAddons and a plugin developer.

European Filmspeler Case

In Europe, the case Stichting Brein v Jack Frederik Wullems (Filmspeler) was brought against a seller of Kodi boxes that came pre-installed with third-party plugins that were configured to access copyright-infringing streams. Although the seller was not engaged in any unauthorized reproduction of copyright works himself, the Court of Justice of the European Union ruled in April this year that because the boxes were configured with plugins that linked to copyright-infringing content, the defendant was infringing the copyright holder's exclusive power to control "communication to the public" of a copyright work.

The finding that the seller had engaged in a "communication to the public" is, to be charitable, a stretch; especially because recital 27 of Europe's Copyright Directive states that "the mere provision of physical facilities for enabling or making a communication does not in itself amount to a communication."

As best as we can explain it, the court reasoned that the provision of the pre-configured Kodi boxes was, in practical terms, a necessary step enabling end users to access the copyright-infringing steams, since these streams were not readily accessible other then by use of Kodi configured with a plugin to access them. The judgment built upon an earlier bad decisionthat outlawed merely hyperlinking to copyright-infringing content if the party who posted the link knew that the content was infringing; and that they would be presumed to have such knowledge if the hyperlink was posted for financial gain.

Canadian TVAddons Case

The second legal theory that has been used against the Kodi community is that helping people get add-ons that can infringe copyright amounts to an inducement or authorization of users' copyright infringements. This claim has been used to bring complaints and threats against add-on developers, resulting in several of them shutting down, and also forms the basis of a lawsuit against the host of a repository of such add-ons, TVAddons, brought by Canadian telecommunications companies Bell, Videotron, Rogers and TVA.

The lawsuit caused controversy recently when in a shocking abuse of legal process, the plaintiffs executed an Anton Piller order (a form of injunction somewhat like a private search warrant) to raid the home of the TVAddons site administrator, where during a terrifying sixteen hour ordeal he was interrogated by company representatives who threatened to prosecute him. They later seized his personal computer, domain names and social media accounts. A Canadian court subsequently vacated the injunction, ruling that the TV networks' "true purpose was to destroy the livelihood of the Defendant, deny him the [] resources to finance a defense," and to engage in discovery without "procedural safeguards." However, the networks appealed, the lawsuit continues, and TVAddons has not recovered its domain names and equipment (it has continued operation at a new domain name).

It is undisputed that the vast majority of the Kodi add-ons hosted at TVAddons at the time of the seizure were not infringing. Although some add-ons facilitate the users' access to copyright-infringing streams, there is a strong case that no wrong has been committed by TVAddons for merely hosting them online for download. Canadian law, like American law, provides web hosts with a safe harbor making them “exempt from liability when they act strictly as intermediaries in communication, caching and hosting activities.”

The lawsuit against TVAddons seeks to skirt that important protection by arguing that by merely hosting, distributing and promoting Kodi add-ons, the TVAddons administrator is liable for inducing or authorizing copyright infringements later committed using those add-ons. This argument, were it to succeed, would create new uncertainty and risk for distributors of any software that could be used to engage in copyright infringement.

American Lawsuit Against ZemTV and TVAddons

In a counterpart to the Canadian case, Dish Network has sued the developer of an add-on called ZemTV for direct infringement of the streaming media sources that can be accessed through that plugin, and TVAddons for contributory and vicarious copyright infringement, seeking awards of statutory damages against both. In this respect, American laws differs somewhat from Canadian law. This week, Dish amended its complaint to name the individuals it alleges to be the operators of ZemTV and TVAddons. While ZemTV's operators could be liable for infringement if they actually retransmitted broadcast TV channels without permission, the lawsuit's claims against TVAddons are weak. While the complaint claims that TVAddons's operator had "actual or constructive knowledge of [] infringing activity," and that he "intentionally induced ZemTV users to display the programs," the complaint doesn't say what, if anything, TVAddons did besides providing access to the ZemTV plugin amongst hundreds of other Kodi plugins. That doesn't add up to contributory infringement (or inducement).

Dish's attempt to plead vicarious infringement seems to be lacking, as well. Vicarious copyright liability requires that the defendant have the "right and ability to supervise" the conduct of the direct infringer, and benefit financially. Dish claims only that the TVAddons site made ZemTV "available for download." That's not enough to show an ability to supervise.

Despite the weakness of its claims, Dish, like the Canadian broadcasters, has ample resources to throw into litigation. Hopefully, TVAddons will have its day in court.

Conclusion

These lawsuits by big TV incumbents seem to have a few goals: to expand the scope of secondary copyright infringement yet again, to force major Kodi add-on distributors off of the Internet, and to smear and discourage open source, freely configurable media players by focusing on the few bad actors in that ecosystem. The courts should reject these expansions of copyright liability, and TV networks should not target neutral platforms and technologies for abusive lawsuits.

Source: The War on General-Purpose Computing Turns on the Streaming Media Box Community | Electronic Frontier Foundation