Wednesday, August 31, 2016

John Stossel: Gary Johnson gets it. America is electing ‘neither dictator nor king’

John Stossel: Gary Johnson gets it. America is electing ‘neither dictator nor king’

It was refreshing to moderate a “town hall” with the Libertarian presidential and vice presidential candidates last week because Govs. Gary Johnson and William Weld respect limits on presidential power.

Sunday, when Fox’s Chris Wallace challenged Johnson’s plan to replace the IRS with a consumption tax, Johnson pointed out that he’s “not getting elected dictator or king.”

Wallace suggested that means, “Don’t take my policies seriously because they won’t get through.”

I disagree.

It means that Johnson understands that America is a constitutional republic and there are (and ought to be) checks on what presidents can do.

In response to Wallace’s comment about Johnson not taking his promises seriously, Johnson said, “Take them very seriously. Count on certainty that we’re always going to support taxes going lower … being in business being easier, rules and regulations not getting worse.”

Johnson and Weld hold clear positions — unlike aspiring dictators Donald Trump and Hillary Clinton.

Clinton changes positions from year to year: praising trade deals, then condemning them; condemning gay marriage, then praising it — then scolding anyone who doesn’t share her new position.

Trump changes positions even faster, sometimes day to day. After saying he’ll deport millions of immigrants, now he says he won’t if they pay taxes and fill out paperwork — roughly the same position Jeb Bush and Marco Rubio held when Trump trashed them.

Libertarians don’t shift to fit the whims of the day, because we have core principles. One is: On most every issue, less government involvement is better.

“Government doesn’t create jobs!” said Johnson when a young woman asked what Johnson and Weld would “do about jobs.” The Libertarians said jobs get created when government gets out of the way, imposing only a few clear and predictable rules.

While Trump makes vague promises about making government “great” and Clinton about making it “fair,” Johnson and Weld talk about getting rid of as much of it as they can.

“There are constitutional limits to that,” said Johnson. “But if you were to wave a magic wand, there are a number of departments that come up: Commerce, Housing and Urban Development, Education, Homeland Security.”

Unlike Trump and Clinton, Johnson specifies cuts — and he’s willing to go after sacred cows such as defense spending: “You can’t balance the federal budget — something we’re promising to do in the first 100 days — you can’t do that without cutting military spending. … The BRAC Commission, set up by the Pentagon, says that we’ve got to eliminate 20 percent of those bases, but that hasn’t happened.”

Where markets thrive, people thrive. Weld understands that.

“When the GIs returned from World War II, they had two sets of needs, education and health care,” he says. “Education was handled through the GI Bill, which was essentially a voucher system. You could go wherever you wanted, the most successful program in domestic political history of the 20th century. Health care was the … opposite approach: command and control, one size fits all, the government is going to do this.”

The GI Bill vouchers allowed soldiers to enroll at a school they chose. But for health care, they must wait in long lines at government-run veterans hospitals, sometimes dying for lack of adequate care.

Apple Is Only the Beginning of the EU Tax Grab

Apple Is Only the Beginning of the EU Tax Grab

In the aftermath of the EU's latest escalation in its tax war with US multinational corporations, the rebuke from the US was swift, stretching from the US Treasury all the way to Congress: according to Kevin Brady, the House Ways and Means Chairman, the EU Apple decision was  "predatory and naked tax grab."

Chuck Schumer, the third-ranking Senate Democrat on the committee, said that the EU is unfairly undermining U.S. companies' ability to compete in Europe.  Naturally, the Treasury also chimed in, and a spokesperson said that "the Commission's actions could threaten to undermine foreign investment, the business climate in Europe, and the important spirit of economic partnership between the U.S. and the EU."

Naturally, the US would confine itself only to heated words: after all, there was little chance Washington would do anything to truly jeopardize trade relations between the two core trading partners, and Europe knows it.

However, with Europe desperate to boost its dwindling public coffers and only beginning its anti-tax avoidance campaign, AAPL was merely the start in the European Commission's crackdown. As the WSJ writes, following today's ruling that Apple got an unfair advantage over its competitors because of help it got from Ireland government’s, the EU’s antitrust regulator is likely next to turn to two other ongoing tax investigations on its docket: and McDonald's.

The EU regulator has previously disclosed that it is looking at the arrangements both companies have with tax authorities in Luxembourg. In the case of McDonald’s, the WSJ reports that antitrust commissioner Margrethe Vestager said in 2015 that the investigation concerned a 2009 tax ruling granted to a Luxembourg unit of the restaurant chain, called McDonald’s Europe Franchising, that resulted in the fast-food chain “paying no tax on their European royalties either in Luxembourg or in the U.S.” The unit, which collects royalty fees from McDonald’s franchisees across Europe and Russia, recorded a profit of more than €250 million in 2013 alone, the commission said.

As for Amazon, the tax ruling in question dates back to 2003. It applies to an Amazon subsidiary based in Luxembourg called Amazon EU Sarl. Investigators said in 2014 that “most of Amazon’s European profits” were routed through the unit, but that the structure of the subsidiary made it so that those profits were not taxed in Luxembourg.

We expect Google, which has infamously used the "Dutch sandwich" legal tax evasion scheme for years, will eventually make its way in Europe's crosshairs too.

Vestager on Tuesday gave no concrete timing on when the two investigations would come to a close.

Just like Ireland, Luxembourg has denied giving the companies special treatment, and both Amazon and McDonald’s have said they believe they’ve been paying their European taxes appropriately. However both multinational companies warn in their annual report that they could end up on the hook for more if the investigations don’t go their way.

In addition to US corporations' rising tax problems at the Commission level, companies operating in Europe are also facing increased enforcement efforts at a national level. Authorities in Spain and France recently have raided offices of Google’s parent company, Alphabet, and French authorities have demanded more than €1 billion in back taxes and fines from the company. Alphabet says it’s paid all the taxes it owes.

Considering the deteriorating state of Europe's projected financials, in big part a result of Europe's declining tax base as millions of aging workers are set to retire and instead of contributing will become a drain of government cash, we expect today's dramatic crackdown against Apple to be only the beginning of a long slog which will ultimately hurt Europe itself.

Consider that despite its receipt of €13 billion, the biggest loser from today's decision is Ireland itself. As Reuters comments, Dublin already faces a competitive threat from the United Kingdom, which once outside the EU may cut its own corporate tax rate. According to Ireland’s Economic and Social Research Institute, a 1 percentage point cut in the UK corporate tax rate could reduce the probability of non-EU states sending foreign direct investment into Ireland by 4 percent. Irish firms send 44 percent of their exports to the UK, so future trade barriers could mess up Ireland’s economic recovery.

The size of Apple’s potential bill puts Ireland in even more of a corner. While on one hand a 13 billion euro payment would be a windfall for the Irish people, it’s also a big blow to competitiveness if companies fear past dealings could be subject to retrospective meddling. Ireland could simply lower the corporate tax rate across the board. Other countries in the EU with less competitive rates would be among the losers.

To be sure, the full impact of the unwind of Europe's tax policies will take many years; the bigger question is whether, as a result of the ongoing nationalist, refugee and social upheavals, there will even be a Europe in several years.

Source: Apple Is Only the Beginning of the EU Tax Grab | Foundation for Economic Education

Computer Play – December 1988

Computer Play – December 1988

Tuesday, August 30, 2016

Monday, August 29, 2016

Gary Johnson Avoids Typical Third-Party Fade; Best Polling Since Perot in ‘92

Gary Johnson Avoids Typical Third-Party Fade; Best Polling Since Perot in ‘92

A couple of weeks ago in this space I pushed back against assertions by FiveThirtyEight number-cruncher Harry Enten that Gary Johnson's polls have been "trending downwards," indicating that "voters may be moving away from third-party options." Well, today Enten is back with an interesting piece headlined "Gary Johnson Isn't Fading."

While noting what we have been warning you about here for years—third-party candidates typically see their crest of polling support halved by Election Day, according to Gallup—Enten explains that Johnson's numbers have so far not followed this pattern. In fact, the Libertarian may have already weathered the most difficult part of the calendar: "Most third-party candidates didn't lose that much support between late summer and Election Day," Enten writes. "Besides John Anderson in 1980, no candidate ended up finishing more than 3 percentage points below where they were polling in late August. The average drop-off is about 2 percentage points."

So how does Johnson's 9 percent stack up at this point in the campaign against other third-party candidates since World War II? According to numbers compiled by Enten here, fourth place, behind Ross Perot in 1992 (20 percent then, finished at 19), George Wallace in '68 (17/14), and Anderson in '80 (14/7). He's just a tick above Perot in '96 (8/8), behind which nobody comes close...

Source: Gary Johnson Avoids Typical Third-Party Fade; Best Polling Since Perot in ‘92

Friday, August 26, 2016

Bubsy: Claws Encounters of the Furred Kind (SNES)

Bubsy: Claws Encounters of the Furred Kind (SNES)

MegaCon 2016 (Friday)

MegaCon 2016 (Friday)

Waking around the vendor area on Friday at MegaCon 2016.

Thursday, August 25, 2016

Word Games: What the NSA Means by “Targeted” Surveillance Under Section 702

We all know that the NSA uses word games to hide and downplay its activities. Words like "collect," "conversations," "communications," and even "surveillance" have suffered tortured definitions that create confusion rather than clarity.

There’s another one to watch: "targeted" v. "mass" surveillance.

Since 2008, the NSA has seized tens of billions of Internet communications. It uses the Upstream and PRISM programs—which the government claims are authorized under Section 702 of the FISA Amendments Act—to collect hundreds of millions of those communications each year. The scope is breathtaking, including the ongoing seizure and searching of communications flowing through key Internet backbone junctures,[1] the searching of communications held by service providers like Google and Facebook, and, according to the government's own investigators, the retention of significantly more than 250 million Internet communications per year.[2]

Yet somehow, the NSA and its defenders still try to pass 702 surveillance off as "targeted surveillance," asserting that it is incorrect when EFF and many others call it "mass surveillance."

Our answer: if "mass surveillance" includes the collection of the content of hundreds of millions of communications annually and the real-time search of billions more, then the PRISM and Upstream programs under Section 702 fully satisfy that definition.

This word game is important because Section 702 is set to expire in December 2017. EFF and our colleagues who banded together to stop the Section 215 telephone records surveillance are gathering our strength for this next step in reining in the NSA. At the same time, the government spin doctors are trying to avoid careful examination by convincing Congress and the American people that this is just "targeted" surveillance and doesn’t impact innocent people.

Section 702 Surveillance: PRISM and Upstream

PRISM and Upstream surveillance are two types of surveillance that the government admits that it conducts under Section 702 of the FISA Amendments Act, passed in 2008. Each kind of surveillance gives the U.S. government access to vast quantities of Internet communications.[3]

Upstream gives the NSA access to communications flowing through the fiber-optic Internet backbone cables within the United States.[4] This happens because the NSA, with the help of telecommunications companies like AT&T, makes wholesale copies of the communications streams passing through certain fiber-optic backbone cables. Upstream is at issue in EFF’s Jewel v. NSA case.

PRISM gives the government access to communications in the possession of third-party Internet service providers, such as Google, Yahoo, or Facebook. Less is known about how PRISM actually works, something Congress should shine some light on between now and December 2017.[5]

Note that those two programs existed prior to 2008—they were just done under a shifting set of legal theories and authorities.[6] EFF has had evidence of the Upstream program from whistleblower Mark Klein since 2006, and we have been suing to stop it ever since.

Why PRISM and Upstream are "Mass," Not "Targeted," Surveillance

Despite government claims to the contrary, here’s why PRISM and Upstream are "mass surveillance":

          (1) Breadth of acquisition:  First, the scope of collection under both PRISM and Upstream surveillance is exceedingly broad. The NSA acquires hundreds of millions, if not billions, of communications under these programs annually.[7] Although, in the U.S. government’s view, the programs are nominally "targeted," that targeting sweeps so broadly that the communications of innocent third parties are inevitably and intentionally vacuumed up in the process. For example, a review of a "large cache of intercepted conversations" provided by Edward Snowden and analyzed by the Washington Post revealed that 9 out of 10 account holders "were not the intended surveillance targets but were caught in a net the agency had cast for somebody else."[8] The material reviewed by the Post consisted of 160,000 intercepted e-mail and instant message conversations, 7,900 documents (including "medical records sent from one family member to another, resumes from job hunters and academic transcripts of schoolchildren"), and more than 5,000 private photos.[9] In all, the cache revealed the "daily lives of more than 10,000 account holders who were not targeted [but were] catalogued and recorded nevertheless."[10] The Post estimated that, at the U.S. government’s annual rate of "targeting," collection under Section 702 would encompass more than 900,000 user accounts annually. By any definition, this is "mass surveillance."

          (2) Indiscriminate full-content searching.  Second, in the course of accomplishing its so-called "targeted" Upstream surveillance, the U.S. government, in part through its agent AT&T, indiscriminately searches the contents of billions of Internet communications as they flow through the nation’s domestic, fiber-optic Internet backbone. This type of surveillance, known as "about surveillance," involves the NSA's retention of communications that are neither to nor from a target of surveillance; rather, it authorizes the NSA to obtain any communications "about" the target.[11] Even if the acquisition of communications containing information "about" a surveillance target could, somehow, still be considered "targeted," themethod for accomplishing that surveillance cannot be: "about" surveillance entails a content search of all, or substantially all, international Internet communications transiting the United States.[12]  Again, by any definition, Upstream surveillance is "mass surveillance."  For PRISM, while less is known, it seems the government is able to search through—or require the companies like Google and Facebook to search through—all the customer data stored by the corporations for communications to or from its targets.

Seizure: Fourth Amendment and the Wiretap Act

To accomplish Upstream surveillance, the NSA copies (or has its agents like AT&T copy) Internet traffic as it flows through the fiber-optic backbone. This copying, even if the messages are only retained briefly, matters under the law. Under U.S. constitutional law, when the federal government "meaningfully interferes" with an individual’s protected communications, those communications have been "seized" for purposes of the U.S. Constitution’s Fourth Amendment. Thus, when the U.S. government copies (or has copied) communications wholesale and diverts them for searching, it has "seized" those communications under the Fourth Amendment.

Similarly, U.S. wiretapping law triggers a wiretap at the point of "interception by a device," which occurs when the Upstream mechanisms gain access to our communications.[13]

Why does the government insist that it’s targeted?  For Upstream, it may be because the initial collection and searching of the communications—done by service providers like AT&T on the government’s behalf—is really, really fast and much of the information initially collected is then quickly disposed of. In this way the Upstream collection is unlike the telephone records collection where the NSA kept all of the records it seized for years. Yet this difference should not change the conclusion that the surveillance is "mass surveillance." First, all communications flowing through the collection points upstream are seized and searched, including content and metadata. Second, as noted above, the amount of information retained—over 250 million Internet communications per year—is astonishing.

Thus, regardless of the time spent, the seizure and search are comprehensive and invasive. Using advanced computers, the NSA and its agents can do a full-text, content search within a blink of an eye through billions, if not trillions of your communications, including emails, social media, and web searches. Second, as demonstrated above, the government retains a huge amount of the communications—far more about innocent people than about its targets—so even based on what is retained the surveillance is better described as "mass" rather than "targeted."

Yes, it is Mass Surveillance

So it is completely correct to characterize Section 702 as mass surveillance. It stems from the confluence of: (1) the method NSA employs to accomplish its surveillance, particularly Upstream, and (2) the breadth of that surveillance.

Next time you see the government or its supporters claim that PRISM and Upstream are "targeted" surveillance programs, you’ll know better.

Source: Word Games: What the NSA Means by “Targeted” Surveillance Under Section 702 | Electronic Frontier Foundation

Rights Don’t Come from Governments

With every new mass shooting, it seems that everyone on social media is some combination of a gun expert, Islam expert, terror expert, security expert, etc. That’s all well and good, and I am all for people having conversations about these kinds of things. I’m admittedly no expert in any of these areas, and I'm not writing this to try to present any answers or solutions. But this topic, and others like gay marriage, seem to always show that many people profoundly misunderstand what rights are.

Rights and Law Aren’t Synonymous

You can see how far off people really are when you run across arguments along these lines: “The First Amendment and free speech aren’t absolute and can be limited, so the Second Amendment can be too”. There are several things grossly wrong with this argument: the first being that it gives way too much significance and power to the Bill of Rights.

The Constitution and Bill of Rights have no role in “creating” rights. The Constitution itself is useful only insofar as it lays out the guidelines, structure, and organization of the government. It has no place dealing with anything else.

Rights are extremely simple and bills of rights, constitutions, civics classes, etc. only serve to muddy the waters. They lead people into the confused belief that individuals or representatives or majorities can create rights by writing them down on a magical piece of paper.

What Rights Do You Have?

The concept is simple. You have one and only one right, namely property. And you have that right by virtue of being a conscious being. We divide that up into such "sub-freedoms" as freedom of speech, freedom to assemble, the right to bear arms, etc. just for the sake of ease of conversation when talking about specific types of property rights. But make no mistake, every legitimate right can be reduced to a right to property, while every illegitimate right cannot.

And as a conscious being , you are entitled to this natural right even if you are able to conceptualize it. Put differently, if you can think about having rights then you have them: regardless of whether they are written in a 200 year old document or not.

The second thing wrong with the above statement is that it’s completely false! Freedom of speech cannot be morally limited. You own yourself, and your rights only end where the rights of others begin; i.e. you can conduct yourself in any way you see fit so long as you do not violate the property rights of other conscious beings. The classic example typically given is that of someone yelling “fire” in a crowded theater. It is said that this speech can be rightfully prohibited, and so there are “obvious” limits to the right to free speech.

Though you may not rightfully yell “fire” in a crowded theater (most of the time), the reason for this has nothing to do with a limit on free speech. The reason you may not do this is that you would be violating the property rights of both the owner of the theater and the patrons. Most theaters have a code of conduct and yelling “fire” is almost certainly violating that code. Since you would be currently occupying the someone else's property, you must follow all their conditions for using that property, or you must leave. Otherwise, you are violating their rights.

You would also be depriving the patrons of getting what they paid for. They purchased a ticket in exchange for viewing the film or performance being shown in the theater and so have a de facto form of temporary property claim on a seat or spot in the theater for the duration of the show. By yelling “fire” and presumably ending or delaying the show or performance, you are depriving them of their property and violating their rights.

Contractual Restrictions of Rights

It’s extremely important to remember that right(s) only exist in the space that does not encroach on the rights of others. This means that the above situation does not constitute a “limit” on freedom of speech, but rather is a realm in which free speech never existed and can’t exist. Rights can never serve to aid in the violation of another’s rights because true rights never conflict. This is easier to conceptualize when you consider all rights as only a right to property. You can say what you want because you own your body, but if you choose to occupy someone else’s property, you must abide by their rules or leave.

Now let’s bring it back to the original statement and the conflict surrounding the right to bear arms. You can bear arms, not because of a few lines of text in an antiquated document, but because you have a right to purchase anything so long all the people involved in the transaction are doing so voluntarily and knowingly. In other words, you can ethically buy anything you want (drugs, guns, sex) as long as the rights of others aren’t violated in the process. What individuals do with what they buy is a wholly different and unrelated argument.

Freedom of speech is absolute. The right to bear arms (any arms) is absolute. Neither one of these facts has anything to do with the Constitution, and neither can be morally limited.

Source: Rights Don’t Come from Governments | Foundation for Economic Education

Wednesday, August 24, 2016

Compute! – June 1984

Compute! – June 1984

MegaCon 2016 - George Takei

MegaCon 2016 - George Takei

Q & A with Star Trek's legendary George Takei at MegaCon 2016.

Tuesday, August 23, 2016

U.S. Customs and Border Protection Wants to Know Who You Are on Twitter

U.S. Customs and Border Protection Wants to Know Who You Are on Twitter

U.S. border control agents want to gather Facebook and Twitter identities from visitors from around the world. But this flawed plan would violate travelers’ privacy, and would have a wide-ranging impact on freedom of expression—all while doing little or nothing to protect Americans from terrorism.

Customs and Border Protection, an agency within the Department of Homeland Security, has proposed collecting social media handles from visitors to the United States from visa waiver countries. EFF submitted comments both individually and as part of a larger coalition opposing the proposal.

CBP specifically seeks “information associated with your online presence—Provider/Platform—Social media identifier” in order to provide DHS “greater clarity and visibility to possible nefarious activity and connections” for “vetting purposes.”

In our comments, we argue that would-be terrorists are unlikely to disclose social media identifiers that reveal publicly available posts expressing support for terrorism.

But this plan would be more than just ineffective. It’s vague and overbroad, and would unfairly violate the privacy of innocent travelers. Sharing your social media account information often means sharing political leanings, religious affiliations, reading habits, purchase histories, dating preferences, and sexual orientations, among many other personal details.

Or, unwilling to reveal such intimate information to CBP, many innocent travelers would engage in self-censorship, cutting back on their online activity out of fear of being wrongly judged by the U.S. government. After all, it’s not hard to imagine some public social media posts being taken out of context or misunderstood by the government. In the face of this uncertainty, some may forgo visiting the U.S. altogether.

In Louisiana, Private Disaster Relief Outperforms the Government

In Louisiana, Private Disaster Relief Outperforms the Government

The recent flooding that hit Louisiana is the worst natural disaster to hit the United States since Hurricane Sandy hit New Jersey in 2012. So far we know that at least 13 are dead and tens of thousands were left homeless in the flooding. Even worse, most of those affected do not have flood insurance. Up to $21 billion worth of housing stock was wiped out by the deluge of rain.

The recovery will be long and difficult in one of the poorest states in the country. There is the challenge of finding employment and housing for all these displaced people. Given the fact that Louisiana is a hot and humid state most of the year, there will also be the issues of dealing with mold and increased injuries as people try to rebuild.

But one of the greatest stories of the Louisiana flooding is how the people and free markets are playing a role in helping to both rescue people and deliver relief much quicker than the government.

Citizens to the Rescue

The rains that swamped parts of Louisiana over a period of a few days were relentless. Local governments and first responders were overwhelmed with calls for help from people trapped in their homes by rising waters.

Instead of waiting for the government to come rescue them, the people of Louisiana used their own boats to save their neighbors.Instead of waiting for the government to come rescue them, the people of Louisiana used their own privately-owned boats to save their neighbors. This "Cajun Navy" drew its ranks and fleet from Louisiana's large numbers of sportsmen. People who needed rescue contacted a Facebook group and the boats used smartphone apps such as the GPS app Glympse and the walkie talkie app Zello to coordinate. The “Cajun Navy” was responsible for saving the lives of thousands of Louisianians and their pets and livestock.

The people of Louisiana also distributed immediate relief to their displaced neighbors much more efficiently than the government was able to. One of the best examples of this was the conversion of a movie studio into a shelter housing over 2,000 people. The Celtic Media Centre is one of Louisiana’s premier film production studios located in Baton Rouge, which was one of the cities hardest hit by the flooding. The studio’s executive director, Patrick Mulhearn, saw how devastated his neighbors were by the high water and decided to open up Celtic as an emergency shelter.

Celtic was able to shelter over 2,000 evacuees in large, open, and air conditioned sound stages that were not being used for filming at the time. The shelter was supplied at first by local volunteers who donated food, water, and clothing to those affected by the storm. Volunteer doctors and other medical personnel, themselves often flood victims, set up a clinic in Celtic.

Importantly in a pet loving state like Louisiana, Celtic was open to pets as well. Many people did not evacuate during Hurricane Katrina in 2005 because their pets were not welcome at shelters.

There were smaller examples of churches opening themselves up, without prodding by either the Red Cross or the state government, as storm shelters for those who lost everything. Such shelters are all over the parishes that were flooded, and have largely been stocked with supplies by volunteers all over the state. People are even taking donations to the parking lots of stores that were unaffected to bring food, water, and other supplies to the flood zone.

People looking to donate supplies have been coordinating their relief efforts on Facebook and other social media. If people are looking to donate supplies, they can use social media to find places to drop them off. If people in other parts of the state and out of state want to donate, they're being directed on social media to places where they can help.

Even while the streets of Louisiana flooded, trucks from Wal-Mart and UPS did not stop rolling. Wal-Mart, in particular, was able to use its corporate meteorologists to plan delivery routes and shift deliveries of much-needed supplies such as baby formula and water to the affected areas. UPS is able to prioritize delivery of items such as mail order prescription drugs. Companies are rushing supplies into the disaster area quicker than lethargic government agencies and the Red Cross.

Motivated by History

In 2005, after Hurricane Katrina, Louisianians tried waiting on the government. That help never came and over 1,500 Louisianians died in the flood waters of New Orleans, St. Bernard Parish, Plaquemines Parish, and Jefferson Parish. The people of Louisiana learned the hard way that they had to rescue themselves.

After Katrina, Louisianians tried waiting on the government. That help never came and over 1500 Louisianians died.The people of Louisiana were motivated by a sense of community. While the Federal government was giving anti-discrimination lectures to flood victims, the Cajun Navy was rescuing people of all races. Louisiana has come together like never before.

But it wasn't just the compassion of the people of Louisiana that saved lives. Companies which were seeking profit were also responsible. Everyone from the smartphone app developers to the retailers who provided the products to sustain and save lives played a role in this. Businesses and entrepreneurs meeting the needs of customers were literally lifesavers.

As Louisiana rebuilds, the free market will play a leading role in feeding and sheltering the displaced people. Companies motivated by profit will sell building materials to help rebuild homes and others will be looking to hire displaced workers to help them do more business. The pursuit of profit is what will rebuild Louisiana, not a government.

Even in disaster relief the best thing government can do is get out of the way of the private sector.

Source: In Louisiana, Private Disaster Relief Outperforms the Government | Foundation for Economic Education

Monday, August 22, 2016

Official U.S. PlayStation Magazine – December 1999

Official U.S. PlayStation Magazine – December 1999

MegaCon 2016 - Anthony Daniels

MegaCon 2016 - Anthony Daniels

Q & A with Anthony Daniels, otherwise known as C3P0, at MegaCon 2016.

Friday, August 12, 2016

Rogue One: A Star Wars Story Trailer (Official)

Rogue One: A Star Wars Story Trailer (Official)

Watch the official trailer for Rogue One: A Star Wars Story, in which a group of unlikely heroes band together on a mission to steal the plans to the Death Star, the Empire’s ultimate weapon of destruction. Rogue One: A Star Wars Story arrives in theaters December 16, 2016.

America deserves a good look at Gary Johnson

America deserves a good look at Gary Johnson

Sure, I’ve been critical of Donald Trump and the appalling things that regularly fall out of his mouth. (Check here, here and here.)  I have a hard time of envisioning government by temper tantrum and wholesale character assassination.

But I’ve also written about Hillary Clinton. About the curious timing of hubby Bill’sprivate meeting at Sky Harbor with Attorney General Loretta Lynch, who oversees the agency that was, at the time, investigating Clinton’s wife.

About the FBI’s announcement a few days later that Hillary Clinton was “extremely careless” in her handling of state secrets on her private email server. This, despite Clinton’s repeated public assurances that no sensitive material was ever stored on her private email server.

So naturally, I must be a Trump supporter.

“I guess you are one of those women who just can’t stand to see other women succeed,” wrote one reader.

A lot of us don’t want either

Actually I’m one of those Americans who just can’t stand of think of either Hillary Clinton or Donald Trump as our next president.

Turns out there are a lot of us.

According to the latest CNN poll, 55 percent of American voters have an unfavorable view of Clinton and 70 percent don’t like Trump.

We don’t buy Trump’s fear and anger and we don’t trust Clinton’s hope and change – or rather, a lack of change from what we’ve seen over the last eight years.

Oh, for an alternative.

Actually, there are two. We just don’t see or hear much about them.

You have an alternative

Former New Mexico Gov. Gary Johnson is a Republican-turned-Libertarian who might appeal to Republicans who support free trade, entitlement reform and tax cuts. Democrats might like his support for legalizing marijuana and Obama’s deportation reprieve for immigrants who were brought here illegally as children.

Jill Stein is the Green Party candidate who might appeal to Democrats who support single-payer healthcare, a $15-an-hour minimum wage and free child care and college.

Both ran for president in 2012. Neither got even 1 percent support.

Both are running again – not that you’d know it.

Next month, the presidential debates will begin and neither will likely be on the stage. The Commission on Presidential Debates has decreed that a candidate must hit an average of 15 percent support in five national polls.

Johnson wavers between 7 and 13 percent, depending upon the poll.

But how do you get support if nobody knows who you are?

We need to see him debate

How can voters, unhappy with a choice between Trump and Clinton, realize there’s a third option if they turn on CNN (or FOX) and it’s all about Donald’s mouth and Hillary’s email?

Bitcoin Wins in Court

Bitcoin Wins in Court

On July 25, Miami-Dade Florida circuit judge Teresa Pooler dismissed money-laundering charges against Michell Espinoza, a local bitcoin seller. The decision is a welcome pause on the road to financial serfdom.

It is a small setback for authorities who want to fight crime (victimless or otherwise) by criminalizing and tracking the “laundering” of the proceeds, and who unreasonably want to do the tracking by eliminating citizens’ financial privacy, that is, by unrestricted tracking of their subjects’ financial accounts and activities. The US Treasury’s Financial Crimes Enforcement Network (FinCEN) is today the headquarters of such efforts.

As an Atlanta Fed primer reminds us, the authorities’ efforts are built upon the Banking Secrecy Act (BSA) of 1970. (A franker label would be the Banking Anti-Secrecy Act). The Act has been supplemented and amended many times by Congress, particularly by Title III of the USA PATRIOT Act of 2001, and expanded by diktats of the Federal Reserve and FinCEN. The laws and regulations on the books today have “established requirements for recordkeeping and reporting of specific transactions, including the identity of an individual engaged in the transaction by banks and other FIs [financial institutions].”

These requirements are collectively known as Anti-Money-Laundering (AML) rules.

In particular, banks and other financial institutions are required to obey “Customer Identification Program” (CIP) protocols (aka “know your customer”), which require them to verify and record identity documents for all customers, and to “flag suspicious customers’ accounts.” Banks and financial institutions must submit “Currency Transaction Reports” (CTRs) on any customers’ deposits, withdrawals, or transfers of $10,000 or more.

To foreclose the possibility of people using unmonitored non-banks to make transfers, FinCEN today requires non-depository “money service businesses” (MSBs) – which FinCEN defines to include “money transmitters” like Western Union and issuers of prepaid cards like Visa – also to know their customers. Banks and MSBs must file “Suspicious Activity Reports (SARs)” on transactions above $5000 that may be associated with money-laundering or other criminal activity. Individuals must also file reports.

Carrying $10,000 or more into or out of the US triggers a “Currency or Monetary Instrument Report” (CMIR).” Any US citizen who has $10,000 or more in foreign financial accounts, even if it never moves, must annually file “Foreign Bank and Financial Accounts Reports (FBARs).”

In addition, state governments license money transmitters and impose various rules on their licensees.

When most of these rules were enacted, before 2009, there were basically only three convenient (non-barter) conduits for making a large-value payment. If Smith wanted to transfer $10,000 to Jones, he could do so in person using cash, which would typically involve a large withdrawal followed by a large deposit, triggering CTRs. He could make the transfer remotely using deposit transfer through the banking system, triggering CTRs or SARs if suspicious. Or he could use a service like Western Union or Moneygram, again potentially triggering SARs.

For the time being, the authorities had the field pretty well covered.

The Bitcoin "Loophole"

Now come Bitcoin and other cryptocurrencies. Cash is of course still a face-to-face option. But today if Smith wants to transfer $10,000 remotely to Jones, he need not go to a bank or Western Union office. He can accomplish the task by (a) purchasing $10,000 in Bitcoin, (b) transferring the BTC online to Jones, and (c) letting Jones sell them for dollars (or not).

The authorities would of course like to plug this “loophole.” But the internet, unlike the interbank clearing system, is not a limited-access conduit whose users can be commandeered to track and report on its traffic. No financial institution is involved in a peer-to-peer bitcoin transfer. Granted, Smith will have a hard time purchasing $10,000 worth of Bitcoins without using a bank deposit transfer to pay for them, which pings the authorities, but in principle he could quietly buy them in person with cash.

Accordingly, “attempting to fit the sale of Bitcoin into a statutory scheme regulating money services businesses is like fitting a square peg in a round hole.”

In the recent legal case, it appears that this possibility for unmonitored transfers was noticed by Detective Ricardo Arias of the Miami Beach Police Department, who “became intrigued” and presumably alarmed upon learning about Bitcoin at a meeting with the US Secret Service’s Miami Electronic Crimes Task Force.

Detective Arias and Special Agent Gregory Ponzi decided to investigate cash-for-Bitcoin sales in South Florida. (I take details about the case from Judge Pooler’s decision in State of Florida v. Michell Abner Espinoza (2016).) Arias and Ponzi went to to find a seller willing to make a cash sale face-to-face. Acting undercover, Arias contacted one Michell Espinoza, apparently chosen because his hours were flexible.

Arias purchased $500 worth of Bitcoin at their first meeting in a Miami Beach coffee shop, and later purchased $1000 worth at a meeting in a Haagen-Daaz ice cream shop in Miami. Arias tried to make a third purchase for $30,000 in a hotel room where surveillance cameras had been set up, but Espinoza rightly suspected that the currency offered was counterfeit, and refused it.

At that meeting, immediately after the failed purchase, Espinoza was arrested. He was charged with one count of unlawfully operating a money services business without a State of Florida license, and two counts of money laundering under Florida law.

Bitcoin vs Money Laundering Rules

Judge Pooler threw out all three charges. Evaluating her arguments as a monetary economist, I find that some are insightful, while others are beside the point or confused. On the charge that Espinoza illegally operated an unlicensed money services business, she correctly noted that Bitcoin is not widely accepted in exchange for goods and thus “has a long way to go before it is the equivalent of money.”

Accordingly, “attempting to fit the sale of Bitcoin into a statutory scheme regulating money services businesses is like fitting a square peg in a round hole.” However she also offered less compelling reasons for concluding that Bitcoin is not money, namely that it is not “backed by anything” and is “certainly not tangible wealth and cannot be hidden under a mattress like cash and gold bars.” Federal Reserve notes are money without being backed by anything, and bank deposits are money despite being intangible. Gold bars are today not money (commonly accepted as a medium of exchange).

Judge Pooler further correctly noted that Espinoza did not receive currency for the purpose of transmitting it (or its value) to any third party on his customer’s behalf, as Western Union does. He received cash only as a seller of Bitcoin. Nor, she held, does Bitcoin fall into any of the categories under Florida’s statutory definition of a “payment instrument,” so Espinoza was not operating a money services business as defined by the statute.

Bitcoin is indeed not a payment instrument as defined by the statue because it is not a fixed sum of “monetary value” in dollars like the categories of instruments that are listed by the statute. It is an asset with a floating dollar price, like a share of stock.

If even casual individual Bitcoin sellers like Espinoza must also register as MSBs, that will spell the end to legal local Bitcoin-for-cash trades.

Here Judge Pooler accepted a key defense argument (basically, “the defendant was not transmitting money, but only selling a good for money”) that was rejected by Judge Collyer in U.S. v. E-Gold (2008). In the e-gold system, Smith could purchase and readily transfer to Jones claims to units of gold held at e-gold’s warehouse. Federal officials successfully busted e-gold for “transmitting money” without the proper licenses.

Judge Collyer accepted the prosecution’s argument that selling gold to Smith, providing a vehicle for him to transfer it to Jones, and buying it back from Jones is tantamount to transmitting money from Smith to Jones. Of course the Espinoza case is different in that Espinoza did not provide a vehicle for transmitting Bitcoin to a third party, nor did he buy Bitcoin from any third party.

On the charge of money laundering, Judge Pooler found that there was no evidence that Espinoza acted with the intent to promote illicit activity or disguise its proceeds. Further, Florida law is too vague to know whether it applies to Bitcoin transactions.

Thus: “This court is unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning.”

I expect that FinCEN will now want to work with the State of Florida, and other states, to rewrite their statutory definitions of money services businesses and money laundering to reinforce their 2013 directive according to which Bitcoin exchanges must register as MSBs and so submit to “know your customer” and “file reports on your customer” rules. If even casual individual Bitcoin sellers like Espinoza must also register as MSBs, that will spell the end to legal local Bitcoin-for-cash trades.

Source: Bitcoin Wins in Court | Foundation for Economic Education

Thursday, August 11, 2016

Compute! – Issue Number 31 – December 1982

Compute! – Issue Number 31 – December 1982

MegaCon 2016 - Tom Felton

MegaCon 2016 - Tom Felton

Q & A with Tom Felton, Draco Malfoy from the Harry Potter Movies, at MegaCon 2016.

Emails Renew Questions About Clinton Foundation and State Dept. Overlap

Emails Renew Questions About Clinton Foundation and State Dept. Overlap

A new batch of State Department emails released Tuesday showed the close and sometimes overlapping interests between the Clinton Foundation and the State Department when Hillary Clinton served as secretary of state.

The documents raised new questions about whether the charitable foundation worked to reward its donors with access and influence at the State Department, a charge that Mrs. Clinton has faced in the past and has always denied.

In one email exchange, for instance, an executive at the Clinton Foundation in 2009 sought to put a billionaire donor in touch with the United States ambassador to Lebanon because of the donor’s interests there.

In another email, the foundation appeared to push aides to Mrs. Clinton to help find a job for a foundation associate. Her aides indicated that the department was working on the request.


The State Department turned the new emails over to a conservative advocacy group, Judicial Watch, as part of a lawsuit that the group brought under the Freedom of Information Act.

The documents included 44 emails that were not among some 55,000 pages of emails that Mrs. Clinton had previously given to the State Department, which she said represented all her “work-related” emails. The document release centers on discussions between Mrs. Clinton’s aides and Clinton Foundation executives about a number of donors and associates with interests before the State Department.

Tom Fitton, the president of Judicial Watch, charged that Mrs. Clinton “hid” the documents from the public because they appeared to contradict her official pledge in 2009 to remove herself from Clinton Foundation business while leading the State Department.

The documents indicate, he said in a telephone interview, that “the State Department and the Clinton Foundation worked hand in hand in terms of policy and donor effort.”

“There was no daylight between the two under Mrs. Clinton, and this was contrary to her promises,” he added.

A number of the email exchanges released Tuesday included Huma Abedin, who was a top adviser to Mrs. Clinton at the State Department and later worked at the Clinton Foundation.

In April 2009, Douglas J. Band, who led the foundation’s Clinton Global Initiative, emailed Ms. Abedin and Cheryl D. Mills, another top adviser to Mrs. Clinton, for help with a donor.

Mr. Band wrote that he needed to connect Gilbert Chagoury, a Lebanese-Nigerian billionaire who was one of the foundation’s top donors, with someone at the State Department to talk about his interests in Lebanon.


In a separate email exchange, Mr. Band passed along to Ms. Abedin and Ms. Mills a request for “a favor” from an associate who had recently been on a Clinton Foundation trip to Haiti and was apparently seeking work at the State Department.

The State Department deleted much of the information about the associate, including his name and the outcome of the job referral, in turning over the emails to Judicial Watch.

In one undeleted section, however, Mr. Band wrote that it was “important to take care of” the associate’s request. A short time later, Ms. Abedin wrote back to say: “We all have him on our radar. Personnel has been sending him options.”

The Clinton campaign suggested that Mr. Band was acting in his capacity as former President Bill Clinton’s personal assistant, not in his role overseeing the Clinton Global Initiative.

Source: Emails Renew Questions About Clinton Foundation and State Dept. Overlap - The New York Times

Wednesday, August 10, 2016

Let Libertarian Gary Johnson debate Hillary Clinton and Donald Trump

Let Libertarian Gary Johnson debate Hillary Clinton and Donald Trump

For many Americans, this presidential race is a train wreck in progress.

CNN’s latest poll says Hillary Clinton and Donald Trump are viewed unfavorably by a majority of voters. Clinton’s negative number is bad — 55 percent — but Trump’s is catastrophic: 70 percent have an unfavorable opinion of him. The Pew Research Center says 4 in 10 voters find it hard to choose; they think neither would make a good president.

But if many Americans see their options as casting a hold-your-nose vote or staying home, others wonder about a third-party candidate. We saw that interest spike after a July 7 editorial exploring potential alternatives, as readers found their way to our website to learn about Gov. Gary Johnson of the Libertarian Party and Jill Stein of the Green Party.

By July 19 when Johnson, the leading third-party candidate, met with the Tribune Editorial Board, his CNN poll numbers had climbed to 13 percent. That visit, again, led to a bump in web traffic, social media “shares” and reader feedback. Voters want to know more.

Stein and Johnson won their parties’ nominations in 2012, but that November neither broke the 1 percent threshold. This year, Stein has polled as high as 7 percent. Johnson’s ventures into double digits make him, especially, more than a fringe player. He could become the escape-hatch choice for a lot of people Nov. 8 — if he’s included in the autumn presidential debates. The first is scheduled for Sept. 26. The decision on who is included rests with the private, nonpartisan Commission on Presidential Debates. The group says eligible candidates must appear on enough state ballots to have a mathematical shot at winning the Electoral College vote.

Johnson expects to be on the ballot in every state. To meet a second requirement, though, he’ll need to stretch: Candidates must hit an average 15 percent support level in five national polls. A new Fox News poll has Johnson at 12 percent, but in the latest CNN poll he fell from 13 percent to 9 percent amid the hoopla of the Republican and Democratic conventions. A RealClearPolitics average has him at 7 percent. He has time to raise his game. The commission won’t start looking at numbers until after Labor Day.

Johnson tells us his biggest hurdle to reaching 15 percent is that many pollsters focus on the Clinton-Trump matchup and exclude Johnson or include him in a secondary question that gets ignored by the media and public. If the polls acknowledged that 2016 is a not a two-way race, he says, “I’d be at 20 percent overnight.”

A former Republican governor of New Mexico, he’s a moderate Libertarian with an agenda that is more or less socially liberal and economically conservative. He is a free marketeer and skeptic of government power, but not an extremist. Where his views are outside the mainstream, most are not radical, just different. He would, for example, abolish the IRS, replacing corporate and personal income taxes and the capital-gains tax with a consumption tax.

Tuesday, August 9, 2016

GamePro, May 1992

GamePro, May 1992

MegaCon 2016 (Sunday)

MegaCon 2016 (Sunday)

Walking around the vendor area on Sunday at MegaCon 2016.

The X-Files Season 11 Update: Fox Bosses Promise Significant Talks Are Happening

The X-Files Season 11 Update: Fox Bosses Promise Significant Talks Are Happening

The X-Files remain open at Fox, but the question remains when we might get to spend some time with Agents Mulder and Scully again to clear up that apocalyptic cliffhanger.

While they didn’t have a concrete timeline to offer reporters on hand during their executive session during the Television Critics Association summer press tour, Fox Television Group Chairman and CEO Dana Walden and Fox Broadcasting Company Entertainment President David Madden reassured that talks with stars Gillian Anderson and David Duchovny, as well as creator Chris Carter, remain ongoing.

“We would obviously love to do another season. There are significant talks going on,” Madden admitted. “Schedules are hard. We’re working hard to get this done and we’d love to get another season out now.”

What might a new batch of episodes of The X-Files look like? That remains to be seen, but Walden shared following the panel that she hopes to expand on the revival season’s six-episode order. “We would’ve liked to have done more in the first place. It was really the limitations of David and Gillian and Chris’ schedules,” she continued.

Monday, August 8, 2016

Work or Die

Work or Die

The Federal Reserve is giving us a choice – work forever, or make sure to die before running out of money.

The New York Times just featured a spry 71-year old Judith Lister who is teaching kindergarten in Pahrump, Nevada. While Ms. Lister enjoys teaching, she admits she can’t live on her Social Security checks and needs her teacher’s pension, which she can’t collect for three years.

The Times’ Paula Span explains that Ms. Lister is not alone, writing, “Over 16 years, employment rose not only among 65- to 69-year olds (close to a third now work), but also among those 70 to 74 (about a fifth). In the 75-plus population, the proportion still working increased to 8.4 percent from 5.4 percent.”

For seniors who want to work or have to work, it’s great when they can find a job. Ms. Lister’s prospects are, and will continue to be, good. Nevada is so short on teachers that this year the state’s governor, Brian Sandoval, declared the shortage an emergency, allowing school districts to take drastic measures (by government standards), for instance, like allowing school districts to hire teachers licensed in other states before they obtain a Nevada license, or hiring teachers in their 70s.

However, seniors who can’t find work sometimes look for a quick exit.

According to Healthline, suicide rates amongst baby boomers has increased by 40 percent because of the economy. “Our findings suggest that awareness should be raised among human resource departments, employee assistance programs, state and local employment agencies, credit counselors — those who may come into contact with individuals suffering from personal economic crises,” Julie Phillips, a sociology professor at Rutgers University told Healthline. “Just as we provide crisis counseling during emergencies such as natural disasters, we should probably be doing the same in economic crises.”

So Much for Retirement

The financial crash decimated the finances of many individuals. According to theCenter for Retirement Research at Boston College, “for working households nearing retirement, median combined 401(k)/IRA balances actually fell from $120,000 in 2010 to $111,000 in 2013,” and “about half of all households have no 401(k) assets at all.”

But the ZIRP and NIRP policies of central banks are not just putting individuals between a rock and hard place, but are devastating pension funds and insurers as well. William Watts writes for MarketWatch,

Pension funds and life insurers “are feeling the pressure to chase yield themselves, and to pursue higher-risk investment strategies that could ultimately undermine their solvency. This not only poses financial sector risks, but potentially jeopardizes the secure retirement of our citizens,” said OECD Secretary-General Ángel Gurria in a speech.

The California Public Employee Retirement System (CALPERS) just announced it earned all of .61% during its year, ending June 30, 2016. That’s way short of the 7.5% it actuarially assumes it will earn to payout what it has promised its retirees. Currently, it’s 68% funded, again, assuming it can earn 7.5% a year going forward.

CALPERS is not alone with many public and private plans being under water. As for Social Security, its annual report indicates that “the Trustees project that the combined trust funds will be depleted in 2034.” After that, Trustees believe the fund can pay “about three-quarters of scheduled benefits through the end of the projection period in 2090.”

Bond guru Bill Gross writes in his monthly letter, “the return offered on savings/investment, whether it be on deposit at a bank, in Treasuries/ Bunds, or at extremely low-equity risk premiums, is inadequate relative to historical as well as mathematically defined durational risk.” In other words, savers, sophisticated or not, are stuck receiving return-free risk.

Less Than Zero

What central banks are doing, with 40 percent of the European sovereign debt market yielding less than zero and Janet Yellen considering the same for the U.S., is not just unprecedented, but dangerous. However, amongst average folks, the machinations of central banks doesn’t inspire talk around the water cooler. Meanwhile, most people believe themselves to be very savvy about finances, while studies show, and the numbers reflect, that the typical citizen is ignorant in the ways of money and investing.

Knowledge may be a problem, but self esteem isn't.Jeff Sommer writes in his “Your Money” column in the NYT about FINRA’s study of financial literacy. Six easy finance questions were asked of 25,000 people and most people only got half right. Of course, that complicated brain teaser, “How do bond prices respond when interest rates rise?” was missed by 72 percent of test takers.

Knowledge may be a problem, but self esteem isn’t. “Americans tend to have positively biased self-perceptions of their financial knowledge,” the study said. More than three quarters of the test takers rated their financial knowledge “very high.” Even after the financial crash, 67 percent of those participating in the study rated their finance know-how as “very high.”

The “global economy has been powered by credit – its expansion in the U.S. alone since the early 1970s has been 58 fold – that is, we now have $58 trillion of official credit outstanding whereas in 1970 we only had $1 trillion,” Gross explains. The result is an economy of slow growth punctuated by asset booms and busts laying waste to financial portfolios and any semblance of retirement savings and security.

We can look to Japan as an example of the deadliness of continuous Keynesianism. The Bank of Japan just announced its 26th stimulus plan in the last twenty years. Meanwhile, the country continues to have one of the highest suicide rates in the developed world. It's no coincidence the numbers started to rise after Japan’s financial crash of 1998 and the numbers rose again after the crash of 2008, the BBC reports.

Killing Ourselves

The fastest-growing age group for suicide is young men. “It is now the single-biggest killer of men in Japan aged 20-44,” reports Rupert Wingfield-Hayes. One of the primary reasons being that “nearly 40% of young people in Japan are unable to find stable jobs” despite the BoJ holding its rate at 0%, for the most part, since 1999.

Here in America, Baby Boomer men are aging into a dangerous time. Suicide risk is highest amongst males over 65. “They lose friends on a continuous basis. Their heart and blood pressure medications [can] cause symptoms of major depression,” says Lara Schuster Effland, a clinical therapist. She also mentions that loss of money due to poor financial decisions, lack of savings or social security, and chronic illness, as negatively impacting quality of life.

Ms. Lister likes teaching young kids because “it keeps my brain engaged. It connects me to a younger generation.” And, after teaching is over for her, she might try real estate sales.

Lord Keynes famously said, “In the long run we are all dead.” He should have added, “or lucky to have a job.”

Source: Work or Die | Foundation for Economic Education

DRM: You have the right to know what you’re buying!

DRM: You have the right to know what you’re buying!

Today, the EFF and a coalition of organizations and individuals asked the US Federal Trade Commission (FTC) to explore fair labeling rules that would require retailers to warn you when the products you buy come locked down by DRM (“Digital Rights Management” or “Digital Restrictions Management”).

These digital locks train your computerized devices to disobey you when you ask them to do things the manufacturer didn’t specifically authorize — even when those things are perfectly legal. Companies that put digital locks on their products — ebook, games and music publishers, video companies, companies that make hardware from printers to TVs to cat litter trays — insist that DRM benefits their customers, by allowing the companies to offer products at a lower price by taking away some of the value — you can “rent” an ebook or a movie, or get a printer at a price that only makes sense if you also have to buy expensive replacement ink.

We don’t buy it. We think that the evidence is that customers don’t much care for DRM (when was the last time you woke up and said, “Gosh, I wish there was a way I could do less with my games?”). Studies agree.

The FTC is in charge of making sure that Americans don’t get ripped off when they buy things. We’ve written the Commission a letter, drafted and signed by a diverse coalition of public interest groups, publishers, and rightholders, calling on the agency to instruct retailers to inform potential customers of the restrictions on the products they’re selling. In a separate letter, we detail the stories of 20 EFF supporters who unwittingly purchased DRM-encumbered products and later found themselves unable to enjoy their purchases (a travel guide that required a live internet connection to unlock, making it unreadable on holiday), or locked into an abusive relationship with their vendors (a cat litter box that only worked if resupplied with expensive perfume), or even had other equipment they owned rendered permanently inoperable by the DRM in a new purchase (for example, a game that “bricked” a customer’s DVD-R drive)

Now the FTC has been equipped with evidence that there are real harms, and that rightsholders are willing to have fair labeling practices, the FTC should act. And if the DRM companies are so sure that their customers love their products, why would they object?

In Health Care, Freedom Is the Only Way Forward

In Health Care, Freedom Is the Only Way Forward

The winners of this November’s election will have a unique opportunity to improve American healthcare. Neither higher taxes nor increased ObamaCare big government is the answer.

For guidance, look to the one area of health care where quality has improved and costs (inflation adjusted) have declined – cosmetic surgery. Why? Unlike the rest of the healthcare industry, cosmetic surgery typically is not reimbursed by insurance.

Consequently, patients choose carefully among alternative providers and weigh their out-of-pocket costs compared to risks and likely benefits. This is a free-market environment in which consumer choice and competition work to deliver high value to customers.

The operative word is freedom.

Freedom of choice involves access to new drugs that have passed FDA safety trials and shown positive results in initial clinical trials, but which have not yet been approved by the FDA. The world has been changing in ways that favor early access. This includes accelerating medical innovations, big data analytics, personalized medicine with drugs tailored to your genetic makeup, and patients’ enthusiasm for sharing data and participating in medical advancements.

Recently, the world changed in a significant way with Right To Try state legislation which permits patients fighting a terminal illness to get access to not-yet-FDA-approved drugs. Freedom is a powerful rallying call and 31 states have now passed Right To Try legislation with sky-high approval ratings by citizens.

Friday, August 5, 2016

MIMIC Spartan

MIMIC Spartan

Tuesday, August 2, 2016

What to Do About Lawless Government Hacking and the Weakening of Digital Security

What to Do About Lawless Government Hacking and the Weakening of Digital Security

In our society, the rule of law sets limits on what government can and cannot do, no matter how important its goals. To give a simple example, even when chasing a fleeing murder suspect, the police have a duty not to endanger bystanders. The government should pay the same care to our safety in pursuing threats online, but right now we don’t have clear, enforceable rules for government activities like hacking and "digital sabotage." And this is no abstract question—these actions increasingly endanger everyone’s security.

The problem became especially clear this year during the San Bernardino case, involving the FBI’s demand that Apple rewrite its iOS operating system to defeat security features on a locked iPhone. Ultimately the FBI exploited an existing vulnerability in iOS and accessed the contents of the phone with the help of an "outside party." Then, with no public process or discussion of the tradeoffs involved, the government refused to tell Apple about the flaw.Despite the obvious fact that the security of the computers and networks we all use is both collective and interwoven—other iPhones used by millions of innocent people presumably have the same vulnerability—the government chose to withhold information Apple could have used to improve the security of its phones.

Other examples include intelligence activities like Stuxnet and Bullrun, and law enforcement investigations like the FBI’s mass use of malware against Tor users engaged in criminal behavior. These activities are often disproportionate to stopping legitimate threats, resulting in unpatched software for millions of innocent users, overbroad surveillance, and other collateral effects. 

That’s why we’re working on a positive agenda to confront governmental threats to digital security. Put more directly, we’re calling on lawyers, advocates, technologists, and the public to demand a public discussion of whether, when, and how governments can be empowered to break into our computers, phones, and other devices; sabotage and subvert basic security protocols; and stockpile and exploit software flaws and vulnerabilities.  

Smart people in academia and elsewhere have been thinking and writing about these issues for years. But it’s time to take the next step and make clear, public rules that carry the force of law to ensure that the government weighs the tradeoffs and reaches the right decisions.

This long post outlines some of the things that can be done. It frames the issue, then describes some of the key areas where EFF is already pursuing this agenda—in particular formalizing the rules for disclosing vulnerabilities and setting out narrow limits for the use of government malware. Finally it lays out where we think the debate should go from here.

Recognizing That Government Intrusion and Subversion of Digital Security Is a Single Issue

The first step is to understand a wide range of government activities as part of one larger threat to security. We see the U.S. government attempt to justify and compartmentalize its efforts with terms like "lawful hacking" and "computer network attack." It is easy for the government to argue that the FBI’s attempts to subvert the security of Apple iOS in the San Bernardino case are entirely unrelated to the NSA’s apparent sabotage of the Dual_EC_DRBG algorithm. Likewise, the intelligence community’s development of the Stuxnet worm to target the Iranian nuclear program was governed by a set of rules entirely separate from the FBI’s use of malware to target criminals using Tor hidden services.

These activities are carried out by different agencies with different missions. But viewing them as separate—or allowing government to present it that way—misses the forest for the trees. When a government takes a step to create, acquire, stockpile or exploit weaknesses in digital security, it risks making us all less safe by failing to bolster that security.

Each of these techniques should involve consideration of the tradeoffs involved, and none of them should be viewed as risk-free to the public. They require oversight and clear rules for usage, including consideration of the safety of innocent users of affected technologies.

There is hope, albeit indirectly. In the United States, high-ranking government officials have acknowledged that "cyber threats" are the highest priority, and that we should be strengthening our digital security rather weakening it to facilitate government access. In some cases, this is apparently reflected in government policy. For instance, in explaining the government’s policy on software vulnerabilities, the cybersecurity coordinator for the White House and the Office of the Director of National Intelligence have both stated in blog posts that the there is a "strong presumption" in favor of disclosing these vulnerabilities to the public so they can be fixed.

But the government shouldn’t engage in "policy by blog post." Government action that actively sabotages or even collaterally undermines digital security is too important to be left open to executive whim.

Finding Models for Transparency and Limits on When Government Can Harm Digital Security

While government hacking and other activities that have security implications for the rest of us are not new, they are usually secret. We should demand more transparency and real, enforceable rules.

Fortunately, this isn’t the first time that new techniques have required balancing public safety along with other values. Traditional surveillance law gives us models to draw from. The Supreme Court’s 1967 decision in Berger v. New York is a landmark recognition that electronic wiretapping presents a significant danger to civil liberties. The Court held that because wiretapping is both invasive and surreptitious, the Fourth Amendment required "precise and discriminate" limits on its use.

Congress added considerable structure to the Berger Court’s pronouncements with the Wiretap Act, first passed as Title III of the Omnibus Crime Control and Safe Streets Act of 1968. First, Title III places a high bar for applications to engage in wiretapping, so that it is more of an exception than a rule, to be used only in serious cases. Second, it imposes strict limits on using the fruits of surveillance, and third, it requires that the public be informed on a yearly basis about the number and type of government wiretaps.

Other statutes concerned with classified information also find ways of informing the public while maintaining basic secrecy. For example, the USA Freedom Act, passed in 2015 to reform the intelligence community, requires that significant decisions of the FISA Court either be published in redacted form or be summarized in enough detail to be understood by the public.

These principles provide a roadmap that can be used to prevent government from unnecessarily undermining our digital security. Here are a few areas where EFF is working to craft these new rules:

Item 1: Rules for When Government Stockpiles Vulnerabilities

It’s no secret that governments look for vulnerabilities in computers and software that they can exploit for a range of intelligence and surveillance purposes. The Stuxnet worm, which was notable for causing physical or "kinetic" damage to its targets, relied on several previously unknown vulnerabilities, or "zero days," in Windows. Similarly, the FBI relied on a third party’s knowledge of a vulnerability in iOS to access the contents of the iPhone in the San Bernardino case.

News reports suggest that many governments—including the U.S.—collect these vulnerabilities for future use. The problem is that if a vulnerability has been discovered, it is likely that other actors will also find out about it, meaning the same vulnerability may be exploited by malicious third parties, ranging from nation-state adversaries to simple thieves. This is only exacerbated by the practice of selling vulnerabilities to multiple buyers, sometimes even multiple agencies within a single government.

Thanks to a FOIA suit by EFF, we have seen the U.S. government’s internal policy on how to decide whether to retain or disclose a zero day, the Vulnerabilities Equities Process (VEP). Unfortunately, the VEP is not a model of clarity, setting out a bureaucratic process without any substantive guidelines in favor of disclosure, More concerning, we’ve seen no evidence of how the VEP actually functions. As a result, we have no confidence that the government discloses vulnerabilities as often as claimed. The lack of transparency fuels an ongoing divide between technologists and the government.

A report published in June by two ex-government officials—relying heavily on the document from EFF’s lawsuit—offers a number of helpful recommendations for improving the government’s credibility and fueling transparency.

These proposals serve as an excellent starting point for legislation that would create a Vulnerabilities Equities Process with the force of law, formalizing and enforcing a presumption in favor of disclosure. VEP legislation should also:
  • Mandate periodic reconsideration of any decision to retain a vulnerability;
  • Require the government to publish the criteria used to decide whether to disclose;
  • Require regular reports to summarize the process and give aggregate numbers of vulnerabilities retained and disclosed in a given period;
  • Preclude contractual agreements that sidestep the VEP, as in the San Bernardino case, where the FBI apparently signed a form of non-disclosure agreement with the "outside party." The government should not be allowed to enter such agreements, because when the government buys a zero day, we should not have to worry about defending ourselves from a hostile state exploiting the same vulnerability. If tax dollars are going to be used to buy and exploit vulnerabilities, the government should also eventually use them to patch the security of affected systems, with benefits to all.
Above all, formalizing the VEP will go a long way to reassuring the public, especially members of the technology industry, that the U.S. government takes its commitment to strengthening digital security seriously.

Item 2:  Preventing Disproportionate Use of Government Malware and Global Hacking Warrants

EFF has also long been concerned about state-sponsored malware. It’s at the heart of our suit against the government of Ethiopia. Even in the United States, when the government seeks court permission to use malware to track and surveil suspects over the Internet, it can endanger innocent users as well as general network security.

A particularly egregious example is the Playpen case, involving an FBI investigation into a Tor hidden service that hosted large amounts of child pornography. The FBI seized the site’s server and operated it as a honey pot for visitors. A single warrant authorized the FBI to install malware on any and all visitors’ computers in order to breach the anonymity otherwise provided by Tor. By not specifying particular users—even though the list of users and logs of their activity was available to the FBI—the warrant totally failed to satisfy the Fourth Amendment requirement that warrants particularly describe persons and places to be searched.

What’s more, the FBI asked the court to trust that it would operate its malware safely, without accidentally infecting innocent users or causing other collateral damage. Once defendants began to be charged in these cases, the government staunchly refused to turn over certain information about how the malware operated to the defense, even under seal, arguing that it would compromise other operations. As a result, defendants are left unable to exercise their right to challenge the evidence against them. And of course, anyone else whose computer is vulnerable to the same exploit remains at risk.

In these cases, the FBI flouted existing rules: the Playpen warrant violated both the Fourth Amendment and Rule 41 of the Federal Rules of Criminal Procedure. Other cases have involved similarly overboard uses of malware. EFF has been working to explain the danger of this activity to courts, asking them to apply Fourth Amendment precedent and require that the FBI confront serious threats like Playpen in a constitutional manner. We have also been leaders of a coalition to stop an impending change that would loosen the standards for warrants under Rule 41 and make it easier for the FBI to remotely hack users all over the world.

Item 3:  A "Title III for Hacking"

Given the dangers posed by government malware, the public would likely be better served by the enactment of affirmative rules, something like a "Title III for Hacking." The legislative process should involve significant engagement with technical experts, soliciting a range of opinions about whether the government can ever use malware safely and if so, how. Drawing from Title III, the law should:
  • Require that the government not use invasive malware when more traditional methods would suffice or when the threats being addressed are relatively insignificant;
  • Establish strict minimization requirements, so that the targets of hacking are identified with as much specificity as the government can possibly provide;
  • Include public reporting requirements so that the public has a sense of the scope of hacking operations; and
  • Mandate a consideration of the possible collateral effects—on individuals and the public interest as a whole—on the decision to unleash malware that takes advantages of known or unknown vulnerabilities. Even if the VEP itself does not encompass publicly known vulnerabilities ("N-days"), using remote exploits should impose an additional requirement on the government to mitigate collateral damage, through disclosure and/or notice to affected individuals.
The same principles should apply to domestic law enforcement activities and foreign intelligence activities overseen by the FISA Court or conducted under the guidelines of Executive Order 12333.

Of course, these sorts of changes will not happen overnight. But digital security is an issue that affects everyone, and it’s time that we amplify the public’s voice on these issues. We’ve created a single page that tracks our work as we fight in court and pursue broader public conversation and debate in the hopes of changing government practices of sabotaging digital security. We hope you join us.

Source: What to Do About Lawless Government Hacking and the Weakening of Digital Security | Electronic Frontier Foundation