Blayne Sucks

Last month, Jim Harper started an interesting discussion on regulation around the holidays. Although I was hiding from my computer in an attempt to take a vacation at the time I have finally caught up with the discussion. If you happen to have missed this as well, I think it’s well worth reading.

Jim started the discussion with an excellent blog post over on Cato@Liberty about ‘real’ regulation. If you haven’t read it, here’s a juicy tidbit:

What Burnett meant when she called for a “real” regulator, of course, was “the regulator I can imagine.” The regulators people imagine are foresighted, interested only in the public good, they’re resistant to lobbying, and they run efficient organizations. But these characteristics are simply imaginary.

Tim Lee followed this up with a post on the Technology Liberation Front extending the discussion to regulation of technology. Again, if you haven’t read it, here’s a juicy tidbit:

Too many advocates of regulation seem to have never considered the possibility that the FCC bureaucrats in charge of making these decisions at any point in time might be lazy, incompetent, technically confused, or biased in favor of industry incumbents. That’s often what “real regulators” are like, and it’s important that when policy makers are crafting regulatory scheme, they assume that some of the people administering the law will have these kinds of flaws, rather than imagining that the rules they right will be applied by infallible philosopher-kings.

The FCC is designed to ensure (theoretically) that these bureaucrats are independent, but if you take a look at what is actually happening, then it becomes clear that independence is in many ways imaginary. The FCC’s website describes the organization of the Commissioners as follows:

The FCC is directed by five Commissioners appointed by the President and confirmed by the Senate for 5-year terms, except when filling an unexpired term. The President designates one of the Commissioners to serve as Chairperson. Only three Commissioners may be members of the same political party. None of them can have a financial interest in any Commission-related business.

News today that FCC Chairman Kevin Martin will resign on Inauguration Day makes the FCC an even more interesting topic for discussion. With this resignation, Obama will have nominated all five of the serving FCC Commissioners by this summer. Also, it goes without saying that the FCC will be regulating some important aspects of our society, including the Digital TV transition that’s slated for February.

Obama’s choice for FCC Chairman is Julius Genachowski. Wikipedia describes him as “an American business executive with experience in telecommunication and technology issues.” This ideal of not having a financial interest in Commission-related business isn’t starting off well. Of course, that’s Wikipedia, so maybe it’s not trustworthy. Let’s look at Reuters’ description:

Genachowski was chief counsel for Reed Hundt, an FCC chairman under former President Bill Clinton. He also held various positions at Internet search and media company IAC/InterActiveCorp (IACI.O) and several firms investing in technology, including Rock Creek Ventures and LaunchBox Digital.

Again, it sorta feels like this is a man with financial interests in technology. Business Week even lauds his “business sense” as a key benefit that he brings to the table. But let’s take a step back from this individual appointment. I really don’t know much about Genachowski other than what’s been reported in the news, and I certainly don’t want to pick on him as an individual that’s emblematic of the larger problem with “real” regulation.

My point is simply to consider this: Is it really possible to find anyone who has the knowledge needed to help run a regulatory organization like the FCC that doesn’t have a financial interest in Commission-related business? If it isn’t outright provably impossible, then at the very least I think there’s a strong argument to be made that it is impossible. Sure we may wish that it weren’t so, but if wishes were fishes, we’d all be casting our nets. Of course, I’m open to your thoughts in the comments.

Although this was produced a couple months ago now, I wanted to post a link to John Stossel‘s Politically Incorrect Guide to Politics. It’s essentially a 45 minute introduction to basic libertarianism (without using big words like libertarianism) and a thought-provoking show about the role government should play in our lives. You can either watch it on the six embedded YouTube videos below or find it here on ABC’s website.

If one were to take a national poll on the most important year in United States history, 1776 would easily be a top contender. Thomas Paine published Common Sense in January. Although not an American, Adam Smith published The Wealth of Nations, which had (and continues to have) extraordinary influence on American financial history. The Continental Congress signed the The Declaration of Independence that summer. Perhaps most importantly, George Washington held together the young and inexperienced “rabble” that was the Continental Army throughout the course of that entire year and eventually through the conclusion of the war in 1783. This is the story told by David McCullough’s novel 1776.

Although 1776 is the first book by David McCullough that I have ventured to read, I had most certainly heard of the author before I began reading it. McCullough is one of the most decorated living historians in America, and I would be astonished if more than a few American readers haven’t heard of him. He has twice won the Pulitzer Prize and twice won the National Book Award. He has also received the highest honor bestowed to American civilians: the Presidential Medal of Freedom.

As a result of the author’s fame and previous success, I had extremely high expectations for 1776 in several areas. First, McCullough is known as a fastidious researcher, so I was expecting the book to provide details on the inner workings of the fledgling American Revolution. Second, McCullough is often praised as an exemplary story teller, and with the material he has to work with in the American revolution, I was expecting something amazing. Third, McCullough used many of his notes originally compiled in writing his biography of John Adams, so I was expecting much of the book to deal with the political relationship Washington maintained with the Continental Congress.

In regard to my first expectation, I was quite pleased with the details found throughout the novel. If anything, these details were the most redeeming aspect of the book to those who already know the story quite well. McCullough goes out of his way to drop some now-famous names of people who were at the time merely rising stars, including Alexander Hamilton, James Madison, and Aaron Burr. I was also quite pleased to see many misconceptions dispelled. For example, I grew up learning that the Hessians in the Battle of Trenton were drunk or hungover at the time of the attack. Of course, this has been dispelled in many accounts, as McCullough dispels it here, but it was through this book that I learned the truth of the matter stated plainly.

As to my second expectation, McCullough is certainly a master story teller. Even knowing this beforehand did not prepare me for the fluidity of the book. I was truly surprised at how easy to read it is. It flows so quickly and effortlessly that I found my self reading it in large chunks. One of the primary reasons that I even picked the book up was to find some respite from the large amount of technical reading I have been doing recently, and I am pleased to say that it did not disappoint in the least, even though I was already quite familiar with the major events of the year.

Lastly, I was expecting a focus on Washington’s political discourse with the Continental Congress over the course of the year. This expectation was simply not met. Although there is some discussion of this important relationship, it was certainly not a highlight of the book. Each discussion of the relationship feels unbalanced because the book does not introduce or develop most of the important characters in the Continental Congress. I was left wondering if that is due to the coverage it received in his biography of John Adams, which I will endeavor to read.

My one major disappointment with the book was the artificial framing of the subject. Although 1776 was an extremely important year, it was just one of eight years (1775-1783) that comprised the American Revolution. Quite a few important events are not covered by this book including the winter in Valley Forge, enlisting the aid of France, signing the Treaty of Paris, and George Washington stepping back into the role of a civilian. Perhaps feeling a bit cheated at the missing events was somewhat inevitable. The entirety of the American Revolution itself has been the subject of many books, so I can understand why McCullough would not want to plow the same field all over again. However, I have no doubt that his talents would have made the remaining years and events of the Revolution exceedingly enjoyable stories to read.

On the whole, I can heartily recommend 1776. Owing to its easily accessible nature, it is perhaps best geared towards the average American, but there are certainly details that may interest those more deeply involved in studying history.

As a technologist with a strong interest in computer security, privacy, and public policy, I am naturally drawn to the topic of electronic voting. I have written about electronic voting several times before, including this piece on Ed Felten’s work. Recently, I have seen lists of things things could have gone wrong and some lists of things that actually did go wrong. I have even seen a hilarious account of the worst case scenario, but the most interesting accounts that I’ve seen have been personal accounts of computer science professors who volunteered to operate the polls as election workers.

Avi Rubin, a Professor of Computer Science at Johns Hopkins and director of the ACCURATE Voting center, wrote a post describing his experience working the polls and posted it only minutes before most news outlets announced that Barack Obama will be the 44th President of the United States. Professor Rubin is the author of the book Brave New Ballot, an excellent book on the dangers of electronic voting machines that I have reviewed here. His experience at the polls in Maryland describes the very practical and non-technical aspects of just what a poll worker does during the day.

Steven Bellovin, a Professor of Computer Science at Columbia, also wrote about his experience as an election official. Professor Bellovin is another well-respected authority on computer security whose post focuses on the non-technical details of the responsibilities of poll workers in New Jersey. Andrew Appel, a Professor of Computer Science at Princeton, also wrote about the use of voting machines in New Jersey.

Both New Jersey and Maryland used Direct-record electronic voting machines, which have a myriad of security concerns that have been detailed extensively elsewhere. Essentially, DREs store the official record of an election in an electronic form rather than a paper form. If you are interested in some of the problems with DREs and proposed solutions to those problems, then you should check out the USACM’s page on electronic voting.

You may be asking yourself: Why would a computer science professor volunteer to work a poll as an election official? It’s not like there’s anything technical going on there. Well, any computer security expert will tell you that the first line of defense must be physical access. This means that you can have all technology you want, all the cryptography you want, and spend all the money you have and still not be secure without common sense. There was a great video on No-Tech Hacking at DefCon in 2007 which covers what I’m talking about.

Physical access is one of the key problems with DREs: thousands of people must have physical access to the machines themselves to cast their vote. The environment is filled with opportunities for absolutely simple no-tech hacking. Even if these systems weren’t notoriously bad in terms of the technology used, the physical access alone makes these devices difficult to secure.

The challenges of physical access and the stakes of a Presidential election are both great reasons that computer science professors are interested. It’s a unique opportunity to see how these machines are actually used, and some of their observations are excellent. Their posts are worth reading if you’re interested in electronic voting or computer security: Avi Rubin’s post; Steven Bellovin’s post.

This year’s election has already set early voter turnout records in North Carolina by a 40% increase over the previous records. However, most of the interest in the election is a result of the Presidential race. North Carolina has voted Republican in 9 of the last 10 Presidential elections, but it may be leaning towards electing Democratic candidate Barack Obama this year. For voters in North Carolina, the down ticket races are at least as interesting if not more so than the Presidential race.

First, there’s an incredibly competitive race for the Senate. Incumbent Elizabeth Dole was once thought to be a invulnerable in her reelection campaign, but challenger Kay Hagan may actually win the seat. The race becomes even more important because the Democrats may be able to obtain a filibuster-proof majority of 60 senate seats if Hagan wins.

Second, there’s another incredibly close race for governor, which is truly amazing considering that 27 of the last 30 governors of North Carolina have been Democrats. (Yes, North Carolina historically favors Democrats as Governors and Republicans as Presidents.) The string of Democrat governors dates all the way back to reconstruction after the civil war. Popular Charlotte Mayor Pat McCroy is the Republican nominee trying to overcome this history, while current Lieutenant Governor Beverly Perdue is trying to become the first female governor of North Carolina. There’s also a Libertarian candidate for Governor that is doing well for a third party candidate: Michael Munger, who is currently the head of the political science, economics, and public policy departments at Duke University.

If you live in North Carolina and are at all interested in the Governor’s race, then I would urge you to watch the hour-long debate on YouTube by all three candidates. (There are six parts to the debate: Part 1, Part 2, Part 3, Part 4, Part 5, and Part 6.) At the very least, you should check out this summary of the debate.

There are many other important down ticket races. Usually, these down ticket races don’t even register in the minds of voters, but if all politics is local, then why are so many of these important races unkown? I urge you, wherever you live, to go online and at least find the names of all the people who will appear on your ballot in November. Take the time to Google them. You might find it more interesting than you thought, and either way some of these people will have the power to control a part of your life.

[Update: The New York Times has a brief editorial on a strange quirk in the North Carolina ballot. Even though North Carolina voters can vote using a single straight-ticket option, they still have to separately vote for President. This has resulted in unusually high numbers of North Carolina voters who simply do not have a recorded vote for President.  If you are curious what a North Carolina ballot looks like, you can find one on the State Board of Elections website. For more information on North Carolina voting, take a look at the 2008 Voter's Guide.]

[Update 2: Zach has an excellent post about the lack of attention paid to down ticket races over at In the Agora.]

ABC News has an article on the eavesdropping of Americans that answers any remaining questions regarding the FISA Amendments passed this past summer. Essentially, the article details the use of surveillance systems to spy on ordinary Americans. Here’s a quote from the article:

“These were just really everyday, average, ordinary Americans who happened to be in the Middle East, in our area of intercept and happened to be making these phone calls on satellite phones,” said Adrienne Kinne, a 31-year old US Army Reserves Arab linguist assigned to a special military program at the NSA’s Back Hall at Fort Gordon from November 2001 to 2003.

Kinne described the contents of the calls as “personal, private things with Americans who are not in any way, shape or form associated with anything to do with terrorism.”

The article goes on to describe the nature of some of the phone call as pillow talk or phone sex. Some of the individuals involved were from the US Military, the International Red Cross, and Doctors Without Borders. Naturally, the Senate is investigating. The article further states that some especially juicy clips were saved by employees of the NSA.

Unfortunately, abuse of surveillance systems by insiders is nothing new. Bruce Schneier has shown us that surveillance cameras are abused and ineffective. Six well-known security and privacy researchers have warned about this sort of abuse with telephone surveillance as well (pdf).

The only thing that is remotely surprising about this is that we have specific details from whistleblowers, who are risking their careers and livelihood to tell us about this abuse. In this case, it is even more surprising that not one, but two independent whistleblowers came forward simply because the agency involved was the notoriously secretive NSA.

The GCHQ, which is the British equivalent of the NSA, recently dealt with its own whistleblower: Katherine Gun. In this case, Gun was a translator asked to favorably translate documents as evidence to garner support for the Iraq war. Her case was dropped at trial almost immediately. Speculatively, the decision to drop the case was due to the calculated decision that producing the evidence required to prosecute her would have been more embarrassing for the GCHQ than simply letting her go.

Many whistleblowers find the ethics of betraying their employer for the greater good an excruciating ethical dilemma. Check out this BBC News interview of Katherine Gun if you are interested in how she weighed the decision. (There’s a book about her if you are more ambitious.) For these reasons and many more, whistleblowers like Mark Klein in the AT&T case that prompted the FISA Amendments and now David Murfee Faulk and Adrienne Kinne in this more recent case with the NSA shouldn’t be our last line of defense.

Essentially, lesson from this ABC News article is simple: surveillance tools will be abused. It is human nature for power to corrupt. The Founding Fathers of the United States recognized this and tried to limit the power of the government explictly for this reason. They built checks and balances into our government because they knew that hoping for whistleblowers to highlight problems was not reliable. Why does the current US government not seem to comprehend this?  How many more whistleblowers and ABC News stories will it take for our government to catch on?

Once is an anomaly.  Twice is a coincidence.  Three times is a trend.  The US Government has not once, not twice, but three times bailed out a financial company that was facing the consequences of their risky business decisions.  The most recent incarnation of this is AIG, the world’s largest insurance company.  ABC has a great quote in their piece on the AIG bailout that pretty much sums up the core problem in all three of these bailouts:

“They called it insurance, but they were gambling,” said Nobel Prize-winning economist Joseph Stiglitz. “In a market economy, there has to be a sense of accountability. You can’t come running to the government every time you have a problem.”

This is pretty simple cause and effect.  In fitness, this is summarized by the catch phrase “No Pain, No Gain.”  In sports, there’s a common saying that “most games are won or lost before they are played.”  Another common saying, though I have had difficulty finding its origin, is this:

“Capitalism without bankruptcy is like Christianity without hell.”

— Frank Borman

I have seen this modified to “Capitalism without failure is like religion without sin” as well.

The point is that these bailouts are the most fundamental of errors.  Capitalism depends heavily on fair risk and rewards.  If someone takes a business risk that pays out, then those who didn’t take the risk shouldn’t be granted the benefit of regulations limiting the entrepeneurs who did.  If someone takes a business risk that crumples underneath them, then those who didn’t take the risk should be rewarded by not seeing the government swoop in and “save” the now-failing company that did.  The rules of the game shouldn’t change while it is being played.

Now having said that, there may be some circumstances where letting everything go would be worse than some government intervention.  The problem is identifying those circumstances is incredibly hard.  We were told that the Bear Stearns bailout was the mother of all bailouts.  We were told that the $29 bn we spent there would prevent a domino effect.  (Pretty effective, eh?)  Then we were told that the Fannie Mae and Freddie Mac needed the world’s largest bailout.  They said that the $200 bn we spent there essential to our economy.  Now we are being told that AIG is too big to fail.  They are saying that the $85 bn we spend there will save a cornerstone of our economy.  How is this fair to “small” businesses like Lehman Brothers?  What key characteristics were missing in those circumstances?  These arbitrary interventions in the market are bad for all businesses.

Now I’m not an economist.  I don’t claim to be an expert in this area.  I do find it interesting that many of the companies that are failing now are doing so because of prior government intervention in the market.  Fannie and Freddie were a government sponsored duopoly in the market.  AIG was exercising a massive loophole created by the government.  Why aren’t politicians trying to solve these root causes?  Why are they so busy trying to wash away the effects?

Instead, the Bush administration wants to spend another $700 bn on bad debt in an effort to “save” our economy.  Add this to the $314 bn we’ve already spent on bailouts this year and we would break the $1,000,000,000,000 mark.  You can see the trend continuing.  It’s great to know that my tax dollars are violating the most basic principle of economics by purchasing a product known to be bad.  I want my money back.

Edited to add: Looks like the $700 bn deal could be even worse than I originally thought:

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Hat tip: Tim Lee.

I decided to read Franz Kafka’s The Trial after seeing it used by Dan Solove to describe the no-fly list. I knew very little about the book before reading it.  I knew that it was about a man named Joseph K. who was arrested and then, despite his best efforts, completely unable to understand or control the resulting course of events. I also knew that it was one of the books that has motivated the term “Kafkaesque.” What I didn’t know was that it does all of these things in a “meta” sense as well, which has made the the book extraordinarily rich and entertaining to read.

What do I meant by my use of the word “meta” to describe The Trial? Anyone who has read Gödel, Escher, and Bach would probably understand what I mean if I re-phrased it by saying that The Trial is a Strange Loop. However, for those who haven’t read GEB, I will try to explain in more detail, particularly since this is the most delicious part of the book. The Trial was originally written in German, with which I have some experience, but I am not capable of reading a book at this level in German. Thus, it had to be translated. Every time I read a translated book I feel it tug at me a little: Am I really reading this as it was intended? This tugging adds a level of disorientation, which is really the entire point of The Trial.

Of course, Kafka wasn’t intending that everyone read a translated version of the book. In fact, Kafka may have never intended anyone to read the book. It was published posthumously and perhaps against his wishes. Now, there is perhaps some debate over whether or not there was a moral obligation to publish, but that debate is still going today. Thus, it is, in some sense, a book over which not even the author could exercise complete control.

Since it was published posthumously, it was never finished. There is an obviously incomplete chapter that simply ends. There are unfinished chapter fragments and deleted sections published as appendices in the printed version of the book that I read. In fact, literary scholars aren’t entirely sure about the order the chapters should appear. All of this only adds to the confusion and disorder that is depicted throughout the book.

If you haven’t read any of Kafka’s books, but you’re interested in learning a little bit about why Kafka is such an important author, then I would recommend The Trial as a good starting point. I enjoyed the “meta” aspects of the book, but there are certainly a lot of other themes that are enjoyable, including the role of women in the book, which was the biggest surprise for me. I won’t talk about it here though. You’ll have to discover it for yourself.

Yesterday the FCC released their report on their decision against Comcast’s secret degredation of BitTorrent protocol traffic. The basic content of this ruling has been known since early August. It nominally states that Comcast violated federal rules for “reasonable network management.” Network neutrality proponents have been quick to applaud the FCC’s ruling. Certainly, this action violates a hands-off, network neutral approach. However, the extremely important and surprisingly overlooked subtext is that supporting the FCC’s ruling implicitly accepts that the FCC should regulate the operation of ISPs, and effectively, the Internet itself. The end result of regulating the Internet is to seriously muffle the creativity and innovation that has made the Internet great.

Some commentators are avoiding the discussion of the FCC’s jurisdiction in this matter, but it is absolutely the most important aspect of this ruling. The FCC’s five commissioners voted to take action 3 votes to 2. Both Commissioner McDowell and Commissioner Tate have released separate dissenting statements intimating that the FCC shouldn’t be involved in this type of decision. Commissioner McDowell wrote an editorial in the Washington Post several weeks ago defending the incredible growth of the Internet as the result of “the principle that engineers, not politicians or bureaucrats, should solve engineering problems.”

In fact, Comcast and BitTorrent had already agreed to work out an amicable solution to these engineering problems way back in March. Of course, the folks at Freedom to Tinker are right that this isn’t really a two party discussion between Comcast and BitTorrent, but the point is that Comcast was working towards fixing these problems well before the FCC took a regulatory action.

ISPs have always had the ability to solve network problems as they happen without fearing a fine. Government regulation would hamper these efforts. Politicians are concerned about this chilling effect. Kevin Martin, who is the Republican-appointed Chairman of the FCC and who voted in favor of taking action against Comcast, faced significant political pressure prior to the release of the opinion. House Minority Leader John Boehner wrote a letter to Martin to express “dismay” that he was “intend[ing] to interfere with the network management decisions of broadband providers, essentially regulating the Internet.”

Supporters of the FCC’s actions, such as Brett Frischmann, may find the FCC’s use of the phrase “reasonable network management” to provide sufficient wiggle room for analyzing actions on a case-by-case basis, but the phrase “reasonable network management” is not as innocuous as it may seem. Sure, there’s a lot of ambiguity in the word ‘reasonable,’ but adopting this phrase as a de facto standard would destroy creativity and innovation. Here’s what George Bernard Shaw had to say about reasonableness:

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.

This has certainly been true of the Internet, where virtually every major advance seems to have come as a complete shock to the vast majority of experts in the field. Paul Graham talks about this a lot. Most recently he mentioned it in the context of fundraising for startups:

A good startup idea has to be not just good but novel. And to be both good and novel, an idea probably has to seem bad to most people, or someone would already be doing it and it wouldn’t be novel.

Don’t lose sight of this bigger picture like the FCC has: Regulating network neutrality doesn’t work out well for anyone in the long run because creativity and innovation depend on the ability to be “unreasonable” at times.

In an election year, it is easy to become caught up in the political discussion about which candidate has the best policy on education, which candidate will fix healthcare, or which candidate will lower our gas prices. It is easy to focus on the problems because politicians don’t get elected for the things that have gone right. These are the things we take for granted, but there are certainly places in the world where the things we take for granted are serious concerns.

Zimbabwe is one of those places. Yesterday, it was determined that the Zimbabwe dollar has suffered from 11,200,000% inflation for the 12 previous months. That’s 11.2 million percent inflation. As Tom Palmer has aptly said, this is how you destroy a country. As you may have surmised, this is a classic example of hyperinflation.

The leaders of Zimbabwe are at best clueless and at worst ruthlessly careless as to the effects of their policies. Zimbabwe’s President Robert Mugabe and Reserve Bank governor Gideon Gono have devalued the currency rather than attempt to address the root causes of the problem. They blame sanctions from western countries for their economic woes, when in reality they have created their own crisis.

Zimbabwe has the natural resources to be one of the wealthiest African countries. Zimbabwe is home to Victoria Falls, a worldwide tourist attraction. They also has rich mineral deposits that could support some of the best mines in the world. Zimbabwe’s sub-tropical climate could support significant agriculture as well. These resources simply need to be managed properly.

Meanwhile, the people of Zimbabwe are suffering. The unemployment rate is over 80%. The brain drain has been staggering. Only those people who can’t afford to leave or who care too much about their homeland to leave remain in the country. Parts of the country have been without running water for months. The electric grid is unstable. Basic elements of the country’s infrastructure are failing.

Zimbabwe’s economic problems dwarf those problems in the United States. The US has had a 17 year high percentage of inflation: 5.6% This is certainly a problem, and one that has caused the economy to be a serious topic of the current presidential election. The economic concept of sound money (a monetary unit that is relatively stable and inflation-free) is crucial to any economy. However, it is important to remember that things could be much worse and we still have a pretty stable economy. If you find yourself tired of paying too much for gas or fed up with the election year political chatter, remember that there are probably quite a few things we may be taking for granted.