April 28, 2017

An Open Letter to My Friends at Google

You run a fantastically successful business. You deliver search results so valuable that we willingly trade the history of our search requests for free access. Your private network of data centers, content caches and Internet connections assure that Google data pops quickly off our screen. Your free Chrome browser, Android operating system, and gmail see our communication before it gets to the Internet and gets a last look at what comes back from the Internet before passing it on to us. You make billions by monetizing this information with at least our implied consent. I mean all this as genuine praise.

But I think you’ve made a mistake by inviting the regulatory genie on to the Internet. Have you considered that Google is likely to be the next regulatory target?

The Internet and its many business have flourished for the last twenty years under the light regulatory touch that Google used to espouse in the early days of the Internet. It is just as true now as it was at the end of the 20th century that imposing regulations designed for monopoly telcos on the Internet will decrease competition, stifle innovation, and certainly not achieve “Net Neutrality”.

Twenty years ago it was the telcos who wanted regulation to protect them from innovative Internet competitors. With Google’s help, innovation was preserved. But in 2015 Google was a leader among companies which successfully lobbied the Federal Communication Commission (FCC) to end twenty years of bipartisan regulatory forbearance and declare that Internet access providers (ISPs) are common carriers under the telecommunications act of 1934 and should be regulated as such. Do you think Google needs regulatory help to fight off the ISPs as potential competitors? Once you meant to compete with them by building Google Fiber. We do need competition. Neither Google nor the telcos should be shielded from it.

When Congress cancelled a pending “privacy” regulation from the FCC earlier this year, which was based on this new regulatory authority, a misinformed congressman complained that he didn’t want Comcast knowing his underwear size. He apparently searched for underwear online and was then deluged with underwear ads. But you know that he got those ads because of his search history, not because his ISP was disassembling his packets. How long do you think it will before there is significant pressure in the US to stop the abuse the congressman claims to have suffered by regulating search providers? I think that would be a terrible idea and I’m sure you do as well.

How long do you think it will be before protestor signs says that a neutral Internet requires neutral search engines? Even if you protest that Google search IS neutral – just as the ISPs say they don’t favor their own packets – the protestors will say that Google is a profit-making enterprise so proactive regulation is needed. And shouldn’t a neutral Internet require neutral browsers? There are already stories that Google is planning to put code in Chrome which blocks some ads. Do browsers need to be regulated? What about email services which have all our private communications? What about mobile phone operating systems which see all our bits before they even get to the “evil” ISPs.

You at Google have shown your ability to learn and adapt. It’s probably too much to ask that you reverse your lobbying efforts again and support efforts to undo the unwise Internet regulation promulgated in 2015. But it might be a good idea to concentrate more on actually competing with ISPs in the marketplace rather than in in the regulatorium where you won’t be able to innovate either. We’ll all be losers if Google innovation is shutdown.

See excellent Boston Globe article Trump’s FCC can save the Internet — by doing nothing by Hiawatha Bray.

See also Don’t Make the Internet Safe for Monopolies, Net Neutrality. What’s It All About? and Do you Want Comcast to Know Your Underwear Size?

April 23, 2017

Don’t Make the Internet Safe for Monopolies

This week I’m going to Washington to argue against regulating Internet access as if it were phone service. Twenty years ago I was there for the same reason. My concern now as it was then is that such regulation will damage the economy and reduce opportunity by stifling innovation and protecting the current dominant players from the startups which would otherwise threaten them.

At that time the proponents of Internet regulation were most regional monopoly telephone companies, who were regulated themselves (and very comfortable living in a regulated environment). The then small Internet industry (including me) argued that startups were not monopolies and could not afford the batteries of lobbyists and regulatory compliance lawyers needed to survive in a regulated world. “Imagine,” we said, “if each new Internet app had to be approved by some commission or another”.

Fortunately Federal Communications Commission (FCC) Chair Reed Hundt, a Democrat appointed by Bill Clinton, and a majority of commissioners agreed with us. The Commission policy on Internet regulation became one of forbearance. The monopolists were right to worry. The Internet was disruptive. If they had won, there would be no such thing as Skype or Vonage; calls to China would still be $3.00 minute; and 800 numbers might still be more important than websites for shopping. Google, Netflix, Facebook, and Amazon wouldn’t be the companies they are today.

Hundt’s successor William Kennard, also appointed by Clinton, listened carefully to all arguments and continued the policy of benign forbearance. Innovation flourished. When Bush was elected,  Internet folk were afraid that his FCC appointees would be more responsive to telco lobbying. We could no longer argue that the Internet was a fledgling industry but could and did argue the public benefits of innovation and rapidly evolving business models. Michael Powell, Bush’s first appointee as FCC Chair, and the Commission debated and then issued the “Pulver Order” declaring that Voice over IP was not a telecommunications service. That meant in practice that the FCC, whose mandate only extends to telephony services, would have no reason to regulate the Internet.

The FCC did NOT regulate the Internet from then until now. However, in the waning days of the Obama administration, the FCC promulgated a regulation saying that Internet access is a telecommunications service (regardless of whether voice over IP is involved.). Therefor the FCC has the right to regulate Internet access as it used to regulate monopoly phone service. Big reversal.

Those who now want regulation are Google, Facebook, and other major Internet players. They are good marketers so this regulation is called “Net Neutrality”. Who could be against a neutral Internet where all bits are equal? Ironically it is the telcos and cable companies (ISPs) who are on the other side and against reregulation; they are the ones who will be regulated.

There are four major things wrong with the “Net Neutrality” regulations as promulgated:

  1. All users of the Internet as well as the economy itself will suffer if regulation is used to throttle innovation – that’s as true now as it ever was.
  2. This regulation protects the powerhouse incumbents – Google, Facebook et al – from effective and needed competition. It protects them on one side from rich ISPs (why?) and on the other side from would be new providers of Internet access (think mesh networks, access from drones, whatever) who won’t be able to satisfy the regulations made for the technologies they are obsoleting.
  3. There is probably no legal justification for the FCC regulating the Internet. FCC has jurisdiction over basic telecommunications service. They said the Internet isn’t such a service for years; just saying it is all of a sudden a basic telecommunications service doesn’t make it so.

Google may yet regret its call for regulation of any part of the Internet value chain. A Wall Street Journal story last week says that Google is working on an ad-blocking filter for its Chrome browser. Will the FCC next declare browsers a telecommunication service and require browser neutrality?  

With all due respect to many people I respect who support the “Net Neutrality” regulations, I’m as much against regulating the Internet now as I was 20 years ago although I no longer have any direct financial interest except as a consumer. I hope both that the legal challenge to this extension of the FCC’s reach will continue and that the current FCC will undo the harm that its immediate predecessors did and return to the policy which has so successfully supported economic growth and innovation for the last twenty years.

See https://www.bna.com/pai-engages-silicon-n57982087000/ for a Bloomberg story on this issue.

April 20, 2017

Net Neutrality. What’s It All About?

The fear is that your Internet Service Provider (ISP) will be able to determine what Internet content you get to access or at least make it more expensive or less convenient to access some content than other content. Most Americans get their fixed line Internet access from either a phone company or a cable company. Former phone companies like AT&T (owns DirecTV)  and Verizon (buying Yahoo) are increasingly in the content business, and cable companies like Comcast have always owned and controlled content.  Why wouldn’t an ISP favor their own content over that from Netflix or Amazon or YouTube? They could, for example, prioritize the packets which carry their own shows over packets from others; you would have a good experience watching content from the ISP and a lousy experience with content from others – constant freezes and stutters. Yuk!

So is this a credible threat? Do we need a law or regulation to protect us? Google and Amazon and Netflix think we do; they lobbied successfully at the end of the Obama administration to have the Federal Communications Commission (FCC) promulgate a regulation protecting “net neutrality” which essentially mandates that at least wireline ISPs treat all traffic equally and that the FCC gets to decide exactly what this neutrality means. Obviously these companies have a commercial interest in protecting themselves against “ discrimination” by ISPs who have ambitions to sell search and content. But an argument motivated by commercial interest doesn’t have to be wrong in terms of the public interest.

Not surprisingly the ISPs argue that their Internet access business, which has been unregulated so far, should remain unregulated. They say that there have not been proven instances of any such discrimination, that consumers would simply switch away from them if they interfered with customers’ content choices, and (somewhat contradictorily)  that they invested in their networks so they should be able to use them profitably. If they are regulated, they say, they won’t invest an Internet access will not improve. These arguments are also profit-motivated; but that doesn’t necessarily make them wrong from a public interest PoV. The now Republican FCC agrees with the ISPs and is getting ready to reverse the net neutrality regulation.

History tells us that regulation is the enemy of innovation (and usually the friend of monopolists). In the last fifty years of regulated telecommunication, the only innovations we saw were the dial tone and 800 numbers. Just compare the capabilities of your smartphone connected to a largely unregulated data network and your desk phone attached to the regulated phone network which can’t even text.

Internet pioneers lobbied AGAINST attempts to bring the Internet under common carrier regulation; the FCC under Democrats and Republicans agreed; the result was the tidal wave of innovation which brought us to where we are today. Interestingly it was then many of the telcos that wanted to regulate the Internet to prevent it from becoming competition. Good thing they lost or you wouldn’t be Skyping today.

The regulations promulgated last year do exactly what Internet companies, until recently, were against: they impose “common carrier” regulation on ISPs. The common carrier regulations were devised when phone companies were granted monopolies. They gave us some degree of protection (not much) against monopoly pricing and they gave the monopolies protection against competition.

So, if regulation isn’t the answer to potential predatory behavior by ISPs, what is? And what about the danger that ISPs will sell a history of everything we browse which I blogged about last week? Stay tuned.

April 17, 2017

A For-Profit Surgical Center is a Good Idea for Vermont

A group of local investors want to build a $1.8m surgical center in Colchester, VT for surgeons who prefer not to operate in a hospital setting, according to a story in VTDigger last week. Opening such a center, even when no public money is involved, requires a certificate of need from the Green Mountain Care Board. Vermont’s non-profit hospitals (there are currently no “for-profit” hospitals in the state) are urging the Board not to grant the certificate saying that it would result in an increase in health costs.

From the VTDigger article:

“The investors argue such centers save patients and insurance companies money because both Medicare and private insurers pay them less than hospitals for the same procedures. These types of facilities are called ambulatory surgical centers and are both licensed and regulated by the U.S. Centers for Medicare and Medicaid Services

“Christina Oliver, the vice president of clinical services at the University of Vermont Medical Center in Burlington, said the proposed facility is not needed because the hospital’s operating rooms and procedure rooms are working far below capacity. ‘We have open time available every day that is staffed but unused,’ she said.”

I am an admirer of and contributor to UVM Medical Center; but I think that the for-profit surgical center hospital should be allowed to open. The quality of care I've gotten at UVMMC has been excellent; once the hospital saved my life. But that doesn't mean that Vermont won't benefit from competition to keep medical costs down.

We will attract more doctors to the state if they have a choice of being in a wonderful research and teaching hospital like UVMMC or providing care in a smaller, more flexible organization.

There may be plenty of surgical operating rooms in Vermont, as Ms. Oliver said; but I know from experience that does not mean that minor non-emergency operations can be scheduled expeditiously. If a for-profit operation can provide faster care in these cases, that will be a help to many Vermonters.

We are not cost conscious medical consumers in Vermont because we have neither enough choice of providers nor transparent pricing to compare. The proposed center will offer both choice and transparency.

Finally, "for-profit" is not an epithet. A for-profit provider will fold if it does not offer something better than its non-profit competitors. There will be, and should be, quality regulations to assure that efficiencies are not achieved by cutting corners which shouldn't be cut.

It would take a lot to convince me to choose some other provider over UVMMC or Copley; they have set a high bar for quality. Nevertheless, prices are anything but transparent and waits for non-critical care do exist. Competition should be allowed.

The Green Mountain Care Board has a website for public comment. If you have an opinion on this issue – pro or con, please post it at http://gmcboard.vermont.gov/board/comment. Of course your comments are welcome here as well.

April 13, 2017

Do you Want Comcast to Know Your Underwear Size?

Congressman Michael Capuano (D, MA) complained on the House floor that he bought some underwear online and that he thinks that Comcast, his internet service provider (ISP), is selling information about his purchase. He was testifying against Republican legislation which prevents a Federal Communications Commission (FCC) regulation promulgated in the waning days of the Obama administration ostensibly to protect Internet privacy from going into effect. Trouble is the congressman doesn’t understand who is selling his undergarment preferences. It’s highly unlikely that it’s Comcast.

We’ve all had the same experience. You break your ballpeen hammer; you google ballpeen hammers; your search leads you to Amazon where you make a purchase. Immediately your online experience is framed by a flock of ballpeen hammers. You look at weatherunderground: rain tomorrow and ballpeen hammers. Check the local news: headline is arson under a banner ad for ballpeen hammers.

How does that happen, you ask?  Did my ISP spy on my search or my transaction with Amazon and then sell my information to the makers of ballpeen hammers? Is that what happened to the congressman and his underwear order? Nope. It was either Google or Amazon (or both) who “monetized” the information you gave them about your purchase intentions. Here’s how it works:

When you did your search, Google put a “cookie” – a snippet of information only Google and you can read – on your computer. Amazon put an Amazon cookie on as well. The cookies either contain the specifics of what you were searching for or an identifier which lets Google or Amazon retrieve information about searches done from your computer or by you if you happen to be signed on to Google or Amazon at the time.  

Now you go weatherunderground, Google or Amazon or both have bought ad space on the weatherunderground webpage. Their ads run in a “frame” on the webpage which means they have code in them which actually communicates with Google or Amazon and not with weatherunderground. This frame looks to your browser like it is running at Google or Amazon so it has access to the cookies which Google and or Amazon left behind. Aha. As fast as speeding electrons, Google or Amazon “know” that you will be interested in a chance to buy a ballpeen hammer so they give you that chance (I don’t know why Amazon apparently doesn’t know you already bought one). Up pops the hammer. The process is slightly more complex if you are on a different device, but the ballpeen ads can get to your smart phone as well as your computer.

As far as I know Google and Amazon don’t sell the information directly to purveyors of ballpeen hammers; but that’s only because this is not the best way for Google or Amazon to make money from the information. Amazon obviously gains if they can sell you something you want. Google makes most of its money by selling ads. In general they get paid when the ad is clicked on; so they make the most money by serving you an ad you’re likely to respond to. They’ve used the information to make you a source of profit. That’s not a sin, just a fact. You get free searches from Google in return for the information you give them. You pay low prices and get great choices and maybe free shipping at Amazon because they are so good at getting you to buy.

So why does the FCC want to regulate ISPs rather than Google and Amazon? Is that regulation a good idea? How should privacy be protected online? How can you protect yourself? Stay tuned to this blog (it doesn’t put cookies on your computer).

April 10, 2017

Motives Are for Mysteries

Is it more heinous to kill someone for their ethnicity than for their money? Is it worse to beat someone up because of their sexual orientation than because you “just” hate them personally? Yes and yes according to multiple US laws. For example, according to Wikipedia, “The Violent Crime Control and Law Enforcement Act, enacted in 28 U.S.C. § 994 note Sec. 280003, requires the United States Sentencing Commission to increase the penalties for hate crimes committed on the basis of the actual or perceived race, color, religion, national origin, ethnicity, or gender of any person. In 1995, the Sentencing Commission implemented these guidelines, which only apply to federal crimes.” There are numerous other state and federal laws which make the same distinction.

Without making the slightest excuse for crimes motivated by hatred, I think this is absurd. “No, your honor, I didn’t kill him because of his religion; I killed him because he didn’t open the cash register fast enough when I was robbing his store. I should get a lesser sentence.”

Motive is often important in the detective work that leads to an arrest. After arrest and conviction, the punishment should depend on the crime that was committed, not what led the person to commit the crime. A murder should be punished for murder, not for what he said while committing the act.

Over-emphasis on motivation rather than action is not confined to criminal prosecution.

According to NPR, The Hawaii court which issued an injunction against Trump’s second immigration order  "…concluded, based on the historical context of the travel ban and public statements made by the president, that 'a reasonable, objective observer ... would conclude that the Executive Order was issued with a purpose to disfavor a particular religion[.]' " Does that mean that the same executive order would pass legal muster if it were issued by someone else? The order is either constitutional or not; the Supreme Court will decide. It’s either good policy or not; you can decide that on your own and probably have. But whether the court can overturn a law or an order should depend on the language of the law or order, not on the intent of the person who promulgated it. Should we undo the First Amendment if we find out that James Madison was trying to protect himself from a libel suit?

Intelligent friends and relatives have told me that they think our missile attack on the Syrian nerve gas base was a good thing to do and in the interest of both humanity and the United States. “But,” some of them have said, “I don’t trust his motives.” How will we ever know his motives? He probably was aware that sticking a thumb in Putin’s eye would help dispel the allegation that he is Moscow’s man in DC. He probably knew that this action would get the bipartisan support he has not gotten for anything else in his presidency. And no reason to think he wasn’t horrified by the gassing.  You can have more than one motive at a time. But none of that matters. What matters is whether the use of force was right or wrong.

Obama’s extreme detractors say he didn’t act when Assad crossed the chemical red line because he (Obama) wanted to weaken the United States. This is the motive argument backward. If you do something I don’t agree with, you must have a bad motive. In my opinion Obama made a very serious mistake, probably did it with the best of intentions. Doesn’t matter. Actions matter; motives are for mysteries.

April 07, 2017

The World is a Tiny Bit Safer This Morning

The long-overdue attack on Assad’s forces finally came together at unheard of speed – almost faster than leaks about its planning could escape from the Pentagon. That’s only one of the good things about the action President Trump ordered against the Syrian airbase.

Most important, it may deter other horrible chemical attacks against civilians in Syria or elsewhere. It won’t end other atrocities, of course; and it won’t end the complex war in Syria. But it’s still crucial in humanitarian terms that one red line is back.

There was constructive collateral damage to any hopes Russia may have had that Trump would be their man in Washington. According to the NY Times:

Dmitri S. Peskov, a spokesman for President Vladimir V. Putin of Russia, told reporters Friday morning that the strike “deals a significant blow to relations between Russia and America, which are already in a poor state,” …

Although the Pentagon says that it warned Russian forces and tried to avoid killing them at the airbase, we also made clear that we do not regard the Russian presence in Syria as a shield for Assad. That’s important. The Russian troops were inserted after President Obama made the worst mistake of his presidency by setting and then ignoring a red line at the use of chemical weapons against civilians. Putin likes the checkers tactic of occupying vulnerable squares first so that action by the Us and its allies is frozen by fear of Russian casualties and wider consequences (see Ukraine).

President Xi of China is at Mar-a-Lago for his first visit with President Trump. The attack on Syria adds credibility to Trump’s message that China must constrain North Korea or the US will.

Two quibbles:

Before the latest chemical weapons atrocity, the Trump administration did signal that there might be a role for Assad in post-war Syria. We’ll probably never know if that emboldened Assad (if you can use the word “embolden” to describe a cowardly attack). But this signal may have had two fortunate results: 1) the aftermath shows that acts have consequences; 2) there is no appearance that the administration was “out to get Assad”. He was offered an olive branch; he committed a barbarous act; his ability to act was diminished.

My second quibble is that we didn’t do more. “Proportional response” has not proven an effective deterrent. It leaves the enemy contemplating a tit-for-tat and the short patience we Americans have. I think we should have totally destroyed Assad’s air force. I certainly don’t think we should have made the public statement, which we did, that this is all that we’re doing. Too much useful information for the enemy. Why not let them worry?

I’m overjoyed to see that Trump can change his mind as facts evolve. This is a strength and not a weakness. Too often American politicians are trapped by not being able to admit they were wrong.

April 04, 2017

Were You Communists?

Mary and I visited North and South Vietnam on two separate trips in the last couple of years. Couple of weeks as a tourist makes you an expert on exactly nothing but we did learn a lot.

In Hanoi there’s a war museum. The Vietnamese have been in lots of wars. Usually they win; sometimes they lose. When they lose, they keep fighting anyway. That‘s what happened to the French at Dien Bien Phu, a battle they lost after they’d “won” the war in Vietnam a couple of times. That defeat led to the French withdrawal and the partition along the 17th parallel and eventually American involvement.

Ho Chi Minh is the hero of the War Museum. However, there are gaps in the coverage of him. No mention, of course, of his Viet Minh forces cooperating with the French in 1945-46 to massacre other factions from the Vietnamese nationalist movement.  “The American War” is the last war in the long progression. It’s painful for Americans to see the Vietnamese view of it, even with the understanding that there’s no “good” view of what a war does to people. There’s plenty of propaganda and real anger in the exhibit; but no more than there is in the coverage of other former enemies, especially the French and the Japanese.

The North Vietnamese were friendly. They would’ve slightly preferred that we were Brits. But Americans are OK. Lots of countries have lost wars in Vietnam; can’t hate them all. And everyone does have a cousin in the US.

South Vietnam doesn’t talk as much about the “American War”. They still call their old capital by its colonial name, Saigon, and avoid the official name, Ho Chi Minh City. When necessary for administrative reasons, it’s “HCMC”. Many don’t like the North Vietnamese. The only angerI heard towards Americans was bitterness that we abandoned them. Remember the shameful picture of the last American’s leaving Saigon in a helicopter from the roof of a building near the US Embassy? They haven’t forgotten.

We met another American couple (Mary talks to people when we travel). From my PoV the man was stridently liberal and opinionated. But he did respond to (although not agree with) spirited but respectful disagreement. One day they had just come back from talking to some Vietnamese.

“We heard,” said the Vietnamese, “that there were huge protests in your country which led to the US pulling out of Vietnam”

“Yes, our acquaintances told us they said proudly. “We were part of those protests.”

“Were you communists?” the Vietnamese asked.

March 31, 2017

Constructive Compromises for a New Center Coalition

Until recently, a center coalition ruled Washington civilly. Trouble is that the coalition agreed mainly on mutual back scratching and became the creature of lobbyists and interest groups. It tried to appear to do something for everyone but we ended up with crumbling infrastructure, feckless foreign wars, increasingly expensive college tuition and health care costs, bank bailouts, and burgeoning wealthfare and welfare rolls. We elected whomever seemed to offer the most prospective for “change” – without being very fussy about what is going to be changed. Many Americans lost the hope of improvement which has been our distinguishing force. The wrath of both the Tea Parties and The Occupy Movements was kindled.

 Suddenly both parties have become captives of their radical wings, neither of which I think offers much hope. The radical wings can be left flapping in the breeze if there’s a new center coalition and Republicans and Democrats vote for the same bills after some reasonable compromise. Here’s my suggestion for constructive compromises which IMO address the legitimate grievances of voters.

“I’ll vote to end the subsidies and tax loopholes for my contributors (oil and gas drillers , for example) if you’ll vote to end the subsidies and tax loopholes for your contributors (‘renewable energy’, for example).”

Upside: Much less burden to taxpayers. The market rather than government determines business winners and losers.

Downside: Campaign contributors don’t contribute. Congress people have less chance to claim bacon brought back to their districts. The market won’t take into account hidden costs (like pollution) so it is necessary that these are accurately assessed on producers.  

“I’ll vote authorization for US troops in combat if their mission is defined and they are given 150% of what they need to accomplish it in six months.”

Upside: We defend ourselves effectively when we need to; we go less often to places where lives (and money) will be squandered.

Downside: We might be penny-wise and pound foolish and leave ourselves vulnerable. Presidents would need to specify costs and objectives (which we might not want to tell the enemy). Congresspeople would have to take responsibility for the costs of what they approve

“I’ll vote for massive public works if the regulations are changed so all new projects – public or private - must be approved or disapproved within two years, preparing for approval takes no more than six months after design is complete, and those seeking to halt a project after approval need to post a bond for the cost of delay to be refunded only if they prevail in their appeal.” (more here)

Upside: Infrastructure gets built and upgraded as it didn’t under the last stimulus bill. Private dollars pour into projects like pipelines with speedy and firm approval possible. As pipelines are built, gas will displace more coal and oil (lower CO2 AND virtual elimination of SOx and NOx and other bad stuff). Oil will travel by pipeline rather than by train which is not only cheaper but much safer. Better infrastructure helps the regrowth of American manufacturing.

Downside: A project might get built in your backyard and, although you’ll be able to testify against its approval, if it is approved you won’t be able to stop it for 20 years with after- approval litigation. Doesn’t bring back coal miner jobs. Hurts the railroads who lose coal and oil transport business (tough on Warren Buffet).

“I’ll vote for deregulation so banks can lend to new and small business again so long as we also assure that no bank (or other institution) will be bailed out if it fails. This means assuring that no institution can grow to the size that it poses a systemic threat and can blackmail the government for a bailout.” (more here)

Upside: Making loans available to small and new businesses means that the best job-creators are back in business in force. Tired old companies which don’t innovate lose the protection they have now because they get can get credit and nimbler would-be competitors can’t. Local and regional banks grow at the expense of money center banks.

Downside: More banks will fail. Regulating bank size is not easy and could be abused.

“I’ll vote for strict work requirements for all public assistance programs including Medicare if you’ll vote for a higher minimum wage.” (more here)

Upside: It’s bad for both donors and recipients if needed public assistance becomes a disincentive to work. More resources can be focused on those who can’t work if those who can work do and if pay for work covers necessities.

Downside: Determining who can and can’t work and who really needs assistance for how long is difficult and intrusive. Increasing the minimum wage will eliminate some entry level jobs entirely.

“Let’s write legislation which is so clear and concise that regulators don’t make important policy decisions and endless court cases aren’t needed to figure out what we meant.”

Upside: Policy control is in Congress where we can see it rather than in vast bureaucracies where we can’t. We won’t need endless court cases to know what a law means.

Downside: Compromise is more difficult when vague language doesn’t leave it possible for both sides to claim victory. Hard to strike a balance between precision and too much detail in legislation.

March 29, 2017

The Failure of the Center

In The Ship of State is Taking on Water, I warned that increased rocking means we’re in danger of floundering from water coming over both rails as we lunge from side to side. Reader comments have shown both that my metaphor suffers from assuming there’s a strict left-right dichotomy and that failures of the center have much to do with our current instability. Interestingly the two commenters I’ve extracted from below probably don’t agree on much except the failure of the center.

Daniel Berninger wrote (in response to a later post):

The usual left - center - right decomposition misses the more powerful vertical dynamic driving politics across the planet today - elite (up) versus the people (down) aka globalism versus populism/patriotism responsible for a President Trump, Brexit, et al.

The populist energy reflects two things:

  1. Incompetent (actual competently self-serving) stewardship of government by a uni-party power elite. The $48 trillion burned across two R terms and two D terms since 2000 in the US produced a dramatic decay of prospects for the common man (and via similar numbers in the EU) across every category of government activity.
  2. Massive expansion of Internet enabled communication options after 1995 makes it extremely difficult for elites to control the usual narrative - aka everything is fine and we are doing a great job. The government apologist forces control 100% of traditional media channels (and 90% of top 100 news websites), but the existence of direct public to public channels (like this comment) make it impossible (for the moment) to hide reality of utter and complete government failure.

The comprehensive vilification of Trump by punditry can not[sic] dissuade the people of things directly experienced in daily life. The various polls point to pessimism about the prospects for the next generation for the first time.

I defy anyone to name a single aspect of government intervention since 2000 improving daily life. The list of degradations is endless - cost of healthcare & associated insurance, accomplishments of military interventions, median income, labor force participation rate, cost of college and student debt, home ownership and equity, along with an explosion of public and private debt and on and on without end…

John Fairbanks wrote:

…While I would agree - this is the easy part - with the idea we need more thoughtful, evidence-based comity in our public policy discussions, I take exception to other points. While, from your point-of-view, Obama went too far left, he was and is a moderate-to-liberal Dem with a strong sense of social justice. His foreign policy was a mess, but it wasn't coming from the left. The ACA/Obamacare, which you deride as a "Ponzi scheme" (which seems to have become the favored term-of-art on the right for any tax-payer-funded social program), was born at the Heritage Foundation and field-tested by Mitt Romney in Massachusetts. Had Obama been a leftist, he would have pushed for single-payer, if not national health insurance, or at least added the public option to his program. He did none of those things, perhaps out of political utility, but also perhaps because he doesn't see things from the left perspective. (I might add that deriding the ACA as you do, while not snarling and shouting, is neither an example of civil discourse.) Similarly, Obama did not send the Justice Department after the bankers, who not only wrecked the economy and cost millions of Americans, me included, our jobs, savings, and retirements. Anyone from the left would have, at least, done that. The largely-tax-deductible settlements the banks made with the federal government and other plaintiffs scarcely made a dent in the costs of repairing that damage…

Both of their points are well-taken. The anger of both Occupy Wall Street and the Tea Party originated in the massive bank bailout called TARP (see It Was TARP that Boiled the Tea and The Occupiers and Tea Partiers are Both Right). Bernie Sanders got the Occupy votes; Trump got the Tea Party votes (grossly generalizing). Had it not been for the (pretty realistic) public perception that Hillary Clinton represented a continuation of non-partisan wealthfare, she’d probably be President today.

TARP originated in the Bush administration and got even worse under Obama; last outbreak of bipartisanship we’ve had. Not what we want to go back to. The coalition in the middle used to be more civil – but it hasn’t recently been constructive. Compromise has meant I’ll give a handout to your contributors (let’s say oil drillers) if you give one to mine (say “green” energy investors); and let’s both not forget our bankers. Compromise has meant massive funding for public works so tied up in regulation that practically nothing gets built (see We Need Infrastructure, Not Another Stimulus Bill). Compromise has meant fighting undeclared wars while not actually giving our troops the means to win.

My suggestions for a new center are here.

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