Canada Considers Massive 'Internet Tax'

Google actively lobbying against it.
Michael Geist describes the situation in detail.

Basically, a few policy groups are asking the legislature for some laws that have applied to media content before the Internet, to be applied to Internet content. It makes intuitive sense to me until I realize that the government should have no right to regulate media content in the first place.

Final Victory in the War of Ideas?

A friend of mine believes that this recent election may signal a final defeat for the ideals of conservatism, that no genuine right wing alliance will ever again regain control of the country.

While I fundamentally disagree, I'll grant him certain points.

• On some social issues (homosexuality, immigration, and other types of xenophobia) the conservatives will moderate significantly over the next 10 years.
• Conservative aversion to changes to the patent law may reduce as changes in the software industry make those changes more evidently necessary.
• On environmental issues, the conservatives will drop the issue of whether global warming is an issue, and focus on policies that help the market incorporate environmental cost into their decision making (carbon tax or 'cap-n-trade' vs. arbitrary per-company pollution controls).

There are a few other issues where I wish they would change the party line, but these are the ones I think will actually change. Once these changes are made, the conservative party will have a far more focused platform based on consistent principles. It will still be necessary to find a leader who can articulate those principles well to the masses, but those come in time.

The modern GOP is very different from the 1950's GOP which was far away from the 1900's GOP. Political platforms change to fit the times, but some ideas don't become less correct.

To justify 'spreading the wealth around,' one has to accept that wealth does not belong to the individual who creates it. Is wealth created by the social environment that created the person, or is it the creative and motivated character of the person that creates both the wealth and the social environment? If you claim that the social forces created the person's character, than it becomes one social duty to do everything possible to forcibly improve the social environment. That can and will be used to permit government control of anything that affects the social environment, words, print, businesses that compete with government programs, etc. If you deny the basic premise that a person owns the product of their work, then you deny the basic freedom that a person even owns his/her self.

Capitalism 2.0?

I've heard a great deal of talk about this in the wake of this 'crisis,' and it troubles me. I commented on the linked article, my thoughts also available here.

One of the basic tenents of philosophy is that while one cannot prove the existence of others, the act of proof is sufficient evidence to assume one’s own existence (I think, therefore I am). The only person, object or force in all of reality that must exist is you yourself.

Given that, freedom is not a luxury, or a benefit we receive from benevolent governments. Freedom is a fact of nature. 

Capitalism recognizes that nature and attempts to harness it for the best possible outcome. To deny freedom is to reverse the basics of philosophy, holding each person more accountable for the well being of others than that of those they directly care about.

Please don’t misunderstand me. There must be discussion about the proper law society uses to hold people accountable. Peaceful coexistence requires standards of behavior. If those standards are called ‘regulation,’ then fine. But if you deny the basic reality that Freedom is natural and required for life, then expect disaster.

Competitive Alternatives

I'm really bothered that in all debate around the topic centers on the concept that if one is against this bailout, then one is in favor of 'doing nothing.' I have not heard a single serious alternative even floated about how to fix this problem.

I want to hear more about capital requirements. The Chinese have lowered theirs while theEuropeans have raised theirs. Here is my proposition.

Complicated Proposition

The fed should decrease the reserve ratio from 10% to 8%.  That would change the liquidity multiplier from 10 to 12.5. There are 6.3 trillion in time deposits, which probably means there's 630 Billion in base deposits. Reducing the reserve ratio by 2 points would instantly create 1.58 Trillion in liquidity. The danger here is that doing this could inflate the dollar by a lot. To limit that, announce that the reserve ratio will rise by 1 tenth of a percent each quarter until the ratio is back at 10%.

Simple Proposition

The same thing just explained in more detail for the many who  don't follow all the terms  in the complicated version. Follow the link.

Bankruptcy, Not Bailout

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?iref=mpstoryview

I have been sent this link by 2 friends that do not know each other, but know me very well. Jeffrey Miron makes some amazing points.

• The implicit backing of the federal government for Freddie and Fannie encouraged them to take on far more risk than a free market would have allowed.
• "Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending."
• "The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government."
• "If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen."
• "Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents."

Read the article. He makes many more points that fill in the blanks, but I figured 5 was a good synopsis.

Bring On the Shorts

Bloomberg is reporting that 2 companies, Diamond Hill Investment Group and JMP Group Inc. have opted to let their shares be short sold. I know very little about these companies, but I do know that what they've done takes guts and is the truly moral thing for any company in their position to do.

The regulators are giving the financial companies unfair exemptions instead of letting the market run its course and are protecting the weak at the expense of the good. 

Congratulations to the leadership of these 2 firms in standing up for what capitalism is all about, free and fair competition with transparency and justice for all.

Obama's Technology policy

http://www.barackobama.com/issues/technology/

It reminds me of the proverbial candidate for class president who promises CocaCola in the water fountains.

The list of expensive stuff he wants to do is only offset by his increases in taxes that will shrink the economy. He hasn't mentioned a single program that he wants to stop, just programs he wants to start and expand.

Philosophy of Liberty

This was posted 2 years ago, and I just now found it. I have now seen it 3 times, examining it closely for any idea that I even in part disagree with. The only point I have found is a minor one that can wait until you've seen the clip.



Back to that point, When the author says that people should stop asking their governments to initiate force on their behalf, it assumes democratic governments. Dictators pursue ownership of the life and liberty of their subjects as an objective for their own life. And may cause global atrocities without the deliberate consent of their people.

Food Crisis

I found some great commentaries here on the recent rise in food prices.
American Thinker | Financial Times: Economists Forum | New York Times: A Global Need...

Things to think about while listening to the news on the Food Crisis:

Since Gasoline and Biofuels are well on their way to becoming true substitutes, and biofuels are made from food, high oil prices will become directly related to higher food prices. Not only can food substitute for oil, but it apparently works the other way too. I should make a whole blog post just on that.
Wired

India, China, and South America are developing far wealthier populations who consume more of both food and fuel. Driving the demand of both, raising the prices of both.

Those same three regions are also using that wealth to increase their productive capacities. The US utilizes only 0.27% of the world's crop land, but produced 16.8% of all the world's grain in 2007. Which means the US produces grain 80 times more effeciently than the rest of the world, so there's room for 7978% improvement in global grain production without any new technologies. That's about 80 new earths to put that in terms Daniel W. Basse can understand.

I don't have many links to back this up, but it seems that as wealth passes some level, quality begins to take precedence over quantity to the average consumer. High class restaurants serve smaller portions than low class restaurants. Areas with higher average population have more Chipotle's and fewer Taco Bell's. If this is true, then as the West gets still wealthier, it will begin to consume fewer pounds of grain while expending far more in terms of other wealth to get it. That might relax demand for low priced grains for poorer areas.

'Not for Resale' free stuff

Universal Studios sent out a bunch of free promo CD's with a 'promotional use only' label to selected listeners. These CD's arrived completely free through the mail.
Troy Augusto, who decided to disregard that label and sell the disc on Ebay, is now fighting a lawsuit from Universal. The record company claims that the promotion use label identified the product as in part their property, and that they retained all rights of sale. Augusto claims that since the discs arrived in the mail with no action on his part, they were gifts and therefore his property.

The major significance is the challenges this case could pose for the 'first sale doctrine.' Universal wins, could a car manufacturer place a limit on the number of resales for the car? I could do a whole new post on that idea.

EFF has counter sued Universal on Augusto's behalf.

Constitution? What Constitution?

Bush administration claimed that the 4th amendment doesn't apply to them.

For at least 16 months after the Sept. 11 terror attacks in 2001, the Bush administration believed that the Constitution's protection against unreasonable searches and seizures on U.S. soil didn't apply to its efforts to protect against terrorism.

That view was expressed in a Justice Department legal memo dated Oct. 23, 2001. The administration on Wednesday stressed that it now disavows that view.

I'm embarrassed to say that I'm rusty enough on the Constitution that I had to look this up.

Amendment IV

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

So far this is just an echo chamber post, Hat tip to MRogers @ slashdot. But I can't think of any commentary that won't sound like whining.

Clean Energy Gets Cheaper

Business Week: Clean Energy: It's Getting Affordable
Wikipedia: Electricity Market
CBO: Prospects for Distributed Electricity Generation

For the last decades or so, activists and technologists have hoped and worked for a world where cheap clean power improved living conditions all over the world. Not to be melodramatic, Most technological innovation improves living conditions everywhere they're used, freeing resources to improve standards of living everywhere else.

There have been many breakthroughs in the past few years in the forms of 'more efficient' solar cells, that cost more per watt. A power generating floor, and other nifty gadgets that just don't take off. But the real test is in terms of $$$ per Watt. Because it's not really the cleanness that we want, or even the security of knowing that we will have resources for generations to come, but the raw power that keeps us from working in the dark. The environment is important, but it's not how we base our decisions.

One thing I would love our government to actually tackle however, is the legal mess it's already created preventing home owners from selling their own power back to the grid. A good power market should allow this and be transparent enough to permit real time power pricing. So that homeowners can reduce their power consumption when the price gets real high, or feel free to crank up the AC when the price gets real low. If families could MAKE money by selling the power from their solar cell when the price gets high, we might see a much higher adoption rate.

Reagan on the role of Government

Hat tip to Brian Hollar @ Thinking on the Margin
Who gave "(HT Stephen Bainbridge via Instapundit)"

Project Lifeline, Legislating Reality After The Fact

I recently stumbled a wonderful new project by our wonderful government called Project Lifeline.

Thanks to this wonderfully brilliant contribution by our governing officials, banks will actually spend 30 days negotiating with borrowers to resolve their loans before foreclosing on them. This is such a great idea in fact, that banks have been doing this voluntarily for years with no government involvement at all!

This is basically the banks borrowing the governments credibility (imagine!) because for some reason people trust banks less than they trust our 'fiscally responsible' government. When the banks call the homeowners asking them to refinance, people avoid the calls like the plague.

Smurf Healthcare vs. US Healthcare

The Smurfs on Healthcare

My favorite part is how Jokey gets worse and worse as he gets more 'health care' from the other smurfs who 'just want to help.'
Here's Robin Hanson's take on health care at EconTalk. He talks a lot about the psychological effect about the act of providing health care. There's also a lot of research on information asymmetry, like donating a funny bone because the docter says your friend will need one.
Dr. Hanson talked about the RAND health experiment, where people who got free health care were compared to people who paid for all of their own health care. The comparison said that even though the free health care folks used 30% more health care, they got essentially zero health benefit. So all that extra money spent bought zero additional health. I recall Dr. Hanson asking class when I took his class at Mason,

"If you assume that some treatments are helpful, and on average, extra treatment buys no health, then doesn't that mean that some of that treatment hurts?"

Second Life CIA

Concerns Over Online Economies as Breeding Grounds For Terror

U.S. intelligence officials are cautioning that popular Internet services that enable computer users to adopt cartoon-like personas in three-dimensional online spaces also are creating security vulnerabilities by opening novel ways for terrorists and criminals to move money, organize and conduct corporate espionage.

The CIA has created a few virtual islands for internal use, such as training and unclassified meetings, government officials said.

The CIA owns islands in Second Life! I'm glad I pay taxes.

Most virtual worlds are proprietary of some sort. World of Warcraft is owned by Blizzard Entertainment, Second Life is owned by Linden Labs, combined they constitute an estimated 22 Million users total, maybe 6-12 million of which are active more than once a week. For the time that they spend in these worlds, very few of their decisions are in any way affected by the laws of their respective real world governments. While the company has full access to all the data regarding chat, text, exchanges, etc.; the government can request that access.

Second Life gets more media attention because of real money that gets exchanged in that world on a daily basis. 18 Million Linden$ ($67 Thousand) was exchanged in Second Life this January. It is illegal, however, to exchange real money in World of Warcraft (it still happens though).

Video Game Tax in New Mexico

New Mexico Proposes Video Game Tax to Punish Staying Indoors

But a coalition of groups, led by the Rio Grande chapter of the Sierra Club, is sold on the idea that outdoor education programs can inspire children in a way that video games and television cannot.

The coalition wants state lawmakers to create a No Child Left Inside Fund with a 1 percent tax on TVs, video games and video game equipment. The fund would help pay for outdoor education throughout the state.

Joseph Henchman says:

The fundamental purpose of taxes is to raise revenue necessary for programs, not micromanage people's decisions with subsidies and penalties. If a tax targeting video games is justified, it should be on the basis of actual negative externalities, not the whims of social engineers picking things they don't like at random.

For myself, I can say without ambiguity that I vastly prefer this type of policy to efforts to ban certain types of video game content. One advantage is that a direct tax creates a disincentive to hurt the industry.
More ambiguously though, I agree with the philosophy of government given by Mr. Henchman. While it's appealing to think that Parks'n Rec would be paid for by Gamestop, as a service, parks and rec should be paid for by people that use it, not by people that don't. People should want more outdoor activities, government should try to 'make them want' more outdoor activities.

Hat Tip to Joseph Henchman @ Tax Policy Blog

Educational Duties to the Future

Video clip of Richard Dreyfus on liberal education.



Any Questions?

Hat Tip to Brian Holler at Thinking on the Margin.

Immigration Regulations

On the other side of this argument are the well reasoned arguments of Samuel Huntington in Who We Are. My personal perspective is more along the lines of how immigration restriction restricts freedom, here explained by Don Boudreaux.

Huntington's point about culture is true, immigrants will change a culture, and ideal characteristics that attracted the immigrants are likely to be watered down or eliminated. But immigration is the very freedom that allowed those settlers to create this nation in the first place and removing that freedom seems very wrong to me. A wall on the border, for it's own sake seems like a perfectly reasonable project to me, but not for the purposes of keeping immigrants out. The great wall of china was built for real security reasons, I have no problem with that. I'd support the wall, if open immigration were in place on a very permanent basis.

Hat tip to Ampersand at Alas, a blog.

Libertarian Solution to a Political Conflict

A Libertarian Solution to Evolution Controversy: No More Public Schools

When you force people to teach a subject in a way they don't want it taught, and the school system is a political beast, which our public schools are, you're going to see the curriculum you have in mind corrupted by the political process. People campaigning for strong teaching of evolutionary biology in public schools are ignoring that this is what's purportedly been going for the last 50 years. There are no states with a theistic presentation in their classrooms. Real science is what's supposed to be taught; yet when you look at polling data, the ones who see a non-theistic, purely naturalist explanation are in the minority.

The particular libertarian speaking there is strongly pro-evolution, and is trying to resolve the debate about whether to allow the intelligent design curriculum to be taught in public schools.
A lot of people feel very strongly that EVERYONE should be well educated. I rather agree with that, education expands the human experience and gives them the tools to provide high quality services to the people around them throughout their lives. It preserves the knowledge base for a growing economy.
Many people assume however, that the ONLY way to do this is through a ubiquitous government run public education system. The argument for 'school choice' is that you could use the same tax dollars used to fund the public education system to provide limited credits that can be used to pay tuition at all sorts of educational institutions. This would make the market for education more competitive, raising quality, lowering price, and vastly simplifying the content debate.

I am in favor of school choice from kindergarden through the fourth year of college.