Is America a socialist country? And if it is, so what?

Lawrence O’Donnell, host of MSNBC’s The Last Word appeared on C-SPAN’s Washington Journal this morning. One of the callers chastised him and Alexandria Ocasio-Cortez for supporting socialism. Ms. Ocasio-Cortez last week defeated Representative Joseph Crowley in the primaries for the 14th district. The 14th district is heavily Democratic, having favored Democratic presidential candidates all the way back to William J. Clinton. Sixty-one percent of the 14th district’s voter population is black or Latino. Ms. Ocasio-Cortez is favored to win and Establishment Democrats are not too excited about a Bernie Sanders supporter (Ms. Ocasio-Cortez worked on Senator Sanders’ campaign) infiltrating the halls of Congress.

Republicans may see this single win as a virus that is about to spread through the Democratic Party and may position themselves as the cure. While Nancy Pelosi may express outwardly a lack of concern about a democratic socialist win in a single district, democratic socialism has attracted more attention since the November 2016 election as an alternative to a Democratic Party that has been enjoying a quarter of a century of corporatization.

No doubt Establishment Republicans are enjoying the schism being caused by a socialist insurgency, but I sense run-of-the mill conservatives within and outside the Republican Party like the C-SPAN caller are concerned that a seemingly increasing number of young people are moving toward socialist philosophy. Mr. O’Donnell adroitly addressed the caller’s vitriol arguing that the United States has a political economy that mixes certain aspects of market and centrally planned economies. Conservatives tend to focus on the anti-freedom approaches of socialism such as limited speech, and a lack of universal suffrage at the voting booth. They focus on the brutality of a socialist State toward dissidents, currency manipulation, and closed access to economic markets. They assume that socialism is the only top-down, lock down system on the planet.

They are wrong.

Just one look at America’s monetary system alone should tell a critical thinker that the economy of the United States is top-down and centrally planned. Most people do not issue their own currency. That job is for America’s central bank, the Federal Reserve. See mortgage rates going up and you can reasonably tie some action by the Fed to your pain. And while Republican members of Congress scream about free markets and alleviating the tax burdens of entrepreneurs, they add to the entrepreneur’s burdens by increasing budget deficits creating spending gaps that have to be filled by more borrowing which increases demand for loanable funds which leads to higher interest rates which leads to businesses facing increased barriers to entry into the credit markets. This is top down, centrally planned, oppressive economics in American form.

And let’s not forget our tax system. Talk about centrally planned. Have you ever been asked to give direct insight and opinion on whether your marginal tax rate or effective tax rate should be increased? Of course not. America’s version of the National People’s Congress does that, with the only difference between China’s legislative body and America’s is the frequency of meetings and the amount of checks they place on their executive.

Conservatives would argue that the American electoral system is indicative of an open democracy. That fallacy has been exposed twice in the past eighteen years where the “people’s choice” lost because a small body of unknown electors decided five weeks after a presidential election who the winner was and had that decision certified three weeks later by members of Congress. Top-down. Centrally planned.

Lastly, if Obamacare didn’t convince you that your healthcare finance system is centrally planned, then the history of Medicare should inform you as to the impact and influence the federal government has on the insurance industry. Medicare opened up two markets for the private insurance industry: the administrative services market, where private insurers invested in and provided the administrative infrastructure for serving an influx of newer patients, and underserved market of people over the age of 65 and medical insurance supplemental market, where insurance services gaps in Medicare are filled by private insurers. It is hard for conservatives to argue that the free market met these needs when on the contrary government action created the markets and the opportunity for private insurers to increase revenues.

You can probably find more examples, but the point here is that too many Americans express their lack of economic literacy when wailing about the ills of central planning. While I don’t want to give liberals credit for much, they do make a point when clarifying that the United States’ economy is a mixed one and expose the irony that many critics are likely enjoying some of these socialist programs themselves.

When asked to choose an “ism”, my response is either one, whether socialism or capitalism, represents top down suppression of individual choice because government exercises an inordinate amount of influence under either paradigm. The individual has no say in the crafting of policy in either framework. It is a take it or leave it scenario either way. The questions conservatives should be asking themselves is, can I create a better benefit for myself on my own terms?

The Sarah Sanders fiasco challenges the notion of free exchange of ideas and nation-state.

America’s hypocrisy when it comes to the freedom to exchange ideas was further exposed last weekend when Sarah Huckabee Sanders, press secretary for the White House, was asked to leave the Red Hen, a restaurant in Lexington, Virginia. According to The Hill.com, Mrs. Sanders along with seven members of her family, was asked by Stephanie Wilkinson, the co-owner of the restaurant, to leave the establishment because she took issue with the Trump administration’s policy toward transgender members of the military.  Listening to calls this morning to C-SPAN on the issue is giving me the sense of how increasingly polarized the United States is politically. It has me asking, “Are Americans really serious about the free exchange of ideas or is that just some Madison Avenue hype designed to maintain an artificial society?”

The first three words in the Constitution of the United States of America, “We the People”, seem farcical given this latest event. Yes, humans are expected to disagree, but the United States has been transmitting a message to the world that the choice to disassociate based on the groups you want to disassociate away from is somehow a bad thing and that real strength lies in diversity of people and ideas.  The Sanders event is an example that this creed is built on shaky ground. It seems more likely that Americans rather not share space with people who do not share their political beliefs or political lineage. “We the People” means, “We, a Particular People Who Have Taken Charge.” Inclusive means only including those who share your beliefs.

The State had to sell the notion that the disenfranchised were allowed to come to the party. The last thing the United States needed to see was its own version of Bastille Day on American soil. To keep the barbarians at bay the political elite needed a doggy bone and democracy has been that bone since the country’s inception.  But as the guise of democracy and its phony noble intent falls away, are the disenfranchised ready for a world that is not inclusive?

If Americans are serious about freedom of association and the freedom to exchange ideas, they must accept the freedom to disassociate and go one’s own way. The Left is afraid of such a mindset because disassociation means fewer people across which to spread the costs of unnecessary programs and fewer people towing their party line.  The Left has been historically aligned with freedom of thought, but their support for the co-owner of The Red Hen demonstrates to me that even they do not understand their equality standards and the artificial nature of those standards are coming back to harm them.

The co-owner of the Red Hen, again, took issue with transgender policy of the Trump administration and given the lack of anonymity that Mrs. Sanders could not avoid were able to single her out and direct a protest against Mr. Trump by asking her to leave.  Would the Left take issue with a restaurant owner who does not support the Democratic Party because of the party’s support for gay marriage but because she is aware that 90% of blacks support the Democratic Party decides to not serve them? The answer is yes and not because the Left would think the owner is wrong, but the loss of black votes stemming from any Democratic support for the restaurant owner’s free speech would cost Democrats at the polls.

I don’t believe the discussion on free association will ever end. Quite frankly it needs to continue and get louder.

As HR 5709 meanders through the U.S. House, FCC targets a pirate station serving Brooklyn’s Haitian community

On 13 June 2018, the Federal Communications Commission issued a notice of unlicensed operation to Reginald Simeon, an operator of a radio station in Brooklyn, New York. The Commission alleges that Mr. Simeon’s station, operating from a residential property on East 49th Street in Brooklyn, may be operating on the 88.5 Mhz frequency without a license.  The unlicensed operation is, according to the Commission, a violation of section 301 of the Communications Act of 1934.  The Commission also alleges that power emissions from Mr. Simeon’s station violated Part 15 of the Commission’s rules as to allowed field strength of signals at 250 micro-volts per meter for three meters.

While there is the legal and regulatory issue of whether or not Mr. Simeon’s station operated without a license and whether the signal strength was too strong, there is, too me, the more important issue of whether the Commission is about to deny the Haitian community another outlet for receiving news pertinent to the community’s members.

Section 301 of the Communications Act of 1934 requires any person that owns or operates an apparatus that transmits energy, communications, or signals by radio must have, subject to certain exceptions, a license to do so. Mr. Simeon has 30 days to answer the Commission’s complaint and make a showing as to whether he or not section 301 applies to his operations.

The Commission has made “pirate radio” (a derogatory term in my opinion) a priority lately. Arguments against pirate radio include interference with licensed broadcasts; interference with public safety broadcasts; and potential health effects from unregulated radiation. Besides, some critics of pirate radio may argue, if radio operators want to avoid getting a license without getting in trouble why not simply stream their broadcasts via the internet?

Part of the answer to the streaming question may lie in the preferences of the culture. As Justin Strout pointed out in a 2009 article on Prometheusradio.org when discussing pirate radio and Haitian communities:

“For different communities, radio stations are the best way to reach people,” offers Brandy Doyle, a regulatory policy associate for the Prometheus Radio Project, a Philadelphia-based nonprofit advocacy group for low-power communications. The organization forms coalitions to push Congress to reform the rules and regulations that prohibit people from gaining access to the airwaves. “We find that even in the age of the Internet, people still want radio stations,” says Doyle. “In Florida, many of the unlicensed stations are operated by Haitian communities and other Caribbean communities that [have] immigrants who come from places where radio is really vital and important. They come to the U.S. and they can’t get a radio station license. They’re trying to reach the Haitian community in Miami, for example, where it’s really local. In many parts of the world, radio is much more central to daily life than it is in the U.S.”

Congress, however, seems keen on making operating a radio station without a license more expensive. HR 5709, the Preventing Illegal Radio Abuse Through Enforcement Act, provides the following:

“Any person who willfully and knowingly violates this Act or any rule, regulation, restriction, or condition made or imposed by the Commission under authority of this Act, or any rule, regulation, restriction, or condition made or imposed by any international radio or wire communications treaty or convention, or regulations annexed thereto, to which the United States is or may hereafter become party, relating to pirate radio broadcasting shall, in addition to any other penalties provided by law, be subject to a fine of not more than $100,000 for each day during which such offense occurs, in accordance with the limit described in subsection (a).” The limit described in subsection (a) is $2 million.

As a consumer, I do not care for internet radio. It is a costly tie-up of bandwidth. Also, during power outages, connecting to news and information is more difficult online versus via radio. All I need is a supply of batteries to keep my radio charged.

Policy wise, I do not see the Commission or the aforementioned Congress pursuing some type of middle ground policy that would keep small stations serving Caribbean communities alive. With Democrats and Republicans supporting the bill (it has been forwarded to the U.S. House Committee on Energy and Commerce), I see eventually passage by the full House and the U.S. Senate.

A reining in of the political media should be expected under a nation-state model

Forbes reported today about a statement of work issued by the U.S. Department of Homeland Security on 3 April 2018.  The statement of work seeks prospective vendors capable of providing the Department’s National Protection and Programs Acquisition Division with the capabilities to monitor traditional and social media. The specific objective of the services is:

“Services shall enable NPPD/OUS to monitor traditional news sources as well as social media, identify any and all media coverage related to the Department of Homeland Security or a particular event. Services shall provide media comparison tools, design and rebranding tools, communication tools, and the ability to identify top media influencers.”

The statement of work does not get into any specifics as to why the Department would need such a program. It could be one of three reasons. One reason could be a push back by the Trump Administration on what it calls “fake news.” Mr Trump has shown a disdain for what he terms as unfair reporting typically from media perceived to be left leaning. He has no love for CNN, a lack of love expressed with so much disdain that he came out against the Time Warner-AT&T merger, one that is now being challenged by the Trump Justice Department.

The second reason for the proposed statement of work may be to create another tool for dealing with the media attacks a Russian troll service has been accused of. By monitoring media influencers, the United States could make a preemptive strike against journalists, bloggers, broadcasters, etc., that spread fake news and set the stage for divisiveness in American politics.

The third reason I see is that the political media has to be reined in by the nation-state. Part of the nation-state’s political ordering of and for society should include keeping the collective in order by controlling the messaging. While some spin is allowed in order for news organizations to establish some type of brand differentiation, i.e., MSNBC leans liberally forward while FOX is conservatively fair and questionably balanced, the general messages issued by the nation-state via the political media must be uniform enough to keep the masses in line or distracted. Too much spin to the left or to the right creates chaos in the collective, a disturbance in the force that the nation-state cannot afford.

I believe reason three is the purpose for the Department’s statement of work. Some Americans may see the proposal as an attack on a free press, but has the press ever really been free? Except for the occasional “breaking news” (which amounts to a press secretary given their favorite reporter or a reporter they can use the first shot at a story), most political news is initiated by a state actor with the media being tasked for commercial and political reasons for distributing it.

Probably over the weekend we may see some discussion on the meaning of a “free press.” Given that this story is not even trending on Twitter anymore has me wondering how seriously the media is taking the Department’s action.

Will Congress regulate.@facebook like a public utility? Given its potential benefit to partisan politics, probably not. #socialmedia

The Wall Street Journal’s Holman Jenkins, Jr. posted an article last Friday about Facebook’s apparent maturity as a business given its focus on regulatory issues such as the potential of Congress to regulate the social media company like a public utility. Mr Jenkins points out that Facebook’s fear of regulation, a fear shared by other “tech” companies, comes from the attention that large companies draw to themselves as the result of centralization of power. In this case, Facebook is perceived as one of the few central nodes of power in the digital space (along with fellow FANGs; Amazon, Netflix, and Google). Issue is, does Facebook have a monopoly status that justifies “public utility” regulation. My answer is no.

The classic argument for regulating a firm as a public utility is that the public has an interest in benefiting from the use of the public’s rights-of-way including the efficiencies that flow from making such uses exclusive to one firm in a given territory. Electric and water utilities quickly come to mind when we discuss public utilities and rights-of-way. Would you rather see your streets and driveways dug up to provide multiple pipes from multiple water or electricity suppliers or would you rather one supplier who is forced to comply with a pricing model that creates a competitive price and rate of return on the assets used by the utility to produce a good? For the most part, society has settled for the latter. We don’t like the idea of having an excess number of utility lines running overhead or into our residences for aesthetic or safety reasons.

Does Facebook fall into this public utility model? No, it does not. According to Facebook, the company makes almost all of its revenue from the sale of advertisement. Facebook uses its algorithms to identify potential viewers of content or purchasers of services for its advertisers and display ads these ads to content viewers and services purchasers in exchange for an advertising fee. Ad services, including the delivery of advertisements to consumers, by Facebook’s admission is a competitive business. Unlike electricity transmission and distribution, ad delivery is not a monopolized industry. As Mr Jenkins points out in his piece, ads are ads, digital or otherwise, and Facebook is no where near dominating a $540 billion advertising industry.

Even if Facebook had a monopoly on the delivery of advertisements or advertisement services, would a regulator risk creating a state action by regulating Facebook’s advertising services? Bearing in mind that the latest buzz around Facebook ads was spawned by the delivery of advertisement messaging produced by Russian nationals allegedly designed to disrupt and defraud the American electorate, would Congress require that Facebook vet the firm generating advertisement content? Would Congress risk the overturn of legislation requiring Facebook vet advertisers if found violating the First Amendment?

I think that even advertisers confident that their messaging does not violate the public interest would think twice about placing advertisements on Facebook’s platform. More important, from the perspective of the regulator, an administrative agency would not to create the risk of creating First Amendment violations and having to defend those violations in court. As the U.S. Supreme Court held in Edenfield v. Fane:

“The commercial market place, like other spheres of our social and cultural life, provides a forum where ideas and information flourish. Some of the ideas and information are vital, some of slight worth. But the general rule is that the speaker and the audience, not the government, assess the value of the information presented. Thus, even a communication that does no more than propose a commercial transaction is entitled to the coverage of the First Amendment.” 113 S.Ct. 1792, 1798 (1993)

Finally, political parties may not want to impede the returns to electioneering that social media has been providing for the past decade. According to the Brookings Institution, since the 2008 national elections, political parties have been determining how best to convert the amplification and engagement created by social media during a campaign season into two-year and four-year governance.  Political parties have been encouraged to use social media in a number of ways including the following:

  • Acknowledging that the electorate is using social media as a “trust filter” of political news and information;
  • Realizing that politicians have decreasing control over debate topics and that control is shifting to social networks;
  • Making continued use of social media platforms to directly engage constituents;
  • Using social media platforms as “virtual surveys” of constituent sentiment and gauging feedback from the surveys; and
  • Leveraging ordinary citizens’ use of social media to persuade the electorate.

It is 2018 and Congress should view social media that has greater benefits as an electioneering tool if it is not regulated. From a regulatory perspective, there is no economic or legal justification for regulating social media as a public utility.

ISPs got there first. Let it go …

People and associations protesting against the Federal Communications Commission’s reversal of its network neutrality rules are really railing against the fact that current large broadband access providers entrenched themselves between the consumers of communications services and global networks in some before anyone else could. AT&T, Comcast, Charter, and Verizon used private capital and government charters and licenses to carve out territory within which they deployed the networks that connect consumers to that near invisible cloud of interconnected computers that we call the internet. I can’t hate on them for being first.

Net neutrality rules proponents want to dampen this advantage by preventing broadband access providers from blocking traffic from particular content providers; preventing broadband providers from slowing down the speed at which data flows from particular content providers; prohibiting content providers from entering agreements with broadband providers that allow a higher priority be placed on a particular content provider’s traffic; and making transparent to consumers the management practices of broadband providers including pricing, terms, and conditions of service.

The irony of these rules as proposed by allegedly freedom loving advocates is that they are designed to restrict how broadband access providers are to ascertain the value of the traffic that they are requested to transmit across their networks. Businesses assess the value of product, services, goods, information coming across property for determining how much of that value they can extract for themselves. The value extracted hopefully covers the cost of doing business plus profit. Broadband access providers do the same thing, assessing the value of the digital traffic coming across its networks and extracting value in the form of compensation. The greater the value, the greater the compensation.

On the consumer side, how she evaluates value is subject to her personal marginal utility of benefits, to coin the standard economic phrase and accompanying argument. To her, watching African American women twerk at a party on Instagram brings value, but should a doctor consuming video traffic that documents surgery have to risk her video running at a slower speed than a twerker’s in order to comply with a faulty notion of equality of content?

My bias is toward information that actually results in societal improvement, and while I have no problem enjoying the female form, society as a whole gets more mileage where information that helps us better manage our capital and health takes a priority to a cat video or gyrating ass.

Society also gets more mileage where producers and consumers are free to determine what communications they exchange and the terms and conditions of that exchange. This is the problem when we don’t separate content, which is designed to keep people momentarily contented, with information, which should be designed to continuously inform. We have a lot of content floating across our global interconnected networks, and network neutrality rules proponents use the freedom of expression argument to ensure this content gets equal treatment. Prioritizing content on the internet should not be looked at as an attack on freedom of expression, not when there are other outlets available for expression.

What the network neutrality rules proponents always leave out of their argument is the value of the expressions being shared. If they are that serious about their voices being heard over a particular medium such as the internet, then maybe they should put together the capital and construct the technology that ensures their equal access or expression.