Social programs. Money laundered through the Great Unwashed

America needs poverty. Poverty eradication proposals are head fakes. America, especially the America that was created right after the Civil War, would not be where it is today without poor people.

Since the industrial revolution, and definitely as America entered the information age in the 1960s, the products designed and built by highly educated, highly paid labor had to be consumed by a large mass of “dependents.” These people are typically wage earners who do not have the capability to be self-sufficient and hold little to no capital. The greater the mass of consumers, the larger the network used to deliver goods. The larger the network to deliver goods means the higher educated, higher paid laborer and entrepreneur faced lower costs for delivering goods.

Emancipation, reconstruction, and the Jim Crow era coincided with the growth of consumerism. The American political economy, not knowing what to do with freed slaves was willing, in lieu of distributing productive capital to them, to turn them into a mass of consumers, with a willing cadre of banks and bond holders willing to launder money through “social welfare” programs.

The food stamp program? An opportunity for bond holders to launder money by financing a program whose clearinghouses are administered by banks.

Affordable housing programs? An opportunity for bond holders to finance the construction of low cost homes with principal and interest guaranteed by taxpayers, many of whom are not in the upper ten percent.

Medicaid and Medicare? Again, bond holders are offered a guarantee that taxpayers will provide a backstop for premium payments while insurance companies collect fees for administering them i.e. WellStar and Medicaid in Georgia.

There is a reason why the poor are referred to as the Great Unwashed. It is because dirty money is laundered through their misery.

When the #internet was just for #academics….#broadband

Democrats are wary of Facebook, Google, and Twitter. Hillary Clinton’s loss in the November 2016 elections allegedly compounded by a misinformation game played by the Russians via social media has the Democrats in Congress asking themselves if a little more transparency i.e. regulation of social media practices is necessary in order to prevent any more shenanigans from Russia.

In the net neutrality debates, Democrats and grass roots progressives have taken the position that due to their gatekeeper position, internet access providers such as AT&T, Comcast, and Verizon are in a position to negatively impact the innovative internet portal and social media services that Facebook and Google provide. Democrats argue that we don’t want to discourage the creation of the next Facebook by allowing Comcast to throttle speeds from potential upstarts or block a consumer’s access to the new Twitter. Now these members of Congress appear a bit wary of the cat that they have been snuggling up to; being scraped by the FANGs (Facebook, Amazon, Netflix, Google) is not fun.

What I find ironic is that these congressmen were no where to be found as the FANGs were busy building a business model on acquiring consumer data from the droppings that consumers leave all over the internet. This data collection didn’t impact the politicians, who thrive on political intelligence so having a master information collector or two on their donor page didn’t hurt. It wasn’t until the FANGs messed with the source of a politician’s livelihood i.e. the vote, that the FANGs fell under deeper scrutiny.

It is up to the individual to choose whether to use FANG services. I have little to no use for Facebook myself. Amazon, Google, and Netflix deliver pretty much what they promise: logistics and content. What’s amusing is that highly educated, professionals in the Congress have yet to figure out the business model that social media relies on for its survival.

I think it is best that the internet go back to what it was meant to be: a way to connect information seekers with data. The irony is that internet service providers have been providing their networks as a part of the larger data transmission scheme for over two decades but seem to be catching the most heat from congressmen that support the companies providing the most abuse.

Listening to the whiny left on net neutrality can leave you jaded about “edge” technology

Over the past week, a number of progressive grass roots groups and some 21 state attorneys general have filed suit in federal appellate courts seeking to overturn the Federal Communications Commission’s repeal of net neutrality rules that were promulgated in December 2015. This early in the process the petitions have laid out general assertions that the Commission’s decision to repeal was arbitrary, capricious, and an abuse of agency discretion.

In other words, the Commission, dominated by three Republicans to two lone Democrats, was given to sudden and unaccountable mood swings as it went from determining in 2015 that broadband access providers should be viewed as old style telephone companies to last year’s decision where the Commission now views broadband access providers as information service providers.

I don’t see how the left’s position, that the Commission should use rules for regulating a point to point communications service, is to increase broadband access for insular communities like the U.S. Virgin Islands and Puerto Rico. According to Commission data, 66% of population in U.S. territories lacks access to 25 megabit per second download, 3 megabit per second upload broadband access services.  The flexibility required for deploying more advanced broadband access services in U.S. territories like the USVI and Puerto Rico cannot manifest itself in a regulatory framework that requires a body of regulators give approval or delay proceedings necessary for approving the introduction of new services.

The real arbitrary behavior took place when the Commission, led by Democrat Tom Wheeler, actually persuaded two other Democratic members of the board and some four million naive voters and taxpayers, that the Commission was actually in a position to ensure traffic neutrality throughout the entire internet; from the voter and taxpayer’s laptop to her favorite porn site hosted on a server located in the Azores. For Mr Wheeler to premise a ridiculous expansion of the Communications Act on the assertion that the Commission, via regulation, could ensure that all traffic be treated equally on the internet only resulted in creating false expectations regarding service among a public that couldn’t tell you exactly what net neutrality is in the first place.

The Commission, now led by Ajit Pai, has, if anything, reintroduced some reality into communications regulation. The first reality is that Title II of the Communications Act of 1934 is not necessary for regulating advanced, broadband internet access services in the 21st century. Second, the repeal of the 2015 Wheeler order recognizes that providing American consumers with the best access to a global, interconnected computer network means being able to leverage the openness of the internet to provide new services in a permission-less environment.

It is ironic that the edge providers that want their subscribers to access their content on the highest quality communications networks are willing to endure delays that will certainly arise under a Title II regime that requires permission to innovate at every turn.

State regulators probably can’t wait for the return of net neutrality rules

Sovereign individuals are seeking refuge in cyberspace. Minimizing state intervention in the goings on in cyberspace should be a legal priority for those that want to engage and prosper in a decentralized internet. Imposing old telephone rules on broadband access providers under the guise of ensuring the democratization of the internet will have the opposite effect. The rules won’t create more freedom. It will squelch it.

What net neutrality rule proponents take for granted is the actual logistics of Title II regulation and the slippery slope that will emerge from old style telephone regulation of the prime conduit to the digital economy.

First, let’s look at regulation of the access piece from consumer to their internet service provider. Consumers will want this connectivity regulated, especially consumers that use cable modem services for their access. State regulators, who have long abdicated their participation in regulating access services, will find themselves struggling to get back into the oversight game. One argument for validating participation in regulation will be the regulators expert status as a protector of consumer interests. Most consumers know nothing about networks and will need the guiding hand of state commissions on issues of network management and transparency.

I will not be surprised if state commissions start requiring some type of price schedule that is made available for public viewing. Also, state commissions will find reasons for opening investigations into how network management may be impacting pricing. Lawyers and external affairs specialists will be in great demand.

The Federal Communications Commission and state public service commissions will take a more active role in rate design. In jurisdictions where they were abandoned, tiered rates be reintroduced. To make up for the dearth of broadband deployment in rural areas, states will now see an opportunity to authorize higher rates per broadband access line in urban areas in order to keep rates lower in rural areas. As more Americans move to urban centers, they will have to contend not only with higher housing prices but higher communications prices as well.

And I don’t see why wireless communications being spared the onslaught either. Dumping your landline may not be enough to escape increases in mobile phone rates designed not only to fund additional broadband deployment but to maintain universal service access to wire-line services by low income folks.

America was moving in the right direction by innovating access to the internet and in turn getting rid of a layer of onerous communications regulation in then form of state regulators. Net neutrality invites them back in.

 

What happens when the State abandons black Americans?

In their book, The Sovereign Individual: Mastering the Transition to the Information Age, James Dale Davidson and Lord William Rees-Mogg describe the demise of the welfare state with the political changes the information age will bring about. Those who can garner, manipulate, organize, distribute, and monetize information and use today’s digital technology to deploy this new capital from anywhere in the world will be able to achieve a level of individual sovereignty such that the protection services of the old nation-state will no longer be needed. The internet, cyberspace, will be their new jurisdiction, and with capital in the form of information, they will be able to carve out a minimized or tax-free environment in whatever physical jurisdiction they choose.

Information losers, according to Davidson and Rees-Mogg, won’t like this new world. This information-based economy will challenge their welfare state “employee” status. It is a welfare state employee status because in exchange for the “work” that they do at the polls i.e. their vote, information losers are awarded with transfer payments such as Medicaid, Medicare, food stamps, and low-income housing. As the hoarders of the new capital, information, choose lower tax jurisdictions, information losers are left holding the bag containing reduced benefits, the result of a lowered tax base.

The recent tax reform legislation passed by a GOP-led Congress and signed by President Donald Trump is a small indicator of the leverage the wealthy have, especially those who make their income as sole proprietors or partners in a business where they are now beneficiaries of a 20% reduction in the taxes they would normally pay on pass-through income. Congress and the President will now have to reduce or eliminate programs made infeasible by a $1.5 billion tax cut.

There is no guarantee that tax cut goody bags will be continually given out in the future. If the GOP loses both chambers of Congress in this year’s midterms, then Democrats will pursue a rewrite of the tax reform, or at least put on a good show effort.  I say a good show effort because the response by the wealthy will be, “Remember the two trillion dollars we have stashed overseas? How about we keep it there?”

Black Americans are not in the information age game even though blacks over-index on social media sites and, as a proportion of their population, own as many smartphones as whites and Latinos. Black Americans are under-indexed when it comes to employment in information technology. In an article for The Huffington Post, Jamal Simmons noted that black women may be able to scrape up $36,000 for a tech start-up, but white males scrape up on average $1.3 million in start-up funds.

And while blacks and Latinos continue to represent low single-digit proportions of actual STEM employees (technologists, mathematicians, engineers), there are plenty of black consumers of entertainment content on Facebook and Instagram. This content is low value. It differs from information which can be used as an input for production.

You may ask, “Don’t blacks have a right to consume entertainment?” My answer would be, “It’s not about rights to consumer content. It’s about channeling as much time and energy into mining and distributing information that creates knowledge that solves the deep well of problems in the black community.

Meanwhile, the State apparatus that blacks have disproportionately relied on for economic support and political protection is becoming bankrupt. Based on this recent tax reform, one would not sound too cynical in concluding that the GOP was in cahoots with the plot to blow it all up.  The information winners will not think twice about leaving information losers behind.

Government defined by distraction

The past 85 years have created an illusion as to what American government is. In the 1930s, government became a fuel injector for the American economy where the Executive branch pumped money into public works programs designed to employ idle labor. New regulatory regimes were created to regulate away the excesses of speculation and manage the extraction and use of natural resources.

By the 1960s, government took on the additional role of social justice guarantor, crafting and delivering legislation designed in part to further incorporate black Americans into national society and to provide other social services including healthcare to children and the elderly.

Through its military and science branches, government continued its research, development, and investment into computer networks and outer space. It was out of these activities that the internet was spawned allowing my five faithful followers to read this blog.

It is no wonder that Barack Obama said in 2012 with some authority the following:

“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”

The reality is that government as a noble entity is a myth; that the past eight plus decades have been a distraction from what we should only expect from government; that it is an entity that expands its control over jurisdictions anywhere in the world for the benefit of its financiers. What we should expect from government should be more in line with Donald Trump’s views on Iraqi oil:

“If we kept the oil, you probably wouldn’t have ISIS because that’s where they made their money in the first place, so we should have kept the oil, but, OK, maybe we’ll have another chance.”

While many were taken aback at the bluntness of Mr Trump’s statement, the President honed in on the primary expectation we should have of government, an entity that acquires and manages resources.

Americans have an issue with ugliness being exposed. They are weary of the guilt-fest they have endured over the past sixty years in particular, from scenes of police dogs attacking black Americans in Birmingham, Alabama to American military personnel being accused of murdering civilians in Iraq. But in the words of Mr Trump, “There are a lot of killers. We have a lot of killers. Well, you think our country is so innocent?”

Unbeknownst to him, Mr Trump summed up the core expectation of government; that of acquirer of resources. Any “noble” distribution is a response to the distractions caused by the powerless who are able to sneak into democracy’s nooks and crannies to agitate just long enough for social benefits that pale in size to the benefits flowing to the holders of government bonds. An irony, that there is distraction on both sides ….

 

A person living in the internet shouldn’t have to pay taxes

Nyota Uhura is on a quest to digitize herself. She creates digital product on her laptop, transmits her finished product to her clients via the internet, and gets paid primarily in cryptocurrency. Every now and then she accepts fiat currency issued by a nation-state in part because as a mini-sovereign she likes to have a reserve currency for emergency use or in case a hole-in-the-wall restaurant on a south Florida beach doesn’t accept BitCoin.

She probably spends too much time socializing in cyberspace. Facebook and Instagram keep her in touch with her brothers and sisters in Congo or her cousins in Brooklyn. As a busy creative she sends out for food via Uber Eats and uses Uber or Lyft to get around.

She is not naive about the public safety protection that Atlanta markets to its residents. She has a home security service that she communicates with via broadband. She uses her laptop as a surveillance camera courtesy of her broadband access provider. She keeps a shotgun and feels confident in her self-defense skills. If she were a pilot, she would avoid Atlanta’s biggest amenity, Hartsfield-Jackson International Airport and opt for the smaller Charlie Brown airfield.

Why then, she asks, should she even pay taxes?

Her friends rebuttal is that she should contribute to the public services that she uses to get around; that she should pay for use of the streets and use of the police protection. On a national level, she should support Medicare and the national defense, and social security because these programs help provide security for her future.

And she should be ashamed of herself for not showing the ultimate allegiance to her government by avoiding the use of America’s fiat currency. Her failure to use it, they argue, only negatively impacts the nation’s economy by devaluing the dollar through shrunken demand.

Nyota expected the canned rebuttal from her friends and family. She responds, however, with a rebuttal they are not prepared for, one based on value. Being coerced by a false sense of duty and obligation to pay for sub-par protection services makes no sense to her. She hasn’t bought in on the police’s public relations campaign that they are there to protect the public and would like her taxes reduced by whatever the city assesses as her contribution. She has no enemies in Russia, North Korea, Syria, Afghanistan, Iraq, or Iran other than the enemies created by U.S. policy. Since she didn’t create these enemies, she would also like her taxes reduced by the amount of her contribution to these services.

Nyota pays a sales tax when she eats a cheat meal at McDonald’s. She also contributes to the transportation tax when she pays her Uber driver for a lift to the grocery store. She literally works in another jurisdiction, cyberspace, and because of this, Nyota believes she should not have to pay a federal income tax, especially to a government that provides low value protection services.

A strong legal and political argument will have to be crafted and promoted to bring about these changes, but at least Nyota is thinking about exit.