Should Comcast and Verizon be allowed to enter the information mining game? Yes.

Overview

Proponents of the implementation by the Federal Communications Commission of net neutrality rules have been expressing outwardly that by ensuring no throttling of traffic from websites; no blocking access to favored and lawful websites; transparency when it comes to terms and conditions of service or network management; and the prohibition of favored treatment of one content provider’s traffic over another, that consumers of broadband services will be treated fairly and that edge providers will be able to innovate on the edge of the internet while competing with core providers.

While proponents have successfully convinced millions of Americans that net neutrality is about the consumer’s ability to democratize the web or have their voices equally heard among other, especially larger corporate voices, the real issue is whether core providers should be allowed to participate in the information markets or be kept out by making an 85-year old statute a barrier to their entry.

Battle in the Information Market

The statutory approach recommended by edge providers such as Facebook and Google to ensure that core providers such as Comcast and Verizon are reigned in is to apply Title II of the Communications Act of 1934. Edge providers make their bread and butter by mining information from visitors to or users of their website services and packaging that information into advertising products that they sell to businesses that are trying to get their services before as many eyeballs on the internet as possible.

The concern that the edge provider has with the core provider is that given the core provider’s “gateway” service and the core provider’s alleged monopoly or near monopoly control of the access to the internet, the core provider will then be able to capture consumer behavioral information that the edge provider has less access to.

The core provider, the edge provider will argue, is gathering this information from its telecommunications infrastructure; therefore, to ensure fairness, the core provider should not be allowed to call the telecommunications portion of his service an information service just so that they can skirt the information or data collection requirements under Title II.

By creating a net neutrality rule that says that core providers should treat access as a telecommunications service, the edge provider gets the government to apply a barrier to entry to the information market, a barrier that the edge provider has no confidence its superior information services can erect itself.

The Content Endgame: What Would Title II Do and Not Do

If Verizon wanted to use information “that relates to the quantity, technical configuration, type, destination, location, and amount of telecommunications service used by a consumer of a telecommunications service, that information, in general, would be limited in use to services related to the provision of telecommunications services. Verizon would not be able to use information related to the provision of telecommunications services to predict consumer demand for Verizon’s video streaming services.

Interpreting and applying Title II in this manner would help Hulu and Netflix keep Comcast and Verizon at bay. What it may also do is expose Hulu and Netflix’s pricing and cost structures during any public hearing resulting from Hulu and Netflix’s new roles as consumers of telecommunications services. Sections 204 and 205 of Title II provide the Federal Communications Commission the authority to set just and reasonable charges and to have hearings on those charges or on complaints regarding charges and price schedules. What Hulu and Netflix may not understand is that regulation of a market means scrutiny of both of its sides, and challenges to rates charged by a core provider means rebuttal that could include discovery of what economic rationale underlies an edge provider’s assertions. In short, Title II opens the Pandora’s Box for edge providers, too.

What Title II doesn’t do is tell Comcast or Verizon that they couldn’t collect consumer behavioral information from their websites or information portals. This “oversight” is further evidence of how arcane Title II is. A declaration by the courts that a core provider’s services are information services, from end user through a core provider’s entire network would be indication that the State recognizes that core and edge providers equally play in the information markets. Avoiding a balkanized, bifurcated view of broadband service provision would make regulation of advanced communications more efficient because of less time spent having to look at two separated pieces of internet service versus one.

The FCC’s Constitutional Quandry

But even if regulators continued down the two-prong path of regulating core providers, the end game would still be how to treat the content portions of their services. The Federal Communications Commission should not want to be in the position where it would take a hands-off approach to Facebook’s information mining techniques while taking a heavy handed approach to Verizon’s emerging content play. It would cause a constitutional dust up were the Commission to regulate the content of one service provider but not the content of another.

Conclusion

Core providers have the technical knowledge and desire to enter information markets and for that reason alone they should be allowed to profit from the development of content and the extraction and packaging of data that drives a modern economy. Core providers shouldn’t be punished because their basic business model includes the conveyor belts that information is placed on when being extracted. Imagine telling a coal miner that in order to foster competition, they will have to forego their conveyor belt and, like a firm that entered the market late and poorly capitalized, will have to use their hands and wheel barrel to move coal out of the mine. That is not competition but favoritism.

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The U.S. Virgin Islands and the Global Clusterfuck

So, the U.S. Virgin Islands is facing a slight but increasing risk of being caught in the crossfire of an energy war masked by rhetoric about the importance of democracy in South America, rhetoric equally orchestrated by Nancy Pelosi, the Speaker of the U.S. House of Representatives, and a boisterous president of the United States, Donald Trump, who likens himself as the Don King of Manhattan real estate.

Both have given their support to the president of the Venezuelan legislature, Juan Guaido who has declared himself “interim president” eight months after the democratic election of the current and unarguably inept president. It does not faze the Speaker of the House that Mr. Guaido’s politics are more right-wing than the politics of the Democrats who are falling in line with Mrs. Pelosi.

Nor has it apparently fazed the newly elected administration in the U.S. Virgin Islands that Russia, given its energy and other economic ties to Venezuela, decides to piss on the Monroe Doctrine and orchestrate some type of military action, that the U.S. Virgin Islands, which has a couple Russian subs sitting outside of its harbors on any given day, would be a sitting duck, a perfect target for the Russian Bear.

Let’s face it, USVI, the United States didn’t shell out $25 million back in August 1916 just to have a few beaches to visit. The USVI is still at least a second tier, ready-made submarine base and taking the territory would make Vladimir Putin the new Jack Sparrow of the Caribbean.

While the likelihood of the above scenario is small, people of the Virgin Islands, especially those who have very limited means to exit, should have two takeaways from this discussion.

First, you are part of a geopolitical clusterfuck, and given the U.S.’s responses to the territory during hurricanes, you should not be surprised when the U.S. government treats you like so much spoiled milk and collateral damage during a military action.

Second, current leadership needs to grow some balls and think beyond carnival. When potential crises like this one arise, USVI leadership needs to be more forward thinking and outside the box…. assuming you think your people are worth it.

I don’t see Nancy Pelosi’s State of the Union “power move” as a power move at all

Speaker of the U.S. House Nancy Pelosi yesterday sent President Donald J. Trump a letter withdrawing her invitation to the President to deliver his State of the Union address before the entire Congress in the House chamber. Mrs. Pelosi cited lack of funds to provide a secure venue for the event. The move has been cited by some as a power move that scores political points for Mrs. Pelosi and her Democratic Party as 2019 sees the potential challengers for the Oval Office come out of the wood works.

It is not necessary for Mr. Trump to deliver a report on the State of the Union via a speech before Congress. As Mrs. Pelosi herself pointed out, pursuant to Article II Section III of the Constitution the President, “shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient … ”

Mr. Trump can simply send an executive summary attached to a voluminous report addressing how the political economy of the United States is doing. The “State of the Union” is constantly on display, given access to economic material found online and the constant buzz of a 24-hour news cycle.

This move by Mrs. Pelosi could backfire even in light of the move scoring short term points with the party faithful. This is the era of the internet and the 24-hour news cycle previously mentioned. Mrs. Pelosi, rather than subjecting Mr. Trump to an Obama-Wilson moment where a Republican congressman from South Carolina, Joe Wilson, called former President Barack Obama a liar during an address before both chambers of the Congress in September 2009, seems to be letting Mr. Trump off the public embarrassment hook. Democratic boo birds would not have passed at the chance of subjecting Mr. Trump to vocal push back during a partial government shutdown.

Instead, Mrs. Pelosi risks having Mr. Trump look (or at least attempt to look) Kennedy-esque as when during June 1963, President John F. Kennedy addressed the nation in the aftermath of threats of violence at the University of Alabama in response to racial integration efforts at the university. Mr. Trump, ever the marketer, has options in the 21st century. He could, for example, pack a fairground or gymnasium with thousands of middle Americans and deliver his interpretation of the State of the Union without the blandness called for in the formal setting of Pelosi’s House. With cable news, C-SPAN, and the internet as his platform, Mr. Trump could signal a willingness to circumvent the Democratic-controlled House by speaking directly with no filter to the American people.

In the end, Mrs. Pelosi’s power move may end up looking like a sour move.

For Christmas, give yourself a new brand of representative democracy

Every two years we hear candidates for election argue that incumbent representatives are not accountable to the public; that incumbents make political and public policy decisions that are in opposition to the public interest. We hear arguments that incumbents have served in office too long and that they should be term-limited either by law or by the voters. But instead of change, we usually see voters sending incumbents back to office to continue the supposed damage. Maybe it is time to call the voters’ bluff. Maybe it is time to give the voter more control of the process by implementing a new indirect voting system for national leaders; a voting system where the voter is the troll under the bridge.

In my opinion, a more electorally effective voting system i.e. the troll system creates a concrete connection between state and national elections. An electorally effective voting system would put a U.S. congressman or senator’s electoral fate in the hands of state legislators and vice versa.

Specifically, the system would allow direct elections of state representatives by a state’s citizens, just like the states have today. However, instead of popular vote for representatives to either chamber of the U.S. Congress, state legislators would be responsible for selecting these federal representatives.

And instead of popular or electoral college vote for the president, the Congress would be responsible for nominating from their body candidates for president and vice-president. Preferably, the U.S. House would select the president while the U.S. Senate would select the vice-president who would continue her dual role as president of the senate.

One advantage of this system is that it ties the state and federal levels of representative government. If national representatives and the president fail in their management of the political economy, state representatives who hold the responsibility for vetting national representatives would incur heavy political liability up to and including removal from office. Removal or the threat of removal from state office would translate into lost support for national representatives who may find themselves heading out the door at the end of their terms.

Another potential advantage is a better alignment of political choices with the political values of the electorate. It has been argued and observed by pundits, commenters, and analysts that America is a center-right nation, yet the political noise has emanated from the fringe elements of its two major political parties or that the two major parties represent the more radical voices in the Left and Right of the electorate. Under my proposed system, state legislators may focus their search for national representatives on candidates who best represent a middle of the road, collaborative characteristic of governance and policy making, thus ensuring that national representatives are in line with the political culture of a plurality of the electorate.

Another advantage of the troll system is that it would severely reduce campaign expenses. Most campaign spending would occur on the state level as candidates vie for the state houses out of which national representatives will come. While the political action committee system that owes its success to its flyover view of the electorate would take a hit, the upside is that resources will have to be spent on the ground. Local advertisement as well as old fashioned “knocking on doors” campaigning will gain new life because voters would be able to impart consequences on elected officials more efficiently, with only one visit to the voting booth.

Another advantage to consider is that candidates on the state level may be forced to admit up front what their stances are on national issues thus further tying the consequences of poor national management of the political economy to state politicians. Candidates for state office will have to take a more holistic and cohesive view of the political economy; being more thoughtful of the role their jurisdiction plays in extracting, managing, and distributing resources.

I have merely scratched the surface on alternative views on democracy. An increasing number of commenters have been pondering democracy’s inability to allocate resources, capital, and opportunity to citizens and elected officials can only brush off how complicit they are in the problem but for so long.

The American voter bears significant burden as well. Her burden emanates from an unwillingness to promote evolution of the electoral system. So enamored or frozen by tradition that the voter believes that pursuing improvement of the system of change in leadership by replacing it is somehow heresy. It makes me wonder about a people who go bonkers every July 4th celebrating revolution but are lazy when it comes to electoral evolution, willing instead to suffer through the inequities in the name of tradition.

A misinterpreted federalism narrative fuels more misinterpretation of net neutrality

A number of state legislatures are ramping up for their legislative sessions where they will pass bills addressing various matters from funding their governments to other state government operational issues to civil rights to fighting crime. I have been giving some thought to the sovereignty of states, to these so-called laboratories of democracy and I am starting to question just how sovereign states are? As I read between the four corners of the U.S. Constitution, I am at a point where I don’t believe states were meant to be sovereign. Instead, states are merely administrative lordships existing to better manage the population, manage the extraction of resources, and convert citizens into tax coin. The U.S. Constitution makes clear that the extent of their powers is set by the federal government, not the other way around, and the regulations of state powers, in my mind, eliminates any claims to sovereignty.

The Tenth Amendment of the U.S. Constitution is usually referred to when describing the extent of state sovereignty. It reads:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

The Tenth Amendment reads like a “shifting screen”, where the federal government via legislation passed by the Congress or changes in how the administrative states interprets its rules, can determine the amount of power it will either delegate or take back. We have seen over the last 85 years how the federal government has used the U.S. Constitution’s commerce clause to support laws and extend regulations into social and commercial relationships that on the surface seem confined to a particular state, bakery, or bedroom. With changes in presidential administrations or U.S. Supreme Court membership, we also expect to see changes in this shifting screen as public policy, regulations, or court rulings redefine federal and state powers.

Besides, how sovereign can a state be if, as spelled out in Article I, Section 10 of the U.S. Constitution, it is not allowed to enter into any treaties or alliances with other national governments? How sovereign can a state be if it cannot mint and issue its own coin? How sovereign can a state be if it cannot, without the consent of Congress, assess duties on imports and exports? How sovereign can a state be if it cannot even maintain troops and ships in time of peace?

In the net neutrality debate where a number of states, either through legislation or executive orders issued by their governors, states have made the assumption that promoting how an advanced communications network is to be managed is a power reserved to the states under the U.S. Constitution. The internet, as an advanced communications network, is a platform responsible for moving an increased amount of commerce across state and international borders. As a channel for commerce, its regulation falls under the jurisdiction of the Congress, as determined by Article I, Section 8 of the U.S. Constitution. This alone, in my opinion, invalidates any attempts on the part of the states to use the net neutrality narrative to regulate the internet.

I would go one step further. Net neutrality is a management philosophy stemming from the business judgment of network managers and designers. It would not benefit a network manager to provide the public access to an interconnected global network of computers if that manager blocked its subscriber’s access to certain websites.

Nor would it make good business sense to degrade a subscriber’s experience by slowing down the speed of traffic from a subscriber’s chosen content provider. And given the level of competition between network providers, being transparent about prices and charges that a network manager’s subscribers face not only increases the level of faith subscribers have in a network, but also gives the network manager an edge over other competitors. She would be seen as being considerate to her subscriber’s consumer protection interest, a position a network manager can ill afford to ignore in these days of privacy violations.

Because of the interstate nature of the internet, the responsibility lies with the federal government to ensure the above net neutrality principles are met. State governments, as administrative lords over certain populations and territory, should focus on aligning their state advanced communications policy with national policy, including properly administering any national funds allocated for encouraging the deployment of advanced communications. To interpret “state sovereignty” as permission to go one’s way would disrupt the interstate nature of commerce and its regulation by a central government.

Rather than regurgitating the standard rhetoric of “states’ rights”, policymakers need to take a fresh look at federalism and adjust its meaning to the proper interpretation under the four corners of the Constitution.

Does an “open internet” promote a representative democracy? No, because democracy is not its job

Techopedia defines the open internet as “a fundamental network (net) neutrality concept in which information across the World Wide Web (WWW) is equally free and available without variables that depend on the financial motives of Internet Service Providers (ISP).”

The political debate over net neutrality over the last three years has focused on the ability of ISPs such as Comcast and AT&T to discriminate against third-party content provider traffic in favor of ISP content, to the extent that ISPs are expected to use their gateway status to slow down traffic from certain websites or outright block subscriber access to certain websites.

The internet as a platform plays an important role in American commerce as American consumers are expected to spend an estimated $7.8 billion on Cyber Monday. Net neutrality violations could mean lost advertisement revenues for content providers who are unable to get their products and advertisements in front of consumer eyeballs.  Being cut out of $7.8 billion of revenues during the holiday season could pose an existential threat for small businesses depending on those holiday sales to break even or stay in the black.

Besides the issue of staying in the black is the issue of whether an open internet promotes the components of American political culture; whether an open internet or lack thereof poses an existential threat to the American republic.  I think as currently construed, an open internet does not pose an existential threat to the American republic. On the contrary, when it comes to navigating the political-economic environment of the United States, knowledge on how well American representative democracy is working is best ascertained by reviewing hard political-economic data published by public agencies or academic or other research institutions.

The open internet has inundated the political economy with junk. It has Americans sacrificing value of specialized information for volumes of narcissistic junk.

First, why has the internet not eroded the American republic?  Contrary to the hoopla surrounding assertions that the Russian government sponsored psychological warfare on the American electorate during the November 2016 elections, the populace participated in the selection of the electors that voted for the president of the United States. More votes were cast for president in 2016 (135,719,984) than were cast in 2012 (128,768,094).

In addition, what I refer to as “insurgent” parties, i.e., the Green Party, the Libertarian Party, etc., did better in 2016 than they did in 2012.  The Gary Johnson-led Libertarian Party ticket picked up approximately 4.5 million votes in 2016 compared to 1.3 million votes in 2012.  The Jill Stein-led Green Party almost tripled its 2012 showing during the 2016 campaign, with approximately 1.5 million votes cast for the Green Party in 2016 versus approximately 470,000 votes in 2012.

Rather than eroding representative democracy, an argument could be made that the internet provided less expensive outlets for insurgent parties to get their messages out to the voting public.  I saw more of Gary Johnson and Jill Stein on YouTube than I did mainstream press.

America’s founding aristocracy chose a republic as the best vehicle for promoting the three major components of American political culture: liberty, equality, and democracy.  Does the open internet help promote these characteristics of American political culture? I would argue only if the government expressly decides to use the open internet itself in order to accomplish these goals or requires by charter that every private entity operating on the internet do so.

Liberty is freedom from government control where Americans expect a great degree of economic and personal freedom without the government unreasonably regulating personal and commercial behavior.  The open internet itself does not have this responsibility. In the end it is just a communications platform.  Problems would arise if government were to use the internet for surveillance purposes, i.e., use deep packet reading to ascertain what messages you are sending over the internet or, under the guise of “smart city” technology, surveil minority neighborhoods to regulate citizen movement.

Nor does the internet have the responsibility of creating political equality. Political equality refers to the right to participate in politics equally based on the principle of “one person, one vote.”  Notwithstanding the alleged Russian interference in the 2016 general elections, the “one person, one vote” characteristic of American political culture is, again, the responsibility of national and state governments.  Online voting as a concept is in its infant stage.  And while the Russians allegedly interfered by waging a messaging campaign via social media, there were other outlets, both online and offline, where Americans could get their information and strengthen their “one vote” with knowledge.

Lastly, there is democracy itself, the right to cast that one vote for the candidate of your choice.  How does the unimpeded flow of information across 100,000 interconnected global computer networks impact your ability to choose a leader? The above discussion summarizes the answer: it doesn’t.  Yes, one could go to the internet and look up information on a candidate, but there are millions of Americans with no access to broadband that function normally in society; that buy groceries, go to work, and yes, vote, without having to access the information floating around the internet that is deposited by various sources.  Besides traditional media, they probably access information from the original sources i.e. city council meetings; public access television, government agency public information offices, and make just as accurate a political decision as the woman surfing the internet in her bunny sandals and pajamas.

Yes, the internet has afforded millions of people to express themselves in cyberspace via blogs, websites, podcasts, and online videos, but the open internet neither promotes or hinders democracy.  Only humans can and there are other sources of information through which humans can accumulate knowledge on liberty, equality, and democracy.  Democracy is the responsibility of government and its citizens.  The open internet is neither savior, devil, or panacea….

The “economy” is doing better but I am seeing more homeless in Atlanta

I am seeing more homeless people in my West End Atlanta neighborhood. I have seen at least one sleeping in his vehicle. Others make use of the parks to sleep at night.  What I see on the ground does not coincide with the claims made in Washington of a booming economy.

WABE, citing data collected from the city of Atlanta, reported that the homeless population numbers around 3,000 people and is allegedly on a decline.  And last year, the Atlanta Journal Constitution reported that Atlanta ranks among America’s neediest cities based on 21 metrics including child poverty and the number of uninsured. Homelessness is the result of a number of factors including the lack of affordable housing, poverty, discrimination, and shifts in the economy. Can city policies adequately impact these factors?

Take the factor of affordable housing. Atlanta mayor Keisha Lance Bottoms has made affordable housing one of her top public policies, but it appears to me that such an approach falls out of line with one important goal of a city: to generate tax revenue necessary for providing the amenities that keep citizens interested in living in Atlanta.  Land owners want to see property values rise and see an increase in the revenues that their properties generate.

Also, as city leaders continue their efforts to make Atlanta a job center, they have to keep in mind that as part of the efficiencies offered by a city is the location of housing close to job centers.  Housing located close to job centers may also end up being some of the most costliest housing.

I ride into Buckhead every day from southwest Atlanta. I have blogged before about how the MARTA train feels more like those conveyor belts loaded with coal that go into a furnace to fuel a production facility.  In this case the human coal are the lower and middle income individuals heading into Buckhead to work a job that, ironically, may be on the chopping block in a few years due to artificial intelligence.  If these people can’t afford to live close to an employment center where they can walk to work, the pressures of living will really increase when they have to find alternative employment.

But even with current employment, there may not be enough affordable housing available because landlords will be under pressure to meet rising property taxes resulting from the increased values of their properties, at least in the short run. This rise in value and ensuing property taxes will result from increased demand for housing that Atlanta expects to face over the next ten years.

Let’s not forget the upward pressure expected on interest rates over the next two years.  Property owners will have to increase rents in order to cover higher mortgage rates.  For the city of Atlanta it means higher bond servicing costs as the city continues to raise money through bond issues for its development and operational needs.

Affordable housing, because of the above pressures, won’t increase in supply.  Only an economic downturn may bring about cheaper rentals but even that will be short lived because a downturn in the economy means a slowdown in hiring and the specter of non-affordability due to increased lost income.

Politics wise, it is time for elected officials, particularly Democrats, to eliminate the affordable housing mantra from their campaign slogans.  They won’t be able to achieve it at any meaningful scale.

 

Trump and the Federal Reserve: Governing with transparent purpose

Listening to the rhetoric of President Donald Trump over the past 19 months, if I were to summarize the role of government, it is to defend national borders, sustain an environment that creates jobs, and be impactful in driving up stock market values.  Mr. Trump has effectively drowned out the Republican congressional leadership to the point where I don’t care what Senate Majority Leader Mitch McConnell or Speaker of the House Paul Ryan’s views on what the government’s role is supposed to be.

Under my interpretation of public administration, the buck, when it comes to governing, begins and ends with who is in the White House.  It is the Executive who enforces the law and interprets the law every day given a particular problem.  An argument can be made that during the run-up to the 2020 presidential election, the views of Mr. Trump’s challengers will take on some importance as voters compare the record of Mr. Trump with the promises of his Democratic challenger, but Americans have a way to go before the Democrats settle down on a few contenders and beginning pushing their messages before the electorate.  All we have right now are the whispered names of Andrew Cuomo, Elizabeth Warren, Joe Biden, and, yes, Hillary Clinton.

I suspect that none of the above named Democrats will be serious contenders in the spring of 2020 anyway.  Listening to the roll call of potential presidential candidates is like believing that the baseball team leading their division eight weeks into the season will be in the World Series much less holding the trophy.

In my lifetime, Mr. Trump has been the most transparent of presidents when it comes to the factions that he promotes.  Mr. Trump has been consistent and clear with his America’s economy first message. He took Mr. Trudeau out to the woodshed during the renegotiations of the North American Free Trade Agreement.  He kept his word on pulling the United States out of the Paris accords on climate change and the Trans Pacific Partnership Agreement.  He will not enforce the mandate that taxpayers are required to purchase health insurance, facing penalties if they don’t.  These initiatives are driven by a philosophy of American economic nationalism with the hopes of creating incentives for American businesses to repatriate jobs and cash to America’s shores.

He’s recently been transparent about the most important engine in the American economy: the Federal Reserve.  Mr. Trump disapproves of the Federal Reserve’s increase in the target for its federal funds rate, even though the Federal Reserve’s independence gives the central bank the okay to thumb their noses at the President.  The federal funds rate is the interest rate at which the Federal Reserve’s member banks may lend each other money overnight.  Changes in the fed funds rate seep into the overall economy in the form of mortgage rates, credit card rates, and interest rates on bonds.  Higher rates raise the costs of borrowing making it tougher for businesses to invest in growth including hiring more labor.

Higher rates mean that the economy’s “labor to tax conversion mechanism” becomes less efficient.  The labor to tax conversion mechanism is that layer of the economy where companies convert human resources into tax dollars by adding labor to payroll and collect and transmit income, payroll, and social security taxes to the Treasury.  Tax dollars are collected by the U.S. Treasury and either deposited for future spending on public programs or to service the debt.

But as I alluded to before, companies will feel constrained by interest hikes as they see revenues and profits reduced by higher costs for doing business. This may mean, depending on the business, a move toward automation in order to reduce labor costs.  Taking labor off of payroll means removing a head that could be taxed.  Will government have to apply some type of alternative tax applicable to an artificial intelligence that replaces a human intelligence on a factory line?

Going back to transparency, neither Mr. Trump or any leading Democrats have clearly demonstrated an ability to describe to the American public how their current economic environment works.  Neither begin any of their discussions on the economy with a discussion on capital or describe how the central bank is still the only game in town and the relationship to and importance of the central bank to all Americans. Mr. Trump has come the closest which means at this time he is the only elected official that gets it.

 

Does Facebook’s business model disrupt the political information markets?

Facebook is engaging in a war against misinformation and divisiveness in the United States as perpetrated via social media, according to published reports by Bloomberg and The Atlanta Journal Constitution. Having done a 180 degree turn from its position last year that its platform was not used to cause a disruption of public opinion leading up to the 2016 presidential election, Facebook is using artificial intelligence tools to identify inauthentic posts and user behavior.  With teams comprised of data scientists, policy experts, and engineers, Facebook is blocking fake accounts and vetting news stories posted on its site.

Critics doubt that Facebook’s attempts to thwart future social media influence will outweigh its incentives to distribute fictional political stories that keep people glued to Facebook while providing advertisers with millions of pairs of eyeballs.  Facebook, according its 10-K annual report, garners almost of its revenues from advertising.  In 2017, advertising made up 98% of Facebook’s revenues.  According to Facebook’s 10-K, at the top of the list of factors that could adversely impact advertising revenues: decreases in user engagement, including a decline in the time spent using the company’s products.

Having used Facebook for eleven years, I witnessed the increase in the use of the platform as a tool for political engagement.  Facebook has expanded opportunities for voters to vet politicians and their policies.  I have seen a significant number of posts, including memes and video, that got the facts wrong; that showed no knowledge of process, politics, or economics.  Cynicism, fear, passion, inaccuracies, sincerity, patriotism, anarchy, and indifference all run rampant on Facebook.  But do I buy the argument that messages placed on Facebook by Russian agents spread so much misinformation that America became suddenly divided overnight? That “Russian interference led to a Trump victory?

No.  The divisiveness was already there.  Giving a couple hundred million Americans the ability to quickly share their thoughts, accurate or not, on the political news of day simply tore away the scab.

Further evidence of divisiveness in American politics: print, broadcast, and cable media.  American media is meeting the demand of a divided public, with Fox News occupying the Right and MSNBC and CNN serving the frenzied Left.

What Washington may truly be afraid of is that politicians have less control over the channels through which they are vetted.  On the one hand, Jeffrey Rosen, president of the Constitution Center, shared the following with The Atlantic’s Jeffrey Goldberg:

“Twitter, Facebook, and other platforms have accelerated public discourse to warp speed, creating virtual versions of the mob.  Inflammatory posts based on passion travel farther and than arguments based on reason.  We are living, in short, in a Madisonian nightmare.”

On the other hand, Americans may be taking to Facebook, YouTube and Twitter in search of alternative opportunities to criticize the political packages and action plans that politicians offer in exchange for votes and increases in taxes.  The divisiveness may be stemming from an increased lack of enchantment with democracy itself.  After all, according to Professor Yuval Harari, democracies are “blips in history” depending on “unique technological conditions” and losing credibility as democracy faces more questions about its inability to provide for and maintain a middle class.

Democracy is hard up to explain why almost all the nine million jobs created post recovery from the 2007-2009 recession have been “gig work” paying little to no benefits.  Democracy has yet to come up with a solution to a wealth gap that the Left invests time in describing, laying blame at the feet of the rich yet coming up with no solutions for a society that prides itself on equal access to the ballot but still comes up short on adequate access to capital.

To the question whether Facebook’s business model has disrupted the political information markets, I would, for now, answer yes.  Facebook has contributed to bringing unreasonable, uninformed voices into the arena. I for one do not want to be lead or have policy fed by impassioned, unreasonable voices, no matter what part of the spectrum they fall on.  What the political class may have to look at for in the near term is that democracy may be less of a facilitator of a peaceful transfer of power between its factions as the mob continues to peel away the scab.

 

 

It will be up to people, not tech, to make government not relevant

Peter H. Diamandis penned an article recently that discusses whether technology, particularly artificial intelligence, will make government irrelevant. Failure to keep up with private sector digitization combined with declining trust on the part of its citizens, argues Dr. Diamandis, contributes to emerging technology knocking government off of its dominant perch.

While I see government remaining behind the private sector in the adoption of artificial intelligence, I don’t see the concept of government going away anytime soon.  If anything, at least in the short and intermediate run, emerging technologies are going to be used to augment what government does.

In addition, at the risk of sounding metaphysical, until humans can abandon corporeal form, they will always need access to physical infrastructure in order to get to work or entertainment venues or have goods transported between physical points.

Part of government’s role, the role that allows it to maintain its dominant perch, is its responsibility for maintaining and administering physical space.  Government in the United States, through its public works initiatives, leverages less than five percent of total national capital to carry out this role.

The American Public Works Association defines public works as the following:
“Public works is the combination of physical assets, management practices, policies, and personnel necessary for government to provide and sustain structures and services essential to the welfare and acceptable quality of life for its citizens.”

Public works is an increasingly information intensive endeavor and rather than allowing an emerging information economy disrupt government’s public management of physical jurisdiction, I see government using the information markets to strengthen its influence and control.

Some local and state governments are at the crossroads when it comes to extracting, organizing, and leveraging information and information technology in order to maintain their viability.  As Michael Ward wrote in 2015 during an assessment of the use of information technology by local and state government in Massachusetts, many of the Bay State’s agencies were not taking full advantage of data especially when it comes to determining how effective their local and state government programs are.

What Mr. Ward found were local and state agencies in general and public works agencies in particular using inadequate work order systems, relying instead on antiquated technology such as Post-it notes and e-mail.  He also found that in the era of big data, machine learning, and deep learning that not only were data entry skills lacking, but also lacking were the skills necessary for analyzing data.

But government, at least on the local and state level, doesn’t appear quite ready to abdicate its role in developing or deploying public infrastructure due to a failure to use data adequately.  One example is local government exploration of the use of geographic information system technology for public works projects.

National Geographic defines a geographic information system as a computer system for capturing, storing, checking, and displaying data related to positions on Earth’s surface.  There is an efficiency resulting from this type of mapping tool as it allows various amounts of data, i.e., vegetation, buildings, roads, etc., to be shown on one map. Combining various types of data allows easier analysis of patterns and relationships.

ESRI, in a 2006 white paper, provided examples of best practices for local governments that choose to use this tool for data gathering and management.  Extracting and sharing data within public works agencies and with other local government agencies is one benefit.  According to ESRI, public works employees can tap into data collected by GIS in order to create maps,, design new projects, build infrastructure, and manage existing assets.

But if information technology such as GIS exist, why the concern that government may become irrelevant as a result of emerging technologies such as artificial intelligence, deep learning, and machine learning?  Is it just wishful thinking on the part of libertarian-leaning technologists?  Is it a belief that technology is deterministic of how political power is going to be balanced or exercised? Is it the perception that government is notoriously slow to respond to change?

The answers to the above questions may be “yes”, but I believe that the existence or relevance of institutions such as government lays in the hands of the humans that created them.  Government and politics are social relationships that may be enhanced by technology.  Technology does shape how social and political actors engage each other, whether from attending a town hall meeting in person in 1960 to listening in via telephone in 1984 to streaming it live and watching on a smart phone in 2018. It won’t change, however, the need for humans to form factions that compete against one another for the control and management of public resources.

Government will remain relevant. In what form is always the question.