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Dodd-Frank Under Fire

Published by Anonymous (not verified) on Wed, 08/02/2017 - 4:51pm in

Tags 

finance, Politics

Over the weekend, Bloomberg reported:

As he prepared to sign orders designed to roll back bank regulations
enacted to stop the next financial crisis, President Donald Trump said
that the rules are stifling lending.

“We expect to be cutting a
lot out of Dodd-Frank, because frankly I have so many people, friends of
mine, that have nice businesses and they can’t borrow money,” Trump
said on Friday. “They just can’t get any money because the banks just
won’t let them borrow because of the rules and regulations in
Dodd-Frank."

While rolling back restrictions on the financial sector seems contrary to the Trump administration's populist veneer, it is consistent with what he said he would do during the campaign.

We can expect more misleading rhetoric about "holding" capital, like this from former Goldman Sachs president Gary Cohn, who Trump has appointed director of the National Economic Council:

“Every place a bank needs to hold capital and they need to retain
capital prohibits them from lending,” Cohn said in the interview. “So
we’re going to attack all aspects of Dodd-Frank.”

As the article (admirably) explains:

Banks don’t actually “hold” capital. In banking, capital refers to the
funding they receive from shareholders. Every penny of it can be loaned
out. A 5 percent minimum capital requirement means that 5 percent of the
bank’s liabilities has to be equity, while the rest can be deposits or
other borrowing. The more equity a bank has, the smaller its risk of
failing when losses pile up.

On their blog, Cecchetti and Schoenholtz summarize findings that higher capital not detrimental to lending.

Its not clear that Congress will undertake a full repeal of Dodd-Frank, but there are plenty of ways it can be weakened.  Brookings' Robert Pozen outlines some of the things that may happen.  At Vox, Matthew Yglesias argues that Dodd-Frank has been successful.  This paper by Martin Baily, Aaron Klein and Justin Schardin provides a more detailed assessment of its provisions.  John Cochrane has favorable views of some of the Republican alternatives, though its far from certain that there will be action on them.

The administration is also halting the Labor Department's "fiduciary rule," which requires investment advisors to act in the interest of their clients.  Cohn's defense of this action seems rather strained:

"I don't think you protect investors by limiting choices," said Cohn, who previously was Goldman Sachs' COO.

"We think it is a bad rule. It is a bad rule for consumers," Cohn told The Wall Street Journal.
"This is like putting only healthy food on the menu, because unhealthy
food tastes good but you still shouldn't eat it because you might die
younger."

See columns by Steve Rattner, Paul Krugman and Mike Konczal.

Overall, the administration's approach to financial regulation may have short-run benefits to the financial industry, and its not surprising that financial stocks largely drove the gains in the stock market after the election.

Looser reins and more profits on Wall Street also likely mean bigger bonuses - before the crisis, financial industry compensation had been a substantial contributor to widening income inequality, and that trend seems likely to resume.

Rolling back or watering down Dodd-Frank also will increase the likelihood of another financial crisis, which we should know all too well from recent experience can have severe negative effects on the economy as a whole - from January 2008 through December 2009, nonfarm payrolls dropped by 8.6 million before beginning an agonizingly slow recovery.

Trashing the fiduciary rule and increasing the likelihood of future financial crises will also be detrimental to Americans' efforts to save for their retirements.  While there's been a short-run boost to financial shares, overall, the risk of severe losses is increased, as is the likely proportion of savings that will be eaten up by fees.  That is, Americans will be poorer and less financially secure in their old age.

Populism, indeed.

Update (2/12): CNBC's Ylan Mui reports on efforts by Jeb Hensarling, chair of the House Financial Services Cmte., to go after the CPFB.  The NYT has an op-ed by Vanguard founder John Bogle on the fiduciary rule.  Meanwhile, at the Fed, Daniel Tarullo, who has led efforts on regulation, is stepping down from the board, causing financial stocks to jump.

Economic Implications of the Immigration Order

Published by Anonymous (not verified) on Mon, 30/01/2017 - 5:18pm in

Tags 

Politics, trade

The most troubling aspects of President Trump's immigration executive order are the moral and national security implications (the later is outside my area of expertise, but its hard to see how betraying our friends, alienating our allies and handing an easy propaganda victory to our enemies advances the stated goal of protecting America).

The economic implications are pretty bad as well.  Although the order currently applies only to people from seven countries, the spectacle of people who've jumped through all the bureaucratic hurdles to get permission to come to the US being detained and turned away at airports by a sudden, incompetently planned and implemented policy change will no doubt deter many others from wanting to come.

In the short run, making it less attractive to come to the US will hurt our tourism and education exports.  In the longer run, it will harm our productivity by diminishing our universities, science, technology and human capital.

One of Trump's stated economic concerns is the US trade deficit, which was -$499.5 billion in 2016 (2.7% of GDP), according to the BEA's advance estimate.   While the US trade balance is negative in goods (-$770.5 billion) that is partly made up for by a $271.1 billion surplus in services.

According to the ITA, the US had 77.5 million visitors in 2015, and Colorado had 461,000.

Tourism is an important part of US service exports.  2016 figures aren't available yet, but in 2015, according to the BEA, $750.9 billion in service exports included $122.4 billion in "other personal travel" (i.e., non-business travel not related to health or education). 

The order won't only deter tourists; in addition to tourism, education services are another major US export.  According to the Institute of International Education, there were just over 1 million international students enrolled in US colleges and universities last year.  In 2015, the US exported $35.8 billion of education-related travel, which includes tuition paid by international students.

In addition to contributing to US GDP and exports, international students play a vital role in US higher education.  At the undergraduate level, an important part of the experience is learning from one's peers - the presence of international students on our campuses enhances the educational opportunities for everyone.

International graduate students play a significant role in the life of our research universities, particularly in the sciences (and economics!).  The impact of the order was felt immediately by scientists (see also this story).  According to the NSF, international students earn more than half of the doctorates granted in the US in mathematics and computer science and engineering and over one third in physical and earth sciences.

The ability to attract hard-working, talented students from around the world is a source of strength for American university research and one of the reasons US institutions dominate global rankings.  US leadership in many fields also means that many of the faculty in US institutions are immigrants and green card holders.

Technology companies have spoken out about the impact of the immigration order on their workforces, but the impact will be more widespread - according to the NSF, 21% of the US science and engineering workforce is foreign born.

If the grad students, post-docs, scientists and engineers who are so vital to our universities and industries find America a less appealing place to live and work - for example, if they have to worry that if they leave to visit relatives, they risk not being able to get back in - they have other options.  The competition for talent is global, and this hands an advantage to non-US universities and businesses.

America is great, but President Trump's order will make it less so.

Drawing the Line: Toward an Aesthetic of Transitional Justice

Published by Anonymous (not verified) on Sat, 07/01/2017 - 2:21am in

Tags 

Politics, Justice, Law

This Postcolonial Writing and Theory Seminar is on 'Drawing the Line: Toward an Aesthetic of Transitional Justice' with speaker Carrol Clarkson (University of Amsterdam).

GHWB to HRC, macro Trumps with varying endowments

Published by Anonymous (not verified) on Wed, 09/11/2016 - 6:47am in

George Herbert Walker Bush and Hillary Rodham Clinton were each heralded as “most qualified ever” while lacking the most typical qualification (governor), are centrists both relative to their respective parties and any broader political spectrum, and supporters of U.S. supremacy. Bush was given a tremendous gift (the collapse of the Soviet Union), but he and each subsequent temporary dictator utterly failed to secure lasting peace. Clinton starts with a tremendous burden (increasing tensions with Russia and China).

Donald Trump behaves like a petulant child. This is unacceptable and fortunately there’s very little chance he’ll become temporary dictator. But recognize that we expect national leaders to make nations behave like Trump: never wrong, prestige is paramount, never constructive engagement, always construe narrow self-interest as justice, emphasize deals over more important self-reform, peace is an outcome of winning, not the primary goal.

Will Clinton steer towards peace or calamity? Surely the latter, as she will do the expected as a national leader: make her nation, the most dangerous in the world, behave like Trump.

There will be no huge protests when Clinton commands mass murder, just as there have been none when Obama has. That’s OK, because anti-war protests are reactionary and ineffective. Peace is a very long game. My feeling is that shifting the basis of knowledge policy and production from property (i.e., subject of conflict over control) to cooperation is one worthwhile and maybe necessary long intervention. But I’m embarrassed for not having any systematic characterization of the probable magnitude or even direction of the impact of this or other interventions toward peace.

I’m also embarrassed for not having found (nor put much effort into looking) for predicted outcomes conditioned on Clinton or Trump winning. Seem my very weak 2004 and 2008 attempts. The best I can do this year is point out What do financial markets think of the 2016 election? (summary; pdf).

A few subnational initiatives I wish to point out:

More on Brexit

Published by Anonymous (not verified) on Tue, 19/07/2016 - 10:49pm in

Tags 

Politics

After observing the Brexit poll at close quarters, guest Mule contributor John Carmody travelled on to Europe and continued to reflect on the significance of the vote. In this follow-up post he reflects on the historical journey of the European Union and his reasons for thinking that the Leave vote was a terrible mistake on the part of British voters.

I have also continued to reflect on the vote and have arrived at a similar conclusion for different reasons. I do have some sympathy for some of the political sovereignty arguments for Leave (although not those based on Farage and UKIP xenophobia), but I still think that Remain is the better option. The best analogy I have come up with is someone regretting the decision to get a large tattoo. While it may have been better never to have had the tattoo, removal can be painful and leave an ugly scar. In the same way, Britain does not have the option to wind back the clock and eradicate the last 40 years of history: it did join the Union and an exit will lead to a very different Britain. There is no way to transition to a counterfactual Britain that never joined back in 1973 and had developed its own trade agreements, human rights legislation, environmental legislation, funded all of its own infrastructure, scientific research, etc, etc. Exit will be painful and, even if joining in the first place was a mistake as some would argue, leaving will be worse.

But back to the guest post…and I would be interested in reactions to this post, so please post your thoughts in the comments.

As with beauty, the rights and wrongs of the British “Brexit” vote will lie in the eye (or the prejudices) of the beholder.  Certainly, innumerable words are still being deployed about it, though many of them (notably, but certainly not exclusively, in Britain) are rather self-interested or poorly informed.  I believe that the Anglophone world, in general (including in Australia), has a poor understanding of the structure and operations of the European Union and a fortiori of its genesis in the fraught history of Europe, since the Reformation.

It is in part a historical institution and in part a philosophical one. It has grown from the fraught history of European religious, territorial and mercantile wars as well as the growing sense, notably in the twentieth century, if the “idea” of Europe. As an island (even insular) nation which has not been successfully invaded since 1066, Britain has played only a sporadic often simply self-interested part in those developments. And Australia, influenced so powerfully by Britain (as, indeed, it still is) shares much of that ignorance of European history and thought.

Experience commonly determines understanding.  As time passes and people forget or, without that lived experience of adversity, become complacent (especially, in this specific case, about Europe’s peace since 1945): it is the serious responsibility of politicians, as well as teachers and journalists, to impart this knowledge.  Even writers in the International New York Times, who ought to understand a federation, use such demeaning words as “bloc” or “imperfect union”—as if the USA is any different in its fallibility.  Of course, the EU is “imperfect”: it is (like every human institution) “a work in progress”; but commentators need to acknowledge that it has made astonishing progress.  Of course, for a diversity of reason (not the least of which is language) it is not as mature a federation as those of the US and Australia, but in fields as diverse as health and the environment, education and agriculture, for example, it has transformed Europe.  There is, for all its limitations, a far greater sense of a European identity than when I first went there 40 years ago.

Regrettably, for years, journalists and politicians—in particular those in Britain (and hence in Australia, because our journalists are essentially compacts)—have failed in their responsibility to inform, rather than manipulate, their constituencies.  In fact, it has often seemed that they were determined, for their own partisan interests, to misinform and profit from prejudice — especially in that recent “Brexit” campaign.   Australians are all too familiar with some of this behaviour: we have seen many comparable instances when our politicians have engaged in what is called the “blame game” between the states and Canberra.  Thus, British politicians have blamed “Brussels” for decisions which were democratically made in the European Parliament, even when they were elected members of it and they actually voted for the contended measures.

All too frequently the talk is about some sort of opaque and unaccountable bureaucracy, whereas the truth is (as I have been advised by well-informed lawyers) that the administration exercised by the European Commission (as that civil service is called) is pretty lean, and smaller than pertains even in some of the larger cities in Europe.  Furthermore, is it overseen by two levels of representative oversight. Contrary to what many in Britain believe, or are told to believe, this Commission does not control Europe, any more than the public service in Whitehall “controls” the United Kingdom or the Canberra bureaucracy “controls” Australia.  That authority is exercised, jointly, by the Councils of Ministers and the European Parliament. Those several Councils are composed of the relevant Ministers from the legislatures of the constituent countries of the EU, all of whom are accountable to their home Parliaments and electorates.  The European Parliament is made up of directly elected members and is, therefore, no less democratic a body that the House of Commons (and it is decidedly more democratic and representative than the House of Lords).  Of course, as happened with Federation in Australia, when the uniting colonies ceded some powers to the Commonwealth but retained others, this sharing of power is undertaken for a greater good, but it has costs: it is certainly not a “loss of control” as Boris Johnson and his henchmen duplicitously asserted and (either through lack of ability or conviction) David Cameron failed to properly contradict.

That was not the only lie of the recent British referendum.  Another was the claim that a vote for “Brexit” would return to the National Health Service an amount of £350 million each week (the asserted, but seriously inflated, figure for the current British payment to the EU budget).  Almost as soon as the referendum results were declared, the “Leave” proponents were repudiating that promise.  A former Conservative Leader, Iain Duncan Smith, brazenly insisted that “I didn’t say that”, even when he was reminded that the posters and leaflets which his group issued had promised exactly that.  His revised promise became, instead, that the NHS would receive “the lion’s share” of whatever was left over after the essential compensation was paid to British farmers for the loss of their substantial subsidies from the EU.

Other falsehoods, though, continued to be promulgated after the referendum.  In a column in the Daily Telegraph, Johnson wrote that “there will continue to be free trade, and access to a single market.”  In other words, the insular British could continue to have their current cake and eat it too (Johnson once said that this was his “policy”).  It was a reiteration of the campaign propaganda—that it was possible, in effect, to remain a member while avoiding all of those inconvenient costs of membership, political and financial.  That is utter nonsense.  Either Britain is a member or it is not.  There is no possibility of being “a little bit pregnant”.  The situation of Norway was often mentioned.

But, I am advised that, as a non-member wishing to enjoy free-trade, Norway must pay about 90% of what its contributions would be if were actually a member.  Britain would have to pay something comparable if it wanted access to the European market and, given the stern attitudes which, understandably, are currently attributed to such leaders as Dr Merkel and M. Hollande, more attractive rates are highly unlikely.  The bitter result for Britain from Johnson’s interpretation of “free access” would be a comparable cost but with absolutely influence on EU laws and policies.

Some Independence Day for Nigel Farage and his “UKIP”!  Some “regaining control” for the Colonel Blimps and their powdered ladies of “Middle England”! And even worse prospects for the struggling under classes, especially in the north.  Wrongly, they feel neglected by Brussels (the reverse is actually the truth), but, for decades, Westminster has shown little regard for then.

Even if, to other than close observers, the outcome of the poll were unexpected (it had seemed highly likely to me), the heterogeneity of the results – age by age, region by region, class by class—were a harsh reminder of what a fractured county Britain currently is.  The “United” part of the name UK, is meaningless.  Scotland (68%), Northern Ireland (56%) and London (60%), for example, voted strongly to stay in the EU; much of the rest of England voted to leave (52-58%).

Various analyses have shown that education played an important role.  In regions where fewer than 22% of the population have a degree, 62% voted “Out”, but that vote was only 42% where more than 32% of residents have a degree.  The age disparities were even more stark.  Commercial polling, after the voting closed, showed that 73% of 18-24 year-olds support EU membership but only 40% of those over 65.  Those with a future have been trumped by those who may not live to see the promised “independent future”.  As a Cambridge colleague recently said to me, “We feel in free-fall”.  Many Europeans to whom I have spoken are just as perplexed.  Perhaps the real truth was recognised by an astute and experienced Italian journalist, Beppe Severgnini, who wrote, “One should understand that it wasn’t fear, or anger, that brought so many English to vote for Brexit on June 23.  It was nostalgia…….nostalgia for a self-sufficient, cosy Little England that is long gone.  But they don’t seem to realise that nothing, not even voting to leave the European Union, can bring it back.”

Of course, there were as many individual reasons as there were voters: but in some places there seemed an almost wilful determination – notwithstanding that the rage was probably directed at the wrong target – to inflict self-harm.  In some places which depend upon EU finances for their very lives (and certainly their jobs), it ironically became art transformed into life with the “What have the Romans ever done for us?” cry in The Life of Brian turned into “What has Europe ever done for us?”  When reality eventually strikes, it will certainly be harsh and those misled communities will feel the greatest pain and social upheaval.  Certainly, given the deep and serious rifts in her party—let alone British society at large—the task which faces the new Prime Minister designate, Theresa May is immense.

The voting figures indicate that there are clear political divisions as well.  On the day after the vote, the formidable Nicola Sturgeon was unequivocal.  As the First Minister in the Scottish Government, she pointed out how strong the “Remain” vote had been north of the Tweed.  A new referendum on independence for Scotland, she declared, is certainly “on the table”.  Indeed, without Scotland, Britain would shrink to “Little England”, with the serious risk of a crippling reduction in its importance as a financial centre, let alone its potential scientific losses.  Furthermore, whether the enduring sectarianism of Northern Island would prove an implacable impediment to some sort of union with the Irish Republic in the south has become a hot topic because, otherwise, their border would also become the British border with the EU and securing it would be an enormous challenge for both sides in every conceivable respect.

Much has been made of the concern that “Brexit” might encourage more breakaway movements.  While the focus has been on Madam Le Pen and her National Front in France, or the extreme Rightist party of Geert Wilders in Holland, concern will also be felt about the intentions of such nationalist groups as the Basques and the Catalans.  It is ironic that, as the world is supposed to becoming more integrated, notably as electronic communications and transport become ever faster and less expensive, smaller communities and political groups seem so alluring.  Currently, this is simply speculation, but to many people (not just politicians) it is troubling just the same.

Even so, the final card may not have been played in Britain.  The political and legal power of such a referendum as was recently held there are far from clear in that nation’s diffuse constitution.  A corollary of the contemporary rhetoric is that the people want the British Parliament to be supreme.  The logical consequence of that aspiration would be that the parliament must make the ultimate decision about whether to act on that slender 52%:48% margin (keeping in mind the principle that a greater majority—say of 66% or even 75%—ought to have been mandated before any radical action was triggered).  To deny the people their “choice” might seem politically foolhardy (or, even responsibly statesmanlike); but that it why so many nations have parliaments, rather than frequent national plebiscites.

Yet, legally speaking, the position it far more complicated.  It is certainly not a matter of the new British Prime Minister sending a letter to Brussels to trigger exit negotiations.  That action, under the terms of membership agreements, requires action by the appropriate law-making bodies in the member country in question: in Britain that it the parliament—it certainly is not the cabinet, let alone the individual PM.  So, this can hardly be done – in the legal way which Brussels would require, before Parliament returns from its scheduled summer recess, if only because the required legislation (especially if it is to specify the conditions of the negotiations with the EU in the requisite detail) will be difficult and time-consuming to write and debate.

For all that many are said to be calling for a speedy resolution, it simply cannot occur in a hurry.  Lady Macbeth’s wish that the deed should be done quickly might be appealing, but it is not practicable.  Patience is less often understood as the political virtue that is should be.  Like beauty and its appreciation, it is uneven in its distribution.  Sagacity, not seduction, is what is now required on all sides.

Happy Birthday Bassel releases

Published by Anonymous (not verified) on Mon, 23/05/2016 - 5:01am in

Today is Bassel Khartabil’s 35th birthday and his 1530th day of detention in Syria, and the 233rd day since he was moved to an unknown location, and not heard from since (previously: 1, 2, 3). Shortly after his disappearance last year I helped organize (CFP) a book sprint in his honor and calling for his freedom.

After a bit of copy editing and lots of formatting and format coversion the resulting volume, Cost of Freedom: A Collective Inquiry is now available for reading online and downloading, and in print.

I wrote a quasi-review of the book for the Creative Commons Taiwan newsletter:

The Cost of Freedom essays that work best are directly about Khartabil or about the broader costs of free knowledge movements. Barry Threw’s The Uncommon Creativity of Bassel Khartabil gives a sense of the personal and social moorings of the Free Bassel campaign … Several essays offer helpful criticisms of free knowledge movements, among them John Wilbanks’ Inside or Outside the Movement about the costs of internecine posturing, Giorgos Cheliotis’ The Shit of Freedom, a rant of love and frustration with movement participants “too busy working on your sales pitch, or curating your posse”, and Shauna Gordon-McKeon’s Free Culture in an Expensive World

I also contributed an essay to the book, My Brain on Freedom, which begins:

A cost of participation in free knowledge movements is “stupidity” – an assault on intelligence, wisdom, reason, knowledge. The net effect of free knowledge on intelligence is probably positive, possibly hugely positive if free knowledge movements succeed in thoroughly commoning the noosphere, making collaboration and inclusion the dominant paradigm for all economically valuable knowledge production and distribution. But the stupidity costs of free knowledge are real and painful, at least to me. Fortunately the costs, if acknowledged, can be decreased, and doing so will increase the chances of achieving free knowledge world liberation.

Waiting…, a book by Bassel’s spouse Noura Ghazi Safadi, a Syrian human rights lawyer, is also available today in electronic and print formats. Both books are dedicated to the public domain with CC0-1.0.

Thanks to everyone who contributed: Christopher Adams, The Big Conversation Space (Niki Korth & Clémence de Montgolfier), Tim Boykett, Lorna Campbell, Giorgos Cheliotis, Tyng-Ruey Chuang, ginger coons, Ben Dablo, Georges Dahdouh, Patrick W. Deegan, Dr. Martin Paul Eve, Pauline Gadea, Lucas Gonze, Richard Goodman, Shauna Gordon-McKeon, Christian Grothoff, hellekin, Adam Hyde, Pete Ippel, Jaromil, Muid Latif, Lawrence Lessig, Yu Li, Mike Linksvayer, Geert Lovink, Sulaïman Majali, Jean Noël Montagné, Jon Phillips, Théophile Pillault, radium, Donatella Della Ratta, Clément Renaud, Faraj Rifait, Mélanie Dulong de Rosnay, Natacha Roussel, Noura Ghazi Safadi, Anasuya Sengupta, Barry Threw, Stéphanie Vidal, Marc Weidenbaum, John Wilbanks, Maarten Zeinstra, Mushon Zer-Aviv, and Ethan Zuckerman.

Hopefully we will see Bassel’s release before his next birthday. Until then celebrate Bassel’s creativity and demand his release. These books are two of many projects with those aims: freebassel.org.

Aggregated prediction markets and next election iteration outcomes

Published by Anonymous (not verified) on Wed, 06/04/2016 - 1:45pm in

9.5 years ago I wished for a prediction market aggregator. PredictWise gathers data from a handful of betting sites and publishes aggregated odds expressed as percentages, e.g., for the U.S. presidential election. PredictWise data is fairly easy to find and download at http://table-cache1.predictwise.com/(history|latest)/table_NNNN.json (view source of pages on the site to find NNNN’s of interest).

One calculation and graph made using this data:

I could not figure out quickly how to tell gnuplot to add column averages to the column legend, so here they are — merely probability of becoming president divided by the probability of being nominated, averaged over the data most conveniently available, nearly a month:

Clinton (D)
71%

Cruz (R)
22%

Kasich (R)
39%

Sanders (D)
60%

Trump (R)
31%

Bettors seem to think a Democrat will probably win, and the more “mainstream” candidate of either party has a better chance than their same-party primary competitor(s), but I’d guess not by enough to convince a supporter of Cruz, Sanders, or Trump to supporter Clinton or Kasich, even in the unlikely event such a person’s faith that their preferred candidate is the most likely to be elected if nominated were shaken by betting prices.

I haven’t followed prediction markets closely in some years. I’d love pointers to other conditional outcome predictions, preferably bearing on broad, non-manipulable, and non-financialized social goals, rather than merely impact on the next horse race iteration.

If I learn of any, I may collect in a source repository.

In 2004 I wrote about markets and election outcomes and an update on Bush and terrorist stocks. In 2008 I sketched a futarchist voter guide with what very little data I could find.

Monday, 15 February 2016 - 11:17am

Published by Matthew Davidson on Mon, 15/02/2016 - 11:17am in

Always liked that Turnbull fellow. Won't hear a word said against him.

I'm choosing to take this as a sign that things are looking up; that it's no longer sufficient to be a plutocratic ideologue and class warrior to have a hand in Australian public policy.

On the other side of the house, even Shorten appears to have located his spine, and is advocating the decades-overdue sunsetting of the parasitic speculator's best friend, negative gearing. In addition to the hitherto inconceivable possibility of a soft landing to the property bubble, Australia may be catching on to the spirit of democratic renewal that has made possible the rise to prominence of people like Sanders and Corbyn (not to mention, in very different circumstances, Podemos and pre-capitulation Syriza).

Good news for everybody who hasn't thrown in their lot with the crazies. Commiserations to the former Member for Tony Abbott.

Software Freedom Conservancy 2015

Published by Anonymous (not verified) on Fri, 25/12/2015 - 11:25am in

Software Freedom Conservancy is running its 2nd annual (last year) individual supporter campaign. We need 750 supporters (at US$120 each) to keep the lights on (continue serving as a non-profit charitable home for free/open source software projects…assuming we manage to stay alive, some exciting new member projects will be joining in 2016) and 2500 to take on new GPL enforcement work. See the Conservancy news item and blog post announcing the campaign last month.

Conservancy supporter Sumana Harihareswara made a great video explaining why you should also support Conservancy. [Added 20151228: blog post with transcript]

The news item above includes a list of 2015 accomplishments. My second favorite is Outreachy (“helps people from groups underrepresented in free and open source software get involved”) joining as the first member project that isn’t strictly a software development project. My favorite is a link away from the main list. The list notes that Conservancy joined a one-page comment urging the FCC to not restrict wireless devices to manufacturer-provided software. That’s good, but the blog post about the comment notes that Conservancy leaders Karen Sandler and Bradley Kuhn also signed a much more interesting and extensive comment proposing an alternate regulatory regime of requiring fully auditable software and ongoing security updates, almost mandating supported free software (but not quite, for the comment doesn’t call for mandating free copyright licensing) for approved devices. This is by far the most important document on software freedom produced this year and I urge everyone to read it. I’ve copied most of the alternative proposal below (it starts on page 12, and is followed by many pages of endorsers):

In place of these regulations, we suggest that the Commission adopt rules to foster innovation and improve security and usage of the Wi-Fi spectrum for everybody.

Specifically, we advocate that rather than denying users the ability to make any changes to the router whatsoever, router vendors be required to open access to their code (especially code that controls RF parameters) to describe and document the safe operating bounds for the software defined radios within the Wi-Fi router.

In this alternative approach, the FCC could mandate that:

  1. Any vendor of SDR, wireless, or Wi-Fi radio must make public the full and maintained source code for the device driver and radio firmware in order to maintain FCC compliance. The source code should be in a buildable, change controlled source code repository on the Internet, available for review and improvement by all.
  2. The vendor must assure that secure update of firmware be working at shipment, and that update streams be under ultimate control of the owner of the equipment. Problems with compliance can then be fixed going forward by the person legally responsible for the router being in compliance.
  3. The vendor must supply a continuous stream of source and binary updates that must respond to regulatory transgressions and Common Vulnerability and Exposure reports (CVEs) within 45 days of disclosure, for the warranted lifetime of the product, the business lifetime of the vendor, or until five years after the last customer shipment, whichever is longer.
  4. Failure to comply with these regulations should result in FCC decertification of the existing product and, in severe cases, bar new products from that vendor from being considered for certification.
  5. Additionally, we ask the FCC to review and rescind any rules for anything that conflict with open source best practices, produce unmaintainable hardware, or cause vendors to believe they must only shipundocumented “binary blobs” of compiled code or use lockdown mechanisms that forbid user patching. This is an ongoing problem for the Internet community committed to best practice change control and error correction on safety-critical systems.

This path has the following advantages:

  • Inspectability – Skilled developers can verify the correctness of software drivers that are now hidden in binary “blobs”.
  • Opportunity for innovation – Many experiments can be performed to make the network “work better” without affecting compliance.
  • Improved spectrum utilization – A number of techniques to improve the use of Wi-Fi bands remain theoretical possibilities. Field trials with these proposed algorithms could prove (or disprove) their utility, and advance the science of networking.
  • Fulfillment of legal (GPL) obligations -Allowing router vendors to publish their RF-controlling source code in compliance with the license under which they obtained it will free them from the legal risk of being forced to cease shipping code for which they no longer have a license.

Requiring all manufacturers of Wi-Fi devices to make their source code publicly available and regularly maintained, levels the playing field as no one can behave badly. The recent Volkswagen scandal with uninspected computer code that cheated emissions testing demonstrates that this is a real concern.

Why is this so important?

  • It isn’t purely a rear-guard action aiming to stop a bad regulation.
  • It proposes a commons-favoring regulatory regime.
  • It does so in an extremely powerful public regulatory context.
  • It makes a coherent argument for the advantages of its approach; it tries to win a policy argument.
  • The advantages are compelling.

Yes, the last three points are in contrast with relying on an extremely weak and resource poor private regulatory hack which substitutes developer caprice for a public policy argument. But not entirely: the last advantage mentions this hack. I doubt we’ll reach the 2500 supporters required to pursue new hack (GPL) enforcement, but please prove me wrong. Whether you love, hate, or exploit the GPL, enforcement works for you.

Please join Sumana Harihareswara, me, and a who’s who of free/open source software in supporting Conservancy’s work. The next $50,000 in donations are being matched by Private Internet Access.

Call for mini-essays on “the cost of freedom” in free knowledge movements in honor of Bassel Khartabil

Published by Anonymous (not verified) on Fri, 30/10/2015 - 1:54am in

Dear friends,

I’m helping organize a book titled “The Cost of Freedom” in honor of Bassel Khartabil, a contributor to numerous free/open knowledge projects worldwide and in Syria, where he’s been a political prisoner since 2012, missing and in grave danger since October 3. You can read about Bassel at https://www.eff.org/offline/bassel-khartabil
https://blog.wikimedia.org/2015/10/08/bassel-missing-syria/ https://www.amnesty.org/en/documents/MDE24/2603/2015/en/ and lots more at https://en.wikipedia.org/wiki/Bassel_Khartabil and http://freebassel.org/

Much of the book is going to be created at a face-to-face Book Sprint in Marseille Nov 2-6; some info about that and the theme/title generally at http://costoffreedom.cc/

We’re also asking people like yourself who have been fighting in the trenches of various free knowledge movements (culture, software, science, etc.) to contribute brief essays for inclusion in the book. One form an essay might take is a paragraph on each of:

* An issue you’ve faced that was challenging to you in your free knowledge work, through the lens on “cost”; perhaps a career or time opportunity cost, or the cost of dealing with unwelcoming or worse participants, or the cost of “peeling off layer upon layer the proprietary way of life” as put in
http://www.adamhyde.net/open-is-not-a-license/
* How you addressed this challenge, or perhaps have yet to do so completely
* Advice to someone starting out in free knowledge; perhaps along the lines of had you understood the costs, what would you have done differently

But feel free to be maximally creative within the theme. We don’t have a minimum or a maximum required length for contributed essays, but especially do not be shy about concision or form. If all we get is haiku that might be a problem, or there might be a message in that of some sort.

Other details: The book will be PUBLISHED on Nov 6. We need your contribution no later than the end of Nov 3 UTCThursday, Nov 5 at 11:00 UTC (Paris: noon; New York: 6AM; Tokyo: 9PM) to be included. The book will be released under CC0; giving up the “right” to sue anyone for any use whatsoever of your contribution is a cost of entry…or one of those proprietary layers to be peeled back. Send contributions to book@costoffreedom.cc

Feel free to share this with other people who you know have something to say on this topic. We’re especially looking for voices underrepresented in free knowledge movements.

Cheers,
Mike

p.s. Please spread the word about #freebassel even if you can’t contribute to the book!

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