January 2012

Barack Obama and the Price of Change

by Cord Blomquist on January 16, 2009 · 1 comment

in Video

[youtube:http://www.youtube.com/watch?v=YEcLes2dD7k 285 234]

PEOTUS Behavioral Targeted Advertising Adventure

by Nick Brown on January 16, 2009 · 7 comments

in Privacy, Regulation, Tech & Telecom

The prevention of regulation and the Rule of Law pounding its mighty fist within a medium or sector of business is generally something that is lauded around these parts.  On occasion, though, an industry will find that it is possibly pushing the envelope ever so much over the line and chooses to act on its own behalf.  This self-supervision, for the most part, tends to deter government involvement and the creation of legal regulation, which can in many cases be far more costly than self-imposed rules.

In December of 2007 the FTC notified the online advertising industry that Behavioral Targeting-style advertising was pushing the boundaries of privacy.  Their letter–entitled “Behavioral Advertising: Moving the Discussion Forward to Possible Self-Regulatory Principles”–should have made it abundantly clear that this was a warning shot and the hammer was about to drop.  The industry, quick to respond, and taking congressional action very seriously, announced yesterday (some thirteen months later) that they would seek self-regulation.

The announcement of the proposal to self-regulate came from a partnership between four advertising industry trade associations, including, American Association of Advertising Agencies (AAAA), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB).  They plan to work with the Council of Better Business Bureaus to develop their guidelines.

Behavioral advertising is not a new idea.  Advertisers have been seeking better ways to target market specific consumers since the first caveman opened a tool shop.  There is nothing wrong with this.  If I make widgets for men that work in coal mines in West Virginia, I’m going to set up billboards for my product outside the tunnel to the mine.  This is just good business sense.  But the modern computer age’s concern with targeted marketing is that it has become extremely personal, so personal that some are concerned with the privacy factor and how much personal data they may be giving up as they surf the web.

While surfing your favorite website, the site will send your browser (Firefox, Internet Explorer, Chrome, etc.) what is referred to as a “cookie”. It is essentially a small text file, quite harmless in nature, and is generally used to track things like web site shopping cart contents or personal settings on that website. It can, however, be used by advertisers enlisted on that site to determine what types of things you are interested in so that targeted marketing of ads can be implemented.

In these cases a cookie is sent to your machine from an advertiser on the site.  This creates a sort of road map for the advertiser of what you like based on the content of the website you were viewing.  Then upon viewing a different website, the advertiser can take the information it recorded about you from the cookie, and display adverts based on things you previously viewed that the advertiser assumes you would want to see.  What results is a totally personalized advertisement experience for you while you surf the web.

So where’s the rub?  While the identity of a user cannot be revealed by a cookie, a user that has registered with a website can be linked to a cookie.  What results is a privacy dilemma because instead of an anonymous individuals surfing habits being recorded, very specific information about who this person is could then be revealed. Additionally, the advertiser could also then tie a specific person to what they are looking at online.

“When you start to get into the details, it’s scarier than you might suspect,” Marc Rotenberg, executive director of the Electronic Privacy Information Center, a privacy rights group told The New York Times’ Louise Story. “We’re recording preferences, hopes, worries and fears.”

Most Internet companies would provide the rebuttal that a user’s account information was seen as just an ID number.  But the concern is that an ID number is attached to an account, an account contains the user’s personal info, and at some point the data could be accessed.  The privacy concern may be far fetched, or it could be completely legitimate.  It would all come down to the ethicality of the company.

So why the sudden movement toward action by the advertising trade associations after 13 months of ignoring the issue? Because PEOTUS Obama is days away from becoming POTUS. And rumors are that lobbyist fear behavioral targeted marketing will be the main privacy issue examined by Congress this year.

“There are no immune companies or business models from Capitol Hill or state regulation,” said Mike Zaneis, VP-public policy at the IAB.

Obviously the move is to get out in front of the issue. A self-regulating industry could deter Congress from considering legislation to legally enforce guidelines. But a self-regulated industry is also watch dogged by its own people. Only time will tell if they have the will power and character to maintain that approach, but it is certainly hoped for as less government legislation is the favorable outcome.

VIDEO: Barack Obama and the Price of Change

by Richard Morrison on January 16, 2009 · 1 comment

in Bailout Watch, Economy, Stimulus to Nowhere

How much will President Obama’s plans for economic stimulus and other federal spending cost the American taxpayers? We do the math.

Telecom Lobbyists in the DTV Henhouse?

by Richard Morrison on January 16, 2009 · 3 comments

in Politics as Usual, Regulation, Tech & Telecom, Zeitgeist

With the election of a new president and new Democratic majorities in Congress, the era of corporate influence is over in Washington, D.C. Or, at least that what I had heard. According to our old friend Tim Carney, I may have been mistaken:

A telecommunications company has confirmed for this columnist that its vice president for policy—who is also an Obama donor and a former lobbyist—is advising Barack Obama’s transition team on telecom policy.

Obama’s transition team, which has failed to disclose this executive’s involvement, happens to have proposed a significant change in telecom policy that will profit that very company, called Clearwire.

By pushing to delay the long-scheduled transition of television broadcasting from analog signals to digital signals, president-elect Obama is directly aiding Sprint and its partner Clearwire while hurting Verizon.

It turns out that there is more to this digital TV transition than just those endless commercials advising old people that their 1953 RCA with rabbit ears isn’t going to be able to function on its own anymore. Additional props go to Julian Sanchez at Ars Technica for breaking and updating the story.

John Berlau on Tim Geithner’s Qualifications

by Cord Blomquist on January 15, 2009

in Odds & Ends

[youtube:http://www.youtube.com/watch?v=Qaza_FkFUV4 285 234]

FEMA — Fraudulent Emergency Mismanagement Agency

by Jonathan Tolman on January 15, 2009 · 1 comment

in Odds & Ends, Politics as Usual

President Bush has declared an emergency in the District of Columbia for the inauguration of his successor. This unprecedented move will allow FEMA to reimburse state and local governments. In reality the DC government doesn’t really view the inaugural as an emergency so much as a reason to throw a giant 5 day party. In December the DC city council passed emergency legislation allowing all bars, restaurants, and nightclubs to serve alcohol until 5 am and to stay open for 24 hours from January 17th through January 20th.

Given the number of people expected to attend the inaugural this is pretty much a security nightmare for the metropolitan police. Since this is a larger than usual inaugural, the $15 million that Congress has already appropriated to the DC government is already spoken for. Which means the DC government is on the hook for paying the triple overtime for the police, fire and ambulance services that they would need so people can keep drinking and partying into the wee hours of the morning. By declaring an emergency FEMA can now reimburse DC for security, public health and safety related expenses (at 100 percent federal funding) during the emergency. And guess when the declared emergency is? January 17th through January 21st. Coincidence? I think not.

Now I have no problem with DC wanting to throw a big party. I just don’t think that the American taxpayers should foot the bill. Bush declaring such an emergency is beyond the pale.

D.C. Event: BB&T’s John Allison on the Financial Crisis

by Richard Morrison on January 15, 2009 · 1 comment

in Bailout Watch, Economy, Stimulus to Nowhere

Our friends at the Ayn Rand Center for Individual Rights are hosting what promises to be a fascinating public lecture on the state of the U.S. economy and what it means for the future of capitalism. Former CEO and current Board Chairman of BB&T bank, John Allison, will explain the interventionist government policies that brought us where we are today and their anti-capitalist underpinnings.

Location and Details:

The Financial Crisis: Causes and Possible Cures
Thursday, January 29, 2009

National Building Museum—Great Hall
401 F Street NW
Washington, DC 20001
Red Line Metro, Judiciary Square

Doors open: 6 PM
Lecture and Q & A: 6:30 PM

This event is FREE and open to the public.

How gullible are we?

by Julie Walsh on January 15, 2009

in Bailout Watch, Employment, Energy, Environment, Global Warming, Stimulus to Nowhere

Scrolling through the $825 billion dollar monstrosity, my first question is–how many unemployed construction workers do they think there are? Don’t they realize that they will be competing with the private sector beyond those currently unemployed?

We signed our name to a blank check. (CEI opposed it.) Now they want us to sign again and again—bailout, stimulus, whatever they’re calling it today.  But as Martin Hutchinson said, “Stimulus plans also raise the chance of a Great Depression because of the deficits they cause.”

The Wall Street Journal reported today that Americans are in favor of Obama’s stimulus with 89% in favor of deficit spending to create more renewable energy and energy efficiency.

Here’s some hard questions that should be asked about those “green” projects, though:

1. How long will it take the projects to break ground?

2. How many permanent jobs will be created and at what cost?

3. Of those permanent jobs, are they sustainable without government subsidies? EIA has reported that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and “clean coal” $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.

4. What is the current unemployment rate of the industry to be “stimulated?”

5. You won’t catch me signing up to build a wind turbine or highway, so who will you be employing?

6. Is that national electrical grid going to bring inexpensive coal-fired power to needed US industries? E and E reports that Frederick Butler, president of the National Association of Regulatory Utility Commissioners, acknowledged that “strategically sited” transmission lines could bypass power plants in coal states, while running through countryside laced with wind farms to promote clean energy.

Finally, as environmental economist John Whitehead cautioned yesterday in Salon:

“The Wall Street Journal’s economic forecast survey concludes that a big fiscal stimulus will lead to positive economic growth by the third quarter of 2009. But without the fiscal stimulus positive economic growth will be restored by the beginning of 2010. Speeding up the recovery is important in the short run, but there are also long-run risks associated with excessive government spending. At some large debt to gross domestic product ratio, lenders may no longer buy our government bonds and interest rates could spike.”

Regulate First, Think Never?

by Iain Murray on January 15, 2009 · 6 comments

in Environment, Nanny State, Politics as Usual, Precaution & Risk, Regulation

Twitter can be very useful. Walter Olson of Overlawyered.com sent out a tweet this morning about an Amazon list of toys that will be affected by the Consumer Product Safety Improvement Act of 2008, which comes into effect February 10. This new law aims to protect children from the harmful effect of lead in toys, but does so, as usual, in an expensive and ham-fisted way that ignores unintended consequences. Intrigued, I researched further and found a classic tale of regulatory incompetence, but also an excellent example of resistance by the little guy (or often more gal, in this case).

The law, as written, appears to require makers of any new toys to be sold after February 10 to have a third party certify that they meet the lead restrictions. This will be ruinously expensive for small toymakers, especially those of traditional, hand-made wooden toys. No wonder that these manufacturers have taken to calling February 10 National Bankruptcy Day. They have, however, been very effective in using the blogosphere, specifically the “mommy blogs” to draw attention to the cause and have managed to make quick reform of the CPSIA the number six policy to be presented to the new President as voted on by users of Change.org. Investigative journalism by BusinessWeek has confirmed that the small businesses have reason to be afraid, as there has been no clarification from the CPSC that their fears are unjustified (a “debunking” at Snopes applies only to used toys, which will indeed not require testing, but their resale may still break the law).

This is an excellent example of how consumers and manufacturers, self-organizing, can alert people to the terrible consequences of well-meaning but ill-thought out regulation, and of how the regulatory burden can severely affect small businesses especially. The campaigners have a twitter stream at #CPSIA, which is full of useful links.

More from Forbes here, but note that some of the campaigners believe the exemptions cited are worthless.

Obama’s Trillion Dollar “Stimulus” Fantasy, at $300,000 per Job

by Hans Bader on January 15, 2009 · 7 comments

in Bailout Watch, Economy, Legal, Politics as Usual

Barack Obama claims his trillion-dollar stimulus package, financed through new deficit spending, will “create or save” 3 million jobs. That’s pure fantasy — even given the wiggle-phrase “or save” — but even if it worked, it wouldn’t be worth it. That works out to more than $330,000 per job!

Like the Biblical Esau, who sold his birthright for a bowl of pottage, we are selling our children and grandchildren into debt just to increase employment in the U.S. by a tiny percentage.

And in reality, the only jobs the stimulus package would truly “create” — as opposed to help “save” — would be 600,000 new jobs for bureaucrats. Past stimulus plans have usually failed to do much to revive the economy, despite their enormous cost.

Japan tried a similar strategy in the 1990s, in what is now called the “lost decade,” as it spent hundreds of billions of dollars attempting to stimulate the economy through (often useless) infrastructure projects (like virtually unused bridges and airports located in the districts of powerful legislators). Past American stimulus packages have also failed.

Moreover, even according to the Keynesian economic theory behind Obama’s stimulus package, an outmoded, partly-discredited theory that advocates deficit spending to “stimulate” the economy, we already have a powerful “stimulus,” in the form of a budget deficit of $500 billion this year and $1.2 trillion next year. But all that debt, and government coddling of borrowers, has simply driven down confidence in the United States, and the value of the dollar, while failing to keep us out of a recession.

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