July 2003 Archives
July 30, 2003
Marriage? Fatherhood? Mortgage? No sweat--I've handled these in stride. But it was a comment by my 15-year-old cousin the other day that made me start to feel old: "email is for old people."
I was born the day the first message was sent over Arpanet. I was born with email. I was in college when email was sweeping academia and entered the workforce just as email did. But now "email is for old people." Both email and I am getting old together.
The replacement, of course, is IM. My cousin informed me that she doesn't even know many of her friends' email addresses--and it doesn't matter because they hardly check it.
This is just one of many behavior patterns of gen y--see Tim Oren's post on Due Diligence that "The 13-24 demographic, a prime target for many marketers, now spends more time online than with the tube."
Email, which to some of us has become a vital resource that we need to live, like air or water, is not even used by some of the most digitally literate! Email isn't as essential as some--particular those who propose regulating speech to preserve it--would have us believe. There are other technologies already and I predict more to follow. This is why I wrote there is a silver lining to spam--it is forcing us to acknowledge the inherent weakness in the medium and prompting us to seek better methods of communication. I bet the future forms of communication, developed in part in an attempt to solve the spam problem, will be better in the end than before the spam problem ever existed.
No, everything is going wrong at once for America's most dangerous liberal pundit. The economy is recovering, despite Krugman's warnings of a "fiscal train wreck," and we're steadily winning the war on terrorism, despite the mud Krugman keeps throwing at our commander-in-chief. Why, oh why won't the world listen?
July 29, 2003
Unlike fellow guest blogger Daniel Drezner, I am not appalled that Howard Dean believes that labor unions were the saviors of American workers, because I remember learning this in fifth grade social studies class. I suppose that means that the unions as saviors myth is conventional wisdom, and I don't generally expect politicians to depart from conventional wisdom. But I agree with Daniel that neither economic history nor economic logic support this conventional wisdom. Increases in wage rates follow increases in productivity, and have historically been independent of the concentration of union membership or influence. ... Economists have found that to the extent that unions raise the wages of their members, the long-term gains come largely, perhaps solely, at the expense of other workers. ... And labor unions often serve as a barrier to entry to excluded minorities (this was historically true in the U.S., but nowadays blacks are overrepresented in unions) and to unskilled workers.
A fastinating epistle by Jacob Levy in The Volokh Conspiracy on Liberia. Worth s read. Excerpt:
Liberia's wounds are an ongoing result of the state's creation as a haven for resettled American former slaves-- on territory that was already inhabited. The conflict between an Americo-Liberian ruling class and the semi-colonized inhabitants is a major cause of that country's almost-perpetual civil war. Other civil wars in other places in Africa have other causes-- a colonial power that classified local class differences as "racial" ones and created an intra-African racial hierarchy, or the oil curse, of what have you. But this is one of the roots of the Liberian trauma.
I'll admit that one's dedication to the principle of subsidiarity can be tested when the abominable behavior of many country and city governments across the nation are taken into consideration. However, it seems like Anaheim may be setting an example that other local governments would do well to follow. This piece in the OC Register, entitled "Anaheim's new deal,") describe the good, the bad, and the ugly in local politics. After the stunning World Series loss (can you tell I'm a Giants fan?) I find it hard to have much nice to say about Anaheim--but this piece is changing my mind... From the piece:
Instead of harassing business owners that occasionally run afoul of their CUPs [conditional-use permits], the council passed a law decriminalizing such mistakes. As Councilman Tom Tait explained, a CUP is a set of specific conditions imposed by the city on businesses. Treating a violation of the CUP as a crime is of dubious constitutionality in that different businesses have different restrictions placed upon them. City codes are still in force, but the goal is to work with businesses to gain compliance, not come down with a hammer in the case of a specific violation, given that most businesses strive to obey the law.
While most cities are upgrading their general plan in a way that is more restrictive, Anaheim is loosening its restrictions to allow greater expression of property rights. Imagine that - a City Council concerned about individual liberties and property rights rather than just sales-tax revenue.
Thanks to Price Roe for forwarding this one to me.
If there was ever a clear example of why it's so difficult to innovate in government, it's the example of the Darpa's ill-fated idea for a futures market on terrorism (see WSJ.com - Pentagon Retreats From Terror Futures.) Excerpt:
Republican reaction to the program Tuesday was as fierce as the response from Democrats when they disclosed it at a Monday news conference. Some lawmakers said they had known about it but didn't realize money was at stake. Senate Majority Leader Bill Frist (R., Tenn.) ordered that funding for the program be cut off. "I can't disagree more with the approach," said Sen. Pat Roberts (R., Kan.), chairman of an armed-services subcommittee. He said his panel would seek to hold hearings to "fully explore" how the idea came about.
The Pentagon's aim was to help create an alternative way of anticipating events in one of the world's most volatile regions. Middle East specialists would buy and sell futures contracts from self-financed accounts, and defense officials would monitor their trading patterns to glean insights into the likelihood of certain events.
Darpa and the defense department are charged with coming up with innovative ways of providing for our national security. The problems with centrally run, heavily bureaucratic intelligence regimes are almost all we read in the papers these days and yet here is an innovative approach, based on market principles and it is roundly condemned. Why? Certainly not because of any thoughtful critique after careful study of the costs and benefits. (And there may be some reasonable critiques of the system, though thse aren't the ones made by the senators.) No. The problem with this is that it sounds morbid--imagine people profiting from betting on the likelihood of terrorism!--no politician could ever support it on optics alone.
But this clever idea is no more radical--only more straight forward--of things we all to everyday. We all make our judgments about the future--considering small trends and large--and make our bets. Certainly it was the expectation of future attacks, among other factors, that kept markets so weak after 9/11. Much of that fear was misplaced, it turns out, and wouldn't it have been nice to be able to more accurately judge the likelihood of future terrorist attacks?
We all make bets about things we hope won't come to pass. Any of you estate plan? Ever bought life insurance? Medical insurance? Heck, any insurance?
In addition to potentially being a useful source of intelligence on the likelihood of attacks, such a futures market could have economic benefits. If I am in the airline or travel industry (or invest in those industries) I may wish to hedge against a terrorist attack and so find futures a useful index.
The good news is that, while there may have been justification for this being a Darpa project, it can clearly be a privately run service (unless the politicians decide they want more air time in banning this sort of activity.) The private sector will most probably succeed where the government has failed. I can't think of anything more wonderful than competition to our woeful intelligence agencies from the private sector--tapping, as markets will do, the power of dispersed data and complex systems.
It may be politically incorrect to be so straightforward about assessing and betting on the risks we face as a society, but should that be what we are striving for? It may be uncomfortable and perhaps unseemly to bet on tragedy, but the discomfort is cause by the tragedy itself—and denial false comfort.
Coda: I think the fear that terrorists will now have a way to profit from their deeds is overblown. Firstly, they can already do this in a variety of ways—by shorting airline stocks for example. Secondly, if indeed terrorists attempt to profit from terror attacks by buying up (or selling—not sure how the mechanics will work) futures, well then the market will work: that will provide an indicator that a terrorist attempt is more likely. We should be so fortunate for terrorists to signal to the market what their intentions are—and we’d have a paper trail right to the culprits.
The problem is that California seems to do everything it can to encourage workers to overuse the system. For instance, while the state caps the amount of money it pays for each visit to a chiropractor, it places no limits on the number of visits -- so that workers (and chiropractors) receive a blank check. Nationwide, the average number of visits to a chiropractor on a workers' comp claim is 14. In California, it's 34.
California is also ground zero for litigation. Golden State lawyers pocketed $226 million in 2002 for workers' comp cases. Litigation is now so prevalent that California employers and insurers must hire lawyers to deal with a full 29% of claims in which the employee lost a week of work.
California businesses have been pleading for help for years, but Governor Gray Davis and the state's Democratic legislature continue to see more political mileage in rewarding unions (which always demand bigger benefits) and plaintiffs lawyers than they do in keeping California's businesses solvent. Last year Mr. Davis ignored appeals for reform and signed a bill that increased weekly benefits to employees who miss work because of their injuries.
Interesting op-ed from Robert Bartley's WSJ.com - Thinking Things Over column. Is there such thing as true objectivity in journalism? I think it is a practical impossibility. Though the effort to be "fair and balanced" is a noble one, as Fox News has showed us, the question is fair and balanced according to whose perspective? I think there is greater danger in the pretense that our journalism is truly objective, because it suggests that readers can abandon a healthy skepticism--the same moral hazard faced by investors who think investing is (or should be) risk free. There is bias, corruption, manipulation, and mere honest differences of opinion out there--and always will be. The danger is pretending that it doesn't exist or that it can be managed, regulated, or edited away entirely. Caveat emptor, caveat reader. From Bartley:
Though an opinion journalist myself, I'm certainly not against attempts at objectivity. Indeed I believe the ethic is a more powerful influence than disgruntled readers and viewers often seem to believe; it's simply not true that journalists conspire to slant the news in favor of their friends and causes. Yet it's also true that in claiming "objectivity" the press often sees itself as a perfect arbiter of ultimate truth. This is a pretension beyond human capacity.
Especially so given the demands of modern technology. With instant radio, television and now the Internet taking over bulletin-board news, newspapers have to make their mark explaining not just events but their meaning. This is manifestly a matter of opinion.
The opinion of the press corps tends toward consensus because of an astonishing uniformity of viewpoint. Certain types of people want to become journalists, and they carry certain political and cultural opinions. This self-selection is hardened by peer group pressure. No conspiracy is necessary; journalists quite spontaneously think alike. The problem comes because this group-think is by now divorced from the thoughts and attitudes of readers. To take politics as a test, in 1992, a sample of top Washington reporters and editors voted 89% to 7% for Bill Clinton over George H.W. Bush.
So an editor trying to put out objective reports has to contend with a newsroom dominated by a single viewpoint. Bringing some discipline to this process is no easy task, especially since the editor probably also subscribes to the dominant view. Some editors are better than others in instilling discipline, and some news organizations are better than others in building and sustaining a culture that supports their efforts at objectivity.
Everyone I've talked to, from the left and right, agrees that Sarbanes-Oxley was bad law, politically motivated, hastily thrown together, and porly thought through. It also suffers from a fatal conceit that anticipatory regulation--i.e. treating executives as a criminal class--can actually work. An excerpt from "How Not to Prevent another Enron" by Richard Epstein.
It is instructive to remember that Sarbanes-Oxley was brought on by a half-dozen corporate bankruptcies--Enron, Tyco, and WorldCom among them. Each case was a distinctive breakdown, yet, in the concern over these high-visibility cases, it is easy to forget that 99 percent of public corporations have done nothing that merits reproach. Most have behaved properly over the long haul: They make good products that generate profits for shareholders and jobs for employees. But the commonplace becomes inconspicuous when a zealous Congress seeks to "prevent the next Enron" by introducing elaborate safeguards and sanctions. Similar refrains have been sounded after previous frauds, from Teapot Dome to the almost forgotten Salad Oil and Equity Funding scandals. Yet that naive optimism ignores the central truth of any large and diverse economy: Things will go wrong no matter how sound the legal regime.
The grand conceit is that we can "fix" such problems once and for all by anticipatory regulation. Even the most clever, adroit, and skillful legislature cannot achieve zero risk in human affairs. Any sensible legal system has to rely in part on sanctions brought to bear after people have stolen property or looted corporations. We do not possess a laser precise enough to target in advance only thieves. Any regulatory scheme sweeps into the net the good corporations along with the bad. The effort to slow down abuse in poorly run corporations often makes it more difficult for well-run corporations to remain that way. Compliance with external standards could easily undermine internal safeguards, formal and informal, against fraud and abuse.
July 27, 2003
1) Arnold Schwarzenegger will run.
2) He will win.
3) He will be better than expected.
Each point is based on the point that follows. That is, Arnold is the real deal, so I predict the Republican establishment in CA, still smarting from losing to Davis in the last election, will rally around a winner. And since he can win, he will run.
I think it'll be a mixed blessing to win this election--painful, unpopular decisions will need to be made to get the state government back on track. However, better to have those decisions made by someone who will take the right approach. Arnold may be just what California needs--and the right model for Republicans of the future. He's socially moderate and an economic libertarian. Importatly, he has good advisors, such as the brain trust at the Hoover Institution. Let's hope he listens to them.
Vice President Dick Cheney's address to AEI describes the motivation for war clearly: to ignore the Iraqi threat, in the wake of 9/11, would have "irresponsible in the extreme." Worth reading the entire text or watching the streaming video, but here is an excerpt:
Now the regime of Saddam Hussein is gone forever. And at a safe remove from the danger, some are now trying to cast doubt upon the decision to liberate Iraq. The ability to criticize is one of the great strengths of our democracy. But those who do so have an obligation to answer this question: How could any responsible leader have ignored the Iraqi threat?
Last October, the Director of Central Intelligence issued a National Intelligence Estimate on Iraq's Continuing Programs of Weapons of Mass Destruction. That document contained the consensus judgments of the intelligence community, based upon the best information available about the Iraqi threat. The NIE declared--quote: "We judge that Iraq has continued its weapons of mass destruction program, in defiance of UN Resolutions and restrictions. Baghdad has chemical and biological weapons, as well as missiles with ranges in excess of UN restrictions. If left unchecked, it probably will have a nuclear weapon during this decade." End quote.
Those charged with the security of this nation could not read such an assessment and pretend that it did not exist. Ignoring such information, or trying to wish it away, would be irresponsible in the extreme. And our President did not ignore that information--he faced it. He sought to eliminate the threat by peaceful, diplomatic means and, when all else failed, he acted forcefully to remove the danger. ...
Critics of the liberation of Iraq must also answer another question: what would that country look like today if we had failed to act? If we had not acted, Saddam Hussein and his sons would still be in power. If we had not acted, the torture chambers would still be in operation; the prison cells for children would still be filled; the mass graves would still be undiscovered; the terror network would still enjoy the support and protection of the regime; Iraq would still be making payments to the families of suicide bombers attacking Israel; and Saddam Hussein would still control vast wealth to spend on his chemical, biological, and nuclear ambitions.
July 26, 2003
I've become a big fan of the BBC series "Coupling" (on BBC America) and so was disappointed to read this probably accurate review on ext|circ called "Uncoupled in the USA," of the American knock-off coming to NBC. Coupling is essentially a British "Friends," a bit more risque and a lot more, well, British. If you like that sort of thing it's much more satisfying than Friends. While one hopes that an American version will be worthwhile, what's the point? An American Coupling already exists in the form of Friends and if Americans want to see the British version they can see, well, Coupling (on BBC America).
That being said, one of the things that makes Coupling clever is that tey tend to fool the audience. Think of the classic Three's Company plot in which there is a fundamental misunderstanding with humerous consequences. However, the audience always knew exactly what the misunderstanding was (usually before it even happened.) With Coupling the audience doesn't always know what's going on (for those who have seen it, think about the episode with Peter awakened in the middle of the night screaming "glass" and headed over to Sally's) and so the payoff is better. If this doesn't make any sense, watch the show... on the BBC.
How are things going in Afghanistan really? Here's a post from Kabul by way of Instapundit.com. Excerpt:
Despite dozens of missteps, made mostly with good intentions, it has been the understated but forceful American influence, not the UN and the hundreds of NGOs, that has taken the major gambles here. The Americans have displayed admirable flexibility in altering tactics and strategy when necessary and achieved this dicey, delicate transition.
I've said it before and I'll say it again, now that the tech industry's fate is tied to the growth of bandwidth more than microprocessor power the regulatory issues concerning telecom will be the major factor determining its growth.
From Slate, Andrew Sullivan makes a good case for the beneficial impact that blogs have on liberalism in Are Weblogs Changing Our Culture? By Kurt Andersen and Andrew Sullivan. Excerpt:
I think over the past couple of decades, liberalism in its classic sense has been under threat. Not just from crazy theocrats abroad but from P.C. paternalism and religious-right activism at home. The formation of solid camps of thought, and the punishment of heretics, and the maintenance of orthodoxy on all sides have inhibited a free discourse in ideas. And part of the reason for that was the limit on the numbers of vehicles for expression. After all, there aren't that many genuinely intellectual mags in this country, and the battle to influence them can be intense. But the fragmentation of media, accelerated by blogs, can break this up some and allow more complicated or unusual voices to emerge, without their having to ask permission or fight for space or suck up to people already in charge. If, say, the writers at Indegayforum had had no option but to try and get into the established gay press—which has been, until recently, extremely P.C.—it would have taken up a huge amount of time and led to enormous angst and wasted energy. Blogging circumvented that. It widens the sphere of possible voices exponentially. That's wonderful news for the culture as a whole. And for liberalism in its deepest sense.
July 25, 2003
The Cato Institute has recently published "What's Yours Is Mine: Open Access and the Rise of Infrastructure Socialism" By Adam Thierer and Clyde Wayne Crews Jr. which covers the hugely important issue of forced open access. Many classic examples of government failure under the charade of addressing imagined market failure.
Check out the introduction to the book. An excerpt:
To create and preserve the best preconditions for wealth creation and innovation in the economy, it is more sensible to regard networks as private property rather than public-utility-like vessels that should be subject to common carrier–style regulations. Unfortunately, those lobbying for open access, whatever the industry sector, want to hitch an uninvited ride on another’s property rather than construct their own or make a voluntary business deal for access. That impulse is incompatible with the aims of the network owner, and incompatible with the emergence of future networks. There can be no stable regulatory resolutions of such fundamental crosspurposes.
Continued embrace of access regulation threatens to turn Internet and other network-related businesses into lazy public utilities, neutralizing the natural competitive impulse of firms to devise alternative business models and rival networks capable of displacing an entrenched incumbent....
July 23, 2003
I've written about how tort law abuse is the number one domestic problem in this country and also provided some examples, but to really get a feel for this problem look no further than this piece from WSJ.com - The Shakedown State.
Crooked lawyers are blackmailing businesses--costing jobs and increasing costs for consumers--based on dubious legal merit. But with such heavily pro-plaintiff rules in this state the blackmail works because businesses can't aford the risk--juries can be manipulated and it is costly just to defend even a frivilous suit. And for those who have little sympathy for anything that smacks of "business" note that large businesses can afford legal teams to fight these things, so it is the small businesses, often " mom-and-pop immigrant defendants" who get hurt the most.
Why such a dysfunctional system in California? The trial lawyer lobby has the Democrats, who totaly control state governnment, in its pocket.
Shakedown suits are nothing new in the Golden State, but Damian Trevor and two colleagues effectively mechanized the process. They combed through state regulatory records for businesses that had been issued some kind of reprimand, often over trivial paperwork omissions or missed deadlines. They sent letters in the name of Consumer Enforcement Watch, a newly organized group whose mailing address was the same as theirs, offering not to sue the businesses if they came across with checks in the thousands of dollars. The firm's "red letter," named after the color of the paper on which it was printed, put matters bluntly: "Either pay even more money to fight in court or settle out of court and get on with business." Many did pay.
In part because of press sympathy for mom-and-pop immigrant defendants, a furor began to build. And while trial-lawyer spokesmen took a "few bad apples" line, business groups saw Mr. Trevor's treasure hunt as merely the latest logical extension of section 17200, a law so bizarrely pro-plaintiff as to be a major disincentive for many companies to do business in the state. Indeed, the chairman and CEO of mortgage giant Countrywide pointedly cited 17200 in a recent letter to Gov. Gray Davis explaining the company's decision to halt expansion in California. …
Robert Fellmeth, a University of San Diego law professor with strong liberal and consumerist credentials, supports 17200's broad objectives but has said that its current configuration "really creates an environment for extortion." This spring Mr. Fellmeth worked with Assemblyman Lou Correa (D., Anaheim) to craft a very modest measure that would have required court approval of settlements and provided public hearings to vent defendant objections. They might have saved themselves the effort: In May the Judiciary Democrats deep-sixed Mr. Correa's bill along with more far-reaching GOP alternatives that in one instance would even (of all things!) have required lawyers to line up actual injured clients before they sued.
But that was just a prelude to what happened next. On July 8 the respective Judiciary chairs stunned business observers by pulling from a hat and passing substitute bills devised by the state's trial lawyer group, which styles itself Consumer Attorneys of California. …
After that begins a trial-lawyer wish list, starting with liberal rules for "joinder" of defendants, along with explicit authority for lawyers to sue multiple businesses without knowing which ones have actually committed a violation. Most ominous of all, the bill would overturn a March decision in which the state supreme court barred lawyers from demanding the "disgorgement" under 17200 of any and all revenue a business had earned while an infraction was in progress, as opposed to restitution for customers affected by a practice, which they are still free to seek. The difference between the two is dramatic: If you're a pizzeria owner and get sued for unfairly claiming that your pie is the best in town, restitution might consist of giving away consolatory baskets of garlic bread, but disgorgement could mean paying out all the revenue you've taken in while the slogan was printed on your boxes. It's a remedy so drastic that courts seldom impose it; its real function is usually to give lawyers the leverage to terrify defendants into settlement. To top it all, the Escutia bill would allow lawyers to steer settlement funds not paid to actual consumers to organizations that "promote justice," code for the consumer and pro-litigation groups with which the lawyers are allied.
The trial lawyers' bill has now passed both houses in different forms and could reach final-action votes any day now. Don't count on Democratic Gov. Gray Davis to exercise his veto: trial lawyers are likely to be major sources of the war chest he'll need for his forthcoming recall battle.
July 22, 2003
This slightly contorted story in the Venture Capital Journal wanders a bit when it comes to the FCC/media regulation stuff but presents some interesting data on venture investing in media. Todd Dagres of Battery Ventures says "Content has been and will be king," while Stewart Alsop (with a stong media background) of NEA says "Investors would be crazy to get back into content."
But crazy or not, they have returned. As of early June, venture and buyout firms had invested 83% more dollars in media content plays than they did in all of 2002-and were on the cusp of surpassing the 2001 total of $3.39 billion (see chart below). A good chunk of this year's activity involves either buyout or late-stage venture dollars, but early-stage players also are making a push in emerging markets like digital cable television.
Always good to remember the importance of allowing firms to fail--which is, perhaps ironically, a vital component to overall success and prosperity. After more than a decade of weak economic growth the Japanese still haven't figured out the importance of allowing businesses to fail--so that those resources can be put to better, higher uses. The US maintains a global lead because it adopts pro-innovative policies. Worryingly, I feel that risk aversion, and the perceived need to "protect" people from failure--combined with reactionary political forces--are eroding this environment. Take Sarbanes-Oxley which treats executives as a criminal class and discourages risk taking. But the good news, as reported in a recent Rand study, is that we are still ahead of the rest of the world.
Rand said the U.S. will cement its lead in the global information technology revolution because its authorities provide "a hospitable environment to IT business development."
"U.S. businesses are focused on innovation, and Americans readily accept change," the report added.
The United States is ahead because it is willing to let uncompetitive industries fail, said the report.
"Unlike many other nations that concentrate on protecting existing businesses and institutions, the United States presses ahead with change even when it means 'creative destruction' of companies that drive its economy today in order to build a stronger economy tomorrow," said Richard O. Hundley, the lead author of the study.
What to do when notions of free speech seem to collide with the principles of private property? Richard Epstein seems to get it right in this analysis on FT.com, while the 9th Circuit gets it wrong (again.)
All that can be said for sure is that there is no way to wall off the world of spam from the world of mass communications once the unauthorised use of another’s property has been elevated into a social cause, or worse, a constitutional right.
From BusinessWeek: A Big Windfall for Small Biz, a small piece demonstrating that tax incentives matter. Lower taxes reduce the barriers for transactions and thus help captial and resources reach their highest uses.
The Bush administration's recent tax cuts are having an unintended effect: They're encouraging entrepreneurs to sell their companies. The cut in the capital-gains tax from 20% to 15% means most sellers can pocket an extra 5% of the sale price of their businesses. "I think this is going to have a huge effect,'' says Beatrice Mitchell, co-founder of investment bank Sperry, Mitchell & Co., which specializes in midsize outfits. "I've already had a couple business owners say, 'Maybe the pricing isn't quite what I wanted, but with the extra 5% I'll do it.'''
July 20, 2003
July 19, 2003
Tony Blair delivered a marvelous address to Congress on July 17th and anyone who is still puzzeld as to why we went to war in Iraq should read this transcript, or better yet watch the streaming video on C-Span. Many theories abound about why the decision was made to remove Saddam Hussein. To me the reason is quite clear and simple--and it explains why two men as different as Tony Blair and George Bush have been so strongy unified on this issue. In a post-9/11 world, in which we have learned the problems of asymetric threats, it is intolerable for men, chartered primarily with the security of their nations, to allow brutal dictators developing weapons of mass destruction to flaunt the norms of international behavior. Blair expresses it plainly:
The risk is that terrorism and states developing weapons of mass destruction come together. And when people say, "That risk is fanciful," I say we know the Taliban supported Al Qaida. We know Iraq under Saddam gave haven to and supported terrorists. We know there are states in the Middle East now actively funding and helping people, who regard it as God's will in the act of suicide to take as many innocent lives with them on their way to God's judgment.
Some of these states are desperately trying to acquire nuclear weapons. We know that companies and individuals with expertise sell it to the highest bidder, and we know that at least one state, North Korea, lets its people starve while spending billions of dollars on developing nuclear weapons and exporting the technology abroad.
This isn't fantasy, it is 21st-century reality, and it confronts us now.
Can we be sure that terrorism and weapons of mass destruction will join together? Let us say one thing: If we are wrong, we will have destroyed a threat that at its least is responsible for inhuman carnage and suffering. That is something I am confident history will forgive.
But if our critics are wrong, if we are right, as I believe with every fiber of instinct and conviction I have that we are, and we do not act, then we will have hesitated in the face of this menace when we should have given leadership. That is something history will not forgive.
Blair makes a defense of the idea of liberty that is the most articulate I've heard since the days of Ronald Reagan and Margaret Thatcher.
There is a myth that though we love freedom, others don't; that our attachment to freedom is a product of our culture; that freedom, democracy, human rights, the rule of law are American values, or Western values; that Afghan women were content under the lash of the Taliban; that Saddam was somehow beloved by his people; that Milosevic was Serbia's savior.
Members of Congress, ours are not Western values, they are the universal values of the human spirit. And anywhere...
Anywhere, anytime ordinary people are given the chance to choose, the choice is the same: freedom, not tyranny; democracy, not dictatorship; the rule of law, not the rule of the secret police.
The spread of freedom is the best security for the free. It is our last line of defense and our first line of attack. And just as the terrorist seeks to divide humanity in hate, so we have to unify it around an idea. And that idea is liberty.
Clearly, the case for liberty is also the case for security. Since tyranny is a major root cause of terrorism, the fiaght against terrorism can't be distinguished from the fight for liberty. In addition to the fight against tyranny, Blair makes a strong case for addressing global concerns such as tyranny, famine, disease, poverty, and environmental destruction--all while defending free trade.
The Blair address also gives unique insight as to the "special relationship" between the US and the UK--the Channel is wider than the Atlantic. But while Blair chides those in Europe who wish to create a counter balance to the US, rather than working together, he also urges the US to work with Europe.
There is no more dangerous theory in international politics than that we need to balance the power of America with other competitive powers; different poles around which nations gather.
Such a theory may have made sense in 19th-century Europe. It was perforce the position in the Cold War.
Today, it is an anachronism to be discarded like traditional theories of security. And it is dangerous because it is not rivalry but partnership we need; a common will and a shared purpose in the face of a common threat.
And I believe any alliance must start with America and Europe. If Europe and America are together, the others will work with us. If we split, the rest will play around, play us off and nothing but mischief will be the result of it.
I have some sympathy for the case that John Gilmore is trying to make with his "Suspected Terrorist" buttons. His point, as articulated in this piece from Politech: John Gilmore: I was ejected from a plane for wearing "Suspected Terrorist" button, is that the button...
refers to all of us, everyone, being suspected of being terrorists, being searched without cause, being queued in lines and pens, forced to take our shoes off, to identify ourselves, to drink our own breast milk, to submit to indignities. Everyone is a suspected terrorist in today's America, including all the innocent people, and that's wrong. That's what it means. The terrorists have won if we turn our country into an authoritarian theocracy "to defeat terrorism".
Fine. Good point. But British Airways is a private carrier and they can, and should, make decisions about what customers they are willing to serve. Just as I should be able to kick John out of my house for wearing that button (I wouldn't though). Frankly I think wearing a button like this on an airplane was rude--John obviously knew it would make people feel uncomfortable (I presume that was the point.) Do I think he should go to jail for it or be punished by the state? Of course not. But I do want airlines to create comfortable travelling environments and think they have a right to do this.
Now I'm not saying BA made the right decision. Sounds like they had a silly over-reaction. That's their right and it's John's right to choose not to fly with them in the future. My point is that this is a very different thing than those restrictions put on us by the government--which has ability to use coersive force--and conflating the two weakens the whole case.
Now before Jason accuses me of being inconsistent with my post on spam below, I'm not. I don't think the state shoud prevent John from wearing his buttons, nor should they present him from sending out whatever email he wants to. But BA has the right to refuse service, and so should ISPs.
If you ever doubted whether blogs matter, check out what's going on in Iran. From WSJ.com - The Blog Shall Make You Free.
Thanks to these blogs, Iranians are gabbing fairly freely about everything from entertainment and poetry to technology and personal diaries. Iranian women (who can take different names online) use blogs to talk about dating, sex and other taboo subjects. And, of course, the blogs are playing a real role in Iran's democracy movement. Bloggers provide firsthand accounts of student protests, political criticism and even attract politicians -- who comment on postings.
July 18, 2003
The invaluable Henry Miller draws attention in this piece in Tech Central Station to the damaging and inconsistent regulations of biotech. Whether you prefer more or less regulation, we all should want regulations to be rational. We haven't got that. Even though gene slicing methods are more presice, they are discriminated against because the method, not the outcome. This creates a perverse regulatory regime.
The dirty little secret of U.S. biotech policy is that regulation at the USDA and EPA is internally inconsistent and contradicts the official overarching federal policy -- developed during the previous Bush administration with the formal agreement of the agencies -- which stipulates that regulation of biotechnology products should be "risk-based," "scientifically sound," and focused on "the characteristics of the biotechnology product and the environment into which it is being introduced, not the process by which the product is created."
July 17, 2003
Interesting post by Phil Wolff, who has an interesting blog, on whether spam is to the EFF what the KKK was to the ACLU. The ACLU defended the KKK on principle, despite probably loathing them. Should the EFF defend spam on principle, despite probably loathing it?
There is a lot of fast and loose talk about regulating spam--countless bills are floating around our congress. Just read Jason's comment to my opposition to regulating spam for a taste of the certainty that many feel that something must be done--and by that many mean a centrally planned solution. The problem is obvious to many: email works just fine, we just need to fix spam. But the problem is that regulating speech and behavior--even nasty behavior of people trying to *gasp* sell stuff--is something that ought to be done with great, great care and only if the solution is better than the problem--and regulation is the last and only resort. In the words of Robert Conquest: "…it is not enough to show that a situation is bad; it is also necessary to be reasonably certain that the problem has been properly described, fairly certain that the proposed remedy will improve it, and virtually certain that it will not make it worse."
But has the problem been properly described? If it is worth defending the KKK to preserve a principle, we had better be sure that we've thought this through very, very carefully. I think we might be getting the problem wrong: the problem isn't spam, it's email.
We often talk about security in technology and a system that it not secure--vulnerable to hacking--is a bad system. Sure hacking can be bad, but it's a reality. Spam is in a sense a form of hacking--an abuse of a system made possible by that system's vulnerability. We can blame the abusers, but that is a form of denial. You don't leave your car unlocked and the keys in the ignition--and if you did, would you blame the police for your car getting stolen?
But don't take that metaphor too far: car theft should be illegal. But speech? (Yes, email is speech.)
Spam is a huge problem, and it is a big enough problem that we ought to be asking what's wrong with the email system, not with spammers. The solution is not to criminalize speech but to fix the system. We ought to be looking at spam as a huge telltale sign that there is a need (and opportunity!) to fix the system and the pressure created by the problem is what a great entrepreneurial opportunity (opportunities!) is made of.
Now, I know what you are thinking: spam blocking technologies don't or won't work (or you are thinking they do work and have already been and are being created.) But I'm not talking about spam blocking, I'm talking about the whole system of email. After all, email is not the end-all, be-all and has only been with us in mass form for a relatively short time. Perhaps it's not done evolving.
IM is an example of an evolution. There are multiple social networks popping up with messaging components (Ryze, Friendster, etc.). And read Phil Wolff's thoughts on how RSS and email may blend together. There is no spam in RSS aggregation because the user defines the data it wants to aggregate (pull v. push).
I don't know what the answer is. No single person knows. And that's the point. We could be wrong about the spam problem. We could be criminalizing speech unnecessarily and uselessly (most of my spam comes from dethroned princes in Nigeria anyway who probably don't follow the US criminal code that closely.) And my guess is that spam regulation will follow most other examples of tech regulation: the problem gets solved by industry before the regulators get their act together (and the regulations will simply be putting up barriers and infringing on freedom needlessly.)
We are spending too much time blaming spammers and not enough time learning the lesson that the spam problem is trying to teach us. We should be evolving email and, while evolution is a process of trial and error--hard to predict and impossible to plan--riches abound for those who figure it out.
In case you missed it, this is an excellent essay by Clay Shirky titled The FCC, Weblogs, and Inequality and is the smartest analysis of the issues surrounding the FCC regulation of media. Did you fret when the FCC eased, oh so slightly, the rules on media ownership? If so, are you in favor of regulatinng blogs?
The Competitive Enterprise Institute asks "Whatever Happened to Telecommunications Deregulation?" And it's a good question. CEI does a good job of showing that while regulation of telecom has been justified as beneficial to consumers, the data show the opposite.
Have artificially low wholesale prices for telecommunications services helped or harmed consumers? While many federal agencies are required to estimate the costs and benefits of the regulations they manage, the FCC has no such obligation. However, according to a new study released jointly by the Competitive Enterprise Institute and the New Millennium Research Council, regulatory rules that set wholesale rates far below costs have ended up costing Americans substantially more (chart) than what would be the case in the absence of such regulations. While these rules purported to encourage competition, they have usurped market forces and crippled the industry, and by correlation, the economy.
The telecommunications and computer industries have been long recognized as the major catalyst for economic growth. According to the Department of Commerce estimates, these industries have accounted for nearly all of the productivity growth in the economy. However, the industry and economy will meander aimlessly until regulatory rules are changed, the industry is deregulated and the monopoly power of regulators is curtailed.
July 14, 2003
Thanks to Robert Bartley for providing some useful perspective on the whole uranium issue. Let's be clear: Saddam may have in fact been seeking significant quantities of uranium from Africa. The intelligence community is split on the issue. The administration has acknowledged, however, that the intelligence did not rise to the level needed for this assertion to be included in a state of the union speech, and George Tenet, a Clinton appointee, has taken the blame for this error. No one, not even the French, denies that Saddam Hussein has had nuclear ambitions in the past and no one, not even the French, has given a clear reason why or proof that these ambitions abated. Bush made the assertion that "Trusting in the sanity and restraint of Saddam Hussein is not a strategy, and it is not an option," in the state of the union and nothing in this uranium issue would change the wisdom of that approach. Was this strategy (i.e. not to trust Saddam) the right one? Voters have the right to hold Bush accountable for the results of his strategy--and they should do so in 2004. What those results will be and how people will evaluate them remains to be seen. But trying to make political hay out of the innate haziness of intelligence is counter-productive.
July 11, 2003
Here's Sullivan on Horowitz on Coulter. I tend to agree with Andrew and David, but caveat that I haven't read Ann Coulter's "Treason," though I have read the reviews and believe I get the gist. I think it's unhelpful, as Don Rumsfeld might say, to suggest that "the Democratic Party, as an entity, has become functionally treasonable," as she did on the Chris Matthews show. Coulter seems to have made some useful points in her book, but to position the debate as not between right and left, or even right and wrong, but as between the right and the criminal, while being factually inaccurate of course, will polarize the debate in an unhealthy way. There are certainly unpatriotic and even anti-American elements of the left--but this is different than treasonous and those view points ought to be debated, not dismissed. It's good to see so many strong conservatives take Coulter to task on this. Horowitz puts it best:
It is important for conservatives to make distinctions between those on the Left who were (and are) traitors or self-conceived enemies of the United States, and those who were (and are) the fellow-travelers of enemies of the United States, and those who are neither traitors, nor enemies, nor friends and protectors of enemies, but are American patriots who disagree with conservatives over tactical and policy issues. It is important, first because it is just, but also because it is a condition of democracy. Citizens will disagree over many issues and matters. In order for the democratic process to survive, all parties must refrain from attempts to de-legitimize those who disagree with them, provided they have legitimate concerns and dissents. If every Democrat is a traitor, if “the entire party cannot root for America,” we are left with a one party system.
July 10, 2003
Perhaps the only worthwhile thing about watching Brewer's games these days is watching the racing sausages that round the field after the sixth inning. Well Randall Simon of the Pittsburgh Pirates decided to make it interesting last night by whacking the Italian sausage with a bat--knocking the sausage, worn by a 21-year old woman, into the hot dog. Both fell down and sustained mild scraping. Fortunately the bratwurst and Polish sausage avoided the collision and were uninjured. There is a lesson here: You don't hit the racing sausage with the bat.
Here's an excerpt of Mike Bauman's sharp analysis on MLB.com:
We have all seen the replays. Simon did not take anything like a full swing at the sausage in question. He did not take a big, full-of-malice swipe at the sausage in question. But there might have been something more than "a tap" applied. And if you're the racing Italian sausage, you don't expect to be struck by any sort of object. Running with that bizarre, rectangular costume on, it might not take much to knock you off your sausage equilibrium, anyway.
I do not know about the racing sausage aerodynamics and neither do you because we have never been racing sausages. And we certainly are not going to start now, after this episode.
You don't hit the racing sausage with the bat. Moses could have brought this back down the mountain with him as the 11th Commandment, but it was so obvious that there was no need. You don't hit the racing sausage with the bat. In addition to his life sentence being known as the guy who hit the racing sausage with the bat, Randall Simon should do some public service time. He should spend an entire day and/or night of a game at Miller Park in the costume of the racing Italian sausage.
July 3, 2003
Have you ever given a speech? If so, did you ever worry that what you said during that speech would get you killed? Of course not. It's important to remember this fourth of July that we have people to thank for this freedom.
Most people are afraid of public speaking--but not because they are worried about death, but rather mere embarrassment. Jerry Seinfeld remarked that fear of public speaking ranks higher than fear of death in our society--as he put it: So if you are at a funeral, you'd rather be in the casket than giving the eulogy.
Patrick Henry gave a speech once, in 1775, a stirring, moving speech. One that he knew might result in his death. His dedication to freedom was inspiring--to say the very least. I've excerpted just a few lines, but it is really worth reading the whole thing. Happy 4th of July!
"There is no longer any room for hope. If we wish to be free; if we mean to preserve inviolate those inestimable privileges for which we have been so long contending; if we mean not basely to abandon the noble struggle in which we have been so long engaged, and which we have pledged ourselves never to abandon, until the glorious object of our contest shall be obtained; we must fight! I repeat it, sir, we must fight!! An appeal to arms and to the God of hosts is all that is left us! ...
"Forbid it, Almighty God -- I know not what course others may take; but as for me -- give me liberty or give me death!"
Virginia Postrel sounds off on the magic thinking possessing our political leaders in California. I enjoy the quote from Dan Walters of the Sacramento Bee, whose recent column carried the headline "We act like a Third World nation--so treat us like one."
July 2, 2003
David Hornik has written an interesting piece on VentureBlog asking if the Web is inherently democratic. This question has as many answers as "democratic" has meaning. From a political standpoint, if democratic is defined as "the ability of the people to have a say in political process" then my answer is yes, and no. Strictly speaking, we are a representative democracy and therefore the people don't really make political decisions—they choose the people who do. So to the extent the Internet increases voter participation, it is perhaps a tool for democracy. Of course, we all believe that we should have some ability, other than voting, to influence our politicians and there tends to be great outrage that vested interests get to do this while "people" don't. But vested interests are just collections of people (such as companies, industry groups, unions, environmental groups) trying to have a disproportionately large influence over politicians. I don't see anything qualitatively different from a group of people banding together via MoveOn to oppose the war in Iraq, for example, trying to make the whole greater than the sum of its parts, than a company—which is a collection of people (managers, employees, owners, customers, etc.)—trying to do the same thing—or the Sierra Club or the NEA or the NRA doing the same thing. Many with an inherent distaste for corporate power will claim that there is a moral difference because corporations are driven by profit. (I believe this is an over-simplification of what a corporation is and frankly prefer to worry about actions, not motivations.)
I believe that the Internet will surely empower more people to organize (it already does: what special interest group doesn't already use the Internet in some fashion) and that this will probably move us closer towards popular democracy, and further from representational democracy. And I think this is a mixed blessing.
However, I believe that the more interesting aspect of the Internet, and blogging, is not the democratic aspects but the meritocratic ones. Clay Shirky wrote persuasively that the blogging space is not egalitarian and flat, it is lumpy and in fact heavily weighted to the few, not the many. Hornik references this "the more interesting the things we say, the more referrers and traffic we get" and I agree with him that the Internet is more of a tool to empower people (not a tool to level people.) It is meritocratic.
And that changes things. Especially media.
We are used to thinking of media in the manufacturing paradigm. Historically "news" and information has been manufactured because that was the only way to disseminate information en masse. Books, newspapers, magazines had to be printed. Broadcast and radio signals had to be engineered with costly technology. But that's not the way we truly share and digest information at all! Formal media has been a crude approximation of how information is really shared. I get some of my information from reading printed material, but a lot more by talking to people informally in cafes, meetings, over lunch, or attending speeches. I learn about, debate, analyze, and digest information in a dynamic way, with formal, manufactured media being only one component. That's the way meatspace works, cyberspace is just catching up.
Online media is entering its next major generation. The traditional print media model dominated online media in the 1990s—in essence the newspaper and magazine models were ported to the web. This was characterized by deadline-based publishing almost entirely advertising supported. The next generation model for online media, characterized by community-based publishing, was foretold by GeoCities and now can be seen in the proliferation of weblogs as well as pioneering sites such as Slashdot.org in addition to the large Internet players such as eBay, Amazon, and Yahoo. Before this wave settles, however, the third generation, of the semantic web, webs of trust, emergent communities, reputation systems, RSS and the like, will be upon us. Here are some of the attributes I see in new online media models:
* Community is seamlessly integrated into, and sometimes indistinguishable from, content. The barrier that exists clearly in the print world between professional journalist and reader is dissolving in the online medium, replaced by a range of sources from professional to blogger to poster to reader. There is nothing new about getting useful information, analysis, and context from the community, but while this is difficult in the print medium, online media is bringing community content to a level of critical mass.
* The barriers between publishers are breaking down as professional and amateur sites alike thoroughly link and syndicate with each other.
* Information consumers are getting acclimated to new, diffuse media models, such as blogs and community sites.
Call this "emergent media"—media that emerges organically from the community, rather being planned and produced only by central players, on a meritocratic basis.
I'm always a bit frightened when I find myself agreeing with Michael Kinsley, but I think he's on to something in this piece in Slate. He points out accurately that we are about to join a fierce, long battle over gay marriage in this country which may become as intractible as the abortion issue. Can we do something to head this off at the pass? Kinsley thinks so, and I tend to agree: deregulate marriage. Why do we need to have the state subsidize marriage? Doesn't marriage properly belong in the Church (or the country club or Vegas)?
The primary opponent to this will be social conservatives--and they have a point. We should not take lightly threats to the family structure. But is this really one? Does marriage NEED the state to survive? Do we need favorable tax treatment and other legal goodies to "encourage" marriage?
I don't think we have a problem with too few marriages in this country. If anything, we have too many, because we have too many divorces. The problem isn't that people aren't willing to get married--I think they may be too willing. Look how nonchalant we are about marriage when it comes to programs like the Bachelor and Joe Millionaire. We are jaded. If state encouragement truly makes the difference between a couple deciding to get married rather than not, then is that a recipe for a successful marriage? Shouldn't we be goaling for a better quality, not a bigger quantity of marriage? I worry that, as with almost everything, the state's influence can be a distorting one and have unintended consequences (see my post on Paternalism.)
There are reasons to have a legal entity called marriage--having to do with the partnership between two people, contracts, children, healthcare, etc. I'm not saying the state shouldn't respect certain contract bonds and that these aren't problems to be addressed. But does it really help the institution of marriage to force people to get a license from the state? Who's in charge here?
July 1, 2003
Often when I'm debating with friends about political issues we determine that at the core of our disagreement is the notion of paternalism. Paternalism is at the heart, I believe, of many left/right debates and it crops up when talking about everything from minimum wages, healthcare, social security, telecommunications, education, and on and on. At one level the argument in favor of paternalism is seductive: there are people who need help, need protection, need society’s support and we have governments to do just that, right? I am not against all forms of paternalism but I believe that far too often thinkers and policy makers only consider the positive side of paternalism: what the government can do to "protect" people without balancing the drawbacks of paternalism. There is rarely an acknowledgement of the tradeoffs involved or a fair anticipation of the unintended consequences. The result has been, to my mind, that many experiments in state paternalism have had the opposite effects. Often, as noted below, when the state uses the rhetoric of protecting the public interest, it instead protects special interests, as the expense of the common good.
So here are some drawback to paternalism what should be considered when that justification is the core reason for an state action:
1) Infringes on personal liberty. Sadly many dismiss the encroachment on personal liberty as the just cause of "protecting" people. It is surely true that we have to sacrifice some of our personal liberties for the sake of protection, but we should never forget that there is always a tradeoff. I may want to try a new drug or medical technique that has been approved safe in Europe, but time after time the FDA prevents people from trying potentially life-saving therapies in order to protect them. Regardless of whether on the whole the FDA's decisions save or cost more lives, the cost of protection is an infringement of personal liberty.
2) Penalizes the responsible for the sake of the irresponsible. Paternalism essentially restricts the individual rights of those who could make responsible choices for the sake of those it is feared will not. This has the unfortunate effect of encouraging, in essence, irresponsible behavior. The same FDA example above applies here: I may do the research and be fully informed, but my informed choice is not respected for the sake protecting those who can’t or won’t inform themselves. So why bother informing yourself? Once we transfer to the state the responsibility of determining what is safe and what is not safe why bother making the determination on our own? State intervention creates a moral hazard. By replacing our own judgment with the state's, we take less and less responsibility for our own actions. If the FDA approves it, well then it must be good to imbibe, eat, implant, or inject—and vice versa. We tend to confuse the law with morality, when they are not the same thing. How many parents feel it is the state's responsibility, not their own, to educate their children? How many people don’t practice responsible investing because they assume that the state will protect them—even from their own idiocy?
3) Central planning and one size fits all solutions often simply don't work. It's seductive to think that broad, single solutions can address all problems equally well, but truth is that they usually improve some circumstances and worsen others. We are a diverse country and live in a complex world, it is rare when something is good for everyone.
4) Even if there is in fact one best way, often all of the information needed to central plan is simply not knowable. Tom Bell, in this essay on copy rights, references "Friedrich A. Hayek, [cf2]Individualism and Economic Order [cf1](Chicago: University of Chicago Press: 1948), pp. 77-78. Hayek explains that the knowledge essential for central planning does not exist in concentrated form." Information is diffuse, often dispersed, and always changing. The idea that central planners can always acquire all the information that is needed and make accurate decisions in timely manners that will stand up to changing environments is often faulty. More often that not innovation can solve problems before regulators get around to it.
5) Even if there is one best solution and it can actually be determined, there is no guarantee the those politicians and regulators responsible for imposing the rules will not be unduly influenced by special interests and their own career aspirations, rather than a completely objective pursuit of the public good. Tom Bell refers to this "public choice theory" which "holds, in very brief, that because political actors respond to incentives in the same way that other humans do, we should not assume that political acts aim at promoting the public good. See, for example, James M. Buchanan and Gordon Tullock, [cf2]The Calculus of Consent[cf1] (Ann Arbor: University of Michigan Press: 1962); Mancur Olson, Jr., [cf2]The Logic of Collective Action[cf1] (Cambridge, Mass., Harvard University Press: 1965)."
Let me repeat that this post is not intended to refute all instances of state paternalism--or in fact ANY instance of state paternalism: that's a subject for another day. My point is simply that there are trade-offs and unintended consequences of paternalism that are too rarely factored in to decision making.
And there are alternatives. Family, friends, churches, non-profits, the Internet, personal responsibility, and even organizations that profit on helping people make wise decisions. All too often the counter to those who oppose paternalism decry leaving it up to "the market." This is a straw man. Paternalists are in essence arguing for someone to "do something" and implicit in their arguments are that the state is the only vehicle that can be counted on to do something. But I just rattled off a list of other entities that can serve as non-state paternalist, but perhaps in a decentralized manner while avoiding many of the problems that I list above.
Thomas W. Hazlett and Richard A. Epstein, two men I admire a great deal, tag team it in this piece in the FT, decrying both sides of the debate over the FCC's recent decision to loosen some of the regulations media ownership. Theories of excessive media conglomeration when unchecked by regulators are all well and good on paper, but the history of FCC regulation has proven just the opposite: the FCC, far from serving the "public interest" as is its justification for being, is in fact the incumbents' (read: vested interests) best friend, which is why the National Association of Broadcasters has fought AGAINST relaxing the regulations.
The government, subject to the influence of large, special interests, has controlled who gets access to broadcasting licenses and radio spectrum. This has empowered the large interests, retarded innovation, and discouraged entrepreneurialism. The solution: treat the airwaves as property.
Radio and TV regulation is tidily explained by the "capture" theory (in which the agency is controlled by the entities it is supposed to regulate). Rules limit competitive entry, making licences more valuable. Those lucky enough to get a licence take this policy to the bank. Policymakers are happy because it puts them in the loop, yielding political clout in assigning and regulating licensees. But consumers are left out, as competition is reduced and innovative technologies blocked via too-tight spectrum allocations.
Free speech is another loser. Policymakers are adept at making speeches about monopolies thwarted, diversity gained, or localism empowered. But the history of FCC content regulation is a sad one. In fact, the ban on newspaper ownership of broadcast facilities first arose in the 1930s, when FDR was convinced that publishers were anti-New Deal. In 1940, the FCC actually banned radio stations from editorialising (the Mayflower Doctrine). In 1949, the FCC reversed course with the Fairness Doctrine, mandating that radio and TV outlets cover controversial issues from balanced perspectives. But the result was a "chilling effect", as broadcasters chose bland content rather than risking requests for (free) equal time. When the Doctrine was abolished in 1987, informational radio formats increased fourfold in just six years.
Economic restrictions may be even more deleterious than content regulation, however. By suppressing competition, regulators deprive the public of valuable new information sources and free choice in media markets. Take the TV Allocation Table of 1952. The plan killed the fourth network, DuMont, by dishing out insufficient licences to allow survival against the Big Three. DuMont protested strenuously but regulators acted on the public interest in "localism", denying additional stations in big city markets to scatter licences widely.
The emergence of just three national viewing choices was an appalling result that cable TV operators soon attempted to remedy by providing the additional channels consumers demanded. The FCC, despite Chairman Newton Minow’s headline-grabbing speech in 1961 railing against TV’s "vast wasteland", rushed to the broadcasters' defence. Cable's advance was crushed in a series of rulings beginning in1962, and broadcasting remained unchallenged until deregulation in the late 1970s.
The campaign against relaxation is led by the National Association of Broadcasters, which joined FCC lawyers in defending the old rules in court, still arguing the "public interest" after all these years. But, as the D.C. Circuit Court of Appeals wrote in 2002: "the Commission has adduced not a single valid reason to believe the [National Television Station Ownership] rule is in the public interest."
Liberalising just a fraction of the TV band to allow deployment of high-speed broadband would swamp any possible kick from tweaking the TV station ownership rules. But neither the FCC nor its critics seems interested in producing more than grunts and groans in a show fit for pay-per-view.
The source of much of this mischief lies in the Supreme Court’s case law, culminating in its 1969 decision in the Red Lion case, which treated the spectrum as different from newspapers, specifically for first amendment law, and practically everywhere else. The argument du jour was that the scarce space in the spectrum meant that the usual rules on freedom of speech had to be suspended in favour of system that allowed the FCC to rig and run national debate in order to insure balance in the media presentation. But at the same time the restrictive rules on the deployment of spectrum only prolonged the scarcities that were said to justify the government imposition in the first place. Today the idea that scarcity of spectrum really matters is falsified by every cable that snakes underground or dish antenna that pokes up over the roof line. Yet the FCC and its critics are still fighting over which set of special rules should govern the spectrum. The right approach is to start over, and to create property rights in spectrum that can be allocated for whatever purpose the owner chooses subject only to the constraints of the antitrust law. The current mess only confirms the simple truth that there never was any case for special treatment of the spectrum in the first place.