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2022-01-17 12:00 by Karl Denninger
in POTD , 615 references


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2022-01-17 08:35 by Karl Denninger
in Technology , 442 references
[Comments enabled]  

There has been a lot of digital ink spilled on Section 230 and plenty of threats to eliminate it.

I never liked Section 230 and being that I ran an ISP in the 1990s I was in the middle of all the areas of debate that led to it.  We had Cubby .v. CompuServe as our guidepost in regard to case law, and some cautionary tales on the other side when it came to censorship and such (the Prodigy case being one of them.)

The CDA came about in response to other hot-button issues related to kids and sex content, primarily but not exclusively.  There was also a raging dumpster file over ripped-off content, particularly on Usenet, which was an interesting issue because the ripped off content was so voluminous that it constituted 80-90% of the total.  A large part of that was due to the fact that Usenet was mostly a text discussion system so to put up binary files (such as images or stolen software) you had to 7-bit-text encode it first and that made the file sizes wildly expand; the rest was simply due to the fact that one scan out of Hustler was larger in size, even before amplification, than 100 text replies.

It was thus impossible for an ISP to claim "they didn't know" what was going on.  Not only did they know they had to spend 80% or more of their resources that went to Usenet, both in storage and bandwidth, specifically to sell access to illegal material whether that illegality was kiddie porn or ripped off software and images.

I was very public with my view of these things and the industry wasn't unaware of either my position nor the inevitability that law enforcement and the courts would eventually start looking at it this way -- knowing, intentional participation for the explicit purpose of profit, and from there liability, either civilly or criminally was a near-certainty.

In this background the CDA was passed, including Section 230, which exempts service providers from liability provided they are not the "source" of the content in question.  It also left open the capacity to make decisions on an editorial basis without puncturing that shield.  The law was poorly-written from my perspective and I opposed it at the time for that reason; there was a legitimate argument for codifying protection of some sort but what they passed was trivially abusable, which has now occurred.

So let's fix it, but without vitiating Section 230 directly -- and yes, we can.

You see at the time, in the late 1990s, there was no capacity on a storage or analysis basis to do what we do now.  Specifically disks and processor time were both quite expensive.  The disks on our primary RAID arrays, were 8Gb -- yes, gigabytes, and they were (by today's standards) very expensive.  Today they're both trivially cheap -- indeed solid state drives with 30x that capacity and more than a hundred times the performance are a fraction of their cost, which is why all the tracking cookies and such are all over the place and used for targeted advertising.

But this capacity also puts in place the means to neuter the monster.

You see the argument for content discrimination (e.g. Facebook deciding they do not want certain things on their servers) is that advertisers might or do object to their ads being run against something they find offensive and thus there is serious reputational risk.

But.... isn't the point of all this tracking data to not do that in the first place, since said person is not a viable customer?

Of course it is.

Here's the reality of it folks: Google, Facebook, Twitter and others specifically sell targeting advertising.  That is the entirety of their business in that respect: Providing advertisers tools so their ads run against content they, and only they, wish to have it shown against and only to those persons who meet whatever criteria they select on.

Nobody wants to pay for advertising that is worthless, obviously, nor does anyone want to pay for advertising against something that offends their customers or their corporate view of whatever some issue may be.  Where what you have is an undifferentiated display (e.g. a billboard on the side of the highway) there is no way to choose who sees it because you have no way to control who is on the road and every pair of eyeballs can look at it.

But in the modern world with electronic devices that personally deliver advertising with granularity and selection down to an individual human being, which is what every one of these businesses does and forms the very basis upon which they have value as firms this is no longer true.

Therefore any claim that someone must be "removed" or "prohibited" from espousing a particular view lest advertisers have their promotional messages attached to and associated with content they disagree with is a lie and in fact fraud as no advertiser using these businesses displays ads against content except by their decision to key said display based on whatever tags and other characteristics of the viewer and content that they, in their sole election, choose.

Further it is a well-established principle of law under 15 USC Chapter 1, standing as law for 100 years, that banding together to monopolize -- or attempt to do so -- is a felony.  Therefore for advertisers or content providers to undertake a collective action (which is what they do today with "TNI" and similar initiatives) to prohibit certain viewpoints from being monetized or even expressed when such persons so-act with commercial intent cannot be defended on the basis of "reputational risk" since all such advertising can be and is already targeted so only show up on content and to people where the advertiser wishes to have it seen.

Indeed the entire point of such actions is to prejudice and even prohibit commerce that a group disagrees with; that is, through the acts of two or more people monopolize commerce by effectively barring firms from the marketplace that those doing so don't like.

Facts vitiate false claims, especially when you profit from them and in fact structure your entire business around those facts.

So let's make it simple and pass a short two-paragraph federal law as an amendment to the CDA:

No provider of a public service, whether social media, storage, processing power or infrastructure (including DNS, pipes, etc.) may discriminate on viewpoint as to the persons they allow on said service or the viewpoints expressed in any form or fashion, for or against, if they collect, analyze and sell or use tracking information of any sort for the purpose of marketing, advertising or content selection.  For the purposes of this law any cross-ownership interest of any sort between firms, including stock or option ownership and common board membership, or membership in or participation with any coordinating entity between firms whether for profit or not shall bring a firm under the umbrella of this requirement.

A provider who violates this section of law takes publisher liability for all content stored or distributed on their systems and networks irrespective of any provisions that would otherwise shield them either civilly or criminally.

Does this stop a site like mine from banning someone on content or viewpoint, when my TOS disclaims the collection, collation and sale of information on the people who read and post here, either retrospectively or prospectively?  No.  Section 230 still exists.

But does it stop Facebook or Google (e.g. Youtube) from doing so, and does creating something like "TNI" immediately do so for all member organizations?  Yes, unless they dismantle their not-content nor person neutral analysis and data sales procedures, which they can't do without destroying their business since the entire point of their firm, indeed the only reason they have a firm, is said targeting of advertising.

Can one of these "ad-selling firms", after such law, de-monetize a site?  No, because the advertisers on said firm can each individually choose to not display ads on said site. Indeed for them to do so directly implicates 100+ year old antitrust law and this two-paragraph addition to the CDA codifies same as a prohibited action unless the provider chooses to in fact be a publisher with all the attendant liability thereof for everything on and distributed through their systems.

That ought to do it.

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2022-01-15 10:47 by Karl Denninger
in Health Reform , 565 references
[Comments enabled]  

One wonders.

Here and there a bit of it peeks out, yet for the most part it appears to be missing, a relic of a bygone era.

A relic that prevented all manner of mischief while it was strong, and indeed is one of the first and best checks against both tyranny and stupidity, the latter being distinguishable from the former in many cases only on the basis of intent.

Harken back to the national 55mph speed limit, a policy that had no means of actual enforcement as the federal government had no power to set speed limits on highways.  The States did, but not the federal government.

So what did they do?  The Federal Government conditioned federal highway funding on the imposition of the speed limit they wanted.  Some states "complied" but only in name; a few enacted the law but made the penalty a $5 fine, payable on the spot, with no records transmitted or kept.  This likely resulted in more than a bit of local corruption, as you might imagine, but the fact remains that the "enabling act" was vague enough that technical compliance was indeed reached.

Roughly ten years later the same cudgel was used to enact a national drinking age of 21 -- in 1984.

I bring this up because much has been made of the CMS mandate ruling.  The law is not only bad, its catastrophically bad and yet exactly nobody thought it was a "bad idea" as the creeping incrementalism was put into law.  Specifically, the enabling Medicare and Medicaid law permits a single individual to have plenary authority over an utterly enormous amount of federal spending!

Last year the Treasury spent $6.8 trillion, a crazy record-high amount driven by the pandemic.  Of that CMS, that is Medicare and Medicaid services, spent $1.859 trillion, or 27.3% of the total.

Of course this insane level of spending was riven through with a plethora of grab-bag goodies for everyone who was willing to bend to a federal knee.  Congress, and the States learn, you see, that the teat is there provided you do what Congress wants and thus Congress effectively compels the States without actually pulling a gun.  They instead pull a wad of $100 bills.

But the fact remains that the CMS ******* mandate was upheld by the Supremes on the basis of one line in the statutes, which gives the director an unchecked capacity to set standards by mere assertion upon which nearly one dollar in three spent by the Federal Government is disbursed!

There are supposed to be 435 People's representatives and 100 State's representatives who make those decisions, along with one President who must either concur or be overridden by 2/3rds of both of the other bodies.

That was the original design of the Federal Government by the Founders, who recognized that plenary authority vested in anyone for any reason other than immediate and exigent circumstances, such as during an actual battle of a war, was a very bad thing and, if allowed to take root, would inevitably devolve into an effective Monarchy whether named such or not.

Well here we are folks.

This is not in fact about "bodily autonomy" as the narrow issue presents itself in the media and the various screaming from factions on both sides of the aisle.  In fact it is about the structural defect we coded into our federal Statutes and which we have allowed the States to continue to tolerate.

For those who think the answer is to change Biden out for, as an example, DeSantis come 2024 may I point out that changing one dictator for another simply changes who gets screwed!  It does not prevent the screwing, just as we now have Becerra at HHS who holds plenary spending authority over a third of the federal budget but the previous person in that position, Alex Azar did the same screwing when it came to treatments and "bonuses" under President Trump with exactly the same level of national control over what was used and when!

Indeed where was DeSantis or any other governor since, I may remind you, health licensing in all respects are typically state-regulated things.  There is no national doctors license but there sure are 50 state ones.  Likewise there is no national business license but there sure as Hell are state, county and local business licenses.  Where was "Mr. Conservative" and the State Legislatures in telling these firms to cut that crap out or be shut down immediately under long-standing powers that every State has?

Does it matter that Becerra is screwing both patients and employees of various institutions where Azar just screwed your grandmother?  No.  The problem isn't found in the person, its in the Statute which nobody in the press -- or the States -- wants to take on.

Indeed if you listened to the oral arguments that exact point was raised by the justices -- did you not consent?  Why yes, they did, although they barked that the imposition was unreasonable because it could not be foreseen.

Oh, so the language was unclear in the Statute?  Nope; it is exceedingly clear.  It is also tyrannical and outrageous, but it is clear, so why is it that over the last 30+ years the States and so-called "conservatives", including DeSantis, haven't done anything about it?

In short thee doth protest too much, particularly after stuffing your pockets with federal $100 bills!

Want to solve the problem generally or are you just trying to score political points?  If the latter I'm not interested.

If the former, well, I had a plan to solve a lot of it more than 10 years ago, and refined it in various forms over five more years which was last published here.

Nobody wants it nor to have a debate on refining it -- not Democrat, Republican or even Libertarian.

You'd think the latter, at least, would recognize the inherent evil in bribery that immediately turns to blackmail and extortion.  Perhaps neither Democrat or Republican can foresee a world without both, but you'd think the so-called party of principle would.

You'd be wrong.

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2022-01-12 09:00 by Karl Denninger
in Macro Factors , 555 references
[Comments enabled]  

Oh look what the cat dragged in!

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in December on a seasonally adjusted basis after rising 0.8 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 7.0 percent before seasonal adjustment.

Why would you seasonally adjust a 12 month number?  Does not Christmas occur every year at the same time?

In any event this is 1982 style inflation, and exactly what both Trump and Biden, along with Congress, should expect having dumped credit into the economy with wild abandon for the previous two years.  

The all items index rose 7.0 percent for the 12 months ending December, the largest 12-month increase since the period ending June 1982. The all items less food and energy index rose 5.5 percent, the largest 12-month change since the period ending February 1991. The energy index rose 29.3 percent over the last year, and the food index increased 6.3 percent.

The nasty part is that energy and food are inelastic demand items for most households.  That is, you have to buy them and you have to buy them in more-or-less constant amounts.  They're not really optional for anyone, and for the lower income folks shifting food consumption isn't much of an option (the rich man can go out one time a week fewer and eat a hamburger instead of steak; the poor man is already eating hamburger and might wind up with Alpo!)

What's really bad is that the CPI-W, which is the index for urban wage and clerical earners was up even more, 7.8%.  This index reflects the impact on mostly lower to middle income wage employees in cities, who are getting hammered even worse than the averages suggest.

You want to know why you shouldn't support shutting down coal-fired power plants?  How's a 24% increase in piped gas cost sound?  Want to translate that directly into your power bill?  Oh by the way, wind/solar would be even worse since petroleum products figure big into production of both despite the claims of certain climate screamers.

Finally, the scam of Owner's Equivalent Rent continues in this data, which I've pointed out since I began this column.  It implies that the cost of buying a house has only gone up 3.8% over the last year.  I'd like some of whatever they're smoking.

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2022-01-11 07:00 by Karl Denninger
in Macro Factors , 767 references
[Comments enabled]  

Oh, inflation and the supply chain issues are just transitory eh?

Uh, not really.

Stress on the supply chain due to labor shortages has ultimately come to fruition, wiping out products from store shelves across the nation.

Reporters and other shoppers took out their frustration on Twitter by sharing photos of their local grocery stores and tagging #BareShelvesBiden, which began trending.

Uh, what did you expect after decades of offshoring and stretching supply chains across oceans?

You took the bet that nothing would ever happen either here or there that might cause trouble in exchange for higher stock prices since the entire point of doing it was to evade environmental laws, labor laws or both.  The "here" is under our control; we can choose, for example, to tell all the histrionic screamers to go shove it and go to work or starve.

But we can't tell the Chinese to do that!  We can't tell some foreign nation what to do; while we can ask that's the limit of it.

We've been taught this lesson many times; Arab Oil Embargo anyone?

I'm old enough to remember what that caused and the "fun" that we inflicted on ourselves because we were stupid.  Are you?

We didn't learn the lesson even though it was taught, did we?  Rather than take to heart all the pain that time dished up we instead decided to make it even worse by putting basically everything in someone else's basket, starting with every little chip and discrete component necessary to build, well, anything with an electronic element to it, which today is basically everything.

Oh, you'd like a microwave without an electronic timer?  Or a mechanical timer on a washing machine or dryer?

They don't exist.

Instead there are a whole plethora of little chips and discrete components on a board that does this for you which is all fine and well provided you can get all of them.  If even one is unavailable..... oops.

Yeah, that was stupid.

It was stupid the last time too.

Do you think we're going to learn from it this time?

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