Tag Archives: political economy

In Which Alphabet may be Getting One Thing Right

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Alphabet’s Google subsidiary is developing a new Internet protocol, and competitors are worried that the protocol would mak[e] it harder for others to access consumer data. Some thoughts on that below.  Congress is concerned, too, and its “antitrust investigators” are looking into the matter.

The new standard modernizes a fundamental building block of the internet known as the domain name system, or DNS. This software takes a user’s electronic request for a website name such as wsj.com and, much like a telephone book, provides the series of internet protocol address numbers used by computers [to provide user access the website].
Google and another browser maker, Mozilla Corp, want to encrypt DNS. Doing so could help prevent hackers from spoofing or snooping on the websites that users visit, for example. Such a move could complicate government agencies’ efforts to spy on Internet traffic. But it could prevent service providers who don’t support the new standard from observing user behavior in gathering data.

Alphabet, via Google, also runs its own DNS service, Google Public DNS, which lends credence to monopoly abuse concerns.  Alphabet also pointed out, in its proposal, that the new standard would

improve users’ security and privacy and that its browser changes will leave consumers in charge of who shares their Internet surfing data.

My thoughts are these:

  • There’s nothing wrong with Alphabet developing any new Internet nav protocol, including this one. I’d expect them to be required to license it, though, much like chip makers are required to license their tech.
  • There’s nothing wrong with alter[ing] the internet’s competitive landscape as the article put some of the concerns. Product and tech development and innovation always alter the existing competitive landscape. That’s to the good.
  • They [cable and wireless providers] fear being shut out from much of user data.… That’s a bit of too bad. They’re not the providers’ data; they belong to the user. It’s exclusively (or should be) the user’s call whether to share his data with any provider or other vendor.

And this:

Mozilla…will move most consumers—but not corporate users who use providers such as Akamai—to the new standard automatically, even if the change involves switching their DNS service providers.

Users better be able to override that switch. Otherwise, this may resume the browser wars between Mozilla/Netscape and Microsoft.  To Alphabet’s credit, if they can be believed, its Google subordinate has no plans to ape Mozilla and compel a change in DNS providers.

Given licensing, the only real concern is this:

[T]he new system could harm security by bypassing parental controls and filters that have been developed under the current, unencrypted system.

That’s fairly straightforward to restore, though.

Median Incomes on the Rise

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Some statistics:

Real median household income—the amount earned by those in the very middle—hit $65,084 (in 2019 dollars) for the 12 months ending in July. That’s the highest level ever and a gain of $4,144, or 6.8%, since Mr Trump took office. By comparison, during 7½ years under President Obama—starting from the end of the recession in June 2009 through January 2017—the median household income rose by only about $1,000.

These data predate the Trump partial tax reform (partial, because the individual income tax rate reductions still need to be made permanent, an act the Progressive-Democrats in Congress are loath to support). That reform has added an additional $1,400 to the average (not median—mixing apples and salt, to an extent) household, $2,900 per MFJ with two kids household.

This graph puts the matter visually and clearly:

Both rises, though, are faster than anything possible under any of the proposals of any of the current crop of Progressive-Democratic Party Presidential candidates.

Wealth Taxes

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Progressive-Democratic Party Presidential candidates and Senators Elizabeth Warren (D, MA) and Bernie Sanders (I, VT) have proposed taxes on the wealth of Americans—2% on individuals worth more than $50 million and 3% on billionaires in Warren’s case, and from 1% on married couples worth $32 million, rising to 8% on those with wealth over $10 billion in Sanders’.

These are direct taxes, which would make them unconstitutional.  Their unconstitutionality does not arise from their directness but from their lack of State proportionality.  Proportionality—apportionment in the Constitution’s terms—means that such taxes can only be assessed in accordance with a State’s population relative to the other States’ populations, just as Representation in the Federal government House of Representatives is.

Naturally, Warren and Sanders presented their tax proposals armed with economists’ arguments in favor of them.  Two such arguments are these, proffered by Yale Sterling Professor of Law and Political Science Bruce Ackerman, but they fail early.  Ackerman’s first, as paraphrased by FoxBusiness, is that a direct tax, as authorized in our Constitution, was

part of a compromise with the slave-holding South…. The purpose of it was to prevent the North from imposing a “head tax” on slaves, because that could not be apportioned equally across the states.
“Given this history, it is extremely unlikely that the justices will cite the founders’ original compromise with slavery to bar a tax that would serve the cause of economic equality and democratic legitimacy[.]”

This is an idle sophistry, though.  As the Constitutional authorization for direct taxes currently stands—since ratification of the 14th Amendment—all references to slavery and to slaves have been removed from the nature of direct taxes.  The 14th changed the definition of apportionment to referencing only the whole number of persons in each State, excluding Indians not taxed.  That’s the sum and substance of the plain text of the Constitution on the matter of direct taxes.  The historical origin of the direct tax authorization not only is irrelevant, it’s been wholly and explicitly excised from our Constitution as it stands.

Ackerman’s other argument is this that claim that the Warren/Sanders direct tax proposals serve the cause of economic equality and democratic legitimacy.  This, though, is an oxymoron.  Forcing economic equality, even government merely pushing toward it via tax law, is antithetical to democratic legitimacy.  Forcing equal outcomes denies each man his opportunity to show the best that there is in him.  It blocks him from realizing the full outcome from his efforts under his right to equal opportunity.  Indeed, demanding equal outcomes utterly cancels not only each man’s equal opportunity, but his very right to that equality of opportunity.

The Progressive-Democrat candidates’ proposals are wholly unconstitutional—and completely undemocratic.

A Price for Stability

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Global tax reform is a path to a stable international economic regime??

[T]he potential global tax overhaul would force many companies to pay more to governments, not less. But this may be a small price to pay for a stable international framework.

After all,

Existing global tax rules allow companies to transfer those profits, often to a low-tax jurisdiction.

Never mind that an even smaller price—indeed, a net positive gain in prosperity—would be lowering national taxes to the level of the lowest rates imposed by any nation. This would eliminate tax competition, reduce compliance costs as multinational companies no longer had to maneuver the way they realize their incomes and taxes owed, lead to lower end-user prices by reducing taxes as a multinational’s cost center to be covered by the price of its goods.

But no—the globalists want to raise the tax rates to a common high level. They don’t seem to care about actual global prosperity—just getting more of our money for the sake of the chimera of…stability.

I’m minded of Benjamin Franklin in a slightly different milieu:

Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.

One-Upping Elizabeth

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Who can be more socialist than the other?  Progressive-Democratic Party Presidential candidate and Senator Bernie Sanders (I, VT) now has proposed

an annual wealth tax topping out at 8% for the richest Americans, offering the farthest-reaching Democratic plan to pay for expanded government programs and break up concentrated fortunes.

That’s much more than fellow Progressive-Democratic Party Presidential candidate and Senator Elizabeth Warren’s (D, MA) now paltry 2% wealth tax.

That’s on top of the race to give the most free stuff to the most people: who’s got the more extensive Housing-for-All plan, the broader Medicare-for-All plan, the more lucrative student debt forgiveness plan, Sanders’ plan to forgive all medical debt and parent debt taken in support of students (look for Warren to come up with plans for those soon), and on and on and on.

This sort of thing can only be done through government control or outright ownership of all property, and that’s at the core of socialism.

One-upping? No, it’s who can be the more socialist.