Tag Archives: regulation

Italy and the Eurozone

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Since the last Italian election all those interminable months ago, which yielded no party with even a serious plurality, the several (and I do mean several) political parties have been trying to form a coalition of some sort so they could form an actual government with which to operate the country.  The coalition most likely to succeed in forming a government, if not in actual governing, consists of the far-left 5Star Movement and the equally far-right League (Lega Nord, Northern League).  What’s of interest to me is less the irony of these two parties trying to govern together and more the impact on the eurozone and the EU if these two parties actually succeed in allying and governing Italy.  They want

renegotiation of EU treaties, including the Stability and Growth Pact, the cancellation of €250 billion in Italian government debt by the European Central Bank, and a revision of Italy’s contribution to the EU budget.

Although formally walking back much of that, they’re not walking that far back.  Among the things included in those three items, and one that directly impacts Italy’s debt, is the 3% of GDP limit on government deficit that every eurozone nation’s government must meet.  The coalition wants that waived for Italy.  Not raised, gotten rid of.

The coalition didn’t include a commitment to hold a national referendum on whether Italy should remain in the eurozone, or even the European Union, if Italy doesn’t get satisfaction these items, but you can bet that’s still there in the background.  A significant fraction of the population would vote to leave, too; although whether that fraction is large enough to reach a majority is iffy so far.

I’ve suggested before that all of the nations of Europe are a bad fit when jammed together under one imitation government.  Italy is one of those nations that, in concert with the rest of the Mediterranean EU members, would be better off outside.

US Corn Exports

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The Trump administration is working on a deal with the People’s Republic of China to reduce the trade imbalance we have with them (whether the trade imbalance really is a bad thing and whether the PRC is working the deal as hard as the Trump administration are questions outside this post).  American farmers would have trouble producing enough to meet their part of the goal, were the deal to go through.

US corn exports could jump from $150 million to about $10 billion annually within a few years if China vastly expanded its quotas and reduced its duties that are as high as 65%, according to one estimate.

The farmers—particularly corn farmers—would get a great deal of help in ramping up their exports if they weren’t…encouraged…to divert significant fractions of their crop to ethanol production.  This is another consequence of ethanol mandates and another reason to get rid of them.

Update: In 2016, the US diverted 5.28 billion bushels of corn to ethanol production, or 36% of our total corn production that year. At roughly $3.45/bushel, that works out to $18.2 billion of corn production that was diverted.  Simply eliminating this useless diversion would seem to cover that production jump cited in the quote above.  It also would seem to leave $8 billion of production to mitigate food costs that are inflated by the diversion.  This, in turn, would help our poor and mitigate the need for food stamps and therewith reduce the tap on taxpayer pocketbooks.

Encryption/Decryption Race

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The political one I mean, not the technological one.  Recall, for instance the San Bernardino terrorist attack, the FBI’s capture of one of the terrorists’ encrypted iPhones, Apple’s refusal to decrypt it (they couldn’t, by their design of the iPhone’s OS), then-FBI Director James Comey’s (yes, that Comey) cynically tear-jerking demand for future such personal device encryption back doors to decrypt at Government convenience, and Apple’s refusal to support development of that.

An expert on the subject—a technological expert I mean, not a political one—thinks he’s solved the problem.  His solution is described in a Wired article.  This expert thinks he has a way of providing Government “exceptional access” to a private person’s (or private enterprise’s) encrypted cell phone (for instance).  His solution, Clear, works this way:

The vendor—say it’s Apple in this case, but it could be Google or any other tech company—starts by generating a pair of complementary keys. One, called the vendor’s “public key,” is stored in every iPhone and iPad. The other vendor key is its “private key.” That one is stored with Apple, protected with the same maniacal care that Apple uses to protect the secret keys that certify its operating system updates. These safety measures typically involve a tamper­proof machine (known as an HSM or hardware security module) that lives in a vault in a specially protected building under biometric lock and smartcard key.

That public and private key pair can be used to encrypt and decrypt a secret PIN that each user’s device automatically generates upon activation. Think of it as an extra password to unlock the device. This secret PIN is stored on the device, and it’s protected by encrypting it with the vendor’s public key. Once this is done, no one can decode it and use the PIN to unlock the phone except the vendor, using that highly protected private key.

So, say the FBI needs the contents of an iPhone. First the Feds have to actually get the device and the proper court authorization to access the information it contains—Ozzie’s system does not allow the authorities to remotely snatch information. With the phone in its possession, they could then access, through the lock screen, the encrypted PIN and send it to Apple. Armed with that information, Apple would send highly trusted employees into the vault where they could use the private key to unlock the PIN. Apple could then send that no-longer-secret PIN back to the government, who can use it to unlock the device.

Included in the procedure is the requirement to send a judge’s search warrant to Apple along with the encrypted PIN, and Apple would first verify the warrant before sending anyone to the vault.

Hmm….

In a landmark 2015 paper called Keys Under Doormats, a group of 15 cryptographers and computer security experts argued that, while law enforcement has reasons to argue for access to encrypted data, “a careful scientific analysis of the likely impact of such demands must distinguish what might be desirable from what is technically possible.” Their analysis claimed that there was no foreseeable way to do this. If the government tried to implement exceptional access, they wrote, it would “open doors through which criminals and malicious nation-states can attack the very individuals law enforcement seeks to defend.”

Exceptional access is not desirable.  All Clear would do is add to the hackers’/criminals’/malicious nation-states’—and malicious network entities’—target lists the men and women running the companies “storing” the back doors, now working in cahoots with Government men through the screen of a Government-issue search warrant.

It’s true enough that

Using that same system to provide exceptional access…introduces no new security weaknesses that vendors don’t already deal with.

The “same system” is the various ways software developers and vendors encrypt keys that then are used, for instance, to verify the veracity of this or that application a user just downloaded or an OS update being offered—or pushed—to a user.  It’s also true that things like Clear add no new security weaknesses (assuming, arguendo, that the software of the Clears of this potential brave new world is well implemented).  But spreading those existing weaknesses around, putting them explicitly in the hands of Government and out of the hands of individuals using the devices solves nothing.  It’s still men and women who are the weak link in this politically-driven solution, however elegant and simple to execute the technological proposal.

No, it’s not so much a matter that exceptional access is a “crime against science,” Wired‘s phrasing in its misunderstanding of the proposal.  It’s that exceptional access is a crime against individual liberty.  Even against group liberty.

In another cynical representation, current FBI Director Christopher Wray, noting that his FBI “was locked out of 7,775 devices in 2017,” said

I reject this notion that there could be such a place that no matter what kind of lawful authority you have, it’s utterly beyond reach to protect innocent citizens.

Stipulate that Wray is pure as the driven snow with motives beyond reproach.  He’s a man.  So will be his successors.  So are all of the men and women of government and of industry.  So will be their successors.

Thus, a question for those of you to the left of center and beyond, politically: would you really want a Donald Trump’s FBI via his selection of judges to have exceptional access to your secrets?

And a question for those of you to the right of center and beyond, politically: would you really want a Hillary Clinton’s FBI via her selection of judges to have exceptional access to your secrets?  A Bernie Sanders’?

Who among you are willing to trust a James Comey FBI with any of this?  A J Edgar Hoover FBI?

Or the titans of industry, the evil 1%?  Even Tim Cook, who resisted FBI demands in the San Bernardino case, is accommodating to the demands of the People’s Republic of China government.

What the sort of solution that is Clear does is force us to trust the good offices of the men and women running a manufacturer in addition to the good offices of the men and women of government.

That’s the stuff of a socialist’s wet dream.

False Choice

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Consider the kerfuffle involving corm farmer subsidies in the form of ethanol mandates and the required use of ethanol by oil refiners as they produce vehicle fuels.  The argument is being presented as a choice forced on President Donald Trump in that he “must choose” between the corn farmers and the oil companies as the kerfuffle is solved.

Oil refineries want out of a costly requirement to blend ethanol into the gasoline they produce. Corn growers say the requirement diversifies the US fuel supply, and insist Mr Trump fulfill promises to at least hold the ethanol mandate.

This is wrong, because the choice is irrelevant.  What’s good for our economy is to get government to stop distorting the market and let producers and consumers decide for themselves what they want.  The situation as it stands elevates the cost of gasoline for wholly social engineering causes having nothing to do with free choices, it elevates the cost of automobile maintenance, and it elevates the cost of food—all for reasons having nothing to do with free choices and wholly for the sake of the social engineering demands of one group.

Trump needs to get rid of the ethanol mandate.  If there’s a market for ethanol in fuel, folks will buy it.  If the non-economic argument for ethanol additives truly is valid, let the social engineers make the case for it in the public square and show why folks should pay higher prices for the additives.

Battle Against Hate Speech?

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Bob Pearson, co-author of Countering Hate and CIO of W2O Group says that AI is able to identify hate speech today.

All human beings follow patterns online.  You can see what language, content, channel, and people matter to them. You can see which words trigger information seeking, which language is most associated with hate topics or sites, which people are the most important influencers and you can see a range of behavioral characteristics.

Except that humans can’t define “hate speech;” we can’t even define “hate.”  All that can be done is for each of us, individually, to identify what it seems like that to us—not what it is to anyone else.  A Justice’s remark about pornography—that he couldn’t define it, but he knew it when he saw it—is worse than wholly inadequate when Government tries to regulate speech, or when private enterprises try to regulate speech in the public spaces they create as their business models or offshoots of them.  Such regulation is a threat to individual liberty.

Artificial Intelligence certainly is not up to this task of discriminating unacceptable speech from acceptable.  The definitions of those terms will be programed by a select group of humans—who can’t define the terms except as they personally apply the terms to themselves.  This frangibility is demonstrated by those cases that go to jury trials and the differing outcomes differing juries reach on substantially similar cases.  All AIs can do is reflect the prejudices of their programmers.

How, indeed, is “hate speech” to be discriminated from the merely rude or offensive or uncivil speech?  To narrow the thing a bit, think about civility—simple courtesy.  Why should a New Yorker’s version of civility be forced to take a back seat to a Midwesterner’s or a Californian’s version of civility?  Why should one of the other two be forced to take a back seat to a New Yorker’s version?  On what basis would any definer pick one or identify a middle ground that doesn’t wind up being a more insidious censorship?

Consider Marshall McLuhan’s the medium is the message.  Sometimes the overt rudeness—even “hate”—is a demonstration of a point.  Is burning our national flag an act of hatred or political speech?  Is posting a picture of Mohammed…?  Prove it: it’s a hard line to draw between that and rudeness on the one hand or actual hate on the other.

Not even civility is “simple.”  How is something as complex as hate speech to be handled?

Yet the whole argument over identifying, and then censoring, hate speech is irrelevant other than the threat to freedom that is that effort to identify and censor.

The problem he [Pearson] says, is that Facebook and other companies have not taken up the charge to make the battle against hate speech a major priority.

No, Pearson is utterly wrong on this.  Facebook, et al., must not take up the battle, any more than can Government be allowed to.  Any effort along these lines can only be the despicable bigotry and the equally shameful cowardice of censorship.  Bigotry because all such efforts amount to is one man, or a small group of them, imposing his prejudice of acceptability on the speech of all others.

Hackneyed as it’s become, Justice Louis Brandeis still is right: the answer to bad speech—however defined—is more, and better, speech—however defined.

Engage in the discourse, don’t cower away from it.