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Monday, March 29, 2010

YouTube/Google vs. Viacom

Viacom is suing Google and YouTube for copyright infringement. As I've said before, "intellectual property" is not property.

If I steal your car, you may say "WTF? Where's my car?" My theft directly injured you. For intellectual property, that's not true. If I copy your song or movie, you may still use the original.

"Intellectual property" creates problems for any user-generated content website. The site owner can be responsible for what the users do. "A business owner is responsible for what customers do!" is an example of corrupt State law.

YouTube's original management noticed what videos were most popular. Many of these clips were copyrighted. However, they did not take down those videos. They decided to wait until they got a DMCA takedown notice. They did comply with takedown notices. They did not remove popular videos that turned out to be copyrighted. Is that illegal?

For example, clips of The Daily Show and The Colbert Report were placed on YouTube. It isn't clear that actually injured Viacom. The free advertising might have been a net benefit.

Due to the way copyright law works, Viacom's lawyers have to act like jerkwads. If they don't aggressively crack down on copies, they may lose their copyright claim.

Another problem is that there's no clearcut legal standard for "fair use". Am I allowed to use a 5 second clip in my own video? What about 30 seconds? 3 minutes? 10 minutes?

Another problem is that a show can't intentionally allow sharing. For example, Stephen Colbert probably benefited from having his videos shared on YouTube. Videos shared on YouTube increased his personal reputation. Working for Viacom, he has no choice but to follow their corporate policy.

Another problem is statutory damages instead of compensatory damages. With intellectual property, there is no obligation to show actual loss of income. Instead, damages are according to an arbitrary punishment scale. Google/YouTube might be forced to pay $1B, even if Viacom suffered no actual losses. It is possible that Viacom profited overall, due to free publicity from YouTube.

Another example of statutory law is non-crimes like possession of marijuana, tax evasion, or operating a business without a license. In order to be a crime, an action must injure someone else. For statutory crime, there's an arbitrary punishment scale unrelated to actual losses.

A pro-State troll says "Without intellectual property, how will artists get paid?" A more accurate statement is "Without intellectual property, how will all the State middlemen get paid?" When a mainstream media corporation publishes something, they demand you sign over copyright. Most of the money paid goes to the middlemen, and not the content creator.

Sometimes, via intellectual property, an artist loses the right to perform/publish a work they created. If you publish a book and it's out-of-print, the publisher might not be under any obligation to republish it; you can't publish excerpts without their permission.

Intellectual property law and State restriction of the market creates theft opportunities. The middlemen earn economic rent, at the expense of people who do the real work.

It's the usual pro-State troll argument. "Without government, who will build the roads?" Similarly, "Without intellectual property, who will pay the artist?" More generally, "Without violence, how can X earn a living?"

Without intellectual property, people will pay directly to support artists they like. They won't have to pay tribute to a middleman.

Viacom executives and Stephen Colbert earn huge salaries due to their State-backed monopoly. I would have a hard time getting the mainstream media cartel to broadcast and promote my work, even if I could get a larger Internet-based audience.

The State information monopoly creates an artificial shortage of "talented well-known artists". The Internet is leveling the playing field somewhat. It's still really hard to bootstrap an Internet-based business.

Even though I probably could make a better show than most mainstream media performers, the State restricts my opportunities. I'm going to try self-publishing on the Internet soon.

The best model for an Internet-based business is donations from fans, or tickets to live performances. People should support artists who release their work for free on the Internet, with no copyright restrictions.

Intellectual property laws cause more problems than they solve. In a really free market, there's no such thing as "intellectual property". Only a State violence monopoly can prevent people from copying songs and ideas.

Friday, March 26, 2010

Who Murdered Benjamin Franklin's Grandson?

Once in a while, I read a story that makes me think "ZOMFG! Why didn't they mention that in my State brainwashing center (school)?" The story of Benjamin Franklin Bache is very interesting.

Benjamin Franklin Bache inherited his grandfather's newspaper business. According to official State history, Benjamin Franklin is one of the heroes of the US Revolutionary War. Benjamin Franklin died in 1790, before the new Federal government started abusing its power.

The early Federal government passed a lot of bad laws. Benjamin Franklin Bache continued his grandfather's tradition, and questioned these bad laws. He even questioned the legitimacy of the Federal government.

There was an interesting conspiracy theory published by Benjamin Franklin Bache. Allegedly, the British intentionally lost the Revolutionary War. In exchange, George Washington and other insiders agreed to form a strong central government sympathetic to Britain's interests.

One of the first laws passed by the new Federal government was the creation of a central bank and the adoption of the gold standard. This gave the European banksters economic control over the USA. The first US central bank was a really bad law, exactly as the Federal Reserve is evil in the present.

The gold standard was evil in 1787, because other forms of money were outlawed. Many states had their own monetary systems. Local alternative currencies were declared illegal.

There are no gold mines in the eastern United States. A silver standard would have made more sense than the gold standard. In 1787, the European banksters had a near monopoly of the world's gold supply.

The new USA had a gold standard, a central bank, and State-regulated/subsidized fractional reserve banking. This gave the European banksters complete control of the USA monetary system. The banksters sent spies to the USA, posing as immigrant businessmen setting up a bank. The USA had achieved superficial political independence, but not true economic independence. Some people say that the creation of the Federal Reserve and income tax in 1913 was the final victory by European banksters lobbying to quash the freedom the Americans had won.

The first Treasury secretary Alexander Hamilton was a spy for the banksters. Geithner and Paulson are obviously tools for the banksters. Alexander Hamilton was no different. (Does that mean Aaron Burr really was a hero?)

Another interesting bit is the Jay Treaty, where the US politicians essentially bent over for Britain. This law was questioned by Benjamin Franklin Bache.

Benjamin Franklin Bache questioned the legitimacy of the new Federal government. At the time the US government started, the two political factions were the Federalists and the Anti-Federalists. The Anti-Federalists knew that the new Federal government was a bad idea.

The Anti-Federalists are the reason that the original US Constitution had so many clauses protecting individual freedom. They were concessions to the Anti-Federalist faction. The Anti-Federalists demanded the Bill of Rights, in order to support the new Federal government.

Viewed this way, the US Constitution was not a brilliant document. It was a compromise between the two political factions at the time. The State parasites knew that the key was to get a strong central government with a violence monopoly. Once a State violence monopoly is in place, its evil power will only grow over time.

With a violence monopoly, then individual freedom can be gradually eroded, as actually occurred. All the clauses of the original Constitution that protect individual freedom have been nearly completely eroded.

You learn about the Alien and Sedition Acts in your State brainwashing center. You don't learn that they were used by President Adams to silence his political opponents, the Anti-Federalist faction.

The Alien and Sedition Acts expired after Adams' term as President ended. If Adams' faction did not win in the 1800 election, they didn't want the law used against them.

The Alien and Sedition Acts made it a crime to question the legitimacy of the Federal government. It also was a crime to question the morality or validity of any law.

Allegedly, the Alien and Sedition Act was specifically passed to target Benjamin Franklin Bache. Indeed, he was arrested for violating it before it passed Congress, according to this page, (that point is on page 9).

Benjamin Franklin Bache died of yellow fever while out on bail awaiting trial. It's possible that his jailers intentionally exposed him to yellow fever while in jail, or mistreated him while in jail. He might have died due to the stress of a phony trial. Either way, it seems believable that "President Adams murdered Benjamin Franklin's grandson!" Why don't they mention this in State brainwashing centers? I remember reading about the Alien and Sedition Acts. I didn't know that they were a censorship tool designed to silence political opponents.

Benjamin Franklin Bache "died of natural causes while awaiting trial" in the same sense that prisoners in Guantanamo Bay died of "natural causes".

Contrary to official State propaganda, the US Constitution was not ratified with overwhelming popular consent. Violence was used to silence the Anti-Federalist faction. Violence was used to collect the new taxes imposed by the Federal government, such as during the Whiskey Rebellion.

President Lincoln also used violence to silence critics during the Civil War. He arrested the editors of Northern newspapers who wrote that maybe the Southern states did have the right to withdraw consent for the Federal government.

Why is violent censorship not needed in the present? A handful of insiders control all mainstream media corporations. Plus, State spies have almost definitely infiltrated all mainstream media corporations. If a journalist accidentally tells the truth, then he is fired/disgraced/blacklisted, and he cannot find a new job. State restriction of the market prevents competition. State journalists/comedians are very careful about what they say, lest they be fired and be unable to find a new job.

"Mainstream media journalist" is a high-paying job. Most journalists earn high salaries, even though their only skill is spewing propaganda. It's very easy to fire a journalist who disrespects the State, and replace him with someone eager for a promotion.

The Internet changes the equation. The Internet allows people to share information and bypass State censorship. Via the Internet, I read about stories like that of Benjamin Franklin Bache.

Why don't State spies arrest/kidnap/kill everyone who writes about freedom? First, there's a lot of content on the Internet. A typical State spy would think that I'm a harmless fruitcake. Second, perhaps the State is losing power, making it impractical to crack down on everyone who writes about freedom. "People start writing about freedom!" is a prerequisite for eliminating tyranny.

The story of Benjamin Franklin Bache is very interesting. It's an excellent example of State censorship in schools. By refusing to mention certain people or certain incidents, this is important but subtle censorship.

I am offended that I never learned about Lysander Spooner, Bastiat, or Benjamin Franklin Bache in school.

Thursday, March 25, 2010

Google and Record Labels vs. Bloggers

This story is interesting. Google's Blogger shut down a couple of music-related blogs, for publishing links to allegedly copyrighted songs. It illustrates a few points I've mentioned before.
  • Intellectual property is not property. I've mentioned that several times.
  • The DMCA is a particularly evil law.
  • The DMCA is the result of lobbying by record labels. It's a clear example of a law set up to benefit a handful of people at the expense of everyone else.
  • Record label executives are behaving like jerkwads. They are State parasites. They are desperately trying to hold onto their monopoly, which the Internet is making obsolete.
  • If you're an amateur/independent/semipro artist, you're probably better off self-publishing rather than signing with a label.
  • Beginning artists are forced to sign a lousy deal with a record label, due to the State monopoly for funding and promoting artists.
  • If you're an amateur/independent/semipro artist, you should self-publish DRM free. Your biggest risk is "Nobody knows who you are!" and not "People will copy without paying!"
  • In this case, these were less-well-known artists who happened to have a deal with a label. They lose the rights to their own music. They can't give a blogger permission to promote their music.
  • The mainstream media creates an artificial scarcity of music, by promoting some artists and not others.
  • Google could shut my blog down. They could say that I'm committing a crime or advocating people commit crimes, when I write about agorism.
  • As a large corporation, Google has to follow the law. Not willing to risk their State-backed monopoly, Google's executives will err on the side of bending over for the record corporation executives.
Someone should make a database of copyright free music. If I start my own vlog, I'd want to only use music without restrictions.

Wednesday, March 24, 2010

What is a Failed State?

I saw a bizarre idea circulating. Due to California's budget problems, some people are declaring California a "failed State".

If you live in California and refuse to pay taxes, then will people with guns come to kidnap you or take away your stuff? As long as the answer is "yes", California is not a failed State. The thugs don't have to be 100% effective. They just have to scare the vast majority into compliance.

In California, it's practically legal to possess marijuana. There are so many people ignoring the law. This makes it impractical for State thugs to crack down on everyone. However, some people in California do get busted for possession of marijuana. At some point, State thugs might ratchet up their enforcement efforts.

If there were widespread tax resistance, then that would lead to a failed State. The State thugs would walk off their job once their paycheck bounced.

However, California cannot fail unless the Federal government also fails. If necessary, the Federal government would send in thugs to keep collecting taxes. The whole point of the Federal government was that individual state insiders consolidated and expanded their taxation power. In 1787, some states were too weak to force the slaves to pay taxes. The Federal government was formed to consolidate and expand taxation power. State insiders were scared by Shay's rebellion, and formed the Federal government to violently resist future tax revolts.

It is more accurate to describe the USA as a "failing State" rather than a "failed State". As long as State thugs can violently collect taxes, then the State hasn't failed. As long as the vast majority of cattle pay their tribute without resisting, then the State hasn't failed.

In the USA, the Federal government and each individual State government will fail simultaneously. There are technically 50 separate state governments, but they're highly interlinked. For example, individual states can't legally issue their own money. After the US dollar collapses in hyperinflation, individual state governments won't have any money. I estimate there are 20 years left until the final collapse.

Tuesday, March 23, 2010

Another Interesting Mainstream Media Censorship Example

This post was pretty funny. Look at the comments section. "Comment Reported Unsuitable By User". Nearly every comment was deleted! It seems that their engine is going wayoverboard, when allowing users to censor each others' comments.

It seems that it was a discussion of "Taxation is theft!" that led to the censorship rampage. Someone was citing "Taxation is a Type of Slavery" in comment #23.

Why Not Restrict The Freedom Of Pilots?

I saw this joke. Someone wrote "Joe Stack misused a small airplane. We should restrict the freedom of people who own their own plane."

That'll never happen. Can you figure out why?

What type of people can afford their own airplane? Wealthy people and State insiders! A law restricting their freedom isn't going to pass.

BTW, I've seen a commonly cited misconception. "Joe Stack owned his own airplane." Actually, I read he was co-leasing it with someone else. Leasing a small airplane is a lot cheaper than buying one.

There's another bit "Joe Stack owned his own airplane! Why is he complaining?!" Just because your master allows you some possessions, doesn't mean your slavery is acceptable.

There are many positive inventions in our modern society. Most of them happened in spite of the State, rather than because of the State. For example, as soon as electricity was invented and widely sold, Edison and others lobbied for a State-backed monopoly. I can buy electricity in spite of the State, rather than because of the State.

Just because our modern society has some nice things, doesn't imply "Taxation is not theft! The State is beneficial!" The State has a monopoly. You can't prove things would be worse without a State violence monopoly. It's illegal for a group of people to get together and start a business that competes with the State monopoly.

Monday, March 22, 2010

Turd in the Punchbowl!

There were some good bits on Comedy Central this week.

On Tuesday's episode (3/16), Jon Stewart did a criticism of the financial industry that looked like it was straight from my blog. He mentioned that the banksters may borrow at the Fed Funds Rate (currently 0%-0.25%), while the average joe has to pay much higher rates. He mentioned Lehman's abuse of Repo 105 to hide losses. He mentioned that the banksters borrow huge sums of money on shady assets, while paying themselves a huge bonus.

Jon Stewart didn't say "Inflation is theft! The USA has a completely unfair monetary system! The Federal Reserve is one huge price-fixing cartel!" Still, it was the best criticism of the financial industry I've seen in the mainstream media.

There was one evil fnord on The Daily Show and The Colbert Report recently. They were both shown patriotically filling out their census forms. Presumably, some State bureaucrat demanded they air that segment. The correct answer is "The authority of the government is not legitimate!" However, I'd choose to fight another battle. I'd probably only answer the question regarding "How many people live here?" and leave the rest blank. The census is important, because government bureaucrats must keep track of their property!

Wednesday's episode of South Park also seemed like it was directly from my blog. The main point was "Of course a famous and wealthy celebrity is going to have sex with as many women as they can. Who wouldn't?"

I really liked the way the men looked nervously at the woman next to them, when saying "Why would a man want to have sex with lots of women?" That's really insightful, about how productive/parasitic relationships work. An "abused productive" person always fears retaliation by parasites. A parasite doesn't need to always violently retaliate. Psychological intimidation is sufficient.

In that episode, the women were all portrayed as parasitic. In reality, it's closer to 50%. I liked the way the Tiger Woods' wife was portrayed as evil. Based on what I've seen, she has the parasitic personality type.

Another interesting bit is "There's a turd in the punchbowl!" If an abused productive person starts to suspect a scam, then the parasites around them conspire to hurt them. Nothing inspires cooperation among parasites like an honest person.

Using an example from current events, Matthew Lee complained to Ernst & Young that "Repo 105" was wrong. The first thing Ernst & Young parasites thought was "There's a turd in the punchbowl!" Instead of taking the complaint seriously, they fired him. Matthew Lee hasn't found another accounting job since getting unfairly fired by Lehman.

Ernst & Young couldn't seriously investigate Matthew Lee's complaint. That would have required admitting they might not have done a good job. In this manner, the State economy selects against honesty and intelligence.

I don't fit into most large corporations, due to my tendency to object to dishonest behavior. Even at a small startup, one of the co-founders is almost always a parasite. A dishonest hiring manager can tell that I'm intelligent and honest. He'll make up some other excuse for refusing to hire me.

I like the bit where a soldier said "Wait a minute? WTF are we doing?" The response was "There's a turd in the punchbowl!" He was then Pat Tillman-ed. Any soldier who starts to see the scam risks his life.

My father said "I hope FSK doesn't act like that!", referring to how Kyle and that soldier questioned the scam. Unfortunately, honesty severely restricts your career opportunities.

I also liked the "What handkerchief?" mental health screening. Many public schools now have mandatory mental health screening for students. Those tests are as scientific as the "What handkerchief?" test.

Mandatory child mental health screenings are corporate welfare for psychiatrists and pharmaceutical corporations. Those fake screenings are an excuse to forcibly drug children.

When I was in the mental ward, it seemed the staff there were saying to each other "There's a turd in the punchbowl!" My higher state of alertness was falsely labeled as deviant behavior. Instead of seriously investigating, they forcibly drugged me and silenced me. A corrupt mental health industry plays a key role in preserving the Matrix.

Suppose Matthew Lee had told his State-licensed therapist "I think that there was accounting fraud at Lehman!" The therapist would say "There was no fraud at Lehman. You imagined it. You were fired because you were doing a lousy job, and not as retaliation because you pointed out fraud." The purpose of a State-licensed therapist is to reinforce the pro-State brainwashing of the patient.

There's also a "Turd in the Punchbowl!" effect in the 9/11 Truth Movement. Politicians don't want to seriously investigate allegations of incompetence by State insiders. This creates the illusion that they're covering up intentional misconduct, rather than severe corruption and negligence.

"9/11 was an inside job. Therefore, the authority of the Federal government is illegitimate." seems believable. It's an approximation of the truth, which is "All taxation is theft! The authority of government is not legitimate!" The 9/11 Truth movement is treated like a turd in the punchbowl, because it's too close to the real truth. Another problem is that some forums, like the Ron Paul forums, censor the 9/11 Truth movement. They think "Some people who support Ron Paul also believe 9/11 was an inside job. Therefore, all Ron Paul supporters are fruitcakes. We must censor this subject!"

Whether you believe 9/11 was an inside job or not, taxation is still theft and government has no legitimacy at all. Either way, agorism is the best strategy for fighting State evil. The 9/11 Truth movement must be censored, because of the conclusion "Government is a scam!" rather than anything else.

There also were some good fnords in the new series "Ugly Americans". If you take it literally, it seems silly. If you realize that most of the characters are analogies, it makes sense.

The bosses at work are demons. Translating to FSK language, demons are high-ranking State parasites.

The wizard is a typical parasite that exploits the State. He earns a decent living, without doing any real work. He isn't as ambitious a crook as the demons. The wizard does just enough work to get by, while deflecting blame and responsibility to other people. The best analogy is Wally from Dilbert. A wizard is a low-skill low-ambition parasite. Alternatively, the wizard realized that striving for more just isn't worth it. The wizard accepts his role as a cog in the machine. The wizard locally maximizes his ability to exploit the State.

A zombie is an abused productive person who's given up. The protagonist's roommate became a zombie because a woman said "I only date zombies."; she wanted a guy she could push around. A zombie is the typical brainwashed mindless wage slave. I noticed that certain parasitic women avoid me now; they'd rather be with a man they can exploit.

I was surprised that the police were drawn as human. The only human-looking characters besides the protagonist were the police.

The protagonist represents the dilemma a typical intelligent person faces. You don't want to be abusively evil like the demons. You don't want to be someone who shirks their responsibility like the wizard. You don't want to have given up like the zombies. You don't want to be corrupt like the police. What other possibilities are there? The implication of the story is that the protagonist has to become one of the other character types in order to survive.

Sometimes, Comedy Central has the best news. In the guise of fiction and humor, there's an opportunity to tell the real truth. "There's a turd in the punchbowl!" illustrates the way that State parasites crack down on honest people. If only one person at a time develops honesty, then State parasites can easily eliminate them one at a time.

In this manner, a world where everyone is crazy becomes a stable fixed point. When someone starts saying "Hey! This is wrong!", they're forcibly silenced. Usually, it's merely social pressure from parasites who psychologically dominate you. Other times, you might be fired from your job. A corrupt psychiatry/death industry silences dissent. If necessary, you might be murdered like Pat Tillman.

"There's a turd in a punchbowl!" is a great plot point on South Park. It indicates the way State parasites preserve their scam, by cracking down on dissenters.

The Stock Market and Healthcare Reform

This story was incredibly offensive. The headline was "17 health care stocks ready to roll".

The story is "If healthcare reform passes, then health insurance corporation stocks will skyrocket."

That article was pretty severe pro-State trolling. "The healthcare reform law will benefit certain corporations. Therefore, it's a good law." That is false. In fact, that is proof that it is a bad law.

The healthcare "reform" law is a tax hike, with the profits going to certain insiders.

As mentioned before, this is the problem with the US economy. Lobbying the State for favors is more profitable than producing something useful.

I'm still undecided about whether to support or oppose this stupid law. Tax hikes and corporate welfare always are evil. However, the less freedom people have, the sooner the whole scam collapses.

Sunday, March 21, 2010

Mika Brzezinski

I saw Mika Brzezinski as a guest on the Colbert Report. She's the co-host of "Morning Joe" on MSNBC. She was a really lousy guest.

How did someone unqualified like Mika Brzezinski get a mainstream media job? Does it have to do with the fact that her father is National Security Advisor Zbigniew Brzezinski?

This leads to the obvious conflict of interest, when State insiders get jobs in the mainstream media.

In the case of Mika Brzezinksi, the abuse of State connections is obvious due to her name. How many mainstream media "journalists" only got their job due to a connection with insiders?

Saturday, March 20, 2010

Gay Marriage is the New Abortion

State parasites need issues to distract the masses. This allows the average slave to think "I have an opinion on politics!", when they're really debating irrelevant issues.

For example, in the early 20th century, "Should alcohol be legal?" was a political issue everyone understood. Alcohol Prohibition was a great distraction. This coincided with the creation of the Federal Reserve, income tax, and Welfare State. People were debating alcohol Prohibition, while all their other freedoms were taken away.

This illustrates the brilliance of the Roe v. Wade decision. Previously, each individual State got to decide if abortion is legal or not. After Roe v. Wade, regulating abortion became the Federal government's power. Every politician and potential Supreme Court judge is now expected to have an opinion on abortion.

Discussion of abortion replaced discussion of more important issues, such as gradually expanding State power. Time spent grilling statists on abortion is time not spent on important issues.

Over time, abortion loses its effectiveness. The slaves get tired of discussing it. A new issue must be invented. It needs to be an issue that both sides will get excited about, and the population will be nearly evenly divided.

Gay marriage suits this discussion perfectly. The are valid points on both sides. If you're anti-gay marriage, you'll say "Why should I pay higher taxes to pay for the State perks a homosexual married couple gets?" If you're married, you can inherit your spouse's property without paying estate taxes. If one partner works and the other doesn't, you pay lower income taxes filing a joint return.

If you're pro-gay marriage, you'll say "Homosexuals should get the same rights as everyone else."

The correct answer is "Marriage contracts are none of the government's business. If people want a homosexual or polygamous marriage contract, that should be legal."

For political issues, "It's none of the government's business!" is usually/always the correct answer.

Issues like alcohol Prohibition, marijuana Prohibition, abortion, and gay marriage are a distraction for the slaves. They allow people to think they have an opinion about important issues, when they're really debating irrelevant nonsense.

There are important issues that are not discussed in the mainstream media. These fake issues serve as a substitute. Most people know indirectly that government is a scam, but they don't consciously explicitly realize it. These fake issues are a way to vent their frustration.

Important issues are not discussed. Issues like "Taxation is theft!" or "The USA has an unfair monetary system! The Federal Reserve is a scam!" are displaced by nonsense. People need to debate something, and they shouldn't be allowed to think about important subjects.

Other issues must be invented as a distraction. Abortion is no longer effective, so a new issue like gay marriage must be promoted. When people get tired of debating gay marriage, another new pointless issue will be invented.

Friday, March 19, 2010

Terrorists at Work?

Yesterday at work, I saw something that made me think "ZOMFG! Did someone actually just do that?"

I work on the ground floor of a large financial building. There's a big one-way window. People inside can look out, but on the other side people can't look in. Tourists walk by all the time. I should walk around and look at the one-way window; my coworkers told me it was a one-way window.

I saw something *REALLY* suspicious. A woman was taking pictures *OF THE INSIDE OF THE BUILDING*. She had a camera. She put it up against the window, and was taking pictures.

Would that even work? Wouldn't you need a special camera, to take pictures through a one-way window?

That's the sort of thing State propaganda artists warn people about. I never thought I'd actually see it.

I think the woman saw that I saw her. She probably got scared and ran away. She had black skin. I think she had her hair covered, like an Islamic woman.

I'm reluctant to support the State. However, "Terrorists are checking out my workplace!" is where I draw the line. I told the building's security guards. It's their problem now. I wonder if they took me seriously? I wonder if they were able to look at the security tapes and figure out who I was talking about? I told them half an hour afterwards, so they shouldn't have overwritten the tapes yet.

This incident bothered me. I have good body language awareness now, and it's obvious that woman had hostile intentions. I also have good peripheral vision now. That's probably why I noticed the woman acting weird.

I guess being paranoid is another word for being alert.

I wonder if the building security guards investigated? They have security cameras, presumably with tapes. It's the sort of thing they'd publish on the news as a headline, if they had good video evidence.

There really isn't anything interesting worth seeing. I'm working on meaningless financial reports, as are all my coworkers. Someone clueless about finance wouldn't understand that.

That incident was weird and disturbing. I never thought I'd actually see something like that.

Thursday, March 18, 2010

"Deem and Pass" or "Self-Executing Rule"

Democrats in the House of Representatives are using a parliamentary trick for the healthcare "reform" law. It is called "deem and pass" or a "self-executing rule".

The Senate already passed a version of the stupid law, before Brown's victory in Massachusetts. Now, Democrats in the Senate no longer have a filibuster-proof supermajority. They can't get a new healthcare reform law through the Senate *BUT* the House can vote on the law the Senate already passed. The House must pass the Senate law without changing a single word.

The plan is for the House to pass the Senate law with zero changes, and then have a "reconciliation" law to fix the discrepancies. The reconciliation law is not subject to filibuster, due to a technicality. (Technically, the Senate can change the filibuster rule at any time via a simple majority vote. However, that would be a precedent and Republicans can do the same thing when they're a majority. The filibuster rule can be changed at anytime, but nobody wants to be the first to do it. This is the so-called "nuclear option".)

There's one obvious flaw in this method. The Senate won't vote on the reconciliation law until Obama signs the original law. There's no guarantee that the Senate won't make modifications to the reconciliation bill. There's no guarantee they would pass it at all.

Instead of voting on the original law and then the reconciliation law, the votes are bundled together. There will only be one vote.

Some Representatives object to this trick. They won't have the opportunity to vote no on the reform bill, but later vote yes on the reconciliation part.

Any Representative who objects has a simple solution. He can merely vote no. What's the big deal?

A handful of Representatives are on the fence. The reconciliation bill might have a pork project for their district, enticing them to vote for it.

This is a common parliamentary trick. Each law has some favors for each Representative, to entice them to vote for it. That illustrates the problem with representative democracy. That's the reason unrelated riders get stuffed into laws.

Any Representative who falls for this trick is an idiot. Suppose there is something favorable in the reconciliation part of the bill. The Senate could take that out when they vote on it.

The actual healthcare "reform" law is thinly disguised corporate welfare. It's a tax hike, with the profits going to insiders. The real problem is not publicly discussed. The real problem is the State/AMA licensing cartel for doctors, combined with other damaging regulations.

The supply of doctors is restricted, driving up prices. Other regulations also increase costs. For example, there's a law requiring insurance corporations to cover X. The cost of X is passed on to customers as higher prices.

The healthcare "reform" law has a "Cadillac Plan" tax. The Senate version had a 40% tax on plans with a premium over $8500/year, with the profits paying for health insurance for people who can't afford it.

The fallacy is that the $8500 threshold is not properly indexed for inflation. After a few years, almost every plan will be affected.

My current health insurance plan, via my pimp, is barely not a "Cadillac Plan", and I have a cheap plan. My premium is just under the threshold. In a few years, inflation will bring the cost well over $8500/year. The "Cadillac Plan" tax threshold is based on the CPI, which severely understates true inflation. Due to the AMA licensing cartel, health insurance costs rise *FASTER* than true inflation; the rate of increase in the supply of doctor licenses is less than the rate of increase in the population. The number of seats in State-licensed medical schools is capped by Congress.

"Health insurance is too expensive! Let's place a huge tax on it!" is obviously stupid. Only a State parasite and pro-State troll would come up with such a stupid idea. Only a brainwashed zombie would be fooled into supporting such a law.

The healthcare "reform" law is obviously bad. Via "Problem! Reaction! Solution!", State parasites make a government-created problem worse.

It's amusing how stubborn State parasites are. Obama and Pelosi can't admit "This isn't working. Let's focus on something else." That's a form of State brainwashing. A State parasite can't admit they screwed up.

Similarly, Lehman executives and accountants can't say "We admit that Repo 105 was wrong." They have to deny their crimes. They have to spin their crime so that it seems like an honest mistake.

Should I root for healthcare "reform" or against it? Stupid laws are always annoying. However, the more stupid laws are passed, the sooner the whole scam collapses. Approximately 50% of the people don't like the current proposal. Those people will be angry at a government that no longer represents them. If the "reform" law fails, then the people who were brainwashed into supporting it will be disappointed. No matter what happens, a large percentage of people will be very angry.

There will be a 40% tax on health insurance, with the profits purchasing health insurance for people who can't afford it. There also will be a law requiring you to own health insurance or enroll in the State plan. This places an agorist in an awkward position.

What should an agorist with little/no on-the-books income do? Do you enroll in the State plan? Do you take the risk of being uninsured? (Technically, there's a fine for not owning insurance. It might be cheaper to just pay it.) Do you buy a useless health insurance policy?

This would be an obstacle to the creation of an agorist healthcare system, but simultaneously a potential boon. The State system might be so lousy that people are forced to purchase health insurance in the counter-economy. However, an agorist probably should enroll in the State plan and then not use it.

Lousy health care "reform" might be a good idea! It will decrease support for a corrupt government. People might be forced to purchase medical care in the counter-economy, if they want decent service.

I'm considering starting an agorist drug-free mental health treatment business. I don't have a State license, so I can't file claims in the State insurance scam. It would have to be 100% off-the-books. I would get customers, because I would give *MUCH* better service than a State-licensed psychiatrist or therapist. Without licensing overhead and other overhead/taxes, I could offer really cheap prices. My therapist billed my insurance $100-$200 for a half-hour visit. My psychiatrist billed my insurance $200+ for a 5 minute visit. An agorist doctor can't make an insurance claim, but the price would be low and the quality would be high.

Medical care is an excellent agorist business opportunity, due to the high State-imposed overhead. Paradoxically, I might want State parasites to further ruin the State healthcare system, to force the creation of a grey/black market in medical care.

Paradoxically, an agorist might want more bad laws. Temporarily, bad laws restrict freedom. Bad laws also undermine the legitimacy of the government. More bad laws accelerate the collapse of the State. The tricky part is "At what rate should new bad laws be passed? How can the collapse of the current corrupt system be organized so it occurs at a reasonable rate?"

Wednesday, March 17, 2010

What is "ad hominem"?

Some pro-State trolls are confused, regarding the definition of "ad hominem". This is a variation of "debating idiots is a waste of time".

If I write "You are stupid!", that is ad hominem. If I write "You believe 'Taxation is not theft!' Therefore, you are stupid.", that is not ad hominem, especially if I give detailed reasons.

This is an important pro-State troll point. "You should never say that someone is stupid." That is false. Some ideas really are stupid. If I give a careful detailed argument, and the other person ignores my points, then they really are stupid. They are a waste of my time.

If you say "I logically refuted 'Taxation is theft!'", and then you ignore my points, then there's no point talking to you anymore. We're literally speaking different languages. At that point, there's nothing left to do but resort to name-calling.

It is important to call out stupid ideas as stupid. If I point out that your idea is stupid, and you ignore my points, then you've successfully convinced me that you are a fool. You've failed a "Turing Test". You've successfully convinced me that you are not an intelligent lifeform.

I shouldn't waste time on people that are less than human. I have too many other potentially useful things to do, rather than wasting time on fools.

Tuesday, March 16, 2010

Eric Massa

This story is interesting. Eric Massa resigned from the House of Representatives.

You know when Saturday Night Live is making fun of Eric Massa, that he's really the hero.

Superficially, it's a scandal about inappropriately touching a male staff member. That makes no sense at all. That's at most a minor offense.

BTW, I don't have that problem anymore. For example, if someone gives an aggressive handshake, my body language makes it obvious that it's unpleasant. Before I cracked my pro-State brainwashing, I would feel uncomfortable, but my body language wouldn't show it. Now that I give negative feedback, the parasite knows he offended me.

"Inappropriate touching" is only a problem when someone is pro-State brainwashed. The victim doesn't give emotional feedback that it's unpleasant. Most "abused productive" people learn to not show emotions. The parasite is just trying to be friendly. A suppressed emotion of digust makes it seem like the victim enjoys it.

Any politician has to do dishonest things to get elected. That's the way government works. If you wiretap a Congressman, you'll almost definitely find evidence of misconduct.

The President has the power to spy on anyone without a search warrant. Eric Massa was opposed to Obama's healthcare "reform" plan.

"I inappropriately touched a staffer!" is the public excuse. Maybe State thugs discovered other evidence of corruption against Eric Massa. They made a deal. Eric Massa would resign, and they wouldn't pursue corruption charges.

Consider former Congressman James Traficant. He was a highly outspoken critic of the Federal Reserve. He went to jail for corruption charges. Was that fabricated, as punishment for criticizing the Federal Reserve?

Almost every Congressman has to do dishonest things, in order to get elected. The law is so vague that anyone can be accused of a crime, if State thugs want to strictly enforce the law. If you wiretap any politician, you'll almost definitely uncover evidence of corruption.

That's the reason privacy is important. The law is so vague that if you spy on someone 24x7, you'll almost definitely uncover evidence of a "crime".

It seems that Eric Massa was unfairly scapegoated for criticizing the healthcare "reform" law. People who deviate from State propaganda are punished. Other politicians learn by example. They obey the unwritten rules.

Whenever I see a politician publicly disgraced, my reaction now is "What honest thing did they do?" With a mainstream media information monopoly, it's very easy to trash someone's reputation. SNL does a sketch trashing Eric Massa, but they don't discuss the serious problems with the heathcare "reform" law.

State politicians/journalists/comedians must be careful at all times. If they accidentally say a suppressed truth, then an excuse will be fabricated to ruin their career.

The story of Eric Massa has an important evil fnord. If a politician contradicts State propaganda, then his career will be ruined.

The actual healthcare "reform" proposal is thinly disguised corporate welfare. The real problem is the AMA/State licensing cartel for doctors. This restricts supply and guarantees high prices. There are other damaging regulations.

It's the usual "Problem! Reaction! Solution!" model. Government regulations cause a problem. Politicians and the mainstream media hype the problem. The solution is more government regulations. This further restricts freedom and makes things worse.

The correct healthcare reform idea is never publicly mentioned. The State licensing cartel for doctors is evil and should be eliminated. Alternatively, increase the supply of doctor licenses. Currently, there's a Congress-imposed cap on medical school slots. Other damaging laws and regulations should also be repealed.

The only people who benefit from a State licensing cartel are the license holders. They can always profitably lobby to block reform. Most laws/regulations benefit a handful of people. They can always block reform.

That is the problem with the US economy. Stealing is more profitable than working and doing something useful. Why make a high-quality product cheaply, when you can bribe State thugs to declare competition illegal?

This is the virtuous positive feedback cycle of complete economic collapse.

Monday, March 15, 2010

Repo 105

In Lehman's bankruptcy trial, the creditors and judge hired a lawyer to write a report on Lehman's bankruptcy. The report was published here. In particular, the section on "Repo 105" was very interesting.

The US financial system is one big scam. Repo 105 is a scam, even if you believe that the financial system is legitimate. This post explains the Repo 105 scam in a way that even a pro-State troll should understand.

The report was in mostly plain English, rather than legal jargon. The lawyer preparing the report probably did a good job. It wasn't that hard to read.

Before getting into details, here's a one sentence summary of Repo 105. "Repo 105 is an accounting loophole very similar to the one Enron used." Lehman executives used Repo 105 to falsely report their leverage ratio.

Repurchase agreements were reported as sales instead of as loans. One leg of the repo was at the end of the quarter, and the other leg was at the start of the next quarter. This made the end-of-quarter balance sheet snapshot fraudulent.

One of the accounting rules is "Don't look for loopholes in the accounting rules." An accountant has an obligation to follow the intention of the rules in addition to the actual rules. By that standard, Lehman's use of Repo 105 is clear accounting fraud. The Repo 105 trades had no other purpose than to manipulate the leverage ratio published in the earnings statement.

The purpose of the lawyers' report was "Who might be liable, if Lehman's creditors want to sue for fraud/negligence?" Lehman's management might be sued by the bankruptcy creditors. Lehman's auditors Ernst & Young might be sued. They probably will get off with at most a slap on the wrist, unlike Arthur Anderson.

Ernst & Young executives will probably use "We're stupid!" as a defense. That might be accepted. If you're a professional, "I'm stupid!" should never be a valid defense. Unfortunately, that isn't the way corrupt State law works.

Ironically, Lehman's board of directors gets off scot free. Lehman's management never told them about Repo 105! Also, Delaware law gives the Board of Directors nearly absolute immunity!

That's the reason most corporations incorporate in Delaware. Delaware law is very favorable to the corporation's management. Due to some bizarre legal loophole, Delaware law protects the executives, even when the corporation does business in other states. As another example, Delaware law favors executives, when they enact a "poison pill" provision to protect themselves from a hostile takeover.

The Repo 105 transactions were conducted through a UK subsidiary. An accountant in the UK had previously issued an opinion allowing this Repo 105 treatment, albeit not on this large a scale.

Lehman executives hired several law firms to discuss Repo 105. All of them refused to issue an opinion letter, saying that Repo 105 is legal in the USA. That is surprising, since lawyers will usually do anything for a paycheck.


Thus, Lehman executives did all their Repo 105 trades through a UK subsidiary. Assets were shifted to UK, solely for the purpose of Repo 105-ing them.

Repo trades do have a bona fide purpose. Suppose a bank needs to borrow a lot of money for a short period of time. Suppose you're buying mortgages, packaging them as bonds, and then selling them. You need to borrow a lot of money for a short period of time, between when you buy the mortgages and when you sell them as bonds.

A repo trade enables the bank to borrow a lot of money briefly, putting other assets as collateral without selling them.

Here's how an honest repo trade works (ignoring the fact that the US financial system is one big scam). Suppose you want to borrow $1B for a week. You have $1B of assets on your books. You don't want to sell them, because that would lead to transaction costs and capital gains taxes. (Alternatively, the assets aren't really worth $1B, but you're carrying them on your books for $1B.)

You sell the bonds for $1B and agree to buy them back in a week for $1.001B. This transaction has an implied interest rate of approximately 5.3%. Effectively, you have borrowed $1B for a week. The lender is willing to lend you the money, because he has $1B of bonds as collateral.

There's one further refinement. The bonds are usually worth more than the amount borrowed. If you borrow $1B, you need to put up $1.02B in collateral. This can be called "Repo 102". The collateral is 102% of the amount borrowed.

For a "Repo 105" trade, you put up $1.05B of collateral instead of $1.02B. Also, you pay a higher interest rate compared to a regular repo. The collateral rate is 105% for bonds, 108% for equities.

If you make a "Repo 105" (bonds) or "Repo 108" (equities) trade, then the UK accounting rule says you may count it as a sale instead of as a repo. This means the trade is reported as a sale instead of as a repo (borrowing). This creates the false impression that Lehman had deleveraged. The obligation to repurchase the bond in a week is not disclosed.

Lehman had sold $1.05B of bonds for $1B. Instead of claiming the $50M loss, they created a phony derivative asset of $50M, representing the obligation to repurchase the $1.05B of bonds for $1B in a week.

There was not even a footnote mentioning the use of Repo 105. Someone who read Lehman's financial statements would have been totally fooled. There was no evidence of the Repo 105 gimmick.

Would a Lehman investor/creditor have wanted to know about Repo 105? Would a bank regulator have wanted to know about Repo 105? Definitely. Therefore, Lehman executives committed accounting fraud.

Lehman used $50B of "Repo 105" trades to fudge their leverage ratio. Someone else said "That's the same amount that Bernard Madoff stole!" Lehman executives committed accounting fraud on the same scale as Bernard Madoff! Because Lehman executives lied about their leverage ratio, they kept their high credit rating. They were able to borrow more money than they would have otherwise.

For a bank, keeping a high credit rating is *VERY* important. Suppose you have 30x leverage and you borrow at 4% to buy bonds yielding 5%. This is profitable. Suppose your credit rating is lowered, and now you have to pay 5% when you borrow. Your business is no longer profitable. The Federal Reserve credit monopoly and negative real interest rates encourage accounting fraud.

Lehman executives knew they were committing fraud. Lehman's COO Bart McDade said:

I am very aware . . . it is another drug we r on. (p. 742)
There are a whole bunch of quotes in that report by Lehman executives. They knew they were doing something dishonest.

For Repo 105/108, there is a rule that says the underlying bonds/equities must be liquid. Lehman almost definitely ignored that rule. If the underlying bonds were liquid, then Lehman could have sold the bonds outright and genuinely deleveraged.

Suppose a bond has a book value of $1B but a fair market value of only $50M. If Lehman executives sell it via a Repo 105 trade, it looks like they sold the $50M bond for $1B. Repo 105 trades were used to move illiquid assets off Lehman's balance sheet, at a phony sale price.

The traders at Lehman who executed the Repo 105 trades knew it was a fraud. The Repo 105 trades were a worse deal for Lehman than regular repos. The traders were annoyed that they were forced to make money-losing trades.

Anyone at Lehman who did a Repo 105 trade knew it was a fraud. More people than just the executives knew about the scam. Via limited liability incorporation, most of those people are protected from personal accountability. Without limited liability incorporation, everyone at Lehman who handled a Repo 105 trade would be partially responsible for the fraud. Limited liability incorporation encourages dishonest behavior.

If you have a job, and your boss demands you commit fraud, you should be partially responsible. That isn't the way insane State law works. According to natural law, everyone is individually responsible for what they do.

Limited liability incorporation gave Lehman executives an incentive to commit fraud. They loaded up on leverage, gambling that the recession would be short and mild. If that occurred, they would have made huge profits. Via limited liability incorporation, Lehman executives had a free put option to declare bankruptcy and cheat their creditors. If their gamble was right, Lehman executives would keep the profits. When they were wrong, they merely declared bankruptcy.
LBHI’s Global Consolidated Balance Sheet, for example, showed securities inventory levels pre‐Repo 105 usage and with Repo 105, and contained columns for “Repo 105/108 added back” as well as balance sheet targets. (p. 864)
That's hilarious. Lehman was keeping two sets of books! There was a "with Repo 105" and a "without Repo 105" column in their statements. That's a clear tipoff that you're committing accounting fraud. You have one set of books that you disclose to the public. You have another set of books that you keep internally that show your real earnings.

Who were the counterparties for the Repo 105 trades? Anyone who did a Repo 105 trade with Lehman, should have figured out that someone at Lehman was committing accounting fraud.

For example, suppose a trader at Goldman Sachs did a Repo 105 trade with Lehman. This would be a tipoff to Goldman Sachs that Lehman was committing fraud. After making the Repo 105 trade, then other traders at Goldman Sachs could make bets that Lehman would go bankrupt soon.

If you make a trade whose sole purpose is fraudulent, *BOTH* parties of the trade should be held legally responsible. Whoever made the Repo 105 trades with Lehman should also be held partially accountable.

Even though the Repo 105 trades were fraudulent, as long as Lehman doesn't go broke within the next week, the Repo 105 counterparty makes a profit. The money market fund that famously "broke the buck" probably was stuck with a bunch of Lehman repos or short-term debt.

This Repo 105 gimmick shows one problem with traditional financial reporting. It would be more honest to require executives to provide a cashflow statement every day, rather than just a quarter-end snapshot. With computers, such disclosure is easily organized. Even then, there still would be loopholes.

Reform will not occur. Insiders make too much money off the way things are now. Insiders like the fact that they can play games with accounting statements. Almost everyone does it. Lehman and Enron crossed the line too far, got too greedy, and got caught.

No matter what rules you create, there will always be loopholes. The big problem is the Federal Reserve credit monopoly and limited liability incorporation.

The Federal Reserve keeps interest rates negative. The Fed Funds Rate is currently 0.25%, while true inflation is 20%-30% or more. This provides executives an incentive to borrow as much money as they can. Insiders have an incentive to lie on their accounting statements, so they can borrow more money.

Inflation makes borrowing profitable. Lehman executives made a big bet that the recession would be short and mild. If they were right, then they would have made huge profits, salaries, and bonuses. When they were wrong, they just declared bankruptcy.

Right now, banks are making huge profits via inflation and bailouts, while the rest of the economy is still stuck in a recession/depression. If Lehman could have survived until the next inflationary boom, they would have made huge profits.

Limited liability incorporation encourages fraud. It gives insiders a free put option to declare bankruptcy and cheat their creditors. It makes no difference if you go bankrupt with a net worth of -$1B or -$200B. If an executive sees that the corporation is almost broke, then the incentive is to load up on leverage rather than deleverage.

The two main evils are the central bank credit monopoly combined with limited liability incorporation. No matter what other reforms State comedians implement, those two lynchpins of fraud will not be touched.

There was another interesting bit. Lehman executives were asking "Are other banks doing this Repo 105 trick?" The presumption was that, if other banks were doing it, then it was OK. They knew that they were the only one abusing Repo 105.

Lehman went broke just before the Federal Reserve opened up its policy, regarding how banks can borrow. Some people say that Lehman was forced into bankruptcy just before the Federal Reserve changed its policy, so they wouldn't benefit.

Now, banks can move assets off-balance-sheet to the Federal Reserve. Instead of doing a Repo 105 trade via a UK subsidiary, banks can do a repo trade with the Federal Reserve. That's the reason there's a fuss about "the growing Federal Reserve balance sheet" or "The Federal Reserve should disclose how much it lent to whom!"

Large banks can now do, completely legally, what Lehman did with Repo 105. Large banks can repo assets to the Federal Reserve.

There were two big questions that report left unanswered:
  • What bonds were the actual collateral for the Repo 105 trades? Were they really liquid? Were they illiquid bonds with book value much greater than fair market value?
  • Who were the counterparties to the Repo 105 trades?
The main points of "Repo 105" are:
  • Repo 105 is an accounting gimmick that Lehman executives used.
  • Repo 105 fraud is the same as Enron's fraud. Sarbanes-Oxley and other reforms were completely useless.
  • Lehman executives did $50B of Repo 105 trades. That's the same amount that Bernard Madoff stole.
  • Because Lehman executives committed Repo 105 fraud, they were able to borrow more money than they would have otherwise.
  • Lehman asked several law firms for a Repo 105 opinion letter. No lawyer in the USA was willing to give an opinion letter, certifying that Repo 105 was legal. Not even for a huge paycheck, was a US lawyer willing to write such a letter.
  • All Repo 105 trades were done through a UK subsidiary.
  • Repo 105 demands that the assets are liquid. Lehman executives almost definitely ignored this rule. If the underlying Repo 105 bonds were liquid, then Lehman could have sold them and genuinely deleveraged.
  • Repo 105 trades had a higher collateral requirement and higher interest rate compared to a regular repo.
  • Whoever did the Repo 105 trade with Lehman, knew that the trade was fraudulent.
  • Everyone at Lehman who was involved with Repo 105 knew it was a fraud. A lot of people, and not just high-ranking executives, were in on the scam.
  • Lehman kept two sets of books internally, one "with Repo 105" and one "without Repo 105".
  • It is pointless to have bank regulators when executives can lie to the regulators.
  • One of the accounting rules is "Don't look for loopholes."
  • Lehman executives did not mention Repo 105 anywhere on their financial statements, not even in a footnote.
  • The insiders who committed fraud at Lehman will probably get away with it.
  • The Federal Reserve credit monopoly and negative real interest rates provide an incentive to borrow as much money as you can.
  • Lehman executives bet that the recession would be mild. If they were right, they would have made huge salaries and bonuses. When they were wrong, they cheated their creditors by filing for bankruptcy.
  • Limited liability incorporation gives an incentive to lie about earnings. You can always declare bankruptcy and cheat your creditors.
  • Due to recent Federal Reserve policy changes, banks can now repo underwater or underperforming assets to the Federal Reserve, rather than doing the Repo 105 trick.
  • Inflation fuels illegitimate bank profits. Inflation enables the banksters to earn huge profits, without doing any real work.
  • The US financial system is one big scam.
As long as the Federal Reserve and limited liability incorporation exist, fraud like this will occur. It's very predictable! There's a huge accounting scandal every few years!

The negative hype regarding Lehman is itself an evil fnord. Lehman executives were dishonest and got caught. Therefore, everyone who is dishonest gets caught. That is false. Lehman was an extreme example of abuse. Other insiders do the same thing, albeit on a smaller scale.

There are no loopholes or laws to patch a fundamentally corrupt system. No matter what new rule you make, there always will be a loophole.

The only way to protect people from fraud is a really free market.

Even if you had no relationship with Lehman, you still paid the cost of the bankruptcy. The cost of Lehman's bailout was paid by everyone else via inflation. For example, AIG/Goldman were bailed out due to bad bets on Lehman credit default swaps. Creditors with good connections, like Goldman Sachs, made a bundle. Other creditors may have been cheated.

The only way to protect yourself from theft via inflation is to buy gold and silver and take physical delivery. In order to fully boycott the Federal Reserve, you must also boycott income taxes. Agorism is the best strategy for fighting evil like Lehman's executives.

Don't bother writing your Congressman. They don't care what you think. The financial industry bailout passed even though a vast majority opposed it. The system is completely broken and must be replaced.

I'm not just whining, because I'm also proposing a reasonable alternative and how to get there from the current mess. Agorism and really free markets are the only philosophy of economics and politics that makes sense, once you really think about it. It's a hard mental shift for most people, due to their pro-State brainwashing.

Sunday, March 14, 2010

Android, iPhone, and Maemo

I noticed this post via David Z's shared items. That post had a huge omission. It didn't mention Maemo by Nokia.

The two main choices for consumer cellphones are Android and the iPhone. There's another interesting choice not commonly mentioned, Maemo by Nokia.

As a knowledgeable computer user, I'm offended by Android and the iPhone. They are "locked down" environments. The user doesn't get root access to their own phone. You may only run/install applications that the gatekeepers Apple/Google let you run.

(You can sell Android apps without going through Google. You don't have root access on the phone, so there are restrictions. The user must be pretty knowledgeable to install an Android app that wasn't published by Google. This article discusses a tethering app that was banned by Google; the user can still buy and install it, but it's much harder without Google's blessing.)

You can only get root access on Android or iPhone if you hack the phone. If you take a strict interpretation of restrictive copyright law, it's illegal to hack your phone or tell other people how to hack their phone.

Is the BlackBerry an open OS? I believe not, but I'm not sure. The BlackBerry is more open than Android and the iPhone. You can publish/sell your own applications without approval from RIMM. However, I don't think you can overwrite the OS.

With Maemo, you can overwrite the OS and install whatever OS you want. You get full root access to your own phone, if you want. You can install whatever you want, without getting permission from a gatekeeper.

The app store for the iPhone has been a huge cash cow for Apple. They get a cut of 30% of all sales. You can't sell an iPhone application without approval from Apple. You can publish an Android app without approval from Google, but the user still can't get root access on their own phone. The non-Google-approved app may only be installed by a skilled user.

Apple has vetoed certain applications. Notably, they are refusing to support Flash, an aggressive move against Adobe. Apple has vetoed VoIP applications, because it's sometimes cheaper to make a VoIP call than use the phone's voice package.

This article was interesting. Apple removed apps that help you find free wi-fi. There are many apps that Apple has vetoed or later censored/removed.

Apple vetoes applications that compete with native iPhone features. This frustrated the authors of some early popular apps. Version 2 of the iPhone included a feature that competed with their app, and Apple banned their app. These authors wound up doing free market research for Apple.

Apple takes weeks or months to approve an app. This makes it hard for developers to get feedback from users. If you release an app with a bug, then the bugfix has to go through the same lengthy approval process.

Sometimes, Apple demands an app remove a feature. In that case, the automatic "upgrade" removes the feature and you can't go back to the old version.

Given all these restrictions, you'd have to be a fool to invest in iPhone or Android development. You're subject to the whims of a large corporation. All it takes is the arbitrary decision of some executive, and you've lost your investment.

Why invest in development when someone else can arbitrarily cut you off? Android/iPhone apps are trendy right now, but there's no guarantee either will exist 5 years from now.

With Windows development, I don't need permission from Microsoft to sell something. That's not true with the XBox, where only Microsoft-approved games may be sold. One reason the Atari 2600 lasted so long was that 3rd parties could develop games without permission from Atari. Such actions are illegal now. Even if I cracked the XBox encryption, copyright law makes it illegal for me to sell an XBox game without Microsoft's approval.

When last looking for a job, I noticed lots of fools looking to hire Android/iPhone developers. They were only interested in hiring people with 1+ year of experience and who already had written a best-selling app. Amusingly, they also wanted to hire people for "equity only" (i.e. free).

It seems that it's a waste of time learning iPhone or Android development. They're trendy now, but there's no guarantee they will be around 5 years from now. No mobile developer has had the "user lock-in" like Microsoft has had with their desktop monopoly.

I remember that, in 2000, everyone was encouraging me to learn Palm Pilot development. Palm OS was the hot thing, and definitely worth a career investment! My current languages C++/SQL/PHP should be around awhile.

I'm reluctant to invest time learning Android or iPhone development. Everyone says there's a shortage of mobile developers. That doesn't match my experience when interviewing. Everyone is demanding 1+ years of experience, *AND* they expect people to work for free.

If there really were a shortage, employers would be willing to hire competent people without an exact experience match, and pay them with cash instead of worthless equity. It seems that the mobile development environment is "trendy" and attracting fools.

If there's a battle between an open standard and a closed standard, then the open standard usually wins. The FCC is changing the rules for telecom corporations. They will be forced to support *ANY* phone on their network, and sell "data only" packages. Currently, cell phone corporations decide what phones are allowed and not allowed on their network. This allows them to force users onto crippled environments like the iPhone and Android.

Unlike the iPhone and Android, Maemo is an open OS. The user can get full root access to their phone, if they want. In a battle between an open system and a closed system, the open system usually wins. I looked, but you can't buy a Maemo phone for Verizon yet. My LG env Touch is decent, but I wish it had a better text editor. This is good enough for now, and better than what I had before. Now, I can write blog drafts on the subway. The 300 character limit is *ANNOYING*, but it's still usable.

Saturday, March 13, 2010

US Civil War Retcon

I really liked this post on Anarchy in Your Head. "The US Civil War was fought over slavery!" was a historic retcon. The US Civil War was actually fought over taxes.

The Southern states were mostly agricultural. They did not want import/export tariffs on trade with Europe. The Northern states were mostly industrial. They wanted protective import/export tariffs. High tariffs forced the Southern states to sell their cotton to Northern factory owners, and buy goods from Northern factory owners.

President Lincoln's justification for fighting the US Civil War was "The Southern states aren't paying taxes. I'm going to use violence to force them to pay." He blockaded the ports to collect import/export tariffs. His army invasion was to collect other Federal taxes, including the capitation (equal tax per person).

Viewed this way, the Southern states were the heroes. They were refusing to pay unfairly high taxes. They withdrew their consent for a government that no longer represented them.

The Southern army made some severe tactical mistakes during the Civil War. They tried to aggressively invade the North, instead of defending their home territory. If the South had focused 100% on defense, then they probably would have won a war of attrition. One problem is that the Southern generals were pro-State brainwashed by military academies in the North.

Also not mentioned in "Anarchy in Your Head", President Lincoln arrested newspaper editors in the North who criticized the Civil War.

Once the Southern states walked out of Congress, there no longer was a quorum. If you take a strict literal interpretation of the Constitution, Congress and the President no longer had authority do anything. President Lincoln issued executive order #1, to get Congress back in session and keep the Federal government operating. His only other choice was to give up and go home.

"The US Constitution is a voluntary contract!" is a lie. The Southern states tried to withdraw their consent, but violence forced them to remain. The original Constitution was not ratified by an overwhelming popular vote. It only was ratified by a thin margin. In some states, multiple votes were required, it only passed by a thin majority, and some favors/threats occurred in order to secure ratification. There is no provision for individuals to directly ratify the Constitution or Amendments.

"Does a State have the right to withdraw consent for the Federal government?" was not settled by a careful debate of the issues. It was settled the way all important political issues are settled, with violence.

Most other countries abolished chattel slavery at the same time as the USA, without a civil war. Political insiders realized that tax slavery was more effective than chattel slavery. Give people their 40 acres and a mule! Via property taxes, the slaves don't own those 40 acres anyway! It makes no difference if they're paying huge taxes! The master gets his tribute, whether you're a tax slave or a chattel slave.

There's another interesting Civil War footnote. The 14th Amendment allegedly abolished slavery. The US Supreme Court has interpreted the 14th Amendment as allowing limited liability incorporation and corporate personhood. The Supreme Court has cited the 14th Amendment 10x more often to justify rights of corporations, compared with justifying the rights of individuals. Limited liability incorporation is evil. Limited liability incorporation allows State insiders to exert power and control wealth, without any accountability. The corporate executive/employee says "I'm just doing my job!", and that excuses almost all sorts of dishonest and negligent behavior.

Until 1861, the US Constitution was presumed to be a voluntary contract among sovereign states. This placed a limit on expansion of Federal government power. After the US Civil War, a lot of severe abuses started accelerating. For example, the National Bank Act, passed during the Civil War, encouraged dishonest behavior by the banksters. Combined with limited liability incorporation and other bad laws, crises were engineered which led to the creation of the Federal Reserve in 1913.

The US Civil War is one example where State schools act as brainwashing centers, rather than spreading the real truth. I feel cheated that I never heard about Lysander Spooner or Bastiat in school.

Friday, March 12, 2010

Paying an Underwater Mortgage

I saw an article that contained a big error. Suppose you "own" a house with a mortgage. (Via property taxes, nobody in the USA actually fully owns their house.) Due to the declining housing market, your mortgage is worth more than the value of your house.

Suppose you have a job, and can still afford your mortgage payment. Should you abandon your house?

The correct answer is "not necessarily". It's a difficult calculation. True inflation is much greater than interest rates. The interest on your mortgage may be 6%, but true inflation is 20%-30% or more.

Let's use a specific example. Suppose your mortgage is for $500k and your house could be sold for $400k right now. You have equity of -20%. You owe $100k.

Suppose your mortgage has 6% interest, but housing prices will rise by 16%, a reasonable assumption if true inflation is 20%-30%. Assume that you can afford your mortgage payment. After 3 years, you'll have positive equity again. Inflation bailed you out.

This is the same trick that the banksters use. Due to the recession/depression, most/all large banks were technically insolvent. If forced to liquidate at current market prices, they would have been unable to pay off their creditors/depositors.

Via "level 3 accounting", banks were able to keep operating as long as they could meet interest payments. Bailout money from the Federal Reserve and the Federal government eased this process. The banksters borrowed at 0.25% while inflation is 20%-30%+.

The banksters were bailed out by inflation. If you keep making payments on an underwater mortgage, you're using this trick, albeit on a smaller scale. You don't have as high leverage as a bankster, but it works in your favor.

If you own a house with an underwater mortgage, there's an implied call option. If the price of the house rises, you profit from leverage. If the price of the house tanks further, then you default.

If the value of the implied call option is worth more than the cost of the mortgage payments, then you should keep paying your mortgage (if you have the cash or a job). It's an even better deal if you consider the transaction costs associated with buying a house and the cost of renting another place to live.

One negative factor is property taxes. Under normal circumstances, that's only 1%-2% of the value of the house. However, in some cities there were a lot of property tax defaults, combined with a crashing housing market. This led to higher property taxes for everyone else.

State parasites demand the same amount of tax booty, even while the slaves are suffering a recession. Under such circumstances, the property taxes owed are more than the value of the house. This makes the value of the house $0. In effect, the State has stolen your house via property taxes.

Property taxes are a huge drag on property "ownership". There are reasons to not default on your mortgage, besides the implied call option.

  • You might not be able to get another mortgage/house if you default.
  • You trash your credit rating if you default.
  • You still have to live somewhere. If you abandon your house, you'll have to pay rent.
  • It's your home and you don't want to move.
  • There are costs associated with moving.
  • Even if you could buy another home, you would have to pay another real estate agent's commission, another set of closing costs, another set of mortgage financing fees, etc. There's a lot of fees when you buy a house.
Summarizing, it might be in your rational self-interest to keep paying an underwater mortgage, if you're employed and can afford it. There's an implied call option, because the price of your home will probably rise faster than the interest rate on the mortgage.

If you do own a home, you shouldn't keep refinancing every time housing prices rise. "Always maximize your leverage!" only works for the banksters, who are "too big to fail" and always get a bailout. If you're too greedy and you're a non-insider, then you'll lose everything during the next recession/depression. You never know how long the recession will last and how severe it will be. As a non-insider, it's too risky to max out your leverage. Use leverage when buying your home, but keep it mortgage-free once it's paid off.

If you own a house with an underwater mortgage, it isn't necessarily in your rational self-interest to default. This assumes you have a job or can otherwise pay your mortgage. The interest rate on the loan is less than expected inflation, which makes it potentially profitable to keep paying your mortgage even if it's more than the current market value of your house. It's a tricky and complicated calculation.

Thursday, March 11, 2010

Censorship on Yahoo

This post on Yahoo was interesting. Notice there is no comments section. Look at other posts. They do have a comments section.

I noticed this via Google Search (searching for "taxation is theft").

Mar 10, 2010 - taxation is theft . pass it on . GoldenBoys. 205 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. ...
Someone posted "Taxation is theft!" It got a lot of upvotes (205!). Then, someone at Yahoo purged the comments section. Where the comments section would be, it says "We apologize. An error has occurred. Please try again." It seems weird that comments don't work on that post, but work on other posts.

This is a common mainstream media censorship tactic. If a forbidden idea starts spreading in the comments section, purge the comments section or delete the comments section.

Some censor is probably purging the forbidden comments, and then putting back up the comments section. They might even add "Taxation is theft" as a forbidden phrase in their spam filter.

I'm surprised that Yahoo would do such an evil thing.

It's always interesting to catch State thugs redhanded committing censorship.

(Look quickly. It may be back up by the time you read this.)

Constance McMillen - An Example State Mind Control Trick

This story is very interesting. A high school girl wanted to take another girl as her date to the prom. The other girl was going to wear a tuxedo instead of a dress. The school objected.

The girl convinced the ACLU to back her. There was probably going to be a lawsuit, or the school bureaucrats would have to cave to the girl's wishes.

The school bureaucrats/thugs retaliated by canceling the prom.

McMillen almost didn't return to school Thursday for fear of retribution by her classmates who had just lost their prom because of her.
This is a very clever mind control trick. Now, the girl is the villain.

The other students think "We lost our prom because of Constance McMillen!" rather than "The school bureaucrats are scumbags!"

The school bureaucrats are protected by sovereign immunity. Constance McMillen won't be able to sue them directly. Even if she does sue the government and win, the cost will be paid by everyone else via higher taxes. Suing the government is pointless. Besides, the school bureaucrats can say "It's within our personal professional discretion to cancel the prom!", even though everyone knows they're retaliating against Constance McMillen.

The school bureaucrats are treating the school like it's their own private for-profit business. If I owned a dance hall and made a "women may not dress like men" rule, that's my personal choice (although I'd probably be sued anyway). School bureaucrats act like they own the school. State property is technically unowned.

If one member of a group does something wrong, then all members of that group are punished. This is a very important State mind control trick.

As another example, if police suspect someone of a crime, then they and all their friends are arrested. This encourages them to rat on their friend.

A handful of people in Afghanistan organized a terrorist attack. Therefore, everyone living in Afghanistan and Iraq is subject to a war and hostile occupying army.

As another example, high ranking Al Qaeda members are most vulnerable when they're with their families. US troops attack them while they're with they're families, murdering their relatives as well. In effect, US policy is "If you're a member of Al Qaeda, then we'll also murder your family."

If someone in Iraq or Afghanistan assaults/kills a US soldier, then all villagers are assaulted/kidnapped/murdered. Superficially, this prevents crime. In reality, such behavior merely inspires US hatred in the next generation of terrorists.

All these examples have one element in common. The person abusing their power has a State-backed monopoly.

"If there's a crime, punish the group and not the individual!" is an example State mind control trick. Constance McMillen's fellow students now view her as the villain, rather than the State bureaucrats/thugs.

Such mind control tricks make people crazy. The cumulative effect over a lifetime is the way people are pro-State brainwashed.

What's a Manifesto?

I noticed an interesting fnord word, "manifesto". Joe Stack's suicide note and blog post is now referred to as his "manifesto".

"Manifesto" is an evil fnord word. If you call something a manifesto, that usually means "This is the ranting of a crazy person. It contains nothing interesting. His point of view is invalid."

Joe Stack had a valid complaint against the IRS. Corrupt State courts didn't recognize his complaint as valid. He tried writing his Congressmen, but they replied "F*** you! We don't care about your problem!" His violent conclusions were wrong. That doesn't invalidate his complaint.

Another example is the "unabomber manifesto". He had some valid concerns about the way parasites had abused him. He wasn't able to explain it clearly like me. The problem is not "Technology is evil!" The problem is that State parasites abuse people via government. If you summarize the unabomber's complaint, it's "Parasites abused me!" (I tried actually reading the unabomber's manifesto. It was incoherent and badly written. I'm summarizing when I say his real point was "Parasites abused me!") I understand the viewpoint of the unabomber and Joe Stack, but I'm picking a different solution for fighting evil.

Abusive jerks get away with it, because most people with high logical intelligence are pro-State brainwashed to accept abuse.

Another example is the Communist Manifesto by Karl Marx. If you read it carefully, the USA is a nearly perfect implementation of communism! In school, you learn "Karl Marx is evil!", but you don't actually read his writing. If people actually were forced to read Karl Marx's writing in school, they would realize the disturbing similarities with the way the USA is currently organized. Karl Marx wrote a "manifesto", and therefore you don't need to actually read it to conclude he's a fruitcake.

Communism means that government bureaucrats make economic decisions for everyone else. Due to extensive regulation, a corporation is a branch of the State. Theoretically, people are free to start businesses. In practice, it's hard. Many businesses are heavily regulated. The Federal Reserve monetary monopoly restricts non-insiders' access to capital. I can't start my own telephone/electricity/ISP business, because a handful of people have an explicit State-backed monopoly/oligopoly. I can't start my own TV channel, because I couldn't get the cable monopoly to carry it. I can't work as a taxi driver unless I buy a medallion license (in NYC). I can't work as a doctor/lawyer/accountant unless I waste a lot of time and money getting a State permit. I can't start my own alternate financial system based on gold and silver. If I tried that, I'd wind up assaulted by terrorists; that happened to the founders of E-gold and the Liberty Dollar.

Superficially, the USA has a free market. It you look at all the regulations, it's a very non-free market. The cost of starting a business is "Make sure you're in compliance with the bureaucracy!" more than "Do something useful and get customers!" State thugs don't physically assault every small business owner. A small business owner is forced to waste a lot of time and money if he's the victim of an IRS audit or other State regulatory crackdown. State thugs violently crack down on a minority, making everyone else scared. The law is so vague that State thugs have a lot of discretion, when they pick a victim for their harassment.

The income tax, property taxes, a central bank credit monopoly, mandatory public schooling, and government regulations are all key components of Communism. The income tax means that you don't own your own labor. Property taxes mean that you don't own your own land. The inflation tax means that you don't own your own money. The money in your checking account and wallet is subject to theft via inflation. If you don't own your labor, you don't own land, and you don't own money, then aren't you a slave? Government parasites control nearly every aspect of your lives. Mandatory public schooling is really pro-State brainwashing. Government regulations give State thugs an excuse to crack down on almost anyone.

In my State brainwashing center, I learned "Karl Marx is evil! Communism is evil!" When I read about Karl Marx being tried for treason for suggesting "Taxation is theft!", then he seems like a cool guy.

I remember Karl Marx and Communism being heavily criticized in school. However, his actual writing was never mentioned! That's a subtle and important type of State censorship. If you actually read the Communist Manifesto, it's disturbingly similar to the current state of the USA.

The USA passed a lot of laws in the 30's and 40's that severely restricted individual freedom, almost as badly as Nazi Germany. The only difference is that the USA won the war. "Hitler murdered the Jews!" is also a retcon, because the evils weren't fully understood until US troops entered the concentration camps. It was evil, but it wasn't the public excuse for the war at the time.

If something is labeled a "manifesto", there's a fnord implying that the author is crazy and has no valid points. Calling the unabomber's writing a "manifesto" means that there's no reason to try and understand his point of view. The Communist "Manifesto" is criticized but not actually read. By calling Joe Stack's suicide note a "manifesto", that denigrates his valid complaint against IRS terrorism.

Similarly, the mainstream media says that Al Qaeda is a bunch of fruitcakes. State parasites don't want people to understand that Al Qaeda terrorists are retaliating against US aggression. You should not try to understand the point of view of someone who commits an act of violence.

"Manifesto" is an evil fnord word that means "This isn't worth reading." By labeling something a manifesto, that implies the author's point of view is wrong. Joe Stack had a valid complaint against the IRS. His mistaken violent retaliation doesn't invalidate his other points.

The IRS is a dangerous terrorist organization. The IRS hurts more Americans each year than Al Qaeda. The income tax is a complete perversion of the idea that we live in a free society. The income tax means that individuals don't own their own labor. The income tax prevents people from boycotting the Federal Reserve. IRS thugs demand payment in exchange for permission to conduct economic activity, and only Federal Reserve Notes are accepted as valid for paying taxes.

All taxation is theft. The IRS is a clear example of State aggression against people trying to earn an honest living.

Wednesday, March 10, 2010

Cablevision vs. ABC

This story was interesting. There was a dispute between ABC/Disney and Cablevision, regarding fees for carrying ABC's over-the-air signal.

According to that article, a permanent deal was not reached. ABC/Disney and Cablevision reached a temporary agreement, so that the Oscars would not be interrupted. Otherwise, some of the slaves would have started complaining about the immoral Cablevision monopoly.

The real problem was not disclosed in the mainstream media coverage. The problem is that Cablevision has a monopoly. It's explicitly illegal for me to lay my own cables and compete with Cablevision.

The problem is not "It's hard to lay cables and sign up customers." Cablevision has an explicit State-backed monopoly. Competition is illegal.

In NYC, you can get Cablevision or Time Warner, depending on where you live. However, there are no places where you can get both. It's like mafia gangs agreeing to share their turf, rather than true competition.

Why do State parasites allow abusive monopolies? Monopolies maximize the opportunity for corruption. Suppose a monopoly is worth $100M/year. Then, executives can afford to spend $10M+/year on lobbying and kickbacks. With true competition, the seller would not earn economic rent. There would be no surplus profits to spend on bribes, in a really free market.

The cost of corruption and monopolies isn't free. It's paid by customers as higher prices and a lower quality product.

It's almost exactly the same as the king granting certain merchants a monopoly and corporate charter, in exchange for a cut of the profits and certain legal protections like "limited liability incorporation". In the present, the graft is paid to State insiders, rather than to the king. The bribe can come via a campaign contribution. The bribe can come by hiring a politician's idiot brother-in-law as an executive.

The mechanism by which politicians trade favors and bribes is a type of counter-economy! It's totally illegal, but it happens all the time! If only the agorist counter-economy was as sophisticated as the mechanism by which politicians/insiders/parasites buy and sell favors!

If you look at your cable package, you'll notice 100+ channels. However, they're owned by a small handful of corporations. Each channel has its own separate brand, even though the same corporation controls them. For example, MTV and Comedy Central are both owned by Viacom.

The mainstream media monopoly leads to lower quality. There's 100+ channels, but they represent the viewpoint of a tiny handful of insiders. This enables important viewpoints like "Taxation is theft!" to be completely excluded.

If I want to start my own cable TV channel, it's explicitly illegal. I can try, but I probably won't convince the State-owned monopoly to carry my content. Why should the mainstream media cartel allow competition? If an executive at Viacom wants to start a new channel, he just bundles it with the channels he already sells. If I want to start a new channel, I wouldn't be able to get the mainstream media cartel to carry my content.

A pro-State troll says "FSK doesn't deserve his own channel. He has only 200 regular readers on his blog!" First, 200 regular readers, starting with zero marketing budget and no investment besides my time, is actually pretty good. Second, the mainstream media does not promote my content; this severely restricts my opportunities. How do you know that, if I had a show on a mainstream media channel, I wouldn't get better ratings than "The Daily Show"? It's like the mainstream media saying "We shouldn't cover Ron Paul's 2008 Presidential campaign, because he has no chance of winning." Ron Paul had no chance of winning because he didn't receive any mainstream media coverage. Similarly, do I have only 200 readers because my blog sucks? Or, do I have only 200 readers because the mainstream media cartel denies people like me an opportunity to reach a wider audience?

If there really was a free market of ideas, some mainstream media employer would say "Wow! FSK's ideas are awesome! I have to hire him as a writer!" I'm not holding my breath waiting for that to happen. A pro-State troll says "The mainstream media cartel doesn't want to hire FSK as a writer. Therefore, FSK's ideas are wrong." There's no way I'd get a job at a mainstream media corporation. My writing would call out the rest of them for being frauds.

The Internet does level the playing field somewhat. I was able to start a blog for zero capital cost, an opportunity I would not have had pre-Internet. With a physical newspaper, that's a huge barrier to entry. The old saying was "Freedom of the press is a good idea, especially for those people who own a printing press!" Without the Internet, I wouldn't be able to read other people's non-mainstream ideas and get feedback on my ideas. Even if Blogger wasn't free, I could spend the $20/month and buy hosting. Google gives free Blogger hosting because they probably data mine the IP logs. Plus, Google shows ads around search results that include my blog.

I could start my own YouTube channel and grow my audience organically. It's going to be awhile before that's as profitable as a mainstream media program. Plus, the slaves have been brainwashed to believe "If it's on the mainstream media, then it's true."

Superficially, the problem with the ABC vs. Cablevision dispute is a fee disagreement. The real problem is Cablevision's monopoly; the other issues are evil fnords distracting from the real issue.

There's a law saying "Cable providers must carry the over-the-air signal." There's also a law saying "Cable providers need permission from the station owner to carry the over-the-air signal." This leads to the obvious conflict.

Mainstream media corporations used to provide the signal free/cheap. Squeezed for revenue, they're looking for higher fees.

Does Cablevision really care if ABC demands a higher fee? Actually, no. They will just pass the cost on to customers as higher prices. However, if the fee is too high, then customers might drop their cable.

Another problem is that cable corporations only offer "bundled pricing". Customers don't get to individually pick which channels they want. For example, ESPN is an expensive channel, and I hardly ever watch it. However, if I want the package with Comedy Central and the Cartoon Network, I have to also buy ESPN. "Bundled pricing" is the way a monopolistic seller behaves, just like the way Microsoft bundles IE with Windows. Even if I use Firefox, I pay the cost of IE when I buy Windows.

With unbundled pricing, it wouldn't matter if ABC decided to charge $10/month. Then, customers could not pay for ABC and save. Why doesn't Cablevision offer unbundled pricing? Then, ABC could charge whatever fee they want, and Cablevision would itemize the customer's bill. "Unbundled cable" is technically feasible; the cable monopoly chooses to not implement it.

I can't say "I refuse to pay the ABC portion of my cable bill. I'll use the over-the-air signal when I want to watch ABC."

The cable corporations don't want unbundled pricing, because bundling is the way a monopolistic seller maximizes profits. The mainstream media corporations also like this arrangement, because they can bundle unpopular channels with popular channels. Monopolistic sellers like to bundle things together, because customers have to buy stuff they want along with stuff they don't want.

There is one form of competition with the local cable monopoly. There's parallel competition. The phone monopoly also sells cable now, via Verizon FiOS. (FiOS isn't available yet where I live. My parents are eager to dump Time Warner. I'd certainly like a faster Internet connection.)

You also can download some shows on the Internet. That can be done legally on various websites like Hulu. It can also be done illegally via BitTorrent.

However, Internet access is still bought via a State monopoly/oligopoly. Several State-licensed competitors provides some of the benefits of a free market, while still providing the benefits of an oligopolistic cartel. It's mostly/completely illegal for me to start my own ISP business. With Internet access, I have more than two choices. There's the telephone monopoly and the cable monopoly. There's also Internet via cellphone, which isn't as good as a wire (yet?).

When two monopolies negotiate, the incentive is for brinksmanship negotiation. It is not a true free market negotiation. A monopolistic seller and a monopolistic buyer have no market price signals.

For example, suppose the economic rent due to Cablevision's monopoly is $20 per subscriber per month. What is ABC's fair share of this $20 economic rent? There's no correct answer, because it's monopolistic rent.

Therefore, both ABC/Disney and Cablevision have an incentive to stall as long as possible. The only threat is that some Congressman will bow to public pressure and impose a solution. If Cablevision or ABC/Disney act too much like jerkwads, then some Congressman might pass a law that makes their monopoly less valuable, due to public outrage. You can steal from the slaves via taxes and monopolies. If you deny the slaves their bread and circuses and Oscars, that's a real problem!

Another example of brinksmanship negotiating is between a sports league and the players' union. The incentive is for neither side to offer meaningful concessions until the last minute.

For example, the NFL has a State-backed football monopoly. Competition isn't illegal, but there's severe State restriction of the market. Most of the NFL's profit is economic rent. What is the fair share for the players? There's no correct answer. It's like thieves disagreeing over how to share their stolen property.

However, in a really free market, the players would almost certainly earn more. The reason the players don't form their competing league is that it's illegal/impractical. For example, most stadiums are State-funded. The NFL also has long-term mainstream media contracts and bank loans subsidized via negative real interest rates. A new league wouldn't get those perks.

The negotiations between the NFL and the players' union will almost definitely go down to the last minute. The probably will be a lockout. Both sides have a State-backed monopoly. The owners have a stronger bargaining position, because a player's career only lasts a few years. The owners can "divide and conquer" the players, offering concessions that benefit the majority but hurt a minority. One such example is the "franchise" and "transition" tags, which only hurt star players.

The mainstream media covered the dispute between ABC and Cablevision, but not the correct answer. The problem is that Cablevision has a monopoly.

Mainstream media celebrities and journalists are forced to work as wage slaves. Why doesn't someone like Conan O'Brien say "**** this! I'm starting my own channel!" The problem is that the mainstream media cartel won't allow competition.

If I tried to start my own mainstream media channel, I could not get the cable monopoly to carry it. Even if I gave away the signal for free and had a decent audience, it still is impossible/illegal to compete.

The mainstream media monopoly doesn't just lead to higher prices. It also leads to lower quality. Certain important ideas, such as "Taxation is theft!" are not mentioned at all. In many ways, the mainstream media is as State-owned and controlled in the USA, worse than in the Soviet Union. The USA merely has an illusion of a free press. Any journalist who didn't follow the State disinformation campaign would be discredited and forfeit his career.

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