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25 Apr 12:00

Say Yes to Ice Cream-Flavored Beer

by Baylen Linnekin

Last week, ice cream maker Ben & Jerry's and Colorado brewer New Belgium announced they would collaborate to create a new Salted Caramel Brownie Brown Ale, billed as "an ice cream infused craft beer."

This isn't the first beer pairing for Ben & Jerry's. Last spring, for example, the company kicked off a new product launch on the West Coast with a series of "frothy beer floats."

A press release announcing the partnership noted the beer will focus on the companies' shared efforts of "supporting sustainable agriculture" and "focus[ing] on environment awareness."

Wonderful. Or maybe not. Neo-Prohibitionists have jumped on the ice cream maker, warning of the potential harms of pairing a food kids like with a drink adults like.

"It's a crass, corporate greedy move to put a brand name like Ben & Jerry's on a beer," said Bruce Lee Livingston, executive director of the group Alcohol Justice, in remarks reported by USA Today. "It's bad for children—who will start looking at beer as the next step after ice cream."

I'd be surprised if ice cream-flavored beer appealed to anyone, let alone children, who are prohibited by law from buying the product. (Maybe it's my personal bias against anything boasting a salted caramel flavor.) But let's suppose Livingston is right, and the pairing is a gateway drug. If we assume that, why stop there? Let's take this sort of reasoning to its logical conclusions—and look at Ben & Jerry's ice cream itself.

Ben & Jerry's flavors like Hazed and Confused, an homage to 1993's weed-filled hit movie Dazed and Confused, clearly promote children's drug use. Cherry Garcia and Half Baked do the same.

Coffee Caramel Buzz and Coffee, Coffee BuzzBuzzBuzz! clearly promote childhood caffeine addiction.

Chocolate Therapy obviously promotes self-medicating for youngsters. Karamel Sutra, an ode to the Kama Sutra, the ancient Hindu text detailing various lovemaking positions, clearly promotes underage sex.

And with its White Russian flavor, an ode to the vodka-based cocktail of the same name, Ben & Jerry's has been promoting hard liquor use by children—obviously—since it was introduced in 2013.

Clearly. Obviously. Okay, maybe not really. Or at all.

Alcohol Justice, which attempts to "hold Big Alcohol accountable for the harm its products cause," urges a series of policies that target the rights of adult drinkers. For example, the group supports lowering the permissible blood alcohol content of drivers from .08 to .05. It wants to ban flavored beers, including Mike's Hard Lemonade, because they target "youth (especially girls)." It seeks to raise federal excise taxes on alcohol. And it wants to ban Palcohol, a powdered-alcohol product I wrote about here recently.

While Alcohol Justice claims to target "Big Alcohol," craft brewers like New Belgium, smaller competitors like Mike's Hard Lemonade, and tiny startup Palcohol hardly fit that description, not that anybody should feel differently about Alcohol Justice's arguments if they were simply opposed to alcohol being sold by bigger companies.

But even the littlest sellers appear to be targets of the group's ire. For example, Alcohol Justice recently fought a bill in California that would open up farmers' markets in the state to the scourge of wine tastings. Again, it's because of the children.

"Kids, you go on a pony ride while I taste the chardonnay, is what you might hear a parent say at your local certified farmers' market if AB 2488 becomes law," Livingston remarked in opposing the bill.

Among the warnings Alcohol Justice posted about the bill, which became law last year, are that "daytime tastings, with little to no monitoring, in family-friendly settings, are inappropriate and threaten public health and safety" and that "children watching parents drinking alcohol when they shop for fruit or vegetables is a practice very damaging to impressionable young minds."

It's all about the children, right?

Indeed it is. Livingston had previously referred to burger chain Red Robin's "mango Muscato wine shake" as "alcohol on training wheels."

Alcohol Justice isn't opposed to "Big Alcohol." It's opposed to alcohol, full stop. No one, including me, opposes efforts to keep alcohol out of the hands of children. But there's no justice in treating adult consumers of alcohol like children.

25 Apr 11:49

Quotation of the Day…

by Don Boudreaux
(Don Boudreaux)

… is from page 175 of the late Mancur Olson’s classic 1982 work, The Rise and Decline of Nations (original emphasis):

Another myth that generates a lot of poverty and suffering is that the economic development of the poor countries is, for fundamental economic or extra-institutional reasons, extremely difficult, and requires special promotion, planning, and effort.  It is sometimes even argued that a tough dictator or totalitarian repression is required to force the sacrifices needed to bring about economic development.  As I see it, in these days it takes an enormous amount of stupid policies or bad or unstable institutions to prevent​ economic development.  Unfortunately, growth-retarding regimes, policies, and institutions are the rule rather than the exception….​

24 Apr 01:27

Bus Driver to Eight-Year-Old: It's Too Dangerous to Read While You Ride

by Jesse Walker


Never let it be said that the U.S. authorities have a monopoly on absurdly restricting children's freedoms:

Modern childhoodAn eight-year-old girl in St-Jean-sur-Richelieu, [Quebec,] was told she's no longer allowed to read books on the school bus because it poses a risk to the safety of other students.

​Sarah Auger loves reading and used to enjoy using her 20-minute ride to and from school to read for pleasure.

But recently, her bus driver told her she had to stop.

She says she was told reading posed a risk to other students on the bus.

He suggested they might stand up to see what she was reading, or she might poke herself in the eye with the corners of the book.

The school board is siding with the driver, because of course it is. "Obviously, reading a book is not a danger," it concedes in a press release. Still, "The driver is the master of his vehicle....He is the best judge of what is appropriate." And after all, "Any object, be it a book, a toy or electronic device can be a potential danger when a young child drops an object and gets up to go get it while the bus is in motion." Therefore, such personal effects should be kept in closed bags. For safety's sake.

Looking back, it's a miracle I survived the first grade without getting impaled on a Charlie Brown collection.

23 Apr 17:26

End the Personal Bribes Members of Congress Are Getting Not to Reopen ObamaCare

by Michael F. Cannon

The U.S. Constitution vests the legislative, executive, and judicial powers in separate branches of the government that are supposed to police each other. But what if one of those branches violates the law in a manner that personally benefits the members of another branch? That’s what has been happening since the day ObamaCare became law in 2010. For more than five years, the executive branch has been issuing illegal subsidies that personally benefit the most powerful interest group in the nation’s capital: members of Congress and their staffs. A decision today by the Senate Small Business & Entrepreneurship Committee not to investigate those illegal subsidies shows just how difficult it can be to prevent one branch of the government from corrupting members of another branch.  

It is no secret that executive-branch agencies have broken the law, over and over, to protect ObamaCare. King v. Burwell challenges the IRS’s decision to offer illegal premium subsidies in states with federally established health-insurance Exchanges. University of Iowa law professor Andy Grewal recently revealed the IRS is illegally offering Exchange subsidies to at least two other ineligible groups: certain undocumented immigrants and people who incorrectly project their income to be above the poverty line. Treasury, Health and Human Services, and other executive-branch agencies have unilaterally modified or suspended so many parts of the ACA, it’s hard to keep count – and even harder to know what the law will look like tomorrow. Even some of the administration’s supporters acknowledge its actions have gone too far

The longest-running and perhaps most significant way the administration has broken the law to protect ObamaCare is by issuing illegal subsidies to members of Congress.

When congressional Democrats passed the Patient Protection and Affordable Care Act (ACA), they were so desperate to pass a health care law that the ACA did not receive the scrutiny most bills do. Many members of Congress and their staffs were therefore surprised to learn that, as of the moment the president signed the ACA, that very law threw them out of their health plans. The ACA prohibits members of Congress and their staffs from receiving health coverage through the Federal Employees’ Health Benefits Program. They remained free to purchase health insurance on their own, but they would have to do so without the $10,000 or so the federal government “contributed” to their FEHBP premiums. In effect, the ACA gave members of Congress a pay cut of around $10,000.


Big deal, you say. ObamaCare made lots of people take a pay cut and threw millions out of their health plans. Ah, yes, my friends. But those were little people. This is Congress. 

Rather than risk Congress reopening the ACA to restore their lost health coverage – because who knows what other changes Congress might make in the process – the administration simply pretended that that part of the law didn’t exist. The Office of Personnel Management announced that members of Congress and their staffs could remain in the FEHBP until the ACA’s Exchanges launched in 2014. The president thus stuck to his promise, if you like your health plan, and you’re a member of Congress, you can keep your health plan

That still didn’t solve the president’s problems, however. The ACA says that as of 2014, the only coverage the federal government can offer members of Congress in connection with their employment is coverage created under the Act. In effect, that means Exchange coverage. But the law still cut off that $10,000 “employer contribution” to their health benefits. According to Politico, “OPM initially ruled that lawmakers and staffers couldn’t receive the subsidies once they went into the exchanges.” After the president intervened, OPM just ignored that part of the law and started issuing (illegal) subsidies on the order of $10,000 to hundreds of individual members of Congress and thousands of individual congressional staffers.

Note that I label these illegal payments to members of Congress subsidies, rather than compensation. When an employer pays part of a worker’s health premiums as a condition of that worker’s employment, that’s compensation. But these payments are not a condition of employment. In fact, under the ACA, a condition of their employment is that they not receive these payments.

Note too the eerie parallel to King v. Burwell: an executive-branch agency ignores the clear language of the ACA to issue health-insurance subsidies to people that just happen to have the effect of preventing Congress from reopening the law. The OPM’s illegal subsidies are thus indistinguishable from personal bribes to members of Congress.

Offering these subsidies to members of Congress violates the ACA in at least one other way as well. The ACA prohibits employers from making contributions to their employees’ coverage through the Exchanges that serve individuals. (The law’s technical term for them is “American Health Benefits Exchanges.”) So the administration let members of Congress enroll through the ACA’s Small Business Health Options Program Exchanges, or “SHOP Exchanges,” where employers can make contributions to coverage their workers’ premiums. The problem here is that the “S” in “SHOP” stands for small business – i.e., firms with fewer than 50 employees. Yet the OPM and the D.C. SHOP Exchange, where thousands of members of Congress, their staffs and their dependents have purchased coverage, are pretending that Congress is a small business with fewer than 50 employees

Which brings us back to the Senate Small Business & Entrepreneurship Committee. Committee chairman David Vitter (R-LA) has been waging a lonely battle to end these bribes. After suffering numerous setbacks, Vitter now seeks to shine sunlight on how these bribes happened. He wants to subpoena documents relating to OPM’s claim that Congress is a small business. You would think Republicans, who outnumber Democrats on the committee 10-9, would gladly join Vitter in exposing the administration’s malfeasance. Ending Congress’ special ObamaCare exemption – i.e., the bribes individual members of Congress and their staffs are receiving not to reopen ObamaCare – polls off the charts. More than 90 percent of voters believe this exemption is unfair. I mean, c’mon. The rap against congressional Republicans is that they are hyper-partisans who will do anything to take down President Obama and/or ObamaCare. You would think this would be too good an opportunity for those rabid partisans to miss.

You would be wrong.

Today, five committee Republicans voted with all nine Democrats to quash Vitter’s subpoena effort. Someone should ask the 14 senators who voted to keep the truth hidden whether they are personally receiving one of those illegal subsidies, and if so, the precise dollar amount.

I was not all that surprised by the result. I have spoken to many GOP staffers, including leadership staff, about how these illegal subsidies are immoral and standing in the way of ObamaCare repeal. Their faces freeze the moment I raise the subject. Often, they don’t say another word and leave the room as quickly as they can. I understand their fear. They have families. Mortgages. Illnesses. To them, ending these illegal subsidies seems like a $10,000 hit to their annual income.

Fortunately for them, they are mistaken. If those subsidies disappeared, Congress would reinstate them so quickly your head would spin. Congress would even provide back pay that would make members and staff completely whole. The absolute certitude of that outcome is exactly why the administration chose not to enforce this part of the ACA in the first place. They knew that members of Congress – Republicans and Democrats alike – would be so desperate to serve their own interests by reinstating that employee benefit that Republicans could insert important changes to ObamaCare and possibly still have enough support to override a veto. 

But more important, members of Congress and their staff should suffer that pay cut because that’s the law. The ACA has caused millions of Americans to lose their health plans and take pay cuts of similar magnitude. Why should people who work in Congress get a special exemption while people who work in auto repair do not? Is there a class of Americans who are above the law?

For all the talk in Washington about the corrupting influence of money in politics, remarkably few people seem to care that the executive branch is promiscuously issuing illegal taxpayer subsidies that not only personally benefit members of Congress but that also directly affect how members of Congress vote. Vitter deserves credit for taking the lead in trying to expose and put an end to those bribes. The framers of the Constitution did an admirable job, but sometimes the checks and balances they created are not enough to prevent the corruption of one branch of government by another.

23 Apr 11:01

GM Says That While You May Own Your Car, It Owns The Software In It, Thanks To Copyright

by Mike Masnick
Last week, we noted that Senator Ron Wyden and Rep. Jared Polis had introduced an important bill to fix a part of the DMCA's broken anti-circumvention laws found in Section 1201 of the DMCA. For whatever reason, some people still have trouble understanding why the law is so broken. So here's a story that hopefully makes the point clearly. Thanks to DMCA 1201, John Deere claims it still owns the tractor you thought you bought from it. Instead, John Deere claims you're really just licensing that tractor:
In the absence of an express written license in conjunction with the purchase of the vehicle, the vehicle owner receives an implied license for the life of the vehicle to operate the vehicle, subject to any warranty limitations, disclaimers or other contractual limitation in the sales contract or documentation.
How nice of John Deere to say that your ability to operate the vehicle is really subject to the "implied license" it granted you. These comments (and many others) come in response to the ridiculous triennial review process in which the Librarian of Congress reviews requests to "exempt" certain cases from Section 1201's rules against circumvention. We discussed the ridiculous responses from some concerning video game archiving last week, and the John Deere statement is in response to requests to diagnose, repair or modify vehicle software. And, of course, lots of car companies are against this, including GM, which argues that all hell will break loose if people can diagnose problems in their own cars' computers. It, too, thinks that you don't really own your car and worries that people are mixed up in thinking they own the software that makes the car they bought run:
Proponents incorrectly conflate ownership of a vehicle with ownership of the underlying computer software in a vehicle.... Although we currently consider ownership of vehicle software instead of wireless handset software, the law’s ambiguity similarly renders it impossible for Proponents to establish that vehicle owners own the software in their vehicles (or even own a copy of the software rather than have a license), particularly where the law has not changed.
But the real conflation here is by GM, John Deere, and others, in thinking that because they hold a copyright to some software, that somehow gives them ownership over what you do with the copy you legally purchased with the car itself. Once that purchase is concluded, the vehicle owners should be seen to have given up any proprietary interest in the single vehicle you bought. But thanks to copyright and Section 1201, that's an issue that faces "uncertainty." And that's a problem.

The companies lay out a parade of horribles that will happen if people can circumvent the DRM they put in their vehicles, mostly focused on the idea that people might soup up their car, making it dangerous. But that's not a copyright issue. People have always souped up cars, and before there was software in cars, no one argued that Ford could prevent you from turning your Mustang into a drag racer. It's only copyright that has rewritten the very concept of ownership in a dangerous way. As Kyle Wiens notes in his article at Wired in response to the "but, but, car modders!" argument:
They’re right. That could happen. But those activities are (1) already illegal, and (2) have nothing to do with copyright. If you’re going too fast, a cop should stop you—copyright law shouldn’t. If you’re dodging emissions regulations, you should pay EPA fines—not DMCA fines. And the specter of someone doing something illegal shouldn’t justify shutting down all the reasonable and legal modifications people can make to the things they paid for.
But, by far, the most ridiculous in the "parade of horribles" comes from John Deere who was really, really, really, really stretching to try to come up with some way to pretend this is really about copyright issues. It argues that allowing farmers to modify the software in their tractors might lead those farmers to (and I am not making this up), listen to infringing music while they farm.
Moreover, TPMs for vehicle software for entertainment systems protects copyright owners of copyrighted content against the unauthorized reproduction and distribution of copyrighted works. For example, vehicle software for entertainment systems supports the playing of copyrighted music files and copyrighted audio books, among other expressive works. A vehicle driver may listen to sound recordings, while passengers may watch or view television and movie content. TPMs for in-vehicle entertainment systems encourage content providers to create and distribute highly-expressive copyrighted works that might otherwise be easily copied or pirated if the TPMs were circumvented. Consequently, circumvention of the above TPMs for purposes of “personalization, modification, or other improvement” is likely to encourage the unauthorized reproduction, distribution, and use of copyrighted software and content.
I really feel sorry for whatever recent law school grad had this issue dumped on their desk and was told, "make this about copyright... some way... any way."

But all it really does is highlight the sheer ridiculousness of Section 1201 and how it's destroying property rights.

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22 Apr 18:45

Cartoon of the Day for Earth Day, some green wisdom from Dogbert

by Mark Perry

A great Dilbert cartoon for Earth Day, with some wisdom from Dogbert, as Ben Zycher pointed out today in his article for AEI titled “Earth Day and the Celebration of Suffering,” here’s the opening:

In honor of this 45th anniversary of the first Earth Day, let us recall the wisdom of Dogbert, that noted political philosopher and sage observer of the human condition: “You can’t save the earth unless you’re willing to make other people sacrifice.”

As the old saying goes, truer words were never spoken. Earth Day brings each year a worldwide religious celebration at which large masses of people both right-thinking and affluent proclaim their devotion to Gaia and their love of humanity, while displaying their contempt for the lives and well-being of actual people, the poorest among them in particular.

The whole article is worth reading, you’ll find it here.

The post Cartoon of the Day for Earth Day, some green wisdom from Dogbert appeared first on AEI.

22 Apr 21:19

Senator Whitehouse Declaims

by Roger Pilon

On the floor of the Senate last night, on the eve of Earth Day, Rhode Island Sen. Sheldon Whitehouse went after the Cato Institute—among others, including the Washington Times and the Wall Street Journal—for our having accused the senator and his friends in the environmental movement of “having a widespread faith in the government’s ability to solve problems.” We plead guilty. Not only do we believe those folks are of that faith—the evidence is plain, even if the evidence supporting the faith is lacking—but we believe also that it is a self-serving faith, because it drives them to find ever more problems to solve, problems most of us never knew we had.

But it’s a letter that then-Cato President John Allison recently sent to Sen. Whitehouse and others in Congress that seems most to exercise the good senator. As the C-SPAN transcript puts it:

cato also sent us a letter in response to our inquiry, telling us we cannot use the awesome power of the federal government to cow cato and others. cow? according to the “wall street journal” editorial page, which, sadly, has become a front for the fossil fuel industry, we were – quote – “trying to silence the other side.” although i have to confess, mr. president, it is not clear how the other side would be silenced by simply having to reveal whose payroll they’re on, which is all we asked. let’s be clear our letter didn’t suggest that industry scientists should be silenced, just that the public should know if those scientists are being paid by the very industries with a big economic …

Ah. There we have it. We’re in the pockets of Big Oil. Never mind that the facts show otherwise, that Cato’s donor base is wide and composed almost entirely of individuals animated by the idea of a free society under limited government.

But that’s not the main point, not really. Rather, it’s the assumption of Sen. Whitehouse and his friends that they, whose outlook depends so much on government funding, fairly dripping with the taxpayers’ blood, have the cleanest of hands and the purest of motives. Yet why should we believe that the avaricious individuals these folks call on government to check, suddenly become virtuous when they have the monopoly power of government in their grasp, to say nothing of the public till at their disposal? If ever scrutiny were warranted, I should think it on that side of the ledger.

08 Apr 17:33

Familiar Yet Forgotten Tax Lessons from Ancient Greece and Rome

by Alan Reynolds

Alan Reynolds

In Ancient Greece, “The politicians strained their ingenuity to discover new sources of public revenue… . The results of these imposts was a wholesale hiding of wealth and income, Evasion became universal, goods were seized, men were thrown into jail. But the wealth still hid itself, or melted away.”

–Will Durant The Life of Greece, Simon and Schuster, 1939. P. 66.

 In ancient Rome; “taxation rose to such heights that men lost incentive to work or earn, and an erosive contest began between lawyers finding devices to evade taxes and lawyers formulating laws to prevent evasion. The government issued decrees binding the peasant to his field and the worker to his shop until all his debts and taxes had been paid. In this and other ways medieval serfdom began.”

–Will, and Durant, Ariel. The Lessons ofHistory, Simon and Schuster, 1968.

22 Apr 12:00

A Better Use for It

by Harvey

A New Mexico pig farm is getting five tons of food every week from students who throw away their healthy Michelle Obama school lunches.

Ironically, creating bacon the students will never be allowed to eat at school.

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21 Apr 15:08

Uber Driver with Concealed Handgun Prevents Mass Shooting in Chicago

by Adam Bates

A driver with the ridesharing company Uber put a stop to a potential mass shooting in Chicago over the weekend.

According to the Chicago Tribune:

A group of people had been walking in front of the driver around 11:50 p.m. in the 2900 block of North Milwaukee Avenue when Everardo Custodio, 22, began firing into the crowd, Quinn said.

The driver pulled out a handgun and fired six shots at Custodio, hitting him several times, according to court records.  Responding officers found Custodio lying on the ground, bleeding, Quinn said.  No other injuries were reported.

The driver will not be charged:

The driver had a concealed-carry permit and acted in the defense of himself and others, Assistant State’s Attorney Barry Quinn said in court Sunday.

Chicago was home to some of the most draconian gun laws in America until a 2010 Supreme Court ruling, McDonald v. Chicago, found Chicago’s gun regulation regime unconstitutional. That ruling applied the Court’s previous landmark 2nd Amendment ruling, District of Columbia v. Heller, to state governments. While those rulings dealt with the right to bear arms for self-defense in the home, some circuit courts (including the 7th Circuit, which governs in Chicago) have extended the Heller/McDonald logic to certain public places as well as the home.

Under the previous regime in Chicago, the driver would have had  to choose between saving lives and avoiding a lengthy, potentially life-ruining prison sentence.  It’s safe to assume that both the hero in this case and the potential victims of Everardo Custodio are thankful that unconstitutional burden has been erased.

That is, of course, not to say that the struggle for gun rights is over.  Some circuits maintain a more limited view of Heller and McDonald, granting the government far more discretion in denying the right to bear arms outside the home.

For every hero Uber driver there are still far too many Shaneen Allens and Brian Aitkens: law-abiding, peaceful citizens who have their livelihoods and even their lives threatened for exercising their Constitutional rights.

We can only hope that stories like this, of which there are many, receive the attention they deserve and bolster the case for individual liberty and the right to bear arms.

21 Apr 17:03

Federal Judge Attacks Pro-Police 'Orthodoxy' in 4th Amendment Case

by Damon Root

Federal Judge Janice Rogers Brown, a George W. Bush appointee frequently criticized by liberals for her “libertarian” jurisprudence, filed a blistering opinion today challenging the “prevailing orthodoxy” in Fourth Amendment cases which, she said, permit the police to conduct “a rolling roadblock that sweeps citizens up at random and subjects them to undesired police interactions culminating in a search of their persons and effects.”

At issue in Judge Brown’s concurrence today in the case of United States v. Gross was a 2013 arrest by Washington, D.C.’s Gun Recovery Unit. In February 2013 four officers from that unit were driving around on “gun patrol” when they spotted Will Gross, followed him, and finally approached him. One of the officers shined his flashlight on Gross and demanded that Gross show the officers his waistband. Another officer asked Gross to submit to a search. Gross fled. When the police apprehended him, Gross had a handgun in his possession.

At trial, Gross moved to have the gun suppressed from evidence because its discovery was the result of an illegal seizure by the police. But the federal district court disagreed, arguing that the initial police encounter with Gross did not qualify as a seizure under the Fourth Amendment because it was a “consented” interaction between citizen and state. Today, the U.S. Court of Appeals for the District of Columbia Circuit upheld that judgment. Judge Brown concurred in that decision, though, as she explained in her opinion, it was only because binding precedent required her to hold her nose and do so:

In its efforts to ferret out illegal firearms the District has implemented a “rolling roadblock.” Officers randomly trawl high crime neighborhoods asking occupants who fit a certain statistical profile—mostly males in their late teens to early forties—if they possess contraband. Despite lacking any semblance of particularized suspicion when the initial contact is made, the police subject these individuals to intrusive searches unless they can prove their innocence. Our case law considers such a policy consistent with the Fourth Amendment. I continue to think this is error. Our jurisprudence perpetuates a fiction of voluntary consent where none exists. [Citations omitted.]

According to Judge Brown, under this dismal case law, the police have free rein to “engage with members of the public en masse and at random to fabricate articulable suspicions for virtually every citizen officers encounter on patrol.”

What can be done? Judge Brown offered this advice to those citizens unfortunate enough to bear the brunt of such sweeping law enforcement tactics:

Persons questioned by the District’s Gun Recovery Unit patrols may reasonably be at a loss as to how to react to these contacts. Is there a means to react to such nominally voluntary encounters that might preserve their constitutional prerogatives? I offer this advice: speak to officers firmly, politely, respectfully. Tell them, “I do not wish to have an encounter with the police right now. Am I free to leave?” If the answer is “no,” then coercion will cease to masquerade as consent. Our courts will be forced, at last, to directly grapple with the reality of the District’s policy of routinized and involuntary seizures.

The D.C. Circuit’s opinion in United States v. Gross is available here.

15 Apr 21:22

SpaceX releases film of Falcon’s crash landing

by John Timmer

SpaceX's trial-and-error process of learning to land one of its Falcon main stages continued this week. After successfully sending a Dragon capsule toward a rendezvous with the International Space Station, the Falcon reversed course, fired its thrusters, and made its way back into the atmosphere over the Atlantic. After a controlled plunge through the air, it attempted to land on a barge named "Just Read the Instructions." This time, conditions enabled the company to have had an aircraft in the area to film the results.

It fell down and went "boom."

The video above shows the Falcon dropping at a rather healthy clip until it's quite close to the barge. At that point, the rocket's electronics appear to try to adjust its location; the craft tips while firing its main engines at a much higher level. This appears to be enough to set it down on the barge, but now tilting in the opposite direction. Thrusters at the top of the rocket attempt to correct the tilt but can't; it slowly falls over until it explodes while nearly horizontal.

SpaceX originally posted video footage of the crash landing, but it was taken down and marked private on YouTube on Wednesday afternoon.

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20 Apr 18:04

Will Minimum Wage Protesters Order Fries From Their Burger-Flipping Robot Replacements?

by J.D. Tuccille

The Momentum Machines website is low-key right now, but that may have something to do with high-profile arguments in the press and protests in the streets demanding that fast-food chains pay workers $15 an hour to do the job the company's robots are designed to fill. Even before those placard-wielders decided to raise their costs in terms of dollars and grief, the San Francisco-based start-up announced that they were obsolete.

Momentum Machines' old, boastier website claimed:

Fast food doesn’t have to have a negative connotation anymore. With our technology, a restaurant can offer gourmet quality burgers at fast food prices.

Our alpha machine replaces all of the hamburger line cooks in a restaurant.

It does everything employees can do except better:

*it slices toppings like tomatoes and pickles only immediately before it places the slice onto your burger, giving you the freshest burger possible.

*our next revision will offer custom meat grinds for every single customer. Want a patty with 1/3 pork and 2/3 bison ground after you place your order? No problem.

*Also, our next revision will use gourmet cooking techniques never before used in a fast food restaurant, giving the patty the perfect char but keeping in all the juices.

*it’s more consistent, more sanitary, and can produce ~360 hamburgers per hour.

The labor savings allow a restaurant to spend approximately twice as much on high quality ingredients and the gourmet cooking techniques make the ingredients taste that much better.

Separately, the company noted, "An average quick service restaurant spends $135K every year on labor for the production of hamburgers. Not only does our machine eliminate nearly all of that cost, it also obviates the associated management headaches."

Even before Momentum Machine started mechanizing the burger-flipping process, McDonald's moved to make ordering a task that could be accomplished untouched by human stupidity. The fast-food chain is bringing self-order kiosks to the United States after deploying thousands of them overseas.

I'm guessing that workers in the streets demanding that their pay be hiked by fiat to $15 per hour do not erode Momentum Machine's competitive edge, or its attractiveness as an alternative to human employees. Those kiosk makers are probably warming up the production line, too.

Ron Bailey recently noted that "Defying the law of demand will end up harming lots of the people minimum wage proponents aim to help."

Yep. But the robots appreciate the effort.

19 Apr 17:14

California Nightmare

by Don Boudreaux
(Don Boudreaux)

Joel Kotkin has alway been good.  But he is (in my opinion) getting even better.  His essay on the sorry state of California, in today’s Daily Beast, is a gem.  (HT Manny Klausner)  Below are several slices (but do read the whole thing):

California has met the future, and it really doesn’t work. As the mounting panic surrounding the drought suggests, the Golden State, once renowned for meeting human and geographic challenges, is losing its ability to cope with crises. As a result, the great American land of opportunity is devolving into something that resembles feudalism, a society dominated by rich and poor, with little opportunity for upward mobility for the state’s middle- and working classes.


But since the 1970s, California’s water system has become the prisoner of politics and posturing. The great aqueducts connecting the population centers with the great Sierra snowpack are all products of an earlier era—the Los Angeles aqueduct (1913), Hetch-Hetchy (1923), the Central Valley Project (1937), and the California Aqueduct (1974). The primary opposition to expansion has been the green left, which rejects water storage projects as irrelevant.

Yet at the same time greens and their allies in academia and the mainstream press are those most likely to see the current drought as part of a climate change-induced reduction in snowpack. That many scientists disagree with this assessment is almost beside the point. Whether climate change will make things better or worse is certainly an important concern, but California was going to have problems meeting its water needs under any circumstances.


And there needs to be, at least for the short term, an end to dumping water into San Francisco Bay for the purpose of restoring a long-gone salmon run, or to the Delta, in order to save a bait-fish, the Delta smelt, which may already be close to extinct. This dumping of water has continued even as the state has faced a potentially crippling water shortage; nothing is too good for our fish, or to salve the hyper-heated consciousness of the environmental illuminati.


But it’s not just water that exemplifies the current “era of limits” psychology. Energy development has always been in green crosshairs and their harassment has all but succeeded in helping drive much of the oil and gas industry, including corporate headquarters, out of the state. Not building roads—arguably to be replaced by trains—has not exactly reduced traffic but given California the honor of having eight of the top 20cities nationally with poor roads; the percentage of Los Angeles-area residents who take transit has, if anything, declined slightly since train-building began. All we are left with are impossible freeways, crumbling streets, and ever more difficulty doing anything that requires traveling.

These policies have had numerous impacts, like weakening California’s industrial sector, which cannot afford energy prices that can be twice as high as in competing states. Some of those who might have worked in the factories, warehouses, and farms of California now help swell the numbers of the welfare recipients, who remarkably make up one-third of the nation’s total. As recently as the 1970s and ’80s, the percentage of people living in poverty in California was below the national average; California today, based on cost of living, has the highest poverty rate in the country.


Ultimately this is a story of a state that has gotten tired, having lost its “animal spirits” for the policy equivalent of a vegan diet. Increasingly it’s all about how the elites in the state—who cluster along the expensive coastal areas—feel about themselves. Even Brown knows that his environmental agenda will do little, or nothing, to combat climate change, given the already minimal impact of the state on carbon emissions compared to escalating fossil fuel use in China, India and elsewhere. But the cosmopolitan former Jesuit gives more priority to his spiritual service to Gaia than the needs of his non-affluent constituents.

But progressive narcissism is, as some conservatives assert, not the main problem. California greens are, to be sure, active, articulate, well-organized, and well-financed. What they lack is an effective counterpoint from the business class, who would be expected to challenge some of their policies. But the business leadership often seems to be more concerned with how to adjust the status quo to serve privileged large businesses, including some in agriculture, than boosting the overall economy. The greens, and their public-sector allies, can dominate not because they are so effective as that their potential opposition is weak, intimidated, and self-obsessed.

What we are witnessing the breakdown of a once-expansive, open society into one dominated by a small group of plutocrats, largely in Silicon Valley, with an “amen” crew among the low-information donors of Hollywood, the public unions, the green lobby, and wealthy real estate developers favored by Brown’s pro-density policies. This coalition backs Brown and helps maintain the state’s essentially one-party system. No one is more adamant about reducing people’s carbon footprint than the jet set of Silicon Valley or the state’s planning elite, even if they choose not to live in a manner that they instruct all others.

18 Apr 18:59

Yelp's Way of Caving to Corporate Pressure and Hiding Reviews While Saying They Didn't Delete Anything

by admin

A few days ago I posted a negative review of Applied Underwriters, and linked to this post on my blog for much more detail.  Yelp promptly pulled the review, saying I violated their terms of service by linking to a commercial web site.  I thought that bizarre, since my blog has absolutely nothing commercial about it.   But it made more sense when I received a letter from Applied Underwriters demanding that I take down my negative Yelp review or they would sue me for libel.  I don't know for sure what happened, but I suspect that Applied Underwriters sent Yelp a similar demand and they used the link in the review as an excuse to delete it and avoid legal entanglements.

So I posted an updated review with more detail and no link.  Now, Yelp is hiding the review, along with most of the other negative reviews, behind a nearly invisible link at the bottom that says "other reviews that are not currently recommended".  Scroll down to the bottom of this page and you may see it if you have a keen eye.  It is not even clear it is a link, but if you click on it, you get all the bad reviews Yelp is hiding.

Let's dismiss all the reasons why Yelp might say they do this.  One is clarity, to reduce clutter.  But go to your favorite restaurant Yelp page.  Likely you will not see this link / hidden review phenomenon.  You will see pages and pages of reviews, far more than they would have to show if they just displayed all the reviews for Applied Underwriters.

So there must be another reason.  They say in their note there is a quality algorithm.  Anyone who has read a lot of Yelp reviews will know that if this is so, their quality algorithm is not working very hard.   They have a number of reviews that they "recommend" that are nothing more than a rant like "I will never use these guys again" while my unrecommended review includes paragraphs of detail about the service.  They say it is based on your review volume as well, but I have more Yelp review volume than several of the others who seem to pass the screen.

All of which leads me to believe that this is Yelp's purgatory where they hide reviews based on corporate pressure.  They have gotten a lot of cr*p publicly about deleting bad reviews from sponsors and from corporations that pressure them to do so.   They have a zillion self-righteous FAQ's asserting that they don't delete anything.   So imagine Applied Underwriters sends Yelp loads of threats to take down each negative review that comes up.  What do they do?  They put them in the not-recommended purgatory.  They can claim that they haven't deleted anything, but absolutely no one will ever likely see the review.  And they don't count any longer to the company's review count, so for all intents and purposes they are gone.

All of this is a guess, because it is absolutely impossible to contact Yelp about these issues.  No phone numbers.  The ones in general directories for San Francisco don't work for them.  You can't email or chat or contact their customer support in any way.  For a company in the transparency business, they avoid it like the plague.

But do you want to know what makes me doubly sure of my analysis?  Because there is no way to up-rate any of the "not recommended" reviews.  I would have thought the whole up-rating system was how they sorted reviews to present the most relevent at the top, but you can't do that with the ones they have put in purgatory.  Why?  Because these reviews are being put in purgatory not for some customer benefit but to protect corporations able to put pressure on Yelp.  Yelp doesn't want them uprated.  They are supposed to disappear.    If I had time, I would compare the number of "not recommended" reviews for corporations with powerful legal staffs like Applied Underwriters to the number for Joe's local business  (AU has 17 recommended reviews but a 28 full reviews that have been "disappeared" as unrecommended).

15 Apr 21:31

On Jackie Robinson Day, Let’s Remember When He Was Fired From the New York Post for Being Too Republican

by Matt Welch

The first black columnist for a major white newspaper in U.S. history. ||| Today is the 68th anniversary of Jackie Robinson breaking Major League Baseball's notorious de facto ban against players having skin tone a shade or two darker than pure Castilian soap. As is the annual tradition, all MLB players today are wearing Robinson's #42 in homage.

As I (and plenty of others) have long argued, Jackie's awe-inspiring legend has, if anything, given short shrift to what a colossally competitive, accomplished, and complicated man he really was. He has as good a claim as anyone else at being the best all-around athlete of the 20th century (he was also a national champion long jumper, league champion collegiate basketball scorer, and All-American halfback at UCLA). He was a prolific if underappreciated author. A passionate and righteously angry civil rights activist. A banker/entrepreneur, active Rockefeller Republican, and the first black columnist for a major non-black newspaper, The New York Post. Which fired him for being too pro-Nixon.

Wait, what?

Sweet cover. ||| There was an entertaining collection of Robinson's newspaper and magazine writing brought out two years ago, titled Beyond Home Plate: Jackie Robinson on Life After Baseball. The intro, written by the civil rights historian Michael Long, is an almost anguished attempt to explain how this anti-racist hero could have belonged to the yucky Republican Party. Sample:

It may seem strange to us now that Robinson found a home in the Post, but at this point in history the newspaper was known for its liberalism. It was simply impossible to find the politically conservative opinions that are so characteristic of its op-ed pages today. And as a liberal paper, the Post had given Robinson, and larger civil rights issues, favorable coverage through the years; it was one of the few racially progressive media outlets of its time.

OK, so what happened with the Nixon/Kennedy business, then?

On November 4, 1960—Election Day—Post Editor James Wechsler informed Robinson that he and Dorothy Schiff had decided not to resume his column. (Robinson had taken a leave of absence to serve on Richard Nixon's campaign team in September 1960.) Wechsler, a Kennedy supporter, apparently felt that Robinson's pro-Nixon sentiments had led to unfair reporting during the presidential campaign[.]

Jackie's retort, published at his new home in the New York Amsterdam News in January 1962, is filled with some classic Robinsonian acid:

No one will ever convince me that the Post acted in an honest manner. I believe the simple truth is that they became somewhat alarmed when they realized that I really meant to write what I believed. There is a peculiar parallel between some of our great Northern "liberals" and some of our outstanding Southern liberals.

Some of the people in both classes share the deep-seated convictions that only their convictions can possibly be the right ones. They both inevitably say the same thing: "We know the Negro and what is best for him."


15 Apr 04:01

Walter Scott Shooting Highlights Cops’ Contempt for the Right to Record Police

by Jacob Sullum

Even before it became clear that Feidin Santana was witnessing what local authorities now describe as a murder, it took guts for him to record the police encounter that ended in Walter Scott's death. Santana, who was walking to work at a barbershop in North Charleston, South Carolina, the day before Easter, risked illegal retaliation by camera-shy cops the moment he stopped talking on his smartphone and started using it to capture Scott's interaction with patrolman Michael Slager.

Although the First Amendment right to record the police as they perform their duties in public is well established, cops often violate that right by ordering people to turn off their cameras, confiscating their cellphones, or arresting them on trumped-up charges. The shooting of Walter Scott, which last week led to Slager's arrest thanks to the details revealed by Santana's video, illustrates both the prevalence of this contempt for constitutional rights and the importance of counteracting it.

After Scott fell to the ground, struck by five of the eight rounds that Slager fired at him as he fled a traffic stop, Santana continued recording. "One of the officers told me to stop," Santana told CNN. "It was because I say to them that what they did, it was an abuse, and I witnessed everything."

The New York Times reports that when Scott's older brother, Anthony, arrived at the crime scene and took pictures of the body, three officers "surrounded him, telling him to turn over his phone." He gave it to them. "Hours later," the Times says, North Charleston Police Chief Eddie Driggers "arrived, returned Mr. Scott's phone and offered his condolences."

As Driggers seemed to recognize, there is no legal basis for such interference with camera-carrying bystanders. The right to record police has been explicitly upheld by at least four federal appeals courts—in the 1st7th9th, and 11th circuits—and implicitly recognized by others.

Federal judges outside of those four circuits have ruled that the right to record flows logically from the First Amendment right to gather information and that it applies equally to everyone, not just credentialed journalists. Big-city police chiefs take it for granted that "members of the public are legally allowed to record police interactions," as a 2014 NYPD memo put it, and that "a bystander has the same right to take photographs or make recordings as a member of the media," as Washington, D.C., Police Chief Cathy Lanier informed her officers in 2012.

The behavior of North Charleston police after the shooting of Walter Scott suggests why such memos are necessary. So do the actions of the officers who arrested Austin, Texas, activist Antonio Buehler three times in 2012 for daring to record police encounters.

Last July, responding to a lawsuit filed by Buehler, a federal judge ruled that the right he was exercising is well enough established that police cannot rely on qualified immunity to escape liability for violating it. U.S. Magistrate Judge Mark Lane cited "a robust consensus of circuit courts" that "the First Amendment encompasses a right to record public officials as they perform their official duties."

Even the threat of personal liability may not be enough to deter cops from harassing people who record them, since taxpayers typically pick up the tab when cities settle lawsuits arising from such incidents. Last year, for instance, New York City paid $125,000 to settle a lawsuit brought by Brooklyn resident Dick George, who said police roughed him up and arrested him for disorderly conduct after he recorded a stop-and-frisk encounter in 2012.

According to George's complaint, one of the cops said, "Now we are going to give you what you deserve for meddling in our business, and when we finish with you, you can sue the city for $5 million and get rich. We don't care."

Anthony Scott encountered a similar attitude when the cops took his cellphone. "It was eerie how they were acting," he told the Times. "They were cocky."

© Copyright 2015 by Creators Syndicate Inc.

14 Apr 19:57

Watch SpaceX Try to Land Rocket Parts on a Drone Barge, Right the Heck Now

by Katherine Mangu-Ward


Ascent successful. Dragon enroute to Space Station. Rocket landed on droneship, but too hard for survival.

— Elon Musk (@elonmusk) April 14, 2015

UPDATED UPDATE: Here's the new feed.

UPDATE: Canceled Monday, rescheduled for Tuesday. 

Yep. I said "drone barge." Isn't living in the future awesome?

space x

The private space firm SpaceX (read Reason's cover story on the company and its founder Elon Musk here) is sending another resupply mission to the International Space Station (ISS), using its Falcon 9 rocket. The Dragon capsule will make its way to the ISS with cargo and supplies, as well as a small satellite by Planetary Resources. But while they're at it, SpaceX is going to try something new that could make space flight quicker, cheaper, faster, better.

Right now, when a rocket takes off it discards various bits and pieces on the way up—boosters breaking off and falling as the spacecraft ascends will be a familiar sight to anyone who ever watched a Shuttle launch—in order to be more efficient about fuel use. But those pieces can technically be reusable. Enter the "drone barge," which will use GPS to position itself under the falling booster. That booster has been designed to retain enough fuel and wherewithal to set itself down relatively gently on the barge instead of smashing into the ocean.

This is SpaceX's second attempt, after a lack of hydraulic fluid in the descending booster's fins screwed things up in January. 

Go here to watch the livesteam of the SpaceX launch, starting at 4:15, weather permitting.

drone ship

14 Apr 10:54

Quotation of the Day…

by Don Boudreaux
(Don Boudreaux)

… is from page 255 of David Boaz’s excellent new (2015) book, The Libertarian Mind (original emphasis):

Government doesn’t have customers, who can use its products or try a competitor’s instead, so it’s difficult to decide when government is doing a good job.

People on the left fancy that they are devoted to science and reality-based thinking – or are at least that they are more devoted to science and reality-based thinking than are their political and ideological opponents.  While the right has no shortage of people who are irrational and hold positions unsupportable by science – likewise for the political middle, by the way – I have no interest in offering my own opinion on which group wins the rationality contest.  But I will point out that people on the left, by so often decrying market competition and seeking to displace it with one-size-fits-all diktats from government, decry and displace the only dispassionate and most objective test for how best to allocate scarce resources among their multitude of possible uses.  If science requires empirical tests – rather than reliance on dogma or the pronouncements of pooh-bahs – then those people who fail to appreciate the incredibly rigorous and objective tests that take place every moment in private-property markets are not as devoted to science as they think.

12 Apr 21:28

Venn diagram Sunday

by Mark Perry

Over the last few months, I’ve featured more than a dozen Venn diagrams on CD, and thought it might be a good time to feature ten of those today in this post. Here are my top ten favorite CD Venn diagrams:

1. Venn Diagram I on price controls (below).VennKidneys

2. Venn Diagram II on price controls (below).

3. Venn Diagram III on price controls (below).VennObesity

4. Venn Diagram IV on prices controls (below).


5. Venn Diagram on weed vs. vaping in California (below).


6. Venn Diagram I on gender activism (below).


7. Venn Diagram II on gender activism (below).


8. Venn Diagram on diversity on college campuses (below).


9. Venn Diagram on income and wealth diversity (below).


10. Venn diagram on the War on Beer vs. the War on Drugs.



The post Venn diagram Sunday appeared first on AEI.

09 Apr 16:07

Beware Applied Underwriters Workers Compensation Insurance

by admin

Well, I have managed to get myself into a scam.  It is not your normal scam, like the ones that are run by some mafia boiler room with guys working under aliases.  This scam comes via a major insurance company called Applied Underwriters (working under the names California Insurance Company and Continental Indemnity Company) which is owned by Berkshire Hathaway and none other than Warren Buffett.  If you feel sorry for Warren Buffett and want to give him a large interest-free loan for an indeterminate number of years, this is your program.

First, I need to give a bit of background on how workers comp works.  When you are a new company, they assign you an experience rating -- that is a multiplier of your premium based on past loss experience.  There is some default starting number that if I remember right, in most states, is a bit over 1.0x.  Each year, the workers comp world looks back at your past history and computes a new loss rating -- higher if you have had more payouts, lower if not.  Generally it is based on three years experience not counting the last year (so 2-4 years in the past).  Your future premiums get multiplied by this loss rating.

Several years ago we had a couple bad injuries that drove our loss number into the 1.7-1.9x area.   Neither were really due to a bad safety issue, but both involved workers in their seventies where a minor initial injury led to all sorts of complications.  Anyway, my agent at the time calls me one day a couple of weeks before renewal and says that none of the major companies will renew me.  This seemed odd to me -- I understood that my recent claims history was not good, but isn't that what the premium multiplier was for?  In fact, if my loss history returned to normal, they would make a fortune as I paid high rates based on old losses but had fewer new ones.

Apparently, though, insurance companies have fixed rules that keep them from underwriting higher loss ratings.  Probably for the same reason Vegas won't take action on Ivy League football games any more -- just too much variability.  I found out later with my new broker we could probably have overcome this, but I learned that too late.

My broker at the time put me into a 3-year program from Applied Underwriters, in part because they were taking everybody.  This program was set up differently from most workers comp programs.  You had a basic policy, but there was a second (almost indecipherable to laymen) reinsurance agreement that adjusted the rates of the basic policy based on you actual claims.  In other words, based on your claims, they would figure up at the end how much you owed and what your premium multiplier would be.

I saw two red flags that I ignored in signing up.  1)  The reinsurance agreement was impossible to understand, violating one of my foundational rules that I shouldn't sign things I don't understand.  And 2) The rate structure was very suspicious.  They touted a rate structure that could go as low as, say, $100,000 a year and was capped around $400,000 a year.  But when you pulled out a calculator, the $100,000 was virtually unobtainable.  It would require about zero claims.  If there were any claims at all, even for a few bandaids, the price would march up to $400,000 really fast.  It was the equivalent of a credit card teaser rate, and it should have made me suspicious.

Anyway, I was desperate.  For a business like mine, being told I had no workers comp insurance just a few weeks before the old policy ran out was a death sentence.  No one would write me or even quote me a policy that fast.  So I took the Applied Underwriters offer.  Shame on me, I should have worked on this much harder.

I won't bore you further with my voyage of discovery in trying to figure out how this thing works.  I will just tell you the results that I have found.  There are apparently other companies with similar issues, one of which is documented here Applied Underwriter Suit (pdf)Newsletter publisher objected to scan of article, so I have taken it down at their request.

I spent hours and hours trying to figure out their statements.  There is a whole set of terminology to learn that is actually not used in most of the rest of the workers comp world.  The key page of the statement is page 7, which I will show below because it highlights several of the issues with Applied.  Page 7 is the page where the monthly premium is "calculated".  I have added the red numbers and arrows for the discussion below.


Here are some of the Applied Underwriter problems:

  1. Large deposits that must be made each year and may never be returned.    You can see that I am making deposits over $40,000 a year.  And that is each year.  The first year deposit is not returned.  The second year and third year are just added to it.  And I have found out since I joined this scam that they are not contractually obligated to return them until they are totally sure that all the claims are paid.  Maybe some guy who was hurt in his thirties has a relapse and claims more money when he is 75.  Gotta keep your deposit just in case, don't we?
  2. Premiums based on the worst of your experience and their estimate of your losses, and they keep the difference for years and years.   For those in the same trap as me, I will try to explain the numbers above.  The estimated loss pick containment at the top is basically their estimate of your losses.  Note that it drives every number on the page and is basically their arbitrary number -- they could have set it anywhere.  The loss pick containment to date is just pro rated for the amount of the year that has gone by.  The 65% is an arbitrary number.    The $25,278 is my actual losses to date.  You can see where I point with #2 above, though, that my losses are irrelevant to my premiums.  They take the higher of my losses and what is essentially their estimate of my losses and I pay based on that.   Note that their higher number is not based on the reserved amounts on actual claims -- the $25,278 includes their reserves.  It is just the number they established at the beginning of my policy they think my claims are going to be and gosh darnit they are going to stick to that (and my claims even in my worst year in history were never even half of their estimate).  Yes, at the end of the policy if my losses stay low, they owe me money back for all the premium they overcharged me based on their arbitrarily high estimates.  But see #1 above -- there is no time horizon under which they have to return the money.  They can keep it for years and years.
  3. The final premium is, after all these calculations, entirely arbitrary.  So after this loss calculation (which essentially just defaults to their arbitrarily high estimate and not my actual loss history) they do some premium calculations.  These actually sort of make sense if you stare at the agreements for a really long time.  But then we get to the line I point to in red labelled 3.  It is the actual amount I owe.  But it does not foot to any other number on the page.  How do they come up with this?  They won't say.  To anyone.  It might as well be arbitrary.  I actually had some dead time and took all my reports and tried to regress to a formula they use for this, but I couldn't figure it out.   So all the calculation on this page is just a sham, it's the mechanical wizard in the Wizard of Oz.  It looks good, but does not actually directly lead to what you are billed.

So I thought I understood my problems.  I put in large deposits and overpaid premiums based on arbitrarily high loss estimates they make -- all of which will take me years and years of effort to maybe get back.  It turns out that I likely will have a third problem.  In the lawsuit linked above in the pdf, the plaintiff complains that when they left the program after three years, Applied arbitrarily wrote up all their estimated losses on open claims to stratospheric levels and then demanded a large final premium payment at the end.  Folks on Yelp complain of the same thing.  You should know how this works by now -- the plaintiff will theoretically get all this back someday, maybe, when the claims prove to be less costly, but in the mean time Warren Buffet gets to invest the money for years and years (cost of capital = 0) until it is returned.

This is why I think Applied Underwriters actually likes companies with high lost histories.  Rather than costs, losses for them are excuses to over-collect on deposits and premiums -- money that can then be invested and held for years free of charge.

As an aside, I want to thank my new agents at Interwest Insurance for helping decipher all of this.  They actually flew a guy in to help me understand this policy.  They didn't get me into it, but they are helping me pick up the pieces as best we can.

10 Apr 15:21

When Corporations Use Social Causes as Cover for Cutting Costs

by admin

My absolute favorite example of corporations using social causes as cover for cost-cutting is in hotels.  You have probably seen it -- the little cards in the bathroom that say that you can help save the world by reusing your towels.  This is freaking brilliant marketing.  It looks all environmental and stuff, but in fact they are just asking your permission to save money by not doing laundry.

However, we may have a new contender for my favorite example of this.  Via Instapundit, Reddit CEO Ellen Pao is banning salary negotiations to help women, or something:

Men negotiate harder than women do and sometimes women get penalized when they do negotiate,’ she said. ‘So as part of our recruiting process we don’t negotiate with candidates. We come up with an offer that we think is fair. If you want more equity, we’ll let you swap a little bit of your cash salary for equity, but we aren’t going to reward people who are better negotiators with more compensation.’

Like the towels in hotels are not washed to save the world, this is marketed as fairness to women, but note in fact that women don't actually get anything.  What the company gets is an excuse to make their salaries take-it-or-leave-it offers and helps the company draw the line against expensive negotiation that might increase their payroll costs.

Postscript:  Yes, I understand the theory of negotiation and price discrimination, as used by auto dealers.  One can make an argument that setting prices high (or wages low) and then allowing negotiation by the most wage or price sensitive is the best way to optimize profits, and that Pao's plan in the long-term may actually raise their total compensation costs for the same quality people.  I don't think she is thinking that far ahead.

08 Apr 17:53

DEA Phone Tracking Program Would Have Continued If Not For Snowden

by Mike Masnick
We already covered the fact that the DEA had a phone tracking program similar to the NSA's that we've been debating. As we noted in our post, that DEA phone tracking program was actually revealed years ago in a NY Times report, though it didn't get that much attention at the time. Yesterday, USA Today's Brad Heath did a much more detailed report on the details of the program -- including how massive it was, how little oversight there was (basically none) and how widely it was used (all the time). But there was one element that seemed important enough to call out separately: this program has been ended and it's entirely because of Ed Snowden. While there's still a fight going on over whether or not the NSA program will continue after June 1st (when Section 215 of the PATRIOT Act expires), Heath's reporting notes that the DOJ realized the DEA program could not continue -- once it realized how similar it was to the NSA program:
Holder pulled the plug on the phone data collection in September 2013.

That summer, Snowden leaked a remarkable series of classified documents detailing some of the government's most prized surveillance secrets, including the NSA's logging of domestic phone calls and Internet traffic. Reuters and The New York Times raised questions about the drug agency's own access to phone records.

Officials said the Justice Department told the DEA that it had determined it could not continue both surveillance programs, particularly because part of its justification for sweeping NSA surveillance was that it served national security interests, not ordinary policing. Eight months after USTO was halted, for example, department lawyers defended the spy agency's phone dragnet in court partly on the grounds that it "serves special governmental needs above and beyond normal law enforcement."

Three months after USTO was shut down, a review panel commissioned by President Obama urged Congress to bar the NSA from gathering telephone data on Americans in bulk. Not long after that, Obama instructed the NSA to get permission from the surveillance court before querying its phone data collection, a step the drug agency never was required to take.

The DEA stopped searching USTO in September 2013. Not long after that, it purged the database.

"It was made abundantly clear that they couldn't defend both programs," a former Justice Department official said. Others said Holder's message was more direct. "He said he didn't think we should have that information," a former DEA official said.
Think about this, though: the program lasted for more than two decades before anyone bothered to even consider this idea. And it was only once the other database (which actually had a lot more strict access controls) started getting negative press that Justice Department officials realized they had no real legal basis for the DEA program.

Who, again, is watching the watchers? While some have argued that Snowden's revelations have not (yet) resulted in the NSA's surveillance programs being stopped, it seems pretty clear that he was directly responsible for this DEA program being shut down completely and the data purged.

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08 Apr 11:23

Quotation of the Day…

by Don Boudreaux
(Don Boudreaux)

… is from page 256 of the original edition of Robert Higgs’s indispensable 1987 book, Crisis and Leviathan:

The mixed economy that has prevailed in the United States since World War II, a uniquely American form of participatory fascism, has lent itself to a substantial expansion of the scope of government authority over economic decision-making.  Given capitalist color by the form of private property rights, the system has denied the substance of any such rights whenever governmental authorities have found it expedient to do so.

07 Apr 23:30

The Drug War, Not Terrorism, Brought Us Mass Surveillance

by Scott Shackford

This logo needs to be arrested for obviously abuse of hallucinogensWell, here's a corker: Federal officials from the Drug Enforcement Agency (DEA) and the Department of Justice (DOJ) are actually the source of our current domestic mass metadata collection madness, not the National Security Agency (NSA). The NSA got the idea from them. It turns out the DEA had been engaged in mass metadata collection of all phone calls originating from the United States to many foreign countries all the way back in the 1990s, a decade before the Sept. 11 terrorist attack. Of course, the reason back then was to fight the unwinnable drug wars. The DEA needed to know about your call to your aunt who lives in Italy in order to track down international drug cartels, obviously.

The details come courtesy of USA Today's Brad Heath, who interviewed a host of anonymous government sources:

For more than two decades, the Justice Department and the Drug Enforcement Administration amassed logs of virtually all telephone calls from the USA to as many as 116 countries linked to drug trafficking, current and former officials involved with the operation said. The targeted countries changed over time but included Canada, Mexico and most of Central and South America.

Federal investigators used the call records to track drug cartels' distribution networks in the USA, allowing agents to detect previously unknown trafficking rings and money handlers. They also used the records to help rule out foreign ties to the bombing in 1995 of a federal building in Oklahoma City and to identify U.S. suspects in a wide range of other investigations.

The Justice Department revealed in January that the DEA had collected data about calls to "designated foreign countries." But the history and vast scale of that operation have not been disclosed until now.

The program was discontinued in 2013 after the outrage of Edward Snowden's revelations. According to Heath, the program was also "suffering from diminishing returns," as there were now so many different ways for drug smugglers to communicate outside of the telephone.

Heath's investigation also reveals that the concept of "parallel construction" also predates the NSA outrage. That's the method where government officials used information gained from this mass surveillance to secure arrests, but then deliberately concealed the source of this information from the court in order to keep it all secret (and incidentally to keep defendants from challenging the evidence):

To keep the program secret, the DEA sought not to use the information as evidence in criminal prosecutions or in its justification for warrants or other searches. Instead, its Special Operations Division passed the data to field agents as tips to help them find new targets or focus existing investigations, a process approved by Justice Department lawyers. Many of those tips were classified because the DEA phone searches drew on other intelligence data.

That practice sparked a furor when the Reuters news agency reported in 2013 that the DEA trained agents to conceal the sources of those tips from judges and defense lawyers. Reuters said the tips were based on wiretaps, foreign intelligence and a DEA database of telephone calls gathered through routine subpoenas and search warrants.

As a result, "the government short-circuited any debate about the legality and wisdom of putting the call records of millions of innocent people in the hands of the DEA," American Civil Liberties Union lawyer Patrick Toomey said.

Is this a big deal or another "Let me put on my surprised face" moment? And as we all know, all those arrests they may credit to this program has done absolutely nothing to stop the flow, demand, or availability of illegal drugs in the United States.

Read the full story here. Jacob Sullum took note of the existence of the program back in January, but the full extent of the program was not revealed then.

07 Apr 23:13

Obama claims 'global warming' public health hazard...

Obama claims 'global warming' public health hazard...

(Third column, 10th story, link)
Related stories:
07 Apr 21:03

YouTuber Angry Joe Swears Off Nintendo Videos After The Company Claimed His Mario Party 10 Take

by Timothy Geigner

Nintendo's never-ending desire to control how YouTubers review its games or do "let's plays" has been laughable from the start. From the trust-destroying agreement YouTubers had to enter into in order to get access to visual content to the beauracratic nightmare individuals had to wade through just to get a video approved for monetization, the whole thing started off on messy footing. And the biggest issue in all of this: Nintendo still can't seem to grasp that these YouTubers are giving the company free advertising. Gamers love the kinds of videos these YouTubers produce. They use them to make purchasing decisions, to become interested in new games, and to fuel word-of-mouth advertising that no trumped up ad campaign could ever possibly hope to achieve. Why make any of that more complicated by creating an approval system for the videos? And, more importantly, why take away the incentive for fans to promote your games by demanding a share of their YouTube revenue?

Well, the program that's a mere few months old has already resulted in the first major YouTuber proclaiming that Nintendo games will no longer be covered. Angry Joe (Joe Vargas) has one hell of an online following in the gaming YouTuber community and, following a spat over his Mario Party 10 video, Nintendo is dead to him.

Joe “Angry Joe” Vargas, who commands nearly two million subscribers on YouTube, has decided to stop covering Nintendo games, following a dispute over a Mario Party 10 video. Angry Joe’s Mario Party 10 video was flagged by YouTube, and while it’s possible for him to keep the video online, he can’t make money off it. It’s easy to imagine why he’s upset.

He tweeted about the decision a few days ago:

I hope @NintendoAmerica enjoyed the free ad revenue & coverage I generated for em. It will be my last Nintendo video. — Joe Vargas (@AngryJoeShow) April 4, 2015
That sort of says it all, doesn't it? Millions of gamers who went to Angry Joe for help in where to spend their gaming dollar will no longer be directed by Joe to Nintendo games via reviews and gameplay footage. For Angry Joe followers, Nintendo might as well not exist. What's particularly insane about this is that the YouTuber Nintendo affiliate program described above wouldn't even have applied to this particular video, since some Nintendo games, Mario Party 10 among them, don't even qualify for coverage under the program. Why Nintendo would seek to piss off a popular YouTuber over a video for a game that wouldn't have been granted the okay under the affiliate program is beyond me.

Here's a case where Nintendo has locked up 100% of the ad revenue on Angry Joe's video, despite the fact that it's not Nintendo's copyright-covered content viewers are coming to watch. That's not only unfair, it's biting the very hand feeding Nintendo's coffers and sending the company new customers. This is the first major YouTuber to jump off the Nintendo ship, but it almost certainly won't be the last.

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07 Apr 13:24

Top Spy: Hillary's Emails 'Likely' Hacked by China, Russia, Iran...


Maybe we can get them to post the emails to wikileaks.

Top Spy: Hillary's Emails 'Likely' Hacked by China, Russia, Iran...

(Second column, 8th story, link)

06 Apr 20:58

The typical US firm doesn’t earn a profit until sometime in December, and often it’s the end of the month

by Mark Perry

I featured a series of posts about profits last week here and here, (the first post was mentioned and discussed at other blogs and websites here, here, here and here), and this is another post on profits.

According to this database at Yahoo!Finance for 212 US industries, the median profit margin (net income / sales) for American companies was 6.5% during the most recent quarter. Assuming that a company operates 365 days a year, here’s a question about profits: How many days of sales in a calendar year does it take to cover all of a company’s annual expenses (labor, rent, cost of goods, utilities, property taxes, income taxes, interest payments, advertising, etc.), and then how many days of sales would represent the company’s profits?

As the table above shows (click to enlarge), for the typical US company with a 6.5% profit margin, all of the company’s sales revenue from January 1 to December 7 would go to cover the firm’s expenses for the year, and its sales on roughly the last 24 days of December from December 8 to December 31 would represent its profits. For the other industries displayed in the table above that operate on thin profit margins of less than 4%, companies in those industries have to operate until the middle of December (airlines for example at December 18), or even until the last week (department stores), or in the case of grocery stores until the middle of the last week of December. Think about it — a grocery chain like Safeway or Kroger has to operate from January 1 to December 26 until it breaks even for the year, and only then will its sales revenue from the the last 4.4 days starting on December 27 represent the profits for the entire year! And that’s only if everything goes exactly right, and nothing goes wrong — like a sales slump from a recessionary slowdown or from increased competition from a new competitor like Walmart and Target (now in the grocery business); or like an unexpected increase in costs that can’t be passed along in the form of higher prices, etc.

Using a different data source for the restaurant industry, the average profit margin over the 7-year period from 2007 to 2013 was 2.1% according to this report from Sage Works, and was less than 2% in five of those years. That means a typical restaurant that is open seven days a week has to operate until December 23 to cover its costs and break even, and would only earn its profits from the sales revenue generated from the last 8 days of the year from December 24-31. And again, that’s only if everything goes perfectly and there are no unexpected increases in costs/expenses and if there are no unexpected decreases in sales revenue. Those are big ifs in the hyper-competitive restaurant business, as demonstrated by the fact that 25% of restaurants close or change ownership in the first year of business, and that percentage rises to 60% after three years. Those thin margins in the restaurant business also demonstrate how vulnerable those establishments are to the whimsical and fanciful actions from politicians who routinely pass legislation that artificially and significantly raises the labor costs of restaurants in the form of minimum wage laws government-mandated wage floors that guarantee some small businesses and restaurants will be forced to close down. 

Bottom Line: The analysis above of profit margins for firms based on the “first day of profit” in the calendar year is another way to help illustrate that most of the money a firm takes in from its sales goes to pay expenses and costs of operation, and only a very small fraction of those sales (6.7% for a typical firm and only 1-4% for many retail industries) turns into profits that allow the company to survive. It’s a lesson about profits that politicians and the general public should keep in mind when they support proposals like a $15 minimum/living wage that can often mean the difference between a small business’s survival on a razor-thin profit margin and bankruptcy.

Update: As Jon Murphy aptly points out in his comment below the post, “many of the industries (restaurants, grocery stores and discount retailers) with low profit margins are also major employers of minimum wage workers. The simple fact is they cannot absorb wage hikes, their razor-thin profit margins simply won’t allow it.”

BONUS: In the Prager University video below, Professor Walter E. Williams of George Mason University answers some basic questions about profits: Is profit a dirty word? Would the world be better off without profits? Or are profits progressive — the only thing that can move potatoes from Idaho to Manhattan and medicine from America to Africa?

The post The typical US firm doesn’t earn a profit until sometime in December, and often it’s the end of the month appeared first on AEI.

06 Apr 22:25

carry-on-my-otp: If Stuntmen from the old movies don’t have...


If Stuntmen from the old movies don’t have your full respect then I just don’t know what to say to you