Category: Politics

Senate Facebook Hearings

The hearing today reminds me of digital discovery pre-Zubulake – bunch of folks who I suspect might be investigating edgy technologies to ditch cuneiform script making rulings regarding how search and seizure case-law applies to electronic data. Not terribly encouraging that they intend to draft legislation controlling … what? Digital privacy in general? Social media platforms? Here’s hoping a good number of Congresspersons take Scheindlin’s initiative to educate themselves about that on which they seek to rule.

Something that stands out to me is how much of the platform’s operations, litigation, and regulation about which Zuckerberg claims not to know anything. I get not wanting to provide an answer that looks bad for your company, not wanting to provide inaccurate information in a Congressional hearing … but I expected they would have come up with a more reasonable boilerplate fob off answer than, essentially, “I don’t know about that stuff”

The anti-trust thread is an interesting path to go down, although I doubt Graham will follow that path. Shame, too. I had great hopes for Google+ — backed by a company with enough money to compete, enhancing Google’s current ad platform, and the idea of circles to provide granular control of who can see what. An idea which would have vastly limited the impact here. In Google+, I could avoid sharing a lot of personal information with vague acquaintances and distant family members. Heck, close family too if they’re the types who are always downloading rubbish and infecting their computer.

Consumerism and advertising is a priori accepted as a good thing. Not shocking, considering the way of American society, but it really stood out to me throughout the testimony that no one questions the benefit of having stuff more effectively marketed, to having ads that are more apt to result in a sale. They’ve spent enormous sums of money, dedicated incredible human capital to delivering an ad that is more likely to show a shirt I like. Why is that a good thing? I have clothes. If I needed more, I would either go to a store or search online. I understand why a business wants to sell me a shirt … but how is more effectively separating me from my earnings a personal boon??

And the American public is having a good self-education week. There’s interest in taint teams from Cohen yesterday, and today we’re understanding the actual business model of large tech companies — the nuance between “selling my data” and “using my data to form advertising profiles and sell my services in presenting advertising based on those advertising profiles”. Back when the ISPs wanted to be able to commoditize web history, I encountered a lot of uproar about literally selling someone’s browsing history. Which – and no offense meant – your browsing history? Not a thrilling read. Taking your browsing history and turning it into profiles, then using those profiles to sell services presenting ads to customers. Objecting to “selling my data” provides a strawman for the companies to tear down (as Zuckerberg did several times with “we don’t do that”).

Hopefully people are gaining a more complete understanding of what information is available through the “Facebook Platform” … and that you are trusting not just Facebook but the other company to act in good faith regarding your privacy. When the ToS says they may sell data or analytics to a third party … well, they may well do that. What does that third party do with the data? How much control can you, Facebook, or the app developer exert over the data sold to the third party? Not a whole lot.

Finally – the bigger question that doesn’t get asked … how can Americans insulate themselves from having personal information used to foment discontent? How can we get better and analyzing “news” and identifying real fake news. Not Trump-style FAKE NEWS which basically means “something I don’t like hearing” but actual disinformation.

Warrants And Attorney Client Priviledge

I assume that like many other obscure laws and procedures with which the general population has become familiar over the past year (seriously, how many people knew what the Emoluments Clause, Hatch Act, or the Jones Act were two years ago?), ‘taint team’ shall now enter the public discourse. And the crime-fraud exception to attorney client privilege. And the fact that being an attorney does not automatically privilege everything said in a thousand foot radius around you.

For those who didn’t spend some time immersed in the nuances of electronic discovery law, a taint team is essentially a team involved in the investigation to serve as an air-gap protecting privileged information. Seize documents from a lawyer’s office, and something is bound to be protected. So the individuals involved in the investigation are not the ones to initially review seized documents. A team of investigators unrelated to the case review to filter out privileged communications (and, I assume, irrelevant documents). This is essentially privacy theater – should the taint team encounter some other illegal activity in the course of document review, it will not be ignored.

Which brings us to the crime-fraud exception to attorney client privilege — while a client is free to communicate with their attorney in many ways, asking one’s lawyer how to commit a crime (or how to cover up a crime) is not protected communication. If documents about laundering Russian money through Trump properties since the mid 1980’s (after 18 U.S.C. §§ 1956-1957 were enacted) are obtained from Cohen’s office … well, the documents have been obtained and privilege does not apply.

Farther, Trump’s seeming belief that having an attorney listen to a conversation aside, attorney client privilege covers communication seeking legal advice, providing legal advice, or research to provide legal advice. Otherwise rich dudes would just have a lawyer travel with them at all times and call everything privileged.

But maybe I’ve found the silver lining to Trump’s time in office — a good number of people are becoming far more informed about the country’s laws and procedures.

Trump, Amazon, and USPS

May have figured out how Trump managed to lose so much money — he doesn’t know the difference between losing money, making money, and breaking even. The post office does not lose money on delivering packages. I don’t know this because I’ve got insider information on their contract with Amazon, but I do have access to the text of American legislation. The Postal Accountability and Enhancement Act disallows the Post Office from selling package delivery under its cost. Now you can debate the cost calculation – the real issue being disputed by FedEx and UPS is that the Post Office doesn’t have to include all of their delivery costs in package delivery “cost”. Why? Because they’d have carriers driving trucks all over the country even if there were on package delivery service. Of course this gives the Post Office a huge advantage in their package pricing model. And, yeah, that sucks for FedEx and UPS. But it’s sucked for FedEx and UPS for a LONG time.

The Post Office may just be breaking even on it’s Amazon contract – but as the package delivery “cost” does include some operational expenses … well, Amazon is saving American tax payers money because package delivery does include 5.5% of the fixed operating costs (I assume to cover additional cost created by package delivery service). Sure FedEx and UPS have to include 100% of their fixed operating costs in their pricing model, and if Trump wanted to talk about how providing package delivery services is unfair to private industry … that’s a discussion. But I doubt any commercial venture is going to delivery mail every day across the entire country so it’s up to the government. And providing package delivery and shipping services in urban areas (where it would be profitable for a private corporation to operate) subsidize delivery out to the cabin I stayed at in South Dakota. If the Post Office could be charging more for its services … that’s a discussion. Except do you want to pay more to ship packages and mail!?! And if we want to delve into the financial nuances of the Post Office, let’s look at their pension pre-funding requirements.

How does a guy who claims to be all about business deals think it’s bad for a corporation to use the service that provides them a cost advantage?!? Unless Trump thinks he can start tariffing the bloody post office (or, more accurately, have the legislature change the suppositions they are permitted in their pricing model) … Amazon would be outright silly to voluntarily pay more to another carrier.

And how does a guy who claims to be all about negotiating wins for American citizens think it’s a bad deal that the Post Office is making money off of Amazon instead of FedEx or UPS doing so? Say they *do* change the postal pricing model to make it “fair” to UPS/Fedex (or just outlaw package service from USPS). Our tax money is still paying for postal carriers to drive all over the country to delivery mail, Amazon Prime memberships cost more, but hey UPS is making bank. And … that’s what really matters?!?

What they’re really upset about is that the post office used to be a crap shot of getting something to “Point B” even without getting into SLA’s. You paid extra to FedEx or UPS to make sure it actually *got there*. Now the three services are equally reliable … which means government managed to provide a service as good as private industry.

Alternative Fact: Constitutional Amendments Are Easy

Alternative Fact: Courtesy of Mnuchin on Fox News Sunday:

MNUCHIN: Well, it doesn’t need to be reality. And I’m not going to comment on what the president will do. But as you heard him say, he’s not planning on doing this again. I think — I think they should give the president a line item veto. These things should be looked at —

WALLACE: But that’s been ruled unconstitutional by the Supreme Court, sir.

MNUCHIN: Well, again, Congress could pass a rule, OK, that allows them to do it. But —

WALLACE: No, no, sir, it would be a constitutional amendment.

MNUCHIN: Chris, we don’t — we don’t need to get into a debate in terms of — there’s different ways of doing this.

Real Fact: It actually is a Constitutional amendment, and while there may well be many ways of “doing this” … they shouldn’t fare any better. That’s the basic principal of the three branches of government. Sadly, I suspect many in Trump’s administration could use a civics refresher. While the principal of a line-item veto could be rewritten in an altered form, the decision in Clinton v. City of New York, 524 U.S. 417 (1998) wasn’t quibbling details. They found that the Executive branch altering legislation violates the Presentment Clause.

What, me worry?

Steven Mnuchin, one of Trump’s best people, is not worried about mass worker displacement due to automation. Said so at an event hosted by Axios. I’d love some of whatever he’s been toking.

In the near term (and evidently that’s all business execs or government types care about these days), sure automation and AI will drastically increase profitability. But I foresee the trend following a similar path as off shoring … great for individual businesses, but at some point capitalism mandates people have some money to buy the stuff and neither offshoring or wide-scale automation is sustainable. Offshoring at least provided alternate jobs for enough people to float enough debt to sustain the market near-term. We’ve got “knowledge workers”. But what percentage of those can be turned into AI programs? A significant number. I automate 80% of IT work. Chat bots could provide at least half of legal and medical consultations — the routine stuff. Robots make products, load the truck/train/drone that drives itself. Right to your door, or even inside if you have the Amazon lock. There aren’t a lot of jobs where some portion couldn’t be automated today. And budget cuts and productivity demands essentially require it. Some lucky few own doomed companies and profit for some time, another really lucky few are AI programmers and electronics engineers (although self-building AI/robots are totally a thing too). Maybe automation will beget a whole new industry that will provide good jobs for billions of people. Maybe the capitalist system will collapse and everyone will have more than they need (the Star Trek series, I guess). But I don’t know that I wouldn’t worry about the impact automation has on employment and the economy.

There’s *ALWAYS* A Worse

I thought James Comey was fired in about the worst way imaginable – giving a speech at a remote office, he sees a TV with a banner announcing her termination and thinks it’s a joke. Which … I know a lot of people with that sense of humor. I remember putting an etc\hosts record to direct someone’s company home page to an internal sandbox web server, cloning over the internal home page project, and editing it to announce the company’s merger with some big competitor and the immediate closing of the HQ office. Screen grabbing CNN, throwing on a new banner, then playing the video back isn’t a stretch.

Then Rex Tillerson, who set out to prove experience negotiating mineral rights contracts is the same as negotiating international political situations where everyone isn’t getting what they want, read his boss’s tweet and learned he was terminated. This is what you get when 48% of voters want a guy whose fame, really, was firing people (in new and dramatic ways) on TV.

Alternative Fact: Trade Wars

Alternative Fact (from Trump’s Twitter @ dark-o-clock today): “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”

 

Real fact: Not buying a billion dollars of stuff from country X does not mean said “stuff” will now be produced domestically (assuming the domestic capacity and raw materials to produce the “stuff” exist). It may well mean we’re paying for a few cents more (bad for people with limited income streams) to source the “stuff” from country Y (until Trump sufficiently offends them too and we have to move on to country Z at yet another slight cost increase).

Retaliatory actions significantly reduce American exports too (see: Bush 2’s steel tariff a year or so into his presidency). So maybe you’ve managed to reduce the trade deficit with country X. You’ve increased the overall trade deficit twofold: we’re paying more for our imported “stuff” AND the targeted countries (and possibly non-targeted countries) are buying less from us.

Now theoretically slapping wide-spread tariffs on everything sourced from everywhere would be an easy trade war to win – assuming you want to restrict your country to domestic markets (again, retaliatory action). I expect that means domestic corporations with international operations would spin off international divisions. An ugly mess … and probably why the stock market reacted so poorly yesterday.

Bonus real fact: China isn’t our biggest trading partner for steel or aluminium. That would be Canada. And the EU. Both of whom, I must assume, will object to the tariffs (again, see Bush 2 in 2002)

Let the war begin

One thing I respected about the first President Bush was that he didn’t attempt to secure re-election by re-invading Iraq. The 1990-1991 invasion of Iraq led to significant jumps in Bush’s approval rating — 15% at the onset and 20% when we “won”. And a surge of nationalism (and the “don’t change horses mid race” thinking that certainly helped his son’s re-election bid) that accompanies military action may well have allowed him to win in 1992.

George W didn’t have terrible approval ratings at the onset of his presidency – his approval number was over 50% just before 9/11. But his approval rating hit near 90% in the immediate aftermath.

Which brings me to Trump. Someone who loves glowing praise. And who kicked off a new round of trade wars with tariffs on steel and aluminium which may allow some increased domestic production, but is more apt to make everything that uses steel or aluminium more expensive. Or maybe it make more sense to make parts in Canada and truck the bits South. Or maybe finished products crossing the ocean become cost competitive. And that doesn’t even address adverse response from trading partners.

If the guy was sufficiently delusional to believe it was possible for any president to receive a surfeit of adoration, and by his own admission he’s not into fomenting new wars (+he has some existing wars in which to drop huge bombs +the general population has had more than enough warring to last a few lifetimes) … is it possible this is a self-aggrandizing trade war?