free market

SOPA and PIPA May Break the Internet, Hurt Consumers, and Chill Free Speech Online

The Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) are currently pending in the U.S. House of Representatives and Senate. They are ostensibly intended to stop piracy and protect intellectual property. They won’t work. The approach SOPA and PIPA use to combat piracy are like trying to plug holes in a sinking ship with your fingers.

But the music, movies, comedy, and publishing aren’t sinking industries. They are flourishing. People just paid Louis C.K. over a million dollars for Live at the Beacon Theater, and it was protected from pirates only by Louis C.K.’s polite request not to pirate it. Radiohead now sells its albums itself, and thousands of other musicians, writers, and other artists are doing the same thing. But that’s just the thing. No big media corporations get paid that way, so they are trying to buy relevance by attacking the democratizing nature of the internet.

But it won’t work. SOPA and PIPA will be easily circumvented by pirates. What they will do, as Consumers Union, U.S. PIRG and the Consumer Federation of America explain, is encourage consumers to take greater risks online, increasing their exposure to phishing, fraud, and identity theft. They will censor the web without due process. They will stifle innovation and encourage a sanitized internet that looks (and costs) more like cable television than Facebook, Wikipedia, and Twitter.

SOPA and PIPA will also punish websites like this one, not pirates. Why? As BoingBoing’s Cory Doctorow points out, “in order to link to a URL on LiveJournal or WordPress or Twitter or Blogspot, we’d have to first confirm that no one had ever made an infringing link, anywhere on that site.” That is an impossible task. Instead, many websites will stop linking. Some will go dark. That’s why Wikipedia has gone dark today, along with BoingBoing, Reddit, and many others. That’s what the internet may look like if SOPA and PIPA become law.

All of this adds up to a broken internet.

Why break the internet to protect an industry struggling for relevancy? Contact your representatives in Congress and tell them not to censor the internet. Or take a moment to sign the online petition asking Congress not to censor the web. One more thing: Spread the word. Share it on Google+, Facebook, and Twitter.

Mad Cow: A Test the Bush Administration Doesn’t Like

Less than 1 percent of slaughtered cows are currently tested for Mad Cow disease under Agriculture Department guidelines, because the agency believes that more widespread testing does not guarantee food safety and could result in a false positive that scares consumers. So when Kansas-based Creekstone Farms Premium Beef tried to increase testing to reassure Japanese consumers, the Ag Dept. sued. Fortunately, some judges are smarter than all that and at least recognize the testing as a good thing for providing the consumer with more information. According to the Associated Press larger meatpackers have opposed Creekstone’s push to allow wider testing out of fear that consumer pressure (the free market) would force them to begin testing all animals too. Increased testing would raise the price of meat by a few cents per pound. It appears the Court of Appeals maybe on the side of more information is a good thing.

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The housing market mess; connecting some dots

It is getting time for a complete overhaul of the whole housing market in the US, rather than just messing with edges. Two different stories in the Minneapolis StarTribune this morning illustrate why.

First is the story about all the people applying for Section 8 assistance. Recently about 3,700 people took applications, for one of the 300 voucher to be drawn in a waiting list lottery for housing in Plymouth.

The turnout is a sign of a growing metro-area problem: a shortage of affordable housing. In fact, experts had predicted it. Each time a housing authority opens its Section 8 wait list, applicants overwhelm it.

Experts and housing advocates say the long lines point to a larger crisis in affordable housing: Paychecks have not kept pace with housing costs, and the supply of affordable housing pales in the face of growing demand. In 2006, one in eight Minnesota households was paying half of its income on housing, according to a census analysis by Minnesota Housing Finance Agency. That’s up from one in 15 in 2000. Renters in Minnesota are worse off. In 2006, nearly one in four renters was paying half her income on housing.

Second, we have a story about the trouble and costs of vacant foreclosed houses in the City of Minneapolis. The number of boarded properties has swollen from about 250 in 2005 to more than 800 now.

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Mortgage securitizers fiddle as Rome burns

The NYTimes has a piece on the 5th Annual Conference of the American Securitization Forum held in Las Vegas. These are the guys who played a major role in bring us the current foreclosure mess. Well while the rest of the country and the world for that matter mucks its way out of the mess in a gilded ballroom at the Venetian, the revelers sipped cabernet, dined on surf and turf and crowed as the Blue Man Group put on a private show. Need I say more?

Mortgage fraud, another Enron?

The StarTribune reported today on another criminal investigation of mortgage fraud. While it is a good thing that someone is going after these people for the fraud they have committed, it would have been much better if someone had been guarding the hen house in the first place. The eggs are now gone and a lot of people won’t be eating eggs for breakfast in the comfort of their own home. Trapping a fox or two won’t change that.

We saw what enormous damage the Enron debacle did to our economy, not to mention all the individuals whose savings were wiped out. The entirety of the mortgage mess, while not quite as dramatic a fall, ultimate may impact more lives and do greater harm to the economy.

So will we learn that regulation is needed? Probably not. There maybe a few band-aids put on until the wounds heal, but band-aids either fall off or are taken off. There is a large segment of society that believes that government regulation is evil, that it stifles the free market, so they do everything they can to de-regulate the market and inhibit the regulators. Those same people also are the leaders of the Tort deform movement. They wish us to forget that lawsuits and the resultant jury awards are part of the marketplace. Lawsuits are the marketplace, in the form of a jury, punishing reprehensible conduct. One must not forget that especially in the consumer marketplace many of the laws against deceptive trade practices are meant to be used by one business against another to prevent conduct that deceptively externalizes a cost, thereby under cutting competition.