Arms Export Control Act

Interesting and somewhat disturbing article in today's New York Times reporting alleged refusal of Apple store employees to sell iPads and iPhones to Iranian Americans because of concern that such sales are the same as selling to Iran. Apparently Apple employees have been spurred by US government efforts to increase enforcement of the US embargo against Iran.

Apart from the injustice of abusing Americans who just want to make a purchase, the allegations remind me of some of the dumbest decisions made during the Cold War.

The two examples that come to mind are the decision to prohibit export of the Intel 80286 or any computer products made using the chip. The 80286 at that time (early 1980's) is what powered the central processing unit (CPU) of the IBM AT-class computers and their clones.

We also prohibited export of Xerox and other photocopiers.

I thought these particular uses of the Arms Export Control Act were foolish in the extreme. What made more sense to me was to flood the Soviet Union and Eastern Europe with as many 80286 computers and copy machines as we could smuggle in.

These very subversive machines in the hands of freethinkers would have allowed engineers, economists and other researchers to crunch their own data. Hierarchical organizations have a hard time dealing with independent sources of analysis.

And copy machines? Oh, my!

Russian and East European intellectuals and dissidents had to exchange prohibited books by laboriously typing them on mechanical typewriters with many layers of carbon paper. This was known as "samizdat" from the Russian for "self-publishing.)
Copy machines could have speeded up distribution of subversive works by daring men and women.

Eventually, someone in Washington apparently saw the light. When Lech Walensa led the Solidarnost uprising in Poland, organizations willing to upset the status quo received substantial material help against communist regimes in Eastern Europe. It was said that US labor unions contributed computers (including AT-class), copy machines, satellite TV receivers, digital still and movie cameras and other embargoed electronics to Solidarnost in large quantities. This wouldn't have happened without US Government help.

The floodgates were opened. And not long afterward, the wall came down.

Modern telephone communications, internet, twitter, facebook, etc. were essential tools for the Iranian "Green Revolution" of two years ago. The pro democracy movement didn't succeed, but sometimes such efforts need time to take firm root.

And they need tools. IPhones and iPads among them.

I hope our government is flexible enough to see this.

On Greatness

"There are no great men, only great challenges that ordinary men are forced by circumstances to meet."

- Fleet Admiral William F. Halsey, USN

Taxes

Tax policy is complicated. If the actual policy weren't complicated enough, understanding tax policy becomes almost impossible because of unsupported assertions and fear mongering.

Yesterday economist Robert Reich posted an article attempting to cut through the often complicated rhetoric and describe the proposal that is actually on the table.

By the way, the Congressional Budget Office has a new study out on income and taxes. The study shows that in 2008-2009 average federal taxes paid for all households reached the lowest level in thirty years. As for income distribution, the top 20% of the population received more than half of total before tax income. The bottom 20% received five percent of total before tax income. Probably not good for aggregate demand.

South Avenue Special Meeting July 9

Monday evening's special meeting of Oriental's Town Board opened at 5:30 PM, then immediately went into closed session to "consult with the attorney." Both the Town Attorney, Scott Davis and the Town Manager took part in the closed session. About an hour and a half later, the Board came out of closed session and adjourned. In response to a question after adjournment, Mayor Sage stated that no action by the Board is contemplated before the next regular meeting in August.

Thoughts On Today's South Avenue Meeting

 Today's special meeting of the Board of Commissioners of Oriental at 5:30PM (Monday, July 9, 2012) at First Baptist Church Fellowship Hall on Broad Street, is for Town Board to consult with counsel concerning the South Avenue Street end transactions and the Fulcher contract with the Town. The Board may go into closed session during the meeting.

It isn't clear what the meeting intends to accomplish, but the Town has already held the required public hearing. The Board can close South Avenue at any time, though they seem inclined currently to do more research before taking such an irrevocable step. 

This would be a good time for residents to make their views known to the Board.

Rent Seeking

Economist Joseph Stiglitz in a recent interview attributes many of our economic problems to rent-seeking.

"The people at the top are not the people who made the most contributions to our society. Some of them are. But a very large proportion (is) simply people I describe as rent-seekers -- people who have been successful in getting a larger share of the pie rather than increasing the size of the pie.  ...[W]e don't understand the extent to which our economy has really become a rent-seeking economy."

This runs counter to a view I often see in conservative commentary - the people with a lot of money are the "winners," who should be exalted and people who actually work for a living (and especially those who lose their jobs in an economic downturn) are "losers" and "freeloaders."

I think the biggest freeloaders are those who siphon off money from the productive work of others.

Stiglitz' take:

"Much of what goes on in the financial sector is this kind of rent-seeking.

"The most dramatic example was the predatory lending and the abusive credit card practices, which took money from people on the bottom and the middle often in a very deceptive way, sometimes in a fraudulent way, and moved it to the top.... 

"And what is interesting to realize is that our tax structure not only is unfair, but actually distorts our economy. It lowers growth and increases inequality. If you tax speculation at less than half the rate you tax people who work for a living, what you do is you encourage speculation. You weaken the economy. Speculative activities are activities associated with high levels of inequality. And that way you increase inequality. We tax in a sense a lot of the rent-seeking activities at a lower rate because they get under the rubric of the capital gains tax. ... "

Stiglitz' aim is an economy that works better. For everyone.

Polarized Politics

I have from time to time offered the view that in understanding political controversies, it is helpful to seek the answer to two questions: who benefits? and who pays?

Today I came across a review of a book by political scientists who have studied and sought to explain polarization. Political scientists Nolan McCarty, Keith Poole, and Howard Rosenthal present their findings in Polarized America: The Dance of Ideology and Unequal Riches (Walras-Pareto Lectures).

The review summarizes their findings: "[The authors] succeed in cutting through the seemingly crazed rhetoric of conservative extremists in and out of Congress and reveal what it's really all about: protecting the economic interests of the wealthy....
"What is really interesting about this analysis is that it implies that the sizzling rhetoric coming from the right -- personal attacks on the President, anti-gay rants, renewed heat around abortion and contraception -- is just window dressing. By the evidence of voting records, what the right really cares about is economic issues favoring the affluent -- tax cuts, reduced social spending, reduced regulation of business activity, and estate taxes. This isn't to say that the enraged cultural commentators aren't sincere about their personal belief -- who knows? But the policies of their party are very consistent, in the analysis offered here. Maybe the best way of understanding the extremist pundits is as a class of well-paid entertainers, riffing on themes of hatred and cultural fundamentalism that have nothing to do with the real goals of their party."

Who benefits? Who pays?

Why Wasn't The Higgs Boson Discovered By America?

A serious/humorous take on the issue by New York Times columnist Gail Collins in today's on-line issue here. Worth reading.