The Unacceptability of the Future   Leave a comment

Steven Pinker, a Harvard psychologist, has a written a book, “The Better Angels of Our Nature”, which documents how humans, over the centuries and millennia, have become steadily less violent, and the famous skeptic Michael Shermer has written another book, “The Moral Arc”, with largely the same theme.

And generally, if we look back in time, we observe that peoples’ values became steadily more like our own.  Some of us call this “progress”.

But many people go on to the next step, and assume they can predict the future.  They describe those with whom they disagree as “on the wrong side of history”, as though the speaker had inside knowledge as to which way things were going to go.

Let’s see how people in the past would see the present:

    • In the US, church attendance currently varies from about 25% to about 45%, depending upon the state, and in most of Europe, it’s lower still.  Many people are openly atheist.  If you told people 200 years ago that that was how things would turn out, they would have been absolutely horrified.
    • 60 years ago, over 90% of Americans believed that it was morally wrong for people who were engaged but not yet married to sleep together. Now, few people wait for marriage before having sex. And the consequences of this are pretty ugly — 25% of American adults have genital herpes, and 40% of babies in this country are born out of wedlock (which is probably related to the fact that a fifth of American children are raised in poverty). Are you sure that people from the past would see this as “progress”, rather than moral decay?
    • If you went back 300 years, and told a European that in the year 2000, there wouldn’t be a monarch in the continent who wielded any real power, and that in most countries, the head of state was usually spoken of with outright contempt by at least 30% of the population at any given time, they would find the prospect extremely disturbing.
    • If you told people 200 years ago that homosexuals would be legally allowed to marry, that New York City law would impose a fine of a several years’ wages on anyone who wilfully and maliciously referred to a transvestite by a gender pronoun other than that which the person preferred, and that, in some states, bakeries that refused to bake cakes for gay weddings would be heavily fined, they would not see it as “progress”, but rather as wanton depravity and confusion.
    • 100 years ago, only the poorest wives had jobs.  If you told people then that in the 21st century most wives, not just the poorest ones, worked, even if they had very young children, and that as a result many if not most mothers had tremendous difficulty finding enough time to spend with their kids, would they see this development as an anything but a deterioration of the quality of life?
    • Around 1970, there was a tremendous consensus on college campuses that capitalism was on the way out.  Many felt the economic model of the Warsaw Pact was preferable to that of the West.  Most people didn’t have the slightest grasp of micro-economic theory.  In 1979, when there was a revolution in Iran, causing a shortage of oil, gasoline prices were tightly regulated by the government, resulting in very long lines and sometimes fuel being unavailable at any price.  Any suggestion that the government allow gasoline prices to rise to reflect scarcity and encourage conservation was considered unacceptable because of the impact on the poor.  Anyone who declared themselves “pro free market” was definitely considered “on the wrong side of history”.  If you went back forty years and told those liberals that the Warsaw Pact had abandoned socialism and that most of the American Democratic Party had, for several decades at least, embraced free market economics, they would have disbelieved it as a thought too horrible to contemplate.

So if we look at the present through the eyes of the past, we find that the future has been profoundly unacceptable.  How can we be so sure that the future ahead of us will not be equally unacceptable when viewed in terms of our current values and biases?  My feeling is that it probably will be.

Posted March 27, 2016 by xyquarx in Uncategorized

How Not to Donate Money   Leave a comment

In 1989 the Berlin Wall fell, and soon after pretty much all of the Warsaw Pact decided that they were going to be capitalist and democratic.  It seemed like a miracle.

I felt there were bound to be some growing pains involved in the transition, and it was very much in the self-interest of the US for their experiment with freedom to be a successful one.  To that end, I felt that we should send massive aid to the countries of the former Warsaw Pact.

The US government was giving $1-2 billion a year, which I felt was just a drop in the bucket, totally insufficient.  In 1995 I had personally had a lucrative year and decided to donate some money of my own to that end.

So I decided to donate over 5% of my job income, several thousand dollars.

I had the money, I felt giving it would be easy, just a matter of finding the nearest appropriate do-gooder and giving them the dough.  I found a local Russian Orthodox church in my yellow pages and called them up, asking if they knew of any organizations giving aid to Russia.  They said they’d call around.  They got back to me with contact information for a Russian Orthodox organization in San Francisco, 45 miles from where I lived.

I wrote out the check and mailed it to them.

They invited me to their annual banquet.  They were interested in finding out who this person was, with a non-Russian name, willing to give so much to their cause.  When they met me, they were really surprised that I, not having a drop of Russian blood in my veins, and being an atheist to boot, would give so much.

I learned that this organization was involved in 2 activities:

  • Sending care packages consisting of foodstuffs to poor people in Moscow.
  • Providing aid to recently arrived Russian immigrants in San Francisco.

Neither of these things were really achieving what I had in mind.  I suppose it’s good to help the poor, but I really wanted to help industries get going, help the Russian economy overall, which would be good for everybody in the country, including the poor.  And I didn’t want my money spent on people who had left Russia, I wanted to help the people who were still there.

Another thing is, I am not Russian Orthodox.  I am an atheist.  And the organization was clearly mixing a religious pitch in with their charity.  The poor people who received the care packages were sending letters talking about how they were “thanking God” for the help, something that was certainly not on my agenda.

And then there was the newsletter I was sent, which had an offhand remark about how, “unsurprisingly”, most of the donations came from religious people.

At the banquet, a woman sitting next to me told me I was lucky to have found their church.  There was another Russian Orthodox church across town that was trying to reinstate the Russian monarchy.

Later, I managed to look up where the $1-2 billion the US government was giving was targeted.  It was going to key industries, exactly the sort of recipients I had in mind.

Getting rid of money is easy.  But if you really want to make a difference in the world, it is necessary to do careful research first.

Posted March 25, 2016 by xyquarx in Uncategorized

Apple’s Letter to the Public About Compromising Their Security   Leave a comment

February 16, 2016 A Message to Our Customers

The United States government has demanded that Apple take an unprecedented step which threatens the security of our customers. We oppose this order, which has implications far beyond the legal case at hand.

This moment calls for public discussion, and we want our customers and people around the country to understand what is at stake.
The Need for Encryption

Smartphones, led by iPhone, have become an essential part of our lives. People use them to store an incredible amount of personal information, from our private conversations to our photos, our music, our notes, our calendars and contacts, our financial information and health data, even where we have been and where we are going.

All that information needs to be protected from hackers and criminals who want to access it, steal it, and use it without our knowledge or permission. Customers expect Apple and other technology companies to do everything in our power to protect their personal information, and at Apple we are deeply committed to safeguarding their data.

Compromising the security of our personal information can ultimately put our personal safety at risk. That is why encryption has become so important to all of us.

For many years, we have used encryption to protect our customers’ personal data because we believe it’s the only way to keep their information safe. We have even put that data out of our own reach, because we believe the contents of your iPhone are none of our business.
The San Bernardino Case

We were shocked and outraged by the deadly act of terrorism in San Bernardino last December. We mourn the loss of life and want justice for all those whose lives were affected. The FBI asked us for help in the days following the attack, and we have worked hard to support the government’s efforts to solve this horrible crime. We have no sympathy for terrorists.

When the FBI has requested data that’s in our possession, we have provided it. Apple complies with valid subpoenas and search warrants, as we have in the San Bernardino case. We have also made Apple engineers available to advise the FBI, and we’ve offered our best ideas on a number of investigative options at their disposal.

We have great respect for the professionals at the FBI, and we believe their intentions are good. Up to this point, we have done everything that is both within our power and within the law to help them. But now the U.S. government has asked us for something we simply do not have, and something we consider too dangerous to create. They have asked us to build a backdoor to the iPhone.

Specifically, the FBI wants us to make a new version of the iPhone operating system, circumventing several important security features, and install it on an iPhone recovered during the investigation. In the wrong hands, this software — which does not exist today — would have the potential to unlock any iPhone in someone’s physical possession.

The FBI may use different words to describe this tool, but make no mistake: Building a version of iOS that bypasses security in this way would undeniably create a backdoor. And while the government may argue that its use would be limited to this case, there is no way to guarantee such control.
The Threat to Data Security

Some would argue that building a backdoor for just one iPhone is a simple, clean-cut solution. But it ignores both the basics of digital security and the significance of what the government is demanding in this case.

In today’s digital world, the “key” to an encrypted system is a piece of information that unlocks the data, and it is only as secure as the protections around it. Once the information is known, or a way to bypass the code is revealed, the encryption can be defeated by anyone with that knowledge.

The government suggests this tool could only be used once, on one phone. But that’s simply not true. Once created, the technique could be used over and over again, on any number of devices. In the physical world, it would be the equivalent of a master key, capable of opening hundreds of millions of locks — from restaurants and banks to stores and homes. No reasonable person would find that acceptable.

The government is asking Apple to hack our own users and undermine decades of security advancements that protect our customers — including tens of millions of American citizens — from sophisticated hackers and cybercriminals. The same engineers who built strong encryption into the iPhone to protect our users would, ironically, be ordered to weaken those protections and make our users less safe.

We can find no precedent for an American company being forced to expose its customers to a greater risk of attack. For years, cryptologists and national security experts have been warning against weakening encryption. Doing so would hurt only the well-meaning and law-abiding citizens who rely on companies like Apple to protect their data. Criminals and bad actors will still encrypt, using tools that are readily available to them.
A Dangerous Precedent

Rather than asking for legislative action through Congress, the FBI is proposing an unprecedented use of the All Writs Act of 1789 to justify an expansion of its authority.

The government would have us remove security features and add new capabilities to the operating system, allowing a passcode to be input electronically. This would make it easier to unlock an iPhone by “brute force,” trying thousands or millions of combinations with the speed of a modern computer.

The implications of the government’s demands are chilling. If the government can use the All Writs Act to make it easier to unlock your iPhone, it would have the power to reach into anyone’s device to capture their data. The government could extend this breach of privacy and demand that Apple build surveillance software to intercept your messages, access your health records or financial data, track your location, or even access your phone’s microphone or camera without your knowledge.

Opposing this order is not something we take lightly. We feel we must speak up in the face of what we see as an overreach by the U.S. government.

We are challenging the FBI’s demands with the deepest respect for American democracy and a love of our country. We believe it would be in the best interest of everyone to step back and consider the implications.

While we believe the FBI’s intentions are good, it would be wrong for the government to force us to build a backdoor into our products. And ultimately, we fear that this demand would undermine the very freedoms and liberty our government is meant to protect.

Tim Cook

Posted February 17, 2016 by xyquarx in Uncategorized

Timeline: The 2008 Financial Crisis, Bailouts, and Repayment   Leave a comment

August 2007: Countrywide Financial, one of the least responsible lenders in the country, runs into financial trouble and is rescued by being acquired by Bank of America, which was completed in January 2008. This move was very unfortunate for Bank of America.

November 2007: Charles Prince, CEO of Citigroup, resigns in disgrace after very poor performance of Citi due to excessive exposure to poorly performing subprime loans. He is replaced by Vikram Pandit.

March 2008: Bear Stearns fails and is rescued by JP Morgan Chase with help from the government.

Sept 14, 2008: Merrill Lynch, an investment bank failing due to excessive exposure to subprime loans, agrees to be acquired by Bank of America, a transaction which was completed in January 2009.

Sept 2008: Lehman Brothers is on the verge of bankruptcy. Over the preceding months, several other banks had considered rescuing / acquiring it, but all backed after a closer look, seeing just how bad Lehman’s assets were. The Fed and Treasury try desperately to save it, but they don’t have the legal authority to outright bail it out, and on Sept 15, 2008, Lehman declares bankruptcy.

Late September 2008: After the failure of Lehman, financial panic freezes credit markets. Hank Paulson (Secretary of the Treasury) and Ben Bernanke (Fed Chairman) approach congress asking for permission to use $700-800 billion to bail out the banks. The first question they were asked is “Can’t this wait until after the election?” (the election was scheduled for the beginning of November). Bernanke stresses that credit markets are frozen, banks aren’t lending to each other, let alone anybody else, and normal companies cannot get the routine loans they need to stay in business.

September 29 2008: The House of Representatives rejects the bailout; stock markets crash.

Oct 1, 2008: The Senate passes an amended bailout proposal and the House passes it too on October 3. President Bush immediately signs it into law.

An important feature of the bailouts is that all banks have to be bailed out, whether they need it or not, and whether their management wants it or not. Otherwise those banks that get bailed out could be stigmatized and experience runs. Banks that refuse to take the money are threatened by the government with dire regulatory harassment unless they relent, so that all the banks eventually agree to take the money.

The banks are prohibited from paying back the bailout money until the government gives them permission, and they are prohibited from issuing their employees large bonuses until they pay back the bailout money. Somehow AIG (not a bank) finds a loophole in this and issues large bonuses in spite of still owing a very large amount of TARP money.

In January of 2009, Vikram Pandit, the new CEO of Citi, announces that he will take $1 / year in total compensation until Citi is profitable again. Citi is in extremely bad shape at that time, which was not Pandit’s doing.

In the spring of 2009, the government conducts accounting “stress tests” to see if the banks can weather another storm. Those who pass the stress tests are to be permitted to pay back the bailout money, which most of the big banks do in early June 2009. Citigroup is still in bad shape, and Bank of America also is not fit to repay, mostly due to its unfortunate acquisition of other, far less healthy, banks. Many small banks are struggling and will remain unable to repay the bailout money for years, even until 2016.

The repayment of the TARP money by most of the big banks in June of 2009 gets almost no media attention, being probably the most under covered event of the 21st century.

Later in 2009, the banks that had repaid their TARP money issue bonuses to their employees. It should be noted that under normal conditions, a banker’s bonus is a large part of their routine pay, so not issuing bonuses would be effectively a large pay cut. The public, believing that the TARP money has not been repaid and not understanding the normal nature of bankers’ pay, is enraged.

In September of 2009, “Capitalism: A Love Story”, a Michael Moore movie about the financial crisis, hits the theaters. In it, Michael Moore makes a big act of driving an armored truck around Manhattan to all the big banks demanding that they repay the TARP money. Bankers, knowing that anything intelligent that they say to him will wind up on the cutting room floor, refuse to interview him, and he never gets past the security guards. Whether we should believe that nobody ever told Moore that those banks had already repaid the money is left to the reader.

2011: Ron Paul and Bernie Sanders (a strange pair of bedfellows if ever I saw one) get legislation through congress dictating that the Fed is to be audited. The audit reveals that many short-term secret loans were made by the Fed during the crisis. In early 2009, these loans totaled $1.2 trillion, which was the peak outstanding. This was almost entirely paid back by January of 2010.

Bernie Sanders, on his website, to this date, claims that his Fed audit revealed that $16 trillion in secret loans had happened and makes it sound like none of it has been paid back. To turn $1.2 trillion into $16 trillion, some accounting tricks are done. If I borrow $100 from you Thursday to be paid back in a week, and the next Thursday take out another $100, one-week loan to finance paying the first back, and then repeat the process every week for a year at which point I pay it off, Bernie Sanders’ accounting would call that 52 * $100 == $5200 in loans. But it’s paid back at the end of the year, and it was never more than $100. It was effectively a $100 loan for one year.


Above: the total outstanding debt of the allegedly $16 trillion (actual peak of $1.2 trillion) in loans exposed by the Fed audit.

Most news sources, like Sanders, report the loans as $16 trillion, and insinuate that none of it has been repaid.

2016: All the big banks and AIG have repaid their TARP money long ago.  Some small banks still have yet to pay back.  GM and Chrysler still owe bailout money.

Posted January 18, 2016 by xyquarx in Uncategorized

Movie Review: The Big Short   Leave a comment

The movie, I felt, was very different from the book, especially the last few minutes of the movie. While the book stressed stupidity and insanity, the movie stressed criminality.

First, prior to the movie, there was some discussion of whether there have been any nationwide crashes in real estate prices since the depression.  I remembered looking at the nationwide Case-Schiller index of home prices, and prior to 2006, we do not see a decrease:

Unfortunately, the Case-Shiller index only goes as far back as 1987, so we don’t have any data prior to that.  The smoothness of the curve, however, is remarkable.  It is easy to see how people as late as 2005 an observer could think that the trend was a very reliable up, up, up.

I don’t think there had been a nationwide drop in real estate prices since the great depression, there had been drops within local markets when local industries got into trouble.  This is why taking a bunch of A and AA bonds from different localities, and bundling them together into a CDO could lead to the CDO legitimately having a better rating than the individual bonds it contained.  A diverse portfolio is less risky than a concentrated portfolio.  The movie basically says this is fraudulent, like using old fish to make a stew so the customers won’t notice that it’s not fresh.  I think the movie was wrong.

At one point, someone sells something for more than it was worth, and someone in the movie said something to the effect that that was criminal.  No, it’s not criminal to sell something for more than it’s worth if you don’t lie in the process.  There’s no law against charging whatever the market will bear.

The movie said that the banks were bailed out and used the bailout money to pay big bonuses.  That’s true of AIG, but not of most of the banks.  Most of the banks paid their bailout money back to the government, with a profit, as soon as they were permitted to, in June of 2009.  One bank that didn’t (because they were in worse shape than the other banks) was Citi, whose CEO, Vikram Pandit, took $1 a year in total compensation until the organization resumed profitability.  This is especially interesting as it was Pandit’s predecessor, not Pandit himself, who made a mess of things at Citi.  AIG did eventually pack back the bailout money.
The repayment of the bailout money was one of the events least-covered by the media, relative to its importance, of the 21st century.  Most Americans just think the banks kept the money and that was the end of it.

Near the end of the movie, someone says the bankers knew they would be bailed out.  I don’t recall that from the book, and it’s inconsistent with most of the movie, which shows the bankers not being aware that a crisis was looming at all.

Many people feel the banks did not suffer at all due to the meltdown.  That’s not accurate, the shareholders  of the badly-managed banks lost most of their investment.  Note that a lot of the management of the banks get paid in stock options, so they lost a lot too.  Here are some plots of stock prices of the various financial organizations: Bailout Statistics

Posted January 3, 2016 by xyquarx in Uncategorized

Saving Lives Doesn’t Always Carry the Debate   Leave a comment

A couple of Muslims recently perpetrated a mass shooting in San Bernadino, California, that looks to have been inspired by Islamic State.  14 people were killed and many more injured.  The first thing one must realize is that this was a “media event” — it is not something that is happening on a wide scale, mass shootings of all kinds are so rare that it is exceedingly unlikely to die from one.  Note that homicide is the 27th most likely cause of death in the United States, with about 0.6% of total deaths, and mass shootings are a very tiny fraction of homicides.

But there were several responses as to how we are to deal with this “threat”:

  1. Enact gun control.
  2. Reduce or block Muslim immigration.
  3. Increase government surveillance of civilians.

1 and 3 both have constitutional problems — the 2nd amendment of the Bill of Rights, as currently interpreted by the courts, entitles citizens to own guns, and the 4th amendment forbids excessive searches without a warrant.  It should be noted that both of these rights are among the most weakly enforced rights in the constitution.  There is no constitutional problem with 2, as someone who wants to immigrate has no rights under the constitution and can legally be refused entry for any reason or no reason.

I will posit here that all 3 of these measures could save lives.  But there are people, myself included, who are vehemently opposed to at least one of them, regardless of how many lives would be saved.

Gun Control

Michael Shermer, a public intellectual who has frequently debated in favor of gun control, says he observes that the gun enthusiasts debating against him, when cornered and confronted with the reality that gun control would save lives, don’t care.  They feel that the right of citizens to arm themselves is a sacred, fundamental, and important right that should not be abridged, regardless of the cost in lives.

Gun enthusiasts often argue that had there not been gun control in Nazi Germany, the Jews could have resisted violently rather than passively being rounded up and marched into the gas chambers.  They also argue that mass shootings would be less deadly had there been more “good guys” carrying concealed guns on the scene, but this is a fairly ridiculous argument and I don’t believe it’s their prime motivation.  Most of their ideology is bound in the idea that an armed populace is an important check on government tyranny.

Reducing Muslim Immigration

We have had about 3,000 deaths from Islamic terrorism in the US over the last 20 years.  With about 4 million Muslims in the country, that boils down to about one American civilian death, per year, for every 25,000 Muslims in the country.  Most of those deaths were in 9/11, but there is no reason to believe that an attack on that scale could not happen again.  It’s harder to hijack a plane than it was before 9/11, but there are many ways to kill large numbers of people, all that is required is a bit of imagination.  If anything, the threat is elevated since before 9/11, since ISIS is more adept than Al-Qaeda was at radicalizing westerners on the Internet.

But again, the people who advocate for immigration don’t care about the loss of life.  Many people object to the idea of a religious litmus test on immigration, because it is inconsistent with our desire to be a secular, diverse society with freedom of religion.  Many people also, for reasons I don’t understand, believe that it is somehow vital to just take large numbers of immigrants, as an end in itself.

Increased Government Surveillance

Whistle blower Edward Snowden revealed that the extent to which the American government is spying on its citizens goes far beyond the level that most people perceived to be going on.  There have been some half-hearted efforts by politicians to reign this in.  Some Internet companies have responded by encrypting their customers’ email in such a way that it is technically impossible for the Internet company to decrypt the email, even if they are faced with a court order.  Some politicians have been trying to make this practice illegal.

It is clear that giving the government the right to read all of everybody’s email will help them thwart terrorists and save lives.  But those who object to such spying don’t care about the lives saved.  The potential for abuse here is huge, and inevitable.  Possibly the government can misuse it to spy on political enemies, rogue employees of the government could track people they know for their own purposes that have nothing to do with thwarting terrorism, and people could be blackmailed by the government or by rogue government employees.  Those who object to surveillance believe that privacy is a sacred, fundamental human right that should be respected.


Posted December 23, 2015 by xyquarx in Uncategorized

Canada’s Illegal Immigration Problem   Leave a comment

The Manitoba Herald

The flood of American liberals sneaking across the border into Canada has intensified in the past week, sparking calls for increased patrols to stop the illegal immigration.  The recent actions of the Tea Party and the fact that the Republicans won the Senate are prompting an exodus among left-leaning citizens who fear they’ll soon be required to hunt, pray, and to agree with Bill O’Reilly and Glenn Beck.

Canadian border farmers say it’s not uncommon to see dozens of sociology professors, animal-rights activists and Unitarians crossing their fields at night. “I went out to milk the cows the other day, and there was a Hollywood producer huddled in the barn,” said Southern Manitoba farmer Red Greenfield, whose acreage borders North Dakota .  “The producer was cold, exhausted and hungry. He asked me if I could spare a latte and some free-range chicken.  When I said I didn’t have any, he left before I even got a chance to show him my screenplay, eh?”

In an effort to stop the illegal aliens, Greenfield erected higher fences, but the liberals scaled them.  He then installed loudspeakers that blared Rush Limbaugh across the fields. “Not real effective,” he said.  “The liberals still got through and Rush annoyed the cows so much that they wouldn’t give any milk.”

Officials are particularly concerned about smugglers who meet liberals near the Canadian border, pack them into Volvo station wagons, and drive them across the border where they are simply left to fend for themselves.  “A lot of these people are not prepared for our rugged conditions,” an Ontario border patrolman said. “I found one carload without a single bottle of imported drinking water.  They did have a nice little Napa Valley cabernet, though.”  When liberals are caught, they’re sent back across the border, often wailing loudly that they fear retribution from conservatives.  Rumors have been circulating about plans being made to build re-education camps where liberals will be forced to drink domestic beer and watch NASCAR races.

In recent days, liberals have turned to ingenious ways of crossing the border.  Some have been disguised as senior citizens taking a bus trip to buy cheap Canadian prescription drugs.   After catching a half- dozen young vegans in powdered wig disguises, Canadian immigration authorities began stopping buses and quizzing the supposed senior-citizens about Perry Como and Rosemary Clooney to prove that they were alive in the ’50s.  “If they can’t identify the accordion player on The Lawrence Welk Show, we become very suspicious about their age,” an official said.

Canadian citizens have complained that the illegal immigrants are creating an organic-broccoli shortage and are renting all the Michael Moore movies.  “I really feel sorry for American liberals, but the Canadian economy just can’t support them,” an Ottawa resident said. “How many art-history majors does one country need?”

In an effort to ease tensions between the United States and Canada, Vice President Biden met with the Canadian ambassador and pledged that the administration would take steps to reassure liberals.  A source close to President Obama said, “We’re going to have some Paul McCartney and Peter, Paul & Mary concerts.  And we might even put some endangered species on postage stamps.  The President is determined to reach out,” he said.”

from a forwarded email

Posted November 22, 2014 by xyquarx in Uncategorized