World affairs

Internet commerce is still commerce

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My classes have been working on international treatment of Internet Censorship. It’s led to interesting discussions about company and national policies. But it’s easy (for me at least) to fall into the Internet is new and unique trap. It’s true, but sometimes it’s also irrelevant.

Here is an excerpt from Craigslist’s list of items that are forbidden to be advertised. These restrictions are the results of prosaic US laws on advertising and commerce. As far as I know, they are exactly the same for ads in newspapers, flyers, or even word of mouth. I don’t “like” certain of these restrictions, but by and large it’s a sensible list.

  • Tickets you are not allowed to sell, including airline tickets that restrict transfer.
  • Coupons or gift cards that restrict transfer or which you are not authorized to sell.
  • Lottery tickets, sports trading card grab bags, raffle tickets, sweepstakes entries, slot machines, other gambling items.
  • Used or rebuilt batteries, or batteries containing mercury.
  • Used bedding and clothing, unless sanitized in accordance with law.

via craigslist | about > prohibited items.

There are a few controversies about Craigslist ads that seem to have more specific Internet nuances. Sexual crimes seem to feature prominently in them.

China is stealing software? Yes, but it’s not as useful as it sounds.

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Inside the Chinese Boom in Corporate Espionage is the headline in a recent article in Businessweek (now named Bloomberg Businessweek). It reports an 007ish tale of software theft by a Chinese windmill company. American Superconductor Corp (AMSC) had a profitable partnership selling control systems to Chinese wind turbine company Sinovel. As for all expensive industrial equipment, software plays a vital role in wind turbines. So when stolen/edited copies of their software turned up in Sinovel machines, and Sinoval stopped accepting equipment from AMSC, it was a calamity for AMSC.

   The Business Week article implicitly blames high tech “Chinese espionage,” which has been getting a lot of coverage in the US press recently. But as a very interesting blog post by Steve Dickinson points out, the actual theft was very traditional. An insider (one of the software’s chief developers) was bribed  to turn over the source code. Nothing high-tech about the theft, unless you still call email “high tech.” And according to Dickinson, the theft was predictable, and was facilitated by lack of low-tech protection measures by AMSC. 

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Why LightSquared failed: It was science, not politics

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Why LightSquared failed: It was science, not politics.

Good summary of the battle between LightSquared, and GPS users/makers. On the political/interest group side, it shows that established industries have ability to protect their regulatory interests, even against a well-financed lobbying campaign. (LightSquared) Perhaps it also shows that the FCC is also able to make technically appropriate decisions, at least when the two sides are approximately balanced in political power.

 
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Classic definition of recession no longer useful

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We now need 2 separate concepts of recession. Time for employment to return to pre-recession

“Total GDP recession” is the conventional one. “Actual people recession” is the one that matters to almost everyone. The rationale is that all of the “growth” after the 2001 recession, and this one as well, is in the upper few percent of the income distribution, or in corporate profits. Median income, for example, has been approximately stagnant or declining for a decade. Much more important to “the 99%” is what happens to their share of national income – which is much slower to recover. (If you adjust for increasing health care costs, then median income is doing even worse – but that’s another story.) 

(This interpretation is my own. I got the graph link from Andy McAfee

 

Fiscal FactCheck: payroll tax = income tax!

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Fiscal FactCheck.

Astonishing fact is buried here: Payroll taxes (social security, medicare etc) have almost caught up with federal income tax. Payroll taxes are 40% of federal receipts in 2010, while personal income tax was 41.5%.

Payroll taxes tend to be quite regressive — they start at about 10% of ALL payroll income for your first dollar, and fall to about 2.3% above $100,000 or so. So this means we have a bizarre combination of progressive and regressive tax rates. And it’s more evidence of how high health care costs are dragging everything down (in this case, via Medicare costs).

By the way, many “conservatives” have suggested a “flat income tax”  e.g. 17%. As far as I can tell, this does NOT include payroll taxes. So it would not be flat at all – it would be highly regressive. Another factor is that richer people earn more from capital gains and other sources not counted as income. I’d love to see someone lay out the numbers carefully on this. Some information is in this report by Congressional Research Services.