Relevant and even prescient commentary on news, politics and the economy.

The mindless canard stating as unexplained fact that it would be worse to expand the federal government by a third in order to accommodate single-payer healthcare insurance than it is to have private, for-profit health insurance companies playing this role instead

No one would ever accuse Bernie Sanders of thinking small. The senator from Vermont and Democratic presidential candidate wants to transform one of the world’s most boisterous free-market economies into an exemplar ofScandinavian-style “democratic socialism.” He wants to jail Wall Street executives and double the minimum wage. And he wants to spend taxpayer money, lots of it.

According to an estimate by The Wall Street Journal, Sanders’ spending plans would cost $18 trillion over 10 years, increasing the federal government’s size by roughly a third. He would create a single-payer health plan, make public universities free, expand Social Security, spend big on infrastructure, create universal child-care and pre-K programs, provide federal jobs for young people and bail out struggling pension plans, among other things.

To be sure, fully $15 trillion of the $18 trillion would come from Sanders’ health plan, which seems unlikely to cost that much. Bringing all Americans under the umbrella of a single-payer system would create enormous power to hold down prices.

Even so, there’s no doubt that Sanders, who’s running a surprisingly strong second to Hillary Clinton in the latest polls, is talking serious money.

— Bernie Sanders: ‘Now is the time for bold action’, USA Today editorial, yesterday

Yes, no one would ever accuse Bernie Sanders of thinking small.  And no one should ever accuse the USA Today editorial page staff of explaining why increasing the federal government’s size by roughly a third is per se a bad idea. I mean other than just saying we can’t afford it.

I give the writer of this editorial credit for saying upfront and explicitly that $15 trillion of the $18 trillion would come from Sanders’ health plan.  That’s more than Washington Post editorial writer Stephen Stromberg did the day after that WSJ report last month.*  And it’s more than the WSJ reporter did in the article itself, if I remember right.

But why exactly is it per se bad to expand the federal government significantly?  That is what Medicare and Social Security did, and the National Labor Relations Act and the Securities Exchange Act and the EPA, etc.  If you think these pieces of legislation should not have been enacted, fine.  But most people would disagree with you.

Sanders wants to replace private-industry healthcare insurance with federal, nonprofit, single-payer insurance.  Like Denmark!  And like Medicare.  I would love to see Sanders have an economist like Uwe Reinhardt or Joseph Stiglitz compute what the cost to individuals receiving Medicare would be now if there were no Medicare.  Especially since most of them are retired, so there would not be the possibility of employer-based private insurance.

What drives me crazy about this mindless but politically potent canard is that these folks don’t attempt to explain why it would be worse to expand the federal government by a third in this respect than it is to have private, for-profit health insurance companies playing this role instead.  How much more income tax revenue would the federal government receive if the money that employers now pay in insurance premiums went instead to wages and salaries?  And how much better would the economy be if that happened, and if individuals weren’t saddled with premiums and large out-of-pocket healthcare costs?

Josh Barro has an outstanding column in today’s New York Times, the theme of which is that Sanders unnecessarily complicates his candidacy and causes confusion—providing an opening to his opponents like the one Clinton took at the debate last week to imply that Sanders wants to nationalize businesses, large and small; he cited Clinton’s comment—by calling himself something he is not: a democratic socialist.  He’s a social democrat, Barro and others he quotes, say, accurately.

But the key part of Barro’s lengthy column is this:

“When you look at the policies, there’s a way to see it as Bernie has cranked up Hillary’s agenda to 11,” [Roosevelt Institute economist Mike] Konczal said. To wit: Mrs. Clinton favors preserving Social Security with some enhancements for the poorest beneficiaries, while he wants to raise taxes on the rich to expand it in ways that could add $65 per month to the average benefit. This, like most political debates, is a disagreement about how far to turn the knobs when adjusting policy; it does not seem to call for a separate ideological label. That said, Mr. Konczal did offer one difference between Mr. Sanders’s and Mrs. Clinton’s worldviews that is of kind rather than degree. This is decommodification: the idea that some goods and services are so important that they ought to be removed from the market economy altogether.  [Italics added.]

The idea behind the Affordable Care Act, and behind Mrs. Clinton’s approach to tinkering with Obamacare, is that quality health insurance should be affordable to everyone, and that people who can’t afford it should be given subsidies to buy it. For a democratic socialist, that’s not good enough; instead, health care should simply be provided to everyone without charge, removing the profit motive from health care. But even this is a matter of degrees. Mr. Sanders favors Medicare for all: a single­payer health care system, with the federal government as the sole insurer. This would remove the profit motive from health insurance but not from health care, which could continue to be provided by private doctors and hospitals, often working on a for­profit basis. Mr. Sanders is not proposing to go further, like Britain, and have doctors work directly for the government. Nor does he appear inclined to decommodify broad swathes of the economy; in other countries, even conservatives often endorse special, less-­marketized rules for health care than for other sectors.

This distinction is real, but it’s not clear to me that it merits Mr. Sanders his own ideological label.

That—the idea that some goods and services are so important that they ought to be removed from the market economy altogether—is why it is absolutely incumbent upon the USA editorial writer, Stephen Stromberg, Hillary Clinton, and anyone else who takes the position that a single-payer, Medicare-for-all healthcare insurance system is per se bad because it would be run by the federal government, to actually state why this is so.

*The editorial was, like all Post (and most newspaper) editorials, published without a byline, but Stromberg had a blog post there on the same day that was virtually identical to the editorial.  [Elementary, Watson!]

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John Boehner’s Student Loan Legacy

Guess Post by Alan Collinge, Founder of The Student Loan Justice Organization

When I first started researching the student loan issue over a decade ago, it quickly became obvious that there was one congressman the student lending industry loved more than anyone else: John Boehner.

Sallie Mae (the nation’s largest student loan company), through its PAC, gave Rep. Boehner (R-Ohio) more money than anyone else. Boehner enjoyed trips to Boca Raton and other vacation spots aboard Sallie Mae’s private jet. At a meeting of the Consumer Bankers Association, Boehner told the student loan industry crowd;

“Know that I hold you in my trusted hands. I’ve got enough rabbits up my sleeve…”

Boehner even got one of his family members a job at a student loan collection company over a game of golf!

Looking at legislation passed while Boehner was chairman of the House Committee on Education and the Workforce, it becomes clear why the student loan companies were so generous to him. He was instrumental in killing the ability of borrowers to refinance their loans with competitors of Sallie Mae at lower interest rates. He fought hard to preserve hugely generous subsidies to lenders who assumed zero risk for the loans they made to students.

Most significantly, however, Boehner was instrumental in removing bankruptcy protections from private student loans in 2005. This shocking move was couched in promises from the banks that removing bankruptcy protections would allow them to lend to more needy students and at better rates. After Boehner and friends successfully pushed this through Congress, the banks not only broke these promises, they actually began demanding cosigners (with assets to come after) for over 90 percent of the private loans they made. This crushed many people financially and tore apart untold thousands (probably hundreds of thousands) of families.

Whatever Boehner’s motivations for destroying long-standing, fundamental, free-market protections for student loans, the facts are very clear: When Boehner took leadership of the House education committee, the nation owed about $100 billion in student loans. When he passed the baton in 2006, the amount had risen to over $400 billion. Boehner will be leaving office with the nation owing close to $1.5 trillion in student loan debt. Those numbers speak for themselves.

Wittingly or unwittingly, Boehner leaves behind a Department of Education that is just about the worst, big-government monstrosity one can imagine. It is immune to the bankruptcy protections for which every other public or private lender must contend. There are no statutes of limitations on its entire portfolio. It has a completely captive market of more than 44 million citizens, more than half of whom are currently unable to pay on their debt. It actually makes a healthy profit on defaulted loans. This should make all economists, all conservatives, and all citizens very, very worried.

Boehner says he is not concerned with his legacy; but, millions of citizens of all stripes have suffered by his handiwork and millions more are queued up for decades of financial misery at the hands of both government and banks. At a minimum, the standard bankruptcy should never have been removed from any lending instrument involved with student loans.

Boehner says he’s not worried about his legacy. But on this issue, he should be.

Reference: John Boehner’s Student Loan Legacy Alan Collinge, The Hill, October 14, 2015

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Why does Clinton keep getting away with saying that gun manufacturers are the only industry in America that is immune from being held accountable for criminal acts by the purchasers of their products? Almost NO manufacturers are, by law, accountable for criminal acts by purchasers of their products. Someone should ask her to name one that is.

Senator Sanders did vote five times against the Brady Bill. Since it was passed, more than 2 million prohibited purchases have been prevented. He also did vote, as he said, for this immunity provision. I voted against it. I was in the Senate at the same time. It wasn’t complicated to me. It was pretty straightforward to me that he was going to give immunity to the only industry in America — everybody else has to be accountable but not the gun manufacturers. And we need to stand up and say, “Enough of that.”

 Hillary Clinton, at Tuesday night’s debate

It was pretty straightforward that Sanders was going to vote to give immunity to gun manufacturers for crimes committed by purchasers of their guns.  It also, I assume, was pretty straightforward to her that no other industry is liable for crimes committed by customers using their products.  She does, after all, have a law degree from Yale, and practiced corporate law in Arkansas.

It also, of course, was straightforward to her that although most people do know that, she could make this statement, unchallenged, in a debate forum in answer to a question that she knew Sanders would have no opportunity to respond to, since she was being asked to respond to his answer to a question.  And she knew that, in the moment, it would sound correct to the public.*

But, folks, gun manufacturers are not the only industry in America — actually, almost nobody else has to be accountable.  Maybe in the next debate, the moderator will ask her to name, maybe, two or three manufacturing industries that are held liable for wrongful use of their products by customers.  Can’t wait to hear the answer.

This is, of course, a different issue than the one O’Malley mentioned: that gun shop owners and others who sell guns and ammunition are not held liable when they themselves commit acts of gross negligence by selling several guns and huge amounts of ammunition to a single person, or failing to conduct a background check before selling guns or ammunition to someone.  I believe that this is what O’Malley said occurred in the Aurora, Colorado movie theater shooting in 2012.

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A final post for me (for now; I’m out of breath) on last night’s debate and mainstream journalists’ coverage of it

 

E.J. Dionne just posted a column online that will be published in tomorrow’s Washington Post.  Here are its last three paragraphs:

But the debate’s most substantive contribution was to the larger philosophical argument the country needs to have in 2016. Republicans plainly still believe their central mission is cutting taxes, shredding regulations and shrinking government. Americans who agree should vote for them.

Democrats clearly believe that government has a role to play in solving the problems of unequal opportunity, imbalances between family life and work, concentrated economic power and wage stagnation. Clinton’s best personal moment may have been when she defended mandated paid family leave from the critique advanced by Republican contender Carly Fiorina that it would be an excessive burden on small business.

Clinton went straight at the GOP’s contradictions: “It’s always the Republicans or their sympathizers who say, ‘You can’t have paid leave, you can’t provide health care,’ ” she said. “They don’t mind having big government to interfere with a woman’s right to choose and to try to take down Planned Parenthood. . . . We should not be paralyzed by the Republicans and their constant refrain, ‘big government this, big government that.’ ”

And one way to end this paralysis is to show, as Sanders is doing, that social democratic countries — including Denmark, another of the night’s stars — have thrived over the years with far more social provisions than we have.

Setting the boundaries of debate is one of the most important tasks in politics. We now have a more realistic sense of the choices before us: Sanders’s unapologetic democratic socialism, Clinton’s progressive capitalism, and the Republicans’ disdain for government altogether. Guess who occupies the real political center?

I love this column.  For one thing, it reminded me of the one line of Clinton’s that warmed my heart: “We should not be paralyzed by the Republicans and their constant refrain, ‘big government this, big government that.’ ”

For another, I can’t think of a more apt description of what my candidate, Bernie Sanders, has done. And it shows that Clinton’s sleight of hand will not work.  She’s won’t after all get away with conflating Denmark and the old Soviet Union.

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Why does Paul Waldman think only URBAN young people are interested in the issue of tuition-free college?

I read Paul Waldman’s posts on the Washington Post Plum Line blog regularly and agree with most of what he says, but his claim today that rural young people who can’t afford college aren’t interested in attending college anyway, and those who do attend are fine with borrowing large amounts of money to do so if that is what’s necessary, strikes me as really strange.  It’s surely not accurate.

Bernie Sanders surely is correct that they do care.  A lot.  Which is the direct subject of Waldman’s post.  Waldman says Sanders is wrong.

Why would Waldman think that?  I have no idea.

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Some lesser-known pundits are not falling in line, it now appears

[Sanders’s] most newsworthy moment, of course, came when he declined Cooper’s invitation to attack Clinton for using a private email server. “[L]et me say something that may not be great politics,” he said. “But I think the secretary is right, and that is that the American people are sick and tired of hearing about your damn emails.”

Sanders was wrong: It was great politics. His statement made him look like a mensch and a man of principle, ensuring that the debate remained a surprisingly substantive exchange on the issues he cares about most, rather a GOP-style pro-wrestling match. He actually seemed less interested in taking down the front-runner than in elevating his own ideas. That’s hugely rare in a politician.

Yes, Hillary Clinton Won the Debate …But Bernie Sanders set the terms, Michelle Goldberg, Slate, today

As with this matter, the punditry’s reaction to the above moment last night was, um, different than mine.  After spending most of the first hour of the debate disappointed in Sanders’s performance—he seemed very, very nervous, and occasionally almost tongue-tied—I reacted to that comment by him with a “Wow! Yeah!  He’s found his sea legs!”

My question today is: Why is this interpreted by the political analysts as a big victory moment for Clinton rather than for Sanders?  Is this how most of the viewing public saw it?

I’m betting that answer is that they saw it as I did.  And as this one journalist, Michelle Goldberg, saw it.  As a victory for the Democratic Party.  And a triumphant moment for Sanders.

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Greg Sargent gets it right: Clinton tried last night to return the definition of ‘progressive’ to the traditional ‘women’s-and-children’s’ issues that have been her calling card for decades. The pundits’ kudos notwithstanding, I doubt it will work, because ACTUAL progressives these days have a different idea.

Until last night, the Democratic presidential primary had largely been viewed through a simple frame: Bernie Sanders represents the full-throatedly populist and progressive wing of the party on economic issues, and Hillary Clinton occupies a more moderate, less populist, less-overtly redistributive zone, while edging in Sanders’ direction in order to obscure economic differences between them in the eyes of Democratic voters.

This analysis of the race had mostly taken shape around the preoccupations of the “Elizabeth Warren wing” of the Democratic Party, spurred on by ongoing debate over (among other things) how far to go in raising the minimum wage, taxing the wealthy to fund massive new social spending, and confronting the size and power of major financial institutions.

In last night’s debate, Clinton may have broken this frame.

It has been widely observed that Clinton went on offense against Sanders by sparring with him over his unabashed socialist vision and his weakness on gun control, while simultaneously defending her economic policies as being even tougher than his. But what is crucial to understand is that Clinton also sought to redefine what counts as “progressive” in this race on her own terms, by making women’s and children’s issues — and family-oriented workplace flexibility policies — more central than the other candidates did.

In other words, Clinton answered Sanders not only by debating him over whether she is progressive enough on the issues he has tried to own, but also by laying claim to issues such as paid family and sick leave and early childhood education. In so doing, she staked out her own progressive turf, rather than fighting on his alone.

— Greg Sargent, Washington Post, today 

Actually, though, I would amend that last paragraph to say that Clinton tried to lay claim to issues such as paid family and sick leave and early childhood education, and that in so doing, she tried to stake out her own progressive turf, rather than fighting on his alone.  Not all jujitsu moves succeed, and I’m betting that this one will not.

Clinton’s attempt to lay claim to paid family and sick leave and early childhood education is, in progressive circles, like trying to lay claim the air around us.  Clinton hasn’t copyrighted it, although if she has she should sue Sanders and many other progressives for copyright infringement.  It’s a basic part of Sanders’ policy statement, and mentioned routinely in his stump speech.  I mean … seriously; how stupid do Clinton and her consultants think progressives are?

No, not pundits; actual progressives.

Clinton’s mega-donors certainly approve of paid family and sick leave and early childhood education, but maybe not, say, universal healthcare, tuition-free public colleges and universities.  And not, maybe, that raise taxes substantially on wealthy individuals and corporations, to a still-lower rate than when Clinton’s father started and operated his successful small business in the 1940s, ‘50s, and 60s.  And maybe not that reinstate-Glass-Steagall thing, either.

Sargent goes on to say:

When CNN’s Dana Bash pushed Clinton by asking whether paid family leave programs would hurt small businesses, she pushed back hard, making a wonky case that such programs can be smartly designed to avoid the downsides Republicans predict from such policies.

Actually, of course, a wonky case already has been made by, say, Denmark.  And Sweden and Norway.  And Germany.  Y’know, countries with no middle class, high rates of poverty, and no innovation because businesses there are owned by the government.  Which by definition explains the lack of entrepreneurship.

You can, it’s true, fool some of the people all the time.  And all, or most, of the people some of the time if the people you’re out to fool are political pundits and analysts.*

—-

*Sentence typo-corrected [i.e., the missing words were inserted.] 10-14 at 5:38 p.m.

 

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Denmark isn’t a middle-class, capitalist, entrepreneurial country? Because it has universal healthcare, free college, subsidized day care, and guaranteed family and medical leave? Really, Secretary Clinton? Really?

We are not Denmark — I love Denmark — we are the United States of America.  We would be making a grave mistake to turn our backs on what built the greatest middle class in the history of the world.

— Hillary Clinton, last night

Okay.  When I heard that, I said, “Wow.  Did she just say that Denmark isn’t a middle-class, capitalist, entrepreneurial country?  And that that’s because it has universal healthcare, free college, subsidized day care, and guaranteed family and medical leave?

That struck me as a major gaffe.  She is, after all, running for the Democratic Party’s nomination for president, not the Republican Party’s.

Sanders didn’t respond to it because, if I remember right, he didn’t have the chance.  But I expected the political analysts to point this out afterward.

Silly me.  It’s being hailed as a big moment for Clinton.  By most commentators I’ve read, anyway.  But not by Slate’s Jordan Weissmann, who wrote last night:

The odd thing here is that, despite his preferred nomenclature, Bernie Sanders isn’t really all that much of a socialist. Yes, the man is certainly on the left edge of mainstream American politics. He would like to raise taxes significantly on the wealthy, to spend more on infrastructure, to break up large Wall Street banks. He’d like to make public colleges tuition-free, but he isn’t pushing to eliminate private universities. Fundamentally, the man isn’t really running on an anti-capitalist platform of nationalizing private industry. The one exception, you could argue, would be his stance in favor of single-payer health care—that would amount to a government takeover of health insurance. But that would also basically bring the U.S. in league with decidedly capitalist nations such as Canada and Great Britain.

In the end, left writer Jesse Meyerson, himself a bona fide socialist, put is most simplyin Rolling Stone: “For now, the proposals at the core of his platform—for the most part very good—are standard fare for progressive Democrats.” That comment was from July but still holds.

Which brings us to the Northern Europe comparison. Typically, policy types refer to Scandinavia’s “social democracies,” because of the robust social safety nets in countries such as Norway, Sweden, and, yes, Denmark. But it’s not as if these places are antagonistic toward capitalism and business—by some measures, they’re about as entrepreneurial and innovative as the United States (at least if you adjust for the size of their economies). Saying we shouldn’t emulate Denmark because we want to preserve America’s spirit of industriousness, as Clinton suggests, is a bit strange.

I clicked the “by some measures” link, which is to an October 2012 article by Weissmann in The Atlantic titled “Think We’re the Most Entrepreneurial Country In the World? Not So Fast.”  It’s subtitled “We’re the venture-capital capital of the world, but start-ups and young small businesses play a smaller role in America’s economy than in many other rich nations.”  A key paragraph says:

Some of the most cutting-edge young companies in the world call Silicon Valley, New York, Boston, and Austin, Texas home, partly because we have the financial backers to support them. According to the OECD, the U.S. ranks second overall in venture capital invested as a percentage of GDP, which wedges us between Israel at No. 1 and Sweden at No. 3. In sheer dollars, we dwarf everyone. That said, it’s not clear all that money floating around makes our start-ups much more creative. The OECD ranks us ninth out of 22 for the number of start-ups younger than five years old that issue patents, adjusted for the size of our economy (Denmark leads on that measure).

Weissmann’s right that Sanders isn’t really that much of a socialist.  And if that statement by Clinton is an indication—and I think it is—Clinton isn’t really that much of a progressive.  Or even that much of a Democrat.

Sanders now has the funds to start running internet and even television.  I suggest to his campaign, should anyone from it happen upon this post, that the first ad they run shows a clip of Clinton saying what I quoted her above as saying, and juxtaposing it with the statistics that Weissmann cites in that Atlantic article, and a few statistics about Denmark’s standard of living.

If Clinton believes that venture capital for innovative startups, and bank loans for ordinary small businesses, will dry up if we have universal healthcare, free college, subsidized day care, and guaranteed family and medical leave, then she should maybe actually look into it a bit.  Maybe she should even visit Denmark, which apparently on her trip there in which she came to love it didn’t notice that most of its residents weren’t living in poverty and didn’t realize that most of its businesses, large, small, and midsized, weren’t owned by the government. While she’s in the neighborhood, she also could visit Sweden and Norway.  And if she can spare the time, even Germany.

But if she can’t fit a trip overseas into her schedule, well, Canada is just north of her home state of New York.  She could even do a day trip there.

****

I mean it, Sanders campaign.  Run ads of the sort I’ve suggested.  Soon.

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People who are published in newspapers who don’t make proper use of published data


“Pundits are regularly outpredicted by people you’ve never heard of. Here’s how to change that.”
is a very interesting article at the monkey cage by Sam Winter-Levy and Jacob Trefethen.
(h/t @MarkThoma)

They note a study of people you’ve never heard of vs intelligence analysts (not pundits) and write

accountability. While many pundits may not see themselves as being in the business of making forecasts, implicit predictions underpin much of what they write. It seems strange then that we know more about the accuracy of the predictions of Bill Flack, a superforecaster and retired irrigation specialist from Nebraska, than we do about the predictions of Paul Krugman or Bret Stephens.

I don’t know who Bret Stephens is, but note that Winter-Levy and Jacob Trefethen decided to type “Paul Krugman” without mentioning any forecast made by Paul Krugman. They don’t discuss evaluation of the accuracy of Paul Krugman’s forecasts. I assert with great confidencethat they didn’t google Paul Krugman forecast accuracy. I am also sure that they didn’t google Paul Krubman forecast accuracy (as I did — I don’t type so good)

My comment

It may be true that we know more about the accuracy of Bill Flack’s forecasts than of Krugman’s but Krugman’s ability to forecast has been graded. The sample was small, forecasts made on TV, but Krugman didn’t make any incorrect forecasts.

This is publicly available information. google Krugman forecast accuracy and find
https://www.hamilton.edu/documents/Analysis-of-Forcast-Accuracy-in-the-Political-Media.pdf
or if you don’t want to bother with a pdf the second hit
http://www.poynter.org/news/mediawire/130485/claim-krugman-is-top-prognosticator-cal-thomas-is-the-worst/

I think that you really must note this scrap of data in an article about evaluating forecast accuracy in which you chose to name Krugman. Are you aware of the study ? If so, why didn’t you mention it. If not what does that tell us about your ability to handle publicly available data ?

I think your article shows us something about the ability to deal with publicly available data of people who are published in newspapers (including yourselves) and people no one has heard of (including me).

I mean really, would it have been too hard to google ?

Interestingly, this isn’t yesterday’s only post at The Monkey Cage which includes the words Paul and Krugman. Nor is it one which suggests the most ignorance.

I think the staff of The Monkey Cage (including the editor equivalent if there is one) have to have a talk about the proper use of the word “Krugman” which includes two principles

1) watch out for Brad DeLong and his friends (or in other words Krugman’s acolytes and his acolytes’ acolytes)
&
2) Paul Krugman is right surprisingly often.

I am not joking at all.

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Volkswagen Followup, DMCA, and Two Cassandras

“’Intelligent public policy, as we all have learned since the early 20th century, is to require elevators to be inspectable, and to require manufacturers of elevators to build them so they can be inspected,’” said Dr. Eben Moglen of the Columbia University School of Law.

Yves at Naked Capitalism provided this NYT article in her Links and it is a good read detailing what is wrong with today’s policy. Big business has again exhibited its irrational exuberance with a “trust me” approach to secrecy while it rakes in $billions. The deliberate failure of Volkswagen to follow the nation’s, and for that matter the world’s, rule of law is another stunning example of business placing itself above the law. While “poisoning your customers may well land you in jail,”; we have yet to see the government take a hard stance with those such as Volkswagen and TBTF’s deliberate and planned fraud neither of which were mistakes. To some degree, GM’s ignition switch was deliberate malfeasance as management also failed to take action on a safety issue. The time for fines is long past as these business giants pay their fines and then go on to commit another crime in the name of “it’s just business.”

“Proprietary software is an unsafe building material,” Dr. Eben Moglen had said five years ago before this discovery of fraud. “You can’t inspect it.” The same as relying upon TBTF/investment firms and the peanut butter manufacturer to do their own policing, the EPA relied upon Volkswagen to do its own testing of its product. In each case, the market failed to police itself.

Again Dr Mogen; “’If Volkswagen knew that every customer who buys a vehicle would have a right to read the source code of all the software in the vehicle, they would never even consider the cheat, because the certainty of getting caught would terrify them.’” Except Congress by passing the DMCA and the agencies in place to monitor the activities of business have blocked the efforts of independent researchers and simple consumers.

Instead of years going by since the 1998 Digital Millennium Copyright Act was signed into law by President Clinton, independent researchers and even consumers could have uncovered the Volkswagen emissions cheat much sooner if they were allowed to “understand how the device or software works and whether it is trustworthy.” However, the law specifically states independent researchers must obtain the permission of the automaker or manufacturer before they can research the device and in this case they were blocked from doing so. Alarmingly, the EPA and government supports such a stance by the industry even with instances involving safety and security. The Toyota acceleration and the hacking into vehicles and stopping them come to mind. Volkswagen was aided by the EPA in its emission fraud.

Kit Walsh of the Electronics Frontier Foundation writes “the EPA wrote to the Copyright Office to oppose the exemptions we’re (EFF) seeking. In doing this, the EPA is asking the Copyright Office to leave copyright law in place as a barrier to a wide range of activities that are perfectly legal under environmental regulations: ecomodding that actually improves emissions and fuel economy, modification of vehicles for off-road racing, or activities that have nothing to do with pollution.” The EPA’s response was to the Librarian of Congress in an effort to block the Electronics Frontier Foundation efforts to conduct independent research.

Kit adds “we’ve now learned that, according to the Environmental Protection Agency, Volkswagen had already programmed an entire fleet of vehicles to conceal how much pollution they generated, resulting in a real, quantifiable impact on the environment and human health.” This is no longer an ~500,000 vehicles involved in the earlier recall, it has growth 20 fold to be millions of vehicles polluting.

References:

“Researchers Could Have Uncovered Volkswagen’s Emissions Cheat If Not Hindered by the DMCA” Kit Walsh, Electronics Frontier Foundation; Sepember 21, 2015

Volkswagen’s Diesel Fraud Makes Critic of Secret Code a Prophet, Jim Dwyer, NYT

Naked Capitalism Links, Yves Smith, September 27, 2015

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