Ya pays yer money, an' ya takes yer choice.
It's still not time to start a party, but the economic doctors are reporting improving symptoms.
Total output in the U.S. increased by 4.2 percent in the second quarter, the government Bureau of Economic Analysis reported. That's a solid increase from the 2.1 percent growth rate of GDP in the first three months of this year. Meanwhile, the Congressional Budget Office estimated that growth will "expand more rapidly" for the rest of the year, after being held back by bad weather and some other factors earlier. And for next year, the CBO anticipates a growth rate of 3.4 percent during 2015.
There's also a report that the government's spending deficit is still narrowing. That will satisfy some critics, but others insist that spending cuts are holding back recovery.
And for its part, the Federal Reserve Board, which plays a major role in pumping some life into the economy, remains cautious, suggesting that they haven't yet seen strong enough evidence to pull back too sharply yet.
So economic recovery seems to be taking hold, and we can expect the Administration to take the credit for it as midterm elections approach. There is, of the course, the question of who deserves blame or credit for downturn and recovery. When things look good, incumbents claim credit. If not, they blame predecessors.
As for a global picture, the International Monetary Fund is even more cautious than the Fed, noting that some European nations are still mired in deep economic mud, while others are struggling.
Who's right? Everybody and nobody. Consider your own political leanings, and then take your pick.
Thursday, August 28, 2014
Tuesday, August 26, 2014
Austerity
"No man is an island, entire of itself." -- John Donne
The problem with austerity as a national policy is that it doesn't work.
"A dangerous idea." -- Mark Blyth, Brown University.
"A country is not a company." -- Paul Krugman, Princeton University
The news that the government in France has toppled as its austere economic policies failed to revive the economy comes as no surprise. Austere budgeting may help a household muddle through hard times, and a firm may need to trim expenses briefly to help it survive. One family, however, cannot affect the larger economy of a city or a metropolitan region, and a major firm cannot radically damage the entire country with austere reductions.
The effects, however, can ripple through larger segments. When a large company trims its budget by reducing its workforce, those unemployed workers have less to spend on food, clothing, shelter and luxury goods. In turn, this reduces the income of grocers, tailors, builders and jewelers. Food sales drop, rental income falls, gasoline sales and auto repairs are delayed as vacation trips are canceled, and all these vendors suffer as the economy of a neighborhood, a city or a region declines.
Austerity may work for an individual or a family for a short time, but a nation -- the largest of economic entities -- will only drown in a self-perpetuating recessionary whirlpool.
Nevertheless, some politicians and their economy wonks continue to preach the glories of austerity as a national savior, even as history has documented that only the 1 percent benefit, since their daily bread does not depend on having a job.
One family can adopt austerity until its finances improve. One company can adopt sharp cutbacks until sales resume, and the economic damage will be limited to those workers who are laid off.
On a larger scale, when one company dominates a regional economy, the economic damage can be widespread. When a government does it, the entire nation suffers directly, and the malaise can quickly spread to other nations.
And, as reported, the collapse of the government in France threatens to drag the eurozone countries into a new recession.
The lesson is not new. An economy survives on trade, purchases, sales and money flow. When the money stops flowing, the economy stops. And if families and businesses cannot or will not spend, the government must, until those disabled by recession recover.
Or as the economy minister in France, Arnaud Monte Bourg, said to the newspaper Le Monde, "The priority must be exiting the crisis, and the dogmatic reduction of deficits should come after."
The problem with austerity as a national policy is that it doesn't work.
"A dangerous idea." -- Mark Blyth, Brown University.
"A country is not a company." -- Paul Krugman, Princeton University
The news that the government in France has toppled as its austere economic policies failed to revive the economy comes as no surprise. Austere budgeting may help a household muddle through hard times, and a firm may need to trim expenses briefly to help it survive. One family, however, cannot affect the larger economy of a city or a metropolitan region, and a major firm cannot radically damage the entire country with austere reductions.
The effects, however, can ripple through larger segments. When a large company trims its budget by reducing its workforce, those unemployed workers have less to spend on food, clothing, shelter and luxury goods. In turn, this reduces the income of grocers, tailors, builders and jewelers. Food sales drop, rental income falls, gasoline sales and auto repairs are delayed as vacation trips are canceled, and all these vendors suffer as the economy of a neighborhood, a city or a region declines.
Austerity may work for an individual or a family for a short time, but a nation -- the largest of economic entities -- will only drown in a self-perpetuating recessionary whirlpool.
Nevertheless, some politicians and their economy wonks continue to preach the glories of austerity as a national savior, even as history has documented that only the 1 percent benefit, since their daily bread does not depend on having a job.
One family can adopt austerity until its finances improve. One company can adopt sharp cutbacks until sales resume, and the economic damage will be limited to those workers who are laid off.
On a larger scale, when one company dominates a regional economy, the economic damage can be widespread. When a government does it, the entire nation suffers directly, and the malaise can quickly spread to other nations.
And, as reported, the collapse of the government in France threatens to drag the eurozone countries into a new recession.
The lesson is not new. An economy survives on trade, purchases, sales and money flow. When the money stops flowing, the economy stops. And if families and businesses cannot or will not spend, the government must, until those disabled by recession recover.
Or as the economy minister in France, Arnaud Monte Bourg, said to the newspaper Le Monde, "The priority must be exiting the crisis, and the dogmatic reduction of deficits should come after."
Monday, August 25, 2014
Collective Confusion
When in doubt, leave it out.
If you have to ask, the answer is no.
Question: Which is correct for a collective noun, a singular or a plural verb?
Answer: Rewrite the sentence.
Many an hour has been wasted in pointless debate over superfine points of grammar, especially between those who insist that collective nouns always take a singular verb, a result of what they maintain is an absolute and irrevocable rule that was drummed into them in an American elementary school.
Never mind that the Brits, who developed the language, use either singular or plural verbs depending on the sense of the sentence, and whether members of the group are acting together as a team, or individually as a motley bunch.
Consider: /A/ The crew is ready to set sail or /B/ (Members of) the crew are going ashore, and each is likely to get drunk. However, in British usage, especially in sports reports, the team gets a plural verb, as in Manchester United are going to win the championship.
You want logic in language and grammar? Fuhgeddabowdit!
As mothers have often said, if you have to ask, the answer is no.
So the debate continues, as editors and writers argue over which is "correct," and readers stop in mid-sentence and try to puzzle out which is "better," until no one is able to finish reading the relevant passage.
Point to remember: You write to convey information or a message. When readers are distracted by wondering or debating which usage is grammatically "correct," your message is lost in the confusion.
The goal of writing is clarity, not confusion. If the reader is distracted because the verb choice "doesn't sound right" -- even though the elementary school grammarian insists it is -- you the writer have failed to reach your communication goal. Your message is buried.
Or consider this, from an earlier ER posting: A first draft said, "The most important weapon the news media have ... " Or should it be "news media has"? Solution: Rephrase to "news reporters have..."
If you have to ask, the answer is no.
Question: Which is correct for a collective noun, a singular or a plural verb?
Answer: Rewrite the sentence.
Many an hour has been wasted in pointless debate over superfine points of grammar, especially between those who insist that collective nouns always take a singular verb, a result of what they maintain is an absolute and irrevocable rule that was drummed into them in an American elementary school.
Never mind that the Brits, who developed the language, use either singular or plural verbs depending on the sense of the sentence, and whether members of the group are acting together as a team, or individually as a motley bunch.
Consider: /A/ The crew is ready to set sail or /B/ (Members of) the crew are going ashore, and each is likely to get drunk. However, in British usage, especially in sports reports, the team gets a plural verb, as in Manchester United are going to win the championship.
You want logic in language and grammar? Fuhgeddabowdit!
As mothers have often said, if you have to ask, the answer is no.
So the debate continues, as editors and writers argue over which is "correct," and readers stop in mid-sentence and try to puzzle out which is "better," until no one is able to finish reading the relevant passage.
Point to remember: You write to convey information or a message. When readers are distracted by wondering or debating which usage is grammatically "correct," your message is lost in the confusion.
The goal of writing is clarity, not confusion. If the reader is distracted because the verb choice "doesn't sound right" -- even though the elementary school grammarian insists it is -- you the writer have failed to reach your communication goal. Your message is buried.
Or consider this, from an earlier ER posting: A first draft said, "The most important weapon the news media have ... " Or should it be "news media has"? Solution: Rephrase to "news reporters have..."
The Embarrassment of Truth
"Nobody every went broke underestimating the intelligence of the American public." -- H.L. Mencken
Protect me from your True Believers. -- A cynic's prayer.
Insults and mockery do not substitute for intelligence and competence.
The most powerful weapon news reporters have is embarrassment, and truth has a way of embarrassing politicians. Some, however, are beyond embarrassment, and count on their beguiling looks and personality -- often so successful in the past -- to get them through sticky situations and pesky news reports that persist in exposing wrongdoing.
Their defense, then, is a strategy of denial and blaming the media, despite overwhelming evidence of their guilt.
Independent news media are essential to the successful functioning of a democratic society, and reporters fail in their moral obligation when they ignore or neglect to expose problems that should be dealt with.
However, just as there are incompetent politicians and greedy business executives, there are also incompetent reporters and greedy publishers.
Protect me from your True Believers. -- A cynic's prayer.
Insults and mockery do not substitute for intelligence and competence.
The most powerful weapon news reporters have is embarrassment, and truth has a way of embarrassing politicians. Some, however, are beyond embarrassment, and count on their beguiling looks and personality -- often so successful in the past -- to get them through sticky situations and pesky news reports that persist in exposing wrongdoing.
Their defense, then, is a strategy of denial and blaming the media, despite overwhelming evidence of their guilt.
Independent news media are essential to the successful functioning of a democratic society, and reporters fail in their moral obligation when they ignore or neglect to expose problems that should be dealt with.
However, just as there are incompetent politicians and greedy business executives, there are also incompetent reporters and greedy publishers.
Friday, August 22, 2014
Nitpicker's Delight
Picayune, any yune at all.
A prime characteristic of good writers -- and editors -- is that they are good nitpickers. That is, they pay attention to details of fact as well as of spelling, grammar and punctuation. They know, for example, the origin of the word "nitpicker." And they know there's a difference between "crash" and "collision," unlike whoever wrote a press release for a Pennsylvania politician. The announcement dealt with construction of a highway median to prevent "head-on crashes." Note: A collision requires two moving vehicles. A single vehicle can only crash.
A movie promo had the announcer speaking of "femme fatales," meaning there would be more than one. More than one what? More than one "fatale" or more than one "femme"? The secret is to pluralize the noun, in this case the French word "femme," meaning "woman." Whether the descriptive word (adjective) should also be pluralized is an issue for fluent speakers of French to decide. In English, only the noun is pluralized.
In that vein, consider the term "attorney general." Normally, the adjective comes before the noun. This, however, is an exception, refers to an attorney who is in charge. To say "attorney generals" suggests a bunch of military lawyers, and to say "general attorney" implies a non-specialist lawyer. The correct plural is "attorneys general."
Here's an easy way to decide whether to use "who" or "whom." Without getting into the instructions from your elementary school grammarian, who spoke of subjects and objects, just consider the letter "m." If you can substitute the word "him" for "whom," you have the answer. Example: Who did it? Who did it to whom? He did it to him.
By the way, a nit is not just any very small thingy. A nit, specifically, is the egg of a louse. And that is, indeed, very small.
A prime characteristic of good writers -- and editors -- is that they are good nitpickers. That is, they pay attention to details of fact as well as of spelling, grammar and punctuation. They know, for example, the origin of the word "nitpicker." And they know there's a difference between "crash" and "collision," unlike whoever wrote a press release for a Pennsylvania politician. The announcement dealt with construction of a highway median to prevent "head-on crashes." Note: A collision requires two moving vehicles. A single vehicle can only crash.
A movie promo had the announcer speaking of "femme fatales," meaning there would be more than one. More than one what? More than one "fatale" or more than one "femme"? The secret is to pluralize the noun, in this case the French word "femme," meaning "woman." Whether the descriptive word (adjective) should also be pluralized is an issue for fluent speakers of French to decide. In English, only the noun is pluralized.
In that vein, consider the term "attorney general." Normally, the adjective comes before the noun. This, however, is an exception, refers to an attorney who is in charge. To say "attorney generals" suggests a bunch of military lawyers, and to say "general attorney" implies a non-specialist lawyer. The correct plural is "attorneys general."
Here's an easy way to decide whether to use "who" or "whom." Without getting into the instructions from your elementary school grammarian, who spoke of subjects and objects, just consider the letter "m." If you can substitute the word "him" for "whom," you have the answer. Example: Who did it? Who did it to whom? He did it to him.
By the way, a nit is not just any very small thingy. A nit, specifically, is the egg of a louse. And that is, indeed, very small.
Thursday, August 21, 2014
Anglophone Disconnect
It's one thing to show snobbery, but you make it worse by showing ignorance.
"The French don't care what you do, actually, so long as you pronounce it properly." -- Prof. Henry Higgins, in "My Fair Lady."
If you must use French (or Spanish or any other language), use it correctly.
Every language is capable of expressing subtleties in the most complex of issues. Some elitist folks seem to believe that to prove their intellectual capabilities, they must use words and phrases from another language. In English-speaking countries, that often means borrowing from the French language.
The problem is that when they do so, they run the risk of being branded a show-off, a snob, or worse, of not being understood if the listener is not familiar with French.
Sprinkling your prose with words and phrases from another language only works when the reader understands. When you use them wrongly and your readers and listeners know the right way, you're the one who appears foolish.
The goal of conversation or writing is to communicate ideas and information. If the listener or reader does not understand what you say or write, the fault is yours, not theirs.
"The French don't care what you do, actually, so long as you pronounce it properly." -- Prof. Henry Higgins, in "My Fair Lady."
If you must use French (or Spanish or any other language), use it correctly.
Every language is capable of expressing subtleties in the most complex of issues. Some elitist folks seem to believe that to prove their intellectual capabilities, they must use words and phrases from another language. In English-speaking countries, that often means borrowing from the French language.
The problem is that when they do so, they run the risk of being branded a show-off, a snob, or worse, of not being understood if the listener is not familiar with French.
Sprinkling your prose with words and phrases from another language only works when the reader understands. When you use them wrongly and your readers and listeners know the right way, you're the one who appears foolish.
The goal of conversation or writing is to communicate ideas and information. If the listener or reader does not understand what you say or write, the fault is yours, not theirs.
The Money Gap
"Money tends to reproduce itself." -- Thomas Piketty (2014).
"The rich get rich and the poor get children." -- "Ain't We Got Fun?" by Richard A. Whiting / Gus Kahn / Ray Egan (1921).
The wealth gap is widening in America. The latest figures from the U.S. Census support the theme detailed by economist Thomas Piketty that the rich are getting richer at the expense of those at the low end of the income range.
For example, those in the wealthiest group enjoyed a net worth more than 300 times greater than some groups in a lower echelon.
The government survey divided the wealth range of Americans into five groups (quintiles), and it showed that those in the bottom range suffered a net loss of wealth, while those in the richest group posted a 10.8 percent gain in the decade from 2000 to 2011.
Specifically, median net worth for the wealthiest 40 percent rose, while it dropped for the bottom 60 percent, according to a Census report released today (Thursday). Here are the numbers: For households in bottom group, net worth decreased by $5,124, and increased by $61,379 for those in the top group.
Moreover, median net worth of households in the highest quintile was almost 80 times higher than those in the second lowest group, up from 40 times greater a decade ago.
In addition, the wealth gap widened regardless of demographic characteristics such as age, race and origin, as well as educational level, the report said. For example, the median net worth for non-Hispanic whites in the highest quintile was 21.8 times than for those in second-lowest quintile in 2000, but by 2011, this ratio jumped to 31.5 times higher. And for blacks, this ratio leaped from 140 times higher to 328 times higher.
More details and the full report on the widening wealth gap are available at the Census Bureau's web site, www.census.gov.
"The rich get rich and the poor get children." -- "Ain't We Got Fun?" by Richard A. Whiting / Gus Kahn / Ray Egan (1921).
The wealth gap is widening in America. The latest figures from the U.S. Census support the theme detailed by economist Thomas Piketty that the rich are getting richer at the expense of those at the low end of the income range.
For example, those in the wealthiest group enjoyed a net worth more than 300 times greater than some groups in a lower echelon.
The government survey divided the wealth range of Americans into five groups (quintiles), and it showed that those in the bottom range suffered a net loss of wealth, while those in the richest group posted a 10.8 percent gain in the decade from 2000 to 2011.
Specifically, median net worth for the wealthiest 40 percent rose, while it dropped for the bottom 60 percent, according to a Census report released today (Thursday). Here are the numbers: For households in bottom group, net worth decreased by $5,124, and increased by $61,379 for those in the top group.
Moreover, median net worth of households in the highest quintile was almost 80 times higher than those in the second lowest group, up from 40 times greater a decade ago.
In addition, the wealth gap widened regardless of demographic characteristics such as age, race and origin, as well as educational level, the report said. For example, the median net worth for non-Hispanic whites in the highest quintile was 21.8 times than for those in second-lowest quintile in 2000, but by 2011, this ratio jumped to 31.5 times higher. And for blacks, this ratio leaped from 140 times higher to 328 times higher.
More details and the full report on the widening wealth gap are available at the Census Bureau's web site, www.census.gov.
All News is Local
When you lose your job, it's a recession.
When I lose mine, it's a depression.
We hear reports on economic performance every day, and usually they are a summary of a survey of a sample. This method is useful for spotting trends, but not always valuable for smaller regions, firms or individuals, or even for the overall performance, just as a snapshot of a dancer doesn't prove the excellence of the entire ballet.
So while national statistics are interesting, when your job is not affected, the report borders on the abstract. It may be distressing that the national economy grew slowly after falling in the previous three-month period, but for those whose job is secure, many couldn't care less.
With all that in mind, here's a new report from the government's Bureau of Economic Statistics showing each state's performance as 2013 ended. It's the first time the BEA has reported state-level data. Previously, the government released national statistics, and then regional reports on GDP growth.
Of the 50 states, only one -- Mississippi -- posted a decline in its economy in the fourth quarter of 2013. Minnesota showed no change. Pennsylvania showed a robust 3.4 percent, while neighboring New Jersey and Delaware posted growth of 2.6 percent and 2.2 percent, respectively. Maryland's economy grew by 2.3 percent, and the New York State economy posted an increase in production of 1.3 percent.
There's always a delay in reporting regional data, while the government number-crunchers gather more statistics, and early reports are regularly revised. There can also be a wide fluctuation, so first-glance numbers should be held at a distance and kept there until others come in, and show a pattern.
Even so, taken as a whole, there seems to be progress. The national GDP decreased by 2.1 percent in the first quarter of this year, but rebounded to a growth rate of 4 percent in the second three months. And if earlier state-level data show a believable trend, our jobs may be safe.
When I lose mine, it's a depression.
We hear reports on economic performance every day, and usually they are a summary of a survey of a sample. This method is useful for spotting trends, but not always valuable for smaller regions, firms or individuals, or even for the overall performance, just as a snapshot of a dancer doesn't prove the excellence of the entire ballet.
So while national statistics are interesting, when your job is not affected, the report borders on the abstract. It may be distressing that the national economy grew slowly after falling in the previous three-month period, but for those whose job is secure, many couldn't care less.
With all that in mind, here's a new report from the government's Bureau of Economic Statistics showing each state's performance as 2013 ended. It's the first time the BEA has reported state-level data. Previously, the government released national statistics, and then regional reports on GDP growth.
Of the 50 states, only one -- Mississippi -- posted a decline in its economy in the fourth quarter of 2013. Minnesota showed no change. Pennsylvania showed a robust 3.4 percent, while neighboring New Jersey and Delaware posted growth of 2.6 percent and 2.2 percent, respectively. Maryland's economy grew by 2.3 percent, and the New York State economy posted an increase in production of 1.3 percent.
There's always a delay in reporting regional data, while the government number-crunchers gather more statistics, and early reports are regularly revised. There can also be a wide fluctuation, so first-glance numbers should be held at a distance and kept there until others come in, and show a pattern.
Even so, taken as a whole, there seems to be progress. The national GDP decreased by 2.1 percent in the first quarter of this year, but rebounded to a growth rate of 4 percent in the second three months. And if earlier state-level data show a believable trend, our jobs may be safe.
Monday, August 18, 2014
Cliche Corner
Good writing should be an enjoyment for the reader, not work.
"To be sure" is a useful phrase to emphasize a point a writer is about to make. But when used to excess, it loses any meaning it might have, and becomes distracting. But this is true of any phrase. It's useful in moderation, but quickly becomes a meaningless filler, adding nothing to a writer's message. This point was driven home in a recent reading of a best-selling book. When the phrase "to be sure" appeared on every other page, and sometimes twice on a single page, in chapter after chapter, it became jarring.
Moral: If it adds little or nothing to what you're trying to convey, don't use it. Repetition for emphasis is one thing, but repetition that jars and distracts readers, leaving them to puzzle out why you're using a single phrase so often only antagonizes readers and destroys their attention.
"To be sure" is a useful phrase to emphasize a point a writer is about to make. But when used to excess, it loses any meaning it might have, and becomes distracting. But this is true of any phrase. It's useful in moderation, but quickly becomes a meaningless filler, adding nothing to a writer's message. This point was driven home in a recent reading of a best-selling book. When the phrase "to be sure" appeared on every other page, and sometimes twice on a single page, in chapter after chapter, it became jarring.
Moral: If it adds little or nothing to what you're trying to convey, don't use it. Repetition for emphasis is one thing, but repetition that jars and distracts readers, leaving them to puzzle out why you're using a single phrase so often only antagonizes readers and destroys their attention.
Wednesday, August 13, 2014
Trial Balloon or Windbag?
"Ah, brave new world, that hath such people in't." -- Shakespeare.
"The fundamental things apply, as time goes by." -- Herman Hupfeld (1931).
"Round up the usual suspects." -- Captain Renault (Claude Rains) in "Casablanca," 1942.
"The road ahead (is) unclear." -- Stanley Fischer.
"The global recovery has been disappointing" since the Great Recession ended five years ago. So said Stanley Fischer, vice chairman of the U.S. Federal Reserve Board of Governors, in a speech in Sweden this week.
No surprise there, so the bigger issue facing economists, government regulators and policy makers, then, is what to do about it, since the usual suspects have not worked as well as hoped. In short, fiscal policy will be more important than ever as economic and demographic forces affect the world economy in new ways.
In effect, Fischer's speech was a trial balloon to gauge reaction and potential responses to modified strategies by major central banks. In economic recovery efforts, the same fundamental strategies should be used, even as they are modified to fit changing conditions. That's the problem today.
In Fischer's view, "the depth and breadth" of the worldwide downturn "changed the economic environment in many ways." Moreover, three factors are stalling a more vigorous recovery in the U.S., he said: a weak housing sector, inadequate fiscal policy, and anemic foreign demand due to a growth slowdown, especially in Europe.
And the slowdown may be more than cyclical, Fischer said, but structural as well. To prevent more permanent declines, Fischer noted, policy makers must pay more attention to macroeconomic features. Among these, three stand out: Increased rate of productivity per worker, expanding the frontiers of knowledge, and human ingenuity.
The Fed for months has been critical of inadequate fiscal measures by the federal government to boost the economy, even as hardline conservatives continue to protest government stimulus programs. In his speech in Stockholm, Fischer said his opinion was that the Fed should continue its "flexible" monetary policy to encourage employment and maintain price stability. Moreover, policymakers need to strengthen financial sector regulation and supervision to reduce the possibility of another crisis."
The full text of Fischer's speech is available on the Fed's web site, at http://www.federalreserve.gov/newsevents/speech/fischer20140811a.htm
"The fundamental things apply, as time goes by." -- Herman Hupfeld (1931).
"Round up the usual suspects." -- Captain Renault (Claude Rains) in "Casablanca," 1942.
"The road ahead (is) unclear." -- Stanley Fischer.
"The global recovery has been disappointing" since the Great Recession ended five years ago. So said Stanley Fischer, vice chairman of the U.S. Federal Reserve Board of Governors, in a speech in Sweden this week.
No surprise there, so the bigger issue facing economists, government regulators and policy makers, then, is what to do about it, since the usual suspects have not worked as well as hoped. In short, fiscal policy will be more important than ever as economic and demographic forces affect the world economy in new ways.
In effect, Fischer's speech was a trial balloon to gauge reaction and potential responses to modified strategies by major central banks. In economic recovery efforts, the same fundamental strategies should be used, even as they are modified to fit changing conditions. That's the problem today.
In Fischer's view, "the depth and breadth" of the worldwide downturn "changed the economic environment in many ways." Moreover, three factors are stalling a more vigorous recovery in the U.S., he said: a weak housing sector, inadequate fiscal policy, and anemic foreign demand due to a growth slowdown, especially in Europe.
And the slowdown may be more than cyclical, Fischer said, but structural as well. To prevent more permanent declines, Fischer noted, policy makers must pay more attention to macroeconomic features. Among these, three stand out: Increased rate of productivity per worker, expanding the frontiers of knowledge, and human ingenuity.
The Fed for months has been critical of inadequate fiscal measures by the federal government to boost the economy, even as hardline conservatives continue to protest government stimulus programs. In his speech in Stockholm, Fischer said his opinion was that the Fed should continue its "flexible" monetary policy to encourage employment and maintain price stability. Moreover, policymakers need to strengthen financial sector regulation and supervision to reduce the possibility of another crisis."
The full text of Fischer's speech is available on the Fed's web site, at http://www.federalreserve.gov/newsevents/speech/fischer20140811a.htm
Thought Police
"T'ain't so, McGee." -- Molly McGee.
Research popped up recently claiming that people stop reading certain books after a given number of pages. Specifically, the study by Pew Research, citing the number of highlighted passages in the Kindle version of Thomas Piketty's book, "Capital in the 21st Century," pointed out that highlighting stopped around page 26 of the book. Therefore, the experts concluded, people stopped reading the book.
There's no doubt that Piketty's best-seller is a difficult read, and takes determination to slog through the early pages. But to link highlighting to readership is a leap, and may not be justified. While the Kindle data stored in Amazon's computers clearly show that highlighting slows and stops on average around page 26 of the Piketty book, it does not follow that Kindlers have stopped reading. An equally valid conclusion is that they have stopped highlighting.
Those who buy used college textbooks have for decades seen passages underlined, marked, highlighted or otherwise tampered with a book that prior students do not intend to keep, and buyers have seen the amount of marking slow and stop part way through the book, this is not proof that the students don't read the entire book. Again, it only means they have stopped highlighting and marking. And that can mean they are beginning to understand the author's message and no longer feel the need to mark up the text.
And, of course, there are many folks who never mark, highlight, underline or otherwise violate their books at all. According to the research experts, this is evidence that these folks do not read.
Among these folks, a book is a sacred trust, and they resent the idea that others feel at liberty to tamper with the appearance of a book they know they will sell or otherwise pass on to others.
As for Amazon's practice of keeping track of the highlighted passages of Kindle ebooks, and showing these highlighted passages to all future users, how dare you presume to carry forward the markings of others, who may or may not have marked important passages? What's important to one may be drivel to another. Moreover, it may be evidence of the density of some readers to be unable to understand what the author is attempting to communicate.
In effect, highlighters are saying, READ THIS PART. I THINK IT'S IMPORTANT!!! (Who cares what you think?) Future readers may not agree, and resent the markings of ignoramuses who are so dense that they must highlight nearly every paragraph in the book.
So while it may be helpful to some to underline or highlight key words or phrases as a study aid, marking entire paragraphs or pages is counterproductive, especially since many textbooks already make use of contrasting colors to draw reader attention to important ponts.
If you plan to keep a book, it is your right to do whatever marking you like. But to pass on your notations to others is dishonorable to the book itself.
In addition, there is the practice of ebook vendors of keeping track of who marked which passage of which book. This yields information to corporate vendors, who can use it to further target their marketing of other things to readers.
But a bigger question is what happens when this data is provided to government Thought Police.
Research popped up recently claiming that people stop reading certain books after a given number of pages. Specifically, the study by Pew Research, citing the number of highlighted passages in the Kindle version of Thomas Piketty's book, "Capital in the 21st Century," pointed out that highlighting stopped around page 26 of the book. Therefore, the experts concluded, people stopped reading the book.
There's no doubt that Piketty's best-seller is a difficult read, and takes determination to slog through the early pages. But to link highlighting to readership is a leap, and may not be justified. While the Kindle data stored in Amazon's computers clearly show that highlighting slows and stops on average around page 26 of the Piketty book, it does not follow that Kindlers have stopped reading. An equally valid conclusion is that they have stopped highlighting.
Those who buy used college textbooks have for decades seen passages underlined, marked, highlighted or otherwise tampered with a book that prior students do not intend to keep, and buyers have seen the amount of marking slow and stop part way through the book, this is not proof that the students don't read the entire book. Again, it only means they have stopped highlighting and marking. And that can mean they are beginning to understand the author's message and no longer feel the need to mark up the text.
And, of course, there are many folks who never mark, highlight, underline or otherwise violate their books at all. According to the research experts, this is evidence that these folks do not read.
Among these folks, a book is a sacred trust, and they resent the idea that others feel at liberty to tamper with the appearance of a book they know they will sell or otherwise pass on to others.
As for Amazon's practice of keeping track of the highlighted passages of Kindle ebooks, and showing these highlighted passages to all future users, how dare you presume to carry forward the markings of others, who may or may not have marked important passages? What's important to one may be drivel to another. Moreover, it may be evidence of the density of some readers to be unable to understand what the author is attempting to communicate.
In effect, highlighters are saying, READ THIS PART. I THINK IT'S IMPORTANT!!! (Who cares what you think?) Future readers may not agree, and resent the markings of ignoramuses who are so dense that they must highlight nearly every paragraph in the book.
So while it may be helpful to some to underline or highlight key words or phrases as a study aid, marking entire paragraphs or pages is counterproductive, especially since many textbooks already make use of contrasting colors to draw reader attention to important ponts.
If you plan to keep a book, it is your right to do whatever marking you like. But to pass on your notations to others is dishonorable to the book itself.
In addition, there is the practice of ebook vendors of keeping track of who marked which passage of which book. This yields information to corporate vendors, who can use it to further target their marketing of other things to readers.
But a bigger question is what happens when this data is provided to government Thought Police.
Monday, August 11, 2014
Cherry Picking Data
Decide what you want to prove, then choose the evidence to support that position.
It's a common practice, well known to prosecutors and defense attorneys. It's not limited to them, however. Investigators of all types, as well as proponents and opponents of issues, including advertisers, politicians, academics and journalists, have been guilty of this for generations.
Politicians roam through academia recruiting experts to support their preconceived notions of what they believe is the correct side of an issue. Academics, meanwhile, rummage through the data trough, trying to make sense of the information mish-mash bubbling up to the surface. And with some regularity, they pick and choose the bits of information that would most help endorse their views.
And, of course, journalists with an agenda use similar tactics. In an ideal world, journalists would be the last to cherry-pick through the information orchard. Unfortunately, many do, and it's up the readers and TV viewers to know who has an agenda and who's attempting to be objective. (True objectivity is probably not possible in humans, but they can try their best to be neutral.)
So what's the best way to reach a truthful conclusion? Do you gather all the information you can and look for a pattern that establishes a principle, or do you start with a principle that you know (or assume) to be true and than add things that fit the pattern? In short, which do you start with, the principle or the pattern?
In formal logic, the rules of which were set down thousands of years ago in ancient Greece, one is called Deductive Reasoning, where you start with a known principle, also known as a premise, and deduce -- that is, work down -- from that to establish a pattern.
The other method is Inductive Reasoning, where you gather data and look for a pattern that establishes a principle.
Of course, with the first you will encounter examples that don't fit the pattern suggested by the premise. Too often, these are simply ignored. This happens with what's called the Prosecutor's Dilemma. Police find a suspect and then look for evidence to support and prove their suspicions.
A better method may be Inductive, where information about the crime is collected and examined for a pattern that fits only one suspect.
So it is also with economics and politics. Gather the data, and a pattern will show itself. If you do not yet see a pattern, you may not yet have gathered enough data. And when you find something that doesn't fit what you discern as an evolving pattern, be cautious. You may have inadvertently and subconsciously outlined an erroneous pattern.
Or you may be about to discover a totally new pattern. That's how scientific breakthroughs are made.
On the other hand, you may be just collecting a mess of junk.
Pick up a thread and follow it. Along the way, you can pick up other threads and weave them together. Eventually, either you will have a beautiful tapestry, or just a ball of yarn that the cat will ignore.
It's a common practice, well known to prosecutors and defense attorneys. It's not limited to them, however. Investigators of all types, as well as proponents and opponents of issues, including advertisers, politicians, academics and journalists, have been guilty of this for generations.
Politicians roam through academia recruiting experts to support their preconceived notions of what they believe is the correct side of an issue. Academics, meanwhile, rummage through the data trough, trying to make sense of the information mish-mash bubbling up to the surface. And with some regularity, they pick and choose the bits of information that would most help endorse their views.
And, of course, journalists with an agenda use similar tactics. In an ideal world, journalists would be the last to cherry-pick through the information orchard. Unfortunately, many do, and it's up the readers and TV viewers to know who has an agenda and who's attempting to be objective. (True objectivity is probably not possible in humans, but they can try their best to be neutral.)
So what's the best way to reach a truthful conclusion? Do you gather all the information you can and look for a pattern that establishes a principle, or do you start with a principle that you know (or assume) to be true and than add things that fit the pattern? In short, which do you start with, the principle or the pattern?
In formal logic, the rules of which were set down thousands of years ago in ancient Greece, one is called Deductive Reasoning, where you start with a known principle, also known as a premise, and deduce -- that is, work down -- from that to establish a pattern.
The other method is Inductive Reasoning, where you gather data and look for a pattern that establishes a principle.
Of course, with the first you will encounter examples that don't fit the pattern suggested by the premise. Too often, these are simply ignored. This happens with what's called the Prosecutor's Dilemma. Police find a suspect and then look for evidence to support and prove their suspicions.
A better method may be Inductive, where information about the crime is collected and examined for a pattern that fits only one suspect.
So it is also with economics and politics. Gather the data, and a pattern will show itself. If you do not yet see a pattern, you may not yet have gathered enough data. And when you find something that doesn't fit what you discern as an evolving pattern, be cautious. You may have inadvertently and subconsciously outlined an erroneous pattern.
Or you may be about to discover a totally new pattern. That's how scientific breakthroughs are made.
On the other hand, you may be just collecting a mess of junk.
Pick up a thread and follow it. Along the way, you can pick up other threads and weave them together. Eventually, either you will have a beautiful tapestry, or just a ball of yarn that the cat will ignore.
Sunday, August 10, 2014
Inversion Perversion
Points to ponder as bean counters shift their tokens.
There's been so much talk about U.S. firms repositioning their corporate headquarters overseas to take advantage of lower tax rates that fear-mongers may be missing a few points.
To a large extent, this is a paper shuffle, and will not mean a wholesale move of corporate operations out of the country. After all, many U.S. firms are incorporated in Delaware, and conduct most of their business in other states. For some, their only presence in Delaware is a file in a lawyer's office.
In the past, U.S. firms that made money worldwide left the profits where they were gained, because if that cash were to be "repatriated" -- brought back to corporate HQ in America -- it would be taxed at U.S. rates. So the companies that use the "inversion" tool to shift their corporate parentage to another country will still do business in the U.S., but they become -- technically, at least -- a "foreign firm" and are taxed at home-country rates.
Does all this mean manufacturing, sales and marketing divisions will all be uprooted and taken out of America? Not likely, unless the company drops out of the U.S. marketplace. And that would mean abandoning a huge slice of their business.
Consider also these examples: Ford assembles cars in Mexico and Canada for sale in the U.S., and Toyota, a Japanese firm, assembles cars in Tennessee for sale in the American marketplace. And for many years, Japanese firms did not "repatriate" their profits, but instead reinvested them in the U.S.-based facilities.
One quick way to stop the so-called inversion trend would be to lower U.S. corporate tax rates, if in fact inversion is such a terrible danger to American business. In Logic 101, this fear is known as the "slippery slope fallacy," the idea that one thing inevitably leads to a series of other dangerous happenings.
Possible? Yes. Plausible and likely? Not for manufacturing firms, although some pharmaceutical firms already concoct some of their products elsewhere.
There's been so much talk about U.S. firms repositioning their corporate headquarters overseas to take advantage of lower tax rates that fear-mongers may be missing a few points.
To a large extent, this is a paper shuffle, and will not mean a wholesale move of corporate operations out of the country. After all, many U.S. firms are incorporated in Delaware, and conduct most of their business in other states. For some, their only presence in Delaware is a file in a lawyer's office.
In the past, U.S. firms that made money worldwide left the profits where they were gained, because if that cash were to be "repatriated" -- brought back to corporate HQ in America -- it would be taxed at U.S. rates. So the companies that use the "inversion" tool to shift their corporate parentage to another country will still do business in the U.S., but they become -- technically, at least -- a "foreign firm" and are taxed at home-country rates.
Does all this mean manufacturing, sales and marketing divisions will all be uprooted and taken out of America? Not likely, unless the company drops out of the U.S. marketplace. And that would mean abandoning a huge slice of their business.
Consider also these examples: Ford assembles cars in Mexico and Canada for sale in the U.S., and Toyota, a Japanese firm, assembles cars in Tennessee for sale in the American marketplace. And for many years, Japanese firms did not "repatriate" their profits, but instead reinvested them in the U.S.-based facilities.
One quick way to stop the so-called inversion trend would be to lower U.S. corporate tax rates, if in fact inversion is such a terrible danger to American business. In Logic 101, this fear is known as the "slippery slope fallacy," the idea that one thing inevitably leads to a series of other dangerous happenings.
Possible? Yes. Plausible and likely? Not for manufacturing firms, although some pharmaceutical firms already concoct some of their products elsewhere.
Wednesday, August 6, 2014
Trading Blows
In a political tug-of-war, the flag in the middle gets muddied.
U.S. firms sold more stuff overseas than customers bought from foreign companies in June, trimming the trade deficit once again, according to new statistics.
So why the stiff opposition to the agency that helps American firms finance foreign trade? Go figure.
Here are the numbers: Exports in June totaled $195.9 billion, up $0.3 billion from the total in May, and imports were $2,9 billion less in June than the previous month. The Bureau of Economic Analysis and the Census Bureau jointly reported that this resulted in a trade deficit of $41.5 billion, down from $44.7 billion.
This may not be much in an economy totaling $16 trillion, but it shows progress, as stuff made in America increases worldwide sales.
Meanwhile, the Ex-Im Bank, which provides loans to American firms that have trouble getting it from private sector financial institutions, is facing a vote in Congress to extend its charter beyond its Sept. 30 expiration date.
If that happens and the Ex-Im Bank shuts down, American firms would lose sales and workers lose jobs. Unless American banks step up their financing of overseas business at reasonable loan rates.
Will that happen? Or will political thoughtlessness and financier greediness win the day as firms lose business?
Governments around the world give strong support to international trade through loans to help finance export and import transactions, but oppositionists in America continue their campaign to abolish the Ex-Im Bank, claiming that it loses money and is a burden on taxpayers.
Oppositionists cite a loan of more than $640 million to build a petroleum refinery in Turkey. What they do not say is that the refinery equipment is made in America, supporting 3,000 U.S. jobs in doing so.
They also argue that the Ex-Im Bank operations will cost taxpayers $2 billion over the next ten years. The bank, on the other hand, points out that it is an independent federal agency that "creates and maintains U.S. jobs by filling gaps in private export financing at no cost to American taxpayers." It provides financing where others do not. And not only does the bank turn a profit, but last year alone it forwarded more than $1 billion to the Treasury.
So the political tug-of-war continues, with a showdown in September between political oppositionists and pro-business and labor supporters.
Who will lose? Stay tuned.
U.S. firms sold more stuff overseas than customers bought from foreign companies in June, trimming the trade deficit once again, according to new statistics.
So why the stiff opposition to the agency that helps American firms finance foreign trade? Go figure.
Here are the numbers: Exports in June totaled $195.9 billion, up $0.3 billion from the total in May, and imports were $2,9 billion less in June than the previous month. The Bureau of Economic Analysis and the Census Bureau jointly reported that this resulted in a trade deficit of $41.5 billion, down from $44.7 billion.
This may not be much in an economy totaling $16 trillion, but it shows progress, as stuff made in America increases worldwide sales.
Meanwhile, the Ex-Im Bank, which provides loans to American firms that have trouble getting it from private sector financial institutions, is facing a vote in Congress to extend its charter beyond its Sept. 30 expiration date.
If that happens and the Ex-Im Bank shuts down, American firms would lose sales and workers lose jobs. Unless American banks step up their financing of overseas business at reasonable loan rates.
Will that happen? Or will political thoughtlessness and financier greediness win the day as firms lose business?
Governments around the world give strong support to international trade through loans to help finance export and import transactions, but oppositionists in America continue their campaign to abolish the Ex-Im Bank, claiming that it loses money and is a burden on taxpayers.
Oppositionists cite a loan of more than $640 million to build a petroleum refinery in Turkey. What they do not say is that the refinery equipment is made in America, supporting 3,000 U.S. jobs in doing so.
They also argue that the Ex-Im Bank operations will cost taxpayers $2 billion over the next ten years. The bank, on the other hand, points out that it is an independent federal agency that "creates and maintains U.S. jobs by filling gaps in private export financing at no cost to American taxpayers." It provides financing where others do not. And not only does the bank turn a profit, but last year alone it forwarded more than $1 billion to the Treasury.
Economist Robert J. Samuelson has written that conservative charges of "government bloat that's bleeding taxpayers ... is, charitably, wildly misleading." The bank's expenses are "fully paid by fees and interest" from its customers.
In addition, the National Association of Manufacturers has come out in favor of renewing the Ex-Im Bank's charter, which will expire Sept. 30 unless Congress acts. In a larger context, the bank's operations are chump change compared to the financing activities of other nations. The Ex-Im Bank supports about 2.4 percent of all U.S. exports, compared to 12.5 percent by China and 20 percent by Canada.So the political tug-of-war continues, with a showdown in September between political oppositionists and pro-business and labor supporters.
Who will lose? Stay tuned.
Monday, August 4, 2014
Money Talks
Money may talk, but sometimes it's only a whisper. Listen up.
The market is great! -- Willy Loman.
All things are for the best in this best of all possible worlds. -- Dr. Pangloss.
So maybe we're not going broke after all, but sometimes it seems that way, especially if you're not a one-percenter. Data just issued show increases in income and spending, as well as easier lending standards and a pickup in loan demand.
The total of personal income in America rose by $56.7 billion in June, the government reported, and disposable personal income increased $51.5 billion. Both amounted to raises of 0.4 percent, according to a Bureau of Economic Analysis report.
Spending also rose, the BEA said, increasing $51.7 billion in May, or 0.4 percent. After allowing for inflation, income and expenditures both rose by 0.2 percent in June.
Separately, the Federal Reserve Board said a survey of senior bank loan officers showed an easing of standards for commercial and industrial loans, as well as a broad-based jump in demand for loans. Real estate lending, however, showed a mixed picture, according to the survey. But most banks reported little change in standards for consumer loans, the Fed said.
Meanwhile, applications for home mortgages rose 2.4 percent in mid-July, according to the Mortgage Bankers Association, with the average nationwide interest rate little changed, at about 4.3 percent.
As for sales of homes, they're up for the first time since last October, said the National Association of Realtors, to an annualized pace of 5 million homes, posted in June. That's up 2.6 percent from the May sales rate.
However, construction of new homes is off, according to government figures. The Census Bureau reported a 4.2 percent drop in building permits issued in June, to an annualized pace of 963,000. And housing starts were down by 9.3 percent from the month before, to an annual rate of 893,000.
Taken together, the numbers say things are looking up, assuming you have the wherewithal to take advantage of improving conditions, except that an increase in demand for homes and a decrease in construction will mean a lower supply, thus causing higher prices.
So if you have a good job and your situation looks secure, jump in, says Willy Loman, who believes the market is always great. If you don't, welcome to the wonderful, wishful, waiting world of those who want a good job and a nice house but can't afford to jump in. That's why the homeownership rate in America has fallen to a 19-year low because of higher prices and stiff credit rules. As it is, 64.7 percent of Americans own their own homes, a notch down from the 64.8 percent recorded in the first quarter of this year, according to the U.S. Census. It reached a high of 69.2 percent ten years ago.
But the good news is that homeownership in America is quite high compared to what it was many years ago. In 1900, the rate was 46.5 percent, according to Census records, and the Great Depression drove that percentage down to just 43.6 percent in 1940. The post-war boom and government-sponsored loan assistance programs helped to boost that to its current levels.
Now the question is whether a return of the Great Recession and a growing inequality of wealth between the 1 percent and the rest of Americans will pummel the Great American Dream once again.
The market is great! -- Willy Loman.
All things are for the best in this best of all possible worlds. -- Dr. Pangloss.
So maybe we're not going broke after all, but sometimes it seems that way, especially if you're not a one-percenter. Data just issued show increases in income and spending, as well as easier lending standards and a pickup in loan demand.
The total of personal income in America rose by $56.7 billion in June, the government reported, and disposable personal income increased $51.5 billion. Both amounted to raises of 0.4 percent, according to a Bureau of Economic Analysis report.
Spending also rose, the BEA said, increasing $51.7 billion in May, or 0.4 percent. After allowing for inflation, income and expenditures both rose by 0.2 percent in June.
Separately, the Federal Reserve Board said a survey of senior bank loan officers showed an easing of standards for commercial and industrial loans, as well as a broad-based jump in demand for loans. Real estate lending, however, showed a mixed picture, according to the survey. But most banks reported little change in standards for consumer loans, the Fed said.
Meanwhile, applications for home mortgages rose 2.4 percent in mid-July, according to the Mortgage Bankers Association, with the average nationwide interest rate little changed, at about 4.3 percent.
As for sales of homes, they're up for the first time since last October, said the National Association of Realtors, to an annualized pace of 5 million homes, posted in June. That's up 2.6 percent from the May sales rate.
However, construction of new homes is off, according to government figures. The Census Bureau reported a 4.2 percent drop in building permits issued in June, to an annualized pace of 963,000. And housing starts were down by 9.3 percent from the month before, to an annual rate of 893,000.
Taken together, the numbers say things are looking up, assuming you have the wherewithal to take advantage of improving conditions, except that an increase in demand for homes and a decrease in construction will mean a lower supply, thus causing higher prices.
So if you have a good job and your situation looks secure, jump in, says Willy Loman, who believes the market is always great. If you don't, welcome to the wonderful, wishful, waiting world of those who want a good job and a nice house but can't afford to jump in. That's why the homeownership rate in America has fallen to a 19-year low because of higher prices and stiff credit rules. As it is, 64.7 percent of Americans own their own homes, a notch down from the 64.8 percent recorded in the first quarter of this year, according to the U.S. Census. It reached a high of 69.2 percent ten years ago.
But the good news is that homeownership in America is quite high compared to what it was many years ago. In 1900, the rate was 46.5 percent, according to Census records, and the Great Depression drove that percentage down to just 43.6 percent in 1940. The post-war boom and government-sponsored loan assistance programs helped to boost that to its current levels.
Now the question is whether a return of the Great Recession and a growing inequality of wealth between the 1 percent and the rest of Americans will pummel the Great American Dream once again.
Sunday, August 3, 2014
Juris Diction
There is no privacy on the Internet.
If you don't want to see it in print, don't put it into the computer.
Ask nicely, and you'll probably receive. Tell me I gotta, just on your say-so, and you'll wait a long time.
Juris Diction -- The law speaks. But how loud, and how far?
It has long been recognized that sovereignty is crucial to maintaining jurisdictional integrity, whether across state lines or international borders. But as the Internet increasingly blurs these boundaries, the law has yet to catch up with technology, thus creating a metadata muddle when authorities in one nation want to search computer files stored in another jurisdiction -- legally, of course.
The latest wrinkle in this dispute involves prosecutors' access to potentially incriminating email, when the suspect is in one country and the messages are stored on computers in another.
Earlier this summer, Yahoo! moved its computer servers out of Britain and went to Ireland, where privacy laws are stricter. British prosecutors protested that "national security" gave them the right of full access to international emails, so no warrant was needed. For a long time, Internet providers acquiesced to such requests for metadata, but then an outcry over privacy called for them to stop. So Yahoo! shifted its storage units to Ireland.
Comes now a U.S. effort to peruse Microsoft servers, stored in Ireland, in search of evidence in a drug-related case. They dutifully obtained a warrant from a federal judge ordering Microsoft to produce the data.
Nay, nay, quoth the legal beagles at Microsoft. That's personal information, stored in another country, so U.S. prosecutors and judges have no jurisdiction over files stored elsewhere, and investigators have no authority to demand such information.
Yes, we do, say the feds, because Microsoft is an American company.
No, you don't, say the corporate lawyers, because the files are elsewhere, and the warrant is not valid.
Meanwhile, a top lawman in Ireland noted that there is a procedure to follow for such things. All the U.S. has to do is get a judge in Ireland to sign off on the search warrant, and the Irish will comply.
That's "too cumbersome," replied the U.S. law hounds.
According to former Irish Attorney General Michael McDowell, Irish law prohibits data held in Ireland from being handed over to foreign law enforcement agencies unless it is signed off by an Irish Judge in Ireland. There is a '"Mutual Legal Assistance" treaty between the U.S. and the European Union, including Ireland, which facilitates such requests. The U.S. Department of Justice takes the position that U.S.-based companies must comply with valid warrants issued in the U.S.
European data protection measures are much more restrictive than those in the U.S, which sometimes seem to work with no restrictions. While the "law of the land" should be enforced, the question arises as to which land. Even the U.S. Supreme Court cannot assume a decision will be honored in another land.
In short, Irish authorities simply don't have to obey a court order that did not come through their legal system. Moreover, the attitude of U.S. prosecutors smacks of arrogance, as in "We're bigger, so do as we tell you."
Perhaps the CIA or the NSA could hack into the Microsoft computer systems and retrieve the stuff the prosecutors want, but if (when) they get caught, it would be at least embarrassing, and worse, unacceptable in a court proceeding because it was snatched illegally.
Now here's another potential consequence: U.S. companies may resort to "inversion," moving their corporate headquarters to another country. It's being done now, to avoid higher U.S. tax rates, and more firms -- especially tech firms -- could do it to take advantage of stricter privacy laws elsewhere.
If you don't want to see it in print, don't put it into the computer.
Ask nicely, and you'll probably receive. Tell me I gotta, just on your say-so, and you'll wait a long time.
Juris Diction -- The law speaks. But how loud, and how far?
It has long been recognized that sovereignty is crucial to maintaining jurisdictional integrity, whether across state lines or international borders. But as the Internet increasingly blurs these boundaries, the law has yet to catch up with technology, thus creating a metadata muddle when authorities in one nation want to search computer files stored in another jurisdiction -- legally, of course.
The latest wrinkle in this dispute involves prosecutors' access to potentially incriminating email, when the suspect is in one country and the messages are stored on computers in another.
Earlier this summer, Yahoo! moved its computer servers out of Britain and went to Ireland, where privacy laws are stricter. British prosecutors protested that "national security" gave them the right of full access to international emails, so no warrant was needed. For a long time, Internet providers acquiesced to such requests for metadata, but then an outcry over privacy called for them to stop. So Yahoo! shifted its storage units to Ireland.
Comes now a U.S. effort to peruse Microsoft servers, stored in Ireland, in search of evidence in a drug-related case. They dutifully obtained a warrant from a federal judge ordering Microsoft to produce the data.
Nay, nay, quoth the legal beagles at Microsoft. That's personal information, stored in another country, so U.S. prosecutors and judges have no jurisdiction over files stored elsewhere, and investigators have no authority to demand such information.
Yes, we do, say the feds, because Microsoft is an American company.
No, you don't, say the corporate lawyers, because the files are elsewhere, and the warrant is not valid.
Meanwhile, a top lawman in Ireland noted that there is a procedure to follow for such things. All the U.S. has to do is get a judge in Ireland to sign off on the search warrant, and the Irish will comply.
That's "too cumbersome," replied the U.S. law hounds.
According to former Irish Attorney General Michael McDowell, Irish law prohibits data held in Ireland from being handed over to foreign law enforcement agencies unless it is signed off by an Irish Judge in Ireland. There is a '"Mutual Legal Assistance" treaty between the U.S. and the European Union, including Ireland, which facilitates such requests. The U.S. Department of Justice takes the position that U.S.-based companies must comply with valid warrants issued in the U.S.
European data protection measures are much more restrictive than those in the U.S, which sometimes seem to work with no restrictions. While the "law of the land" should be enforced, the question arises as to which land. Even the U.S. Supreme Court cannot assume a decision will be honored in another land.
In short, Irish authorities simply don't have to obey a court order that did not come through their legal system. Moreover, the attitude of U.S. prosecutors smacks of arrogance, as in "We're bigger, so do as we tell you."
Perhaps the CIA or the NSA could hack into the Microsoft computer systems and retrieve the stuff the prosecutors want, but if (when) they get caught, it would be at least embarrassing, and worse, unacceptable in a court proceeding because it was snatched illegally.
Now here's another potential consequence: U.S. companies may resort to "inversion," moving their corporate headquarters to another country. It's being done now, to avoid higher U.S. tax rates, and more firms -- especially tech firms -- could do it to take advantage of stricter privacy laws elsewhere.
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