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Mueller’s Russian Indictment

2018 February 16

So, Mueller has indicted 13 Russian nationals and three entities. Let’s look at this a bit closer.

In an indictment announced Friday in Washington, Mueller describes a years-long, multimillion-dollar conspiracy by hundreds of Russians aimed at criticizing Hillary Clinton and supporting Senator Bernie Sanders and Trump.

More accurate, I suspect, would be to say that Putin wanted someone who wasn’t as anti-Russian, and anti-him. Clinton and Putin have a long time adversarial relationship, and Clinton has been very antagonistic to Russia. In particular she wanted a no-fly zone in Syria after the Russians were there, and Putin sees her as lying to him about Libya: reassuring him that the no fly zone there was not about regime change.

This “information warfare” by the Russians didn’t affect the outcome of the presidential election, Deputy Attorney General Rod Rosenstein told reporters. Trump and his Republican supporters have repeatedly denounced the Mueller investigation as a “witch hunt” and have denied any collusion. The indictment cites no instances of Russians coordinating directly with the Trump campaign.

The election was so close that I don’t see how it can be said that the Russian interference didn’t effect the outcome. Though, exactly because it was so close that can be said of everything, from Clinton not campaigning in key Rust belt states to Republican voter suppression. (The later is probably most significant, but Clinton racked up a lot of votes where she didn’t need them and didn’t put much in the way of resources into some marginal states which mattered.)

The Internet Research Agency, a Russian organization, and the defendants began working in 2014 to interfere in U.S. elections, according to the indictment. They used false personas and social media while also staging political rallies and communicating with “unwitting individuals” associated with the Trump campaign, it said.

In a Feb. 10, 2016, planning memo, the Russians were instructed to “use any opportunity to criticize Hillary and the rest (except Sanders and Trump — we support them).”

The operations also denigrated candidates including Ted Cruz and Marco Rubio, Trump’s rivals in the 2016 Republican primary, the indictment said.

The 2014 date indicates plans were in place long before Trump or Sanders could be expected to run. That Trump was the chosen one on the Republican side makes sense, he was consistently Russia and Putin friendly. As for the Democratic side, it was Clinton or Sanders, and Sanders, while not a Russia booster, was certainly better for Russia than Clinton.

I don’t see a great deal here to be excited about. The US routinely interferes in foreign elections to a much greater extent than this. The best solution would be an agreement to stop interfering in foreign elections on both sides.

I assume Mueller will continue and indict some more Americans (one American is indicted here on minor charges.)

Oh, and…

They spent thousands of dollars a month to buy advertisements on social media groups, while carefully tracking the size of U.S. audiences they reached, according to the indictment. (emphasis added)

Thousands of dollars? Not millions? Or even “hundreds of thousands”? It is hard to take that very seriously.

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Is “Skin in the Game” Good?

2018 February 15
by Ian Welsh

So, this is an idea whose time has come, again.

It is only half right.

It is right, somewhat, when it comes to suffering harm if something fails. One of the reasons for the 2008 financial collapse is that most of the actors were rich, and knew that even if their companies failed and were not bailed out, they would be fine.

OTOH, taking massive risks was making them rich. So given the upside was theirs, and the downside wasn’t, why not risk?

And this is before they knew for sure that the government would bail out almost all of the companies.

So, had they had relatively small amounts of money, and thus needed their ongoing salaries, and for their companies not to collapse, the financial collapse might well have not happened.

However to do that meant making sure that they were not reaping so much of the upside of the housing and MBS (mortage backed securities) market.

The less upside they had, the poorer they were, and the more they needed their companies to continue, the more they would have been risk averse.

Alternatively, the credible threat of losing everything they had could have worked, but it had to be credible, and as we see, for most, it did not exist.  Threats of future losses don’t work well unless they are near certain: this is well established in criminology, where it is known that how likely one is to be caught and convicted of a crime is far more important than how harsh the punishment will be.

People who think they’ll get away with it, in other words, aren’t scared by “having skin in the game.”

Skin in the game has to be a near certainty to work.

The core issues of making skin in the game work are responsibility, power and externalities.

A person’s responsibility (consequences/skin) must be equal to their power.

You should only take a hit equal to your responsibility, and your responsibility is NEVER more than  how much power you have.

But the hit you take must be equal to all the losses taken that are your responsibility.

And that is often, effectively, impossible. The key people behind the financial crisis were responsible for losses far greater than the amount of money they personally possessed. This is particularly true of central bankers like Alan Greenspan and Ben Bernanke, but is also true of Wall Street execs and so on.

Even in an ideal world, they could not take hits equal to the damage they did. The closest  one could come would either be lifetime imprisonment, or death. (Understand, very clearly, that many people died because of the financial crisis and its aftershocks. People who lose their jobs and housing die a lot.)

To make “skin in the game” work requires two things.

1) No one must be in a position to “quit the game” if they win. If the upside is so large that it doesn’t matter if the game continues, people will destroy the game. Understand that if it takes 7 years to make enough money to never work again and live a life of luxury, those people WILL do that no matter the consequences after they leave.

2) No one must be isolated from social consequences of their actions. Money or power MUST never be able to buy anything that matters: health care, a good education for your kids, skipping security theater, avoiding endemic social violence or anything else. If the decision will cause bad things to happen to people in society, decision makers must suffer the consequences with those people.

(This means no private schools. No public schools that are better than other public schools. No private jets. No skipping security lines for first class travel. No buying healthcare poor people can’t have. No polluting and not having to suffer the pollution  yourself.)

But even if you put this in place skin in the game has sharp limits to its usefulness.

Skin in the Game Doesn’t Beat The Death Bet or IBG, YBG.

The death bet is a bet that you’ll be dead before the consequences of your decisions occur. Climate change was understood and taught in school as early as the late 70s, but adults in the late 70s bet that they would be dead before it mattered. They were right to make that bet. They didn’t have skin in the game and they couldn’t.

During the 2000s, in the runup to the financial crisis, the saying when a shitty deal was being cut was “I’ll be gone, you’ll be gone.” Anyone who has worked in a big firm is familiar with how a new executive will change things one way (let’s outsource!) then the next one will change them back (let’s bring it in house for control!). They are familiar with how salesmen get almost all their commissions up front, and multi-year sales deals then blow up a few years down the line.

Real skin in the game requires a commitment to go after people who did shitty things in the past and left. When the Sepoy rebellion happened in India in the 19th century, the British didn’t just blame the current Viceroy, they went after the Viceroy before him, because he had to have screwed up too.

But, at the end of the day, skin in the game only goes so far. People do die (which is why harsher regimes than us would hit the entire family.) People do leave.

And then there is fact that skin in the game can actually be bad when…

Detachment is needed.

Doctors make better decisions when they no financial incentives. Those who make more money the more surgeries they do, do more surgeries, needed or not. Those who make more money the more drugs they prescribe, prescribe those drugs.

Those who have no incentive tend to do the right thing by the patient, because why not. Flat fee suffering person, help them. But they aren’t required to die if the patient dies, the normal human mechanisms of empathy and social bonding work quite fine IF they aren’t overwhelmed by incentives.

This is true also of analysts. The best analysts are generally people who have no skin in the game; no dog in the fight. They may be interested, but they don’t actually care.

Detachment: lack of concern, makes it possible to see things as they actually are.

Skin the game works best when it is identical with the largest group that makes sense. Aligning workers with overly precise incentives leads to them ignoring things outside their incentives. Whatever the bottom line for them is, they see to (even cheating) and they ignore everything else.

The survival and prosperity of a country, a company, a team, or a marriage must be the responsibility of everyone, and they must suffer consequences if it fails equal to their power in that group.

When they don’t, societies fail.

But even this rule is not enough, because we are finite beings. We die. This is the reason for the Iroquois maxim that decisions must be made with the next 7 generations in mind. It is why the Ancient Greeks said that a society is great when old men plant trees in whose shade they will never sit.

And to get there requires something more than skin in the game.

Or rather it requires an extended sense of self which our society does not embrace and which it cannot embrace as long as its core moral sentiments and identity are based on individualistic liberalism and the selfish self-concern that is mandated by capitalist ideology.

Self-interest can only walk so far.

More on that another time.

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How To Solve London’s Housing Problems (And Canada’s)

2018 February 12
by Ian Welsh

So, two lovely facts about London’s housing market. First:

Londoners spend 72% of their income on rent.


Overseas buyers snap up majority of exclusive London homes

These two facts are related.

This is a problem with an obvious solution, do not allow non residents to buy housing in your country. Do not allow housing to be empty more than 3 months a year. If it is, and renovations are not actively ongoing (physically check to see if it is), then tax them at punitive rates (30% of the property value or more) and if after a year it still isn’t, simply expropriate it, with no compensation.

Further, smaller countries CANNOT absorb the excess money of larger countries busy printing money and/or creating billionaires. Canada and Australia I am talking to you with relation to China. You are pygmies and China is printing more money than every other major nation combined. You cannot allow Chinese to buy up real estate, or anything else in your countries, because they have enough money to buy everything at prices your locals cannot compete with.

This is obvious. It is stupidly obvious. But various speculators and builders are getting rich so it is ignored.

These housing price problems require more than just banning foreign buyers, but any solution starts there, and the problem cannot be solved without doing so.

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“Privilege” Mostly Isn’t, It Is What Everyone Should Have

2018 February 8
by Ian Welsh

This is hilarious:

Rather than increasing the pay of female staff the BBC has decided to slash the salaries of the top male earners, in a belated attempt to tackle the broadcaster’s gender pay gap crisis…

…It is understood that under new plans being rolled out to fight off the gender pay row the that has recently dogged the broadcaster, the BBC’s male stars will see their six-figure salaries slashed by up to 30 percent.

There are a few problems with the use of the word privilege. The main one is that much of what is called “privilege” isn’t, it’s what everyone should have. In the US it is often noted that a black or brown person is far more likely to be killed than a white: the police go far out of their way not to kill whites in comparison.

But that doesn’t mean that the police should treat everyone like they do African-Americans, say, it means they should treat everyone like they do whites.

As for the pay gap, the idea is that everyone should earn what white males do for the same work, not that white males should earn less. (Well, I don’t actually care how much rich white male presenters make, but in the general sense.)

Most of what white males have is what everyone should have because white males are generally treated better, even well, and that’s how we should treat everyone.

It isn’t a privilege to not be shot out of hand by cops, or to earn the same (good) pay for the same work, it’s decent and fair.

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Another Mile to the End of Privacy—And Freedom

2018 February 5
by Ian Welsh

Privacy and freedom aren’t quite synonyms, but they are closely related.

he Immigration and Customs Enforcement (ICE) agency has officially gained agency-wide access to a nationwide license plate recognition database, according to a contract finalized earlier this month. The system gives the agency access to billions of license plate records and new powers of real-time location tracking, raising significant concerns from civil libertarians.

Those who want to know everything about you want to control you. Whether that is to get you to buy things, or to make you work harder, or to form  your opinions, or to be able to arrest you whenever they want (and have the data available to always have something on you), doesn’t matter much.

We had freedom, such as it was, because we couldn’t be tracked easily. More and more we don’t, and this is qualitatively different from most older surveillance societies, which did not have minute by minute records going back years and years.

You will never be free in this new state. Don’t do anything that could be used against you, even 50 years later when mores and laws have changed.

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Slavery, Amazon Version

2018 February 2
by Ian Welsh

Because Hell (aka. working at an Amazon warehouse and plenty other places) is about to get worse. Amazon has patented wristbands which track where  your hand is at all times AND can nudge you.

Amazon already tracks warehouse workers  by the second, with supervisors watching their location.

This is hell. Absolute hell.  It extends assembly line horror to a vast range of other jobs, allows a smaller number of supervisors (and soon AI) to watch them and control them like flesh-robots.

Revolution is the only sane response to the extension of such technologies. And quite probably, revolution French style.

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How to Stop Russian Election Interference

2018 February 1

Let us take as a given that Russia interfered in the last US election, though many of the accusations are unconvincing, some may be true.

Why did they interfere?

They most likely did so because having a President in charge who was somewhat favorable to Russia is in Russia’s self interest. Remember that Russia is under US led economic sanctions.

There is a case to be made that what Russia did was simply what Russia should have done: it was in Russia’s self-interest, and Russia should do what is in its self interest.

Moreover, it was the same as what the US does, all the time, to other countries, including to Russia. When America thinks that a country should have different leadership, it tries to make sure that happens. Such operations include political support, propaganda and often support for violent actions. Money is funneled to opposition factions. The color-revolutions were US supported, so were the Maidan protests which overthrew the elected Ukrainian government and caused the most recent large crisis with Russia, but there are many many examples including extensive support for anti-government forces in Iran.

The US does this because they think it is in their interest. If they think a democratic party is good for the US, they support it, but dictators and anti-democratic coups have received support as well.

So what Russia is doing has a lot of precedent.  The US is not some trembling innocent suffering some unspeakable crime. The better analogy is a serial bully who got his eye blacked by a past victim.

From the outside Americans screaming about this look like a bully screaming “how dare you do to me what I do to everyone else. I’m going to bury you!”

This does not induce sympathy.

Still, we can make a strong case that countries shouldn’t interfere in other countries internal political affairs, especially including elections.

I think that the Russians might be willing to agree to that.

So the sane method of dealing with this issue, which virtually one will agree to, would be negotiations.

Americans and Russians get together and have frank talks, which amount to a peace treaty: we won’t do it to you, if you don’t do it to us.

They might even extend that to not doing it to other countries.

This is the actual road out, though it seems laughable because it’s really impossible to imagine. Both America and Russia have been interfering in many countries for a long time, though America is the champion of the last 30 years or so, and by a wide margin.

But if you don’t want someone to hit you, perhaps you shouldn’t hit them?

The problem here is that this can’t stand alone. If the US retains the ability to sanction other countries economically, in ways that are so damaging they kill vast numbers and impoverish more, which it does, who is going to agree to just sit there and take it?

And the US does have this ability, for now, due to its control over the world payments system. The US Treasury can unilaterally sanction countries and firms, and no one can stop them, because banks outside the US feel compelled to obey as any transfer that touches on the US triggers US law, and the payment system is US built and controlled.

Most foreign debts are also subject to either US or British law, as the Argentinians learned to their great cost.

But then don’t sanctions fall under “don’t interfere with other countries?” Perhaps the US might also wish to stop sanctioning countries. Almost every case has done more harm than good, and the sanctions almost always hit ordinary people harder than leaders, even when they are targeted at the richest.

The way to have peace, is to leave other people alone.

I know that this runs exactly against the American character which is “hurt them until they do what I want”. It runs directly against how American disciplines its own people, which is “if you don’t cooperate, you’ll be poor and miserable.” (See how felons are treated after their incarceration for the most direct example.)

But perhaps, just perhaps, the best results in this world rarely come from hurting people till they submit, however long that takes.  (See Cuba and Iran for how long it can not work.)

Oh, sure, sometimes it does “work”. The US has overthrown many countries governments, and gotten many other political parties elected. No one can deny this. But somehow, doing so often leads to even worse situations down the line. It seems that if you hurt people enough they resist and start hating you and act against you and try to get a government they like that doesn’t like you and so on.

Sanity is saying “ok, ok. Let’s stop this cycle of reciprocal hurting people.”

But that has to start and be credibly initiated by the worst abuser. And though most Americans won’t admit it, that worst abuser is America.

This has been another episode of “kindergarten level ethics for adults.”

If you don’t like it when someone does it to you, don’t do it to other people.

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Trump’s Refusal to Impose Sanctions on Russia

2018 January 30
by Ian Welsh

He should impose sanctions, not because they are a good idea, but because they passed with a veto-proof majority.

That said, sanctions are a terrible idea. I am aware of no case in which they have not done more harm than good, except possibly South Africa.

Further, the US “punishing” another country for electoral meddling is ludicrous. If this is worthy of punishment, the US is due for sanctions 50 times worse, since they are the world’s leading criminal when it comes to messing with other people’s elections.

One of the few things Trump is doing that is a good thing is trying to keep US/Russian relations from getting any worse.

Maybe he’s doing it for the wrong reasons, but it’s still something worth doing.

Regular reminder: Russia is one of two countries with enough nukes to destroy the world.

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.