Free Markets, Free People

Monthly Archives: January 2012


More Law vs. Constitutional Rights

Interesting case.  And I lean toward the side which says doing what is ordered amounts to self-incrimination which the 5th Amendment is designed to prevent.

American citizens can be ordered to decrypt their PGP-scrambled hard drives for police to peruse for incriminating files, a federal judge in Colorado ruled today in what could become a precedent-setting case.

Judge Robert Blackburn ordered a Peyton, Colo., woman to decrypt the hard drive of a Toshiba laptop computer no later than February 21–or face the consequences including contempt of court.

I’m not sure, in her case, what they’re looking for, not that it matters particularly.  We again have technology in the focus and its use being ruled on by the court.  The question is, does such an order violate the defendants right to refuse self-incrimination by unlocking data which has the possibility of incriminating her.

Today’s ruling from Blackburn sided with the U.S. Department of Justice, which argued, as CNET reported last summer, that Americans’ Fifth Amendment right to remain silent doesn’t apply to their encryption passphrases. Federal prosecutors, who did not immediately respond to a request for comment this afternoon, claimed in a brief that:

Public interests will be harmed absent requiring defendants to make available unencrypted contents in circumstances like these. Failing to compel Ms. Fricosu amounts to a concession to her and potential criminals (be it in child exploitation, national security, terrorism, financial crimes or drug trafficking cases) that encrypting all inculpatory digital evidence will serve to defeat the efforts of law enforcement officers to obtain such evidence through judicially authorized search warrants, and thus make their prosecution impossible.

I certainly understand the import of that claim.  And it is a valid point.  But is it something which over rides the protection of the 5th Amendment?  In my opinion, this is not at all as clear as the 4th Amendment case below.  I’m not sure, however, one explains away the fact that decryption may indeed incriminate the person required to do the decrypting. 

For instance:

[A] Vermont federal judge concluded that Sebastien Boucher, who a border guard claims had child porn on his Alienware laptop, did not have a Fifth Amendment right to keep the files encrypted. Boucher eventually complied and was convicted.

On the other hand:

In March 2010, a federal judge in Michigan ruled that Thomas Kirschner, facing charges of receiving child pornography, would not have to give up his password. That’s "protecting his invocation of his Fifth Amendment privilege against compelled self-incrimination," the court ruled (PDF).

The government argues:

Prosecutors tend to view PGP passphrases as akin to someone possessing a key to a safe filled with incriminating documents. That person can, in general, be legally compelled to hand over the key. Other examples include the U.S. Supreme Court saying that defendants can be forced to provide fingerprints, blood samples, or voice recordings.

The defense argues:

On the other hand are civil libertarians citing other Supreme Court cases that conclude Americans can’t be forced to give "compelled testimonial communications" and extending the legal shield of the Fifth Amendment to encryption passphrases. Courts already have ruled that that such protection extends to the contents of a defendant’s minds, the argument goes, so why shouldn’t a passphrase be shielded as well?

There you have it.

Opinions?

~McQ

Twitter: @McQandO


Economic Statistics for 24 Jan 12

Today’s economic statistical releases:

The week has started slowly, as there were no releases yesterday, and only minor releases today.

Retail sales, as reported by Redbook, have slowed substantially in January, as last week was…weak, and so is this week, with the year-on-year same-store sales rate falling 0.5% 2.8%. ICSC-Goldman Store Sales also fell steeply, down -1.4% from last week, and up only 2.8% from last year.

The Richmond Fed index rose strongly from last month’s 3 to 12 this month, indicating expanding growth in the richmond district’s manufacturing sector.

~
Dale Franks
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What part of the 4th Amendment does law enforcement not understand?

I don’t know about you, but this seems such a clear thing to me.  If law enforcement is going to put any sort of a tracking device on a citizen’s vehicle, they need to obtain a warrant first.  See 4th Amendment:

The Supreme Court on Monday ruled unanimously that the police violated the Constitution when they placed a Global Positioning System tracking device on a suspect’s car and monitored its movements for 28 days.

[…]

Walter Dellinger, a lawyer for the defendant in the case and a former acting United States solicitor general, said the decision was “a signal event in Fourth Amendment history.”

“Law enforcement is now on notice,” Mr. Dellinger said, “that almost any use of GPS electronic surveillance of a citizen’s movement will be legally questionable unless a warrant is obtained in advance.”

Specifically:

“We hold that the government’s installation of a GPS device on a target’s vehicle, and its use of that device to monitor the vehicle’s movements, constitutes a ‘search,’ ” Justice Antonin Scalia wrote for the majority. Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Clarence Thomas and Sonia Sotomayor joined the majority opinion.

“It is important to be clear about what occurred in this case,” Justice Scalia went on. “The government physically occupied private property for the purpose of obtaining information. We have no doubt that such a physical intrusion would have been considered a ‘search’ within the meaning of the Fourth Amendment when it was adopted.”

The government, in this case, had put a GPS device on the target’s vehicle without a warrant, monitored it for 28 days and then used that information at his trial (he was convicted on cocaine trafficking charges and given a life sentence).

The reason I think this should have been a no-brainer for LEOs is the fact that the SCOTUS decision was unanimous. 

When the case was argued in November, a lawyer for the federal government said the number of times the federal authorities used GPS devices to track suspects was “in the low thousands annually.”

Vernon Herron, a former Maryland state trooper now on the staff of the University of Maryland’s Center for Health and Homeland Security, said state and local law enforcement officials used GPS and similar devices “all the time,” adding that “this type of technology is very useful for narcotics and terrorism investigations.”

Monday’s decision thus places a significant burden on widely used law enforcement surveillance techniques, though the authorities remain free to seek warrants from judges authorizing the surveillance.

Ok, get a freaking warrant first. 

What this decision does is uphold a Constitutional right that has been under assault for quite some times.   The “envelope stretching” that is not uncommon as new technology offers new methods of surveillance and monitoring.  The watchword for LEOs should be “when in doubt, get a warrant”.  And live by the document you’ve sworn to uphold and defend.

~McQ

Twitter: @McQandO


The Newtron bomb and plastic, fantastic Mitt

Yesterday, on our podcast, Dale, Michael and I talked for quite some time about the significance of Newt Gingrich’s win in South Carolina.

Does it foretell a Gingrich nomination?   Probably not … or at least not necessarily.  What it may signal, more than anything, is that the GOP voter doesn’t want some timid nominee who is mostly in a prevent defense mode.  Or Mitt Romney as he has presently evolved.

I was under the mistaken impression that the interminable debates were really not having much of an effect.  The South Carolina debates and results changed that impression for me pretty dramatically.

What Gingrich accomplished, with those two debates, was electorally remarkable.  He literally changed the course of a primary that all the polls told us was Romney’s – and pretty comfortably too.

The big question though is what does it all mean?  After all there are many ways to interpret this primary result.

Perhaps the biggest take-away may be that voters want a fighter.   They’re tired of the apologies for what they believe.  They want someone who is, as Michael described Newt, “unapologetic” about their conservatism.

The question that then follows is, does that mean they want Newt?

That’s actually a complicated question.  Gingrich certainly was the choice in South Carolina after his “unapologetic” debate performances.  But, per the polls, he wasn’t their choice prior to them.  So has Newt suddenly become acceptable as a candidate or was it primary voters really expressing their dissatisfaction with the rest of the field and using Newt as their surrogate example of why?

I frankly think it is the latter.  Quin Hillyer described Newt as the “Bill Clinton of the right, half the charm and twice the abrasiveness”.

If you’ve at all followed Newt Gingrich’s career you understand the truth of HIllyer’s description.  Gingrich is, in political terms, a human hand grenade.  In his previous life as a minority member of Congress, he was a designated bomb thrower.   He has, many times in his career, managed to insert his foot in his mouth to such a depth that he’s killed the impetus of whatever good thing he had going at the time.

However, in the South Carolina debates, he said what many conservatives have been longing to hear said.  And he also did something that conservatives love – he smacked the mainstream media, not once but twice. 

But is that enough to carry  him through the nomination process to victory?  That’s the pregnant question.  Will voters tire of him quickly?  Will Romney again reinvent himself as a fighter for conservative values? 

One of the theories out there is that voters have factored Newt’s baggage into their calculations about the man and have decided, the hell with it.  But Conn Carroll reminds us that for the most part, ‘America hates Newt Gingrich’.  His negatives far outweigh his positives and he runs poorly against Obama.

Of course, he was running poorly against Romney in South Carolina until a few days ago.

The other question about Gingrich is can he manage to discipline himself enough to somehow avoid doing or saying something which would doom his run for the nomination and/or his candidacy should he win the nomination?  My guess is, if there was a betting line established on that question, the odds wouldn’t favor Newt at all.

Finally, there’s the question of how the big middle – the independent voter – will react to Newt.  While he may, at least for the moment, satisfy conservative voters, they won’t win the election for the right.  The premise of the Romney campaign, at least viewed from here, is that their primary goal must be to woo indies because, in their calculation, conservative voters will eventually come into the fold when it is clear that Romney is the inevitable nominee.

I don’t think that calculation is necessarily wrong, but it is very unattractive to conservative voters.   And what the Romney team doesn’t seem to understand is that these primaries, unlike the general election, are where political activists and conservatives are much more likely to show up than independent voters.  And, of course, if you can’t get past the primaries, how acceptable you’ve made yourself to indies is really a moot point, isn’t it?

So Florida just became a lot more interesting.  As did the debates that are going to happen in the state.  We should see at least some of the questions I’ve posed answered there, or at least be given a hint as to their eventual answer.

Is Newt the one or will he eventually bomb.   And will we see plastic fantastic Mitt Romney reinvent himself yet again in an attempt to defuse the Newtron bomb?

All this and more, coming to a state near you soon.

~McQ

Twitter: @McQandO


Davos elite: Capitalism is the problem

That is certainly the premise at work in Davos as “political and economic elite”, who’ve served us so well to this point, meet to plot discuss modifications to capitalism.

Economic and political elites meeting this week at the Swiss resort of Davos will be asked to urgently find ways to reform a capitalist system that has been described as "outdated and crumbling."

"We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations," said Klaus Schwab, host and founder of the annual World Economic Forum.

"Solving problems in the context of outdated and crumbling models will only dig us deeper into the hole.

"We are in an era of profound change that urgently requires new ways of thinking instead of more business-as-usual," the 73-year-old said, adding that "capitalism in its current form, has no place in the world around us."

Show me “capitalism” at work somewhere, please?  Social welfare, in its current form, driven by high taxation and deficit government spending, is what “has no place in the world around us”.

The dirty little secret these “elite” won’t admit was that their premise that capitalism could forever fund their social welfare states is absolutely wrong and failing.  They’ve killed the goose that laid the golden capitalistic eggs.  It isn’t “capitalism” that is failing.  It is their social welfare system that is “outdated and crumbling”.

These are just the same people who got us into this mess trying to shift the blame from unsustainable policies founded in socialism to something which has kept their socialist utopias functioning for more years than they would have had it not been there.

And we should also be precise about what it is that has kept them stumbling along this long … a mixed economy, not capitalism.  A mixed economy which has featured less and less capitalism as the years have gone by.  Capitalism in its defined form exists in few, if any places in this world.

Margret Thatcher’s warning that the only thing wrong with socialism is you eventually run out of other people’s money has come true … again.  The agony was only prolonged because some free market mechanisms were left to at least partially function over all these decades that the Europeans (and now Americans) were constructing their little social welfare houses of cards.  The elite simply refuse to see that reality and now seek another target to which they can shift the blame.  The ultimate in “can kicking”. 

The eurozone’s failure to get a grip on its debt crisis and the spectre this is casting over the global economy will dominate discussions.

"The main issue would be the preoccupation with the global economy. There will be relatively less conversation about social responsibility and environment issues — those tend to come to the fore when the economy is doing well," John Quelch, dean of the China European International Business School, told AFP.

"The main conversation will be about a deficit of leadership in Europe as a prime problem," he added.

The deficit in leadership isn’t just found in Europe.  It is found worldwide.   And it isn’t a deficit of leadership from capitalists, but instead a deficit of leadership within the ranks of the political elite.  They continue to do or try to do the same things that have gotten us into this mess and expect different outcome.   We all know how Einstein defined such activity.

It is interesting to note, too, that the Euro elite are now ready to pitch “social responsibility (however they define that – does that mean the welfare state?) and environmental issues” over the side.

But, in fact, it is more than just that which they should be considering abandoning.  The problems they face do not find their root in a capitalist system or within capitalism itself.   In fact, capitalism could be their savior, if they only gave it an opportunity.

However, they’d also have to abandon most of the social welfare state to do so.

No, their primary problem is to be found with the institution that has attempted to control their economies and which constantly gets in the way of any capitalistic successes in the name of social justice. 

Government.   And more to the point, government spending driven by high taxes and borrowing.  It requires a deficit in intelligence not to understand that.

In essence Davos will be the elite – the social welfare elite – trying their hardest to shift blame on a system they’ve done the most to try to kill over the decades (even while using it to extend the life of their social welfare states).

Controlling government, taxation that provides disincentives to business, labor rules that prohibit firing bad employees, mandated early retirement and generous welfare benefits are not the problem of capitalism.

They are the problem of large, intrusive and socialist leaning governments.

But, apparently, that won’t be a part of the discussion in Davos.

~McQ

Twitter: @McQandO


953 dead people voted in South Carolina

Aw, come on, we know this doesn’t happen:

South Carolina’s attorney general has notified the U.S. Justice Department of potential voter fraud.

Attorney General Alan Wilson sent details of an analysis by the Department of Motor Vehicles to U.S. Attorney Bill Nettles.

In a letter dated Thursday, Wilson says the analysis found 953 ballots cast by voters listed as dead. In 71 percent of those cases, ballots were cast between two months and 76 months after the people died. That means they "voted" up to 6 1/3 years after their death.

The letter doesn’t say in which elections the ballots were cast.

The analysis came out of research for the state’s new voter identification law. The U.S. Justice Department denied clearance of that law.

~McQ

Twitter: @McQandO


Observations: The QandO Podcast for 22 Jan 12

This week, Bruce, Michael, and Dale talk about the Republican primaries and the Keystone decision.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.


More on the Keystone decision and why it was a decision based in politics, not what was best for America

More fallout from the Obama Keystone XL pipeline decision.  Read this carefully:

Prime Minister Stephen Harper, in a telephone call yesterday, told Obama “Canada will continue to work to diversify its energy exports,” according to details provided by Harper’s office. Canadian Natural Resource Minister Joe Oliver said relying less on the U.S. would help strengthen the country’s “financial security.”

The “decision by the Obama administration underlines the importance of diversifying and expanding our markets, including the growing Asian market,” Oliver told reporters in Ottawa.

Currently, 99 percent of Canada’s crude exports go to the U.S., a figure that Harper wants to reduce in his bid to make Canada a “superpower” in global energy markets.

Canada accounts for more than 90 percent of all proven reserves outside the Organization of Petroleum Exporting Countries, according to data compiled in the BP Statistical Review of World Energy. Most of Canada’s crude is produced from oil-sands deposits in the landlocked province of Alberta, where output is expected to double over the next eight years, according to the Canadian Association of Petroleum Producers.

“Relying less on the U.S.”  “Diversify our markets”.  “99% of … crude exports go to U.S.”

Those three phrases shout one thing in unison: The U.S. is an unreliable trading partner.

One more shocking statistic, if we want to talk about safe and secure petroleum supplies in our future – “Canada accounts for more than 90 percent of all proven reserves outside the Organization of Petroleum Exporting Countries”.

In case you missed it that’s OPEC.  That’s right the very oil cartel in which we find most of the less than friendly oil exporters in this world.

As Gale Norton points out, this should have been a no brainer:

This seems like a truly simple determination. Iran is threatening to blockade the 20 percent of the world’s oil supply that flows through the Strait of Hormuz. The American economy is struggling from high unemployment. The volatility of oil prices, reflected in periodic spikes at the gas pump, is a threat to productivity. A privately funded pipeline project that would create tens of thousands of jobs while helping stabilize America’s energy supply clearly seems to be in the national interest.

Here we have, next door to us for heaven sake, a supply of oil from a friendly nation which is about as secure as it can get and we do what?

Reject it.

Warren Meyer, writing at Forbes, hits upon some apparent truths:

But local environmental concerns were merely the public pretext for a decision that is much more troubling.   Opposition to the pipeline began to rally among radical environmental groups long before any of them had the first clue about the pipeline route.  The real goal of these groups was not to protect water along the pipeline route, but to make it impossible to develop new sources of oil in Canada.  Unable to stop Canadian oil drilling and tar sand extraction programs, environmental groups are now trying to block any pipeline that is proposed out of the oil producing regions.

As I pointed out yesterday, the “local concerns” had been addressed or were being addressed successfully according to the Governor of Nebraska.  And, as Meyer points out, there was no real reason for this decision except:

The Keystone decision only makes sense in the context of a general push to limit energy supply and roll back our industrial economy and all its amazing gifts.  Part and parcel of this same effort has been the growing opposition to natural gas fracking.  Fracking is an underground procedure that has been used safely and successfully for decades to extend the life of older oil wells.  Fracking is one reason that serial predictions of older fields “running out of oil” have been repeatedly incorrect.

Recently, though, fracking has presented the promise of substantially increasing our domestic energy supply by opening up new shale formations previously thought to be impossible to produce.  With this new promise, anti-growth, anti-energy environmentalists have suddenly taken notice, and are gearing up to try to kill this exciting (and ironically quite clean) new energy source.

I think he has a very valid point – a point that William Tucker has also written about.  This is about stopping progress.  This is about a selfish belief that since they have theirs, the rest has no need for more.  Here’s Tucker’s description:

It is not that the average person is not concerned about the environment. Everyone weighs the balance of economic gain against a respect for nature. It is only the truly affluent, however, who can be concerned about the environment to the exclusion of everything else. Most people see the benefits of pipelines and power plants and admit they have to be built somewhere. Only in the highest echelons do we hear people say, "We don’t need to build any pipelines. We’ve already got enough energy. We can all sit around awaiting the day we live off wind and sunshine."

And that’s precisely the case with Keystone.  Meyer again:

Ostensibly, Obama made the decision to block the pipeline because of concern over contamination of the Ogallala Reservoir, a vast underground water source that makes much of Midwestern agriculture possible.  And I am sure there are folks whose concerns are narrowly about the Ogallala or other environmental and NIMBY concerns along the proposed route.   But the US has tens of thousands of miles of petroleum pipelines, many cris-crossing this same general area.  There is nothing unprecedented or unmanageable about this particular line.  Had these routing issues been the actual problem, the Obama Administration could easily have approved the line with conditions or route modifications.

The national security and energy needs of the nation are being held hostage by an affluent elite who have decided, because they can, that enough is enough.  And they have the perfect soul-mate/tool to implement their desires in the Oval Office.  Don’t forget, this is the guy who said that at some point, “you’ve made enough money”.  They couldn’t be more simpatico.

Meyer also asks a question to make a point about the red herring of the route:

Does anyone doubt that had this exact same route been for high speed rail, rather than a pipeline, it would already have been approved and President Obama likely would have been proposing to throw a pile of taxpayer money at it to boot?  This despite the fact that high-speed rail almost certainly has more environmental negatives than an underground  pipeline.  The route has always been a red herring — the real goal is reducing energy supply.

He’s dead right.   Also:

The Keystone XL pipeline would have single-handedly carried more energy to the United States than the sum of all the green energy projects funded by the Obama Administration.  And it would have done so entirely with private  funds rather than the Administrations increasingly ill-fated and ham-handed attempts at venture capitalism with taxpayer funds. 

And:

In the case of the pipeline, the Obama administration killed a private infrastructure project that is widely supported, covers its own costs, and requires no taxpayer money.  I wonder where Thomas Friedman is — does he still lament our inability to do large infrastructure projects of the kind President Obama just blocked, or does he only support large state-funded triumphal projects?  This seems yet another example of what I called the tendency of government to shift capital from the productive to the sexy.

Spot on.

There you have it, all laid out in a neat bundle.  A “private infrastructure project that … covers its own costs and requires no taxpayer money”, vs. an environmentally destructive government boondoggle that most oppose and neither the federal or state government can afford?

The choice of this administration is the latter.

Finally, to once and for all put the “route” issue to bed, check out this map.  Find Omaha.  Yes, that’s right, there are oil pipelines all over Nebraska.

And surprise …the XL pipeline is the second phase of TransCanada’s pipeline plans. 

TransCanada won approval in 2008 for the first Keystone pipeline, which carries crude oil across Saskatchewan and Manitoba and through North Dakota, South Dakota, Nebraska, Kansas, Missouri and Illinois. That portion began moving crude in June 2010.

Uh, yes, that’s right … Nebraska.  And apparently, at least to this point, everything has operated as expected with no environmental problems.  So could these route problems have been handled without rejecting the pipeline in question?  Of course they could have.

P.S. I’ll have a lot more to say about fracking (which suffers from the same sorts of attacks by the same sorts of groups) in a post soon.

~McQ

Twitter: @McQandO

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