FBI Hacks Terrorist’s IPhone without Apple

The FBI has withdrawn its lawsuit attempting to force Apple to assist in retrieving data from an IPhone belonging to one of the San Bernadino terrorists. According to reports (autoplay video at link), the FBI was able to get into the phone with help from a third party.

I haven’t followed this story closely, and never formed much of an opinion on the legalities of the issue, but it seems to me that Apple has shot themselves in the foot with the way this has played out. Apple dug in its heals in order to protect its brand and reassure customers that the IPhone operating system is secure and that their data is safe. The end result, however, is just the opposite.

Had Apple cooperated with the FBI, the public perception would have been that the IPhone operating system is so secure that even the U.S. government, with all its resources, could not penetrate it. Instead, the whole world (including terrorists) now know that the operating system is hackable and that perception is lost.

There are, of course, other reasons and arguments for why Apple should have held its ground. But from a marketing perspective, I think Apple took a big hit on this one.


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Considerable Quote

The GOP goal should be a government in which 95%-98% of the time it makes no difference to the average American citizen who is president. The US President should matter more to foreigners than to Americans.

The Diplomad

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Economic Democracy

From Henry Hazlett’s Economics in One Lesson:

Everything, in short, is produced at the expense of forgoing something else. …

It follows that it is just as essential for the health of a dynamic economy that dying industries should be allowed to die as that growing industries should be allowed to grow. For the dying industries absorb labor and capital that should be released for the growing industries. It is only the much vilified price system that solves the enormously complicated problem of deciding precisely how much of tens of thousands of different commodities and services should be produced in relation to each other. These otherwise bewildering equations are solved quasi-automatically by the system of prices, profits and costs. They are solved by this system incomparably better than any group of bureaucrats could solve them. For they are solved by a system under which each consumer makes his own demand and casts a fresh vote, or a dozen fresh votes, every day; whereas bureaucrats would try to solve it by having made for the consumers, not what the consumers themselves wanted but what the bureaucrats decided was good for them.

Economics is all about efficiency. Given that both labor and resources are limited, what is the best way to direct them to the best uses possible?

One approach is to put very smart people in charge and give them the authority to make decisions about what should be produced, how much it should cost, what workers should be paid, etc. This is what economists call a command economy. Socialism and Communism are command economies.

Another approach is to leave people alone and let them figure it out. This is called a free market economy. Capitalism is a free market economy.

Which approach is better for creating a healthy, growing economy?

A century ago there was a reasonable case to be made for either approach, as we had to rely heavily on theory to form conclusions. It’s just not practical, after all, to conduct massive experiments where we divide countries up and run a command economy on one side and a free market economy on the other to see what happens.

The events of the 20th century, however, conspired to conduct several experiments of precisely that type, and the results are quite definitive.

Experiment 1: Hong Kong, which, after over a century as a British territory, was returned to China in 1997. As part of the deal, China had to agree that Hong Kong would retain its British-derived constitution, and that it would be guaranteed a high degree of autonomy for at least 50 years after the transfer. As a result, Hong Kong has enjoyed the most free market economy in the world for the past decade and a half.

Shortly after the transfer, Hong Kong’s economy was devastated by both the Asian financial crisis and the outbreak of the H5N1 bird virus. In 2003, it took another major hit with the outbreak of the SARS epidemic. Despite these setbacks, and despite having few natural resources, the tiny island has experienced phenomenal economic growth, becoming one of the world’s leading international financial centers.

Experiment 2: Korea, which, at the end of World War II, was divided at the 38th parallel. North Korea was set up as a soviet-style socialist republic, while South Korea adopted a western-style free market economy. Here’s how Index Mundi reports the results of this experiment:

North Korea, one of the world’s most centrally directed and least open economies, faces chronic economic problems. Industrial capital stock is nearly beyond repair as a result of years of underinvestment, shortages of spare parts, and poor maintenance…. Industrial and power output have stagnated for years at a fraction of pre-1990 levels….  Large-scale international food aid deliveries have allowed the people of North Korea to escape widespread starvation since famine threatened in 1995, but the population continues to suffer from prolonged malnutrition and poor living conditions.

South Korea over the past four decades has demonstrated incredible growth and global integration to become a high-tech industrialized economy. In the 1960s, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion-dollar club of world economies, and is currently the world’s 12th largest economy.

Experiment 3: Berlin, which like Korea, was partitioned at the end of World War II, with East Berlin falling to the Communists and West Berlin adopting a free market system.

Though the Berlin Wall went up in 1961, the city was actually divided in 1949, at the end of the war. What is remarkable is how quickly West Berlin thrived while East Berlin, sharing the same history, the same culture, and the same devastation from the war, floundered.

B.R. Shenoy, an Indian economist visiting Berlin wrote in 1960:

The contrast between the two Berlins cannot miss the attention of a school child. West Berlin, though an island within East Germany, is an integral part of West German economy and shares the latter’s prosperity. Destruction through bombing was impartial to the two parts of the city. Rebuilding is virtually complete in West Berlin. Vacant plots are often used to raise crops. Buildings still in damaged condition are rare. The residential areas including flats for workers–of varying floor space, they are not shawls–and the shopping centers radiate boom conditions. In East Berlin a good part of the destruction still remains; twisted iron, broken walls and heaped up rubble are common enough sights. The new structures, especially the pre-fabricated workers’ tenements, look drab.

Shenoy goes on to describe the vibrant atmosphere in West Berlin, its thoroughfares “near jammed with prosperous looking automobile traffic” not evident in the Communist version of the city. The departments stores in West Berlin “are cramming with wearing apparel, other personal effects and a multiplicity of household equipment, temptingly displayed. Nothing at all comparable is visible in East Berlin.”

Most telling is the difference in the people: “Visiting East Berlin gives the impression of visiting a prison camp. The people do not seem to feel free. In striking contrast with the cordiality of West Berliners, they show an unwillingness to talk to strangers…”

What is clear from the examples of Hong Kong, Korea, and Berlin is that the economic systems — free market on the one hand; command economy on the other — are the key drivers of the sharp differences in outcomes. As Shenoy concludes:

The people being the same, there is no difference in talent, technological skill and aspirations of the residents of the two parts of the city. In West Berlin efforts are spontaneous and self-directed by free men, under the urge to go ahead. In East Berlin effort is centrally directed by Communist planners, who do not lack in determination for speedy progress; the urge to progress is particularly strong, if only to demonstrate the potentialities of communism to foreign visitors to the two Berlins.

And so it is in all three experiments: same people, same culture, same resources, but entirely superior outcomes when people are free from government meddling. A century ago, those who advocated socialism and communism may have had an excuse. They could still claim they didn’t know any better. But we now have ample real world evidence that a free market system is vastly superior to a command economy. Statists can no longer claim they don’t know any better.

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Post-constitutional America

Yesterday, the Senate passed the Comprehensive Addiction and Recovery Act (CARA). The bill now awaits approval from the House.

Per the Association for Addiction Professionals, CARA is the most expansive federal, bipartisan legislation to date for addiction support services, designating up to $80 million toward advancing treatment and recovery support services in state and local communities across the country.

CARA specifically targets addiction to heroin and other opiates, which has grown to staggering levels over the past decade. Opioid addiction has taken a terrible toll in terms of lives lost and families destroyed, not to mention the vast amount of public resources spent in battling what is being described as an epidemic. It’s not surprising, then, that CARA has received tremendous public support, nor that it cleared the Senate on a 94-1 vote.

The problem is that it’s unconstitutional.

The 10th Amendment states:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

This means that Congress is explicitly forbidden from doing things that are not spelled out in the Constitution. It doesn’t matter if these are good things, or worthy things, or popular things. If the Constitution doesn’t give Congress the power to spend taxpayer money on behalf of individual citizens, and it does not, then it is illegal.

James Madison, the “Father of the Constitution”, put it this way:

I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.

So how does an unconstitutional bill get through the Senate on a 94-1 vote? Senators do take an oath to uphold the Constitution, after all.

The answer is that nobody cares about the Constitution anymore. Our citizens don’t know and understand the Constitution because our schools don’t teach it. Our representatives have no incentive to adhere to it because there are no consequences for ignoring it. All the incentives are for them to “do something” so they have some accomplishment to point to come reelection time.

It’s easy to let this slide, since everyone agrees that this is a noble cause, an “object of benevolence” in Madison’s words. But this is a big deal. Once we start ignoring the supreme law of the land, no matter how good our intentions, the whole fabric starts to unravel, and soon any and every violation of the Constitution is rationalized because it’s for a good cause. The Constitution was designed specifically to combat this kind of thinking, because the Founders knew that it leads to tyranny.

Polls consistently reflect the public’s belief that the country is headed in the wrong direction. They also show that Americans have lost faith in Washington. There is no question that Washington is a huge part of what’s wrong with the country. But it doesn’t seem to occur to people that the reason for this is that Washington no longer works the way the Founders intended it. And that’s because we no longer hold it accountable to our founding document.

The Founders took great pains to create a Constitution that would keep the federal government in its place and keep power in the hands of the people. Within a century, that blueprint allowed us to grow into the greatest nation in all of history. Then we started chipping away at the Constitution, each time in the name of “objects of benevolence”, until we arrived at a point where it’s become irrelevant. And now we wonder what went wrong.

It’s worth noting the lone senator who voted against CARA and his reason for doing so. His name is Ben Sasse, and he’s a rookie Republican senator from Nebraska. His reason?  He “wasn’t sure fighting addition was best addressed by the federal government.”

I have no doubt that Madison would agree.


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California Pays Carl’s Jr. to Leave the State

Carl’s Jr. is packing its bags for Tennessee.

The hamburger chain’s parent company, CKE Restaurants of Carpinteria, announced Tuesday it is moving corporate headquarters to Nashville, Tenn.

The company said it will consolidate its Carl’s Jr. offices with those of its other restaurants, including St. Louis-based Hardees, in Nashville.

“It’s too bad. It seems like another business cutting out of California,” said Carl’s Jr. customer Twyla Channel of Fullerton.

“Business will be business. It’s a business decision to save money,” said another customer.

The article doesn’t get into the details, but it’s a sure bet the customers quoted above have it right.

According to the Tax Foundation’s most recent rankings, California ranks 48th out of 50 states in terms of being attractive to business. Tennessee ranks 16th.

Most of this comes down to taxes, of course. California has been taking an “eat the rich” approach to solving its fiscal woes for some time. While relocating an entire company is an enormous expense, it’s actually become the cheaper alternative.

California is, in effect, paying businesses to leave the state — taking with them much needed jobs and tax revenue.

The rule of unintended consequences strikes again.

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“Bush Lied!” is a Lie

During the February 13 Republican debate, Donald Trump resurrected the tired “Bush lied us into war in Iraq” narrative, claiming

They lied. They said there were weapons of mass destruction, there were none. And they knew there were none.

These accusations have been looked at by multiple bipartisan committees and proven false on several accounts. (WMD were just one of many justifications for the war; WMD were actually found in Iraq. Bush was relying on credible evidence, etc.) This is old news and easily verifiable by anyone with an Internet connection and a willingness to take an honest look. (See below for a place to start.)

But Donald Trump is a knave, and he needed something to hit Jeb Bush over the head with during the debate, and the cheap shot was the closest thing at hand. So he took it. The media routinely lets him get away with this kind nonsense, so it was a fairly safe gamble on this part.

But in this case, he was challenged on it (at least the “Bush lied” part, if not the rest) and we got to witness the Trump Shuffle the very next morning:

I’m not talking about lying, I’m not talking about not lying. Nobody really knows why we went into Iraq.

But the gamble paid off anyway, as Jeb’s prospects quickly collapsed, and Trump’s polling numbers held steady. Well played, Mr. Trump. There’s no limit to what can be done when you don’t mind telling lies and your supporters don’t mind hearing them.

If that isn’t sad enough, we’ve now got Lefties popping up everywhere shouting about how even the Republican frontrunner admits that George Bush lied us into war. (They are more than happy to ignore the fact that Trump walked it back the next day, for they are also knaves.)

I don’t have the energy to beat this whole thing down one more time and set the record straight. But in case any of you want to refresh your memory about what actually lead us to go to war, I recommend to you these links:

Invading Iraq Was Necessary and We Would Do It Again

Did Bush Lie About Iraq?

Operation Iraqi Freedom FAQ

That should be enough to get you started.

 Update: Add Iraq: The Real Story to the list.

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Bad Gun Control Arguments

In last night’s Democratic primary debate, on the subject of gun control, Hillary Clinton said

I know some of the parents from Sandy Hook. I want people in this audience to think about what it must feel like to send off your first grader, little backpack maybe on his or her back, and the next thing you hear is that somebody has come to that school using an automatic weapon, an AR-15, and murdered those children.

I’m currently reading Henry Hazlett’s Economics in One Lesson, a fine book that I highly recommend. In it, Hazlett illustrates that a single fallacy — Bastiat’s Broken Window Fallacy — is at the heart of most of our economic missteps.

Simply put, the Broken Window Fallacy is when we fail to consider all the effects of a given course of action. For example, when Maryland instituted its “Millionaire Tax,” it expected to increase tax revenues by $106 million. Instead, revenues dropped by $257 million. The city failed to consider that millionaires have a lot of money (who knew?) and could simply move out of the state to avoid paying the higher taxes.

The Left commit the same fallacy when they argue that strict gun control laws save lives. They focus on the lives that are taken each year by gun violence and argue that we are safer without guns. But that’s only half the story. What about the lives that are saved by guns?

According to a study published in the Journal of Quantitative Criminology, U.S. civilians use guns to defend themselves and others from crime at least 989,883 times per year. Another study, commissioned by the Obama White House, concluded that at least as many deaths and injuries are prevented by guns than are caused by them. Yet we seldom hear about that side of the equation.

The Broken Window Fallacy isn’t the only slight of hand Hillary resorts to in her remarks. She’s also guilty of an Appeal to Emotion, when she imagines for us a mother learning of her child’s murder. But it’s just as easy to imagine how the shooter could have been stopped if only someone at the school had been armed. Far too often, the only thing that stops a person with a gun is another person with a gun.

Hillary also misstates the facts when she suggests that the Sandy Hook shooter used an automatic weapon. Three weapons were found at the scene, one rifle and two handguns. All were semi-automatic weapons– meaning they shoot one shot per trigger pull — not automatic.

(For what it’s worth, I spent some time trying to find out how often automatic weapons are used in these types of shootings and wasn’t able to find a single case. Fully automatic weapons are already illegal throughout the U.S., so they wouldn’t be affected by stricter gun control laws anyway.)

In sum, pretty much everything Hillary said is misleading nonsense, designed to sound scary, but not amounting to much. Whether she is simply ignorant or deliberately trying to mislead, I do not know.

Hillary concluded her remarks with what I suppose was intended as a condemnation of gun manufacturers:

We talk about corporate greed. The gun manufacturers sell guns to make as much money as they can make!

Well, I hope they do! Just as I hope McDonald’s sells hamburgers to make as much money as they can make, and Hillary gives 45-minutes speeches for $225,000 a pop to make as much as she can. There is nothing wrong with doing things for money, and I wish the Left would stop pretending otherwise.

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