So, we are told that Net Neutrality is a necessary regulatory step in order to prevent ISPs from offering prioritized service. The initial rules came down from the FCC last month, and it explicitly enshrines this exact behavior:

"Managed services" delivered over a last-mile broadband pipe will be allowed, as we expected, though the FCC does say it will monitor them for anti-competitive behavior.

Understandably, even Net Neutrality supporters are angry at the ruling. However, this is a classic example of "regulatory capture", the process where regulations meant to reign in an industry instead serve to entrench and benefit established players.

Regulatory capture is an issue that transcends the traditional left / right spectrum. It is an issue that the left needs to address if it expects any of the regulations that it proposes to actually improve the state of affairs. As importantly, it is part of the reason why much of the Republican establishment is seen in the pockets of big business, and frequently does not live up to its liberal market ideology.

The form of the recent Net Neutrality ruling should come as no surprise, and needs to be remembered whenever advocating for government policies.

What is Net Neutrality?

Imagine that you are Netflix boss Reed Hastings. You're busy trying to eat the cable companies' collective lunch by offering on-demand Internet streaming video; sure, you're not there yet, but it's clear this model has a bright future… except for one little worry.

The cable companies and telcos you rely on to deliver your bits also compete with you, offering profitable video services of their own that don't come through "the Internet" but are increasingly based on IP and use the exact same pipe. Should those companies be allowed to offer managed quality of service enhanced video streams over a segregated section of the last-mile Internet pipe to directly compete with your own best-effort Internet offering?...

"The fact that network operators control the delivery pipes and generate significant revenue from content that travels over those pipes provides both the means and motive for discriminating against new ventures that might threaten revenue sources of the network operators," Netflix warned. These developments "exacerbate the growing concern that [video providers] will use their control over programming networks to stifle competition, including the growing competition from online video providers like Netflix."

Therefore, according to Netflix, the FCC should apply its open Internet principles to "managed services," too, possibly by requiring that such services could never consume more than a set fraction of the Internet pipe, reserving the rest for the "open Internet."

So, basically, Netflix says that the mere possibility that their competitors might throttle throttle other people's service is unfair. So, their remedy is to: throttle other people's service. This is a classic example of overt regulatory corruption, one group lobbying government to restrict their competitor's ability to compete. The fact that the most efficient technological solution might not involve Netflix is sufficient to use government to intervene on their behalf.

Foreign Policy runs down the list of the countries with the top 10 gun ownership rates, and asks

America has by far the most robust gun culture on the planet and one of the world's highest rates of gun crime to go along with it. Looking at the next nine countries on that list, however, reveals a very mixed bag. How is it that the world's most gun-crazy countries include some of the most dangerous and the safest?

Could it be that there's no correlation between guns and instability? Could it be that political upheaval and violence have more to do with culture and legitimate governance than gun control?

For the record, the top gun owning countries are:

1. The United States (just under 90 per 100 residents)
   
2. Yemen (54.8)
   
3. Switzerland (45.7)
   
4. Finland (45.3)
   
5. Serbia (37.8)
   
6. Cyprus (36.4)
   
7. Saudi Arabia (35)
   
8. Iraq (34.2)
   
9. Uruguay (31.8)
   
10. Sweden (31.6)
    
11. Norway
    

Tax rates by income, 2007.

Our tax code:

As the report says, "The most serious problem facing taxpayers--and the IRS--is the complexity of the Internal Revenue Code."

Olsen estimates that individuals and businesses spend 6.1 billion hours preparing their returns. That equal to a year's labor by three million full-time workers. Individual taxpayers are so befuddled by the Code that she reports 89 percent either pay a preparer or buy commercial software to help with the paperwork. The total cost of compliance in 2008, Olsen estimates, was $163 billion, or more than 11 percent of total income tax collections.

via Megan McArdle.

The math on overpopulation.

An update on Erin Brockovich's War on Science:

From 1996 to 2008, 196 cancers were identified among residents of the census tract that includes Hinkley — a slightly lower number than the 224 cancers that would have been expected given its demographic characteristics, said epidemiologist John Morgan, who conducted the California Cancer Registry survey.

The survey did not attempt to explain why any individual in Hinkley contracted cancer, nor did it diminish the importance of Pacific Gas & Electric Co. cleaning up a plume of groundwater with elevated levels of chromium 6, Morgan said.

"In this preliminary assessment we only looked at cancer outcomes, not specific types of cancer," Morgan said. "However, we did look at a dozen cancer types in earlier surveys of the same census tract for the years between 1988 and 1998. Overall, the results of those surveys were almost identical to the new findings, and none of the cancers represented a statistical excess."

Why we shouldn't worry about the Gini coefficient:

There is less to the income inequality issue than meets the eye. Most analyses of income inequality neglect two major points. First, the inequality of personal well-being is sharply down over the past hundred years and perhaps over the past twenty years as well. Bill Gates is much, much richer than I am, yet it is not obvious that he is much happier if, indeed, he is happier at all. I have access to penicillin, air travel, good cheap food, the Internet and virtually all of the technical innovations that Gates does. Like the vast majority of Americans, I have access to some important new pharmaceuticals, such as statins to protect against heart disease. To be sure, Gates receives the very best care from the world’s top doctors, but our health outcomes are in the same ballpark. I don’t have a private jet or take luxury vacations, and—I think it is fair to say—my house is much smaller than his. I can’t meet with the world’s elite on demand. Still, by broad historical standards, what I share with Bill Gates is far more significant than what I don’t share with him.

Compare these circumstances to those of 1911, a century ago. Even in the wealthier countries, the average person had little formal education, worked six days a week or more, often at hard physical labor, never took vacations, and could not access most of the world’s culture. The living standards of Carnegie and Rockefeller towered above those of typical Americans, not just in terms of money but also in terms of comfort. Most people today may not articulate this truth to themselves in so many words, but they sense it keenly enough. So when average people read about or see income inequality, they don’t feel the moral outrage that radiates from the more passionate egalitarian quarters of society. Instead, they think their lives are pretty good and that they either earned through hard work or lucked into a healthy share of the American dream.

What is Network Neutrality about? From the head of the lobby group Free Press:

We have a long way to go. At the moment, the battle over network neutrality is not to completely eliminate the telephone and cable companies. We are not at that point yet. But the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.

Roger Pielke:

[Kyoto] did almost nothing to accelerate historical rates of decarbonization of the EU... Decarbonization in the EU occurred at an annual average rate of 1.35 percent per year in the nine years before the Kyoto Protocol and 1.36 percent in the nine years following.

Obama economic advisor Professor Jeff Liebman on the poverty trap created by our high effective marginal tax rates:

Despite the EITC and child credit, the poverty trap is still very much a reality in the U.S. A woman called me out of the blue last week and told me her self-sufficiency counselor had suggested she get in touch with me.

She had moved from a $25,000 a year job to a $35,000 a year job, and suddenly she couldn’t make ends meet any more. I told her I didn’t know what I could do for her, but agreed to meet with her.

She showed me all her pay stubs etc. She really did come out behind by several hundred dollars a month. She lost free health insurance and instead had to pay $230 a month for her employer-provided health insurance. Her rent associated with her section 8 voucher went up by 30% of the income gain (which is the rule). She lost the ($280 a month) subsidized child care voucher she had for after-school care for her child. She lost around $1600 a year of the EITC. She paid payroll tax on the additional income. Finally, the new job was in Boston, and she lived in a suburb. So now she has $300 a month of additional gas and parking charges.

She asked me if she should go back to earning $25,000. I told her that she should first try to find a $35k job closer to home. Also, she apparently can’t fully reverse her decision to take the higher paying job because she can’t get the child care voucher back (the waiting list is several years long she thinks). She is really stuck. She tried taking an additional weekend job, but the combination of losing 30 percent in increased rent and paying for someone to take care of her child meant it didn’t help much either.

Why do people remain poor?

As de Soto [president of the Institute for Liberty and Democracy in Peru] explained: "These pictures show that roughly 4 billion people in the world actually build their homes and own their businesses outside the legal system. ... Because of the lack of rule of law (and) the definition of who owns what, and because they don't have addresses, they can't get credit (for investment loans)."

In a reversal of his position, Dr Lockwood explains that the Sun is a key driver in global temperatures:

The respected science journal, 'New Scientist' has published a watershed article appearing to controvert the man made global warming hypothesis. 'New Scientist' in ‘Quiet sun puts Europe on ice‘ (14 April 2010) reveals how international climatologist, Mike Lockwood, of the University of Reading, England, explains his latest findings that conflict with the accepted view that human emissions of carbon dioxide and other greenhouse gases are likely to warm our climate.

These findings vindicate the claims of skeptic researchers such as Henrik Svensmark who for years have insisted the Sun is the key driver of Earth’s climate. Skeptics of the man made global warming theory (AGW) argue that the increased activity of the Sun, not human-emitted greenhouse gases, was the real cause of the temporary global warming blip that lasted from 1975-98. Now that short burst of activity has decreased it appears global temperatures have followed suit.

Secret mercenary army to fight pirates in Somalia:

An un-named Muslim country is funding the creation of a well-armed and privately trained militia force in Somalia's north to fight piracy, the AP reports today. And behind the scenes consulting are the George W. Bush administration's former ambassador at large for war crimes, Pierre Prosper, and former CIA deputy station chief in Mogadishu Michael Shanklin. The force has already trained its first recruits (Saracen, a private security firm, is taking the lead) and recieved its first shipment of weapons. And most incredibly of all, it will have air support -- something that no military force in the country currently has, even the U.N. peacekeepers.

It would be interesting to find out who is funding this. Egypt stands to loose if less traffic pays for tolls through the Suez Canal. Dubai on the other hand has built a major port that offers little more than transshipment, the type of work that could easily be moved elsewhere to other routes. The Saudi kingdom ships most of their oil through the Gulf of Aden and up to Europe.

Power struggles in Iran:

Casual Iran observers tend to portray the country's most prominent political division as that between fundamentalist hard-liners and secular moderates. In reality, however, the struggle for Iran's future is a three-way fight waged by the different branches of conservatives that control the parliament, the presidency, and the theocracy. The Green Movement may have stalled, but the parliamentary opposition to President Mahmoud Ahmadinejad has only grown stronger and more assertive over the past year -- culminating in a recent push to charge the president with abuses of power warranting impeachment. Those efforts are coming to a halt under orders from Supreme Leader Ali Khamenei, who fears that the parliament's attempt to assert itself against the president will also be at the expense of his own power base, the country's conservative mullahs...

Ahmadinejad has also clashed with parliamentarians over his prerogative to influence the activities of the Central Bank. As financial hardships mount on common Iranians, in part due to mismanagement and in part from international sanctions, their elected representatives are blaming the president and his bureaucrats for the economy's woes.

It's a naked power struggle that has cloaked itself in ideology. Ahmadinejad and his cohorts in the executive branch of Iran's government increasingly reference secular Iranian nationalism. They recently celebrated an exhibition honoring Cyrus the Great, the founder of the Persian Empire over 2,500 years ago; they have also been known to castigate influential mullahs for diminishing Iran's greatness, going so far as to encourage the separation of religion from the government. Meanwhile parliament speaker Ali Larijani and his legislative supporters present themselves as adherents to the fundamentalist traditions of Shiite Islam and as true believers in the velayat-e faqih, Iran's system of governance by Muslim jurists.