Big Brother and the Data Holding Company

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I just can't for the life of me work up any shock or outrage over the latest disclosures over PRISM and the NSA. I think we all had a reason to assume that this was being done since shortly after 9/11. And actually this 2006 report in USAToday pretty much confirmed it already. Obviously, the scope of the program has grown since then. But I have a problem with the government collecting more information to help "connect the dots." As Jeremy Bash, chief of staff to former C.I.A. director Leon Panetta put it. "If you’re looking for a needle in the haystack, you need a haystack." Or perhaps a whole barn full of haystacks.

There is always some potential for lower-level abuse in any data-mining endeavor or at any large government agency or corporation, for that matter. We've just spent four weeks talking about lower-rung employees at the IRS giving a little more attention to conservative-sounding political groups seeking tax-exempt status. And similarly your credit card number may get poached when you purchase things on-line. Several times a year a bank or another company ends up having to apologize for a security breach that results in thousands of credit card numbers being publicized. It's the electronic, on-demand world we live in and most people just shrug and assume the risks with everyone else.

But just as you wouldn't close down banks, the internet, or any government agency because of some minor abuses or privacy violations, neither should you shutdown the N.S.A. programs over the "potential" for abuse.

So it's extremely important that there be dogged oversight and transparency to provide some public assurance. Will Saletan of Slate made some great points in regards to this earlier in the week. However, since the information is classified, the public will have no choice but to trust that Congress will provide the necessary oversight. And that is hopefully what the Edward Snowden revelations facilitate.

The most surprising revelation for me from this entire story is that so many (roughly 500K) contractors have security clearances to access top secret information. Now of course there's access and there's "access", but still even if the real number is 100K, it's a little worrisome. Our government contracting out over 30% of this type of work is another issue for another day. Do we really want so many civilian contractors working with such sensitive data? In this instance it's about time to revisit the old Republican canard about the private sector always being better, more efficient, etc, than the public sector. That may not be the case when it comes to defense and intelligence. And when the private companies have mostly sweet no-bid deals with the government, then it leads to the same inefficiency we harp on about Big Government.

I'm generally pretty liberal on most issues. Crime (both the prevention of and prosecution of) and counter-terrorism are areas where I'm pretty authoritarian. I don't really support Stop-and-Frisk because it has proven to be ineffective. But if it worked, I'd be on board. Perhaps, due to living in several different neighborhoods in a big city like Philadelphia with more than its share of violent crime, these issues are never just abstract philosophical civil liberties debates for me. It's a real thing I need to think about literally every time I walk down a city street. People who grew up in similar environs have much more practical, real-world takes on gun-control as well. It's tough selling the libertarian "virtues" of less gun regulation and drug decriminalization in neighborhoods like, say, North Philly, which have been ravaged by guns and drugs, as opposed to, say, rural enclaves in central PA.

So my perspective on this issue is that crime or fear of crime eventually curtails liberty. So a reasonable sacrifice of a little privacy to help reduce or prevent crime and terrorism is the foundation that allows us to achieve life, liberty, and the pursuit of happiness. Michael Grunwald sums up this point of view in Time more eloquently here.

Most of the extreme slippery-slope arguments against any law tend to be presented in absence of more legitimate points that address here-and-now particulars. "This may make sense now or may prevent x, but in 40 years y could happen!" should not be taken seriously as an argument. The same lazy argument could be used against any law that's on the books.

The government won't be taking your guns if background-check laws are enacted. And the government will not be viewing your cell phone call logs unless you call someone, who called someone, who called someone, who called a suspected terrorist at some point in the last five years. It's a high-tech version of police detectives dropping by your house to "ask you a few questions" about a particular case if they believed you might be tangentially connected to one of the suspects.

Rightly or wrongly, the executive branch and the intelligence agencies are held accountable for any potential terrorist attack. The natural human response then is for people in those positions to do everything legally and technologically possible to prevent terrorist attacks. And the same "cover your ass" incentives line up politically for those people to keep their jobs, as it should be in a responsive, functioning democracy. It would be unrealistic for us to expect our leaders to not use every technological advantage at their disposal to prevent crime/terrorism and keep tabs on our enemies. The surveillance state will continue to get bigger, not smaller. This is the path our country has been on since the beginning of the Cold War and there's no turning back.

Fortune 500 Companies Are Doing Fine

This part of the private sector is doing just fine.

A few weeks ago the media and the Romney campaign jumped all over President Obama's remark that the "private sector is doing fine." He was making a general point that it was doing fine compared to the public sector, which has been shedding hundreds of thousands of jobs since the economic crisis started in 2008.

Perhaps people didn't see this story in the Huffington Post that the Fortune 500 Companies are in fact doing a lot better than fine. In fact they've never been finer.

Fortune released its annual list of the country's 500 biggest companies this week, and it turns out to have been a good year for corporate America. In 2011, the Fortune 500 generated a combined $824.5 billion in earnings -- an all-time record, and a 16 percent jump from the previous year.

The report echos others indicating corporate America is experiencing boom times. U.S. corporate profits returned to pre-recession levels, according to the International Institute for Labour Studies released Friday, hitting 15 percent of gross domestic product.

.....

But much like the too-big-to-fail banks -- whose assets now exceed half the size of the U.S. economy, and which have made more profits since the financial crisis than they did in the eight years prior -- corporations don't seem bothered by the bleak weather on Main Street. They just keep growing.

Here is the entire chart.

One company that caught my eye was Verizon Communications at #15 on the list, who made $2.4B in profit last year (that's profit, not revenue). And then I thought of another story I had read recently by Matt Yglesias at Slate. Yglesias makes the argument that the state of poor quality broadband access is really due to the customers not willing to pay more money for faster speeds. Here's Yglesias' main point:

....But in this particular case, we're not really talking about innovation at all. What's galling—to those of us who are galled by it—about America's broadband infrastructure is that we don't need more innovation. The relevant technology has been invented. What we need are more holes in the ground so that we can fill them with fiber optic cables. This is an expensive proposition, and the basic problem here is that when Verizon dipped its toes into making the investment it turned out that customers didn't want to pay for it. People who write about tech policy on the internet for a living place an unusually high subject value on high-speed internet access, so the resulting situation is frustrating for us. But the problem is really with the customers rather than the companies. There simply aren't enough people who want to pay a premium price for premium service.

When I first read Yglesias' post, I didn't totally buy it. But after thinking about it, Verizon just made $2.4B in profit during a poor economic year for the country overall. So they had a great year. And FiOS implementation is clearly one of the best sources of growth for their business during this time. So with that kind of money available to invest in further roll-outs. it seems much more plausible that the reason Verizon halted this is because not enough customers were willing to pay the higher price.

A few possible solutions proposed by Yglesias [bold mine]:

One way to change that would be to broadly increase household income. This is the kind of situation in which economic inequality spurs technological stagnation. A household earning 20 times the national average income isn't going to buy 20 broadband connections. But if the median household were richer, it might be more willing to pay up for better internet service.

Incentivizing broadband internet investment seems more sensible than incentivizing large houses, and if we want to make that policy choice, there are any number of ways to make that happen either through direct subsidies or through regulations designed to create cross-subsidy.

Expanding access to broadband and wireless connectivity is a real key to growing the economy in the future. The more people who are able to use the fastest possible internet speed will spur other internet-related innovation. Think about what a 56K modem connection limited you to on the Internet 15 years ago compared to what you can do with a fiber-optic cable connection now. iTunes, You Tube, and untold other products or sites wouldn't have been possible without large numbers of people able to connect to the internet at higher speeds.

And this scenario where big corporations have record profits that they aren't using to grow their business is the fundamental macro-economic problem of our time. Businesses didn't stop hiring because of the Confidence Fairy, the Uncertainty Fairy, new regulations, or fear of increased taxes. They aren't expanding or hiring because consumer demand is low and therefore it makes no sense to expand your business and hire more people until consumer demand returns to normal levels. It seems anything short of another round of stimulus spending by the government or some type of changes to the corporate tax code to spur hiring and spending by big corporations and/or a deterrent to sitting on record profits (e.g. a windfall profits tax) will not change this stagnation. And it's hard to understand how cutting corporate taxes even more (the GOP plan) will create more hiring and growth, given these profits.

We Can Work at Home

What your company assumes you're doing when you work at home (Source: Colourbox)

Matt Yglesias of Slate posted a column Tuesday on the hidden benefits of telecommuting. Here's the gist:

...But there is also a compelling case to make that working at home makes people much more efficient, because it allows workers to take care of annoying little chores while still getting their jobs done. Remote working—at least occasional remote working—can be great precisely because of the opportunity it affords to get a certain amount of non-work stuff done. It’s much faster to shop for groceries at a quarter to three than to stand in line during the after-work rush. Far too many people work similar schedules and want to eat dinner at dinnertime. My neighborhood supermarket turns into a nightmare from 6 p.m. to 8 p.m. Sunday late afternoon, another popular shopping time, is even worse, with the aisles often featuring Soviet-style shortages of key commodities. If you just start working a bit earlier (no commute, after all) and pop by the store during a lull when lines are short, you can get both more work and more shopping done in a fixed amount of time. Even better, if more people did that, then shift workers with genuinely inflexible schedules might also be spared some line pain.

And telecommuting allows you to tackle household tasks that take up a lot of time but don’t actually involve much work. Watching laundry spin in your washer or dryer is perfectly compatible with productive work. But between the washing step and the drying step comes a time-sensitive “put the wet clothing in the drier” phase. Taking just a few minutes off from work to do the swap lets you get the chore done efficiently, and leaves your actual leisure time free for exciting activities like leaving the house. Many recipes, similarly, involve considerable periods of simmering or roasting during which it’s good to be around the house but you don’t actually have to do anything. In a “work-then-shop-then-cook-then-eat” paradigm, it’s challenging to eat anything that can’t be made quickly. But if you can simmer while you work, then a lot of household labor can be accomplished with minimal reduction in professional output.

Amen. I have a job that provides me with the flexibility to work remotely very often, just not on a pre-scheduled basis. The benefits are numerous. By having no commute to and from work (as well as extra time spent getting ready in the morning), that's at least an extra hour to do work that you aren't instead spending on driving, walking, bicycling, or waiting for/riding in buses and trains. That also means your morning will be a little less stressful getting little Johnny and Sally off to school, and your evening may less stressful if you are already home and ready to take Johnny or Sally to their soccer game or piano class as soon as you are done working.

In fact, I worked remotely today. I was able to get my hair cut and run a few errands, and do 2 loads of laundry, totaling about an hour that I wasn't actually working. If I had attempted to get a hair cut or run these errands during the normal times I'd be available it would have probably taken me at least 2 hours, factoring in time getting from work to my hairdresser, and probably forced me to take a 1/2 vacation day.

Generally, I also find myself more productive on the days I work remotely, even though I am doing many of the same chores Yglesias describes above while I am home. Instead of stretching and taking a quick five-minute break to clear your head in the office, you can take a five-minute break to do a load of laundry at home. Occasionally, I'll watch an inning here and there of an afternoon ballgame, but I'd be trying to listen to that on the radio if I was at work anyway.

Being out of earshot of your coworkers often allows you to be able to focus more on getting your work done, instead of continually being interrupted so you can help others get their work done. (for more on this, see this great video - "Why You Can't Work at Work"). Many times if you aren't "right there" and your coworkers have to call or email you with whatever question they had, they will just spend 5-10 minutes figuring out the answer on their own, as they should. It's amazing how little verbal communication/interaction is actually necessary at 21st century office jobs, yet if you are in the office you can't get away from the chatter.

Overall, the case for office workers being more productive and motivated in their jobs, if they were able to work remotely 1-2 days a week, seems pretty solid. This would be a welcome change to the culture of office work.