One assumption regarding net neutrality is that access providers will inevitably limit the service they provide based upon their rational best interest - the almighty dollar. This is best scene in the negtotiations over fees Netflix paid to Comcast over bandwidth usage. Once access providers see their income streams dry up, corporate interests lobby for high barriers to entry to stifle competition, ensuring their position in the market. This is exactly what has happened as consumers, tired of high costs and lackluster service, have done in attempt to get content at a better price. Companies such as Netflix and Hulu benefit when cables subscriptions are terminated. The institutionalization of access providers to control content from media platforms in the market allows them to monopolize supply as well as pricing (technically an oligopoly). The ability of Comcast and Verizon to control bandwidth as revenue streams search for better investments is directly analogous to the movement of capital at the peak of the financial crisis. Investors could no longer rely on income from MBS as the first wave of option ARMs reset- the real price for real estate collapsed when demand was exhausted. This is exactly what happened to cable television subscriptions. The movement of capital, seeking the best return on investment, substituted internet service for cable and cash for mortgage backed securities. The fundamental survival technique is evolve or die- become acquired or parish, consolidate and reform to provide better service at a lower cost- as the new wave of youtubesphere takes over. But, if you run a 200 billion dollar corporation, it's much simpler to lobby that infratructure and bandwidth are finite, rather than innovate. The slow collapse of traditional interests gravitates to the institutionalization of market power and ultimately results in higher prices for consumers. Let's hope that the innovators can continue to provide the best choice for consumers.
Sunday, November 16, 2014
Wednesday, October 1, 2014
does more political power lie in beijing or hong kong?
The attainment of political capital in the south is viewed as existential threat to the monopolies held by the communist party in local market economies. The geographic location and purchasing power or civilians plays a central role in level of resistance, as does the draconian actions sought to control public opinion. The stronger the threat, the more intense pressure is exerted by the political establishment in order to control the response, media and opinions held by civilians. This is manifested through the communist party's control of candidates in local elections. The approval or disapproval of the democratic process is far from out of the ordinary in traditional Chinese elections. The ability of leadership to control online content is a primary concern, according to western media reports. The post reported that there was widespread belief that western governments and their allies are responsible for much of the protest in Ukraine. Unfortunately, the pattern has been established throughout the Arab world that the tighter control of internet users is prone to strengthen the dissent in the long run- given the speed of information movement is exponentially faster than the ability of governments to control the message. The institutionalization of control is prominent and even expected throughout Chinese society. One perspective views the Chinese opinion as Hong Kong students as the ones who violated Beijing's agreement with the UK in 1997. That is, historical precedents for elections already exist as a widely agreed upon process, e.g.the electoral college without the democracy part. This assumption is based on historical connotations of political power. It should be noted that the US can often appear as opposed to democracy in many parts of the world, particularly in the middle east. This is based on the fact that the US oftentimes refuses to support legitimate elections when they are won by a party that is classified as a terrorist organization. The US is only now beginning to recognize the strategic importance of organizations such as Hezbollah, given their political clout, provisions of government services as well as influence in Beirut and Damascus. The ability of protests in Hong Kong has to spread to the mainland is an ominous storm that Bejing has seen and weathered in the past. One cannot underestimate Beijing' s ability to control the message. However, it would be naive to think that opinions can be dictated by backroom dealers in the 21st century. The era has yet to be defined, but leadership will be served best by the public perception and evenly distributed wealth- it is the return on political capitalism in advanced market systems that that can define a changing of the guard. The world is witnessing the aftermath of the Arab Spring. The Hong Kong or Shanghai version has higher potential output due to the size of the economy. Well managed urbanization and continued reform of the hoku system is one place for emphasis. Another is giving civilians more choices in the products they buy and leadership that are supposed to represent their interests.
Thursday, September 18, 2014
Does Scotland deserve its own independent country?
That question will be answered by the Scottish people in a very short period of time(hopefully by 10:30 pm ET on 9-18-2014). However, in light of the ability of IS to control its own territory inside Iraq and Syria, I'd say the Scottish should easily qualify. Each situation is a prime example of socioeconomic development in the 21st century. he separation of market economies from nation-states will innately increase over time.
Throughout history, it has been the role of nation-state actors to: (1) control territory; (2) develop market systems; (3) fund government services; and (4) provide public goods The Industrial Revolution in the UK (r.i.p.?) was the first modern market system, beginning in the 1800s. Before the IR, it was the British control of vast ocean supply routes, development of the US colonies and superior naval force that provided the economic engine of a robust export economy.
The role of the British Navy and western style economic development-- complete with deep and liquid financial markets-- has contributed to the prosperity in Western Civilization for hundreds of years. Militias, such as IS, are able to control territory that is not supported by liquid socioeconomic market systems, in the absence of government services and public goods. The demand for political establishment to develop court systems and military capabilities is obvious --- the demand from the cities is a natural part of socioeconomic system, whereas IS profits from the demand and provides services that are in some twisted shape, a form of rent seeking.
Well, why does this happen? The success of organizations such as IS is rooted in theory of small and large concentrated interests. Small groups are more efficient, less bureaucratic, nimble entities that owe their survival to adaptation to the environment. Essentially, it is a lot easier to go to dinner and pay a bill with 5 people than it is to split it with 15 people. This enables IS to seek rents, develop military capabilities and control territory, albeit on quite a large scale. Their ideology appeals to a certain aspect of society that reads the works of Sayid Qtub, the Egyptian poet that provides the theoretical basis for modern extremism.
Throughout history, it has been the role of nation-state actors to: (1) control territory; (2) develop market systems; (3) fund government services; and (4) provide public goods The Industrial Revolution in the UK (r.i.p.?) was the first modern market system, beginning in the 1800s. Before the IR, it was the British control of vast ocean supply routes, development of the US colonies and superior naval force that provided the economic engine of a robust export economy.
The role of the British Navy and western style economic development-- complete with deep and liquid financial markets-- has contributed to the prosperity in Western Civilization for hundreds of years. Militias, such as IS, are able to control territory that is not supported by liquid socioeconomic market systems, in the absence of government services and public goods. The demand for political establishment to develop court systems and military capabilities is obvious --- the demand from the cities is a natural part of socioeconomic system, whereas IS profits from the demand and provides services that are in some twisted shape, a form of rent seeking.
Well, why does this happen? The success of organizations such as IS is rooted in theory of small and large concentrated interests. Small groups are more efficient, less bureaucratic, nimble entities that owe their survival to adaptation to the environment. Essentially, it is a lot easier to go to dinner and pay a bill with 5 people than it is to split it with 15 people. This enables IS to seek rents, develop military capabilities and control territory, albeit on quite a large scale. Their ideology appeals to a certain aspect of society that reads the works of Sayid Qtub, the Egyptian poet that provides the theoretical basis for modern extremism.
Monday, August 25, 2014
The Ferguson-Palestinian Parallel
The excessive use of force by police officers in Ferguson, Missouri draws a distinct, yet credible connection to the disproportionate use of hellfire missiles by IDF, in their misguided efforts to put down the Palestinian uprising.
The blockade of goods and medicine, use of heavily armed checkpoints, and economic crisis in Gaza strips the freedom of ordinary citizens. In Ferguson, the tanks, tear gas and rubber bullets on display showed CNN viewers that the police were as ready for a riot as US Marines were ready for a multiethnic civil war in 2003. The show of force becomes fuel for the opposition and sets the obvious example of the have v. have- nots. Additionally, the lack of community engagement further exacerbated the divide between the all white paid officers and the predominantly black community- those they were paid to protect.
Although, police did not use laser guided bombs as IDF uses against civilian targets, the lack foresight and misuse of urban combat contributed significantly to the escalation of violence. If the Ferguson riots were equivalent to the Palestinian conflict, the police department would have characterized all citizens as terrorists that use children as shields for cover.
Insurgencies happen for a reason - they adapt dynamically to changes in the environment. Underlying tensions and conflict in urban areas can arise from distrust and misperceptions in both rich and poor communities. Bridging the socioeconomic gap, increasing social interactions, equal rights, education and a police force that knows the names of the citizens they are paid to protect will go a long way to the new deinstitutionalization of segregation and racism that exist in the US and the Gaza strip.
The institutionalization of racism is a function resulting from a combination of income inequality, homogeneous social networks, fractured cities, local government and prohibitive zoning laws that segregate populations. The proportionality of violence triggers unrest and violence in the presence of underlying tensions from segregated populations. When the violence occurs outside of St. Louis or in Gaza, the details of who was acting in good faith are irrelevant because the socio-economic forces are so far apart in terms of physical location as well as the mental state of disjointed communities- Black-and-white, Israeli-Palestinian. Natural violence occurs when segments of populations are marginalized by political elite as rational actors seek to maximize political capital in response to community reaction. The tendency for rational actors to minimize the political clout of segregated minority groups has been seen throughout history, most notably during the Civil Rights movement and riots that occurred throughout the US in the 1960s.
The most difficult aspect of this urbanized phenomenon is lack of political power- where riots and violence attempt to reverse the risk-reward calculus. In Missouri, citizens can vote. In Gaza, the people can also vote, but because one political organizations is also a terrorist organization, the democratic process becomes a hypocrisy and is not recognized when the outcome does not go accordingly. It should be noted that Hamas was only part of the coalition government- just as Hizballah represents a portion of the Lebanese Parliamentary system.
The blockade of goods and medicine, use of heavily armed checkpoints, and economic crisis in Gaza strips the freedom of ordinary citizens. In Ferguson, the tanks, tear gas and rubber bullets on display showed CNN viewers that the police were as ready for a riot as US Marines were ready for a multiethnic civil war in 2003. The show of force becomes fuel for the opposition and sets the obvious example of the have v. have- nots. Additionally, the lack of community engagement further exacerbated the divide between the all white paid officers and the predominantly black community- those they were paid to protect.
Although, police did not use laser guided bombs as IDF uses against civilian targets, the lack foresight and misuse of urban combat contributed significantly to the escalation of violence. If the Ferguson riots were equivalent to the Palestinian conflict, the police department would have characterized all citizens as terrorists that use children as shields for cover.
Insurgencies happen for a reason - they adapt dynamically to changes in the environment. Underlying tensions and conflict in urban areas can arise from distrust and misperceptions in both rich and poor communities. Bridging the socioeconomic gap, increasing social interactions, equal rights, education and a police force that knows the names of the citizens they are paid to protect will go a long way to the new deinstitutionalization of segregation and racism that exist in the US and the Gaza strip.
The institutionalization of racism is a function resulting from a combination of income inequality, homogeneous social networks, fractured cities, local government and prohibitive zoning laws that segregate populations. The proportionality of violence triggers unrest and violence in the presence of underlying tensions from segregated populations. When the violence occurs outside of St. Louis or in Gaza, the details of who was acting in good faith are irrelevant because the socio-economic forces are so far apart in terms of physical location as well as the mental state of disjointed communities- Black-and-white, Israeli-Palestinian. Natural violence occurs when segments of populations are marginalized by political elite as rational actors seek to maximize political capital in response to community reaction. The tendency for rational actors to minimize the political clout of segregated minority groups has been seen throughout history, most notably during the Civil Rights movement and riots that occurred throughout the US in the 1960s.
The most difficult aspect of this urbanized phenomenon is lack of political power- where riots and violence attempt to reverse the risk-reward calculus. In Missouri, citizens can vote. In Gaza, the people can also vote, but because one political organizations is also a terrorist organization, the democratic process becomes a hypocrisy and is not recognized when the outcome does not go accordingly. It should be noted that Hamas was only part of the coalition government- just as Hizballah represents a portion of the Lebanese Parliamentary system.
Monday, July 28, 2014
The war of 1,000 Palestinians and the Proportionality of Violence
The recent Palestinian-Israeli conflict was sparked by the killing of three Israeli teens and the quid pro quo killing of a Palestinian youth. However, this conflict runs much deeper throughout history as oppression of the Palestinian people and proportionality of violence raises much concern for US interests abroad. The use of asymmetric violence is rooted in the theory of jus in bello (http://en.wikipedia.org/wiki/Just_war_theory) and has numerous implications for US Foreign Policy.
First, the missiles used by Israel are "Made in America," by US contractors. The current year estimate for US foreign aid to Israel is $3.1 to $4.0 billion (see CRS report http://fas.org/sgp/crs/mideast/RL33222.pdf). Second, the US-Israeli military aid serves as justification for Mr. Netanyahu to conduct asymmetric warfare. Without consequences of withholding aid, there is little reason for Mr. Netanyahu to compromise on settlements. Land for peace and the return to UN Security Council Resolution 242 is a cornerstone of the Palestinian insurgency. Third, the presence of U.S. troops in the Gulf and support for Israeli war crimes was a primary greivance of the attacks on September 11, 2001. Fourth, the slaughter of civilians in Gaza will only increase despair, oppression and hopelessness of the Palestinian population. This increases the likelihood of violence and uprising over the long run. Fifth, the insurgency can become significantly more complicated if Hizballah begins operations from the northern front. Israel can continue to destroy the lives of innocent civilians in Gaza, but the economic, social and opportunity cost is exponential if a multiethnic war breaks out on two fronts.
The current Israeli-Palestinian conflict is far from symmetrical. Israeli missiles have been flying into the homes of Palestinian civilians, complete with "Made in America" logos from Lockheed and Northrop Grumman. The slaughter of civilians gives the insurgency just cause, irrespective of Hamas' use of hospitals and schools for shelter. According to Boot, Byman, Killcullen, Nagl, et al, the use of hellfire missiles to combat an insurgency is a misguided strategic plan. The violation of jus ad bellum principles of warfare impedes the ability of the U.S. to conduct sound foreign policy when the time comes to clean up the mess left by Netanyahu.
First, the missiles used by Israel are "Made in America," by US contractors. The current year estimate for US foreign aid to Israel is $3.1 to $4.0 billion (see CRS report http://fas.org/sgp/crs/mideast/RL33222.pdf). Second, the US-Israeli military aid serves as justification for Mr. Netanyahu to conduct asymmetric warfare. Without consequences of withholding aid, there is little reason for Mr. Netanyahu to compromise on settlements. Land for peace and the return to UN Security Council Resolution 242 is a cornerstone of the Palestinian insurgency. Third, the presence of U.S. troops in the Gulf and support for Israeli war crimes was a primary greivance of the attacks on September 11, 2001. Fourth, the slaughter of civilians in Gaza will only increase despair, oppression and hopelessness of the Palestinian population. This increases the likelihood of violence and uprising over the long run. Fifth, the insurgency can become significantly more complicated if Hizballah begins operations from the northern front. Israel can continue to destroy the lives of innocent civilians in Gaza, but the economic, social and opportunity cost is exponential if a multiethnic war breaks out on two fronts.
The current Israeli-Palestinian conflict is far from symmetrical. Israeli missiles have been flying into the homes of Palestinian civilians, complete with "Made in America" logos from Lockheed and Northrop Grumman. The slaughter of civilians gives the insurgency just cause, irrespective of Hamas' use of hospitals and schools for shelter. According to Boot, Byman, Killcullen, Nagl, et al, the use of hellfire missiles to combat an insurgency is a misguided strategic plan. The violation of jus ad bellum principles of warfare impedes the ability of the U.S. to conduct sound foreign policy when the time comes to clean up the mess left by Netanyahu.
Wednesday, April 2, 2014
Natural Gas Exports, Payment Transaction Networks and Russia
Natural gas exports are a vital resource for the Russian economy. According to the EIA, Russia exported net 7.4 million bbl/d equivalents in 2012. Among this 7.4 million, 5.0 million was crude and 2.4 included other petroleum products. The EIA reports that Germany is the top recipient of crude (approx. 700,000), followed by the Netherlands (approx. 550,000), China (approx. 480,000) and Poland (approx. 470,000). The UK receives over 100,000 barrels per day.
Russia's support for the economy of EU, represents a dominant position in the market, and the Middle East, in particular. This economic clout is vital to the region's interest and represents a strong counterweight to US policy in Berlin. The EU stance on the Russian invasion is heavily influenced by the energy economy. Russia undoubtedly supplies the regimes of Bashar al-Assad and the Alawite regime in Damascus. The supply of arms is widely reported through US and British newspapers. This political clout represents an economic interest that is much stronger than the US in the region. Germany has been slow to move against Russia, given its vulnerability as the top recipient of Russian gas exports. Pipeline networks throughout the EU and Eastern Europe are vast natural resource of infrastructure development. This economic leverage ought to be diversified to support a market system that is independent of unstable Middle East and Easter European policital economies.
During the Civil War, Europe was forced to move supply routes for cotton to Egypt because Union blockades prevented the sale of cotton from southern ports. The effect was devastating, crippling the war efforts demand for financing from European economies. The payment networks and flow of goods across the globe are a key component of Russian chess moves. This includes energy supplies in Europe, which are dominated by Russia and payment processing networks by US companies such as Visa and Mastercard.
The payment networks in the developed world represent a significant and influential policy tool. They represent behavior of participants in a market, whether in Washington or Moscow. Payment networks represent an economic base, from tourism to trading of commodities and natural resources, the networks process transactions efficiently. The monies generated by the networks are real, the participants using the networks are rational and facilitation of the market system is an integral piece of the infrastructure that exists. The connection of buyers and sellers to the network creates a market system governed by the laws of the country which the transactions take place.
Eastern Europe is notorious for their utilization of the black market. This is analogous to "by any means necessary" as black markets represent an efficient form of a functioning economy and fill the void left by governments, institutions and infrastructure. The efficient use of the black market may trump legitimate corporations and crowd out market participants. The laws in much of the undeveloped world are local, the rules are local and appropriate obedience must be followed to gain access to these markets. If the costs of obtaining access are prohibitively expensive and returns not high enough to justify taking risk, the market entrenches locally, cutting off access to the global economy.
The extent which the US and EU control this infrastructure can have important influence over decisions made by countries such as Russia. The Russian elite are widely known to utilize the bailed out banking system in Cyprus. The Treasury has limited influence if the transaction payment networks are held outside of US corporations.
Mr. Putin may have already grabbed the natural resources he needed and expanded his market system. One could argue that the risk-reward decision was tilted in favor of Mr. Putin and that he acted completely rational in terms of maximizing return on political capital. The opportunity cost was huge and deterrence by the international community was weak. Mr. Putin simply repeats the pattern of Georgia in 2008, albeit without the precursor of a cyber attack and with a different US President.
(1) Ref: http://www.theguardian.com/world/bashar-al-assad.
(2) Ref: http://www.eia.gov/countries/cab.cfm?fips=rs.
(3) Ref: http://www.bbc.com/news/business-26724081.
Russia's support for the economy of EU, represents a dominant position in the market, and the Middle East, in particular. This economic clout is vital to the region's interest and represents a strong counterweight to US policy in Berlin. The EU stance on the Russian invasion is heavily influenced by the energy economy. Russia undoubtedly supplies the regimes of Bashar al-Assad and the Alawite regime in Damascus. The supply of arms is widely reported through US and British newspapers. This political clout represents an economic interest that is much stronger than the US in the region. Germany has been slow to move against Russia, given its vulnerability as the top recipient of Russian gas exports. Pipeline networks throughout the EU and Eastern Europe are vast natural resource of infrastructure development. This economic leverage ought to be diversified to support a market system that is independent of unstable Middle East and Easter European policital economies.
During the Civil War, Europe was forced to move supply routes for cotton to Egypt because Union blockades prevented the sale of cotton from southern ports. The effect was devastating, crippling the war efforts demand for financing from European economies. The payment networks and flow of goods across the globe are a key component of Russian chess moves. This includes energy supplies in Europe, which are dominated by Russia and payment processing networks by US companies such as Visa and Mastercard.
The payment networks in the developed world represent a significant and influential policy tool. They represent behavior of participants in a market, whether in Washington or Moscow. Payment networks represent an economic base, from tourism to trading of commodities and natural resources, the networks process transactions efficiently. The monies generated by the networks are real, the participants using the networks are rational and facilitation of the market system is an integral piece of the infrastructure that exists. The connection of buyers and sellers to the network creates a market system governed by the laws of the country which the transactions take place.
Eastern Europe is notorious for their utilization of the black market. This is analogous to "by any means necessary" as black markets represent an efficient form of a functioning economy and fill the void left by governments, institutions and infrastructure. The efficient use of the black market may trump legitimate corporations and crowd out market participants. The laws in much of the undeveloped world are local, the rules are local and appropriate obedience must be followed to gain access to these markets. If the costs of obtaining access are prohibitively expensive and returns not high enough to justify taking risk, the market entrenches locally, cutting off access to the global economy.
The extent which the US and EU control this infrastructure can have important influence over decisions made by countries such as Russia. The Russian elite are widely known to utilize the bailed out banking system in Cyprus. The Treasury has limited influence if the transaction payment networks are held outside of US corporations.
Mr. Putin may have already grabbed the natural resources he needed and expanded his market system. One could argue that the risk-reward decision was tilted in favor of Mr. Putin and that he acted completely rational in terms of maximizing return on political capital. The opportunity cost was huge and deterrence by the international community was weak. Mr. Putin simply repeats the pattern of Georgia in 2008, albeit without the precursor of a cyber attack and with a different US President.
(1) Ref: http://www.theguardian.com/world/bashar-al-assad.
(2) Ref: http://www.eia.gov/countries/cab.cfm?fips=rs.
(3) Ref: http://www.bbc.com/news/business-26724081.
Thursday, March 27, 2014
Payment Transaction Networks and Russia
The payment networks in the developed world represent a significant and influential policy tool. They represent behavior of participants in a market, whether in Washington or Moscow. Payment networks represent an economic base, from tourism to trading of commodities and natural resources, the networks process transactions efficiently. The monies generated by the networks are real, the participants using the networks are rational and facilitation of the market system is an integral piece of the infrastructure that exists. The connection of buyers and sellers to the network creates a market system governed by the laws of the country which the transactions take place.
Eastern Europe is notorious for their utilization of the black market. This is analogous to "by any means necessary" as black markets represent an efficient form of a functioning economy and fill the void left by governments, institutions and infrastructure. The efficient use of the black market may trump legitimate corporations and crowd out market participants. The laws in much of the undeveloped world are local, the rules are local and appropriate obedience must be followed to gain access to these markets. If the costs of obtaining access are prohibitively expensive and returns not high enough to justify taking risk, the market entrenches locally, cutting off access to the global economy.
The extent which the US and EU control this infrastructure can have important influence over decisions made by countries such as Russia. The Russian elite are widely known to utilize the bailed out banking system in Cyprus. The Treasury has limited influence if the transaction payment networks are held outside of US corporations.
Mr. Putin may have already grabbed the natural resources he needed and expanded his market. One could argue that the risk-reward decision was tilted in favor of Mr. Putin and that he acted completely rational in terms of maximizing return on political capital. The opportunity cost was huge and deterrence by the international community was weak. Mr. Putin simply repeats the pattern of Georgia in 2008, albeit without the precursor of a cyber attack and with a different US President.
Eastern Europe is notorious for their utilization of the black market. This is analogous to "by any means necessary" as black markets represent an efficient form of a functioning economy and fill the void left by governments, institutions and infrastructure. The efficient use of the black market may trump legitimate corporations and crowd out market participants. The laws in much of the undeveloped world are local, the rules are local and appropriate obedience must be followed to gain access to these markets. If the costs of obtaining access are prohibitively expensive and returns not high enough to justify taking risk, the market entrenches locally, cutting off access to the global economy.
The extent which the US and EU control this infrastructure can have important influence over decisions made by countries such as Russia. The Russian elite are widely known to utilize the bailed out banking system in Cyprus. The Treasury has limited influence if the transaction payment networks are held outside of US corporations.
Mr. Putin may have already grabbed the natural resources he needed and expanded his market. One could argue that the risk-reward decision was tilted in favor of Mr. Putin and that he acted completely rational in terms of maximizing return on political capital. The opportunity cost was huge and deterrence by the international community was weak. Mr. Putin simply repeats the pattern of Georgia in 2008, albeit without the precursor of a cyber attack and with a different US President.
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