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The Death of the Internet

March 13, 2019

The Death of the Internet

Intended to be open, free, and decentralized, it’s now dominated by a handful of companies that control what we see and what we can say.

Credit: Frederic Legrand – COMEO / Shutterstock.com

The internet was meant to be open, free, and decentralized, but today it is controlled by a few companies with grave consequences for society and the economy. The internet has become the opposite of what it was intended to be.

In the early 1960s, Paul Baran was an engineer at the RAND Corporation when he began thinking about the need for a communications network that could withstand a nuclear strike. RAND was contracted by the Pentagon to create a system that could continue operating even if parts of it were destroyed by an atomic blast. It was supposed to be the ultimate decentralized system. 

Baran went on to publish a paper in 1964 titled “On Distributed Communications,” which was influential in establishing the concepts behind the architecture of the internet. 

Vint Cerf and Robert Kahn put these concepts into practice at the Department of Defense’s Advanced Research Projects Agency in the late 1960s, and created the communication methods that make the internet possible. The principles of freedom and openness were at the heart of the design—packet switching made the system robust in the face of nuclear attacks and Internet Protocol allowed for open interconnection.Advertisement

Years later, Cerf said, “The beauty of the internet is that it’s not controlled by any one group.” In his view, “this model has not only made the internet very open—a testbed for innovation by anyone, anywhere—it’s also prevented vested interests from taking control.”

The principle of decentralization went directly against the business models of technology giants like AT&T and IBM. Until AT&T’s monopoly was broken up in the early 1980s, communications were extremely centralized and traveled through dedicated, point-to-point channels. The use of third-party devices on the network was prohibited. 

 …click on the above link to read the rest of the article…

The Myth of Capitalism – A Book by Jonathan Tepper

November 7, 2018

The Myth of Capitalism – A Book by Jonathan Tepper

Crony Capitalism vs. Free Markets

Many of our readers are probably aware of the excellent work our friend Jonathan Tepper does for Variant Perception (VP)*****, a financial research boutique that really does bring a unique perspective to the table*. Jonathan (with co-author Denise Hearn) has just added a new book to his résumé, which is going to be released on 12 November: The Myth of Capitalism (MoC) – Monopolies and the Death of Competition** (a link to the official site is at the end of this post).

Jonathan Tepper and Denise Hearn: The Myth of Capitalism, an excellent plea for more competition and free markets.

MoC deals with a subject that has increasingly captured the attention of political and economic observers in recent years: the growing quasi-monopolistic powers of a small (and shrinking) number of large corporations that have seemingly succeeded in exempting themselves from competition.

They are often aided and abetted by government imposing regulations certain to suppress competition from less well-funded upstarts and smaller firms. At the same time governments are creating loopholes which only the biggest established firms with international operations are able to take advantage of.

Don’t get us wrong – we have no problem with loopholes as such: to paraphrase Mises, they allow capitalism to breathe. Problematic is only that the benefits granted to the most powerful players are denied to their potential competitors; we wouldn’t want to see these loopholes closed, we would like to see them extended far and wide.

Restoring Consumer Sovereignty 

MoC is not focused on questions of monopoly theory***. The book is actually quite a page turner, at the same time informative, entertaining and infuriating. It is primarily concerned with practical problems and discusses what might be done to overcome them.

…click on the above link to read the rest of the article…

Signs of Mortgage Meltdown in Australia

February 23, 2016

Signs of Mortgage Meltdown in Australia

“Not a question of if but when there will be a mortgage crisis.”

Real estate is local – until it isn’t. Cities have their own housing bubbles that implode on their own time. But once contagion spreads to mortgages and banks and infects confidence of real estate investors and homebuyers alike, and once debt levels are so high that they have become unsustainable and can’t be pushed higher, then a real estate bubble suddenly becomes a national economic issue with terrible consequences.

In Australia, which has the highest household debt in the world, “homes are so expensive that nearly half of all mortgages are interest-only.” They’re offered by the biggest banks with loosey-goosey lending standards. And “that is a red flag for imminent disaster.”

“It’s not a question of if but when there will be a mortgage crisis in Australia,” explained Jonathan Tepper, CEO at research firm Variant Perception, on the local 60-Minutes segment, Home Groans, that aired in Australia on Sunday.

He’d predicted the mortgage meltdowns in the US, Ireland, and Spain. And the one word that best describes the Australian housing market? “Insane.”

The flood of interest-only mortgages with sky-high price-to-income ratios is “a sign of Ponzi financing,” he said. And banks are now heavily exposed to these mortgages and any downturn in prices.

The video clip also features a young investor who was named “Australian Property Investor of the Year” in 2012 by a real-estate hype organ, and who now faces bankruptcy. She marveled at just how “easy to get” money had been.

“Banks only look at the balance sheets and the numbers,” she said. “They don’t see the emotional toll they have on people, and they don’t understand the social costs of their business practices.”

…click on the above link to read the rest of the article…

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