Warning! Big Tech might be drawn into a too close too dangerous for us relation with Big Brother.

Sir, Ms. Rana Foroohar writes: “Whatever their size, the winning companies will be those that are profitable. That may sound obvious, but it hasn’t been for the past decade, as easy money has dulled investor senses.” “Activist’s critique of M&A is right” September 16.

But where did that “easy money” come from? Was it not central banks injecting immense amounts of money, and which effects were much distorted by the risk weighted bank capital requirements, which low capital requirements allowed that liquidity to multiply manifold? Has Ms. Foroohar tried to put the breaks on such easy money, or the contrary has she not been egging it on? 

And Ms. Foroohar concludes: “Meanwhile their Big Tech competitors are already being circled by regulators… Attorneys-general from 50 US states and territories in the US have launched an antitrust investigation into Google’s dominance of search and advertising, while New York is leading a probe of Facebook’s monopoly power… in Europe, the EU competition commissioner Margrethe Vestager… has been given a broader remit that includes digital policy.”

Should we cheer that? Absolutely not! For two reasons:

First that it might lead to Big Tech entering into too close too dangerous relation with Big Brother.

Second we, whose personal data is being exploited by Google, Facebook and similar, should be compensated long before redistribution profiteers and neo-ambulance chasers… for instance by having 50% of their ad-revenues to help fund an unconditional universal basic income.

@PerKurowski

Risk weighted bank capital requirements are anathema to neoliberalism

Sir, Rana Foroohar writes “we have spent decades of living in the old reality — the post-Bretton Woods, neoliberal one.” "Markets are adjusting to a turbulent world" August 19.

There are many definitions of neoliberal policies out there but they always include a large role for the hands of the free market and the reduction in government spending in order to increase the role of the private sector in the economy.

In 1988, for the banking sector, one of the most important economic agents, credit risk capital requirements were introduced by means of the Basel Accord. It gave incentives that distorted the allocation of bank credit to the real economy. For instance lower risk weights for the sovereign (0%) and for residential mortgages (35%) signifies subsidizing the sovereign and the safer present, by taxing the access to credit for the riskier future, like to entrepreneurs (100%). So I do not know what neoliberalism Ms. Foroohar refers to.

Ms. Foroohar, speculating on the possible “impact of an Elizabeth Warren or Bernie Sanders victory in the US primaries?” mentions a 13D Global Strategy and Research note that holds that such event would “fit perfectly into the cycle from wealth accumulation to wealth distribution”, something that Foroohar also believes “will be the biggest economic shift of our lifetimes.”

Sir, at the very moment income, through the purchase of assets, is transformed into accumulated wealth; there cannot be any significant redistribution of it, which means having to sell many of those same assets, without any significant destruction of wealth. If you’re scared of a deep recession, as we all should indeed be, then the last think you’d want to do is to deepen it with a wealth redistribution cycle.

So we cannot redistribute? Yes, we can, but that’s best done getting hold of the income before it is converted into assets, and then, preferably, sharing it out equally to all, by means of an unconditional universal basic income.

@PerKurowski

The battle between capital and labour may be surpassed by the battle between the working class and the not working class.

Rana Foroohar announces, “The age of wealth distribution is coming and will have major investment consequences”, “The age of wealth accumulation is over” August 5.

Indeed, but two questions stand out. 

First, for wealth to be redistributed some assets of the wealthy must be sold and, since precisely because of that there might be less interest among other to acquire those assets, the value of these could fall… with unexpected consequences. Here’s an example, what is best for New York City keeping property taxes and property values at current values, or increasing the taxes running the risk that property values fall and wealthy property owners run away somewhere else?

The second question is who is going to redistribute? Will a mechanism like an unconditional universal basic income be used, or will the usual redistribution profiteers be in charge of it?

Foroohar also announces, “Another battle will be between capital and labour.” That battle will always be present but, in these times when robots and AI seem to threaten jobs, the real battle could end up being between the working class and the not working class.

http://perkurowski.blogspot.com/2012/04/we-need-worthy-and-decent-unemployments.html

@PerKurowski

Should we tax robots low so they work for us humans, or high so that we humans remain competitive?

Rana Foroohar references “a recent report into the US labour market conducted by the McKinsey Global Institute found that… the biggest reason for the declining labour share, according to the study, is that supercycles in areas such as commodities and real estate have made those sectors, which favour capital over labour, a larger part of the overall economy”, “The silver lining for labour markets”, July 1.

“Do we have a supercycles that favour capital over labour”? At least with respect to real estate, especially houses, the “supercycle” we have is caused by bank regulators much favoring credit to what’s perceived as safe over credit to what’s perceived as risky, without one iota of importance assigned to the need of allocating credit efficiently to the real economy.

Then Foroohar refers to the problem: “shifting labour market dynamics will sharpen the political divides that already exist. Many “left behind” cities are home to more Hispanics and African Americans. Job categories that will be automated fastest are entry-level positions typically done by the young. Meanwhile, the over-50s are at the highest risk of job loss from declining skills”. As “The solution” Foroohar writes; “shift policy to support human capital investment, just as we do other types of capital investment”

Sir, unfortunately it is so much more complicated than that. Just the problems with student debts we currently hear about, evidences that we might not really know about how “to support human capital investments”.

Before social order breaks down, we need to start considering the need to generate decent and worthy unemployments, creating an unconditional universal basic income that serves somehow as a floor and decide what to do with AI and robots. Should we tax these low enough so that they do as much jobs as possible for us humans, or should we tax them high enough for us humans to remain competitive for the jobs they do?

PS. On “a mere 25 cities and regions could account for 60 per cent of US job growth by 2030”, may I venture those cities will not include those with the largest unfunded social benefit plans.

http://perkurowski.blogspot.com/2007/01/should-not-higher-education-be-more-of.html

http://perkurowski.blogspot.com/2012/04/we-need-worthy-and-decent-unemployments.html

http://myubi.blogspot.com/2017/01/my-universal-basic-income.html

https://perkurowski.blogspot.com/2017/02/here-some-disorderly-lose-cannon.html

@PerKurowski

America, warning, industrial policy fertilizes crony statism

Sir, Rana Foroohar argues that America has chosen “to support a debt-driven, two-speed economy rather than one that prioritises income and industry” “Plans for a worker-led economy straddle America’s political divides” June 9.

“Debt-driven” indeed, but that has mostly been by prioritizing the safety of banks and the financing of the government.

In 1988 the Land of the Free and the Home of the Brave signed up to a statist and risk adverse bank regulation system. The Basel Accord favors “the safer present”, for instance lending to the sovereign and financing the purchase of houses, over that of “the riskier future’, like lending to entrepreneurs. 

In 1988 when a 0% risk weight was assigned to it, the US debt was $2.6Tn. Now it is $22Tn, and still has a 0% risk weight. And just look at how houses have morphed from being homes into being investment assets.

There’s no doubt the report issued by Marco Rubio, as the chair of the Senate small business committee, is correct in that “the US capital markets had become too self-serving and were no longer helping non-financial business... and that public policy could play a role in directing capital to more productive places — away from Wall Street, and towards Main Street.”

But that does not mean the US, in order to “successfully compete with state-run capitalism” like China, has now to turn to industrial policy and thereby risk being captured by even more crony statism.

Regulators assigned a 20% risk weight to what, because it has an AAA rating could really create dangerous levels of bank exposures, and one or 150% to what is below BB- rated, and which banks do usually not want to touch with a ten feet pole. So why should we believe that governments who appoint such regulators, have better ideas than the market on how to funnel capital to the most productive places, connecting the dots between job creators and education.

Therefore the public policy most urgently needed is that of freeing America (and the rest of the world) from that public policy distortion of the allocation of bank credit, that which builds up dangers to the bank system, and weakens the real economy.

PS. Germany has benefitted immensely from so many eurozone nations helping to keep the euro much more competitive for it than what a Deutsche Mark would be. Therefore it is not really correct to bring up the “success” of Germany as an argument in favor of more state intervention.

http://subprimeregulations.blogspot.com/2019/03/my-letter-to-financial-stability-board.html

@PerKurowski

John Kenneth Galbraith could very well have been asking for the impeachment of current bank regulators.

Sir, Rana Foroohar writes “Americans still fundamentally accept the idea that the private sector always allocates resources more efficiently than the public sector. It is a truism that dies hard” and she uses John Kenneth Galbraith… “concept of countervailing power”, put forth in his 1952 book American Capitalism… a critique of the “market knows best”, as back up. “Old economists can teach us new tricks”, June 3.

Indeed but for a different perspective she should also read John Kenneth Galbraith’s ““Money: Whence it came where it went” 1975. 

I quote: “For the new parts of the country [USA’s West]… there was the right to create banks at will and therewith the notes and deposits that resulted from their loans…[if] the bank failed…someone was left holding the worthless notes… but some borrowers from this bank were now in business...[jobs created]… 

The function of credit in a simple society is, in fact, remarkably egalitarian. It allows the man with energy and no money to participate in the economy more or less on a par with the man who has capital of his own. And the more casual the conditions under which credit is granted and hence the more impecunious those accommodated, the more egalitarian credit is… Bad banks, unlike good, loaned to the poor risk, which is another name for the poor man.”

So, what would Galbraith had said about current regulator’s risk weighted bank capital requirements? Those that favor credit going even more to those who perceived as safe are already favored, and less to those perceived as risky who already have to pay higher interest rates and get less credit? That which guarantees especially large bank crises, from especially big exposures to what’s perceived as especially safe, against especially little capital?

Sir, I believe Galbraith could very well have joined me in a “Let’s impeach those regulators”.

And for the why these regulations are not sufficiently questioned, let me also quote Galbraith: “If one is pretending to knowledge one does not have, one cannot ask for explanations to support possible objections”

PS. More than forty years ago, in Venezuela, John Kenneth Galbraith autographed my heavily underlined pocketbook version of “Money”

http://subprimeregulations.blogspot.com/1997/06/puritanism-in-banking.html

http://subprimeregulations.blogspot.com/2019/06/are-these-reasons-not-enough-cause-for.html

https://subprimeregulations.blogspot.com/2016/03/decreed-inequality.html

@PerKurowski

We might not end up homeless, but homes might be the only thing we end up with… and so how do we eat homes?

Sir, Rana Foroohar writes “Central banks can’t create growth by themselves. They can only funnel money around.” “What Trump gets right” April 15.

Indeed, but the way they funnel money around can also promote obese growth, and impede muscular and sustainable growth.

If you fill a financial irrigation system with huge amounts of liquidity, QEs, and ultra low interest rates, and some of its most important canals, like the financing of entrepreneurs are, because you consider these as risky, blocked with high risk weighted bank capital requirements, there’s no doubt bad things will happen. Among other, that those channels relatively wider because they’re perceived “safer”, like sovereign and the purchase of houses, will get dangerously much credit.

Sir, just consider the role of so much the credit for the purchase of houses has had in turning houses from being homes into being investment assets (Washington Post 2018). I have not done the calculations but were we to deduct from the assets of the 99% less wealthy the worth of their houses, I am sure that we would be horrified about what little savings we would find. We might not end up homeless, but homes might be the only thing we end up with… and how do you eat a home?

@PerKurowski

PS. November 2025, Rana Foroohar wrote in FT: "I was encouraged by a recent pro­file of New York’s newly elec­ted mayor Zohran Mam­dani, which indicated he might have a more soph­isticated view than I had pre­vi­ously thought. In 2020, Mam­dani told a reporter, “What I’ve seen in my work is, it’s not ten­ant versus homeowner.” The afford­ab­il­ity crisis is, rather, “ten­ant and homeowner versus fin­an­cial speculator and investment bank port­fo­lio”. Hous­ing should be about shel­ter first and fore­most — not investors’ profits."

Foroohar and Mamdami would do well having a dialogue with AI about financial incentives and house prices.

PS. In 2025 there are about 86 million U.S. homeowners, a homeownership rate of about 65 percent. In 2024, Trump won with little more that 77 million votes. Does that not mean something?

If the inflation-measured basket used house prices instead of rental costs, the story would be different.

Sir, Rana Foroohar points to “The latest Consumer Price Index figures show that almost all core inflation… was in rent or the owner’s equivalent of rent (up 0.3 per cent) [while] Core goods inflation, meanwhile, was down 0.2 per cent” and argues “that the housing market is once again completely out of sync with the rest of the economy.” “America’s new housing bubble” March 18.

Yes and no! No! “Rent” in much is a laggard response to the price of houses, and so it would be more precise for the arguments made by Foroohar to compare core goods inflation to what is happening to those prices.

Yes! “Hyman Minsky would have had a field day [more precisely many field years] with his Financial Instability Hypothesis that [argues] two kinds of prices — prices for goods and services, and asset prices.”

And yes, Daniel Alpert is correct: “What we have now is a form of inflation that’s never been seen before — it’s all concentrated in housing.”

To explain that with as “something the US Federal Reserve has actually exacerbated (albeit unintentionally) via low interest rates and quantitative easing that boosted housing prices in the very cities where the best paying jobs are located”, is correct but quite incomplete.

If banks needed to hold as much capital against residential mortgages as against for instance loans to entrepreneurs, something that was the case before the Basel Committee got creative, that would be happening much less.

As is, the resulting abundant easy financing when purchasing a house has helped morph houses from being homes into being investment assets. 

PS. In a letter I wrote and that FT published in 2006 (before it stopped doing so) titled “The information Mr Market receives could also be neurotic” I argued:

“Inflation as they, our monetary authorities, know it, is just obtained by looking at a basket of limited consumer goods chosen by bureaucrats and that although they might be highly relevant to the many have-nots, are highly irrelevant to measure the real loss of value of money. 

For instance, who on earth has decided for that the increase in the price of houses is not inflation? And so what should perhaps be argued is that really our monetary authorities have not been so successful fighting inflation as they claim they have been.”

@PerKurowski

The Fed and bank regulators have done many times more harm to the real economy than the political leadership, President Trump included.

Sir, Rana Foroohar writes:“It is clear that the power of monetary policy to support the real economy has diminished. In lieu of better political leadership, the key task for central bankers in the years to come may be to roll up their sleeves and do the gritty work of bolstering not the markets, but Main Street.” “Central bankers refocus on Main Street” December 31.

That’s not likely to happen. The Fed and bank regulators have clearly evidenced they are not up to that task. Without the slightest consideration to how banks are to serve the real economy, and its needs for development, with their risk weighted capital requirements for banks, they blocked “the risky” Main Street’s access to bank credit, in order to favor all that which was perceived (or decreed) as safe… like residential mortgages (and the sovereign) 

Now every one of them will eagerly be trying to escape his or her responsibility, by blaming Donald Trump, who in many ways is acting as a perfect godsend scapegoat.

PS. “We are almost 10 years into a recovery cycle — the time when economic slowdowns typically occur”. That might be so, but it still sounds so expertly besserwisser. 

"Paga-peo" a Venezuelan name for a scapegoat

@PerKurowski

Let us issue shares fed with some results of our economy to all of us, and then worship these.

Sir, Rana Foroohar asking “At what point does bad corporate behavior become willful malfeasance?” writes, “Facebook is the natural culmination of 40 years of business worshipping at the altar of shareholder value.” “Facebook puts growth over governance” December 25.

Really? If all the incredible developments around Facebook, Google, Apple, Amazon, and Microsoft and similar, results from “worshipping at the altar of shareholder value” then perhaps we should issue a share to each citizens that feeds on a substantial part of profits, like those of Facebook, or taxes, like carbon taxes, and have us all worshipping these shares, instead of trusting the acts of genius politicians or bureaucrats with agendas of their own. 

Those shares, which would pay out an equal unconditional societal dividend to all of us, is by the way what a Universal Basic Income is all about. 

Of course, as usually comes with new developments, there are new and serious problems, and data privacy is one of them. Foroohar asks “ Have we reached one of those watersheds when US and European authorities are going to step up and do something about it? Let us beware, there’s no guarantee that would not be even worse. 

Foroohar says she is reminded of “bank executives who had no understanding of the risks built into their balance sheets until markets started to blow up during the 2008 financial crisis” 

I am though more reminded of regulators who allowed banks to leverage over 60 times their equity with what rated as AAA could be very dangerous to our bank system, and less that 8.3 times with what rated below BB- bankers do not like to touch with a ten feet pole. I am reminded of regulators who assigned a risk weight of 0% to the sovereign of Greece, and thereby doomed that nation to its tragedy.

@PerKurowski

The people in the poorest part of the US have no reason whatsoever to blame Trump for their desperation… yet.

Sir, Rana Foroohar writes,“It never ceases to amaze me that a man I consider the most venal and rapacious president in history has managed to sell desperate people in the poorest parts of the US on the idea that he is their saviour”, “America’s vote marks a culture shift” November 5.

Why would that be surprising? The people in the poorest part of the US have no reason whatsoever to blame Trump for their desperation… yet.

Foroohar writes,“Most Americans, liberal and conservative, are united in their definition of what constitutes “just” business behaviour — they believe it is about spreading the wealth, and improving worker pay and treatment.”

Really? Would most Americans, liberal and conservative, not believe that what constitutes “just” business behaviour — is first and foremost to create that economic growth that could generate opportunities for them?

Foroohar concludes, “It would be wise for both politicians and business to focus on those ideas that bring people together, rather than those that drive them apart”. 

What does she mean by “And business”? Except for some truly minuscule exceptions we have not seen any ordinary business dedicating itself to driving people apart. That is normally very bad for business. What we sure have seen is way too many politicians, activists and journalists, being in the business of polarization… many of them even very happy of being able to exploit Trump in order to improve the profitability of their franchise.

What would they all be doing, and writing about, was there no Trump? They better thank their lucky star.

@PerKurowski

True elite should fight odious polarization and not allow itself to be painted into a corner by the neo-parochialism of political correctness.

Sir, Rana Foroohar writes: “there’s research to show that elites are less likely to part with their biases than the ordinary person. This is probably because they believe themselves to be better educated and informed than the masses, which may well be true. “The elites are ignoring deglobalisation” August 15.

If we include bank regulators as part of the elite (they would hate it if we don’t), these do indeed find it very hard to part with their biases. It is sad because they’ve gotten it totally wrong.

You ask them: Why do you want banks to hold more capital against what is especially dangerous for our bank system because it is perceived or decreed as safe, than against what is perceived risky and therefore poses no threat? Their eyes glaze over and they never answer, except for when they make it as if they’ve heard a coTmplete different question.

The direct consequence of those risk weighted bank capital requirements is plain awful. It only guarantees, especially large exposures, to what’s perceived as especially safe, against especially little capital, dooming our bank systems to especially severe crises. 

Forrohar asks: What is the next big thing the global elite is missing?

My answer would be it is missing out way too much on how polarization and redistribution profiteering, among other empowered by low cost and far reaching social media, is creating odious social divisions that will tear it to pieces.

What could de elite do? To begin with, find ways to restrict those peddling opinions for money (donations). Whenever something exploitable in terms of polarization happens, my inbox is swamped by donation requests to allow the favored anti-devil-champion of turn to enter into battle and save us.

Recently Lawrence Summers in “I discovered the rest of America on my summer holiday” described America’s small communities’ parochialism with “The conversations we overheard hewed close to local matters.”

In the discussion of the article on the web I commented “Political correctness, that which only allows focusing on small-predefined sections of an issue, rather than allowing considering its wider context, is a living example of a neo-parochialism you find in universities and big cosmopolitan cities”

Sir, a true elite does not allow itself to be painted into a corner by political correctness.

Red and blue, or, red or blue

@PerKurowski

For better transparency should newspapers have a section of “Journalism” and one of “Political Activism”?

Sir, Rana Foroohar discussing the issue of ever growing student debt, ends her review of Devin Fergus’s book “Land of the Fee”, with: “Perhaps the new generation of millennial socialists rising in the US should make this the issue they tackle first”, "Slow bleed" August 18.’

What’s wrong with plain millennials? Do they have to be socialists? Or is Foroohar more than a journalist an activist?

Sir, since many years I have been arguing that higher education should be much more of a joint venture between the students and their Alma Maters; and that financing preferentially educational costs would just leave over-indebted students and enriched professors. Just as financing preferentially house purchases benefits those who have invested in houses, much more than those who want a house just to be their home.

Here below are two of my tweets that I think cut over political lines, but that therefore might not be of too much interest to redistribution or polarization profiteers.

1. “Instead of taking on debt, perhaps students should go for crowdfunding their study costs, offering to pay a percentage of their incomes during their first 15 after graduation years. If so would not investors want their professors to have some skin in the game too?”

2. “Would insurance companies be willing to invest in the future by financing students against a percentage of their first 15 after graduations years of income? Would IRS be willing to certificate the incomes of these students for the investors?”

I have now ordered, “Land of the Fee” and so I will keep my comments till after I read it. That said I am sure I will again have to ask: Where was FT when regulators risk weighted sovereigns 0% and citizens 100%? Where was FT when regulators allowed banks to leverage 62.5 times only because an AAA rating issued by human fallible rating agencies was present? Where is FT on that all the real benefits of securitization do not accrue those securitized, much the contrary securitization profits are maximized when hurting the most? 

@PerKurowski

There’s never a wrong time to begin correcting bad bank regulations, such as the current ones.

Sir, Rana Foroohar writes: “Financial crises always start the same way” and refers to “Over-confident financiers [and] lax regulators”, “The wrong time to weaken bank reform” May 21.

The 2007/08 crises resulted from overconfident regulators, those who believed so much in the capacity of credit rating agencies that, if private sector assets were rated AAA to AA, banks were allowed to hold these against only 1.6% in capital, meaning they were allowed to leverage a mindboggling 62.5 times. The financiers on their hand, much more than overconfident, were lax and did not have it in them to resist the temptations of such regulatory generosity.

Sir, just think about how much sufferings and how many unrealized dreams could have been avoided had only the following four simple questions been asked of the Basel Committee’s about their risk weighted capital requirements for banks. 

1. What? Do you really know what the real risks for banks are? If you do, why are you not bankers?

2. What? Don’t you see that allowing banks to leverage differently with different assets will lead to a new not-market-set of risk adjusted returns on equity. Are you not at all concerned this could dangerously distort the allocation of credit to the real economy?

3. What? Do you think that what’s perceived risky, that which bankers adjust to by means of lower exposures and higher risk premiums, is more dangerous to the bank system than what they perceive as safe?

4. What? A 0% risk-weight of sovereigns? That could only be explained by their capacity to print currency in order to get out of debt. But is that not also one of their worst possible misbehaviors?

The saddest part though is that 30 years after that faulty regulation was first introduced with the Basel Accord in 1988, these questions are still waiting for an answer.

Sir, there is never the wrong time to start correcting for such bad regulations. You could argue that the introduction of a leverage ratio is doing that. Indeed, but as long as the risk weighted capital requirements remain these will be influencing credit decisions where it most counts, on the margin.

And it is only getting worse. Foroohar writes “larger banks with assets ranging from $250bn to more than $2tn… will now be able to reclassify municipal bonds as “high quality assets”, making it easier for them to game the liquidity coverage ratio.” What does that signify? Those municipalities will get too much credit in too easy terms… just like Greece.

@PerKurowski

Rana Foroohar. Please ask yourself a question and, if you cannot answer it, do ponder why.

Sir, I refer to Rana Foroohar’s “Three questions for the Fed’s Powell” February 26.

Ms. Foroohar (and you too Sir) should ask herself: why do regulators want banks to hold more capital against what, by being perceived as risky, has been made quite innocous, than against what, because it is perceived as safe, is so much more dangerous?

And if could not come up with a truly convincing answer, then that should give her a clue on that something very strange is going on in the field of bank regulations.

And if she had gotten to that point, then it should not be too hard for her to begin to understand how those different capital requirements, which allows for some assets to be leveraged much more than others, might distort the allocation of credit to the real economy… and thereby affect its “real non-financialised growth”

And at that point she would surely add, that same question she could not answer, to those three she proposes to ask Powell.

Foroohar also references companies “buying up the higher-yielding bonds of riskier companies at a favourable spread and holding those assets offshore [and that now after] President Donald Trump’s new tax rules… They will simply be able to move their money wherever they want, whenever they want, in cash.”

“Cash”? In order to become cash, all those assets the companies have bought and held offshore must be sold. Would that not have any consequences?

@PerKurowski

Universal Basic Income seems to be the most neutral and efficient tool to handle the unknown upheavals the use of artificial intelligence and robots will bring.

Sir, Rana Foroohar writes: “A McKinsey Global Institute report out on Wednesday shows that, while digitalisation has the potential to boost productivity and growth, it may also hold back demand if it compresses labour’s share of income and increases inequality.” “Why workers need a ‘digital New Deal’” February 19.

That sure seems to make the case for a Universal Basic Income, a Social Dividend, both from a social fairness angle and from the perspective of market efficiency.

To preempt that really unknown challenge at hand, Foroohar proposes something she names “the 25 percent solution” based on how Germany tackled an entirely different problem, the financial crisis. What it entails makes me suspect it could risk reducing the growth and productivity that could be achieved, and waste so much of the resources used to manage the consequences, so that only 25 percent, or less, of the potential benefits of having artificial intelligence and robots working for us would be obtained.

I worry sufficiently about a possible new Chinese curse of “May your grandchildren live with 3rd class robots and dumb artificial intelligence”; to also have to add “May your grandchildren have to serve the huge debt derived from technocrats defending your generation from artificial intelligence and robots.

Sir, I had more than enough of besserwissers trying to defend us and when doing so causing much more harm. Like when regulators, full of hubris, promised “We will make your bank system safer with our risk weighted capital requirements for banks”.

http://myubi.blogspot.ca/2017/01/my-universal-basic-income.html

@PerKurowski

If you pick the wrong data stream, as bank regulators did, real tragedies can happen

Sir, Rana Foroohar writes: “The ability of a range of companies — in insurance, healthcare, retail and consumer goods — to personalise almost every kind of product and service based on data streams is not just a business model shift. It is a fundamental challenge to liberal democracy.” “Digital democracy is dangerous” January

Yesterday I received the following message from Amazon: “Based on your recent activity, we thought you might be interested in: The Complete Guide to Building with Rocks & Stone: Stonework Projects and Techniques”. Since, at least after the age of eight, I am absolutely sure I have never harbored any intention, much less a burning desire, to build with Rocks & Stone, I suppose that, in terms of using the correct data streams, they business are not really there yet. Neither are bank regulators, though that has much more serious consequences than me not clicking on that book.

Foroohar writes: “Illah Nourbakhsh, a professor at the Robotics Institute of Carnegie Mellon, [has] launched a project to educate elementary school children about the power of data, its risks and rewards, and how to use it to advocate for themselves.”

Great! I hope professor Nourbakhsh makes a case of explaining to the young that the regulators, when setting their current risk weighted capital requirements for banks, used the data about the riskiness of assets, and not the data about what risks those assets posed to the bank system. Had they picked the correct data stream, they would never ever have assigned a minimal risk-weight of 20% to what, perceived so safe as to be rated AAA, could be truly dangerous, and 150% to what, being perceived so risky so as to validate a below BB- rating, is totally innocous.

And then the professor could also, if he dares, explain to these youngsters that these perceived risk adverse regulations now have banks solely refinancing and extracting all value from the “safer” present economy; and not financing the “risky” future that they as young need to be financed, if they are going to have a reasonable future.

http://perkurowski.blogspot.com/2016/04/here-are-17-reasons-for-why-i-believe.html

@PerKurowski

The marginal cost for others than my friends to connect and bother me on the web, should not be zero.

Sir, Rana Foroohar, with respect our lives and adventures on the web advises us “to think much more carefully about three things. First, the extent of information that we reveal and all the myriad ways in which it can be used. Second, whether the products and services we receive in exchange for our data are worth it, or whether the terms of the exchange should be reconsidered. And third, how governments may shift the rules of the new digital playing field, and what it will mean for capitalism in the 21st century.” “Tech’s fight for the upper hand on open data” October 9.

She might be right, but boy that is a big task. I get tired of even thinking I must get through all that.

My current day-to-day concerns are much more mundane, like that of being able to get the most of what I want out of the web, with my very limited attention span. Let us say out of the 180 minutes I might be on the web each day, I would be happy if I were not rudely interrupted more than 50% by distractions; like those fake-news that require so much self-discipline not to click. But the truth is that, for the time being, the robocalls I get on my cell and on my landline are much worse. These demand an immediate attention that the web does not.

There is though one aspect of this all that I have given a lot of thought; and that is on how all revenues generated by exploiting our own preferences should be distributed.

If I, as the owner of the intellectual property rights on my own preferences, cannot be duly paid a royalty for these, at least I do not want others to be able to exploit them for their own causes.

If 50% of all web revenues went to help fund a Universal Basic Income, perhaps that could be an acceptable compromise for me.

But back to our limited attention span, the major problem is that the marginal bothering cost for social media or other service providers to connect with us is zero. If each connection that does not originate from someone directly authorized by us is taxed with US$ one cent… then I am sure those connecting would at least think a bit more before bothering me.

And, of course, those taxes should also help feed a Universal Basic Income. The last thing we need is social media and redistribution profiteers teaming up in order to engage in mutually profitable crony statism. 

@PerKurowski

The numbers of ads on Facebook and Google need to be limited, and those clicking these should also be paid something.

Sir, Rana Foroohar, with respect to those services we supposedly receive free from Goggle, Facebook and similar for free, correctly writes “free is not free when you consider that we are not paying for these services in dollars, but in data, including everything from our credit card numbers to shopping records, to political choices and medical histories. How valuable is that personal data?” "Big tech makes vast gains at our expense", September 18

Indeed, more than 10 years ago I wrote you a letter in which I said: “Clearly a search engine should mostly be valued in terms of the services it offers to the searchers but in this case it is actually the searchers that become the searched and this leads to some very strange signalling effects”.

And since then I have been all over the web promoting among others the possibility that we should be able to get an intellectual property right over our own preferences, in order to have sometRhing to negotiate with… and then on how we could enter into agreements with ad-blockers that could help us exploit those IPRs.

But lately what has also come to concern me, is how our very limited attention span is being overexploited, leaving us too little time for reflection on our own realities.

Would it not be great if Google or Facebook, or any such similar social media service we get hooked on, and which has over a million members, could only send each member ten adds per day, and that these would receive 50% of any ad revenues collected as a result of having clicked on the ad?

Under no circumstances should we humans allow the marginal cost of bothering us to be zero.

I believe that could benefit all parties involved. Even Google, Facebook and alike would be less harassed by the besserwisser. Don’t you think so Sir?

@PerKurowski

Profits obtained under cover of patents should be taxed higher than those obtained when competing in the nude

Sir, Rana Foroohar writes about the clear ‘you can’t have the cookie and eat it too’ conflicts present in the area of protection of intellectual rights. “A better patent system will spur innovation” September 4.

In 2008, trying to build a bridge that could resolve some issues, I ended an Op-Ed with a proposal of introducing a special tax on all profits generated under the cover of any IPR, for instance a patent.

As I have since repeated many times, it is not logical the same tax rate applies to profits obtained when competing naked in the market, than when the profits are obtained under the cover of a protection.

Such tax should, as a minimum minimorum, at least cover all costs for society of awarding and enforcing IPR protections.

Nowadays I would also argue that tax should also be a source of funding for a Universal Basic Income. That because, most or even all of these protections, truth be told, are sort of unfairly awarded to whoever runs the last leg of a relay that has been run, with ingenuity, creativity and strenuous efforts, by generations of humans.

@PerKurowski