An open letter to the FCC, transmitted to openinternet@fcc.gov, the FCC's comment address for their "Open Internet" rulemaking process.

Dear Mr. Wheeler;

The recent debate on Open Internet has been entered by stakeholders on all sides.  Unfortunately, in my opinion, many of those presenting positions are failing to disclose their true intentions and bias, and in fact are attempting to use the government to force cost-shifting from their firms to others.

I am a former CEO of an Internet concern, MCSNet, which operated in the greater Chicago area during the early days of the public Internet (1993 - 1998.)  The company was sold to Winstar Communications in 1998.

The issues being discussed today are not new.  As the Internet transitioned from a government-funded (primarily National Science Foundation) interconnection for research and education into a privately-funded network accessible to the public, technological change brought many points of friction that served to place competing interests into conflict.

Internet providers, then and now, sell service to consumers and business interests.  These providers either purchase the service they resell or they build private networks and interconnect them at public "meet points" operated by various entities.  Many have a hybrid structure where both private network construction and the purchase of transport takes place.

All providers of Internet service, for cost reasons, oversell.  That is, a service provider who has 100 Mbps of aggregate capacity in and out of his or her network will sell far more than 100 1Mbps connections to the public.  This is very similar to how roads, water, telephone and electrical systems work.  There were approximately 7 million people in the Chicago metropolitan area in the 1990s when I was operating my ISP, but all 7 million of them could not possibly travel on the freeways in the area at one time.  My home has 200 amp electrical service but there is not sufficient electrical power available from my power company for myself and all of the other people in my neighborhood to each consume all 200 amps of electrical power at once.  I have a connection to the water main at the street and nominally there is 40psi of pressure at my tap, but if myself and all of my neighbors open all of our taps at once the pressure will drop to nearly zero, because the main cannot serve every house in my neighborhood using its full capacity to deliver water at one time. And while we all have cell phones in our pocket these days, and used to have a phone on the wall or a desk in our homes, if everyone tried to make a call at the same time the majority of them would not go through as there is insufficient capacity for everyone to make a phone call at once.

The same is true for the gas station on the corner.  The owner has purchased enough storage to hold a reasonable amount of gasoline, but if I and everyone in my neighborhood tries to buy gas all at once not only will we wait for hours in line to get to a pump he will run out and be unable to serve all of us.

Please take note a few points in the above examples, however.  My electrical use, water use and purchase of gasoline are usage sensitive.  That is, there is a natural process by which I am disabused from consuming an unlimited amount of water -- the size of my water bill.  Likewise, I do not waste electrical power, because I am charged by the kilowatt-hour for it.

Most Internet access at the consumer level, with the exception today of cellular phone delivery, is unmetered.  That is, I pay a flat price no matter how much I use.  This model, with minor changes (e.g. a cap on use) is what has evolved in the marketplace as the pricing model preferred by consumers.  MCSNet sold service we called "PackRAT" during the era of dial-up modems which was nominally unmetered but had a 200 hour per month cap on it, with a fee per-hour beyond that.  This amounted to about 6.6 hours/day of actual use.  Since you must eat, sleep and do things other than stare at a computer the cap was not intended to prevent you from using the Internet as you choose but rather to prevent you from abusing the service by locking up a limited (and expensive) resource on our end (in this case, the line and modem you were connected to) when you were not actively using the connection.

As the Internet has developed there have been people who have sought to try to shift their cost of innovation and content delivery to others.  These people often couch their "innovation" in lofty terms, as if they are somehow providing a public service.  What they are actually doing is attempting to run a business at a profit.  Today's pet example is Netflix (Nasdaq: NFLX) but they are hardly the first.  Youtube, back in its early days, created somewhat-similar if less-severe issues of the same character we face today.

Let's take the Internet "neutrality" position out of cyber-space and into the physical world.  We'll assume that I develop a really innovative movie theater that immerses the viewer in some new way in the film they are seeing.  We'll also assume that this theater only works financially if I can manage to get 10,000 people into it for each showing; the cost of building and operating it is large enough that unless I can amortize those costs over that many people I will lose money and eventually go bankrupt.

Whose responsibility should it be to construct the roads, infrastructure and parking lots so as to be able to fill that theater every two hours during the business day, efficiently directing traffic into and out of the complex so that I can attempt to make a profit?  Should that cost fall on the persons who watch the movies (whether directly via fees on their use of the infrastructure or indirectly via my ticket prices, with the city assessing me for the necessary improvements) or should I be able to force everyone in the Chicago area to pay those expenses, whether they want to watch movies in my theater or not, by convincing the City Government to increase property and gasoline taxes?

This is the essence of the problem we face today with the Internet.  Netflix has developed what many view as a "disruptive technology" through on-demand delivery of movies to the consumer.  In order to perform that function they must deliver a multi-megabit/second uninterrupted stream of data to your computer that meets certain specifications.  Any failure to deliver this stream, even momentarily, results in your display "stuttering" or stopping entirely.

But this requirement is dramatically more-stringent than it is for you to watch short video clips on Youtube or to view a web page.  There a short interruption in transmission or slowing of the transport results in you waiting a few tenths of a second before your page refreshes or is displayed in full.  The same delay while watching Netflix makes their service unusable.

There are other firms that would like to develop and deliver other services over the Internet with similarly-stringent requirements.  Most of these attempts will fail commercially, but some will not -- and eventually another "great new thing" will burst onto the scene.

The problem Netflix and similar services produce is that the technical requirement to deliver their service on an acceptable performance basis to the end customer is dramatically more-stringent than existing requirements for other Internet services.  Netflix purports to sell their service to the end customer for $8 per month.

But this premise, and thus the entire business model Netflix is promoting, is a chimera and unfortunately the common law of business balance (which states that you cannot get something for nothing) has caught up with them.

When Netflix was first starting the available margin between the engineering for a typical customer connection and what the customer actually used had some slop in it.  This is good engineering practice, and what most ISPs do.  That is, the ISP models all of their user behavior and says "We sell 20 Mbps service" while knowing full well that the customer bursts to 20Mbps of performance but on average uses a tiny fraction of that -- typically less than 10%.  The reason is simple: You browse to a web page -- even a very graphically-intensive web page -- and then read it; during the time you're reading the usage is zero.

Enter two new paradigms that break this model: Embedded audio/video advertising and streaming video content.

Let's assume that I am a site such as Facebook, and I want to sell video ads to companies.  Now when you browse to a Facebook page Facebook "pushes", without user request, video advertising content to the user's screen.  This dramatically increases the amount of data that the consumer is using and requires that the data be delivered on a highly-stringent technical basis, lest the video "stutter" or fail to play at all.  Note carefully that the consumer did not request or benefit from this "video advertising" yet they paid an ISP for the connection to deliver it.  Facebook sold the advertising and benefited from it but did not compensate the consumer or their ISP for the higher load on his connection despite imposing that load on him or her.

The question becomes this: If Facebook delivers a sufficiently-large number of video ads such that it begins to impact network performance and thus forces upgrades of the ISP's infrastructure who should get the bill for that upgrade?

If the bill falls only on those who use Facebook and thus view their ads consumers may (rightfully) reject Facebook since the additional cost imposed on them is not present so they can look at a picture of their friend's cat, but so companies can advertise to them!  It is thus strongly in the interest of Facebook to hide this cost from those users by trying to impose it on everyone across the Internet so it cannot be traced specifically to their commercial, for-profit activity.

The same applies to Netflix.  If a sufficient number of people subscribe to Netflix the stringent demands for delivery of Netflix bits to the consumer will force the ISP to upgrade their infrastructure.  Who should get the bill for that upgrade?  

If the bill falls only on Netflix customers then their bill will likely more than double; suddenly that "$8/month all you can eat" video streaming service might cost $25 or even $50.

What is before the FCC today is the fact that the cost increment to deliver what Netflix and Facebook are pushing to the consumer is real; the only point of debate is who pays for it and how.

Those arguing for "strict" Net Neutrality argue that the ISP should be barred as a matter of law from telling Netflix or Facebook that if they wish to have this level of performance available to them, since it is outside of the engineered and normal realm for all customers, that they should pay for that enhanced delivery -- and if they refuse, there is no guarantee their content will display as desired.

If the "Net Neutrality" argument wins the day it will force ISPs to bill all customers at a higher rate to provision that level of service to them whether they want it or not.

Why should a customer who has no interest in having high-bandwidth advertising shoved down his throat pay a higher bill because Facebook has decided to force him to watch those ads in order to use their service?

Why should a customer who doesn't want to watch Netflix pay a higher connection charge to an ISP because 20 of his neighbors do want to watch Netflix?

This is the question before the FCC, in short.

When you boil this down the question before the FCC is whether it is about to implement Communism when it comes to the Internet.  Does the FCC, in short, use the government's ability to forcibly compel the purchase of a service by a customer who doesn't want it and won't use it, leaving the consumer with only one option to evade a forced and undesired purchase: Buying no Internet service at all!

There is a legitimate issue with the Internet today when it comes to "last mile" services.  Unlike ISPs who typically can purchase long-haul services from many different providers and enjoy a competitive marketplace for those services consumers do not typically have free and open choice between multiple providers. When I ran MCSNet there were roughly one hundred dial-up and several dozen ISDN provides selling service in the greater Chicago area.  We all competed on price and service, and some of us were more successful than others.   For business leased-line services in the Chicago Loop we had three competitors available to us; MFS Datanet, TCG and Ameritech.  This competition kept prices low and service levels high; during a five year period I enjoyed a roughly 60% decrease in the cost of leased line services to customers where multiple options were available.  This resulted in "all-in" monthly recurring cost for T-1 service to business customers falling from approximately $2,000 a month to about $850 over the space of a few years.

Sadly, that same competition was not available to the average consumer; they had exactly one choice, Ameritech, for their "last-mile" phone service.  Thier phone bill over the same time period did not decrease.

But even in the "business service" area we had occasional problems; the only "neutral" meet point available in the area was the Chicago NAP, run by Ameritech.  To get to the NAP since it was on Ameritech's property you had to buy a circuit from them.  I was able to buy circuits of the same speed and character that spanned much larger distances from competitors going to other places at a dramatically lower price, yet I could not use those competitors to reach the NAP.  It was Ameritech's government-granted monopoly position along with its effective monopoly on the so-called "public meet point" that enabled this distortion to exist in the market.  Attempts to appeal to the State Regulatory apparatus in this regard (the ICC) were unsuccessful.

Today the promise of competition for high-speed Internet access is essentially non-existent for most consumers.  Most households can only obtain like kind and character high-speed Internet access from one, or perhaps two, companies.  In my local area we have a cable company and a phone company but they are not equivalent -- DSL service is not of "like kind and quality" to Cable Internet with the disparity being as much as 10:1 in terms of available speed.  Virtually all Americans today have an insufficient set of options available to promote effective competition, and as a result we have relatively high costs and relatively poor service compared against other developed nations.

We should not, however, and indeed must not conflate these two distinct issues.  The problem with last-mile access and discriminatory conduct is real, as are the issues with previously-granted monopoly access to rights-of-way that exist across our nation.  Not only do those effective monopolies exist but many states and localities have passed ordinances and laws prohibiting municipally-funded or other third-party alternatives from being established, with carrier lobbying groups typically spending large amounts of money to influence that process.  That activity facially appears to be a rank violation of The Sherman and Clayton Acts and should be met with investigation and, where appropriate, prosecution.

Resolving the last-mile monopoly issue is separate and distinct from creating a government mandate that effectively allows established businesses to shift their cost onto others who do not wish to consume their service.

At the end of the day what those arguing for "Net Neutrality" in the context of today's submissions are demanding is the ability to use government force to compel the subsidization of a private, for-profit business service.

The FCC not only has the right, it has the obligation under the Constitution's demand for Equal Protection as found in the 14th Amendment to reject such entreaties and expose them as a sham argument and blatantly improper attempt to force consumer subsidization of their businesses interests.

PS: On 5/21 I got back a letter from Chairman Wheeler (presumably a form letter) thanking me for my submission -- and including what appears to be a unique response number.  I presume this means it was "accepted" into the public record.  Good.

As we head toward the weekend here's something to contemplate.

You've recently seen my essay on all of us having an hourglass full of sand with the top mostly-painted over, so we can't see how much sand is in there until it is about to run out.  That is, it is almost-always true that one doesn't learn about their impending death until, well, it's impending.  When was the last time you heard a doctor tell someone "you have 20 years left."  No, they always tell you "you have six months", don't they?

Time is a funny thing.  It's the one commodity you can't buy more of no matter how rich you are.  Money does enable the compression of everyday tasks at varying rates, but that doesn't actually get you more time -- it just removes your expenditure of it on certain everyday tasks, should you so choose.  For instance you can fly commercial and spend six hours door-to-door to go from A -> B, or for a (lot) more money you can hop in your LearJet and make the same trip, again door-to-door, in four hours or less.  Much of that two hour difference is purely wasted with government-mandated bullshit such as the TSA.

Huge percentages of the population, however, fail at various tasks or barely eek by not because they're stupid, not because they're not capable, but because they refuse to master and accept responsibility for time management.

Indeed I would argue that a plurality if not the majority of failures at various tasks, whether it be work or school related, are in fact failures of time management.

That night out drinking, or the 20 minutes (or hour!) you spend on Facebook or Youtube can have a profound impact on success, and it frequently is a ripple effect too.  You stay out late on a Friday and sleep all day Saturday as a result instead of studying for a final.  Then on Sunday you cram in a panic, realizing that at 7:00 AM Monday you need to have your ass in the chair ready to go.  The result is that you get 4 hours of sleep before the test and score a screaming "F" because you were both half-asleep and unprepared.

You didn't fail because you were stupid, you failed because you decided to blow off steam on Friday night and get puke-drunk, then needed all day Saturday in bed to be able to move.  Had you instead spent Friday studying, slept a normal schedule that evening, studied for a few hours Saturday and Sunday and went to bed at 8:00 Sunday evening you would have gotten a "B" or "C" on the final instead of an "F" -- and passed.

Note that absolutely nothing changed in terms of your absorption of the original material, or your time in class.  All that changed was your decision to allocate time first to the task that had to be done and rather than wait until the last minute, dedicating the time toward studying a couple of days in advance so you had a cushion if something went wrong.  The difference in outcome is enormous.

It gets worse if you rely on something other than your brainpower (e.g. a computer, etc.)  If you wait until the last minute to begin what happens if your computer crashes while you're writing that term paper?  You don't turn it in -- and get an "F."  

You are owed exactly zero forbearance from the professor in that case, since while the computer failure was not foreseeable your decision to wait was, and had you not jacked off for the previous two weeks you could have used someone else's computer or had yours repaired in plenty of time to complete the assignment.

Over the space of your life managing time efficiently and not can literally be and frequently is the difference between success and failure.  A "death spiral" of missed deadlines that lead you to being evicted or having your power and water turned off and hundreds of dollars (which you don't have!) for reconnect fees and penalties imposed can quite-easily come from a simple night out on the town or a few hours blown playing "Farmville"!

Kids and young adults, I know you won't listen to your parents on this and neither will the adults, young or otherwise, who are guilty of the same thing -- but if you're reading this piece you know I'm right. You've probably made this mistake and hopefully it didn't have catastrophic consequences.  You probably blew it off too, especially if you managed to talk your way out of the box you created or just "took the F" but it didn't kill your scholarship or otherwise imperil your lifestyle in some other serious way.

Trust me -- this is something you cannot afford to allow in your life, especially in a world where competition for resources is stiff and the forward economic picture cloudy at best.

In March of 2007 I began writing The Market Ticker.  Some of you have heard the saga of how and why, but it bears repeating here in 2014, now 7 years later.

I was blessed in the 1990s with being in the right place at the right time.  Oh sure, it didn't start that way; there was a lot of hard work dragging myself out of a sewer that I was headed into at high velocity, beginning with a speculative trip to Chicago undertaken with what was literally my last $100 and an offer to crash on a guy's couch I had never met in person; I only knew him as someone who ran software I had written for the TRS-80 operating an online bulletin board. That Sunday upon arrival I found an ad in the Chicago Tribune for a job in Schaumberg "programming the pins off the Z-80" at a little store-front business called NSI. Russ Berube, the guy who owned the joint, gave this at-the-time young man clawing himself away from a vortex of personal and financial disaster a programming position that he sorely needed -- and the income to rent an apartment.  I still remember the workbenches and old-time PDP-11 running TSX-Plus, the cross-compiler and the EPROM burner; indeed, I spent so much time there that I could probably still walk from the little room where I worked to the can -- or to the PROM machine -- while sleeping.  I remember well Mary, Denise, Don and several others.  At night I slaved over my TRS-80 with a cobbled-together set of add-ons, some standard, some not-so-much, writing my own code for myself.

That was the opportunity that got me on my feet.  It began my ventures as an entrepreneur, led to selling PCs along with doing network and computer integration for various firms in partnership with the guy who lent me his couch that first night.  D&D Software morphed over time into both of us programming in his basement while I rented a room from him and his wife as it was closer than my first apartment (and cheaper), an expansion of the business to a small back warehouse in Mundelein where we built partitions out of wood and covered them with a remnant of carpet, a further expansion to a location in Wheeling and then, when the winds of change blew drying up business we amicably closed the firm and split up the assets as he was offered a technology position with an association and I was offered a network operations job at a project development office of a Fortune 50 company in Bannockburn.  That ultimately led to me being hired by a spun-off subsidiary of another firm (VideOcart) that itself went public in Chicago proper.

When VideOcart got in trouble and it was apparent the firm was going to fail I prepared to start MCSNet -- in the bedroom closet of my apartment.  That little place was the second level of an old brownstone rented out by a professional landlord who owned a few of them across the city, complete with out-of-true floors but somehow "safe enough" to pass a code inspection.  It began with six modems, a 56kbps leased circuit and a hand-built PC running Unix, sporting a $20 box fan blowing extra air over the open case and collection of modems to keep them from melting down.  That was the genesis of MCSNet; I built it with my bare hands and I retained majority ownership of the company throughout the firm's life.

MCSNet moved to 1300 W Belmont and expanded to fill two "micro office spaces" in a shared office building, where the photo that I've posted before was taken, and when we ran out of room there I moved the company to 180 N Stetson, otherwise known as 2 Prudential Plaza, leasing 8300' of the 26th floor.  The company ultimately employed a couple of dozen people, served over 10,000 users in the Chicago and Milwaukee areas, turned several million in gross receipts a year and was acquired in 1998 by Winstar Communications -- all with not one nickel of debt being taken on, ever, and not one item on lease other than the building space and office copy machine.

Why do I bring all of this history up?

Because there were many times during those years that I wondered if any of what I working toward was worth it, and there were plenty of times that it was a royal bitch too.  It wasn't just the 4AM pages to go fix something, which as the boss was my job above everyone else -- that's not a big deal.  No, it was the bare-knuckle aspect of business and the utter necessity of being willing to go to the mat when threatened, whether that came from competitive forces or other, less-orthodox events. That's a key part of being a successful enterpreneur that most people don't talk about; you either have the willingness to do that and are good at it, including remaining within the bright line tests but giving no quarter, or not. What's not required is that you like it; indeed, if you do enjoy it there's probably something wrong with you.

Then, just over 18 months after the sale closed I watched the Nasdaq come apart from the Sandestin Hilton in the Florida Panhandle.

I had much emotion over that event.  My kid was a toddler and we were house-hunting, having decided that Chicago was not where I was going to raise her.  I had been out of the market for roughly a year at the time because I saw it coming, but of course didn't know exactly when it would happen.  I was angry.  I remember telling Juanita and Jerry, the two Realtors that were showing us houses, that this was just the start of what was going to prove to be a monstrous crash, warning them that if they had investments in the market to pay very close attention.

That crash came from massive, outrageous fraud.  It was founded in hubris, not so much in the people offering the stock in worthless companies and pipe dreams -- after all, if you're an entrepreneur you either believe in yourself and are both willing to and are good at being a bare-knuckled bastard when you need to be or you may as well quit before you start.

No, it was Wall Street, the bankers, and the puerile change in our society that had already begun to engulf us all.  The media had lost its desire to look into stories and instead had become a lapdog for anyone with an ad budget.  The Internet had become a monster, both enabling things nobody had ever thought of before which was good but at the same time either amplifying or at least exposing some really ugly realities about our human condition, which was bad.

The sharp drop in Asia in early 2007 woke me up from what had been a nice dream.  I had spent the previous six years fishing, diving and raising my kid, and for four years had been a reasonably-active but long-only investor.

I looked into what was going on and saw the same old crap that had polluted the landscape in 1999 and 2000.  It wasn't all that hard to figure out; after all I did have Realtors knocking on my door at 6:30 AM Saturdays claiming to have a couple in their car wanting to buy my house -- sight unseen, and no, it was not listed for sale.

I decided to try to make a difference.

So I began to write, and ultimately set up the forum as well as a place for people to congregate, trade ideas, and hopefully get something of value -- and perhaps, just perhaps, coalesce into something worthwhile that might put a stop to this sort of garbage in the future.

That appears to have been a foolish dream.

It wasn't my first foolish dream; I've been a fool many times before -- and I'm sure it won't be the last time either.

You see, nobody wants to do anything about the real issues facing our nation and that we have as a people -- at least not in a productive way.  It's far more important and easier to take cheap shots, to play "gotcha" and to parade around bullshit than it is to face the facts about what our society has become, and when we play those games all we're doing is adding to the puerile and derelict nature of what our society has devolved into.

We're more-interested in whether Alec Baldwin said a bad thing on a NY Street than whether colleges are ripping off young adults.  We're more interested in going after people predicated on half-truths and outright lies than the bald-faced rip-offs and outrages that are served upon us daily by those who claim to be acting in our "best interest" -- and our own culpability for same, in that virtually every one of these people holds office and power only because we consent with votes cast at either the polls or the store.  It doesn't matter that the media intentionally placed their logo in a strategic fashion when George Zimmerman got out of a cop car to hide the back of his head so you couldn't see the gash that Trayvon Martin put there, and that was just one of the first half-truths and outright distortions presented in that case; we buy the products advertised on those "news" shows and watch those networks to this day.

Harry Reid struts around the Senate pontificating on evil Republicans even though his office and he personally knows that Medicare and Medicaid will bankrupt the country -- but he'll be dead first, so he doesn't give a damn nor will he put a stop to it.  Boehner and McConnell, for their part, are happy to make all sorts of noises about deficit spending, but then when the time comes to actually stop it they fold for the same reason -- they don't give a damn either as they expect they'll leave office before it all goes to Hell and it's very profitable for them and their friends to continue the charade.  Both sides of the aisle knew damn well that Obama was lying about virtually every respect of Obamacare and yet Pelosi literally said that Congress had to pass the law to know what was in it, which is a rank admission that she knew she was screwing the entire country.  You don't care either because she's still in office.  CEOs come on CNBC and other media channels to tout their "greatness" just as Mozillo did -- or for that matter Dick Fuld of Lehman who promised he was going to "burn the shorts."  When his own pants caught on fire instead who called him on that?  

Nobody.

What does it say about us when we're more-interested in whether Miley Cyrus is twerking with a foam finger than the rip-offs on Wall Street promulgated with HFT, blatant falsehoods spewed forth in Congressional testimony by Fed officials and outright lies by the head of the NSA?  What does it say about us when a Congressperson documents that they and the President lied about your health care, intentionally destroying your insurance coverage and relationship with your physician -- and yet they still sit in their offices drawing paychecks funded with your money, voluntarily handed over, more than four years later?

What does it say about us when we're too damn busy dredging up old bullshit to demand that the foundation of this nation actually mean something?  What does it mean when the most-important aspect of our lives is prattering about who's porking who (or who did pork who) instead of why we as a society tolerate grift on a wholesale basis to the point that 40% of our population gets a check that they literally steal from everyone -- including themselves and their children?

Maybe we all deserve what's happening and what's coming.  Maybe we deserve the sort of thing that's happening in the Ukraine.  After all, we watch those TV shows.  We patronize the advertisers.  We spend money making the paparazzi photo worth something; they wouldn't bother with the long lens pointed at the high-rise window or assaulting people in the street if nobody bought the magazine with the pictures.  There's a whole section of magazines and newspapers in virtually every grocery store in the country filled with this crap at the checkout line and you're the reason it's there and is produced because you buy it. 

Why is it considered acceptable when you have a garf with someone to blast them by text message instead of picking up the phone -- or talking to them in person?  Where has our sense of reason gone and why don't you simply walk away if you conclude that you don't like someone?  What does it say about your life when you find it so compelling to see how much crap you can load on someone else?  Why is destruction so much more interesting to people these days than construction?  Which moves the needle forward on balance for everyone, and which simply blows shit up for fun?  How is that any different than chortling over the latest photo taken by the paparazzi?

You can't even drive to the store any more without running into someone who's hyper-aggressive about getting somewhere now and will ride your ass even though you're driving not only safely but somewhat faster than the speed limit.  Nope -- they gotta go 70+ in a 55, on a bridge with one lane in each direction -- and no way to pass.  When you won't accede to playing Speed Racer for a whole 30 second advantage in travel time they sit 2' from your bumper with their high beams on.  Oh do I long for the days when I drove an AMC Pacer with rusted floorboards that was worth about $200 and could claim I saw a squirrel run across the road!

Why do we put up with exploding products?  Manufacturers buy intentionally-cheapened components in modern electronics that are virtually guaranteed to fail not long after the warranty runs out.  I've lost count of the number of LCD monitors and TVs I've resurrected that were felled by $5 worth of this crap made in China -- intentionally selected, I'm sure, for "lowest price."  I can fix them for $5 in parts and 30 minutes with a soldering iron but how many people know that -- or know how to fix them? More to the point how many billions of dollars are wasted every year by consumers buying replacements for things that broke because they were designed to fail and how many tons of toxic waste are sitting in landfills that don't have to be there? How much of our so-called "GDP" is in fact spending driven by these intentional acts that rob us all? Why do we tolerate a "smartphone" or music player with a non user-replaceable battery that has a design life of 12-18 months when cycled from empty to full daily -- and better, why do we buy them for our kids and set that example for them?  I have a Pioneer stereo receiver sitting next to me as I write this that I use for my computer speakers; it's two decades old and works perfectly.  Can you say the same will be the case 20 years hence if you buy one today?

What does it say about us as a people when we build up and promote so-called "crypto-currencies" predicated on nothing more than the expenditure of electricity while intentionally ignoring the fact that they are designed to be self-extinguishing, exponentially-more-difficult to "mine" over time and the cost of verification of transactions increases with both volume and use? That's like trying to apply future value to a burning candle and yet many claim there is alleged "value" in these things -- or even worse, that they're "money."  Where did the hallucinogenic drugs come from that are powering these fantasies?

What does it say about us when we build so-called "professions" up that lie to our youth as a matter of course -- and get paid for it?  Why do we not only tolerate this but vote for the tax levies that fund these people instead of throwing them all out into the street on their ear?  What purpose does "zero tolerance" actually have as applied to suspending children from school and giving them a permanent disciplinary record for biting into a Pop Tart in the wrong way, or pointing their finger? By the same token what does it say about us when a group of teens get a young girl drunk and then after she passes out remove her clothes, draw slurs on her thighs and assault her, and when we find out about it we make excuses for and protect the "kids" who did it even when it drives her to commit suicide?  A singular, sad incident?  Nope; Steubenville Ohio anyone, and I'm sure there are more.  If you think this sort of crap is new, think again; it goes back at least decades.  I have my own personal list of people I believe will burn in Hell that used to work in so-called "education" with culpability for similar, if in some cases less-severe, cover-ups and white-washes.  You know who you are and if you're still breathing and read this piece I place my trust in God to judge you appropriately, for that decision is not mine to make.

Why do we have Fire Stations with "Safe Place" stickers on them where a woman can drop off a newborn baby without signing anything or identifying herself, and that child is forever gone from the perspective of its father, utterly without recourse?  At the same time if she chooses to keep said kid she can hammer the same man for 18 or more years of child support, file false allegations of abuse to keep him from ever seeing the child for so much as 10 seconds and never be punished for the harm done to that kid or the false allegations.  At the very same firehouse, however, five firefighters can ignore a man having a heart attack across the street despite being asked for help and after he dies as a consequence one of the involved parties is allowed to retire with her pension intact.  In what sort of world do we live where life has become someone's plaything to be exploited for profit, both in birth and death say much less all the time in between?  Want more examples?  Go to your nearest hospital; you'll find hundreds of them each and every day from the ER waiting room to the patients in the beds.

Why would anyone bother to try to write opinion pieces or even news stories when they present a concise position in a paragraph and the second sentence is intentionally ignored so as to take a cheap shot at the author's point of view and claim they support something that is 180 degrees opposite from their actual and expressed position?  Is that poor reading comprehension or intentional misconduct?  Does it matter?

Maybe I have the wrong perspective here.  Perhaps I should have looked at what I do as being part of the entertainment industry.  Then it would all be par for the course; paparazzi are part of the deal, you smile for the camera and you pump out whatever crap you think people want to consume, damn the truth to Hell and back again.  You expect to be the subject of tabloids and similar bullcrap.  Oh, and to play my part well I'd have to speak in words of less than six letters, composing sentences of less than five words.

Just to make sure people can read them, of course.

But that's not why I set up The Market Ticker and Tickerforum.  That's not why I spent a couple of thousand hours writing the software that runs this place (currently at version 41.4 as I pen this), say much less writing the articles herein.

It is, however, quite-clear that's what the expectation is of many who are consuming what's on this site -- complete with being a recipient of all the crap that has and does come with it.

There is more but I decline to dignify it with public commentary.

For all of the above reasons, enumerated and not, I decline to continue under the current arrangement. I'm seven years into this and enough is enough.

I'd rather go running with actual friends and then perhaps partake of a drink at the local pub where I can have a face-to-face conversation with real people.  Or, maybe I'll go fishing.

Therefore what was is no longer.  The Market Ticker will continue to publish articles at my whim if events catch my eye, much as Musings used to before The Ticker existed.  I suspect there will be plenty that I want to comment on in the coming months and years.  However, all comments will be moderated and will appear whenever I get around to looking at and approving them, starting here and now.  The rest of what was Tickerforum has been closed.

Bonne chance mes amis.

In 2007 I began writing The Market Ticker due to the outrageous conduct of various branches in the Administration and portions of the Capital Markets.  Endemic fraud in the financial system that had generated unbridled and outrageous credit creation threatened the collapse of our entire economic system.

The consequence of this should have been thousands of indictments, prosecutions and imprisonments -- of banking executives, of members of Congress, of various executive branch officers in various agencies and more.  The banking system should have been forced to match assets to liabilities and either put up the margin to back their bets or liquidate them -- and if that forced them out of business and collapsed asset prices by 90%, so be it.

Instead our government took the easy way out.  It doubled down on the fraudulent models of the past.

But the models of the past were unsustainable and no amount of gaming arithmetic changes the outcome.  Indeed, the laws of mathematics state that the longer you allow an exponential system to run away from you, the worse the correction to reality you must sustain is.

From 2007 to 2013 the government has grown from $2.7 trillion to $3.68 trillion, a 36% increase. Marketable federal debt has gone from $4.96 trillion to $12 trillion, up 120% (that is, more than a clean double.)  

At the same time median family income has dropped from $56,000 to $52,000 in 2013 dollars (that is, adjusted for "inflation"), a roughly 7% decrease.

Oh, and that's before taxes.

Everyone talks about there being a "tsunami" of incoming inflation to be expected.  The real tsunami is government spending and debt and it already happened.  In real-dollar terms the federal government alone is taking from you nearly twice as much today as it was in 2007 and 80% of the minimum-wage-earner's buying power has been destroyed from 1980 to today.

And this is before Obamacare really kicks in.

Then there are the outrageous actions of our government in Benghazi.  What we are covering up there has not yet been determined with accuracy, but we don't need the fine details to understand the essence of the act.  That our tax money was funding terrorists and other bad guys in some form or fashion, and that we were probably providing them weapons is unfortunately pretty-much beyond dispute.

Never mind the outrageous and unconstitutional acts of the NSA in spying on people.

But perhaps the most-outrageous of all has been Obamacare and the medical "industry", which has used the power of government to utterly destroy any pretext of a fair and free market, creating a system where your medical care costs five times or more what it should.  That, incidentally, means that you should be able to pay cash for what your deductible is on your insurance (including Medicare!) were that outrageously corrupt system to be exposed to the white-hot light of either the market, prosecution under the Sherman Act or both.  Instead of making strides to resolve that outrage, no matter how small, Obama and Congress have doubled down with signature legislation embodying in statute the utter financial rape of our entire society and both sides of the aisle in Congress not only allowed it to happen but continue to allow it to proceed to this very day.

I've been a contributor to the government in the form of taxes my entire adult life.  I've written plenty of checks to the IRS, some of which gave me writer's cramp.  Never have I claimed a federal or state benefit check -- no food stamps, no welfare, no medicaid, nothing.  But I have been poor enough to qualify earlier on in my life -- I was simply too proud to do it, and found some how, some way to not.

I have tolerated running a company in a state where an employee that was fired for not showing up for work was able to collect unemployment, along with several others fired for cause.  I paid the increased rate of tax for what were bogus claims on my account and which drove up my tax rates.  I complained, but I paid.  I have put up with the ignobility of never actually owning real estate, having to rent it every single year from the State and County governments, even though claiming that you have "ownership" of something that you then must pay to keep is an abject fraud.  I have been "promised" both Social Security and Medicare even though it is mathematically impossible for me to ever receive them, and have paid taxes to support those programs for decades, while those who made the promises knowing they're false have never faced indictment, prosecution or imprisonment.  I have watched our government reach its hands down the crotch of sick 80+ year old leukemia patients claiming they might be "terrorists" while at the same time a man who states openly he attacked other Americans and killed them on a military base in the service of Islam is called an incident of "workplace violence" and those injured or killed are denied just recognition of being harmed in combat against a self-declared terrorist and/or taking heroic action to save others from same.

We all have our point at which we simply refuse to consent.  A few, like Joe Stack, take that refusal and turn it into acts of violence.  Singularly such acts are futile and amount to nothing more than martyrdom at best and a waste of human capital at worst.

But others, like myself, are unwilling to waste our lives.  One can recognize there is a non-violent means of refusal that no government can counteract or put a stop to.  It is far more effective and personally-satisfying than active, violent resistance, especially when the latter is singular and most of America is busy watching Dancing With The Stars, unworthy of anything more than being sheep to provide warmth for the "leaders" and occasionally a plate full of mutton.

Some of us have entrepreneurial ideas that might change the world.  But the drivers for entrepreneurs are more complex than simply the satisfaction of seeing something we imagine come to fruition.  For some it's simply the acquisition of wealth to the exclusion of everything else, but if I wanted to make that my focus in life I'd choose to be a bankster and figure out how to rip people off and get away with it.  After all it's far easier to abuse leverage to rob people than it is to build things, in today's environment the odds of going to prison for doing it are somewhere between slim and none, and Slim left the bar an hour ago.

At the end of the day you have to be able to sleep with yourself every night.  And unfortunately there can come a point where the cost-to-benefit ratio is simply all out of whack.  I've been blessed with both industry and luck; via both I was able to answer the "do you have enough?" question in the affirmative close to twenty years ago.  My motivating factors left the realm of making sure I could eat at that point and now the balance has unfortunately shifted to where what I do every day is work rather than joy.  

In no small part this shift is due to the zombie-like activity of many in this nation, including in places and among parts of the population where you'd think it would not be present.

I refuse to continue to silently accede to, and actively fund through my drive to acquire that measured in and rewarded by "wealth", the rampant theft and fraud that has and continues to take place in the economic sector, especially in the banking and health care areas of our economy.  None of this could ever exist except through the insertion of the guns of government up the noses of the American people.  

I can no longer live with being one of the better sources of funding for these abuses.  This decision did not come lightly, easily or quickly.  But I'm convinced it's the right choice as things stand today.

In short, if you want it in two words, it's this: I'm done.

I choose instead of either active participation through funding of our government's BS or violence to peacefully withdraw my consent.  To refuse to labor.  To make do with less -- a lot less.  I choose to reduce my voluntary contribution to the tax hoard that is misspent or forms the foundation against which our government borrows, giving the proceeds to those who think that doping it up is a grand past-time or shoveling guns, missiles and money to terrorists while groping our grannies, using the very existence of the terrorists we gave the guns and missiles to as justification for what any civilized society would call sexual assault.

The portion of that which I earn by my efforts that I am able to retain in real terms shrinks by the day, and I have concluded that the balance of benefits and harms, especially the harms done to others using my tax dollars, is no longer acceptable to me.

My decision will not change until America changes.  Until it wakes up.  Until the people demand and the government of this county, this state and this nation recognize everyone's fundamental rights -- that shall not be infringed means what it says, that shall pass no law means what it says and all branches of government stop using taxpayer dollars to arm terrorists, maintain and promote medical monopolies, promote and empower banking cartels while excusing violence and fraud, both financial and corporeal, committed against the people of this nation by those entities and the agents of government itself. 

I have seen enough frauds committed by and with the active involvement of government to become convinced that this is what, in the main, my tax dollars are buying.  Whether it be Angela Corey's apparent intentional withholding of evidence from George Zimmerman's counsel (and now her firing of one of the people who tried to do the right thing), the rip-off of pension funds and the taxpayer through both looting of the funds and ridiculously over-promised rates of return or the literal thousands of citizens that have had their homes foreclosed upon through blatantly fraudulent process and perjured documents, enough is enough.

I will not accept mere political promises as they are rubber checks without a penalty for being fraudulently issued and over the last 20 years they have always bounced.  I instead demand action, indictments, prosecutions, break-ups of monopolies, impeachments, business closures, the end of deficit spending and reform. These are not discussion points, they are demands.  They are demands that I have every right to make because it is with the fruits of my hand and mind that this government has foisted upon the American people these frauds, costs and harms.  I have written too many large checks to the IRS over the years only to see this crap not only continue but accelerate in the harm done to our nation -- and especially our youth.

I hope, pray for and encourage others to also peacefully withdraw their consent.  If enough of us who are the producers in this nation do so then government will have no choice but to bow to our will or collapse.  My decision in this regard, if ratified by concurrence of just a small percentage of the population, represents what I believe is the only remaining lawful and peaceful way to accomplish that goal.

If there are an insufficient number of others willing to also participate then my personal conviction that it is unacceptable to fund the screwing of others, whether it be financially or through actual acts of violence, will be demonstrated to be that of a tiny minority.

I accept that this is not only possible, it's likely.

But should that be the case then this nation does not deserve to survive as a Constitutional Republic -- and in the end, it will not, becoming something much darker, uglier and unworthy of any of my support.

There is only one way to know which of the two possibilities is true -- and that is to act, and see who also acts.  To lead not through exhortation (or worse, extortion) but rather by example.  To see who chooses to not only continue to consent but actively supports the murder of others, physical violence served upon those who simply wish to enjoy their unalienable rights and the financial rape of our own citizens en-masse -- especially our children and young adults.

If and when things change I will reconsider my position and lower my middle finger.

But not before.

I therefore choose to reduce the ability of our government to tax my income to as close to an effective zero as I can reasonably achieve in keeping with what I enjoy doing, which is putting before the people a chronology of lies, frauds and scams in the hope that others wake up.

But I will do so on my terms, not someone else's.

Therefore, Tickerforum's donor program has been closed, effective today.  Existing gold donor privileges will remain active through their expiration date -- or 12/31, the latest a quarterly donor could expect them to remain active (and the longest donation formally permitted since mid-2010.)  Those who set up recurring donations have had their profiles canceled at PayPal.  

For those who wish to comment and discuss politically-related topics the politics areas will remain fully-accessible for the present time.

The formerly-anticipated newsletter, coding for which is in fact complete and ready to go, will not be launched.  My personal activity in the markets and otherwise, including entrepreneurship, will for nearly all intents and purposes cease by the end of the year.

The Market Ticker will continue to operate in an advertising-supported format but other than macro-level economic reports (e.g. the payroll report, Z1, etc) you will find the balance shifts toward less market-related material and more politically-related material -- simply because I have withdrawn from market-related activity beyond the macro level.  There will be fewer articles, and many days with none at all -- a rarity up until now.  Old articles will disappear from public view, a change recently implemented and one now filtering through the various Internet archives as they "refresh" their links.

Finally, for those who argue that I should become more involved in political pursuits, no matter what they may be, I will answer your question in advance and save you the time you'd otherwise use to solicit me for such purposes: No.

On a net basis this should reduce my "income footprint" to be within the "Screw You Uncle Sam" range.  The comment capacity on The Ticker will be commensurately reduced, as I have observed that for the most part those who are not donors to the system comprise the vast majority of inane (or worse) comments.  But for those who can form a cogent opinion and use logic, your input to the discussion will still be possible.

The activities that I choose to undertake in the entrepreneurship area will all be of a long-term capital gain in nature, where the government is able to garner little of what I come up with, and then only on my schedule, not theirs -- a schedule that may well be "never" if I so choose and there is no reform.

It is time for those of us who care to direct our energies in a different way, and I know of no better means of laying that forward than through personal example.

For whatever you deem it to be worth, here's my example.

In a just world when someone swindles you they go to prison.  If the swindle is extreme and the loss similarly extreme, they should get the death penalty -- after a proper and fair trial, of course.

But we do not live in a just world.  We live in a world where plunder is the order of the day.  The recent Cyprus bank confiscation is both right and wrong.

It's right in that it's the correct way to resolve a bank, provided the capital structure is honored and both shareholders and bondholders are wiped out -- entirely -- before depositors are hit.

But it's wrong in that the government, including Brussels and the ECB, provided assurances that these institutions were financially sound and it turns out they lied.

Now the fruit of this poison tree is upon us.  Small businesses, which simply cannot operate without being over insured deposit limits in most cases at least some of the time, have been destroyed.  There are now reports from real companies coming in that 85% of these firms'working capital has been effectively seized. The correct word for this is theft.

This has and will force an immediate shutdown of these businesses and the loss of every single job associated with them.

I have no quarrel with someone losing an imprudently-made investment.  That happens all the time, and I lose money all the time when I make bad investments.  But this is not a matter of a bad investment.  It is a function of outright fraud committed by government agencies and false claims that they have repeatedly made, upon which these firms relied, and now they have been destroyed as a consequence.

You cannot at the same time have the government telling you that the banks are safe and sound and at the same time preparing to, or actually, seizing your funds.  That is felony grand theft and fraud -- period.

That is not confined to Cyprus.  Now Canada intends to put the same system in place.  Buried on page 144 and 145 of their latest budget document is the following ditty:

The Government proposes to implement a ―bail-in regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants.

Systemically important banks will continue to be subject to existing risk management requirements, including enhanced supervision and recovery and resolution plans.

But note that there is no recompense when that "enhanced supervision" fails.

When you deposit funds into a bank the cash the bank now has is an asset.  The deposit is a liability.  What they are talking about is you, the depositor, being the one who is tagged for that "very rapid conversion" -- that is, they're simply going to steal your money.  

This, coming in the paragraph before they claim to have enhanced supervision, is an all-on joke.  Either that supervision is an obligation of the government upon which you have a right to depend or it is an active and intentional fraud intended to lead you to leave money on deposit through deception when in point of fact doing so is not safe.

Which is it?

In the Euro Zone the answer is already known -- it's an active and intentional fraud that did lead you to leave your money on deposit through intentional deception.

Incidentally, the model here is the United States.  In the United States, if you remember, IndyMac bank was backdating deposits.  The OTS knew it and in fact one of their employees had been caught allowing the same thing to happen during the S&L crisis.  He not only kept his job after the S&L crisis he wasn't prosecuted this time either, and yet anyone who was over insured limits in Indymac got screwed.

In addition, Washington Mutual, which I reported on at the time in 2007, was paying dividends out of money they didn't actually have.  Once again, the OTS and FDIC did nothing and the firm eventually collapsed.

In the United States 12 USC §1831o requires bank regulators to take "Prompt Corrective Action" to prevent the exhaustion of bank capital and close the institution before that occurs.  These are not suggestions, they are statutory requirements -- requirements that were ignored in the United States and as a consequence real injury occurred to real people.

Now the same thing has occurred in Cyprus.  

These are not ordinary business failures where investors lose their money.  They are failures where the government has falsely certified health and soundness and, in many cases, where it has intentionally ignored practices such as backdating deposits that intentionally created a false appearance of health. The organs of these governments, including our government, have been willful and intentional co-conspirators with those who committed these acts.

And yet.... nobody has gone to jail.

Trust?

Honor?

Integrity?

Honesty?

The rule of law?

Forget it -- all you have left is the rule of the Jungle, and as it stands right now, given your choices and actions thus far, you're what's for dinner.