Apple Opposes FBI for Commercial Reasons

The Guardian reported that the FBI responded to Apple’s refusal to help it break into the San Bernardino terrorist’s phone by accusing Apple of using the case for financial and commercial benefit.  The article said:

The FBI accused Apple of prioritizing its public relations strategy over a terrorism investigation on Friday in a significant escalation of this week’s war between the tech company and the law enforcement agency.

Inside the FBI's encryption battle with Apple

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The accusation, made in a court filing demanding Apple comply with an order to unlock an iPhone belonging to the San Bernardino terrorists, represents a nadir in the relationship between two opponents that previously extended each other public respect.

“Apple’s current refusal to comply with the Court’s Order, despite the technical feasibility of doing so, instead appears to be based on its concern for its business model and public brand marketing strategy,” Justice Department attorneys wrote in the Friday filing.

http://www.nytimes.com/2016/02/20/business/justice-department-calls-apples-refusal-to-unlock-iphone-a-marketing-strategy.html?emc=edit_na_20160219&nlid=56573240&ref=cta

Kashkari on Bank Break Up

I am pleased with Kashkari's remarks reported in the WSJ, reinforcing my earlier remarks that the big banks need to be broken up.

Bank Problems

I am concerned about declining confidence in the US banking sector.  Recently CNBC and Bloomberg have been discussing problems at the German bank Deutsche Bank.  More disturbing for Americans, declining stock prices for big American banks indicate a lack of confidence in the whole industry. Dodd-Frank was supposed to protect us from bank failures, but today Sen. Elizabeth Warren grilled Fed Chair Janet Yellen at length about problems with “living wills” for banks that fail. 

I am concerned that American banks are still too big to fail, and that Dodd-Frank has failed to keep them from engaging in risky activities that could create a global financial catastrophe.  Dodd-Frank and the Volker rule have failed to fill the gap created by President Clinton’s elimination of Glass-Steagall. 

I would like to see Glass-Steagall re-enacted.  At a minimum we need to make big banks smaller and rein in their riskier trading activities.  I am alarmed to see the stock market illustrate Wall Street’s lack of confidence in its own big banks like JP Morgan-Chase and Goldman Sachs. 

Related to this is, I believe, is the issue of income inequality.  There has been talk of lack of liquidity surrounding the current unsettled bank environment.  One problem with consolidating all the nation’s wealth in a few hands is that the few hundred families who control that wealth may all decide at once to do the same thing, e.g., sell bonds.  If they all act at once, there will be no one to buy bonds, for example.  Prices would plunge, and we would be back in another financial crisis.  To some extent this is what happened in the 1929 market crash, when like today, much wealth was held by a few extremely wealthy people.  The aggregation of wealth means that markets become smaller, controlled by a few people. and more susceptible to volatility.  As markets become dominated by a few players, the country becomes less capitalistic and more oligopolistic.  This is what happened to Russia under Yeltsin.  I hate to see America following the Russian model. 

Keep the Draft

As one of the last people subject to the draft during the Vietnam War. I am writing to support the continued existence of the Selective Service System in case we need a military draft sometime in the future.  I actually volunteered after being classified 1-A and passing the physical, rather than wait a month or two to be drafted. 

I am very disappointed that military service has become such a contemptible, dishonorable profession in the United States.  I came home from Vietnam to scorn for being a veteran.  Today, people praise veterans, but in my opinion, it is usually because the people heaping the praise are not willing to serve themselves.  They think, “If I tell this fool what a great job he is doing, then I won’t have to do it.”  When it comes to something more expensive than praise, like giving veterans jobs or health benefits, the country is less fulsome. 

The military likes having an all-volunteer force, but I think we need people who would not ordinarily serve in the military.  We need people from Harvard and Stanford who look at the world differently from the ordinary pool of recruits, who are mostly poor and less well educated.  Supreme Court Justice Elena Kagan hated the military so much when she was dean of the Harvard Law School that she prohibited military recruiting there.  The military needs a diversity of personalities, perspectives and talents, just like any other large organization.  This lack of intellectual diversity has hampered the military ever since Vietnam, when despite the draft, rich, smart, well-educated people generally did not serve.  That may be one reason we lost the wars in Vietnam, Iraq, and Afghanistan.  We sent our trailer-park trash to fight and we got trashy results. 

I realize that the proposal by Congressmen Coffman and Polis to abolish the draft is motivated by the recent call to include women in the draft.  I have no objection to including women in the draft, but I do oppose the recent decision to include women in all fighting units of the military, including the Army infantry and the Marines.  I think the problems with rape and other sex offenses in our universities illustrate the problems of putting young men and women with raging hormones together in situations where there are frequent romantic temptations.  I was in the artillery, where living conditions are better than in the infantry, but everyone slept together in one bunker, used the same latrine, etc.  Living conditions are probably manageable in rear echelon environments, where women could certainly serve, but I think forcing men and women to live together in combat situations is just asking for trouble in terms of sexual contact.  In any case, there are certainly military jobs for which America could draft women. 

I believe that the draft would strengthen the military by bringing in new blood, although the military leadership probably is not enthusiastic about the challenges to it that would emerge from a better quality of recruits.