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Open Letter to Washington State Rep Jenny Graham

This is a first ever guest post by my good friend Martin Hughes addressing the heavy Covid related governmental restrictions ongoing in his state of Washington.


The Honorable Jenny Graham
404 John L. O’Brien Building
Olympia, WA 98504

Dear Representative Graham,

I am writing to you with regard to the restrictions implemented by Governor Jay Inslee related to Covid-19. This is a follow-up to my letter of 24 April 2020, in which I stated, “I am writing to enlist your support in calling for an immediate cessation of all government restrictions related to the SARS-CoV-2 virus outbreak;” and it is a follow-up to the two subsequent online submissions on this topic that I have provided to your office through the web site.

My opposition to Governor Inslee’s continuing lockdown restrictions stems from my background as a scientist. As I mentioned in my previous letter, we have known the impact of lockdowns from the very beginning: Increases in poverty-related adverse physical health outcomes including obesity, diabetes, malnutrition, substance abuse, domestic violence; and increases in poverty-related and isolation-related adverse mental health outcomes including depression, anxiety disorders, stress, suicides, to name a few. And of course, we know of the mounting societal costs we are paying and will have to pay for years to come due to world-wide starvation as predicted by the World Food Program, and the excess mortality we will experience due to lockdown-related limitations in primary care, including cancer screenings. Also, as I noted in my previous letter, we don’t need to rely on an infamously fraudulent model from Neil Ferguson of Imperial College, London to ascertain the scale of the impact of these ill-advised lockdowns. The connection between poverty and the above listed adverse physical and mental health outcomes is extensively documented in the literature.

Note well, these are not due to the virus. They are due to the draconian lockdown orders issued in response to the virus. I have said this from the very beginning, as have many of my fellow scientists and other academics. In my letter from six months ago, I provided quotes from Nobel laureate Michael Levitt, Stanford professors Eran Bendavid and Jay Bhattacharya, and professor Richard Epstein from New York University, all urging proportionality in our response to the virus, and decrying the “draconian measures that are now being implemented” (in the words of Dr. Epstein). Thankfully, more and more scientists are recognizing what some of us have been saying from day one: Lockdowns are anti-scientific, useless as a response to a viral outbreak – and more than useless, they are outright harmful. Earlier this month, Dr. Bhattacharya, joined by Dr. Sunetra Gupta of Oxford University and Dr. Martin Kulldorff of Harvard Medical School, issued the “Great Barrington Declaration” urging the replacement of blanket lockdown orders with strategic interventions designed to protect those most vulnerable to Covid-19. Even the World Health Organization (WHO) has reversed course just this month. Dr. David Nabarro, the WHO special envoy on Covid-19 stated on 08 October, “We in the World Health Organization do not advocate lockdowns as the primary means of control of this virus,” noting, “Lockdowns just have one consequence that you must never, ever belittle, and that is making poor people an awful lot poorer.” 

The evidence continues to accumulate. Sweden defied the prevailing orthodoxy and made the science-based decision to not undertake a lockdown. The results are in: Sweden, with no lockdown, experienced more than 10 times fewer Covid deaths than Ferguson’s farce of a model predicted they would. Sweden has fewer Covid deaths per million than many countries that did enforce a lockdown, including Spain, Italy, the United States and the United Kingdom. And what is most significant, life has returned to normal in Sweden. Not a “new normal” – the old normal, just as it was when I was an exchange student at Uppsala University 24 years ago. And yet, like so much else, Governor Inslee and his enablers continue to ignore Sweden’s success. Despite the accumulating evidence of the ineffectiveness and outright counterproductive nature of lockdowns, Governor Inslee is still enforcing his widespread irrational, overbearing, indiscriminate lockdown policies, including restrictions on businesses and a statewide mask mandate.

About those masks. Recently, Dr. Robert Redfield, the Director of the Centers for Disease Control and Prevention, absurdly stated in testimony before Congress, that a flimsy cloth mask would be more effective in protecting him from the virus than a vaccine. This was a bizarre statement, given that the public health community previously proclaimed that the purpose of the masks was to protect others, not one’s self. But beyond that, it was a preposterous statement given what we know about the ineffectiveness of masks to prevent the transmission of respiratory viruses. Prior to the coming of Covid, we had data going back 100 years to the Spanish flu, in particular data from controlled trials conducted over the last 40-50 years on masks, all of which came to the same conclusion: Cloth masks do not prevent the transmission of respiratory viruses. This makes perfect sense: These flimsy masks were not designed to block virus particles. Of course, Dr. Redfield knew this at the time of his testimony. His very own taxpayer-funded CDC published a paper just a few months ago which concluded, based on a review of 10 randomized controlled trials, that face masks have no substantial effect on the transmission of influenza.[1] This is consistent with the well-publicized conclusions of health authorities in Norway, Sweden and the Netherlands, who have all concluded that masks are not useful in limiting the spread of the SARS-CoV-2 virus.

In addition to the data from scientific studies, we also now have extensive real-world empirical data showing increases in cases of Covid-19 subsequent to implementation of mask mandates in many locales throughout the world. On 10 October, Dr. Simone Gold tweeted a chart illustrating that 19 of the 20 areas in the United States with the highest number of new Covid-19 cases over the previous 2 weeks have mask mandates. And just last week, the CDC itself published the results of a July 2020 study of Covid-19 in 11 outpatient care facilities in the United States, which showed that out of the 154 Covid-19 patients interviewed, 70.6% reported wearing masks “always”, and another 14.4% reported wearing a mask “often”. Between them, the mask-wearing groups accounted for 85% of the confirmed infections.[2]

The data continues to accumulate, and the science is clear: masks do not prevent the transmission of respiratory influenza-like viruses. And yet our governor continues to mandate their use, a clear violation of personal freedom and individual rights. 

Another point about the masks: As I informed the governor in a voice mail message when he first mandated masks, and as I told you as well in my e-mail at the time, masks are in fact harmful to our individual and collective ability to fight off SARS-CoV-2. Our best defense against viruses is our innate immune system. Our immune systems need exposure to the countless innocuous microorganisms in our environment, our “microbiome”, to function properly. This is how our immune system gets its exercise. This is what keeps our immune system vigilant. You can think of this exposure as daily programmatic updates to the software of our immune system. Putting a mask over one’s mouth and nose erects a barrier between the immune system and that microbiome, that daily update. It won’t stop viruses, because they are too small. But it will reduce exposure to the larger, mostly innocuous particles that update and train our immune systems. This is madness.

I am amazed every time I venture out into the public and see a sea of mask-covered faces. I am astonished that my fellow Washingtonians tolerate such an incredibly intrusive violation of their very person. A person’s face is such a profoundly personal aspect of their very identity, made “in the image and likeness” of God (Genesis 1:26). The resemblance to one’s parents and grandparents is a constant reminder of one’s heritage. At the same time, the uniqueness of each person’s face is a testament to their individuality. It really is no wonder that the forces of collectivism and socialism want to see those individual faces covered up. Faces that give a constant reminder of their individuality, their humanity, their personhood. Socialists are not interested in people as individuals. They are only interested in people as cogs in their socialist machine. 

One last point. The WHO estimates that 10% of the world’s population has been infected by SARS-CoV-2. Many scientists believe it is actually much more than that, but for the sake of argument, let us take their estimate. With a world population of approximately 7.5 billion, this equates to 750 million people. Given that approximately 1 million people have died from Covid-19 – another number that can be disputed, but again, taking this number for the sake of argument – this equates to an infection fatality rate of 0.13% for SARS-CoV-2. Now let us compare that to the infection fatality rate of the influenza virus. The following table provides the CDC estimate of the infection fatality rate for the seasonal flu over the last ten years:

YearInfuenza IFR (%)

The conclusion here is obvious: Using the WHO and CDC estimates, the SARS-CoV-2 virus is equivalent to the seasonal flu in terms of its overall lethality, at 0.13%. And that is even given that with the flu we have the advantage of a vaccine. But we don’t crash our economy for the flu each year. We take appropriate precautions and go on with our lives, just as we have done for millennia.

The SARS-CoV-2 pandemic ended several months ago, but the pandemic of fear continues. This is the worst result of the virus. Leftist politicians like Governor Inslee, medical bureaucrats like Dr. Redfield and Dr. Fauci, and their collaborators in the media have destroyed our collective ability to assess and manage risk. Covid-19 is a risk just like any other that we encounter in our daily lives, yet for some reason THIS risk has been elevated to a status far beyond any other. People die from heart disease, lung cancer, diabetes, influenza, tuberculosis, car accidents, Alzheimer’s – all of these we recognize as inherent risks in life. Yet somehow, a single death from Covid-19 is intolerable – so much so that we have shut down our state, increasing death from many other tangential causes, in order to prevent a single death from Covid-19. This is madness.

On top of everything else, is the irony that we do have real means of reducing deaths from Covid-19, and it’s not by lockdowns and masks, but from numerous therapeutic options for managing the disease, all of which Governor Inslee denies or ignores. He always claims to be guided by the science, but he completely ignores it. Science is about forming a hypothesis, challenging the hypothesis experimentally, then affirming or rejecting the hypothesis based on the results. Based on the data and the science, there is no need for ongoing lockdown measures, no need for wearing masks. But Governor Inslee stubbornly clings to his hypothesis. This isn’t science, this is religion, the new faith of Covid Hysteria. This is policy-based “science”, not science-based policy.

I could go on, but I’ve taken up too much of your time. I just want to ask you, as my representative, to amplify my voice in Olympia. End this madness. End the lockdown. End the mask mandate. End the fear the Leftists are using to advance their agenda. Edmund Burke once stated: “No passion so effectually robs the mind of all its powers of acting and reasoning as fear.” Leftists ignite and fan the flames of fear, then exploit that fear to create an excuse for their abuses of power. We can’t go on like this. We need to end this pandemic of fear and return to reason, and to life as normal.

Our governor has become a tyrant. He is using SARS-CoV-2 as an excuse to end our democratic form of government. He thinks his voice is the only voice that matters, and that he gets to unilaterally decide the law of the land. It is time to call him out on his despotic tyranny. C.S. Lewis recognized this behavior for what it is, noting, “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”

No. Governor Inslee does not get to rule over us like a tyrant. He does not get to decide our fate. We, the people decide. End the lockdown now. Repeal the mask mandate. Restore our freedoms.


Martin Hughes, Ph.D.

[1]   “In pooled analysis, we found no significant reduction in influenza transmission with the use of face masks.” Nonpharmaceutical Measures for Pandemic Influenza in Nonhealthcare Settings – Personal Protective and Environmental Measures. Xiao, J.; Shiu, E.Y.; Gao, H.; Wong, J. Y.; Fong, M. W.; Ryu, S.; Cowling, J. Policy Review. 26(5), May 2020. 

[2]   Community and Close Contact Exposures Associated with Covid-19 Among Symptomatic Adults ≥ 18 Years in 11 Outpatient Health Care Facilities – United States, July 2020. Fisher, K.A., et al. MMWR, 2020, 69(36):1258-1264.

Open Letter to the USG Board of Regents & Chancellor

Dr. Steve Wrigley,

I wanted to thank you for your dedication, work, and perseverance in developing and implementing a course of action that has made it possible for our state Universities to be open this fall. Returning to some semblance of normalcy is absolutely critical to the mental health and well being of the returning students. 

Although the social environment on campus has been more isolating than under normal circumstances, this is a vast improvement over the alternative of not having students on campus. As adults we are usually able to weather unexpected challenges in life, however this past spring and summer I gained new insights into how the young struggle with these novel obstacles. I witnessed both of my sons (18 and 22) grapple with the isolation of being “stuck” at home. Although parents and children share a close bond we all know as parents we can’t compete with the social fulfillment from their own peer group. They endured both social and mental isolation while simultaneously being educationally disadvantaged through involuntary online teaching. If we could all just read a book or watch TV and become proficient then schools would not exist. But they do exist – for the very critical reason that most people learn best in a direct, tangible, hands on environment. Teaching is often a dialogue, and that does not happen in the virtual world in any meaningful sense. But perhaps more critically (as this can lead to thoughts of suicide for many) is the despair that accumulates over time from the realization that there is no clear end point to these major life disruptions. Even prisoners know the length of their sentence.

As a father who does not want to be forced to stand by and witness his sons’ mental states spiral backward into darkness I plead with you to maintain your resolve and support our schools in remaining open. I know challenges lie ahead but your past wisdom in opening the schools for on campus instruction gives me great confidence that you will remain dedicated to putting our children first and doing what is in their best interest.


Gregory Morin, Ph.D.

Warren’s Healthcare Plan Dead on Arrival

The likely Democratic front-runner, Sen. Elizabeth Warren, has at long last lifted the proverbial kimono to reveal the wizardry by which she proposes to fund the so-called “Medicare for All.” She has long insisted her plan would require no new taxes for the middle class while deftly sidestepping questions seeking details on the funding scheme. Those details have now been revealed and it is apparent that the veracity of her prior assertions depends on her definition of “tax”, “middle class”, and “total costs.” In Warren’s world a payment that the government requires you to make is not a tax but rather a “contribution.” Ok. Although Democrats are not shy about wanting to drain your wallet via taxation, they assiduously avoid associating themselves with that particular term, instead opting to use feel-good Orwellian phrases such as the “Affordable” Care Act’s “shared responsibility payment.” Other common taxation weasel words include “revenue,” or board/department of “equalization” when referring to the entity responsible for taking the money. The Department of Theft would be more honest, but I digress. 

The crux of the financial underpinnings for her plan rely on a new employer mandate, that is, a “contribution” paid by every “large” (whatever that means) employer to the federal government in place of the amount they used to pay in health insurance premiums. But I’m sure that amount will never go up, just like the original income tax rate of 6% was promised to never increase. New government programs always cost exactly what they are estimated to and efficiently achieve their stated goals. 

But wait, there’s more. The remaining funding for her plan relies on what George Bush senior would have charitably called “voodoo economics.” It makes broad assumptions about economic growth and how much can be saved by consolidating services under the federal umbrella as well as laughable estimates of how much more tax revenue can be brought in by increasing IRS enforcements efforts. How tone-deaf does a candidate have to be to propose increasing IRS audits? Truly, Americans love nothing more than the prospect of an IRS audit. It’s right up there with Root Canals for All. 

But don’t take my word for it. Just listen to what her fellow Democrats have to say about this plan. Vice President Joe Biden’s campaign went on the record stating that,

For months, Elizabeth Warren has refused to say if her health care plan would raise taxes on the middle class, and now we know why: because it does. Senator Warren would place a new tax of nearly $9 trillion that will fall on American workers.”

Additionally, the Urban Institute (a highly regarded liberal think tank) projects a Warren/Sanders style single payer plan would raise health care spending by $7 trillion over a decade, while healthcare economics Kenneth Thorpe finds such a plan would increase costs to more than 70% of people who currently have private insurance. And these are people on the left!

To briefly touch on the economics of her new “contribution” it should be obvious this would have the side effect of suppressing future earnings of the very middle class she is pandering to. Economics is (partly) the study of the seen and the unseen (Bastiat). The seen benefit here is the “free” healthcare. The unseen result is that future wages and hires will necessarily be lower in comparison to a world where this new “contribution” does not exist. Companies do not have an infinite supply of money; if resources are mandated toward an MFA payment scheme, then that much less will be available for raises, new hires, and expansion of operations. In short this new tax would be a million ton anchor on the American economy. To suggest one can add $20 trillion in new spending without harmful economic consequences is either deranged or willfully dishonest. Neither is a good option from a presidential candidate.

Slippery Slope

It seems the Democrats are hell-bent on losing to Trump in 2020. Americans do not like taxes. They tolerate them because they’ve been conditioned to accept the fiction that society can’t function without top down central planning. But when given a choice of more or fewer, they’ll opt for fewer. Consider the candidacies of Michael Dukakis and George H. W. Bush. The former promised new taxes while the latter broke his promise to avoid them; they both were beaten badly. Perhaps an oversimplification, but the point is, don’t lead with “more dental work for all”. The near success of Bernie Sander’s prior candidacy has nearly every Democrat tripping over themselves to ironically capitalize on their perception of his voter appeal: envy. The message from the Democrats now is one of simple, base envy. Those people have stuff, we want it, let’s take it. The trite slogan of “making America work for everyone” can be parsed into “making” = “armed thugs will force you”, “America work” = “productive Americans to hand over your property”, “for everyone” = “to the unwilling, unskilled, and envious.” 

The irony is they may succeed as they take a page from Trump’s political playbook. Trump used fear and vilification of “the other,” the illegal immigrant, to bolster support for his cause. The Democrats too vilify “the other,” except theirs is “the wealthy” or “the capitalists.” They make indulgent promises that rest on a bedrock of theft. Just raise their taxes to the roof and empty the pockets of the Kulaks, after all it’s our fair share right? 

Alexandria Ocasio-Cortez’s plan of a 70% tax rates is built upon a foundation of either downright stupidity or deliberate misrepresentations. Neither are good options. Tax rates were at that level and higher in the past but so were allowable deductions! For example, if gross income were $10 then net AGI was only $3 when rates were 70%, but today the rules yield an AGI of $6 but at 35%. Obviously the tax obtained is identical. No matter the tax rate, the government only manages to bring in about 17% of GDP give or take since 1930. I’m sure the current plan is to raise rates and not deductions … but to equate the current goal as being equivalent to past policy is disingenuous – high deductions in the past means nobody paid those high rates. 

Elizabeth Warren has an even more ghastly proposal – a direct wealth tax on assets. Settings aside the constitutional issues with such a tax any student of history should see where this is going. When the income tax was first implemented it was but a mere 1% on income over $50k in today’s dollars, and 6% on income over $8 million. We know how that went. Warren’s proposal has equally high thresholds of 2% on assets over $50 million and 3% over $1 billion. Only a fool would believe those rates will not rise and the thresholds fall in short order. But the big reveal for those thinking this would not affect them is the fact that even those not owing the tax will still have a filing burden. Everyone would in perpetuity endure the annual burden of submitting to our overlords a complete accounting of all that one owns in order to prove no tax is owed. Think property tax on steroids.  

Those who may be persuaded that they will be better off if “others” are punished should be wary of the collateral damage from these financial grenades. When it comes to taxes, slippery slopes are the rule.

Defending the Undefendable: The Scalper

Country music star Eric Church recently took the unprecedented step of cancelling 25,000 tickets to his spring tour that he claims were purchased by scalpers. The cancelled tickets will be up for re-sale so his “true” fans can purchase them. In fact, this effort to curtail scalping harms his fans – who does he think bought or will buy the tickets from scalpers? I recently tried to buy tickets to an event but was barred from buying more than 2 at a time. Ever. Had I bought two and went back and bought two more I would have been branded a scalper and all 4 tickets cancelled. Net effect: I just won’t go; it’s my whole family or none of us. Oh well. So I have no doubt many of those 25,000 were people like me who tried to skirt the stupid rules just so a family or group of friends could all go to a concert and actually sit together.

The idea that scalpers cause high prices is as persistent a ‘cart pushes the horse’ myth as is the notion college education causes success. Scalpers provide an invaluable public service. They identify and solve glaring supply problems. They make it possible for poor planners, the blissfully unaware, and the peripatetic to enjoy a show at a moment’s notice. In my college days I was in Paris for a summer study abroad. Through last minute word of mouth I happened to find out Pink Floyd was in concert one evening. Of course it had been sold out months before I arrived, but that was no problem. I walked up to the venue and in a few seconds had bought a ticket from a scalper. Couldn’t have been easier. Now someone might argue (incorrectly) that had there been no scalpers I could have bought one at the box office for a normal price. Ten minutes before show start? I don’t think so – not with a band as popular as Pink Floyd at the time.

But, that scenario actually could take place (box office purchase) if only the artists would stop ignoring basic economics. If something is in high demand (seating at a show) but the supply is low (seats x shows) the solution is to not to set an artificially low price and cover your eyes and ears and stamp your feet demanding scalpers not buy the tickets. The solution is to (a) raise prices or (b) increase supply (more shows or more seats). If they truly want all their fans to have an opportunity to see them perform they need to stop selfishly withholding their talents and perform more frequently!

The two most vilified economic activities, piracy and scalping, are both the result of producers over or under estimating their own worth. If someone is pirating your goods then you are charging too much. If someone is scalping your goods then you are charging too little. Think about it: if music and movies were priced at a nickel each, all piracy would cease. The irony is the studios would make more money following this model. Riches are obtained more readily not from charging high prices to a few but rather low prices to the many (which is why price based competition, in contrast to quality or service based competition, is the most popular tool at gaining sales).

Looking back to our example of scalping we can see that if performers charged what the scalpers charged, the scalpers would realize no more arbitrage advantage to scalping and would cease. Airlines do this rather well, offering a range of ticket prices all of which are still high enough there is nothing to gain by scalping them (ignoring security issues today, but this was true in the past when tickets had no names on them).

These performers are a “victim” of their own success. There is only one of them, so increasing popularity means more and more will vie for contact. They have no choice but to charge more or devote more time to their fans. Supply and demand is as inexorable as gravity: sooner or later it will win.

Athens voters consider third party presidential candidates

I was recently interviewed by James Thompson a senior in the UGA school of journalism. His final project was featured in Online Athens and you can see the result here or below. My part is only about 10 seconds at most, but hey, it’s something.

Reasons Don’t Matter

Found this quote years ago, anyway, interesting way of explaining by Steve Jobs of the difference between jobs with unlimited potential and those with limited potential. Strive to never make excuses and anticipate all problems and you will go far in this world.


Jobs imagines his garbage regularly not being emptied in his office, and when he asks the janitor why, he gets an excuse: The locks have been changed, and the janitor doesn’t have a key. This is an acceptable excuse coming from someone who empties trash bins for a living. The janitor gets to explain why something went wrong. Senior people do not. “When you’re the janitor,” Jobs has repeatedly told incoming VPs, “reasons matter.” He continues: “Somewhere between the janitor and the CEO, reasons stop mattering.” That “Rubicon,” he has said, “is crossed when you become a VP.

Knock, knock – Who’s there?

A pair of nearly identical bills (SB 45, SB 159) has been introduced this session into the Georgia legislature concerning “no-knock” warrants. Apparently all those no-knock raids we’ve heard about recently in Georgia (a toddler nearly killed in Habersham County, the murder of David Hooks in Laurens County) were illegal. Under Georgia law (O.C.G.A 17-5-27) officers must give “verbal notice” before force can be used to execute a warrant. Huh. Imagine that, words on a piece of a paper didn’t stop those in power from doing whatever they wanted – and since there was no accountability in either case, apparently the current law prohibiting no-knocks is of little practical value. So, let’s see, how could we possibly remedy this situation? I’ve got it – make no-knock raids LEGAL! Now when officers engage in this practice they won’t be breaking the law anymore, problem solved.

Why stop there? Why not make rape, murder, and theft legal? That would lower the crime rate in Georgia to the point where there would be no need for no-knock raids. Oh, right that wouldn’t help because no-knock raids aren’t about catching actual criminals (rapists, murders, and thieves). No, they are about nabbing the low hanging fruit of drug “crimes” where mere possession of “stuff” is all that is needed to close a case. Smash, grab, arrest. Wash, rinse, and repeat. Detective work is so tedious – this is much easier. I have a suggestion for these politicians. If you are so keen on legalizing that which was formerly illegal in order to control it better, then try this: repeal all drug laws. Now there is no need for no-knock warrants.

Now, just to clarify, both bills’ proponents claim the bills prohibit no-knock raids. One (SB45) even goes so far as to call itself “Bou Bou’s Law” (after the toddler that nearly had his face blown off). Because both bills would greatly increase the probability of another “Bou Bou” type incident, this particular appellation is about as disconcertingly insulting as naming a rape legalization bill a “Women’s Rights Law”.

What the declaration giveth (“No search warrant shall be issued which contains a no-knock”), the exception clause taketh away (“unless the affidavit or testimony supporting such warrant establishes by probable cause that if an officer were to knock and announce identity and purpose before entry, such act of knocking and announcing would likely pose a significant and imminent danger to human life or imminent danger of evidence being destroyed.”)

“Significant and imminent” are the weasel words that will build the foundation of every manufactured excuse to engage in this practice. Honestly, if the degree of danger is that serious do you really think an extra 5-10 seconds will provide an absolute measure of safety? If the danger level is truly “imminent” no one should be entering, announced or unannounced, if officer safety is the primary concern. Surround and siege is a much less dangerous alternative for all involved. Likewise, the phrase “evidence being destroyed” is code for “drugs flushed down the commode”. Thus upon this rock one may build the excuse for every drug case being a no-knock case.

Opposition to these bills is not “anti-cop”. Quite the contrary. Officers tend to get shot when they break into people’s homes unannounced. That’s just a fact. The goal should be to eliminate such raids, not increase their use through legalization and specious pleading of “oversight.” The only situation where a no-knock raid would ever be warranted is if someone’s life inside the residence is in danger (think serial killer situation). But to risk the lives of officers and innocent bystanders inside in order to potentially get a few grams of dope off the streets – that is simply reckless and the Georgia senate should be ashamed of themselves for attempting to codify under the color of law this outrageous practice. Please contact your Georgia Senator to voice opposition to these bills.

Stop mining!

Yes, I am a big dumb idiot. I, like many others, fell prey to the bitcoin frenzy last fall as the price continued to climb, and climb and climb, and just when I thought it couldn’t go any higher, it did. Although I had managed to purchase a small amount of bitcoin (0.16 BTC)  at the Cryptocurrency conference in Atlanta (October 2013) for the now-unbelievable price of $120/BTC (using a bitcoin ATM they had there), I felt I had for the most part missed the boat on this whole bitcoin thing. But better late than never. I looked into mining equipment. Too expensive and too complicated (I’m an old school Mac guy, I’m not into compiling my own code in Ubuntu just to get some command line miner to work – I want point and click). But this cloud mining thing looked interesting. I knew just enough about Austrian economics to dupe myself into believing the business model of cloud mining companies made sense (“they are simply renting out time on their hardware to make an additional return on it” I thought). I read stories on line about how mining is for suckers, that the difficulty changes too quickly to make anything, but I dismissed those in my fervor to get some bitcoins at a really good price. I did some back of the napkin calculations that showed I could indeed make my investment back and then some. I was convinced! As it turns out, lazy, back of the napkin calculations don’t work. You actually need to do the fully detailed calculations… which I did not do until several months into it at which point it hit me like a ton of bricks, “YOU’RE AN IDIOT!” – it is mathematically impossible to make money in cryptocurrency mining. But so many people are doing it you say? That’s because they are wishful thinkers like I was or simply have not done the math yet.

From a strictly basic economics approach it should have been obvious to me that this business model made no sense. Why would you spend money on a piece of hardware and then you yourself not use it but rather rent it out at a rate of say $100/period even though if you used it yourself you could make $150/period? That’s the premise behind cloud mining: make more than you spent, otherwise what is the point. Intuitively it seems to make sense since we invest in all kinds of assets that produce returns (stocks, bonds, depreciable capital equipment, etc). The key difference here though is that if a stock produces a 2% dividend for me the stock itself still has value (assuming no insane market crashes). I can sell that stock at some later date for as much if not more than what I paid, and even if I sell for less, as long as the loss there does not exceed the dividends produced during that period, I still have realized a profit. But, with crypto currency mining the asset your are purchasing is simply time. As soon as it is used it is gone and worthless. When a mining contract is over there is no underlying asset for you to sell. In other words, for crypto mining to work you have to expect an investment return that approaches Ponzi-esque levels: a minimum 100% return during the holding period (of the contract). Even if we assume the crypto price in terms of fiat is increasing, the numbers still do not work. Why? Because you could have simply bought the crypto on the same day you started the mining contract and would have realized the same gain due to fiat inflation.

For example if it is $1/BTC on day 1 and you spend $1000 to mine for a year, you could have just bought 1000 BTC instead. So let’s say you mine for a year and only mine 500 BTC, but the price has gone to $10/BTC. You think you made out well because you spent $1,000 but now have $5,000… but you must recognize that you could have just bought 1000 BTC on day 1 and would now have $10,000. The loss must be accounted in the crypto currency you are mining relative to what you could have bought at the market price on the date the contract started.

I actually also dabbled in some Litecoin mining as well and bought one of those pre-built rigs off of Ebay. It was mostly plug and play… but it was extremely LOUD and HOT. As I considered where I could relocate this rig in my house I decided to run some detailed calculations to determine when I would turn a profit. And that is when I discovered I would never get my money out of what I paid for the rig, let alone all the electricity use as well. So I made the smartest move one can make when mining; I sold the rig. Because I sold it a mere 3 weeks after I had bought it the difficulty level had not changed appreciably and the market rate for the rig was the same. I sold it for exactly what I paid for it and managed to pocket the litecoins produced. So in all I netted about $100. So it is possible to make money mining but you must (a) buy the actual equipment so you have something to sell when done and (b) mine for under a month so difficulty increases do not depreciate your equipment by an amount exceedeing what you made in mining (as denominated in the currency being mined). Of course that is not really practical, but it is possible. The only other way to make money is if you just happen to already own the hardware needed to mine and can build a rig yourself (and live where electricity rates are low). Of course you must factor in the opportunity cost of any other endeavors you could have participated in that could have made more of a return. It wouldn’t make much sense for a neurosurgeon to waste his time building a rig, although for someone in high school or college it might (if they are not employed) in terms of opportunity costs.

So to help people out I have put together a spreadsheet using Google docs where you can estimate mining returns. It is set up for BTC but one could do the same for any crypto currency, the principle is the same. The document shows an example of the currently most expensive mining contract (1 TH for $2999) using the Global Hash rate of 8/19/2014 as the starting point and an average change in difficulty of 20%. With those numbers you can see you lose 75% of what is spent. The only way to make a return is if difficulty changes were 1% or less (or they could cut their price by a factor of 4). The spreadsheet is Read Only on the web but you can download it and then make changes to it offline. Trust me, no matter what mining contract you see, plug it in here and you’ll see it’s a loser. And if it is a winner then you can be sure it is a “pre-order” contract. Don’t do it, trust me. I fell for the pre-order Butterfly Labs mining contract last December. Had they delivered that product on the day I purchased it, I would have made a return. But they knew it would be months before it was delivered so they could price it aggressively such that it appeared to be a money maker. Six months later after no delivery on the contract I luckily qualified for a 100% refund (which I had to wait another 45 days to get). But to their credit they did finally refund all of my money. I made out far better getting my money back than if they had delivered the contract in the February time frame originally promised. Their reputation for taking money and not delivering for months (if ever) suggests to me they are simply using their customers as a source of 0% financing. They collect pre-order money from suckers like me, then hold our money for 7 months, and then finally return it with 0% interest. But like a Ponzi-scheme, this will only work as long as they continue to entice new suckers into doing the same. I will give them the benefit of the doubt and assume it is not a pure Ponzi scheme, but rather that they are using the “loaned” funds to invest in their business and grow it. I’m just glad I got out when I did. is a bit different from Cloudhashing actually delivers their contracts when you buy them, it’s just that given their pricing it is not possible to ever make a return. They have a “revenue reinvestment” scheme which sounds like it makes sense; reinvest your mined returns in order to stay ahead of the difficulty changes. But all you’re doing is running to stand still if you participate in the RRP. But in theory and in practice it can’t work as it falls prey to the same problem of mining itself; you’re better off just buying the BTC. Ultimately I think they and all other mining companies operate on the same principal. Instead of investors they have customers who freely give them their money, they use that money (risking none of their own) to buy the equipment, they then charge the customers 10% of their return (and may very well be mining on the side using the equipment paid for by their customers). A parallel would be this: I sell the ability to receive a dividend from some penny stocks. You give me $100, I use that $100 to buy shares of penny stocks. Those stocks pay a $2 dividend per month. I give you $1.80 and I keep $0.20. After 1 year you’ll be lucky to have made $20 (thus an $80 loss), I’ll have $2, and then the “contract” is over. I’m making $2 per account/per year risk free by using your money to buy the stock. After a year the penny stocks are worthless so there is no way to recoup that initial investment. Now all I need to do is scale up to a massive level and make a pretty decent amount of money risk free.

So, this whole essay begs the question, “If it always make more sense to buy than to mine, shouldn’t it be impossible for any crypto currency to get off the ground?” Yes, quite literally that is true. But, fortunately, turning a profit is not the sole motivation behind everyone’s actions. I’m certainly not saying turning a profit is bad, simply that people do things for reasons other than profit. A painter might paint his whole life for pleasure and never realize a profit from that endeavor. Then when he dies his painting shoot up in value and then people are buying and selling them for profit. In a sense that his how crypto mining operates. The miners don’t make anything, but the traders who buy their product do.

Mine because it is fun. Mine because you want to help grow the market. Mine because you want to be a part of history. Mine for any number of reasons, just don’t mine because you want to make a profit. You won’t. The only people that make a profit in the crypto currency game are those that are (a) very lucky and found good deals on hardware or (b) people selling mining equipment or mining contracts. If you just want to make money then just buy what you can afford to lose. It is a purely speculative market so the only profit you’ll see is if the crypto you buy gains value relative to other goods.

So there you have it, the perspective of a former miner and cloud miner on why neither makes any sense if your sole intention is to make a profit. I hope this information gets out there and helps others to avoid buying mining contracts that are a total loss from Day 1. I was a victim of my own lack of due diligence and placement of trust in companies that I expected to deliver what was implied (net gain) by the nature of the product. That’s the free market, if you aren’t careful you can get hurt. Well now I’m here as part of that market to warn others away from participating in these “products”. Eventually there will be enough of us warning everyone else that these companies will simply go away, but sadly not without having made off with a lot of money. Caveat emptor.

Postscript Jan 9, 2018, Just found this article, guess my speculation on what Butterfly Labs was doing was vindicated:

Ideas are not Property, on dismantling IP

The US Supreme Court ruled unanimously this past week that human genes may not be patented. That was a good decision. However those in support of this ruling are by and large hypocrites. They vociferously decried the negative consequences of upholding such patents (limiting research, higher costs, limited choice) but then fail to acknowledge these same deleterious consequences occur for ALL patents. It’s not like these bad things don’t occur for “legitimate” patents but do occur for “illegitimate” ones. Patents are the problem, not their “legitimacy.”

So what are patents (and copyright) (aka Intellectual Property or IP)? Quite simply they are a state granted monopoly for a fixed period of time during which the presumed creator has an exclusive right to do with their creations as they see fit. The hope is that in providing, as a reward, a period of monopolous profits such entities will be incentivized to expend resources in creation and thereby benefit mankind. This unquestioningly presumes that risk should be subsidized by the state. Risk the right way and the state will support you, risk the wrong way and you’re out in the cold. But that’s ok, because IP helps the “little guy” right? Wrong. The IP holder must enforce their IP. This necessitates enormous financial resources to legally pursue IP violations. Only the “big boys” can afford this and thus it becomes clear for whom the IP system was created. The IP system is nothing more than a symptom of state and business cronyism. One of the hallmarks of cronyism is the arbitrariness of the rules and regulations supporting it and IP is nothing if not arbitrary. IP terms have changed over the years, often in concert with the needs of the large corporations whose IP is threatened by expiration.

Although its cronyist roots are reason enough to withdraw support from the IP system, we find that upon closer inspection the whole raison d’être of IP is actually quite absurd. IP rests on the idea that mere ideas can be considered property. For a proper claim (title) to be made, the material in question must be “scarce.” “Scarcity” means there is some marginal cost of production, e.g. clothing is commonly available but it is scarce because it does not simply pop into existence; obtaining it requires some non-trivial expenditure of resources. Where there is scarcity there exists the potential for rivalry or conflict over some particular good. There are two ways to prevent such conflict: 1) invent a way to make the good non-scarce or (2) establish property rights in such objects.  Property rights are the civilized, non-violent alternative to killing each other in order to determine ownership/possession. But when it comes to ideas or non-scarce goods there can be no conflict because both parties can simultaneously possess the thing in question. Therefore without conflict there is no reason to have property rights. Such rights are entirely absurd – you might as well attempt to establish property rights in looking at the moon or the right to whistle. The only possible conflict is over who can legitimately say they thought or did something “first”. Fine, fight over that if you wish. But that is not a property right; just because you had the name “Greg” before me doesn’t preclude me from also using that name.

The idea of scrapping the entire IP system will raise the ire of those who have fallen sway to the false choice paradigm we are propagandized with our whole lives, namely that without such “protections” people will simply stop being creative and all new literature, music and inventions would dry up. Seriously. Now doesn’t that sound pretty stupid when you say it out loud. Do you really think there are NO other possible ways creators might get remunerated for their work? Do you truly believe that patents and copyright are the ONLY possible way this could work? These types of objections are about as imaginative as the “but who will pick the cotton?” rejoinders thrown at those that desired to end slavery. In other words, one’s lack of imagination does not invalidate my argument. End the shackles of IP and let loose the entirety of human creativity. (For a more in depth discussion please see the godfather of anti-IP, Stephen Kinsella’s “Against Intellectual Property” which can be downloaded, for free.

The following is an adjunct to the discussion above . The question “But how will this work?” is not a refutation of the principle that IP as a concept is invalid… however…it can be an interesting intellectual exercise to start from a priori free market principals and imagine how people might conduct themselves in order to accomplish the same goals absent a coercive state influence. I will go through some of the more common objections to dismantling IP.
The most common objection to ending IP is that businesses simply won’t innovate anymore because other businesses (the parasites) will just copy everything they do which in effect results in the innovating business subsidizing the parasitic businesses who have no R&D budget. There is just one problem with this. It only looks at one side of the equation (however in this case it reverses the usual paradigm of the “seen benefit and unseen harm” described by Bastiat into one of the “seen harm and the unseen benefit”).
These assertions always ignore the benefits to both society AND the business from whom the idea was stolen. Obviously society will benefit with lower prices and more choice (just as they do when drugs go off patent and can be made as generics). However all businesses will benefit because now it is “legal” for everyone to “steal” ideas from everyone else and improve upon them. So for every ten businesses “stealing” from Business A, Business A can in turn “steal” the ideas of ten other businesses themselves – often the same one that “stole” their idea to begin with. The playing field is leveled if everyone can participate. Rather than restricting R&D to just one company that happens to hold a patent, the creative R&D resources of thousands of companies can bang away at some idea, sowing improvements at each iteration, each company striving to outdo the others in either price, efficacy or quality.
As an aside here I would like to mention this is not an endorsement of industrial espionage. By that I mean businesses can have their employees sign non-disclosure agreements (contracts) and if such agreements are violated they have full legal grounds to pursue not only those employees but most likely the business they disclosed it to (tainted fruit as it were). Now some might object and say “well technically the business it is revealed to can’t be sued because they are not party to the contract”. True, however in a truly libertarian system (no employment law tying the hands of the employer or employee) any higher level employment situation (i.e. knowledge workers with the potential to bring innovation to the table) would be established under an employment contract and in such contracts only a fool of an employee would sign such a contract that did not stipulate that the employer will indemnify that employee in any lawsuit related to their actions in the course of employment (which would of course cover conveying ideas/processes learned at a former employer that could benefit the new employer). In that situation then the employer would be a fool to not make entirely sure all information they get from the employee is not covered by any sort of non-disclosure agreement since if it is, and they don’t check, the employer opens themselves up to an enormous amount of liability (indirectly via their employment agreement). This system would of course not stop such transfer of proprietary knowledge, but it would greatly mitigate the likelihood and even today’s system does not stop all of it either so to say that people might find a way around it and so therefore it can’t work is to say what we have today can’t work because people today find ways around our current system.
Now, back to trade secrets: If your process is truly novel and inventive then it will not be readily copied as no one will be able to figure it out (because without patents you would not need to disclose to the world how it works). If it is a secret, then keep it secret. However, if you are the inventor of something fairly obvious (i.e. one-click checkout, round edges on a phone) then it will be trivial for others to copy you. But because the invention was trivial you would not have had much invested it in anyway. Therefore in a free system those that invent truly novel things that are difficult to reverse engineer will naturally reap the most reward before competitors finally figure it out (if ever). “First to market” is still a powerful incentive to innovate. And even after others figure out an invention there is still much value in the reputation of being the seller of the “original” or “authentic” version of something.
Next common objection, “Ok Mr. Smarty pants, without IP you’d have even more firms like the Chinese just making cheap knock offs and putting the innovators out of business and since they aren’t innovating there is nothing to copy from in this iterative process you describe”. Think about what those “knock off” companies are doing. They are making stuff efficiently and inexpensively. They are making it less expensively than the makers of the “original” products. Now to the extent the knock offs are sub par in quality and function, there will be little market penetration beyond those who never would have bought the authentic product to begin with because of price – so no real loss there. But to the extent there are such manufacturers that actually are basically making “generics” of whatever product it is, that means they are of nearly equal quality and efficacy but for a lot less. In other words between the two such companies (the R&D company making it for a lot of money vs the Manufacturing company making it for little money) there is a stark difference in comparative advantage. One is really good at making stuff and one is really good at inventing stuff. That means each will tend to specialize and become better and better at what they do. Without a patent system we would tend to see more company specialization. For example today companies are more vertically integrated in that they invent things and then manufacture them and then waste time and resources going after those that copy them. In a system without patents the “inventor” companies would specialize in R&D and inventing things and then they would turn around and sell the information on how to make some hot new thing to the manufacturing companies. Basically it is contract manufacturing – which already exists today. The resources they formally spent fighting them with are now used to make improvements. The manufacturing firms are weak in R&D but great at manufacturing. It is a natural symbiosis where the strengths and weakness of each partner complement each other. So as companies specialize in this way we get better R&D and we get better manufacturing. It doesn’t mean that companies can’t still invent things and then make them and sell them, it just means that market pressures will tend to minimize the number of companies operating this way. Only companies whose products require enormous capital investment (e.g. auto manufacturing) would likely continue to exist in this arrangement or within markets that are too small to justify specialized manufacturing needs. Just because the structure of businesses today may not work under a no patent system does not mean there is not a different way to structure business that is just as good if not better in terms of net benefits for society in terms of total goods produced and the function of such goods. For example, perhaps without IP the variety and innovation in smart phone technology would be much more advanced than what we have today and there would be greater variety and lower prices, all because all parties could copy off each other, incorporating each new innovation.
And since I’m throwing out ideas about how things might work, let us now turn to how artists (musicians, authors, print, cinema, etc) could ensure remuneration under a no copyright system. One approach used today is the license, which I believe would work in many situations although it does not protect against copying from a non-license holder (e.g. occurring from loss or theft from a license holder) or violation of the license that can’t be tracked to the originator. But for most situations it would work.
Another approach is the pricing approach, i.e. make the product so cheap that the marginal cost of actually pirating is higher than just buying it (e.g. if songs were a nickel is it really worth your time to scour the web for some hack site trying to track down that song…is it really worth it for those people to maintain such a site? It does actually cost money to maintain such sites (domain fees, server hosting fees, etc). Maybe you spend just 5 minutes doing so but even at minimum wage you just wasted 60¢ of you’re your life away when with one click in 2 seconds you could have the song you want for a nickel.
In general, if people are pirating things that means they cost too much (the cost to pirate is lower than the cost of just buying) and if people are scalping things then they cost too little (i.e. you’re basically giving it away). The key is to find that sweet spot of price where the costs of pirating are higher than what it is sold for, but the sell price is not so low that someone can actually realize an arbitrage advantage by buying it at that level and reselling it at a higher level. For unknown artists this approach is already used today. Many simply give away their fares for free or for next to nothing. They simply want to become known. Once they are known and in demand, then they can slowly raise their price.
Another approach is one I call the “trickle down” approach. It is somewhat similar to the system we have of publishing houses or record labels although it is certainly not restricted to such entities (i.e. an artist could sell to whomever they wish at the initial high price). Here’s how it would work: The artist would be paid upfront a very high sum that would cover the total of what they want (the more well known they are, the more they can demand up front). So copying of works really doesn’t hurt them insofar as they have already received everything they expected to get for the work. But the basic idea is incentive driven copy protection. So for example lets say some artist comes out with some great new work and in order to ensure they get as much as they need based on the effort that went into it they would sell each copy of the work for say $200,000. So let’s say only 5 people want it at that price – the artist made a million bucks right off the bat, not over decades of trickling in royalties. Now each of those buyers at $200,000 has the right to resell it. They’ve spent $200,000 so they sure as heck are not going to just give it away, they have a great incentive to get back what they paid and possibly more. They are all competing against each other as well so the price they charge will tend to start out high but drop as they compete more and more in trying to squeeze out every bit of value from their investment. They might sell 200 copies at $1,000 each. If you spent $1000 on a book or CD would you just “share” it with your friends? No. But you might sell it to them or others at a level where you hope to perhaps break even or make a little.
At some point the price reaches a level where the marginal costs become low enough that people will start to trade or give away what they bought. So this system is not much different than from what we have with any hot new product that comes to market. The rich will pay exorbitant amounts to have bragging rights to be the first to have something and as more of them buy it, costs come down and then more and more can afford it until eventually all can afford it. Progressives should love this as the “rich” pay disproportionately more for something based on their income level, but they do so willingly. The “poor” end up getting things for next to nothing or for free. The only real penalty being that the “poor” must wait longer, but is it really a tragedy if those of limited means must wait a few months to enjoy the latest hot album or book or movie when compared to the rich that have access to it immediately? One objection might be this would not work for new or unknown artists. True, and I did not say this is the way it must work for everyone. This is just one idea. And that is the point, there could be dozens of different creative and inventive approach’s people will take up. Many artists today sell direct to their consumers and that works well for the small or unknown artists as they tend to have a loyal following and there is little market to pirate the works of unknowns.
So to ask “how would this work?” is a bit silly – obviously people would figure out ways to make it work. I’ve presented only a handful here. In order to answer this question the onus is shifted from the questioner (who can’t justify his position) and onto the questioned party to come up with the outcome of what will take the creative efforts of thousands or millions to come up with. The questioner presumes that if the answer provided might have even one tiny hole poked in it as to how there might be a problem with this approach or that, then the whole idea must be scrapped. Based on that reasoning we should dismantle the IP system as it has dozens of problems. It certainly hasn’t stopped “piracy” has it? The only fixes offered up amount to nothing more than greater and greater intrusions of state control in our lives (PIPA, SOPA, etc). Must we give up all semblances of privacy and private property in order that the state be enabled to guarantee IP “rights”?