Jerry Brito Says Net Neutrality Isn’t Dead Yet

Judging by the headlines over the past week, one
would think that the Federal Communications Commission (FCC) was
dealt a crushing blow when the DC Circuit Court of Appeals struck
down the agency’s net neutrality rules. The reality is that the
court decision is disastrous, but not because it struck down the
net neutrality rules. Jerry Brito explains that while the court
found that the Commission could not issue net neutrality rules the
way it did, thus striking them down, it nevertheless made it clear
that Congress gave the FCC (and also state public utility
commissions) broad powers to regulate in the name of encouraging
broadband deployment.

View this article.

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Bitcoin Exchange BitInstant CEO Arrested on Money Laundering Charges

The U.S. continues to be a less and less friendly place to do
Bitcoin related business, with
this awful report from Business Insider 
this
morning:

The CEO of BitInstant, a Bitcoin exchange, has been arrested at
JFK airport and charged with money laundering.

Charlie Shrem, along with a co-conspirator, is accused of
selling over $1 million in bitcoins to Silk Road users, who would
then use them to buy drugs and other illicit items.

According to the criminal complaint, Shrem himself bought drugs
on Silk Road.

“Hiding behind their computers, both defendants are charged with
knowingly contributing to and facilitating anonymous drug sales,
earning substantial profits along the way,” DEA agent James Hunt
said in a release. 

Shrem is a vice chairman at the
Bitcoin Foundation
. He is listed as a speaker at a Bitcoin
conference in Miami that ended Sunday.

Shrem is
believed
 to own a substantial amount of bitcoins.

BitInstant, which is backed by the Winklevoss
twins, is currently
offline
. It was recently the
subject
 of a class-action suit alleging misrepresentation
of its services.

The Business Insider story contains a full press
release from the Justice Department.

I wrote back in May about how, although there is no way for the
government to destroy the decentralized Bitcoin network, it can
certainly
do its worst to hobble
those trying to use the digital
currency. And it is, alas.

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Schooling for Troubled Kids, from the Libertarian Tradition

The Freeman has an
interesting account of a specialized school for troubled
teens
 called “Freedom Mountain Academy,” written by Ross
Benes.

While the story doesn’t stress this, the school’s operator Kevin
Culliane started as a chosen successor to early libertarian guru
Robert LeFevre who ran the mid-60s all-libertarian Freedom School,
later known as Rampart College. (LeFevre’s story is told in my book

Radicals for Capitalism
.)

You might or might not agree with the specific tenets and
techniques of the school. They involve:

students start with few privileges but gain more and more as
they demonstrate commitment and personal responsibility. That
little twist from entitlement and punishment to earning and
reinforcement rekindles motivation in FMA’s students. The
curriculum reinforces this approach by rewarding students’
efforts….When students first arrive, they forfeit their
electronic devices….

and:

The first book they read is Viktor Frankl’s Man’s
Search for Meaning
, which chronicles Frankl’s struggle to find
purpose in his life as an Auschwitz prisoner. Students discuss the
book’s theme of suffering and how it relates to their own feelings.
At this point they go on their first expedition into the
wilderness, where they live off the land for 10 days, learning to
work with and rely on one another.

“When you’re out in the wilderness you really can see how we’re
all connected to each other,” said former FMA student Travis
Ackerman. “They teach you how to grow up and take care of yourself.
They don’t just teach you to memorize facts but they push you to
think of new ways to solve problems,” he said…..

The level of regimentation they put the kids through isn’t
something I’d be comfortable with, but then again I don’t have
“troubled kids” (or any). The students also work on the farm
connected to the school, which provides most of their own food. The
article gives at least some anecdotal evidence that the structure
helps some kids who needed self-discipline.

The quality of the education itself is libertarian-flavored,
even if the relationship between the school and its students is
not:

“We don’t teach political history,” Kevin Cullinane said.
“Instead we teach the history of human progress….” 

“The classes don’t just teach you what a public school would
teach you. He teaches the truth about things the government might
conceal,” [one student] said, noting that class discussions about
the Waco siege and the confrontation in Ruby Ridge, Idaho, opened
up her mind. But rather than just take his word for it, Mr. Kevin
instructs students to do their own research, she said.

Benes draws the lesson that, whether or not the FMA methods are
good for everyone, its existence is:

an example of how independent philosophies can be more effective
in helping troubled young people than any uniform system or
standardized regime. If Cullinane had to follow rules from a higher
district or board, he would not have been able to create his unique
program. And his students would likely not have found a program
that worked for them.


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Meet Power of Glamour’s Virginia Postrel and FIRE’s Greg Lukianoff, Tues., 1/28

On
Tuesday, January 28, please join me and the D.C.-based staff of
Reason at a party for former Reason Editor Virginia Postrel’s new
book, The
Power of Glamour: Longing and the Art of Visual
Persuasion
.

Virginia’s latest work is a meditation on how our
perception of glamour shapes our culture, determines the choices we
make, and reveals our inner-selves. The book is an entertaining
romp, analyzing the deeper significance of the glamorous people and
places that have shaped the last century of American
culture.

The Power of Glamour will be available for sale
and signing by Virginia, a columnist for
Bloomberg View  who has
been called “a master D.J. who sequences the latest riffs from the
hard sciences, the social sciences, business, and technology, to
name only a few sources.”

We’re also
welcoming the 
Foundation
for Individual Rights in Education
 (FIRE) to
Washington, D.C., as the group sets up its first office in the
Capital City (conspiracy theorists, please note that Postrel is on
FIRE’s board of trustees).

FIRE’s President Greg Lukianoff, whose own great
book
Unlearning
Liberty: Campus Censorship and the End of American Debate

is coming out in paperback, will outline the group’s goals in
D.C.

Light snacks, wine, beer, and soft drinks will be
served.

What: Happy Hour with Virginia Postrel, FIRE,
& Reason

When: Tuesday, January 28th from 6:00 PM to 8:00 PM

Where: Reason DC headquarters, 1747 Connecticut
Ave. NW (map)

Attendance is free but RSVPs are required. Please let us
know if you can make it by filling out our Eventbrite
form: 
http://bit.ly/1dw7Ni1

If you have questions about the event, please contact
Cynthia Bell at 
cynthia.bell@reason.org.

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Meet Power of Glamour's Virginia Postrel and FIRE's Greg Lukianoff, Tues., 1/28

On
Tuesday, January 28, please join me and the D.C.-based staff of
Reason at a party for former Reason Editor Virginia Postrel’s new
book, The
Power of Glamour: Longing and the Art of Visual
Persuasion
.

Virginia’s latest work is a meditation on how our
perception of glamour shapes our culture, determines the choices we
make, and reveals our inner-selves. The book is an entertaining
romp, analyzing the deeper significance of the glamorous people and
places that have shaped the last century of American
culture.

The Power of Glamour will be available for sale
and signing by Virginia, a columnist for
Bloomberg View  who has
been called “a master D.J. who sequences the latest riffs from the
hard sciences, the social sciences, business, and technology, to
name only a few sources.”

We’re also
welcoming the 
Foundation
for Individual Rights in Education
 (FIRE) to
Washington, D.C., as the group sets up its first office in the
Capital City (conspiracy theorists, please note that Postrel is on
FIRE’s board of trustees).

FIRE’s President Greg Lukianoff, whose own great
book
Unlearning
Liberty: Campus Censorship and the End of American Debate

is coming out in paperback, will outline the group’s goals in
D.C.

Light snacks, wine, beer, and soft drinks will be
served.

What: Happy Hour with Virginia Postrel, FIRE,
& Reason

When: Tuesday, January 28th from 6:00 PM to 8:00 PM

Where: Reason DC headquarters, 1747 Connecticut
Ave. NW (map)

Attendance is free but RSVPs are required. Please let us
know if you can make it by filling out our Eventbrite
form: 
http://bit.ly/1dw7Ni1

If you have questions about the event, please contact
Cynthia Bell at 
cynthia.bell@reason.org.

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DEA Head Criticizes Obama for Telling the Truth About Marijuana

During a speech to a conference of sheriffs
in Washington, D.C., last week, Michele Leonhart, head of the
Drug Enforcement Administration (DEA), reportedly criticized
President Obama for
saying
marijuana is safer than alcohol. Bristol County,
Massachusetts, Sheriff Thomas M. Hodgson
gave this account
to the Boston Herald:

She’s frustrated for the same reasons we are. She said she felt
the administration didn’t understand the science enough to make
those statements. She was particularly frustrated with the fact
that, according to her, the White House participated in a softball
game with a pro-legalization group….But she said her lowest point
in 33 years in the DEA was when she learned they’d flown a hemp
flag over the Capitol on July 4. The sheriffs were all shocked.
This is the first time in 28 years I’ve ever heard anyone in her
position be this candid.

Kern County, California, Sheriff Donny Youngblood, president of
the Major Counties Sheriffs’ Association, the group Leonhart
addressed, confirmed that she “called out Obama for what Youngblood
described as ‘irresponsible’ comments that were a ‘big slap in the
face’ to cops who have lost their lives keeping drugs off the
street.” He said she received a standing ovation.

For Leonhart to describe Obama’s statement as unscientific is
pretty rich. Like all of her predecessors, Leonhart has steadfastly

refused
to reclassify marijuana, which
for no rational reason
remains on Schedule I of the Controlled
Substances Act, a category supposedly reserved for drugs with a
high potential for abuse that have no accepted medical applications
and cannot be used safely, even under medical supervision. In
response to questions from Rep. Jared Polis (D-Colo.) in 2012,
Leonhart famously declined to say
whether marijuana was more or less dangerous than crack, heroin, or
methamphetamine (which is actually less restricted), repeating the
mantra that “all illegal drugs are bad.” Mmmkay?

Leonhart’s objection to the hemp flag reflects the DEA’s
unyielding opposition not only to marijuana itself but to anything
associated with it. Although many countries manage to ban marijuana
while allowing production of industrial hemp, which is not
psychoactive, the DEA has always insisted those two policies cannot
coexist, which is why the hemp for that flag had to be imported.
The DEA’s fear and loathing of anything it associates with cannabis
culture explains its bizarre, lawless attempt to ban all edible
hemp products (such as the hemp seeds and hemp oil you can buy at
Costco). That anti-hemp crusade was ultimately blocked by
a federal appeals court, which said it had no statutory basis,
since the Controlled Substances Act specifically excludes hemp
seeds from its definition of marijuana.

You can call Leonhart’s revulsion at the thought of a hemp flag
flying over the Capitol many things. But “scientific” is not one of
them. Likewise, her refusal to
concede
that alcohol is more dangerous than marijuana has

no scientific basis
. Tellingly, Sheriff Youngblood calls
Obama’s statement about the two drugs’ relative hazards
“irresponsible” and offensive to drug warriors. He does not call it
inaccurate.

Leonhart, of course, was Obama’s
pick
to head the DEA, and he surely knew what he was getting,
since she had been running the agency as acting administrator since
November 2007 and had served as its deputy administrator before
that. As acting administrator, she overruled a
DEA administrative law judge’s recommendation that University of
Massachusetts at Amherst scientists be allowed to produce marijuana
for research, a function currently monopolized by the National
Institute on Drug Abuse, which is more interested in showing how
dangerous marijuana is than in exploring its medical utility. That
monopoly, unique to marijuana, is even harder to defend than the
drug’s Schedule I status—which, by the way, Obama has the power to
change without new legislation. It is fitting that Obama, having
opted to stay the
course
in the war on drugs despite pre-election statements
promising something else, has to endure sniping from the hardline
prohibitionists he appointed now that has managed to utter an
inconvenient truth.

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A. Barton Hinkle Says Eat Your Frankenfood!

A slavish devotion to
narrow ideology has led many people to reject overwhelming
scientific consensus as nothing but a plot by malevolent forces to
control ordinary people’s lives. If you think that sentence
describes conservative skeptics of global warming, congratulations
— you’re right. If you think it describes liberal opponents of
genetically modified crops, congratulations — you’re right again.
Progressives have gotten a lot of mileage mocking conservatives’
truculent refusal to accept scientific conclusions. But, A. Barton
Hinkle points out that the left has exhibited similar truculence on
another subject: genetically modified organisms

View this article.

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Expensive World Cup Preparations, Anti-World Cup Protests Continue in Brazil; Part of Stadium Roof Collapses

till the lights go outWhen FIFA awarded Brazil the 2014 World Cup in
2007 (more or less a given because FIFA rules required the
tournament to be held in South America, and the South American
soccer body endorsed Brazil’s bid), Brazilians took to the streets
to celebrate. Last year the mood turned sour; local protests over
rising bus fares eventually spread across the country, carried by

frustration
over government spending on the World Cup. Those
protests continue; anti-World Cup demonstrations in Sao Paolo
reportedly
became violent
over the weekend.

The Brazilian government insisted preparations for the World Cup
would cost less than $1 billion, and be financed largely by private
investor, when it first launched its bid. Thanks in large part to
cronyism, the costs have ballooned; building up the infrastructure
for the World Cup cost Brazil $3.5 billion as of
last summer
, when the opening game was still a year away. The
tournament is now less than six months from kicking off, and six of
the 12 stadiums promised in the bid are still
under construction
.  Last week, part of the roof of one of
those uncompleted stadiums
collapsed
because of heavy rains and winds, while FIFA issued
an
ultimatum
to the city where another uncompleted stadium is
located giving them four weeks to finish or risk having games
scheduled there moved to another city. Just another reason you
might want to
hold off
on buying tickets to the tournament just yet.

Related: The Brazilian national soccer team is only ranked #10
in the latest FIFA rankings which may be why the AP is asking today
what
might happen
if Brazil doesn’t win the World Cup, as it failed
to do the last time it hosted it, in 1950, in a finals loss a
deputy sports minister insisted remained a “trauma” for the
country.

More Reason on Brazil.

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Will Sacramento Residents Get the Chance to Stop a Massive Stadium Subsidy?

Really, you're calling yourself Kings with that record?Sacramento is considering
contributing $258 million to a stadium to keep the Kings around
(following failed efforts to move the team to Seattle or Anaheim,
Calif.), bringing them downtown. By this point, hopefully we know
the arguments about sports arena subsidies. The city says the
stadium will revitalize the downtown area and spur new development
and wealth creation. Critics say the predictions of development are
wildly optimistic based on evidence from previous stadium
developments and that stadiums really just shift money from one
part of the city to another and don’t actually cause growth.
The Sacramento Bee delved deep into both sides of the
arguments today. Read
here
.

California has a robust – but also complicated – ballot
initiative system. Opponents of the subsidy collected more than
20,000 signatures to get a two-part vote on the ballot. The first
part would have required all city subsidies for sports arenas to be
put up for a vote. Then if that vote had passed in June, the city
would then be required to put the Kings subsidy up for another
vote. Unfortunately, according to the Sacramento City Clerk, they
didn’t do a good job at following the law. On Friday, she ruled
that the petitions weren’t
up to snuff
:

City Clerk Shirley Concolino ruled that petitions circulated by
Sacramento Taxpayers Opposed to Pork (STOP) and Voters for a Fair
Arena Deal contained numerous violations of state and city
elections code. Those deficiencies included the omission of key
legal language on the petitions and differences in how nine
different versions of the petitions were worded.

“I’ve never seen a petition with as many flaws as this one,”
Concolino said.

Sacramento Bee columnist Marcus Breton has been
critical of opposition as being funded by “outsiders,” as if there
was a way to get enough money from “insiders” to fight a city’s
acts of corporate cronyism from wealthy business leaders unworried
about retaliation from Sacramento in terms of contracts, official
harassment, or more likely, threats to their own corporate crony
deals. We really do need to see an end to the “It’s outside money!”
argument. It helps give voice to the otherwise voiceless. That
outsiders may have additional agendas is not as relevant as critics
think. If the anti-arena argument isn’t compelling, it will still
lose. Money doesn’t buy elections, especially for ballot
initiatives, but it allows for both sides to make their cases to
more people.

Anyway, Breton’s latest
column
, while pointing out that a judge will have the final say
as to whether the subsidy initiative will go up for vote, lambasted
the anti-arena group for its lack of competence in their
efforts:

Left off all the petitions, according to Concolino, was required
language notifying all voters that the measure proposed on the
petition would be enacted into law if passed by a public vote.

You read that correctly: These Einsteins asked people to sign
petitions that never stated what would happen if they signed.
Duhhhh.

You might say: People understood that signing the arena petition
would lead to a vote whose outcome could become city law.

OK, but how you can we assume everyone knew that?

“Just because people signed (the petitions) doesn’t mean you
don’t have to follow the provisions,” Levinson told The Bee.

“There is absolutely case law that says, ‘This might sound
picky, but we have these provisions for a reason,’ ” she
said.

It does sound picky, but having encountered signature-gatherers
outside of grocery stores in California who have absolutely no idea
what they’re asking people to sign, I have to agree. Some ballot
initiatives are advisory and don’t actually lead to new laws.

But, having agreed to a regulation that makes the ballot
initiative even more complicated, this is why the “outside money”
complaint is pure bullshit. State regulations make it extremely
difficult for average people to operate on their own to get ballot
initiatives passed (would the sarcastic Breton had known that
language was needed if the clerk hadn’t said so?). Of course these
folks are going to need outside assistance.

Reason is all over the corporate cronyism of publicly funded
sports stadiums. In our January issue, Nick Gillespie interviewed
sports economists J.C. Bradbury about why stadium subsidies keep
winning (“They always underestimate the costs and overestimate the
benefits”). You can also watch the interview below:

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Honduran Government Hypes Its New “Free Zones” with New President

Libertarians the world over have had their eye on Honduras as it
experiments with the notion of special economic zones that allow
great liberty in some respects than the rest of the nation.

Over the weekend the administration of new president Juan
Orlando Hernandez
issued a press release hyping them
.

From the release:

Innovative “Zones for Economic Development and
Employment”
 (ZEDE) are designed
to be the most competitive new jurisdictions in the CAFTA
space.

Unlike traditional special zones that just address a single
dimension by using only economic incentives, the
Honduran ZEDE considers four critical dimensions and addresses
the legaleconomicadministrative,
and political (LEAP) factors that in the CAFTA
region are vital for winning investment leadership….

The advantage for Honduran workers is real:

By building competitiveness across all the
LEAP factors, the Honduran ZEDE avoids the “race to the bottom”
that is driven by the lowest wage countries
of Asia and Africa and instead adds greater
value and security for investors seeking the most credible
“near-shore” production and employment platform in a new,
first-class jurisdiction in the CAFTA region….

the Honduran ZEDE jurisdiction competes for world
investment with additional advantages unique in the CAFTA
region:

— International legal standards, dispute resolution mechanisms
and institutions, using Common Law, mandatory arbitration, and
special judges.

— A 21st century, business-efficient, non-politicized,
transparent, stable, system of administration, plus a special
police and security institutionality to overcome regional issues
and meet world standards….

— For high value brands, a modern and transparent export
jurisdiction able to provide superior confidence and
predictability. For innovative sectors that work with new
technologies, processes and markets, an agile new jurisdiction with
a unique, rapid customization capacity.

— A durable and transparent investment regime secured by a
strong law, guaranteed by a constitutional amendment, reinforced by
an international treaty, and further protected by international
trade agreements including CAFTA and others.

I wrote of the history of this idea in Honduras back in
Reason‘s June issue, “The
Blank Slate State.”

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