Sen. Rand Paul Is Right to Oppose Targeted Killing of U.S. Citizens

Sen. Rand PaulSen. Rand
Paul (R-Ky.) has quite rightly called on the Obama administration
to publicly disclose its legal justifications for the claimed power
to order the killing, without trial or hearing, of U.S. citizens
abroad who are suspected of being terrorist leaders planning
attacks against the United States. The dispute came up, most
recently, in the context of David Barron’s successful nomination to
a seat on the U.S. Court of Appeals for the First Circuit. As a
lawyer in the Office of Legal Counsel, Barron reportedly
co-authored at least two memos providing the legal rationale for
the administration’s decision to order the killing of Anwar
al-Awlaki, a U.S. citizen and propagandist for Al Qaeda in the
Arabian Peninsula (AQAP).

Jennifer Rubin
incorrectly accused Sen. Paul of “misunderstand[ing] the
Constitution”
which, in Rubin’s view, “affords the executive
branch replete powers in the foreign policy realm.” Quoting John
Yoo, Rubin suggests that Sen. Paul’s approach would “[include]
terrorists among those afforded constitutional protections.”

Al-Awlaki was no saint, and that can make the issue seem
trickier than it is. But calm evaluation of some basic facts make
it clear that Paul is right to insist that the Obama administration
explain its rationale (especially before Barron is confirmed to a
lifetime position on a federal appellate court), and Rubin is wrong
to suggest that Paul is defending terrorists.

These are the facts that matter, and show why Rubin’s criticism
is misplaced. First, although al-Awlaki was clearly a propagandist
for AQAP, that is not why the Obama administration placed him on a
kill or capture list (meaning that he could be killed if capture
was not feasible). The administration claimed that al-Awlaki was a
senior leader in AQAP involved in planning attacks against the
United States that posed an imminent threat. This claim has never
been proven. The Supreme Court has made clear that due process
requires a meaningful hearing before a neutral decisionmaker before
a U.S. citizen can be imprisoned, let alone killed. How, then, can
the administration justify al-Awlaki’s killing without hearing or
trial?

The argument seems to depend on an implausibly twisted
definition of due process.
Attorney General Eric Holder claims that due process need not be
judicial process
—in other words, due process can be satisfied
by a purely internal review within the executive branch, with no
judicial oversight and limited congressional involvement. As

Harvard Law professor Noah Feldman points out
, this is an
unprecedented definition of due process. As the Supreme Court
explained in the 2004 Hamdi decision, due process plays an
essential role in separation of powers, preventing the
concentration of power in one branch of government (here, the
executive branch). Holder’s definition turns due process on its
head. It is essential for the public to know whether the
administration relied on something like Holder’s approach in the
Barron memos written to justify al-Awlaki’s killing.

This helps expose the bankruptcy of Rubin’s claim that the
executive branch has “replete powers” in the area of foreign
policy. Not so.

The framers
of the Constitution quite consciously broke with the
then-prevailing British model,
which did assign
plenary or essentially complete power over foreign affairs to the
monarch. The framers, of course, were creating a republic, not a
monarchy. The Constitution they drafted divided foreign affairs
powers between the President and Congress. The President is
Commander in Chief, but Congress has the power, for example, to
declare war, to regulate commerce with foreign nations, define
offenses against the laws of nations, and ratify treaties in the
Senate. It is true that there is a long-standing myth that the
President has plenary control over foreign affairs.

DroneThis myth has what
seems to be solid support in the Supreme Court’s 1936
Curtiss-Wright decision, which describes the President
as the “sole organ” of foreign policy
, citing a speech John
Marshall gave in 1800 that used that term. But Marshall never went
as far as the Court suggested. He described the President as the
sole organ of the United States in carrying out treaties duly
enacted by the Senate, not as the sole organ in the sense of
possessing plenary or “replete” power over foreign affairs.

Even if Marshall had said this, he would have been wrong. The
Constitution does not, in fact, assign the President control over
foreign affairs. Rubin’s casual reference to “replete” executive
power in this area is sloppy and dangerous. The President, like
Congress and the courts, does not possess unlimited power.
Presidential power over foreign affairs is shared with Congress
and, to some extent, with the courts (in the sense that they may
exercise judicial review over some acts). Checks and balances
cannot be swept aside so easily. It is Rubin, not Paul, who
misunderstands the Constitution if she believes the President may
always act unilaterally when it comes to foreign affairs. Outside
of the emergency context (which was not, it appears, claimed by the
administration here), such power simply does not exist.

Although Rubin suggests otherwise, Paul’s criticism of the
targeted killing program and his insistence that the Obama
administration make the Barron memos available to the public has
nothing to do with defending terrorists. To the contrary, he is
rightly standing up for the principle that secret law has no place
in a constitutional democracy, and that even U.S. citizens like
al-Awlaki who are clearly no angels cannot be killed on the basis
of unproven claims.

Below, see author Chris Edelson
discuss presidential power
with Reason’s Nick
Gillespie.

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Brickbat: Banned in Heber City

Some students from
Utah’s Wasatch High School and their parents are upset that the
girls’ photos were altered in their yearbook.
The yearbook staff covered up the exposed shoulders and collarbones
of females in some photos, though not all of them. They also
covered up one girl’s visible tattoo. Wasatch County School
Superintendent Terry E. Shoemaker defended the alterations but said
staffers should have been more consistent.

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Why Do China’s Reforms All Fail?

Submitted by Yang Hengjun via The Diplomat,

Compared with the “revolutions” (peasant uprisings, armed rebellions, palace coups, etc.) that toppled dynasties in Chinese history, the goal of “reform” has been the exact opposite: to perpetuate the dynasty. Ordinary people have roughly the same impression of “revolution” and “reform” as instruments of “change.” But actually, in the 2000-year history of China, there has been one purpose for reform: avoiding change. Reform is used to keep the existing system in place. In Chinese history, “reform” and “revolution” alternated over time. Revolutions often succeeded, and so China became the country with the most peasant uprisings and dynastic changes in the world. But few reforms were successful.

From a modern perspective, almost all reforms in Chinese history can be classified as “failures”: from Shang Yang’s reforms in the state of Qin to the rule of Emperors Wen and Jing in the Han dynasty; from Wang Mang seizing power to Wang Anshi’s Song dynasty reforms; from the Ming and Qing dynasty decision to shut China off from foreign contact to the Westernization movement during the late Qing… None of these movements can really be called successful. Worse, the reformers themselves generally met tragic ends.

Why is this? To simplify, there are three common factors.

First, as opposed to other reforms recorded in world history, almost all of China’s reforms were done purely for the benefit of the ruler (the emperor). The reforms adjusted the ruler’s policies on how to control the people, how to manage the four classes (scholars, peasants, artisans and merchants), how to exploit the peasants’ land, and how to fill the treasury with taxes. None of the reforms touched on philosophies of holding power, or the methods of governance, much less centered around public interests.

 

China’s reformers saw the interests of the common people as objects of reform, rather than reforming the regime in order to benefit the people. As a result, these reforms never touched the ruling dynasty, but only caused power struggles between the interest groups involved. Compared to revolutions (which are either loved or feared), the people were generally indifferent to “reform.” And reforms without public support fail utterly once they encounter counterattacks from interest groups and opposition parties. For the common people, the failure of the reforms was nothing to mourn.

 

Second, many vigorous reforms in Chinese history had one thing in common: The reformers were not the highest ruler (the emperor). Many had been (provisionally) selected by the emperor to act as pioneers for the reforms — and as scapegoats when reforms failed. Reformers like Shang Yang, Wang Anshi and the late Qing Westernization school all suffered this fate. The people who held supreme power were usually governing from behind the scenes. They maintained a certain distance from the reform, which left plenty of room to maneuver. If the reforms succeed, those in charge will take the credit; if the reforms fail, they will sacrifice the reformers. Under these circumstances, the reforms would be half-hearted from the beginning — so much for “top-down” reforms. By contrast, the series of reforms conducted directly by Emperor Wu in the Han dynasty and by Tang dynasty emperors were more effective.

 

Third, all the reforms in Chinese history aimed to perpetuate the current system, rather than changing the existing regime. Some reforms failed, and the reformers were dismembered (like Shang Yang) or died in disgrace (Wang Anshi). But even then, leaders kept the parts of the reform policies that could help maintain the existing system, turning the reforms into cogs in the authoritarian machine.

Those reform measures that served to consolidate centralized authority often succeeded. For example, the state monopolies on salt and iron created by Guan Zhong in the 7th century BCE have a parallel today in the state oil monopoly. However, ideas like the separation of powers and equal distribution of wealth (which the common people cared more about) were often hijacked by  interest groups or abruptly halted by the emperor. As a result, vigorous reform movements in China, no matter how significant their policies were at the start, withered away. After a few decades, the reforms had been reduced to nothing but tools to help exploit the people and control the opinions of citizens.

Of course, the biggest problem encountered by Chinese reform movements is that there’s no way to change the system itself, which has lasted for 2,000 years. All you can do is make it more perfect, more refined — and more evil. In this sense, all reforms in China’s 2,000-year history had no chance of succeeding, and we should be thankful they failed.

Today, many scholars say that if Sun Yat-sen had not been in such a hurry to create a revolution, then the Qing dynasty’s constitutional reform could have succeeded. They have a rich scholarly imagination, but lack literary imagination: Can you imagine a scenario where, from the Qin to the Qing, institutional reforms succeeded? Everyone in China would have a “Manchu queue” and would kowtow every morning, yelling “Long live the Aisin Gioro clan!”

Whether reforms can be successful is related to whether the system can change, and whether the authorities are willing to change the system to pursue a higher goal… Looking at China’s current reforms from the perspective of Chinese history, there’s good reason to be pessimistic. But we shouldn’t say that there’s no hope or no way forward. The reformers should learn from China’s history. Reform needs to be “top-down” and backed by the strong determination of the core leadership. At the same time, the reformers should begin by placing the people’s interests, the future of the nation, and national security as their highest goals. They should avoid only caring about the interests of those in power or the concerns of interest groups.

These things are precisely what China’s historical reformers did not do, and were not willing to do. If in the 21st century, rulers still hold the same thoughts and ideas as those reformers in history. If they do not boldly seek to reform the system for the benefit of the nation and the people but try to maintain the existing system, then they shouldn’t even try to reform. Otherwise, even if the reforms don’t fail, they will bring chaos, and could hasten the arrival of revolution.




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Draghi Is “Desperate To Avoid A Japan-Style Lost Decade”

As we noted previously, it is likely that whatever Draghi does this week “will not deliver a significant impulse to the real economy” in Europe but while negative rates are almost guaranteed (based on the consensus), reviving the ABS market (via focused QE) is being heralded by many as a positive swing factor. Unfortunately, as SocGen explains, even if the ECB began purchasing ABS in H2 2014, the size and reach of the market is not enough to move the scale as Europe acts desperately to avoid a Japanese-style lost decade.

 

Via SocGen,

ABS for dummies or what the ECB could do…

ECB to act to help peripheral SMEs

“What we need to be particularly watchful for at the moment is the potential for a negative spiral to take hold between low inflation, falling inflation expectations and credit, in particular in stressed countries” warned ECB president last week. Real rates remain too high compared to GDP in peripheral countries and the strength of the euro is reinforcing disinflationary pressures.

With ongoing concern on SME financing in the periphery, we expect the ECB to take unconventional measures at the 5 June meeting to boost SME lending. Action could take the form of a targeted LTRO (similar to the Bank of England’s Funding for Lending  cheme) and/or an ABS* repurchase programme. *ABS: A financial instrument collateralised by one or more types of assets, including real estate, mortgages, receivables etc.

Reviving the ABS market

ABS issuance has been subdued in recent years for economic reasons (weak demand) but also due to technical obstacles, (including the deemed unfavourable regulatory treatment applicable to the ABS market).

For now, we expect that the ECB could start purchasing ABS in H2 14 (either in the market or directly from banks) to revive the ABS market. As the size of the ABS market linked to SME loans is small (c. €120bn in Europe) any asset purchase programme is likely to include other types of ABS to have more impact on the economy. But, according to SG ABS & Covered bonds analysts, ECB-eligible ABS outstandings amount to just €760bn (Q1 14). Therefore purchases could be further extended to other assets, such as supranational agency bonds, or corporate paper.

ECB is acting to avoid a Japanese-style lost decade
 
Successful reform of the ABS market could help improve credit conditions in the periphery and break the vicious circle between banks and sovereigns. Initiatives from different European institutions are under investigation (the EIB, the European Commission, the ECB, etc.) but reforming the securitisation market will take several years. Banking Union will also help reduce fragmentation in the future. But, for now, deflation risks are increasing, and the ECB could well fall ‘behind the curve’ if it does not take sufficient action. Any significant downward revision of inflation expectations would require a broader based QE programme (over €1 trillion in asset purchases, including sovereign assets).

The goal is clearly to avoid a Japanese style lost decade… because QE worked out so well for Japan?!




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China HSBC PMI Misses; Economy Contracts For 5th Month In A Row

Despite this weekend’s exuberance over an oddly exuberant “20th month of expansion” official China PMI (survey) given the hard-macro-data that has been exhibited by the reforming nation, it seems China’s ‘other’ PMI (HSBC/Markit – less biased to larger SOEs) just missed expectations (for the 7th month in a row), fell and printed in contraction for the 5th month in a row as China’s economy is clearly bifurcating between the have (government’s help) and have-nots… (as employment continued to plunge) which are you investing in?

 

The ‘official’ government PMI – 20th month in a row of expansion, no matter what the macro data says…

 

HSBC PMI remains sub-50 – in contraction for the 5th month in a row and the fact that HSBC China PMI contracted from its Flash print (fina 49.4 vs 49.7 flash) suggests things are not accelerating either.

 

and missed expectations for the 7th month in a row…

 

HSBC/Markit explains…

“…growth momentum looked weaker than suggested in the flash reading as the stocks of finished goods index was revised up to 49.8 from 48.8 in the flash reading. The final PMI reading for May confirmed that the economy is stabilizing, but it is too early to say that it has bottomed out, particularly in light of a weaker property sector. The lack of a sustainable growth momentum warrants stronger policy support. We expect both monetary and fiscal policy to be loosened gradually over the coming months.”

Tomorrow you will read about how great it is that this PMI rose from 48.1 (last month’s print) and how that confirms the China is recovering meme… remember 1) that is below 50 and thus in contraction, 2) that is below the flash print which means things got materially worse in the last 2 weeks, and 3) it’s all made up anyway.

 

Most desks tend to believe that HSBC’s PMI is more indicative of the true state of commerce in the broad economy – in light of liquidity restrictions for all but the largest and most favored SOEs.

Employment at manufacturing companies declined again in May, as has been the case since November 2013. The rate of reduction was marked overall, and partly driven by company down-sizing policies.

Charts: Bloomberg




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Deadly Ukraine Fighter Jet Bombing Caught On Tape

Earlier today we reported that even as the western media blackout of events in Ukraine gets more black, the ongoing civil war is getting ever more uncivil, following a Ukraine fighter jet attack on the east Ukraine town of Lugansk, in which it struck not only the local administration building, but a neighboring area, resulting in numerous civilian casualties and injuries. Kiev was quick to deny that it was using its airforce on its own people, claiming instead that the explosion quite clearly caught on tape was merely locals trying to unsuccessfully shoot at the fighter jet.

So for your viewing displeasure, because the reality of yet another fratricidal war is hardly enjoyable, and so readers can make up their own minds, here is the moment of the fighter jet bombing caught on tape, as well as the tragic consequences.

The first clip shows CCTV footage as the rocket explosion is spread out across a park neighboring the administration building.

The next clip captures moment the Kiev fighter fired at fellow Ukrainians – something the west vocally condemned when it was allegedly conducted under former president Yanukovich, and is all too quiet this time.

From a different angle:

And the aftermath.




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China Sends 4 More Fighter Jets To Oil Rig Area As Vietnam Threatens Legal Action

A number of Vietnamese officials have now threatened to bring legal action against China over their territorial dispute in the South China Sea; but it does not seem to be having any impact on China's efforts to defend and sustain their presence. As Bloomberg reports, a total of five Chinese fighter jets have now been deployed to the area of exploration in disputed waters off the coast of Vietnam today (compared to 1 previous day) citing Fishing Control Department under Vietnam’s agriculture ministry. China has refused to answer the case the Philippines filed with an international tribunal at The Hague. It is likely to pursue a similar strategy if Vietnam appeals to international law in its own disputes with China.

 

Vietnam appears set to use international law to settle its territorial disputes with China in the South China Sea… (via The Diplomat)

A number of Vietnamese officials have now threatened to bring legal action against China over their territorial dispute in the South China Sea.

And China is responding in kind (as Bloomberg reports)…

Total of five Chinese fighter jets deployed to area of exploration rig in disputed waters off coast of Vietnam today, compared to 1 previous day, newspaper reports, citing Fishing Control Department under Vietnam’s agriculture ministry.

 

China still maintains 120 vessels of all kinds, including 4 military ships in disputed Paracel Islands area: newspaper

 

Some 50 Vietnamese ships are fishing in Paracel Islands area 20-30 nautical miles from the rig: newspaper

And as The Diplomat notes, it is unlikely China will care…

Speaking to Bloomberg News on Friday, Prime Minister Nguyen Tan Dung said that Vietnam is preparing to bring its territorial row with China to an international arbitrator. “We are prepared and ready for legal action,” Dung said, according to Bloomberg. “We are considering the most appropriate timing to take this measure.”

 

Deputy Defense Minister Nguyen Chi Vinh reiterated the prime minister’s statement on the sidelines of the Shangri-La Dialogue in Singapore over the weekend. He also stated that China has asked Vietnam not to pursue legal action. “They [China] have asked us several times not to bring the case to international court,” Vinh told reporters on the sidelines of the annual security forum. “Our response was that it’s up to China’s activities and behavior; if they continue to push us, we have no choice. This [legal] option is also in accordance with international law.”

 

Earlier in the summit, Vinh held a bilateral meeting with Wang Guanzhong, deputy chief of general staff of the People’s Liberation Party, the highest ranking military official Beijing sent to the Shangri-La Dialogue.

 

Vietnam was one of many countries who used the Shangri-La Dialogue to criticize China’s actions in Asia’s maritime disputes in the South and East China Seas. As The Diplomat has previously reported, Japanese Prime Minister Shinzo Abe made implicit criticisms of China’s recent actions in his keynote speech on Friday, while U.S. Defense Secretary Chuck Hagel made more explicit criticisms of China.

 

Australia also criticized China’s recent actions. “They’ve been certainly unhelpful, and if they’re unhelpful they must be destabilizing,” Australian Defense Minister David Johnston said at the Singapore conference. “The unilateral action of the declaration of boundaries is completely unhelpful and takes us in the wrong direction.”

 

General Wang lashed out at both Japan and the United States during his own speech to the annual forum on Sunday. He accused Tokyo and Washington of colluding together in criticizing China, though he said he preferred Hagel’s remarks because they were more direct than Abe’s, which didn’t mention China directly.

 

Vietnam’s threats to take up its case for sovereignty with an international arbitrator has obvious parallels with the Philippines, who is also appealing to international courts to deal with its territorial disputes with China over parts of the South China Sea. Last month, Prime Minister Dung traveled to the Philippines to meet with President Benigno Aquino III as well as attend the World Economic Forum on East Asia. Dung said during the trip that the two leaders “shared deep concern over the current extremely dangerous situation caused by China’s many actions that violate international law.”

 

Around the same time, Dung told the Associated Press that, “like all countries, Vietnam is considering various defense options, including legal actions in accordance with the international law.” According to the Associated Press, it was the first time Vietnam had seriously considered using international law to help resolve its dispute with China. Two unnamed Vietnamese diplomats told the Associated Press at the time that Vietnam might join the Philippines ongoing case or else begin its own complaint against China.

China has refused to answer the case the Philippines filed with an international tribunal at The Hague. It is likely to pursue a similar strategy if Vietnam appeals to international law in its own disputes with China. Interestingly, in his remarks at the Shangri-La Dialogue, General Wang rejected U.S. criticisms that China isn’t following international law by noting that the U.S. has not signed onto the UN Convention on the Law of the Seas.




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Bitcoin “Lobbyists” and D.C.’s Attempt to Contain the Uncontainable

Chris Moody at Yahoo! News reports on
Bitcoin “lobbyists
” or advocates, or as his headline
(don’t always blame journalists for headlines) puts is, “the people
trying to make Bitcoin happen in Washington.”

Of course, any true Bitcoin mavens first reaction to that is
going to be: Bitcoin doesn’t have to happen in Washington.
It only has to happen on the blockchain and in individual
owners/users (hopefully secure and
possibly secret
) wallets.

That is the important point about Bitcoin and should be
front and centered in any discussion about the politics that haunt
and hound the protocol and the cryptocurrency. Still, as I wrote
last May, while government can neither make Bitcoin happen nor stop
it from happening, it
can try to make life difficult and annoying for its users
,
whether that comes in taxing
your profits
or
arresting you
for allegedly using Bitcoin to “launder
money”.

The piece discusses the Bitcoin Foundation and Jerry Brito, who
has written early and often for Reason on Bitcoin
issues—see his groundbreaking December
2013 feature
on all the ways Bitcoin will likely change the
world beyond being an awesome currency.

It also limns a split in the ideological and practical world of
Bitcoin I’ve written about before. As I put it back in April:

between the crypto-anarchists from whom Bitcoin arose and who
were its first adopters, and the big-time legitimate businesses
stepping in to normalize the market, who would just as soon lose
the stink of weirdo anarchism surrounding Bitcoin that can scare
off big money. 

Moody’s story talks of:

an independent San Diego, California-based entrepreneur
named Brett Stapper, the founder of Falcon Global Capital, [who is
late May] filed paperwork to lobby Congress on cryptocurrency
issues. In an interview with Yahoo News, Stapper said he’s in the
process of coordinating with a law firm — he won’t say which — to
organize lobby days and post a “practical guide” to Bitcoin
online.

“We want to work with regulators. We want to work with
governments,” Stapper said. “We’re not libertarians who see this as
a thing that is possible on a massive scale without the help of
these organizations.”

All the people already using Bitcoin on scales small or massive
would choke at hearing this. Moody does a good idea getting across
exactly how weird and inexplicable Bitcoin likely seems to most old
congressfolk—though his lead does a good job pointing out as
recently as 40 years ago the way we now use credit cards might have
seemed equally far-out—and then hits the reader with a series of
questions that might seem very important in Washington but not at
all to most Bitcoin users:

For policy and regulatory purposes, Bitcoin’s transformative
technology blows open a hive of questions. Is it currency? Is it a
commodity? Is it property? Will it threaten the almighty dollar?
Which agency should regulate it? How should it be taxed? Should
vendors that trade bitcoins be treated like banks? Can I accept
bitcoins as campaign donations? Is it dangerous? Should we ban
it?

Well, it is what it is, to the first three questions. Probably,
none, ideally not at all but the community seems able to live with
it being taxed as property (as I reported
in April
), no, yes, no, and no.

Moody closes with a useful summation of some ways the state is
recognizing or normalizing Bitcoin:

 In May, the Federal Election Commission announced new
rules allowing candidates to accept Bitcoin donations. Since then,
Texas Republican Rep. Steve Stockman and Colorado Democratic Rep.
Jared Polis set up accounts to take donations on their websites.
Carl DeMaio, a Republican challenging Democratic incumbent Rep.
Scott Peters in California, has directed his campaign to establish
a Bitcoin page as well. The Libertarian Party (of course) was
the earliest political party to
accept such donations.

A month before the FEC announcement, a company that specializes
in “Bitcoin
ATMs
” set up one of its machines in a congressional office
building and Polis used it to buy $10 worth of bitcoins as a
curious Virginia Republican Rep. Bob Goodlatte, the chairman of the
House Judiciary Committee, looked on.

Moody also wraps up with some of the things that are at stake in
trying to stymie Bitcoin, in a way that any human of good will
should be able to grok:

Washington’s Bitcoiners go to great lengths to point to its
potential, especially for poor and oppressed people. Bitcoin, they
say, has vast potential to revolutionize the way we transfer money
and purchase goods and services. In impoverished, rural areas where
people lack access to banking institutions, Bitcoin users can send
and receive money wherever they can access the Internet on a
computer or a phone. (Bitcoiners use the term to describe these
people — “the unbanked” — with the same concern a Southern Baptist
might have referring to “the unchurched.”) For immigrants who need
to send money to families in their home countries, Bitcoin would
make it easy and relatively cheap.

Bitcoin could also be useful to those living under oppressive
government regimes, advocates say, allowing them to support illegal
speech or causes without fear of censorship. 

And of course it promises to be the Internet’s latest way to
make us all richer by wiping out middlemen who skim off of
transactions, the need for whom the technology obviates:

The growth of Bitcoin could, of course, undermine and disrupt
fee-charging money-transferring services such as MoneyGram and
Western Union; both are now considering adding a Bitcoin
option.

“If I were a company like [that], I would be very afraid,”
[lobbyist Mary Beth] Stanton, who has advised the Bitcoin
Foundation, said.

A worldwide embrace of the Bitcoin protocol could pose serious
risk to the remittance and banking industries, which has prompted
them to keep a close eye on its development. Last month, a federal
lobbyist filing disclosure for MasterCard listed “Bitcoin” as an
industry it would focus on.

Bitcoin’s famously up and down dollar prices seem to be above $650 again
on most exchanges
 today.

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Bitcoin “Lobbyists” and the Attempt to Contain the Uncontainable

Chris Moody at Yahoo! News reports on
Bitcoin “lobbyists
” or advocates, or as his headline
(don’t always blame journalists for headlines) puts is, “the people
trying to make Bitcoin happen in Washington.”

Of course, any true Bitcoin mavens first reaction to that is
going to be: Bitcoin doesn’t have to happen in Washington.
It only has to happen on the blockchain and in individual
owners/users (hopefully secure and
possibly secret
) wallets.

That is the important point about Bitcoin and should be
front and centered in any discussion about the politics that haunt
and hound the protocol and the cryptocurrency. Still, as I wrote
last May, while government can neither make Bitcoin happen nor stop
it from happening, it
can try to make life difficult and annoying for its users
,
whether that comes in taxing
your profits
or
arresting you
for allegedly using Bitcoin to “launder
money”.

The piece discusses the Bitcoin Foundation and Jerry Brito, who
has written early and often for Reason on Bitcoin
issues—see his groundbreaking December
2013 feature
on all the ways Bitcoin will likely change the
world beyond being an awesome currency.

It also limns a split in the ideological and practical world of
Bitcoin I’ve written about before. As I put it back in April:

between the crypto-anarchists from whom Bitcoin arose and who
were its first adopters, and the big-time legitimate businesses
stepping in to normalize the market, who would just as soon lose
the stink of weirdo anarchism surrounding Bitcoin that can scare
off big money. 

Moody’s story talks of:

an independent San Diego, California-based entrepreneur
named Brett Stapper, the founder of Falcon Global Capital, [who is
late May] filed paperwork to lobby Congress on cryptocurrency
issues. In an interview with Yahoo News, Stapper said he’s in the
process of coordinating with a law firm — he won’t say which — to
organize lobby days and post a “practical guide” to Bitcoin
online.

“We want to work with regulators. We want to work with
governments,” Stapper said. “We’re not libertarians who see this as
a thing that is possible on a massive scale without the help of
these organizations.”

All the people already using Bitcoin on scales small or massive
would choke at hearing this. Moody does a good idea getting across
exactly how weird and inexplicable Bitcoin likely seems to most old
congressfolk—though his lead does a good job pointing out as
recently as 40 years ago the way we now use credit cards might have
seemed equally far-out—and then hits the reader with a series of
questions that might seem very important in Washington but not at
all to most Bitcoin users:

For policy and regulatory purposes, Bitcoin’s transformative
technology blows open a hive of questions. Is it currency? Is it a
commodity? Is it property? Will it threaten the almighty dollar?
Which agency should regulate it? How should it be taxed? Should
vendors that trade bitcoins be treated like banks? Can I accept
bitcoins as campaign donations? Is it dangerous? Should we ban
it?

Well, it is what it is, to the first three questions. Probably,
none, ideally not at all but the community seems able to live with
it being taxed as property (as I reported
in April
), no, yes, no, and no.

Moody closes with a useful summation of some ways the state is
recognizing or normalizing Bitcoin:

 In May, the Federal Election Commission announced new
rules allowing candidates to accept Bitcoin donations. Since then,
Texas Republican Rep. Steve Stockman and Colorado Democratic Rep.
Jared Polis set up accounts to take donations on their websites.
Carl DeMaio, a Republican challenging Democratic incumbent Rep.
Scott Peters in California, has directed his campaign to establish
a Bitcoin page as well. The Libertarian Party (of course) was
the earliest political party to
accept such donations.

A month before the FEC announcement, a company that specializes
in “Bitcoin
ATMs
” set up one of its machines in a congressional office
building and Polis used it to buy $10 worth of bitcoins as a
curious Virginia Republican Rep. Bob Goodlatte, the chairman of the
House Judiciary Committee, looked on.

Moody also wraps up with some of the things that are at stake in
trying to stymie Bitcoin, in a way that any human of good will
should be able to grok:

Washington’s Bitcoiners go to great lengths to point to its
potential, especially for poor and oppressed people. Bitcoin, they
say, has vast potential to revolutionize the way we transfer money
and purchase goods and services. In impoverished, rural areas where
people lack access to banking institutions, Bitcoin users can send
and receive money wherever they can access the Internet on a
computer or a phone. (Bitcoiners use the term to describe these
people — “the unbanked” — with the same concern a Southern Baptist
might have referring to “the unchurched.”) For immigrants who need
to send money to families in their home countries, Bitcoin would
make it easy and relatively cheap.

Bitcoin could also be useful to those living under oppressive
government regimes, advocates say, allowing them to support illegal
speech or causes without fear of censorship. 

And of course it promises to be the Internet’s latest way to
make us all richer by wiping out middlemen who skim off of
transactions, the need for whom the technology obviates:

The growth of Bitcoin could, of course, undermine and disrupt
fee-charging money-transferring services such as MoneyGram and
Western Union; both are now considering adding a Bitcoin
option.

“If I were a company like [that], I would be very afraid,”
[lobbyist Mary Beth] Stanton, who has advised the Bitcoin
Foundation, said.

A worldwide embrace of the Bitcoin protocol could pose serious
risk to the remittance and banking industries, which has prompted
them to keep a close eye on its development. Last month, a federal
lobbyist filing disclosure for MasterCard listed “Bitcoin” as an
industry it would focus on.

Bitcoin’s famously up and down dollar prices seem to be above $650 again
on most exchanges
 today.

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