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As Wired
reports today, in an attempt to be proactively intelligent on
managing the risks of the exciting new business world of
cryptocurrencies or whatever other nonsense regulators think about
what they are doing, regulations are proposed that would kill
nearly all valuable about Bitcoin and likely drive all such
businesses away from New York:

The guidelines ask bitcoin businesses to keep track not only of
the physical addresses of their customers, but also of anybody who
sends their customers money using the bitcoin network. That
undermines the fundamental value proposition of bitcoin, which
works very much like the internet’s version of cash. But there’s
more. Bitcoin businesses must also file frequent reports to
Lawsky’s organization, the New York State Department of Financial
Services, or DFS, to detail changes in ownership, financial
forecasts, even strategic business plans.

If adopted, these requirements will make things very tough for
bitcoin startups, who have limited resources and are scrambling to
invent whole new types of businesses….

Another big problem is that the regulations appear to
cover a whole new class of bitcoin businesses that are not
presently subject to federal regulation. These include online
wallet companies like Blockchain and BitGo, and maybe even bitcoin
tipping apps. That’s “ridiculous,” according to Patrick Muck,
general counsel for the Bitcoin Foundation. “Really the scope of
this thing ropes in the whole industry,” he says. “This proposal
would set New York up as a quasi-federal regulator for the entire
bitcoin industry.”….

Roger Ver, a libertarian who and serial bitcoin business
investor, believes that—if adopted— the rules will drive bitcoin
businesses out of New York. “These men calling themselves
government are not asking anybody to do anything. They are making
demands, and will put us behind bars if we don’t obey,” he says.
“Bitcoin was specifically designed to strip away power from men who
would be so presumptuous to believe that they have the right to
rule over others.”

I wrote last May about ways government would try to stymie, but

could not ultimately halt, the largely decentralized
international cryptocurrency.

The World Health Organization
(WHO) released a report this month called “Consolidated
guidelines on HIV prevention, diagnosis, treatment and care for key
populations.” It assessed several different ways to slow the
spread of HIV, including this interesting note:

“Criminalization of drug possession and use is the most
important issue facing PWID [people who inject drugs]….In
addition to exceptionally low coverage, an effective AIDS response
among people who inject drugs is undermined by punitive policy
frameworks and law enforcement practices, which discourage
individuals from seeking the health and social services they
need.”

The WHO reported that the legal environment in countries around
the world must be overcome before appropriate harm reduction
practices can even begin to be implemented. One of the four main
points that the WHO identified: “Decriminalization of injecting
drug use is the key to effective harm reduction.”

“Currently, penalties for possession and use send PWID to
prisons, where they are often denied protection and harm reduction
services; create climates of stigmatization and fear, which
discourage PWID from seeking vital services; and fuel the distrust
and exclusion that PWID experience as marginalized members of
society.”

Portugal decriminalized drugs in 2001 in response to the
declining health of drug users in the country. George Murkin, the
policy and communications officer for Transform Drugs,
published a
report last month detailing some of the benefits that have come
from Portugal’s decriminalization. He reported that drug use
among the group most likely to use drugs, 15- to 24-year-olds,
declined; average rates of use in the general population have
decreased; drug use is below the European average; and most
importantly, the number of people injecting drugs decreased from
2000-2005, which is the time period with the most recent available
data. The WHO’s solution to the spread of HIV appears to have
worked in Portugal, because over the past decade the number of
newly diagnosed HIV cases has dropped at an astounding rate for
people who inject drugs, falling from 1,016 in 2001 to 56 in
2012. 

In Reason‘s
November 2010 issue we presented “14
ways to dismantle a monstrous government, one program at a
time.” One such program singled out for destruction was the
Davis-Bacon Act of 1931, a federal statute requiring all workers on
federal projects costing more than $2,000 to be paid the
“prevailing wage,” which typically means the hourly rate set by
local unions. As I explained
in that story, thanks to Davis-Bacon, “for nearly 80 years,
contractors working on federally funded construction projects have
been forced to pay their workers artificially inflated wages that
rip off American taxpayers while lining the pockets of organized
labor.” To make matters worse, the law’s origins happen to be
explicitly racist:

Davis-Bacon was born as a racist reaction to the presence of
Southern black construction workers on a Long Island, New York,
veterans hospital project. This “cheap” and “bootleg” labor was
denounced by Rep. Robert L. Bacon (R-N.Y), who introduced the
legislation. American Federation of Labor President William Green
eagerly testified in support of the law before the U.S. Senate,
claiming that “colored labor is being brought in to demoralize wage
rates.” The result was that black workers, who were largely
unskilled and therefore counted on being able to compete by working
for lower wages, were essentially excluded from the upcoming New
Deal construction spree.

Today Sen. Mike Lee (R-Utah) introduced legislation he is
calling the “Davis-Bacon Repeal Act.” As he explained in a
statement, Davis-Bacon “crowds out low-skilled workers in the
construction industry, preventing them from getting a fair shot at
a job, and funnels taxpayer money to prop up big labor unions,
which accrue windfall profits as Davis-Bacon removes the incentive
for federal contractors to hire unskilled, non-unionized
workers.”

Last week Reason TV’s Nick Gillespie interviewed Sen. Lee about
the rise of the Tea Party faction in Congress.

A New York congressman having
his wedding recorded via drone has prompted new hissy fits from the
Federal Aviation Administration (FAA), who is still insisting on
the authority and ability to shove genies back into bottles and
manhandle horses back into barns. And it has an amusing twist, the
Associated Press notes. The congressman is on the subcommittee that

oversees the FAA:

The agency’s carefully worded statement doesn’t mention Rep.
Sean Patrick Maloney, D-N.Y., by name, but said it was looking into
“a report of an unmanned aircraft operation in Cold Spring, New
York, on June 21 to determine if there was any violation of federal
regulations or airspace restrictions.”

Maloney has acknowledged hiring a photographer to produce a
video of his wedding using a camera mounted on a small drone. The
wedding took place in Cold Spring on June 21. Maloney is a member
of the House Transportation and Infrastructure Committee’s aviation
subcommittee, which oversees the FAA.

Top agency officials have testified extensively before Congress
about their concern that commercial drones could collide with
manned aircraft or injure people on the ground. Congress has been
pressing the FAA to move faster on creating regulations that will
allow commercial drones access to U.S. skies. The agency has been
working on regulations for about a decade.

As I’ve previously noted, the FAA said it will be
another decade or longer for those regulations. In the
meantime, as this case shows, commercial enterprises are
incorporating drones and resisting the FAA’s efforts to leave them
grounded for 20 years while it gets its act together. Maybe the FAA
investigating the company that orbited Maloney’s nuptials will
prompt Congress to push for timely commercial regulations and not
some poorly conceived, likely unenforceable, challenged in court,
blanket ban. (But then I’m sure the regulations will be awful as
well, with absurd licensing and fee schemes and rent-seeking up the
wazoo.)

The most hilarious response to Maloney having a drone hovering
over some church in New York comes from the reporting by the
New York Daily News. They contacted the office of
Maloney’s challenger, Nan Hayworth, the Republican whom Maloney
beat in 2012 to get into office. Proving there’s absolutely nothing
a candidate won’t use to make his or her opponent appear dangerous
or out of touch with the electorate, spokesman E. O’Brien Murray
tosses on a pearl necklace and
clutches away like nobody’s business:

“Clearly Sean Patrick Maloney doesn’t think that the rules apply
to him, despite the fact that such rules come from the FAA that he
helps oversee from his position on the Transportation &
Infrastructure committee,” Murray said.

‘Unfortunately, this is exactly what people are so frustrated
with when it comes to Washington politicians. Sean Patrick Maloney
thinks he is above the men and women in the Hudson Valley he
represents.”

Well, the guy did manage to snag a fireworks show at his wedding
as well, so there is that. At least they didn’t gay-bait him
(Maloney married a dude). Anyway, you can watch the actual drone
video yourself below and decide whether this is anything for the
FAA to get all upset about:

Previously, Zenon Evans
noted a safety panic about drones and police helicopters in New
York City that appeared a bit overblown.

The back end of Obamacare’s federal
exchange—the guts of the system designed to communicate with and
manage payments to health insurers—still isn’t finished, despite
explicit promises from the administration that it would be finished
months ago.

A document posted by the administration yesterday lists
requirements for the next tech contractor to work on the federal
insurance portal, according
to Politico, which reports that whichever company
wins the next contract, which would begin when the administration’s
current contract with Accenture, the company that replaced the
original contractor CGI earlier this year, runs out in 2015, “is
also slated to help construct major back-end components of the site
that insurers need to get paid accurately.”

It’s the latest indication that the administration is having a
serious problem completing work on the federal exchange’s crucial
back-end payment systems.

Those systems were originally supposed to be ready last year
when the exchanges first went live, but development resources were
shifted when the project fell behind prior to its disastrous
October launch. In November of last year, a federal health official
responsible for Obamacare’s exchange technology admitted that
between 30 and 40 percent of the federal exchange system had
not yet been
built.

After the consumer end of the federal exchange began to work
better in December,
insurers began to openly worry that the back end systems would
not be ready in January 2014, as the administration had promised.
“We want to be paid,” one unnamed insurance executive told The New
York Times. “If we want to pay claims, we need to get
paid.”

But in December, Kathleen Sebelius, then the Health and Human
Services (HHS) Secretary, was adamant that the new systems would be
ready the following month. “The financial management system, which
is getting the insurance companies their money for accelerated tax
credits and cost-sharing, is due to go into effect in mid-January,”
she
told a congressional committee subpanel.

Sebelius was wrong. The back end systems weren’t
ready in mid-January. When the federal government switched
contractors from CGI to Accenture, it said in a
document justifying the rapid award of a no-bid contract that
timely completion of the payment systems was critical.

“Failure to deliver” the payment functionality “by mid-March
2014 will result in financial harm to the Government. If this
functionality is not complete by March 2014, the Government could
make erroneous payments to providers and insurers.” If the payment
system is not complete, “the entire healthcare reform program is
jeopardized.” A missed deadline for completion could
“potentially [put] the entire health insurance industry at
risk.”

The back-end financial systems were not ready in March. They are
still not ready now. Insurers are relying on quasi-manual
workarounds instead. And in April, the administration, which
refused to answer direct question about the timeline for completion
of the back end financial management systems,
indicated in a document that the workarounds would last at
least until September.

Incomplete work on back-end systems also appears to be affecting
the federal exchange’s ability to verify income and citizenship for
people who apply for coverage. A June report from the HHS Inspector
General found more than
2.9 million inconsistencies in federal exchange applications as
of the end of February, a figure that grew to
4 million at the end of May. Serco, the contractor charged with
processing those inconsistencies, has blamed delays in the
“eligibility support desktop (ESD) functionality” that was supposed
to deal with eligibility verification problems. Former HHS Sec.
Sebelius
certified in January the the exchange’s eligibility
verification systems were working. 

The newly posted contracting requirements seem to suggest that
the administration now believes construction of the financial
systems won’t be complete this year at all, and will carry over to
whichever tech contractor gets the job when Accenture’s deal runs
out. 

It doesn’t take much to be smeared as an
isolationist by leading Republicans. Texas Gov. Rick Perry,
who appears to be running for president again, and former vice
president Dick Cheney — not to mention Sen. John McCain,
Gov. Chris Christie, and other members of the GOP establishment —
can always be counted on to drag out that insult whenever they
sense a threat from anyone not as hawkish as they are. If they
thought that 30,000 U.S. troops should be sent somewhere, and
someone recommended sending only 10,000, we could count on Perry,
Cheney, et al., to condemn the other person as an appeasing
isolationist. Let’s be clear, writes Sheldon Richman, someone who
simply doesn’t want America drawn into foreign conflicts is not an
isolationist.

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