Brexit a No-Brainer

Never having merged currencies with the EU means Britain can sneak
away relatively unscathed and be potentially stronger for it.

Unity is such a strong word. Isn't unity want we want? If you ask people if they view "unity" favorably or unfavorably, chances are they will view it favorably without even knowing what sort of unity we are talking about. That is because most of us really just want to get along.

However, the European Union honeymoon is long over, and I believe that it is in Great Britain's best interest to go it alone from here.

Here are some reasons why:

• They already have their own currency and central bank.
• Their economy is strong, with unemployment at 5.4% and headed lower.
• Their debt to GPD is 90%, which is lower than France, higher than Germany, but not out of control (yet).
• There is huge migrant pressure at their doorstep.
• The Greece/Spain/Portugal debt crisis is not over yet.
• A lower pound in a relatively low-inflation environment would make their exports into the EU more competitive.
• Scotland rejected secession in a definitive manner, which means that Great Britain is stronger going forward and does not need the EU as much as it would otherwise. 

So far, the EU has dodged a few bullets, not the least of which is the looming potential default of Greece, Spain and Portugal. If and when that happens, the impact on the larger EU partners will be huge. If Britain leaves now they can avoid having to foot the bill for southern european profligacy.

Since Great Britain never gave up the pound sterling (and, rightly so), they could be in a unique position if they decouple from the EU and take steps to gradually weaken their currency relative to the euro and dollar. Such a move would bolster their industrial output by making their exports less expensive.

Finally, while Great Britain faces a tight labor market and is in need of more skilled laborers, it is better for them to control that flow and be selective as far as who they let in and who they do not.

Basically, I don't see the clear advantage to Great Britain of staying in the EU other than a love of a word, "unity".

Follow-up 8-4-18

With UK-EU negotiations stalling, the world press is ratching up the fear quotient, warning that Britain will suffer, amongst other things:

• Massive food shortages
• Loss of manufacturing facilities employing tens of thousands of people
• The failure of their nuclear power plants
• The loss of countless jobs in the financial sector

However, these fears are solely based on the theory that Brussels decides to impose self-destructive trade barriers with the UK after they leave the common market.

Britain is not seeking any trade barriers whatsoever, and wants completely free trade with the bloc. EU negotiators are presenting the possibility of vindictive retributory actions 

Instead, leaving the common market will permit the UK to free itself from cumbersome EU regulations that will make it more competitive. I predict, for example:

• Greater money flows into UK investment banks as financial regulations are relaxed.
• An increase in jobs in the UK as Britains loosen strict EU work rules.
• No net effect on food trade.

Brussels realizes that the UK will be at a competitive advantage to the bloc countries, which is why they are going to use every trick in the book to scare the Brits out of leaving.

Are the Contents of my iPhone Protected by the Fifth Amendment?

"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."

The question is: if I lock my iPhone with the intent of keeping its contents a secret, can I be compelled to unlock it? Or, before or after my death, can the government legally hack into my iPhone in order to reveal its contents?

In most cases, I believe the answer to be "no". I believe that hacking into someone's personal cell phone is tantamount to forcing him to testify against himself. And, the simple act of putting a password and encrypting the contents of a cell phone is a statement that should be interpreted to mean, "I wish to invoke the rights afforded me by the Fifth Amendment and not allow my phone to bear witness against me."

Our personal cell phones are almost like extensions of our brains in the extent to which we use them to think, muse, comment, plan and remember things about our lives. That is a big part of the reason why the password and encryption that we place on them should be protected by our 5th Amendment right against self-incrimination, in spite of the difficulties that this might cause for law enforcement.

Ironically, in the case of the San Bernardino shooter's iPhone 5c (which is the reason that this issue is currently in the news), I believe that the government has every right to compel Apple Computer to unlock the phone if Apple has it in their ability to do so, BECAUSE THE SHOOTER WAS USING HIS WORK PHONE WHICH WAS, AND IS, PROPERTY OF THE STATE OF CALIFORNIA, AND ON WHICH HE COULD HAVE NO EXPECTATION OF PRIVACY.

So, I expect Apple to lose this case and ultimately unlock the shooter's phone for the FBI. I also believe that the contents will not reveal anything new because the shooter had set up the phone to sync to iCloud (the FBI only wants the data since the last web sync) and knew that the phone was legally not even his. Therefore, I find it difficult to imagine that he could have been using it for any nefarious purpose.

When considering points of law such as this, I like to transport myself back in time and try to find useful analogies to 18th century jurisprudence. The closest analogy to a locked iPhone is a padlocked personal diary. It is my opinion that the contents of one's personal diary should be inadmissible in court unless the defendant has made prior reference to the diary, or used certain entries in support of his defense, in which case the entire diary would be in play. Since it can be reasonably imagined that one's personal cell phone could contain private thoughts and musings, a simple statement to that effect by the defense should render its contents safe from prying eyes on 5th Amendment grounds.

While this clearly represents a serious setback to law enforcement and the prosecution in certain cases (and, in fact, does so on a regular basis), we must remember that it is the communication that occurs between the cell phone and other phones or through the Web that are of most interest, and these communications are NOT shielded by the 5th Amendment. While the government may not be able to legally force a defendant to turn over the password to his private phone, they can certainly get a warrant to monitor and log all his data and voice communications, which could help them build a case. And, IF THOSE COMMUNICATIONS SHOW THAT THE DEVICE (iPHONE, CELL PHONE, ETC.) WAS USED IN THE COMMISSION OF A FELONY, THEN THE DEVICE ITSELF, INCLUDING ALL CONTENTS THEREIN, ARE FAIR GAME.

So, while one's personal diary, or personal cell phone, in most cases should be shielded from prying eyes by the Fifth Amendment, there are circumstances in which these protections would not apply.

Too Big to Fail = Too Big to Exist

The Milwaukee Fed's Mr. Clean wants to tidy up systemic risk

The fact that Neel Kashkari was on the front lines during the 2008 financial crisis adds special urgency to his calls to dismantle the major banks, a position that I support.

When the Federal Reserve and U.S. Congress chose to keep the major banks alive and intact, they created huge systemic problems that are adversely affecting the financial markets to this day.

The main problem, as I see it, is in terms of price and competition. Currently, the market for financial services is dominated by a handful of big players who offer relatively few product options and limited price competition. The majors must be broken apart into regional banks that can compete with one another, and compete with other local and regional banks. These smaller banks, being closer to their customers and local businesses, are generally more willing to take a chance and underwrite loans that the majors would not touch. Additionally, more competition will help to improve customer service and lower fees for the retail customers.

Secondly, "too big to fail" carries moral hazard and an implicit guarantee that can distort risk evaluation and decision-making by investors and the banks themselves, exacerbating the "too big to fail" problem.

Finally, we need to restore the firewall that previously existed between depository institutions and investment banks. We cannot allow investments in derivatives to put FDIC insured deposits at risk.

Therefore, on the depository side, the major banks should be broken down into distinct regional banks with new names and a new organizational structures. The original parent bank can retain the investment banking activities, but can no longer accept federally-insured deposits.

This will serve to streamline and invigorate the financial industry, for the benefit of the nation.

It Takes Chutzpah

I wonder if proof that his mother had sworn allegiance to Canada would wipe
that smug look off his face... (Source: Newsweek)

Leave it to Ted Cruz to believe that he is actually eligible to serve as President of the United States, in spite of having a Canadian birth certificate and dual citizenship:

Ted Cruz has never renounced his Canadian citizenship, so if things don't go well for him
here, he's always got a place to stay north of the border.Source: mrconservative.com

By his logic, since his mother was born in Delaware, that makes him a "natural born" citizen of the United States. EXCEPT, for some reason, his mother applied for and received Canadian citizenship during the time she was living in Canada, along with her Cuban-born husband.

Source: Newsweek

Clearly, the "natural born citizen" clause must be clarified by the courts, as it has wide-ranging implications. Are the children born to a foreign mother in the United States temporarily (or illegally), automatically U.S. citizens upon birth? The answer is not at all clear. It would seem to me that the child is whatever the parents are, independent of the geography of the live birth. The courts have already held that the children of diplomatic attaches on assignment in the States are NOT eligible for U.S. citizenship because the parents have a sworn allegiance to another nation and not to the United States. For me, the same logic applies to foreign nationals who come to the U.S. to give birth in order to imbue their offspring with U.S. citizenship.

So, it seems that Ted Cruz was born in Canada to two parents who had both sworn allegiance to Canada at the time of his birth, which seems to me to be WHOLLY AND COMPLETELY INADEQUATE to justify eligibility to hold the highest elected office in the land.