Is government really a better technology incubator than the private sector?

Wired has an article about a newly-launched commercial satellite, with the highest resolution of any commercial satellite: 41 cm (the lower the number, the better quality the image). Unfortunately, though, these images won't be available to Google (the exclusive commercial customer), or to anyone except government agencies. Dating back to the Cold War days, the federal government has prevented companies from offering commercial satellite imagery at anything near useful resolutions. However, as far as I can tell, it lifted some of these restrictions at some point "in the 1990's." According to the original Wired article, this seems to have ignited a great leap forward in commercial satellite imagery:

But only in recent years the technology became available to the public and businesses while concurrently making dramatic strides in coverage and resolution. For example, when Google Earth launched in 2004, its imagery was low-res and spotty. But by March 2006, a third of the world population could get a bird's-eye view of their own homes in high resolution.

But like I said, don't count on getting the 43 cm resolution that's available to government agencies – Google only gets pictures at resolutions of 50 or above. While this 7 cm differential isn't too big, it'll get bigger in a few years when the company is supposed to launch a satellite that can take pictures at a resolution of 25 cm, which of course will only be available to the government. And though I couldn't find any figures from recent years (as it's still a classified national security matter), it seems that as far back as the late '90s, the private Federation of American Scientists estimated the US government's resolution capacity to be 10 cm, and even better if they dip the satellite down closer to earth.

And this isn't the only case where government technical expertise runs laps ahead of the private sector. The Wired article quotes a backer of the project noting that hi-res satellite imagery is part of this longer tradition, "[j]ust like the internet, just like GPS, just like telecom." And indeed, this has become a popular meme these days: in the second presidential debate, Obama claimed that one of the reasons that the government needs to intervene in the green energy market is that government intervention has in the past has produced the beginnings of the most profound technological developments of the century. But why? Well, in the case of wartime inventions (which is what Obama references), a lot of it can be attributed to a crowding-out effect: as we still see today, government jobs often pay more than the private sector for technology jobs, and thus their presence will dampen entrepreneurship in the private sector.

But also, the government can do something even more pernicious: outright ban private sector development of a certain technology. This is what clearly happened in the case of hi-res satellite imagery, and which also happened in the same way with GPS. GPS was outright banned for public consumption in the US until the early '80s, and even then, was only available at the relatively useless accuracy of 400 feet. It wasn't until 2000 when Clinton (seemingly unilaterally?) ended the signal degradation and allowed the civilian GPS market to flourish, though it's unclear if today the military has better capability because they invest more in it, or because they restrict/degrade the civilian signal.

And the last category that the satellite company representative mentions – "telecom" – has had similar restrictions on its adoption. As Tim Wu explains in a NYT op-ed, wireless adoption (the next exciting frontier in telecommunications) is hampered by government policies which restrict access to the bandwidth over which wireless signals of all kind are carried:

After physical wires, the other major way to move information is through the airwaves, a natural resource with enormous potential. But that potential is untapped because of a false scarcity created by bad government policy.

Our current approach is a command and control system dating from the 1920s. The federal government dictates exactly what licensees of the airwaves may do with their part of the spectrum. These Soviet-style rules create waste that is worthy of Brezhnev.

Many “owners” of spectrum either hardly use the stuff or use it in highly inefficient ways. At any given moment, more than 90 percent of the nation’s airwaves are empty.

The solution is to relax the overregulation of the airwaves and allow use of the wasted spaces. Anyone, so long as he or she complies with a few basic rules to avoid interference, could try to build a better Wi-Fi and become a broadband billionaire. These wireless entrepreneurs could one day liberate us from wires, cables and rising prices.

Just something to think about when someone tries to tell you that only the government can make the investment necessary for innovative technologies like satellites, computers, or the internet. The private market, either due to outright restrictions or the siphoning away of talent by the federal government, is often not given the chance.

The Orange Revolution turns red

I haven't posted much about the political crisis in Ukraine, because I thought it was pretty cut and dry, and I sort of forget that not everyone follows Eastern European politics as closely as I do. So, essentially what has happened is that the South Ossetian war has frightened the people of Ukraine, as well as its political establishment, and the already shaky "Orange" liberal coalition partners – Yushchenko and Tymoshenko – have been divided. Tymoshenko and her bloc refused to share in Yushchenko's condemnation of the Russian actions in Georgia, and she's given in to the heavy pressure to ally herself with Russia, at least for the moment. Ukraine has a sizable Russian minority, and an even larger amount of people in the eastern half of the country who have pro-Russian sentiments. Crimea has a bare Russian majority, and is home to Russia's formidable Black Sea Fleet, and as such could be vulnerable to the same sort of Russian revanchism that happened in Georgia.

Anyway, President Yushchenko has dissolved parliament, and new elections will happen in a few months. Tymoshenko's political stars are clearly on the rise, and in the midst of the crisis she's been to the Kremlin to negotiate Ukraine's natural gas deals with Russia, an issue near and dear to Ukrainians' hearts since Russia shut off gas pipes to Ukraine around New Years 2006. While in Moscow, Tymoshenko pushed for closer ties between the two countries' big state energy concerns – Naftogaz and Gazprom. This was seen as a power play by Yushchenko's supporters, as it came in the middle of this political crisis that was directly related to Ukraine's relations with Russia, and tensions flared when Yushchenko's supporters alleged that Tymoshenko really went to Russia to get the backing of the Russians, who still play a very active role in Ukrainian politics.

According to Stratfor, Russia's got a "wild card" up their sleeve in the form of Ukraine's richest oligarch, Rinat Akhmetov, who is apparently the "puppetmaster" behind Ukraine's large pro-Russian Party of Regions. Stratfor says that his power over Ukrainian politics has "grown exponentially" in recent years, and that ultimately he is "firmly held by the Kremlin," which very well might use him to seal the deal in the December elections. Though at the rate it's going – with Tymoshenko having defected, and Yushchenko's approval ratings below 10% – they might not even have to use him.

Bargain price on genome sequencing

From Wired, apparently a founder of the Human Genome Project and his company have managed to sequence the human genome for only $5,000, a tremendous step down from its current price of $100,000. This is evidently tremendous news for genetic and biomedical research, as it will allow more people access to complete human genetic codes. Thank god that the government didn't step in earlier and decide that human genomes were too important to let cost be an option and that the government should subsidize them for use in research. Because otherwise, competition wouldn't have driven the price down to where it is today, and the taxpayers would still have to pay the $100,000, even if the user wouldn't.

The Kremlin's neo-Nazi ways

Something that the Russian regime often uses to legitimize its rule is railing against "extremism." Often, the extremists are Islamic terrorists (which the Kremlin often creates). But sometimes, the extremists are neo-Nazi fascists. The ideology is supposedly on the rise in Russia, and Russian cities are indeed dangerous places for "blacks" (a generic Russian catch-all for Caucasians, Central Asians, sub-Saharan Africans, and whatever other unfortunate non-European looking person happens to find themselves in non-Siberian Russia). But who really benefits from this? The Kremlin seems to think it does, because according to the Huffington Post, it supported several of these skinhead groups:

Human Rights researchers in Moscow have published documents showing "Nazi skinheads are being encouraged, organized, and used by Russia's ruling circles in their own interests." And Isvestiya reported that "Nazi skinheads from an openly fascist organization, the NNP (People's National Party), were being trained at the Moscow OMON special-purpose police detachment facilities and that they were being trained specifically by OMON coaches." Several years ago Russian historian Vladimir Ilyushenko asserted that "some parties view skinheads as their reserve. The process of encouraging fascist sentiments in Russia is steered by government officials."

Showing that the alternative in Russia to Putinism is fascism is a good way of making Putinism look good. And keeping fascism alive is near and dear to the Kremlin's heart, because one of the big founding myths of the Soviet Union was its fight against the Nazis. As little sense as the fascism/communism dichotomy makes, it was very important to the USSR during World War II and in the years afterwards. While obviously Russia's terrorist machinations are nearest to the siloviki's hearts at the moment, keeping the fascism thing on the backburner is a good way to hedge against unexpected hiccups in legitimacy.

Uzbek spy defects, brings juicy information along with him

This was apparently published a month ago, so it's not exactly news, but it's still fascinating: a high-level Uzbek spy has defected, and he brought some pretty damning information along with him. First of all, he says that Karimov himself (president-for-life of Uzbekistan) ordered the Andijan massacre:

Yakubov says Karimov directly ordered senior military officers to instruct troops to fire on protesters in the eastern city of Andijon in 2005, killing more than 1,500 people -- twice as many as rights groups estimated. Karimov has repeatedly denied that charge.

And not only that, but the terrorist group he blamed on instigating the incident was also funded by the Uzbek government:

In a related charge, Yakubov says the regime itself has propped up many alleged extremist groups and their leaders, including Tahir Yuldash, the purported IMU leader, and Akram Yuldash, the alleged spiritual leader of Akramia, the group Uzbek authorities blamed for sparking the unrest in Andijon.

...and despite propping these radical Islamists, it turns out that the 2004 terrorist attacks that won Uzbekistan so much sympathy abroad were really false-flag operations perpetrated by the Uzbek secret services:

The government blamed the explosions on the Islamic Movement of Uzbekistan (IMU), a U.S. State Department-designated terrorist group, and Hizb-ut Tahrir, an organization that eschews violence but seeks Islamic rule in Central Asia. Yakubov says that after speaking to an operational officer directly involved in the bombings, he realized that the government itself had prepared them.

False-flag Islamic terrorist attacks aren't exactly a new idea. Uzbekistan's old bosses in the Kremlin have been big fans of creating false terrorist attacks, having orchestrated the 1999 Russian apartment bombings, which were blamed on Chechen Islamic terrorist groups. And then of course, there's Alexander Litvinenko, who alleged that essentially every example of Islamic terrorism is actually a false flag attack committed by the Russian secret services.

The attacks – specifically the aforementioned 2004 bombings in Tashkent and Bukhara – worked remarkably well, and combined with Karimov's previous support of the Americans after 9/11, led Heritage Foundation scholar Ariel Cohen to declare that the bombings were all the more reason for the US to support Karimov's impoverishing and repressive regime:

Clearly, the terrorists' primary concern was not human rights. On the contrary, by provoking secular or moderate Muslim governments to take harsh measures, Islamist terrorists undermine those regimes' international reputations and drive a wedge between them and their democratic allies.

Furthermore, addressing anti-terrorist activities in Central Asia by targeting U.S. allies, abusing human-rights rhetoric and utilizing it to weaken or topple pro-American regimes is self-defeating and nearsighted. Extremists view U.S. sanctions against its allies as weakness. Such measures empower global terror networks to provoke pro-Western regimes.

A militant Islamic takeover of Uzbekistan may provide radicals a state base larger and militarily and technologically more sophisticated than Afghanistan. Moreover, demise of a secular Uzbekistan may have tumultuous consequences for all Central Asia. If Islamists overrun Uzbekistan, weak Central Asian states, such as Kyrgyzstan, Tajikistan and even the totalitarian Turkmenistan, may follow. An Uzbekistan controlled by a radical Islamist regime, emergence of a Central Asian Califate, and waning U.S. influence in the region, will leave human rights and individual freedoms worse off than they are now.

...and then there's this cringe-worthy stab at those narrow-sighted human rights advocates:

Leftist-liberal nongovernmental organizations (NGOs) with global reach, which uphold civil rights and ignore Islamist terrorist threats, make Uzbekistan a cause celebre.

While this is a win for those of us who have been trying to show the world that Islamic terrorism is largely a red herring, the real gratification will come when the bigger and badder truths about al-Zawahiri, al-Qaeda, and 9/11 come out. But then again, to quote Star Wars, "many Bothan Russian spies died to bring you this information," but nobody was listening.

Credit default swaps and you

Don't know what credit default swaps are and why they matter? Neither did I. Till now. From Arnold Kling, via Reason:

A credit default swap is like insurance against default. If you want to buy a municipal bond or a corporate bond but not take default risk, you try to buy a credit default swap. You pay a fee, and in exchange for that fee the seller of the swap will make you whole if the city or corporation defaults.

The seller of swaps collects nice fees, and most of the time the borrowers don't default. But if borrowers do default, then the seller is like an insurance company in a town that was hit by a hurricane. [...]

Suppose I have sold a credit default swap on Sallie Mae. That means that if Sallie Mae defaults on its bonds, I will have to pay some of the bondholders a big chunk of money. One way I can hedge that risk is to sell short Sallie Mae securities..... However, the more short-selling takes place, the closer they get to default. It is a vicious cycle. Ordinarily, I do not believe that short-selling affects the price, but when there is massive short-selling that is driven by dynamic hedging, I can see where the short selling would drive down prices.

Sarah Palin: less informed than my seventh grade brother

In what looks like the stupidest Sarah Palin moment yet, Sarah Palin can't name a single newspaper, and becomes offended at the suggestion of the question and deflects, ultimately ending with a defensive, "Alaska is like a microcosm of American." Fun twist: Palin was a journalism major at the University of Idaho, and once worked for a small newspaper.

Old Cold War friends are reunited once again, and it feels so good

Aside from Russia and points eastward, Europe's only true alternative for natural gas is North Africa. And Russia is apparently acutely aware of that, as they've begun courting Libya, initially for its gas and pipeline, but in the future probably for its vast oil reserves, too:

Gazprom is expected to sign a deal with Eni to acquire the Italian company’s stake in Libya’s Elephant oil field. But Gazprom is really after Eni’s stakes in the Greenstream natural gas pipeline, which runs from Libyan fields to Sicily and would give Russia another potential energy lever to use against the Europeans.

In exchange for the Libyan oil fields, Gazprom has theoretically given Eni access to some of the energy reserves along Russia's Arctic coast.

As the Stratfor article mentions, Libya was very close to the Soviet Union during the Cold War. Through its own apparatus and through the security services of other Eastern bloc nations, the Soviets channeled weapons and expertise to Libya, whose leaders dutifully carried out Soviet foreign policy. They armed the PLO and the Iranians after the Revolution, backed the terrorists at Munich, employed Carlos the Jackal at various points (but really – who didn't?), and generally acted as staid proxies for Soviet malevolence. After the end of the Cold War, Libya saw the writing on the wall and jumped sides, resolving tensions over the Pan Am bombing and accepting billions in western development aid. But obviously, Libya has no favorite in this fight, and is up for whatever as long as it gets security and compensation.

Would you like to buy this extra street?

The NYT has a story about something that I didn't even know happened: New York City selling one of its streets. The street in question is called Extra Place, extending out of First Street northwards in Lower Manhattan, but not quite reaching Second Street (i.e., it's a dead end). More accurately described as a grungy alleyway, it is a rare piece of not-yet-gentrified property in Manhattan, and it's adjacent to some luxury apartment buildings on First Street. These are owned by the developer Avalon Bay, who wants to buy the street, repave it, and "create a cleaner passageway to the shops and boutiques that are expected to open in the new buildings." They always want to "install seats, including some to be used by a cafe to which the developer expects to lease space." The city would earn money from the sale, would not have to incur any further costs with regards to maintaining the street, and would contribute to the density of Manhattan (one of its main selling points, and something that's good from both a planning, ecological, and cost-of-living perspective). Not bad for a god-forsaken strip that hasn't changed much since it was featured on the cover of a Ramones album. Of course, some residents in the vicinity are against the plan:

“There’s very little city-owned space left, and we would like the city to continue to own Extra Place,” she said. “There could be proposals to fix it up and manage it, which could be done by Avalon, but we also want to guarantee public access.”

As for the first objection – that the site ought to stay in the city's custody because "there's very little city-owned space left," what the hell is the benefit of city-owned space? Especially if it's left in the condition that it's in. As for the second part – that "there could be proposals to fix it up and manage it" – there could be, but isn't it interesting that there haven't been yet? And look, here is a proposal! And the last objection – to "guarantee public access" – is similarly stupid. Street-level property is very valuable as commercial real estate, which has to be open to the public to be profitable. I guess you could argue that those "seats" that the developers want to build are only going to be open to paying customers (although, if you look at the Starbucks model of outdoor seating or other models, we see that there's usually no one going around making sure those sitting are actually customers), but as it stands now, there are no seats for anyone to use. And I understand that it's sort of a straw man argument since, as this objector said, there "could" be plans to rehabilitate the space and keep it public, but like I said earlier, it hasn't happened yet.

Brit: leave an "acceptable dictator" in Afghanistan

Someone leaked a "coded" diplomatic cable to the French satirical/investigative (??) newspaper Le Canard enchaîné (whose website proudly informs would-be readers that the Canard deals only "avec du papier journal et de l'encre"), in which the British ambassador to Afghanistan says that essentially, the war is lost. He says not only do foreign troops only prolong the inevitable chaos before order emerges, but that increased military presence will have the "perverse effect" of creating more violence. In the cable, which was written by the deputy French ambassador and is a summary of what the British ambassador told him, British ambassador Sherard Cowper-Coles says the western forces should leave "an 'acceptable dictator' in charge of the country within five to 10 years," whatever that means.