A Geek With Guns

Chronicling the depravities of the State.

Archive for the ‘Money Management Mishaps’ tag

Venezuela Tries Its Hand at Creating a Failed Cryptocurrency

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A cryptocurrency managed by the same regime that tanked the economy of a country that has vast natural resource wealth? I can’t see how this could possibly go wrong!

CARACAS (Reuters) – Venezuelan President Nicolas Maduro looked to the world of digital currency to circumvent U.S.-led financial sanctions, announcing on Sunday the launch of the “petro” backed by oil reserves to shore up a collapsed economy.

The leftist leader offered few specifics about the currency launch or how the struggling OPEC member would pull off such a feat, but he declared to cheers that “the 21st century has arrived!”

I’m doubting that we’ll see any technical white paper about the Petro since that would solidify implementation details and I’m guessing the Venezuelan government’s plan is to have a cryptocurrency it can change on a whim.

Written by Christopher Burg

December 5th, 2017 at 10:00 am

What Happens When You Don’t Own Something

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The cloud is good. The cloud is holy. The cloud is our savior. If you listen to the marketing departments of online service providers and Internet of Things manufacturers, you’d be lead to believe that the cloud will soon cure cancer. While there can be advantages to moving services online there are also major disadvantages. The biggest disadvantage, in my opinion, is the fact that you don’t own anything that is dependent on an online service. People who bought the Canary security camera are learning this lesson the hard way:

Canary, a connected home security camera company, announced changes to its free service last week that went into effect on Tuesday. Under the new terms, non-paying users will no longer be able to freely access night mode on their cameras nor will they be able to record video for later viewing. Night mode is a feature that lets you set a schedule for your Canary camera to monitor your home while you sleep without sending notifications.

On top of that, all the videos the company previously recorded for free will be converted into 10-second clips called “video previews.” Essentially, important features are being taken away from users unless they’re willing to pay $9.99 a month.

People will likely blame this on greed but the real culprit is the lack of ownership. The Canary camera isn’t free but paying money to acquire one doesn’t mean you’re paying money to own it. In reality, you’re paying money for the privilege of paying a monthly fee to tie a camera to an online service. The terms of accessing that online service can change on a whim and, in this case, the change left people who decided not to pay the $9.99 per month fee with a paperweight that used to be a security camera (albeit a limited one).

The Internet of Things means never owning the devices you pay money for and if you don’t own it, you don’t control it.

Written by Christopher Burg

October 10th, 2017 at 10:30 am

Rewarding Incompetence

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A lot of people are very upset with Equifax at the moment. The company’s amateur hour security practices allow the personal information of millions of people to fall into unauthorized hands. You would think that a screw up of that magnitude would dissuade any rational business from doing business with it. Well the Internal Revenue Service (IRS) isn’t rational or a business so this shouldn’t surprise anybody:

Between March and July of this year, the credit rating agency Equifax, was infiltrated by hackers who made off with the sensitive personal information of more than 140 million Americans. That sounds like the kind of thing that might hurt a company’s credibility when it comes to security. But Politico is now reporting that the IRS will pay Equifax $7.25 million to “verify taxpayer identities and help prevent fraud.”

I don’t know why the IRS feels the need to pay Equifax to verify taxpayer identities when its database is in the wild. I’m sure the IRS could acquire a copy and just perform verify taxpayers itself.

I really need to get into government contracts. It seems like no screw up is so severe that it will dissuade the government from doing business with you.

Written by Christopher Burg

October 5th, 2017 at 10:00 am

War is Good for Business

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War is good for business. At least if you’re on the waging side. It’s probably not so good for those on the invaded side. But who can bring themselves to care about them when we’re talking about numbers like this:

BOSTON, Sept. 26, 2017 /PRNewswire/ — Force modernization will be one of the primary factors underpinning growth in global defense spending, driven by unprecedented developments in autonomous systems, missile, space and cyber-electronic warfare, and other technologies. Strategy Analytics: The Strategy Analytics Advanced Defense Systems (ADS) service report, “Global Defense Spending Outlook 2016-2026,” forecasts the global defense budget will grow to $2.41 trillion in 2026, with the opportunities available to industry growing at a CAGR of 3.5% to reach $771 billion.

Force modernization, if it follows in the footsteps of the F-35, will involve a great deal of money. However, there will be little to show for that money. The F-35, for example, still has problems reliably delivering oxygen to pilots even though it has cost over $1 trillion. Imagine the same thing happening with other military equipment. If we look at the raw numbers alone, it’ll be amazing economic growth!

Unfortunately, all of the resources invested in “force modernization” cannot be allocated to productive uses like new manufacturing plants, office buildings, and research and development for new consumer products.

Written by Christopher Burg

September 27th, 2017 at 10:30 am

Murder Includes a Nice Severance Package

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Killing Philando Castile has been lucrative for Officer Yanez. Not only did he enjoy a paid vacation but he also received a generous severance package:

“A reasonable voluntary separation agreement brings to a close one part of this horrible tragedy. The City concluded this was the most thoughtful way to move forward and help the community-wide healing process proceed.”

According to a copy of the agreement supplied by the city’s attorney in the matter, Yanez will receive a lump sum of $48,500 minus applicable deductions and tax withholdings.

He also will receive payment for up to 600 hours of accrued personal leave. The agreement did not note how much time he has accrued.

Yanez was making $72,612.80 a year when he fatally shot Castile on July 6, 2016, during a traffic stop on Larpenteur Avenue in Falcon Heights.

$48,500 plus 600 hours of accrued personal leave for murdering somebody is a pretty decent deal. Granted, he’ll have to hang low for a while and wait for this entire mess to blow over before another department will likely take him on.

When a police officer screws up they receive a paid vacation until whatever they did falls out of the news cycle. When they screw up more they might get fired and have to wait until their union forces their department to reinstate them. When they really screw up they are brought before a grand jury to be exonerated. When they really screw up they’re brought before a jury to be exonerated and given a nice severance package.

I must say, being a police officer and screwing up sounds like a good gig.

What Happens When You Rely on a Third Party for Revenue

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Earlier this year many gun channels on YouTube reported that their videos were suddenly disqualified from receiving ad revenue. This change in policy happened without warning and the rules established by YouTube were vague to say the least. In the hopes of appeasing both advertisers and content creators, YouTube attempted to clarify its rules. But if you read YouTube’s guidelines you’ll notice that they remain incredibly vague.

A lot of people have been screaming about free speech but that’s irrelevant. YouTube is a private entity and therefore can make whatever rules it wants. The real issue here is relying on a third party for revenue.

There are two ways content creators can guard their income from arbitrary rule changes made by their hosts. The first is having a contractual agreement where the host can face penalties if they arbitrarily change the terms. The second, and this is the one I generally prefer, is to host their own material on their own systems. This is what I do with this blog (and every other service I rely on). If you own everything you get to make the rules. If, for example, I decided to monetize this site, there would be no way for a third party to cut of my revenue by changing the rules.

YouTube looks like a sweet deal because content creators can put their material online without facing the costs of hosting the material themselves. But there ain’t no such thing as a free lunch. The price content creators pay for using YouTube is being entirely at the mercy of its one-sided user agreement, which can be changed at any moment without prior notice being given. Content creators can scream about free speech or censorship or whatever else makes them feel oppressed. But they only have themselves to blame because they put themselves into a position where their revenue source could be cut off by a third party at any moment.

Written by Christopher Burg

June 2nd, 2017 at 11:30 am

Have Some Government

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Let’s say the government has offered you half of a duopoly on a product that is otherwise illegal. However, the government has also placed a bunch of ridiculous restrictions on that product that will unnecessarily raise your production costs. Do you take the government up on its offer? If you’re smart, you don’t:

Minnesota’s two licensed medical marijuana manufacturers have lost a combined $11 million in just two years of sales, according to financial documents obtained by The Associated Press, continuing losses that hint at systemic problems with the state’s tightly regulated program despite a recent expansion that allowed thousands more patients to buy the medication.

Minnesota Medical Solutions posted a $1.2 million loss in 2016, a year after losing more than $3 million. But LeafLine Labs’ losses worsened: The company said it lost $4.7 million last year, after losing $2.2 million loss in 2015.

When the medical cannabis bill was passed in Minnesota it included a mind-boggling number of restrictions. For example, medical cannabis cannot contain any leftover plant material. Why? Who knows. What we do know is that the law made it so two companies with a duopoly can’t make a profit on a product that teenagers in every high school in the country manage profit off of.

Unfortunately, this will likely be the status quo in this state for many years. The problem with medical cannabis laws is that once they’re passed it makes passing full decriminalization more difficult. One of the best arguments for cannabis legalization is its medical benefits. When medical cannabis laws are passed that argument is no longer available to advocates of full decriminalization. This is another example of the good being the enemy of the better. Medical cannabis laws may appear to be better than full criminalization but they’re actually a detriment to full decriminalization.

Written by Christopher Burg

May 18th, 2017 at 10:30 am

The Hero the Twin Cities Deserves

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I generally believe that the United States education system is a cesspool. But once in a while somebody emerges from the muck and becomes a hero to us all. Beth Elaine Allen is one such person:

According to 12 felony and gross misdemeanor counts filed Friday in Hennepin County District Court, Beth Elaine Allen, 64, is estimated to owe the state more than $50,000 in outstanding taxes, penalties and interest over a five-year period. Charges say Allen failed to pay income taxes since at least 2003, but due to the statute of limitations for tax crimes, charges are limited to years 2010 to 2015.

Five years of denying the State of Minnesota a portion of her revenue. That’s quite a streak! Of course, it could have been longer if she was more intelligent about it. If you’re going to forego paying taxes you should do everything you can to stay off of the Internal Revenue Service’s (IRS) radar. For example, if you can’t pay your mortgage don’t spend lavishly after your home is foreclosed:

Investigators also found that Allen bought a Minneapolis condo in 1992 for $245,000 and made mortgage payments of $1,400 until it was foreclosed in 2011, that she paid $94 a day to live at the Residence Inn in Plymouth and pays $700 a month to store her belongings. Credit card receipts show she spent thousands on travel, restaurants, grocery stores, liquor and wineries.

That’s the kind of thing that raises red flags with revenuers and red flags can lead to investigations. So I commend Beth on refusing to pay money to the State but I think she could have gone about it better.

Written by Christopher Burg

April 18th, 2017 at 10:00 am

More Corruption at the ATF

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Here we go again, another story of corruption at the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF)! This time the agency that likes to sell guns to Mexican drug cartels was caught using an off the books bank account for some rather luxurious expenditures:

WASHINGTON — Agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives used a secret, off-the-books bank account to rent a $21,000 suite at a Nascar race, take a trip to Las Vegas and donate money to the school of one of the agent’s children, according to records and interviews.

Agents also used the account to finance undercover operations around the country, despite laws prohibiting government officials from using private money to supplement their budgets, according to current and former government officials and others familiar with the account.

Before you make the mistake of assuming that those expenses were related to an investigation:

Other expenses, such as renting a 16-person suite at Bristol Motor Speedway in Tennessee, had no obvious connection to law enforcement operations. A.T.F. agents, along with some community members, used the suite in 2012 for the Irwin Tools Night Race, a Nascar event, according to two people who worked closely with the bureau at the time. A receipt obtained by The Times shows the suite cost $21,000.

Agents also donated money from the account, according to documents and interviews, including thousands of dollars to the high school and volleyball team of the daughter of an A.T.F. agent in Bristol. The agent, Thomas Lesnak, is now retired and did not respond to messages seeking comment. He has previously dismissed suggestions that anything was done improperly.

It’s good to be the king’s men and family of the king’s men!

Although every government agency is corrupt, the ATF seems to excel at corruption. There doesn’t seem to be a year that goes by where the agency isn’t caught in some kind of major scandal. The story notes that this latest incident shows the lack of ATF oversight but this is really a minor offense when it comes to the shenanigans of the agency. And if arming Mexican drug cartels didn’t result in more agency oversight this certainly won’t.

What this story really illustrates is how ineffective it is to give an organization a monopoly on holding itself accountable. The government maintains such a monopoly. The consequences of this have become obvious. When an agency is caught doing something corrupt no punishment, or at least no noteworthy punishment, is dispensed. Usually a hearing happens before Congress. During the hearing some members of Congress pretend that they’re shocked to find corruption within the agency in question. The hearing will be followed by a few days of government officials appearing on news channels berating the corrupt agency. Then, after the week’s news cycle is over, the entire matter vanishes from the headlines and people’s memories.

Written by Christopher Burg

April 12th, 2017 at 10:30 am

The Letter of the Law

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The road to Hell is paved with good intentions. Oftentimes people will discuss the intent of a law versus the letter of a law. This discussion usually happens when it comes to light that a law that was passed with good intentions ends up being abused by enforcers following the letter.

In an effort to thwart tax evaders (which qualifies as good intentions to statists although I’m not sure why), a law was passed that required individuals and businesses to report all bank deposits greater than $10,000. It’s a little known law, which means many small business have been running afoul with it. Since the intention of the law was to catch tax evaders you would think that these accidental violations would result in little more than a notice being sent to the offending businesses alerting them of the law’s existence so they wouldn’t violate it in the future. But the Internal Revenue Service (IRS), not surprisingly, has been following the letter of the law, not the intent:

While structuring is technically a crime, it’s something of a secondary one. The reporting requirements were enacted to detect serious criminal activity, such as drug dealing and terrorism. They “were not put in place just so that the Government could enforce the reporting requirements,” as the IG’s report puts it.

But according to the report, that’s exactly what happened at the IRS in recent years. The IRS pursued hundreds of cases from 2012 to 2015 on suspicion of structuring, but with no indications of connections to any criminal activity. Simply depositing cash in sums of less than $10,000 was all that it took to arouse agents’ suspicions, leading to the eventual seizure and forfeiture of millions of dollars in cash from people not otherwise suspected of criminal activity.

The IG took a random sample of 278 IRS forfeiture actions in cases where structuring was the primary basis for seizure. The report found that in 91 percent of those cases, the individuals and business had obtained their money legally.

Structuring is the crime of breaking up bank deposits over $10,000 into multiple deposits under $10,000. That’s right, breaking up larger deposits is a crime in the United States because of the “good intentions” of a few politicians.

But the IRS doesn’t care what the intention of the law was, it only cares about the letter of the law. Instead of using the Bank Secrecy Act to pursue individuals and organizations trying to conceal illegal activities by breaking up larger bank deposits, the IRS has been pursuing individuals and organizations who have been performing perfectly legal activities. By doing this the IRS has managed to seize millions of dollars from innocent people.

Is there any reason why the IRS is despised by basically everybody? Is there any reason why libertarians flip out whenever a seemingly innocent law is passed?

I doubt the IRS will suffer any punishment for this since it was technically doing its job by enforcing the law. But this story should serve as a warning to people who often let the intention of a law cloud their judgement. When it comes to enforcement the intention of a law doesn’t matter, only the letter.

Written by Christopher Burg

April 7th, 2017 at 11:00 am