Pluralistic: 08 Jun 2021

Originally published at: https://pluralistic.net/2021/06/08/leona-helmsley-was-a-pioneer/


Today's links



Rabbits: PK Dick meets Qanon (permalink)

RABBITS is Terry Miles's debut novel – a taut, conspiratorial thriller with overtones of PK Dick by way of Qanon and Dark City.

https://www.penguinrandomhouse.com/books/604640/rabbits-by-terry-miles/?pdivflag

"Rabbits" is the secret name for a mysterious game (AKA "The Game") that is shrouded in secrecy and is played by deciphering impossible clues, like extra tracks appearing on a beloved vinyl record or hidden levels on floppies of old games with references to modern events.

K's sidehustle is teaching curious people about the game and the handful of "winners" – known only by aliases that appear in impossible leaderboards, like glitched out reports from the Tokyo Stock Exchange – after hours at a Seattle retro video arcade.

But K's life is upended one night when a reclusive billionaire attends one of his lecture sessions, tangles some tantalyzing information about changes to Rabbits, and then vanishes utterly.

A new round of the game is now on, and K and his friends are in the thick of it – and yes, there's definitely something wrong with this iteration of the game, as players start to disappear or turn up mysteriously, horribly dead.

K's life is unraveling at the same time, as he suffers blackouts and false memories: a restaurant that closed six years ago being open and none of his friends recalling the closure, then a new album by David Bowie drops.

The conspiracies and coincidences in K's life are definitely part of the game, except maybe they aren't, and K and his friends are drawn deeper and deeper into an end-of-the-world scenario where violence and murder are increasingly common.

It's a fantastic and beautifully plotted, paranoid and mystical book, part pop-culture scavenger hunt (a la Ready Player One), part image-board conspiracism.



Apple's manorial security (permalink)

While digital feudalism is practiced by many Big Tech companies, Apple pioneered it and is its standard-bearer. The company rightly points out that the world is full of bandits who will steal your data and money and ruin your life, and it holds itself out as your protector.

Apple is a warlord whose fortress has thick walls and battlements bristling with the most ferocious infosec mercs money can buy.

Surrender your autonomy by moving to Apple's fortress – where they choose your which apps and where you get repairs – and they'll defend you.

This arrangement (which should really be called "digital manorialism" because feudalism involved providing men-at-arms to the monarch) has the same problem as all benevolent dictatorships: it works well, but fails badly.

https://locusmag.com/2021/01/cory-doctorow-neofeudalism-and-the-digital-manor/

When Apple has the same interests as you – when they work against the bandits, rather than colluding with them – this is great. But when Apple sides with the bandits, the walls that once protected you now make you easy prey.

One place where Apple sides with the bandits is China. Access to Chinese sweatshop labor and the vast Chinese middle-class are key to Apple's ongoing business interests. So when the Chinese state threatens to take these away unless Apple turns on its users, Apple folds.

It's been four years since Apple colluded with the Chinese state to remove working VPNs from its App Store, exposing Chinese users to pervasive state surveillance.

https://www.cnet.com/news/apple-removes-vpn-apps-from-china-app-store/

The benefits of retaining access to China clearly outweighed the reputational damage from colluding with state oppression, because Apple did it again, backdooring the encryption for its Chinese cloud servers.

https://pluralistic.net/2021/05/18/unhealthy-balance-sheet/#think-manorialism

But the problems of benevolent dictatorship go beyond secret malevolence. A dictator can be benevolent, but incompetent.

This week, the Washington Post published an expose under the admirably self-explanatory headline, " Apple’s tightly controlled App Store is teeming with scams."

https://www.msn.com/en-us/news/technology/apple-e2-80-99s-tightly-controlled-app-store-is-teeming-with-scams/ar-AAKL0TG

That hed really says it all: if you think that a "curated" app store is immune to fraudulent apps that steal your money and you're data, you're wrong.

Then there's this equally well-chosen hed from Motherboard over Matthew Gault's byline: "She Sent Her iPhone to Apple. Repair Techs Uploaded Her Nudes to Facebook."

https://www.vice.com/en/article/pkbkey/she-sent-her-iphone-to-apple-repair-techs-uploaded-her-nudes-to-facebook

Again, this is pretty much exactly what it sounds like: two Apple service technicians – you know, those guys Apple says you should use instead of a third-party repairer who might steal your data – extracted a customer's nudes and posted them to Facebook.

It's not the only time this happened:

https://www.washingtonpost.com/technology/2019/11/12/an-apple-store-employee-helped-customerby-texting-himself-private-photo-her-phone/

nor is it the second:

https://9to5mac.com/2016/10/12/apple-australia-photo-sharing-ring-nsfw/

It might be rampant.

This only came to light because Apple paid the victim a multi-million-dollar settlement (that came with a gag order so other people wouldn't learn that Apple's safety claims were lies), and Apple's insurer refused to pay, triggering a legal dispute.

An app store "teeming" with fraudware, service techs who go spelunking for nudes to download and share on devices submitted for repair – these illustrate the core problem with benevolent dictatorships, namely, that the dictator has to be infallible as well as benevolent.

Because Apple has spent millions defeating dozens of state Right to Repair bills that would let customers decide for themselves whether to trust Apple's repair technicians.

Because Apple does everything it can to make it illegal to develop a third-party app store for Ios that would let users decide whether to trust Apple's "curation."

Any time this level of control is questioned – any time someone asks whether an Iphone owner should have the final say over whose apps they use and whose repairs they choose – the answer is that Apple can't protect them if they get to treat its products as their property.

(I'm leaving aside for now the idiotic no-true-Scotsman argument that "real" Apple users all like deferring to Apple on these matters, because of the obvious rebuttal that Apple wouldn't spend millions blocking these activities if its customers didn't want to engage in them)

Lock in and switching costs don't make companies better defenders of users' interests – it assures them that they can sell users out, underinvest in oversight of their employees, tolerate a certain amount of predation – and their users will be stuck inside that fortress.

The deal in the warlord's fortress, after all, is that you have to use a warlord-specified "ecosystem" of proprietary peripherals, media files, and apps for which the warlord is the sole vendor of runtimes. Leave the fortress and all this stuff becomes useless.

Business, after all, is business. Companies know that high switching costs allow them to treat their users worse, because users will weigh all they surrender when they defect to a rival against the costs imposed by staying in a corrupt warlord's demesne.

There's another way: technological self-determination, of the sort that comes with interoperability, right to repair, and an end to the laws protecting terms-of-service, DRM and other forms of lock in.

If warlords are forced to allow us to leave their fortresses without being able to punish us for our disloyalty, then we'll truly learn whether the people who stay within the walls prefer the warlords, or merely endure them.



Billionaires don't pay tax (permalink)

When Clinton accused Trump of paying no federal taxes, he didn't deny it – rather, he said, "That makes me smart."

He wasn't the first rich sociopath to make that claim. Remember when Leona Helmsley told the press "only little people pay taxes?"

https://apicciano.commons.gc.cuny.edu/2020/09/28/remembering-leona-helmsley-the-queen-of-mean-only-the-little-people-pay-taxes-we-have-donald-trump-the-don-of-con/

Today, Propublica published the first in a series of blockbuster analyses of leaked tax data from America's richest billionaires – some of whom have lobbies for higher taxes on the rich! – showing that the true tax rate for billionaires is 3.4%.

https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

These records – which include tax data for Elon Musk, Warren Buffett, Jeff Bezos, Michael Bloomberg, George Soros, Carl Icahn and others – reveal that it's not just sneering boasters like Trump and Helmsley who avoid the tax the rest of us pay – it's the whole cohort.

Much has been made of the "K-shaped" recovery from the pandemic-driven economic collapse, where the rich got richer and the poor got poorer, but when it comes to the 0.001%, this is far more pronounced. America's billionaires got $1.2 trillion richer during the pandemic.

Much of this wealth accumulation is due to the fact that poor people pay high taxes, while rich people pay low taxes. A household earning $70k pays about 14% in federal tax; In 2019, Michael Bloomberg made $2B and paid 1.3% of it in federal tax.

All this wealth-accumulation creates family dynasties, meaning that the rich stay rich, and the poor stay poor, and the only real social mobility is downward, as the middle class loses ground and slips down the ladder.

https://doctorow.medium.com/the-rents-too-damned-high-520f958d5ec5

A quarter of America's richest people owe their fortune to the orifice they emerged from, not the work they did. These heirs – Waltons, Mars candy scions, Estee Lauder's kid – are the new permanent aristocracy, uplifted by the invisible hand by virtue of their "good blood."

The Propublica report – from Jesse Eisenger, Jeff Ernsthausen and Paul Kiel – is valuable not just for the names it names, but for the tax-evasion tactics it explains and the historical context it provides.

Whenever someone points out that Jeff Bezos is so rich that he could afford to give a living wage to his vast, precarious, food-stamp-dependent blue-collar workforce, someone inevitably points out that Bezos's wealth is in shares, not cash and is thus illusory.

This is only partly true, and it obscures more than it illuminates. It's true that CEOs habitually draw nominal salaries – often $1/year – and are only "rich on paper," but this doesn't mean they're not immensely wealthy – rather, this is how they amass immense wealth.

Here's how that works: the US only taxes capital gains (money you make from owning things, as opposed to doing things) when they are "realized" – that is, when you sell the asset that has appreciated in value. If you never sell your asset, you never pay tax on it.

So when an exec takes compensation in stock rather than cash, the exec pays no tax unless they sell the shares. But execs don't have to sell any shares in order to get millions or billions of dollars to play with. Rather, they can stake those shares as collateral on loans.

If an exec sells their shares, they'll pay a 20% capital gains tax. If they borrow against the shares, they'll pay single-digit interest rates. What's more, loans aren't treated as income, so no tax is paid on the loan.

Even better, the interest on the loan can be treated as an expense, which you can apply to any money that comes in the door that you can't help but declare as income.

Working people borrow money because they can't afford to buy cars or houses or just close the gap between payday and an empty fridge. Rich people borrow because it lets them launder their income into tax-free loans.

Here's the thing: this is exactly what critics of this system predicted would happen. In 1920, Rep Cordell Hull ("the father of income tax") warned that the Supreme Court's ruling in Macomber would let rich people "live upon the value" of stock "without ever paying" tax.

Congress could have fixed the tax law, but it left this loophole open, along with other loopholes, like the "step-up in basis" rule that allows billionaires to pass on vast fortunes without ever paying capital gains taxes on them (the true origin of "good blood").

When Propublica called billionaires for comment, they either got stonewalled (Elon Musk sent them a single "?" then ghosted), or heard bluster about "privacy invasions" or got responses like Warren Buffett's, about his plan to give away all his money.

That's more "good blood" nonsense: the idea that we should let people amass vast fortunes through monopoly and exploitation, so long as they – and not democratically accountable governments – then use it for social benefit.

Elite philanthropy is no substitute for democratic programs. It's primarily a means for the ultra-wealthy to launder their reputations.

Take the Sacklers – made richer than the Rockefellers through the opioid epidemic's corporate mass murders:

https://pluralistic.net/2021/05/23/a-bankrupt-process/#sacklers

What's more, elite philanthropy is a vehicle for pushing "good blood" ideology. Bill Gates's foundation didn't just set out to eradicate malaria, but also public education.

https://pluralistic.net/2021/04/13/public-interest-pharma/#gates-foundation

It recycled the materials it used to lobby against letting South Africa make its own HIV medicine to lobby against a covid vaccine waiver:

https://pluralistic.net/2021/05/21/wait-your-turn/#vaccine-apartheid

This report is the first in a series based on the anonymous leaked data. Propublica says its source was motivated by their stellar reporting on the IRS, which revealed the intense lobbying to weaken the agency's power to audit the wealthy.

https://pluralistic.net/2021/05/17/disgracenote/#false-consciousness

Instead, the IRS was perverted so that it primarily targeted poor people for audits, because they alone were weak enough not to resist the IRS's starved, resource-poor auditing division.

Propublica still has a lot of data to report out, but they're interested in hearing from other sources. In this supplemental article, they explain how IRS whistleblowers and others can securely leak more documents to them.

https://projects.propublica.org/tips/help-us-report-on-taxes-and-ultrawealthy/

And if you don't have time to digest the excellent story with its great explainers and graphics, Propublica's got a 7-minute read version:

https://www.propublica.org/article/the-secret-irs-files-short-form-a-quick-guide-to-what-we-uncovered

All of this leaves us with a question, though: what should we do about it? There's a Biden tax plan to raise taxes on the rich, but as Propublica points out, it will have virtually no effect on the "buy-borrow-die" mode of wealth accumulation.

Two other proposals would have an impact, though: Ron Wyden has proposed a capital gains tax on unrealized gains:

https://www.finance.senate.gov/imo/media/doc/Treat%20Wealth%20Like%20Wages%20RM%20Wyden.pdf

And both Bernie Sanders and Elizabeth Warren have proposed wealth taxes:

https://www.cnbc.com/2021/03/01/elizabeth-warren-bernie-sanders-propose-3percent-wealth-tax-on-billionaires.html



Google and France agree on ad-tech interop (permalink)

It's (mostly) great that Big Tech monopolies are finally facing regulation.

There are two bad things about monopolies:

I. They cheat their customers and suppliers because they know they're the only game in town, and

II. They use their money to legalize harmful practices.

Here's a Type I example of how Google uses its monopoly power to cheat: Google controls the ad-tech market they rig it in their favor – they represent both buyers and sellers, and they compete with them, and they advantage themselves.

https://pluralistic.net/2020/11/20/sovkitsch/#adtech

But Google's ad-tech stack also has a Type II monopoly abuse: the ad-targeting systems Google sells are extraordinarily, harmfully invasive. They get away with this privacy abuse because they convert the money they get from rigging the market to lobby against privacy laws.

There's a real danger that competition authorities seeking to blunt Google's monopoly will get Type I and Type II abuses mixed up. It's great to force Google to run a clean ad marketplace, preferably by forcing it to divest of the units that compete with its own customers.

After all, it's nearly impossible to detect "self-preferencing" in complex markets – like, did Google place its own ad rather than a higher-bidding third-party because it was cheating, or because its algorithm assessed the third-party ad as fraudulent?

And if so, was the algorithm itself designed to overblock third-party ads as potentially fraudulent while applying a more lax standard to the ads that Google sells – and makes more money from?

The entity that runs the market is the referee. Referees shouldn't also be members of one of the teams. Period. Obviously. I mean, come on.

The problem is that breaking up a monopolist is really hard. It can take decades and cost billions.

So regulators, out of ignorance or desperation, continue to allow referees to have a stake in the outcome, and instead seek to improve competition in other domains, especially Type II domains – those bad actions that monopolists get away with because they're too big to stop.

That's what's going on in France right now. The French competition regulator just fined Google $268M for anticompetitive ad-tech abuses. Included in the settlement – which Google says it won't fight – is a mandate for interoperability in ad-tech.

https://techcrunch.com/2021/06/07/france-fines-google-268m-for-adtech-abuses-and-gets-interoperability-commitments/

Interop is a great remedy for anticompetitive markets, and indeed, it makes tech a prime target for competition enforcement. When companies are forced to interoperate, their "network effect" advantages can be obliterated, by lowering switching costs.

https://onezero.medium.com/tech-monopolies-and-the-insufficient-necessity-of-interoperability-aafba94f1eb3

Interop is a great solution to Type I problems, problems caused by a lack of competition. But it's a terrible solution to Type II problems. If a monopolist got away with doing something horrible and abusive, we shouldn't fix that by improving competition.

The last thing we want is competition in practices that harm the public – we don't want companies to see who can commit the most extensive human rights abuses at the lowest costs. That's not something we want to render more efficient.

https://www.eff.org/deeplinks/2021/04/fighting-floc-and-fighting-monopoly-are-fully-compatible

Unfortunately, that's what the French interop remedy for Google does. Rather than abolishing or curbing targeting (substituting noninvasive content-based targeting, reliant on the content of a page rather than the identity of the user), they're helping everyone target users.

As Google wrote in its corporate comms about the ruling, it will improve interop by creating a way to share ad-tech data with third party competitors. This is such a fucking monkey's paw.

https://blog.google/around-the-globe/google-europe/some-changes-our-ad-technology/

There's going to be more of this. In the UK, the Competition and Market Authority's otherwise excellent report on ad-tech calls for widespread access to "attribution," where ad-tech follows you around forever to see if an ad leads to a sale.

https://pluralistic.net/2021/06/01/you-are-here/#goog

There are two kinds of entities agitating for more tech competition and interop. On the one side, you have smaller ad-tech firms and telecoms monopolists who want competition in commercial surveillance.

On the other side, you have public interest groups like EFF, calling for interop as a way to help people escape high-surveillance digital environments by allowing them to take their data with them and maintain their social ties.

https://www.eff.org/wp/interoperability-and-privacy

Interop can be fully privacy-compatible – indeed, interop can be a way to weaken tech and open space to enact and enforce strong privacy rules.

But there's some forms of competition – competition to invade your privacy – that we should reject altogether, not enhance.



This day in history (permalink)

#10yrsago Richard Dreyfuss reads the iTunes EULA https://www.cnet.com/news/richard-dreyfuss-reads-the-itunes-eula/

#10yrsago Top universities a ‘breeding ground’ for Tories, warn Islamic groups https://newsthump.com/2011/06/07/top-universities-a-breeding-ground-for-tories-warn-islamic-groups/

#10yrsago Copyright extremist RIAA lawyer confirmed as America’s Solicitor General https://www.wired.com/2011/06/senate-confirms-verrilli/

#5yrsago Password hashing demystified https://www.wired.com/2016/06/hacker-lexicon-password-hashing/

#1yrsago Big mail providers block indie mailing lists https://pluralistic.net/2020/06/08/the-last-federated-platform/#postal-inspectors

#1yrago Private equity's coming for your pension https://pluralistic.net/2020/06/08/the-last-federated-platform/#cat-food-dotage

#1yrsago Cops are legally entitled to reject "high IQ" candidates https://pluralistic.net/2020/06/08/the-last-federated-platform/#derp-badge



Colophon (permalink)

Today's top sources: Boing Boing (https://boingboing.net/), Slashdot (https://slashdot.org/), Gizmodo (https://gizmodo.com/).

Currently writing:

  • Spill, a Little Brother short story about pipeline protests. Yesterday's progress: 253 words (4451 words total).
  • A Little Brother short story about remote invigilation. PLANNING

  • A nonfiction book about excessive buyer-power in the arts, co-written with Rebecca Giblin, "The Shakedown." FINAL EDITS

  • A post-GND utopian novel, "The Lost Cause." FINISHED

  • A cyberpunk noir thriller novel, "Red Team Blues." FINISHED

Currently reading: Analogia by George Dyson.

Latest podcast: How To Destroy Surveillance Capitalism (Part 06) https://craphound.com/nonficbooks/destroy/2021/05/10/how-to-destroy-surveillance-capitalism-part-06/
Upcoming appearances:

Recent appearances:

Latest book:

Upcoming books:

  • The Shakedown, with Rebecca Giblin, nonfiction/business/politics, Beacon Press 2022

This work licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

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"When life gives you SARS, you make sarsaparilla" -Joey "Accordion Guy" DeVilla

The audiobook is told in the first person by K and is read by a female, so I had assumed K was female.

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