text:
24 April 2014
The German Aerospace Center (DLR) Eu:CROPIS satellite is scheduled for launch in 2016. On board will be two greenhouses in which bacteria and algae will convert synthetic urine into fertiliser to promote the growth of tomato plants. Variations in rotational speed around its longitudinal axis will simulate lunar and Martian gravity.
The German Aerospace Center (DLR) Eu:CROPIS Mission will enable scientists to conduct experiments to determine whether tomato plants will grow and bear fruit in a closed life support system under lunar and Martian conditions. The satellite with two greenhouses on board is scheduled for launch in 2016.
Scientists from the German Aerospace Center (DLR) will use the radiation detector RAMIS to measure the radiation field during the Eu:CROPIS Mission.
A symbiotic community of bacteria, tomatoes and single-celled algae, synthetic urine and a satellite that simulates the gravity of the Moon or Mars by rotating around its axis – these elements make up the German Aerospace Center (Deutsches Zentrum für Luft und- Raumfahrt; DLR) Eu:CROPIS (Euglena and Combined Regenerative Organic-Food Production in Space) mission. Two greenhouses are scheduled for launch into space in 2016. In them, a combined life-support system will utilise the waste product recycled urine to manufacture fertiliser and help grow tomatoes for a lunar and Mars habitat, also on long duration missions. This project will run for a year, after which the satellite will burn up in Earth's atmosphere.
The DLR scientists will use the cooperation between bacteria and the single-celled alga euglena gracilis to supply the plants with important nutrients. Synthetic urine will be added to the system at regular intervals and then passed through the lava plates in the trickle filter, integrated within the water circulation mechanism and home to countless microorganisms waiting hungrily for these nutrients. Initially, these bacteria break down ammonia into nitrite, and subsequently into nitrate to remove elements that are toxic for the plants and produce precisely the appropriate fertiliser to allow the tomato plants to bear fruit and produce new seeds. Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU) contributes its euglena to counteract the precipitous rise in ammonia levels: euglena are insensitive to ammonia and assist to its rapid breakdown. "We exploit the properties of these organisms to convert substances into nutrients that are needed to sustain other organisms," explains the mission's Scientific Director Jens Hauslage from the DLR Institute of Aerospace Medicine.
Growing in a lunar and Mars environment
Seeking to simulate the differing levels of gravity on Mars and the Moon, engineers at the DLR Institute of Space Systems and the DLR Institute of Composite Structures and Adaptive Systems are developing and building a 250-kilogram lightweight satellite, designed to rotate around its longitudinal axis while orbiting at an altitude of roughly 600 kilometres. In doing so, it will replicate lunar gravity, that is 0.16 times Earth's, or 0.38 times – the gravity on Mars – depending on the rotational speed. The first of the two greenhouses will operate under lunar conditions over the first six months, while the second greenhouse will operate in a Martian environment for the following six. During the entire period, the two greenhouses will be fitted in a pressure container made of carbon-fibre composite materials, built to maintain a constant internal pressure of one bar.
Eu:CROPIS carries two other experiments: the DLR Institute of Aerospace Medicine will use the radiation detector RAMIS (Radiation Measurement in Space) to collect data on long-term exposure to cosmic radiation over the course of the space flight. The radiation field in space presents a limiting factor for the long-term deployment of astronauts and every other biological system – whether it is plants, animals, or microorganisms. This is why DLR radiation biologists will measure the radiation field on the outer shell and inside the satellite. The data will be used as a basis for further development of radiation field models, also to register the radiation dose to which the symbiotic community will be exposed during its flight on board Eu:CROPIS. The US space agency NASA will contribute an experiment to measure photosynthesis in algae.
Greenhouses under observation
Numerous cameras and sensors will observe what is occurring inside the greenhouses during the mission: are the tomatoes growing properly, and is their photosynthesis satisfactory? What is the pH value and oxygen concentration in the water circulating continuously to transport nutrients throughout the entire greenhouse? Other cameras will observe the single-celled algae, how they are swimming and hence responding to gravity. Regular sampling will permit fully automatic analysis at the genetic level.
"We intend to demonstrate that waste products can be used in reduced gravity environments found on Mars and the Moon, also in long duration missions, in this case to cultivate tomatoes. The experiments on board Eu:CROPIS will deliver important results to enable humankind to survive in hostile environments – whether it be in space or here on Earth," says Hauslage. For instance, the trickle filter C.R.O.P. is currently being successfully used in the Faculty of Agriculture at the University of Bonn (Agrohort) to produce valuable fertiliser from waste products.
Last modified:29/04/2014 13:16:11


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8 a.m. thru 5 p.m. EST 305.757.0555
Italian Wall Decor Signs
Our Italian Wall Signs come as a set of two Italian signs. One sign says Good Fortune and the other sign The Sweet Life. Each sign is accented with a cluster of grapes and leaves. Created from original sculpted art by artist Al Pisano, we hand cast and then hand paint each Italian Sign. We apply an oil stain to capture all the detail of the original art. Each plaque measures approximately 8 in x 5 in. Includes hangers. Made entirely in the USA
These are beautiful handcrafted reproductions of Al Pisano's original carvings and sculptures.Created in the artist's studio, each piece is meticulously hand cast and then hand painted and stained to capture all the incredible detail. We also personalize many of our wall plaques free of charge and these make great gifts. All of our products are Made in the USA by skilled artisans under the supervision of Al Pisano. We offer a money back guarantee. We believe you will enjoy Al's artwork for many years. Call us if you have any questions!

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De Jure
On-line version ISSN 2225-7160
Print version ISSN 1466-3597
De Jure (Pretoria) vol.47 n.1 Pretoria Jan. 2014
Direct marketing and spam via electronic communications: An analysis of the regulatory framework in South Africa
Direkte bemarking en spam deur middel van Elektroniese Kommunikasies: 'n ontleding van die regulerende raamwerk in Suid-Afrika
Bernard HamannI; Sylvia PapadopoulosII
IBCom(Law) LLB. Academic Associate, University of Pretoria
IIBLC(UP) LLB(UP) LLM (UP). Senior Lecturer, University of Pretoria
Hierdie artikel weerlê die feit dat die reguleering van "spam" en direkte bemarking aanlyn nie holistiese aandag geniet nie en dat die gefragmenteerde benadering in terme van die Wet op Elektroniese Kommunikasies en Transaksies 25 van 2002, Wet op Verbruikers-beskerming 68 van 2008 en die Wet op Beskerming van Persoonlike Inligting 4 van 2013 ongewens is. Dit het die gevolg dat verbruikers onvoldoende beskerming geniet en 'n onvermoë van die reg om "spam" en direkte bemarking aanlyn effektief te beheer.
Terwyl aanlyn direkte bemarking en "spam" tot 'n mate oorvleuel is "spam" 'n wyer konsep as direkte bemarking. Dit is belangrik om in gedagte te hou dat nie alle direkte bemarking "spam" is nie, en nie alle "spam" direkte bemarking is nie. Die beperking van die regulering van "spam" tot kommersiële kommunikasies of selfs die meer noue konsep, kommunikasies wat met direkte bemarking betrekking het, is nie voldoende nie omdat daar dan steeds baie verskillende tipes "spam" is wat nog ongereguleerd sal bly.
Die artikel argumenteer dat hoewel onlangse regulatoriese veranderinge kan gesien word as 'n verbetering op die vorige posisie in sekere aspekte, is daar nog meer aspekte wat onaangeraak bly en daar is 'n paar bepalings wat nuwe probleme skep. Ten spyte van die onlangse veranderinge in die regulatoriese omgewing is dit waarskynlik dat verbruikers steeds blootgestel gaan word aan 'n deurlopende stroom van nuusbriewe, meningsopnames, godsdienstige boodskappe, politieke inhoud, virus waarskuwings en virus bedrog, nuus, ketting briewe, haat-pos en noukeurige vervaardigde elektroniese kommunikasies wat bedrieglike of misleidende inhoud bevat.
1 Introduction
From a consumer protection point of view, spam and direct marketing are regulated by certain industry-specific self-regulatory guidelines and codes of conduct,1 section 45 of the Electronic Communications and Transactions Act2 (the ECT Act), as well as through newer legislation such as the Consumer Protection Act3 (the CPA). Once it is fully in force, the Protection of Personal Information Act4 (the PPI Act)5 will repeal section 45 of the ECT Act and replace it with chapter 8, sections 69-71, entitled "The rights of data subjects regarding direct marketing by means of unsolicited electronic communications, directories and automated decision making."6 Despite the PPI Act's intention to repeal section 45 of the ECT Act, on the 26th of October 2012 the Department of Communications published the proposed Electronic Communications and Transactions Amendment Bill7 (the draft ECT Act Amendment Bill) wherein it is suggested that section 45 be retained, or re-enacted, albeit in an amended form.8
The purpose of this article is firstly, to present a brief cursory overview of the abovementioned changing legislative paradigm for spam and direct marketing via an electronic communication and secondly, to critically examine the changes that new legislation has or will introduce within that framework. The article builds on previous research published9 but is distinguished due to the fact that the final version of the PPI Act differs materially to previous versions published10 and takes into account the recently published draft ECT Act Amendment Bill [2012].
2 Direct Marketing vs Spam
2 1 Introduction
Unsolicited electronic communications range from bothersome to destructive, irritating to offensive, they are an abuse of resources and they can be a threat to email and internet security.11
While online direct marketing and spam do overlap to some degree, there are notable differences. It will become evident to the reader that spam is a wider expression than direct marketing and therefore it is important to keep in mind that not all direct marketing is spam and not all spam is direct marketing. With this in mind, this article aims to focus on the current legislative trend, which has opted to regulate direct marketing only.
2 2 Direct Marketing
From a marketing perspective, direct marketing is a system of marketing where the marketer communicates directly with a customer with the goal that the interaction will exact a measurable response and/or transaction.12
From a legal perspective, South African legislation defines direct marketing in section 1 of the CPA and section 1 of the PPI Act, as an approach to a person (or data subject in the case of the PPI Act), either in person or by mail or electronic communication, for the direct or indirect purpose of promoting, offering to supply, in the ordinary course of business, any goods or services or to request a donation of any kind.13
Practically therefore, in terms of these definitions, any method that can be used to deliver an electronic communication to an existing or potential customer for the direct or indirect purpose of promoting, offering to supply in the ordinary course of business, any goods or services or to request a donation of any kind, would amount to direct marketing online, including but not limited to:
• Mobile cellular text and video messaging (SMS or MMS) which is sent directly to the user's device;
• Mobile device applications (Apps) often contain interactive advertisements that appear inside the app;
• Email marketing;
• Search engine optimisation, where meta-tags (keywords written in computer code, which are invisible to the end-user and describe the contents of websites that are recognised by search engines) are used to associate specific websites with specific keywords in order to target people searching for those keywords using search engines like Google. The more often a keyword appears in the hidden code of a website, the higher the search engine will rank the website in the displayed search results, that is, delivered as website or communication by electronic transmission;14
• Pay-per-click advertising is similar to search engine optimization in that this form of advertising also uses keywords that consumers are searching for to deliver the electronic communication (website) directly to the searcher. The difference is that with pay-per-click advertising, advertisers bid on certain keywords and the advertiser willing to pay the most for a keyword will ensure a prominent placement in the search result listings that will be displayed first. The advertiser only pays if the consumer clicks on the link;15
• Social media marketing;16
• Affiliate marketing;17
• Banner advertising (mobile and internet), includes static banners on websites and pop up adverts and are a form of interactive advertisement that appears next to or over existing website content;
• Voicemail marketing, that is, where an advertisement is recorded on a personal voice mailbox; and
• Couponing, where manufacturers and retailers make coupons/discounts available for online electronic orders which can be available on company websites, social media, texts or emails and a methodology which is gaining popularity in South Africa in the so-called "daily-deal" websites which offer online deals each day. Customers sign up to receive notices of discounted offers or to receive coupons.18
It is submitted that all of these amount, in one way or another, to direct marketing via an electronic communication as defined above.
However, in order for direct marketing to be successful, marketers need to address a target audience and, in order to accomplish that, they need information in the form of names, prospects and/or business leads, together with certain other relevant information such as contact details in the form of phone numbers, addresses and email addresses; demographic details and purchase habits/history or preferences.19 This information is electronically compiled in a number of ways such as spoofing,20 harvesting,21 dictionary attacks,22 spyware,23 cookies24 and phishing.25
Whether or not our legislative framework is sufficient to regulate all the practices that are related to direct marketing and information collection or compilation falls outside the scope of this paper.
Direct marketing does have an important role in the economy. Marketing has the function of facilitating exchange by creating utility. Utility is created by matching the supply of a product or service with the demand for that product or service, and facilitating the conclusion of the transaction that benefits both the supplier and the consumer.26 Responsible marketing and related advertising practices can therefore be a very useful tool for consumers.
2 3 Spam
Spam can be in the form of direct marketing, but it is wider than just direct marketing, as it may also take the form of solicitation for questionable products, or services, or contain fraudulent or deceptive content. It can also include hoaxes, virus warnings, urban legends, jokes, chain letters, newsletters, opinion surveys, requests for support or donations and hate mail, that is, non-commercial electronic communications. Spam has also been used to distribute viruses and malicious code.27
There are three main trends that can be identified in legislative descriptions for spam: Firstly, "unsolicited electronic messages" (UEM); secondly, "unsolicited commercial electronic messages" (UCE) and thirdly, "unsolicited bulk electronic messages" (UBE).28
The drafters of the ECT Act chose to regulate, not prohibit, the sending of UCE to consumers,29 while the CPA and the PPI chose to limit their protection to direct marketing, arguably a more restrictive version of UCE.30
The unsolicited element of an UCE communication implies that there is no prior relationship between the sender and the recipient and that the recipient has not explicitly given consent to receive the communication.31 It is also a communication that is commercial in nature that seems to relate to messages whose primary purpose is to advertise or promote goods or services.32 Therefore, any communication that is classified as non-commercial would not be regulated under an UCE definition. This would include, but is not limited to, communications such as newsletters, opinion surveys, religious messages, political content, virus warnings and virus hoaxes, urban legends, news, chain letters and hate-mail.33 More importantly, any carefully crafted electronic communication that contains fraudulent or deceptive content will, more than likely, fall through the regulatory net as a non-commercial communication.
An UCE definition therefore concentrates on message content rather than the sender's motivation for sending the message.34 The main reasons advanced for using an UCE definition include: The fact there are no threshold numbers of messages that need to be sent before it qualifies as "spam" and non-commercial messages may be constitutionally protected under the right to freedom of expression and therefore using an UCE definition avoids legal issues that may arise in this arena.35
None of the legislation discussed in this article included the bulk requirement, as an alternative to commercial, as can be found in some foreign jurisdictions. Therefore, a single UCE communication may be classified as spam.36
Geissler argues that the real issue with spam is not about content but the method of delivery. Bulk implies that the message could be a single message sent to a very large number of recipients, or it could be separate but identical copies of a message that are sent to a large number of recipients. The main problem with a bulk requirement is determining the threshold for how many copies constitute a bulk mailing and within what time period they should all be sent.37
Geissler's arguments in favour of an UBE definition include that often the contents of an UCE communication are not objectionable and that the focus should be on the harm that is caused, that is, the fact that it is sent in large quantities rather that the motivation for sending the communication.38 She finally concludes that legislation regulating or prohibiting spam should include the requirements of "unsolicited" and "bulk", that is, an UBE definition rather than an UCE definition. An argument the authors are in agreement with.
3 The Changing Landscape
3 1 The Electronic Communications and Transactions Act 25 of 2002
3 1 1 Application
The ECT Act applies to all electronic transactions and data messages except those excluded by the Act itself or its schedules.39 Under the provisions of section 42 and the rest of chapter VII it is clear that section 45 will only apply to an "electronic transaction", where one party is a "consumer".40
An "electronic transaction" is not defined in the ECT Act, but a "transaction" is either of a commercial or non-commercial nature.41 It is assumed, that "electronic transactions" include transactions where the use of data42 is a basic component of the transaction.43
A consumer is defined as "... any natural person who enters or intends entering into an electronic transaction with a supplier, as the end-user of the goods or services offered by that supplier".44
This definition excludes the operation of the chapter VII consumer protection provisions in all business-to-business (B2B) transactions and some business-to-consumer (B2C) transactions where the consumer is a natural person but not the end-user of the goods or services acquired.45
It is recognised that juristic persons are often in the same practical position as a natural person consumer, and therefore a strong case could be made to include at least some of these parties in the definition of a "consumer" as is the case under the CPA.46
3 1 2 Regulation
Section 45 of the ECT Act states that senders can send any electronic communication provided that, if the communication is a commercial communication, the sender must give the person receiving the communication, the option to opt-out of receiving further communications and, if a request is made by the consumer, the source where the contact details were obtained must be revealed. A failure to comply with these requirements is an offence in terms of section 89(1), with penalties that include fines and imprisonment of up to twelve months.47 Finally, it confirms that no agreement is concluded where a consumer fails to respond to the unsolicited communication.
3 1 3 Commentary
It's pointed out that for the opt-out or unsubscribe mechanism to be effective, two things are necessary: Firstly, that the spammer respects the call to opt-out; and secondly, that the consumers have faith in using this function.48 This is not a realistic viewpoint in the regulation of spam.49
Some of the further criticisms of section 45 include:50
(a) It's not stipulated how the opt-out mechanism should be made available, therefore most spam doesn't have an opt-out link or if it does, it's dysfunctional;
(b) Spammers disguise or falsify their headers, that part of an email that tells us who sent the email, the sender's email address, time, date, and etcetera, and a person cannot opt-out because they are unable to trace or identify the real spammer. This is problematic because this practice is not prohibited or penalised;
(c) If a person uses the opt-out mechanism or they request information on where the spammer obtained the address, the recipient confirms that the address is alive and functional, with the result that even more spam will be sent, often from a number of new sources;
(d) The onus is always on the consumer to request spammers to stop or to obtain information to lay a complaint which in turn means if the consumers don't exercise their rights, the spammers can continue to send the spam and remain unsanctioned; and
(e) Finally, most spam originates from outside of South African jurisdiction, which makes enforcement of these rights very difficult, and the result is that few, including under-resourced law enforcement offices, will take the time, effort or money to locate and litigate against an offender for a maximum penalty of twelve months in jail.
It is therefore clear that the opt-out mechanism and section 45 of the ECT Act is ineffective in dealing with the problems of spam.
3 2 The Consumer Protection Act 68 of 2008
3 2 1 Application
The CPA applies to each transaction occurring in South Africa, unless it is exempted and includes the promotion, performance or supply of goods or services, the goods and services themselves as well as goods that are a part of certain exempted transactions.51
This means that most entities supplying goods or services in South Africa and the transactions that they enter into with the consumers will fall within the ambit of the Act. The supplier is defined as the person who markets (promotes or supplies) any goods or services, while a service provider is the person who promotes, supplies or offers to supply a service.52 Therefore the CPA mainly regulates the marketing of goods and services to consumers.53 The consumer includes both natural person consumers and small to medium-sized juristic person consumers whose asset value or annual turnover at the time of the transaction is less than the monetary threshold of two million rand, calculated in accordance with the schedule,54 to whom goods or services are marketed, who have entered into transactions with suppliers, in the ordinary course of business of the supplier. It may also include a user, recipient or beneficiary of the goods or services and a franchisee.55
To get a precise delineation of the scope of application of this Act, it is necessary to define some of the other key concepts used in section 5(1), which include the terms "transaction", "goods" and "services":
(a) 'Transaction' refers to a transaction, in the ordinary course of business, which is an agreement between two or more persons for the supply or potential supply of goods or services, the supply of any goods to or at the direction of a consumer or the performance of any services by or at the direction of the consumer in exchange for consideration. Consideration would be anything of value, given and accepted, in exchange for the goods or services.56 For the online consumer it could typically include electronic credit, tokens and tickets, money, property, awards, undertakings, loyalty credit and the rights to assert a claim.57 Under section 5(6) there are certain arrangements that may also be considered 'transactions' between a 'supplier' and a 'consumer' under the Act. These 'deemed transactions' include the supply of goods or services in the ordinary course of the supplier's business, to any members of a club, trade union, association or society and this is true even if the service or goods are provided free of charge.58
(b) Goods and services include anything marketed for human consumption; any tangible object including any medium on which anything is or may be written or encoded; any literature, music, photograph, motion picture, game, information, data, software, code or other intangible product written or encoded on any medium, or a licence to use any such intangible product; a legal interest in land or any other immovable property, other than an interest that falls within the definition of "service" in this section; and gas, water and electricity.59 While services include work; undertakings; the provision of: Education, information, advice, transportation, accommodation, entertainment; access to electronic communication infrastructure, events, premises, activities, facilities; the use, rental, and right of occupancy, and etcetera.60
Despite the very wide-ranging and broad definitions discussed above, the CPA does not apply to everyone or everything. The exemptions to the Act are listed in sections 5(2)(a)-(g) and sections 5(3)-(4) and relate to goods and services promoted to the State where the consumer is an exempt juristic person, transactions exempted by the Minister, credit agreements under the NCA (the CPA does however still apply to the goods and services sold in terms of a such a credit agreement), services under an employment contract, and the provision of education, information, advice, consultations, banking services or related financial services that are regulated under the Financial Advisory and Intermediary Services Act,61 the Long-term Insurance Act62 and the Short-term Insurance Act.63
Finally, the CPA does not, in general, apply to pre-existing transactions and agreements except to the limited extent set out in item 3 of Schedule 2 to the Act.
3 2 2 Regulation
The CPA has placed a great deal of emphasis on honest, fair and responsible conduct when marketing goods and services.
"Direct marketing" has the following pertinent elements:
• It is an approach to a person;
• either in person or by mail or electronic communication;
• with the direct or indirect purpose of promoting or offering to supply any goods or services;
• in the course of business;
• or to request a donation.64
An "electronic communication" for the purposes of "direct marketing" under the CPA is a communication by means of electronic transmission including telephone, fax, sms, wireless computer access, email or similar technology or device.65
To regulate direct marketing, section 11 of the CPA sets out the consumer's right to restrict unwanted direct marketing. Regulation 4 of the CPA Regulations sets out the practical rules for controlling direct marketing communications.66
In essence, the section relating to the consumer's right to restrict unwanted direct marketing is welcome relief and long overdue. It sets out that a consumer has the right to:
• Refuse to accept;
• require another person to discontinue; or
• pre-emptively block any approach or communication if the approach or communication is primarily for the purpose of direct marketing.67
In order to facilitate this, the National Consumer Commission,68 will establish a registry where a person may register a pre-emptive block against direct marketing communications and any person authorizing, directing or conducting any direct marketing must implement appropriate procedures to facilitate demands to stop further communications.69
Once the registry is established, Regulation 4(3)(c), provides that a consumer may register:
(a) his or her name, identification number, passport number, telephone number, facsimile number, email address, postal address, physical address, a website uniform resource locator (URL);
(b) other global address for any website or web application or site on the World Wide Web;
(c) any combination of the media or addresses contemplated in paragraphs (i) and (ii) above;
(d) a pre-emptive block for any time of the day or any day of the year; or
(e) a comprehensive prohibition for any medium of communications, address or time whatsoever in his or her sole discretion, as the factor which triggers the pre-emptive block contemplated in section 11(3) of the CPA.
Most importantly, a direct marketer must, without exception, assume that a comprehensive pre-emptive block has been registered by a consumer unless the administrator of the registry has given written confirmation that the pre-emptive block has not been registered.70
Section 32(2) of the CPA contains a dire warning for direct marketers in that, when any person who has marketed goods and left these goods with the consumer without requiring or arranging for payment, those goods become unsolicited goods to which section 21 applies. Section 21 allows consumers under certain circumstances, to keep the goods without an obligation to pay.71
3 2 3 Commentary
The CPA's field of application is wider than that of the ECT Act's section 42 in that small to medium-sized juristic persons are protected and no distinction is made between natural persons whether end users or not.
The scope of the CPA's protection granted to consumers differs slightly from the ECT Act's section 45 because, with the CPA, the protection is granted for direct marketing via an electronic communication as well as requests for donations of any kind, whereas the ECT Act relates only to UCE. UCE is arguably slightly wider than just a direct marketing electronic communication.
The consumers' right to restrict unwanted direct marketing and to preemptively block any approach or communication if the approach or communication is primarily for the purpose of direct marketing is welcome relief and long overdue.
However, reflecting on the criticisms of section 45 of the ECT Act in paragraph 3.1.3 above, it is clear that a number of issues remain problematic, such as the limitation of the protection to the narrower concept of direct marketing and the fact that the problem of falsified headers is not addressed.
3 3 The Protection of Personal Information Act 4 of 2013
3 3 1 Application
South Africa has enacted its first comprehensive data protection legislation.72 The PPI Act applies to the processing of personal information entered into a record by or for a responsible party by making use of automated or non-automated means; provided that when the recorded personal information is processed by non-automated means, it forms part of a filing system or is intended to form part thereof.73 This Act applies to all public and private bodies.74
Of particular importance for the field of application of the Act are the definitions of "processing" and "personal information". Section 1 of the PPI Act defines "personal information" as:
... information relating to an identifiable, living, natural person, and where it is applicable, an identifiable, existing juristic person, including, but not limited to - (a) information relating to the race, gender, sex, pregnancy, marital status, national, ethnic or social origin, colour, sexual orientation, age, physical or mental health, well-being, disability, religion, conscience, belief, culture, language and birth of the person; (b) information relating to the education or the medical, financial, criminal or employment history of the person; (c) any identifying number, symbol, e-mail address, physical address, telephone number, location information, online identifier or other particular assignment to the person; (d) the biometric information of the person; (e) the personal opinions, views or preferences of the person; (f) correspondence sent by the person that is implicitly or explicitly of a private or confidential nature or further correspondence that would reveal the contents of the original correspondence; (g) the views or opinions of another individual about the person; and (h) the name of the person if it appears with other personal information relating to the person or if the disclosure of the name itself would reveal information about the person.
Whilst "processing" is designated as any operation or activity or any set of operations, whether or not by automatic means, concerning personal information, including:
... (a) the collection, receipt, recording, organisation, collation, storage, updating or modification, retrieval, alteration, consultation or use; (b) dissemination by means of transmission, distribution or making available in any other form; or (c) merging, linking, as well as restriction, degradation, erasure or destruction of information.75
Processing is so widely defined that it is clearly intended to cover any action that could possibly be executed in respect of personal information.
However, this Act will not apply to the processing of personal information that is done in the course of a purely personal or household activity; that has been de-identified to the extent that it cannot be re-identified again; processing by or on behalf of a public body for national security, including activities that are aimed at assisting in the identification of the financing of terrorist and related activities, defence or public safety; or the purpose of which is the prevention, detection, including assistance in the identification of the proceeds of unlawful activities and the combating of money laundering activities, investigation or proof of offences, the prosecution of offenders or the execution of sentences or security measures, to the extent that adequate safeguards have been established in legislation for the protection of such personal information.76
The Act is also not applicable where the processing takes place for exclusively journalistic, literary or artistic purposes to the extent that such exclusion is necessary to reconcile, as a matter of public interest, the right to privacy with the right to freedom of expression. Where a responsible party, who processes personal information for exclusively journalistic purposes is, by virtue of office, employment or profession, subject to a code of ethics that provides adequate safeguards for the protection of personal information, such code will apply to the processing concerned to the exclusion of the Act and, any alleged interference with the protection of the personal information of a data subject that may arise as a result of such processing must be adjudicated as provided for in terms of that code.77
Finally, the Regulator may exempt a responsible party from the application of the Act if satisfied that in the circumstances of the case, the public interest in the processing outweighs, to a substantial degree, any interference with the privacy of the data subject that could result from such processing; or the processing involves a clear benefit to the data subject or a third party that outweighs, to a substantial degree, any interference with the privacy of the data subject or third party that could result from such processing.78 The Regulator may however, impose reasonable conditions in respect of any exemption granted.79
3 3 2 Regulation
The PPI will repeal and replace amongst others, section 45 of the ECT Act.80 This section will be replaced with Chapter 8, sections 69-71, setting out the rights of data subjects regarding direct marketing via unsolicited electronic communications, directories and automated decision making.
The PPI Act is an improvement on section 45 of the ECT Act, in-so-far as it prohibits the processing of personal information for direct marketing purposes unless the data subject has given consent to the processing (that is, an opt-in system); or is, subject to subsection (3), a customer of the responsible party.81
"Consent" is defined as any voluntary, specific and informed expression of will in terms of which permission is given for the processing of personal information.82
In terms of section 69(3), a responsible party may therefore only process the personal information of a data subject who is a customer of the responsible party if the responsible party:
... (a) has obtained the contact details of the data subject in the context of the sale of a product or service; (b) for the purpose of direct marketing of the responsible party's own similar products or services; and (c) if the data subject has been given a reasonable opportunity to object, free of charge and in a manner free of unnecessary formality, to such use of his, her or its electronic details either: (i) at the time when the information was collected; or (ii) on the occasion of each communication with the data subject for the purpose of marketing if the data subject has not initially refused such use.
Section 69(4) of the PPI Act also requires any communication for direct marketing to contain the details of the identity of the sender or the person on whose behalf the communication has been sent; and an address or other contact details to which the recipient may send a request that such communications cease.
The data subject who is a subscriber to a printed or electronic directory of subscribers that is available to the public or obtainable through directory enquiry services, in which his, her or its personal information is included,
... must be informed, free of charge and before the information is included in the directory -
(a) About the purpose of the directory; and
(b) about any further uses to which the directory may possibly be put, based on search functions embedded in electronic versions of the directory.83
The data subject must, furthermore, be given a reasonable opportunity to object to the use of the personal information or to request verification, confirmation or withdrawal of such information if he, she or it has not initially refused such use.84
A subscriber is any person who is party to a contract with the provider of publicly available electronic communications services for the supply of such services.85
On automated decision making, section 71 stipulates that no one may be subject to a decision that has legal consequences, or which affects them to a substantial degree, if it is taken solely on the basis of the automated processing of personal information intended to provide a profile of certain aspects of his or her personality or personal habits such as performance at work, credit worthiness, reliability, location, health, personal preferences or conduct.
The provisions of section 71(1) do not apply if the decision has been taken in connection with the conclusion or execution of a contract and:
• The request of the data subject in terms of the contract has been met;
• appropriate measures have been taken to protect the data subject's legitimate interests; or
• it is governed by a law or code in which appropriate measures are specified for protecting the legitimate interests of data subjects.86
The appropriate measures, referred to above must:
• Allow for an opportunity for a data subject to make representations about such a decision; and
• require a responsible party to provide a data subject with sufficient information about the underlying logic of the automated processing of the information relating to him or her so that representations in this respect can be made.87
3 3 3 Commentary
The opt-in model requiring prior consent before sending direct marketing material as adopted by the PPI Act, is definitely an improvement on the ECT Act opt-out model, as are the provisions on directories and automated decision making.
It is noted with disappointment however, that section 69(2) is included in the PPI Act. This section allows a responsible party to approach a data subject once, to request consent for the sending of direct marketing material, provided that consent has not previously been withheld.
This allowance is strongly opposed due to its scope for abuse and because, in essence, it reverts back to an opt-out model. In fact, by allowing a responsible party to process personal information "once" to make the approach to get consent, the prohibition in section 69(1) is reduced to a second level protection mechanism. That is, it only becomes relevant after the approach has been made. It is also contrary to the position established in the CPA where a direct marketer must, without exception, assume that a comprehensive pre-emptive block has been registered by a consumer.88
The definitional variances between the ECT Act,89 the CPA90 and PPI for electronic communication91 should be carefully considered and harmonised as far as possible. One example will suffice to illustrate the point. The PPI limits its prohibition on the processing of personal information to an electronic communication for direct marketing in the form of text, voice, sound or image that is sent over an electronic communications network. Direct marketing online may not limit its activities to the sending of text, sound, voice or image. It also includes collecting data through software and cookies which are data files. This sort of processing is also not protected under the automated decision making provisions because they don't necessarily have a legal consequence attached to them. It is therefore suggested that the wider CPA or ECT Act definitions which would be sufficiently wide to include actions like data collection via software and the communication of data files be used instead.
A number of the criticisms of section 45 of the ECT Act have also not been adequately addressed in either the PPI or CPA. For example, section 69(4) does not stipulate what, how or where contact details should be displayed for the purposes of requesting a sender to cease sending any further communications. Neither the PPI nor the CPA outlaw the disguising of headers in electronic communications, as is the trend in other jurisdictions. Finally, consideration should be given to extraterritorial reach of national laws.
3 4 The Proposed Draft ECT Act Amendment Bill [2012]
3 4 1 Application
Essentially, the scope of application for the consumer protection provisions of the ECT Act remain unchanged with the exception of a welcome change to the definition of a "consumer" and a clarification on the definition of an "electronic transaction".
The first notable change contained in the ECT Act Amendment Bill is to change the definition of a "consumer" to resemble that in the CPA Act. Thus, in terms of the application of the consumer protection provisions of chapter 7 of the ECT Act, they would protect both natural person consumers and small to medium-sized juristic person consumers whose asset value or annual turnover, at the time of the transaction, is less than the monetary threshold of two million rand, calculated in accordance with the schedule,92 to whom goods or services are marketed, who have entered into transactions with suppliers in the ordinary course of business of the supplier. It may also include a user, recipient or beneficiary of the goods or services and a franchisee.93
The amendment also introduces a definition for an "electronic transaction" which was previously undefined and left open to speculation. This definition confirms and clarifies the application of chapter 7.94
3 4 2 Regulation
The ECT Act Amendment Bill proposes that section 45 be retained or re-enacted and amended to read as follows:
(1) No person may send unsolicited communications without the permission of the consumer to whom those unsolicited communications are to be sent or are in fact sent.
(2) No agreement is concluded where a consumer has failed to respond to an unsolicited communication.
(3) Any person who fails to comply with or contravenes subsection (1) is guilty of an offence and liable, on conviction, to a fine not exceeding R1 million or imprisonment for a period not exceeding 1 year.
The ECT Act Amendment Bill also defines an unsolicited communication, in relation to a data message regarding goods or services, to mean that the data message has been transmitted to a consumer by or on behalf of a supplier without the consumer having expressly or implicitly requested that data message.
3 4 3 Commentary
This "new" section 45 proposes to prohibit anyone from sending unsolicited data messages without consent. At first glance, such a wide definition may infringe on the constitutionally protected right to freedom of expression. However, if one reads the definition of "unsolicited communication" it becomes clear that it is only a data message regarding goods and services, which is essentially the same as an UCE, and therefore this does not materially alter the current position.
4 Conclusion
The authors submit that spam and direct marketing online have not been given holistic attention, hence the fragmented approach we find in the ECT Act, CPA, PPI and the ECT Act Amendment Bill. This will result in inadequate protection for consumers and an inability to effectively control spam or regulate online direct marketing.
In trying to enforce the regulatory framework in an online environment the enforcer will have to consider: The different fields of applications for each Act; the different definitions for terms like "electronic communication"; and more importantly, the overlapping and sometimes conflicting web of legislative provisions applicable to direct marketing or unsolicited commercial electronic communications.
While, for the rest, we have to just live with the continuous stream of newsletters, opinion surveys, religious messages, political content, virus warnings and virus hoaxes, urban legends, news, chain letters, hate-mail and any carefully crafted electronic communication that contains fraudulent or deceptive content that will more than likely fall through the regulatory net as a non-commercial communication.
1 Such as The Code of Banking Practice available at http://bit.ly/1bxMKXQ; The Direct Marketing Association codes for Interactive and Direct Marketing available at http://bit.ly/169NdRK; and The Wireless Application Service Providers Association (WASPA) codes of conduct, advertising rules and a dispute resolution mechanism for members and consumers of the mobile services industry available at http://bit.ly/1gK1XJ9 (accessed 201308-27).
2 Act 25 of 2002.
3 Act 68 of 2008.
4 Act 4 of 2013.
5 The Protection of Personal Information Act 4 of 2013 was enacted in terms of GN 912 in GG 37067 of 26 November 2013. In accordance with s115, the PPI Act will commence on a date determined by the President by proclamation in the GG which has to date not transpired.
6 See the schedule to the PPI Act which will also repeal ss 50 & 51 of the ECT Act.
7 Electronic Communications and Transactions Amendment Bill [2012].
8 GN 888 in GG 35821 of 26 Oct 2012.
9 Papadopoulos "Are we about to cure the scourge of spam? A commentary on current and proposed South African legislative intervention" 2012 THRHR 223-240 and Papadopoulos and Snail (Ed) Cyberlaw@SA III: The law of the internet in South Africa (2012) 63-93.
10 The previous version of the PPI Bill [B9-2009] was published in GG 32495 of 14 Aug 2009.
11 Buys and Cronje (Eds) Cyberlaw@SA II: The law of the internet in South Africa (2004) 160; Van der Merwe, Roos, Pistorius & Eiselen Information and Communication Technology Law (2008) 190.
12 Yordaan "Factors motivating consumers to engage in direct purchasing" 2005 South African Journal of Psychology 346; [ Links ] Dibb, Simkin, Pride & Ferrell Marketing concepts and strategies (2012) 491. [ Links ]
13 The CPA refers to "an approach to a person" while the PPI relates to "an approach to a data subject". For the purposes of this article the definition of electronic communication is important. In section 1 of the CPA it is defined as "... a communication by means of electronic transmission, including by telephone, fax, SMS, wireless computer access, email or any similar technology or device" and in section 1 of the PPI Act as "... any text, voice, sound or image message sent over an electronic communications network which is stored in the network or in the recipient's terminal equipment until it is collected by the recipient".
14 Papadopoulos et al 205.
15 For e.g. see Google Adwords. Google Adwords "See how it works". Available at http://bit.ly/1arOsNu (accessed 2013-11-05).
16 Stokes eMarketing - The Essential Guide to Digital Marketing (2011) 334, available at: http://bit.ly/173skTv (accessed 2013-10-16). Such as Facebook.com, Twitter.com & Pinterest.com. which provide platforms for direct marketers to communicate directly with potential customers by creating content to which customers can respond.
17 Stokes 224. Affiliates promote products and services for each other and get some form of payment upon the occurrence of a specified event.
18 For e.g. see www.groupon.co.za (accessed 2013-10-16).
19 McDaniel, Lamb & Hair Introduction to Marketing (2013) 185-1 86, 275, 281; Dibb et al 25, 29.
20 Email spoofing may appear in different forms, but all have a similar result: i.e. a user receives email that appears to have originated from one source when it actually was sent from another source. Email spoofing is often an attempt to trick the user into making a damaging statement or releasing sensitive information such as passwords. Tladi "The regulation of unsolicited commercial communications (SPAM): is the opt-out mechanism effective?" 2006 SAMLJ 181.
21 Information can be harvested (collected) when people make their email addresses public by placing advertisements online, inquiring about offers, services or products, participating in news rooms, chat rooms and the like, or entering an email address for a legitimate transaction. This information is easily harvested, collated and sold as a database, mostly without an Internet user's knowledge or consent. Geissler Bulk Unsolicited Electronic Messages (SPAM): a South African perspective (LLD dissertation 2004 (UNISA)) 36.
22 Software is also available that can randomly generate millions of random addresses or numbers and messages are sent out en masse, entering the in-boxes of email addresses that are functional in a particular domain such as for e.g. "mweb.co.za". Many of these addresses have very slight variations such as email@example.com, firstname.lastname@example.com, email@example.com, etc. The software then records which addresses are functional or "live" and email lists are generated and sold. Papadopoulos et al 86; Tladi 2006 SAMLJ 181; Geissler 36-37.
23 Spyware is software that is surreptitiously installed on a computer that performs certain behaviors, generally without appropriately obtaining your consent first, such as: advertising; collecting personal information and changing the configuration of your computer. Spyware is often associated with software that displays advertisements (called adware) or software that tracks personal or sensitive information. Spyware programs can collect various types of personal information, but can also interfere with user control of the computer in other ways, such as installing additional software, redirecting Web-browser activity, or diverting advertising revenue to a third party. Tladi 2006 SAMLJ 181.
24 A cookie is a file that a website can store on an Internet user's computer's hard-drive. It allows a website to store information on a user's computer and later retrieve it. Cookies usually contain the name of the website that sent the cookie, an Internet Protocol (IP) address, an expiry date, a time and date when the cookie was created, a user's preference for language or preferred currency, and it may also contain information about the user's email address, and general Internet browsing habits and even information on a user's common keystrokes and mouse movements, postal address (particularly when personal information is entered for the completion of an online order form). Ebersohn "Internet law: cookies, traffic data and direct advertising practices" (2004) SAMLJ 741, 742.
25 Phishing is the name given to online identity theft implemented by sending an e-mail or other communication that deceptively claims, or appears to be, from an established and legitimate company (usually a bank). Its aim is to try and deceive users into disclosing their personal information, such as credit card numbers or banking passwords. Frequently these messages or the websites that they link to, also try to install malicious code. This information obtained by phishers is used to access bank accounts and withdraw money, or to open new bank or credit card accounts in the victim's name, causing major financial losses to those involved. OECD Anti-spam toolkit of recommended policies and measures (2006) 21-22.
26 McDaniel & Darden Marketing (1987) 4-5.
27 Papadopoulos et al 85; Geissler 1 8, 88-90.
28 Geissler 28-32.
29 ECT Act s45.
30 CPA si & PPI Act si.
31 Buys et al 160; Geissler 24-25.
32 The Federal Communications Commission Consumer Facts: CAN-SPAM Act "Unwanted text messages and e-mail on wireless phones and other mobile devices." Available at http://fcc.us/1fG1rur (accessed 2013-10-01).
33 Buys et al 160.
34 Geissler 25.
35 Idem 25, 29.
36 Buys et al 161.
37 Geissler 26-28.
38 Idem 30.
39 ECT Act s4 & schs 1 & 2.
40 Papadopoulos et al 65.
41 ECT Act s1.
42 ECT Act s1 definition where data means electronic representations of information in any form.
43 Papadopoulos et al 65.
44 ECT Act s1.
45 Van der Merwe et al 182.
46 Papadopoulos et al 85. See par 3.2.1 (c) below.
47 ECT Act s89.
48 Papadopoulos et al 86; Tladi 2006 SAMLJ 186-187.
49 Papadopoulos et al 86; Van der Merwe et al 190-191; Tladi 2006 186-187; Geissler 121-131; Buys et al 165-166.
50 Tladi 2006 SAMLJ 186-187.
51 CPA s5(1). Under s5(1)(d) and s5(5) if any goods are supplied within the Republic to any person in terms of a transaction that is exempt from the application of the CPA, the goods and importer or producer, distributor or retailer are still subject to ss60 & 61 which relate to safety monitoring, recall and strict product liability. The exemptions are listed in s5(2) and relate to goods and services promoted to the state, where the consumer is an exempt juristic person, transactions exempted by the Minister, credit agreements under the NCA, services under an employment contract, etc..
52 CPA s1.
53 CPA s5(7). It also regulates the relationship between franchisors and franchisees.
54 See GN 294 in GG 34181 of 2011-04-01.
55 CPA s1 where a "juristic person" includes - (a) a body corporate; (b) a partnership or association; or (c) a trust as defined in the Trust Property Act, 1988 (Act No. 57 of 1988).
56 CPA s1.
57 CPA s1, where consideration also includes cheques, negotiable instruments, credits or debits, electronic chips, labour, barter, coupons, undertakings, promises or agreements.
58 S5(6) also regulates transactions that relate to franchising agreements. It is assumed by the authors that franchise agreements fall outside the typical scope of online consumer law or E-commerce law and, therefore, the provisions directly applicable to franchising have not been included in this discussion.
59 CPA s1.
60 Ibid.
61 37 of 2002.
62 52 of 1998.
63 53 of 1998.
64 See CPA s1 for definition of "direct marketing".
65 CPA s1.
66 See GN 293 in GG 34180 1 April 2011.
67 CPA s11(1) (a)-(c)A.
68 Established by CPA s85.
69 Idem s11(2)-(4).
70 Reg 4(3)(g).
71 CPA s21.
72 Which was first conceived of by the SALRC "Privacy and data protection" Discussion Paper 109, Project 124, available at www.doj.gov.za/salrc (accessed 2013-11-05). Available at http://bit.ly/1bxNLiC (accessed 2013-1105). The commencement date has to still be announced in the GG.
73 PPI Act s3.
74 PPI Act s1 defines a "private body" as "... (a) a natural person who carries or has carried on any trade, business or profession, but only in such capacity; (b) a partnership which carries or has carried on any trade, business or profession; or (c) any former or existing juristic person, but excludes a public body" and a "public body" as "... (a) any department of state or administration in the national or provincial sphere of government or any municipality in the local sphere of government; or (b) any other functionary or institution when - (i) exercising a power or performing a duty in terms of the Constitution or a provincial constitution; or (ii) exercising a public power or performing a public function in terms of any legislation".
75 PPI Act s1 definition of "processing".
76 PPI Act s6.
77 Idem s7.
78 Idem s37(1). The public interest referred to includes: (a) the interests of national security; (b) the prevention, detection and prosecution of offences; (c) important economic and financial interests of a public body; (d) fostering compliance with legal provisions established in the interests referred to under paragraphs (b) and (c); (e) historical, statistical or research activity; or (f) the special importance of the interest in freedom of expression.
79 PPI Act s37(3).
80 PPI Act sch..
81 Idem s69(1).
82 Idem s1.
83 PPI Act s70.
84 PPI Act s70(2), but, in terms of s70(3), ss (1) & (2) do not apply to editions of directories that were produced in printed or off-line electronic form prior to the commencement of this section and in terms of s70(4), if the personal information of data subjects who are subscribers to fixed or mobile public voice telephony services have been included in a public subscriber directory in conformity with the information protection principles prior to the commencement of this section, the personal information of such subscribers may remain included in this public directory in its printed or electronic versions, after having received the information required by ss1.
85 PPI Act s70(5).
86 PPI Act s71(2).
87 PPI Act s71(3).
88 Reg 4(3)(g).
89 ECT Act s1 "electronic communication" means a communication by means of data messages.
90 CPA s1 where an "electronic communication" means communication by means of electronic transmission, including by telephone, fax, SMS, wireless computer access, email or any similar technology or device.
91 PPI Act s1 where it is any text, voice, sound or image message sent over an electronic communications network which is stored in the network or in the recipient's terminal equipment until it is collected by the recipient.
92 The determination of threshold in terms of the CPA of 2008 (Act no 68 of 2008) appeared, in the Government Gazette No 34181, GN No 294 on 2011-04-01. The CPA does not apply to a transaction where the consumer is a juristic person, whose annual turnover or asset value, at the time of the transaction, equals or exceeds the monetary threshold of two million rand calculated in accordance with the Schedule to the Regulation.
93 CPA s1 & Van Eeden (2009) 41.
94 An electronic transaction shall mean a transaction conducted using electronic communications.


text:
Atmospheric Sciences & Global Change
Research Highlights
February 2014
Distant Desert Dust Increases Snowpack in California
Local pollution's influence less impressive on Sierra Nevada Mountains' precipitation
Snow melt from the Sierra Nevada Mountains is the major fresh water supply for California. The Tinemaha Reservoir is at the base of the Eastern Sierra Nevada and is part of the Los Angeles Aqueduct system. Photo courtesy of Creative Commons license. Enlarge Image.
Results: Overseas dust influences the Sierra Nevada Mountains snowpack far more than home-produced pollution, according to scientists at Pacific Northwest National Laboratory. By modeling two cloud conditions during a field experiment called CalWater 2011, their results showed that dust blown in possibly from Asia and Africa increases snow in winter clouds over California and increases precipitation by 10 to 20 percent. However, local pollution from California cities and the Central Valley exerts a very small impact on snowfall. Further, the local pollution's influence on rain from warm clouds heavily depends on cloud conditions and the strength of a low level jet caused by mountain blocking that blows parallel to the Sierra Nevada Mountains.
"We used observational data captured in the clouds and on the surface to better understand how cloud ice forms in the presence of dust particles and simulated this process in models," said Dr. Jiwen Fan, PNNL atmospheric scientist and lead author of the study. "We compared the impact of long-range transported dust and local pollution on cold-season precipitation in contrasting cloud and meteorological conditions."
Why It Matters: The largest source of fresh water and irrigation in California is snow melt from the Sierra Nevada Mountains. Regional water resource managers and planners must understand the environmental and climate influences on California's precipitation and water supply sources. This need propelled the CalWater 2011 field campaign. Understanding the complex factors that impact precipitation and mountain snowpack will help improve regional climate predictions and far-reaching effects on populations and food supply.
Data collected in February and March, 2011, show dust has a greater effect on precipitation than does pollution. Dust effects on precipitation under clean (solid red line) and polluted (dashed red line) conditions; pollution effects on precipitation under dust (solid blue line) and no-dust (dashed blue line) conditions. Enlarge Image.
Methods: The research team led by PNNL's Dr. Jiwen Fan conducted high-resolution simulations using the Weather Research and Forecasting (WRF) model with a very detailed cloud microphysical model for two winter mixed-phase (liquid and ice) cloud cases. They used ground-based, aircraft and satellite data collected during the CalWater field campaign on February 16 and March 2, 2011. The simulations were highly detailed and computationally expensive. To improve the model representations of ice nucleation processes, they employed a state-of-the-art ice formation representation to connect dust with ice nucleation processes and used field campaign data from PNNL-operated Gulfstream-1 aircraft to validate the simulated clouds.
What's Next? A second field campaign called CalWater 2 / ARM Aerosol-Cloud-Precipitation Experiment (ACAPEX) will be conducted over the same region, but with additional measurements over the Pacific Ocean. Researchers will collect more data to systematically study the aerosol impact on snow and regional precipitation in California and improve models that can be used to better simulate aerosol effects on precipitation regionally and globally.
Sponsors: This study was supported by the California Energy Commission (CEC) and the U.S. Department of Energy (DOE) Office of Science Biological and Environmental Research program as part of the Regional and Global Climate Modeling program. The G-1 is base-funded by the DOE's Atmospheric Radiation Measurement (ARM) Climate Research Facility and the deployment of the G-1 during the CalWater campaign was supported by CEC. PNNL Institutional Computing resources were used for the study simulations.
Research Team: Jiwen Fan, L. Ruby Leung, Jennifer Comstock, Balwinder Singh and Jason Tomlinson, PNNL; Paul DeMott, Colorado State University; Daniel Rosenfeld, The Hebrew University of Jerusalem; A. White, National Oceanic and Atmospheric Administration; Kim Prather, Scripps Institution of Oceanography, UC San Diego; P Minnis, NASA Langley Research Center; JK Ayers, Science Systems and Applications, Inc.; and Q Min, State University of New York at Albany.
Research Area: Climate & Earth Systems Science
Reference: Fan J, LR Leung, PJ DeMott, JM Comstock, B Singh, D Rosenfeld, JM Tomlinson, A White, KA Prather, P Minnis, JK Ayers and Q Min. 2014. "Aerosol Impacts on California Winter Clouds and Precipitation during CalWater 2011: Local Pollution versus Long-range Transported Dust." Atmospheric Chemistry and Physics 14:81-101. DOI:10.5194/acp-14-81-2014


text:
For those wanting to mod their console or having problems running software including games and emulators on your console.
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The coupons included in an insert do vary by region, if you do not see a coupon in the pictures then it is not available in this insert in my area. So please look them over carefully to be sure you know what you are ordering.
Sunday, August 10, 2014
SOLD OUT 08/10/2014 Red Plum Whole Coupon Inserts
This is the Red Plum from my area for 8/10 Please click on a picture if you would like to see a larger image.
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text:
Statement by Stephen C. Goss,
Deputy Chief Actuary
Social Security Administration
before the Senate Special Committee on Aging
August 26, 1997
Mr. Chairman and Members of the Committee:
I appreciate your invitation to discuss the status of Social Security's Old Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds. I plan to provide some background on how the trust funds operate and to discuss the 1997 Trustees Report
Background on Trust Funds
Social Security cash benefits are paid under two programs enacted as title II of the Social Security Act. Th programs are Old-Age and Survivors Insurance (OASI) ehich pays monthly benefits to retired workers and their dependents and to survivors of deceased workers, and DIsability Insurance (DI), which pays benefits to totally disabled workers and their families. OASI and DI are financed form Social Security payroll taxes (now 6.2 percent each on employers and employees) and self-employment taxes (12.4 percent), from interest on investments, and from the proceeds of income taxation of Social Security benefits.
Although most of OASI's and DI's current revenues are used to pay for immediate expenses, excess receipts are credited to the trust fund for each program. The excess receipts of the OASI and DI Trust Funds are invested in special issue United States Government bonds. The yield on these special issue bonds equals the average return on all outstanding long-term debt of the United States. The recent yield in real terms has been between 3 and 4 percent, and is assumed to average 2.7 percent in real terms over the long run.
The restrictions in the law limiting investments of excess Social Security receipts to interest-bearing obligations of the United States or obligations whose principal and interest are guaranteed by the United States has traditionally been justified as ensuring the most safety of principal and stability of interest. This policy has also been viewed as a way of avoiding intrusion into private markets of the affairs of State or local governments.
From its inception in 1935, the Social Security program has been financed on close to a pay-as-you-go basis, with current costs met from current revenues and relatively small excess amounts hled in the trust funds. Rather than providing a mechanism for advance funding future benefit obligations of the system, the trust funds have served laregly as a contigency reserve, an accounting of excess obligational authority on the books of the Treasury.
Most experts have agreed over the years that this contingency reserve shoudl equal about 100 to 150 percent of the following year's annual expenditures in order to assure continuation of benefits in the event of short-term adverse circumstances, of either an economic or non-economic nature, that night cause unanticipated revenue shortfalls or benefit expenditures.
The Social Security Amendments of 1977 and 1983 have created a temporary period wher ethe Trust Funds will build up reserves beyond the level needed for a contigency reserve. Currently, the combined OASI and DI Trust Funds are projected to peak at 265 percent of annual program cost in the year 2011.
The 1997 Trustees Report
The 1997 Trustees Report tells u sthat the assets of the combined funds increased by $70.9 billion, from $496.1 billion at the end of December 1995 to $567.0 billion at the end of December 1996. In 1996, the Social Security trust funds took in $424.5 billion and paid out $353.6 billion. In additiona, the combined assets of the OASI and DI Tryst Funds are expected to increase from the current level of about $600 billion to over $2 trillion in 2011, or from about 160 percent of annual expenditures to about 265 percent of annual expenditures. thus, the combined OASI and DI Trust Funds, as well as each fund seperately, are adequately financed and meet the short-range test for financial adequacy for the next ten years.
The Trustees also assess the actuarial status of the trust funds over the next 75 years, the period which is considered long range for program evaluation purposes. The OASI and DI programs are out of actuarial balance for the period ending in 2071. Actuarial balance is essentially the difference between annual income and costs summarized over a given period. If the balance is negative, as it is now, the fund has an actuarial deficit.
The deficit is generally expressed in terms of a percentage of taxable payroll rather than dollars because the value of a dollar changes over time. The deficit in this year's Report for the OASDI program changed very little from last year's Report, rising from 2.19 percent of taxable payroll to 2.23 percent.
In addition, the combined OASDI and seperate OASI and DI programs do not satisfy the long-range test of close actuarial balance. This test essentially requires that the expected income for the program be at least 95 percent of the expected cost of the program over the 75-year period as a whole. In the 1997 Trustees report, the income of the OASDI program is projected to be about 86 percent of the cost of the program over the long-range period.
As has been true throughout the program's histpry, administrative expenses for the OASDI program were small in relation to benefits. Administrative expenses actually decreased by $0.2 billion compared to last year and amounted to $3.0 billion in 1996, of about 0.9 percent of benefits paid during the year.
Interest earnings on the invested assets of the combined OASI and DI trust Funds were $38.7 billion in 1996. This represented an effective annual interest rate of 7.6 percent earned by the combined assets during the year. During the same period, the average interest rate on new securities purchased b the trust funds was 6.6 percent.
The Trustees develop three alternative sets of estimates based on varying economic and demographics assumptions to show a range of possibilities regarding the financial condition of the trust funds. These estimates range from low cost (alternative I) to high cost (alternative III). Alternative II, the intermediate set of assumptions, reflects the Trustees' best estimate of what future experience will be. The projections take into account fertility rates, mortality rates, net immigration rates, productivity increases, unemployment rates, cost of living increases, and other factors, all of which are difficult to predict with very much certainty.
Under the 1997 Trustees Report's intermediate assumptions, the annual combined tax income of the OASDI program will continue to exceed annual expenditures form the funds by more than $30 billion each year through 2006. This excess will then decline, until annual expenditures frm the OASI and DI Trust Funds are projected to become larger that the funds' combined annual tax income for 2012. However, total income, including interest, would continue to exceed expenditures until 2019. The funds would begin to decline in 2019 and would be exhausted in 2029. Each of these three dates is the same as was estimated in last year's Report.
Thus, tax income alone is more than enough to pay benefits in full through the year 2011, and, with the help of the accumulated trust funds, benefits are projected to be payable in full through 2028. Even if no action were taken between now and the year 2029, and the combined trust funds were allowed to become exhausted, continuing payroll taxes and income from taxes on benefits would be expected to generate more than $600 billion in revenues (in constant 1997 dollars) for the Trust Funds in 2029. This is enough income to pay approximately 75 percent of benefit obligations. Even with projected further increases in the cost of the OASDI program throughout the long-range period, the tax income under present law would still be enough to pay over two thirds of benefit obligations in the year 2071.
The Trustees concluded, ... there is ample time to discuss and evaluate alternative solutions with deliberation and care. The size of the long-range deficit is such that long-range balance could be restored within the framework of the present program, or through plans that involve some structural change. Nonetheless, the impact of any required changes will be less disruptive the sooner they are enacted. Addressing the long-range financial imbalance of the OASDI program soon will allow changes to be phased in more gradually and with more advance notice for those affected, allowing more time to make any desired changes in planning for retirement.
Changes from the 1996 Trustees Report
As mentioned earlier, the estimated long-range actuarial deficit of the OASDI program changed from 2.19 percent of taxable payroll for the 1996 Report to 2.23 percent of payroll for the 1997 Report, based on intermediate assumptions. A number of changes contributed to this small change. the mere passage of time, changing the ending year of the long-range period from 2070 to 2071, increased the long-range actuarial deficit by 0.08 percent of taxable payroll, because of the inclusion of the large annual deficit projected for the year 2071.
The net effect of all other changes resulted in partially offsetting improvements to the estimated long-range actuarial balance for the 1997 Report. These changes include (1) modifications based on the latest demographic and economic data, (2) changed CPI- and wage-growth assumptions related to changes made by the Bureau of Labor Satistics in 1995 and 1996 in the measurement of prices for the CPI, (3) new regulations that distribute the date for payment of benefits throughout the month, and (4) an increase in the assumed ultimate real interest rate on long-term Unted States government securities.
Changes from the 1983 Trustees Report
The last comprehensive amendments to the Social Security program, enacted in 1983, were projected at the time to put the OASDI program in actuarial balance for the long-range period ending 2057. The projections in the 1983 Trustees Report indicated that the trust funds would be solvent throughout the period, but would be declining rapidly toward the end of the period and would become exhausted almost immediately after 2057.
Since 1983, a number of changes have been made that have, on balance, worsened the long-range financial projections for the program. Contributing to the currently estimated actuarial deficit of 2.23 percent of payroll in about equal amounts are (1) the gradual change in the long-range valuation period from the period ending with 2057 to the current period ending with the year 2071, (2) changes in ultimate economic assumptions, principally a reduction in the assumed real growth rate in the average wage from 1.5 percent in the 1983 Report to the current assumption of 0.9 percent, (3) increases in the cost of the Disability Insurance program, largely due to higher rates of disability among women and for persons with mental impairments, and (4) changes in the methods used for making long-range projections, primarily improvements in the method for projecting future benefit levels. Modifications in demographic assumptions since 1983, principally higher than expected birth rates between 1984 and 1996 and the asumption that immigration will add more to the United States population, have resulted in partially offsetting improvements in the long-range OASDI actuarial balance.
Clearly, 75-year projections of the cost of the OASDI program should not be considered to be precise predictions or forecasts. Over a period this long, many substantial changes will occur that cannot be predicted. These projections serve rather as a basis for considering the implications of the provisions in current law if economic and demographic trends follow patterns that are deemed to be most likely by the Trustees. Due to the great uncertainty for the future, a range of assumptions is developed to indicate what might occur if trends move in directions that are favorable or unfavorable to the financing of the program.
The favorable, or low-cost, assumptions result in projections where the OASDI program would be well financed into the indefinite future. No change in the program would be needed. The unfavorable, or high-cost, assumptions would result in exhaustion of the combined OASI and DI Trust Funds in 2018, 11 years earlier than under the intermediate assumptions.
Under the intermediate projections, the SOcial Security program will continue to receive more in taxes than it pays out through 2011. The accumulation of this excess budget authority will allow the program to continue paying benefits in full through 2028. Before 2029, changes will be necessary. Early enactment of changes will allow the changes to be phased in more gradually, and will allow for more advance notice to the affected workers and beneficiaries, so that they can effectively adjust their plans for retirement.


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DeaneG wrote:I wonder how long a fully-charged Leaf can be left in an airport parking lot before it runs down significantly. On most ordinary cars, this is about a month.
darelldd wrote:(one neat thing about the EV1 was that it had a "jump" button under the dash. If your Aux battery died, you could manually jump it from the traction pack by just holding a button. Neat!)
garygid wrote:Assuming the traction battery is disconnected when the car is "off", then the 12v battery would need to power any electronics that continues to draw power.
Just 10 ma drain would be 0.24 amp hours per day, or one amp-hour every 4 days. So, a 20 amp-hour battery might last 80 days, less considering self-discharge.
But, we do not know how much the off-current will be.


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Sunday, March 11, 2007
Unit Testing FizzBuzz? Are You Out Of Your Fucking Mind?
One blogger cooked up an implementation of FizzBuzz in Java which gives you the option of changing everything -- the rules, the terms displayed in the text, the language, everything.
My FizzBuzz was intended to be sarcastic, but this should have been the real target of my sarcasm. My solution is something like fifteen lines of code. This solution comes in a .zip file with documentation, DEFAULT_XYZ variables, and unit tests. The comments are more than fifteen lines!
This solution does not have any significant advantage in flexibility over my own quick joke version, and its absurd, painfully detailed documentation is infinitely less clear. Not only that, the "one little flaw" that the author writes off as inconsequential is that you can't change the numbers FizzBuzz alters its output for. That is to say, if you want to do a FizzBuzz that puts out new strings on multiples of 7 or 2, it just can't be done without dismantling the entire system. Except the whole point of FizzBuzz, in reality, is to teach children to recognize numeric patterns in sequences. The numbers involved are the only interesting thing. And a system this overblown takes a hell of a long time to dismantle.
Honestly, you have to wonder. This FizzBuzz is so nightmarishly awful, such a monument to useless busywork, and the blogger's reasoning so flat-out bad, I'm tempted to think the whole thing's a fake -- a troll from some Rails hacker who wants to revive the "Ruby vs. Java" blog war from last year.
I really shouldn't post before breakfast. I'm always grumpy before breakfast. Last time I posted before breakfast, I got myself kicked off a mailing list. I'm sure when I go back and look at this in a less fiendish frame of mind, I'll see advantages to this approach. On the other hand, I posted a little while back that hiring somebody who's willing to code FizzBuzz is as bad an idea as hiring somebody who's unable to code FizzBuzz, and this is pretty much exactly what I was talking about.
Life is short, and this is as true for business models as it is for human beings. Don't believe me? Ask Microsoft. Or better yet, wait five years, and then ask Microsoft, and watch how quickly those five years went. Ask Microsoft what they spent those five years doing while their business model died its death.
You need to be flexible and adaptable in business. This Java solution packs layers of beauraucracy onto what might be the simplest programming problem in the world. Layers of beauraucracy have the functional result of impeding change -- consider how my solution, you can change anything, whereas the Java one supports some changes and not others, and the developer's assumptions about what changes may or may not be necessary shape the eventual range of what changes are possible.
But the sociological result of layers of beauraucracy is the real danger here. Sociology is much more important to software development than people generally realize. The sociological effect of Java, in this case, is encouraging conformity and limiting imagination. The reason is simple: conformity and limited imagination are necessary for the kind of person willing to go through all that effort just to solve FizzBuzz, and cover every reasonable variation. And the key there is not the thoroughness -- thoroughness is admirable. The key is the term "reasonable." The term "reasonable" is an utterly dangerous term. It is by nature a value judgement, and a conservative value judgement. "Reasonable" and "innovative" are not synonyms. Think of all the unreasonable features on the iPod. You can't even change the battery! No reasonable person would ever have designed that thing, which is why one of the most famously unreasonable people in the world is taking over the music industry.
Anybody who's ever seen a software project fail or even falter knows that if you cover every reasonable variation, you're going to build a whole lot of options that your client or users will never ever use or even see, wasting time and money in the process, while at the same time building something which can bend at every join except the one they need to flex. You shouldn't cover reasonable variations. You shouldn't cover any variations. You should code the quickest, simplest solution you possibly can, even if it looks stupid as fuck, and then if your client or your users need some change, you should choose the way to do it which requires the absolute minimum of work.
Everybody pretends they already know this, but if you really mean it, you have to ultimately realize that spinning your wheels writing unit tests for FizzBuzz is not good training for the process of writing great software. Everything you do shapes your mind. I have professional training in hypnosis and I assure you, literally everything you do shapes your mind to some extent. If you're going out there and practicing something as reasonable, safe, and useless as writing tests for FizzBuzz, the next time you sit in front of a computer, you'll do something reasonable, safe, and useless. The powerful pattern-recognition machine that is your subconscious mind will say, "a-ha! I'm in front of a computer. That means it's time to write unit tests for FizzBuzz!"
Don't do it! It's bad!
The point of unit testing isn't covering your ass. It's making code succinct. Unit testing is a design tool. Unit testing FizzBuzz is like drawing up blueprints when you need to make a sandwich.
8 comments:
You're blowing this FizzBuzz issue out of proportion, and even adding to the carnage with your "Sarcastic FizzBuzz"!?! Why not just let it fade into obscurity and die?
Giles, I absolutely love the second half of this post.ReplyDelete
Long after we have forgotten that word with a hyphen and four zeds, your insights into YAGNI and flexibility will still be words of wisdom for software developers.
@ben -- well, your logic is definitely sound. A couple hours later I came to the same conclusion, made the blog a FizzBuzz-free zone.ReplyDelete
@reg -- glad you found some method in the madness.
- AnonymousMarch 12, 2007 at 3:19:00 PM PDT
This post makes me happy.ReplyDelete
Of course, a whole bunch of posts wandering around the internet about baroque and/or remarkably brief ways to implement something like currying would make me happier.
a whole bunch of posts wandering around the internet about baroque and/or remarkably brief ways to implement something like currying would make me happierReplyDelete
Your wish is the Internet's command:
The Y Combinator in different programming languages.
- AnonymousMarch 12, 2007 at 5:02:00 PM PDT
That indeed makes me happy, but I wish the meme had even half the popularity of FizzBuzz.ReplyDelete
"You should code the quickest, simplest solution you possibly can, even if it looks stupid as fuck, and then if your client or your users need some change, you should choose the way to do it which requires the absolute minimum of work."ReplyDelete
While I can appreciate the git-r-done mindset that underpins statements like this, here's a counterpoint, courtesy Olin Shivers.
Heh heh. There's still so much FUD out there about TDD and unit tests, so I can see why your reaction is so strong, as this type of thing just perpetuates the condemnation of the haters.ReplyDelete
I recently addressed the argument of why we don't need to write unit tests for the unit tests.
Fellow L.A. blogger...


text:
Blessing and Cursing
Although it is rarely noted, the concept of blessing lies at the very heart of the gospel. The Apostle Paul highlights this in his letter to the Christian believers in Galatia. In vigorously defending the inclusion of Gentiles within the …Read More
Holy Ground
Of the rich variety of books that make up the Bible, the book of Exodus is unique in providing a micro-picture of the larger biblical story of salvation. Exodus describes how God brings estranged people into a personal relationship with …Read More
From Eden to the New Jerusalem: An Interview with T.D. Alexander
Tabletalk: Describe how you became a Christian and how God called you to work in the academy. T.D. Alexander: I grew up in a rural community in the northeast of Ireland, strongly influenced by Ulster-Scots culture, where almost everyone …Read More
The Royal Genealogy of Jesus
The five books from Genesis to Deuteronomy form the first section of the Hebrew Bible known as the Torah. Unfortunately, the Hebrew term torah is often misleadingly translated into English as "law." Torah is better understood as meaning "instruction …Read More
T. Desmond Alexander
Dr. T.D. Alexander is senior lecturer in biblical studies and director of postgraduate studies at Union Theological College in Belfast, Northern Ireland. He is author of From Eden to the New Jerusalem.


text:
One of the benefits of being a D-list blogger is that I dont get PZ-esque traffic. This means that every once in a while, I can click on my SiteMeter and catch some fun hits-- someone at the NIH, someone living in Figi, its entertaining :P
Its been really fun this past month or so to see all the site hits from Premise Media (LOL! LOSERS!). They started about a month ago, after I posted the 'Inner Life'-Dembski time line. From someone in Vancouver. I happened to be chatting with Peter Irons at the time, and I was like 'Which one of those pieces of shit lives in Vancouver?'
Peter mentioned a name or two, including a computer animator, Mike Edmondson. "Computer animator!" we exclaimed, "Wonder if he is our 'man'?" So Peter dropped Mr. Edmondson a note:
...Mr. Edmondson promptly replied:
2. As part of this employment, you produced, through digital technology in your studio, a segment of the "Expelled" film, purporting to show the operations of cellular mechanisms, particularly the "walking" models of kinesic activities.
3. I have been advised by several specialists in cellular biology that the segment you created copied, virtually without any changes, significant portions of a video entitled "The Inner Life of the Cell," produced by the XVIVO company in Connecticut, under contract to Harvard University.
I did not create or have anything to do with the animation in question.So the guy ('the dude', if you will) who is listed at the computer animator for EXPELLED did not make the Frankenstein 'Inner Life'. Well, okay, there is lots of computer stuff to do-- graphics and such, so I believe(d) Edmondson.
Dude appears to be a genuine computer animator, so I believe him. Copy someone elses shit, and you will never work again, plus I assume there is something about honor in art and being original.Nows where things get weird. One month ago when I looked at Edmondsons 'LinkedIn' business site it said:
... employment since August 2007 as "Digital Artist/Animator at Premise Media creating animations for the film Expelled and a five minute animated propositional piece.Here it is now.
One month ago, Edmondsons photo and biography were on the Premise Media web page. Now, this is all the evidence I can find he is (was?) associated with them:
How very, very odd.
I can think of two reasons for Mr. Edmondsons disappearance.
Scenario #1-- Edmondson had nothing to do with EXPELLEDs plagiarism. He did not know the animation in the film was stolen. When he found out from Peter, he found my blog, and emailed Premise-TARDS for an explanation. When the theft was confirmed, Edmondson declared he wanted nothing to do with EXPELLED-- take his name off everything. If there is a stolen computer animation in EXPELLED, and he is listed as the EXPELLED computer animator, he will never work again. Edmondson is an honest guy trying to run his own business and did the right thing.
Scenario #2-- Edmondson is 'the dude.' Premise media, in their frenzy to wipe hard drives and shred notes, is expunging the history of Edmondson from Premise.
If its the former, I urge Mr. Edmondson to contact me or Peter. We can help you.
If its the latter? *flips off Edmondson*
EDITED 6:15 pm-- Edmontons name was removed from Premise/EXPELLED at his request.
EDITED 4-13-08-- Edmondson is a cool dude-- His videos online are friggen hysterical. How he got tangled up with EXPELLites we may never know, but lay off ol dude :)


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division cases
This information was the most current on file in criminal division of Marion County District Court as of Aug. 9. Information often is not available until more than a week after hearings. Journal entries must be checked before they are filed.
Todd Michael Beneke, 219 N. 10th St., Herington; failed to appear at probation hearing July 22 on three counts of misdemeanor theft and one count of criminal trespass; bench warrant set at $5,000; hearing re-set for Aug. 13.
Leslie W. Coker, 3033 S. Fern Ave., Wichita; plead not guilty July 22 to criminal trespass, driving while license suspended, canceled, or revoked, and circumvention of ignition interlock. Status hearing set for Oct. 8.
Douglas Bryant Eden, 116 W. 3rd St., Peabody; admitted probation violation July 22; sentenced to six months in custody of Marion County Sheriff.
Cody L. Fistler, 785 Old Mill Road, Peabody; failed to appear in court Aug. 5 on charges of possession of methamphetamine and possession of drug paraphernalia. Bench warrant set with no bond.
Oceana Scobee, 1021 S. Cottonwood, Ottawa; pleaded no contest July 15 to charge of possession of methamphetamine; charges of possession of marijuana and possession of drug paraphernalia dismissed.
Mark A. Turner, 307 N. First, Hamilton; admitted to probation violation July 22; disposition hearing set for Sept. 10.
Michelle Williams, 704 N. Cedar, Marion; sentenced to 12 months probation July 22 in lieu of 60 days jail on count of battery; ordered to pay $158.


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Barron's is finally admitting what few in the mainstream have been willing to acknowledge: the Austrian school of economics was right.
The Austrians have been saying for well over a hundred years that big bubbles lead to big crashes, and that – if you want to avoid depressions – you have to avoid the bubbles.
In today's article, entitled "Ignoring the Austrians Got Us in This Mess", Barron's agrees:
The credit crisis and the ensuing global economic contraction have failed to make an impression on academe, where free-market orthodoxy still reigns supreme, the New York Times asserted in an article in arts section recently ("Ivory Tower Unswayed by Crashing Economy," March 4.)…
What definitely is ignored in academe is the Austrian school of economics, especially for baby boomers brought up on Samuelson's economics text, which was pure Keynesian orthodoxy. I did not learn the names von Mises and Hayek or their ideas until a decade or more after graduation (with a degree in economics, by the way.)
The Austrian view is a mirror image on the right to Minsky's from the left. The economy, if left alone, is self-correcting, say the Austrians. But central banks' inflationary expansion of credit produces booms and malinvestments, which inevitably lead to a crashes and depressions.
The only prevention for boom and busts are sound money, which is impossible with government-controlled central banks. Once the bust comes, the only cure is to let it run its course; allow the malinvestments go bankrupt and let the market reallocate the capital to productive uses….
But the Austrians were the ones who could see the seeds of collapse in the successive credit booms, aided and abetted by Fed policies, especially under former chairman Alan Greenspan. …
Greenspan always contended that monetary policymakers can neither predict nor prevent bubbles in asset markets. They can, however, clean up the after-effects of the bust — which meant reflating a new bubble, he argued.
That had a profound effect on risk-taking. Knowing that the Greenspan Fed would bail out the markets after any bust, they went from one excess to another. So, the Long-Term Capital Management collapse in 1998 begat the easy credit that led to the dot-com bubble and bust, which in turn led to the extreme ease and the housing bubble.
Austrian economists assert the current crisis is the inevitable result of the Fed's successive efforts to counter each previous bust. As the credit expansion pumped up asset values to unsustainable levels, the eventual collapse would result in a contraction of credit as losses decimate banks' balance sheets and render them unable to lend. That sounds like an accurate diagnosis of the current problems.
While Barron's acknowledges that the Austrian school is right about how to avoid depressions, it doesn't agree with the other main tenet of the Austrians: that the quickest way to get out of a depression is to let the bad investments clear themselves out of the markets by letting the companies which made dumb decisions fail. (The sub-title for the article is "Their ideas warned us of the bubble; their prescription for the bust is too harsh, however"; and the article ends with the phrase "Make us non-interventionist, but not yet.")
Readers have written to me saying the same thing: the Austrians might be right, but their remedy for an economic crisis is too draconian and we have to do something to help the people.
I am all for helping people and doing something that will speed up a recovery. But remember the 2,000 year old medical wisdom of Hippocrates: "First, do no harm".
The two leading economists of the 20th century – Friedman and Keynes – were both wrong, and so all of the approaches being implemented by economists right now are actually making things worse.
Advocates of the Austrian school – such as Marc Faber, Ron Paul, Peter Schiff, Mish, and others – argue that any interventionist approach by governments will only prolong the economic crisis, and that there really is no choice but to let the gunk clear out of the system.
At the very least, everyone – liberal and conservative alike – should demand that:
(1) The federal reserve be eliminated (as Ron Paul, Mish, and others propose) or at least reigned in so that it cannot blow any more bubbles; and
(2) That no "medicine" be administered to the economy – whether Keynesian spending stimulus, Friedmanite monetary stimulus, or anything else – unless it is proven (using Austrian economic models) to do more good than harm.