How to solve the problem of identity theft and mass credit card fraud

Data Theft: How to Fix the Mess - New York Times

Today merchants and card holder are the victims of identity theft and credit card misuse. The banks do very well thank you; they even make money if the card holder doesn't detect the fraudulent transaction. Merchants don't have the resources to deal with this problem -- only the banks can tackle it. They've had solutions in hand for over a decade, but they cost money to implement -- so nothing happens.

This NYT article outlines the obvious solution, championed by Bruce Schneier. Make fraudulent transactions the bank's problem.

What we need right now is someone in power who can put the burden for this problem right where it belongs: on the financial and other institutions who collect this data. Let's face it: by the time even the most vigilant consumer discovers his information has been used fraudulently, it's already too late. 'When people ask me what can the average person do to stop identity theft, I say, 'nothing,' ' said Bruce Schneier, the chief technology officer of Counterpane Internet Security. 'This data is held by third parties and they have no impetus to fix it.'

Mr. Schneier, though, has a solution that is positively Proxmirian in its elegance and simplicity. Most of the bills that have been filed in Congress to deal with identity fraud are filled with specific requirements for banks and other institutions: encrypt this; safeguard that; strengthen this firewall.

Mr. Schneier says forget about all that. Instead, do what Congress did in the 1970's - just put the burden on the financial industry. 'If we're ever going to manage the risks and effects of electronic impersonation,' he wrote recently on CNET (and also in his blog), 'we must concentrate on preventing and detecting fraudulent transactions.' And the only way to do that, he added, is by making the financial institutions liable for fraudulent transactions.

'I think business ingenuity is top notch,' Mr. Schneier said in an interview. 'And I think if you make it their problem, they will solve it.'

Indeed. The banks know what to do, if they start losing billions they'll put their fixes off the shelf.

Update 1/23/2008: A comment pointed out that South Korea has implemented the policy Mr. Schneier recommends. Sure enough, Schneier wrote about that in December 2005.

Racism is ubiquitous - the Japanese experience

BBC NEWS | Asia-Pacific | Japan racism 'deep and profound'

In Japan it's legal to have store signs that say "Japanese Only", by which I think they first mean "no Koreans" and secondarily no Euros. (Africans are probably too shocking to contemplate.) Many Japanese are still explicitly ethnocentric and racist.

So, for that matter, are the Quebecois. Also the Chinese and the Koreans. And umm, oh yes, the rest of us. What's a bit different about Japanese racism is that it's relatively widely accepted and institutionalized in both religious and political life. Such honesty is unusual for a wealthy nation.

The US has traveled some distance since our days of explicit, santioned racism -- not so long ago. It's been an irregular course and it's sure to reverse; since 9/11 racism has probably grown here. We're still very racist, but we're less honest about it. I think, in this case, dishonesty is good. The first step towards changing a behavior is to make it shameful, something that ought to be hidden.

Progress can occur. One day humans may even be civilized; perhaps in two or three hundred years.

The Rove/Plame story: why did Time try to silence the memo?

Matt Cooper's Source - Newsweek National News - MSNBC.com

Newsweek gets a copy of a Time magazine memo that Time's corporate parents wanted suppressed. The memo implicates Karl Rove in the Plame scandal.

NEWSWEEK obtained a copy of the e-mail that Cooper sent his bureau chief after speaking to Rove. (The e-mail was authenticated by a source intimately familiar with Time's editorial handling of the Wilson story, but who has asked not to be identified because of the magazine's corporate decision not to disclose its contents.)

Presumably a Time magazine journalist, infuriated at this corporate cover-up, leaked the email.

So why did Time-Warner want to hide the memo? Which corporate mogul made that decision? What was the anticipated payoff? The story has developed an interesting new angle.

Diabetes and coffee

BBC NEWS | Health | Row over coffee advice for diabetics

The BBC did a great job of covering this story; most of the media did their usual miserable health care work. It's no wonder the BBC's news sites are displacing traditional print media.

Researchers from the Dutch national Institute for Public Health and the Environment in Bilthoven, Netherlands, asked over 17,000 how much coffee they drank each day.

Those who drank seven or more cups of coffee a day-were 50% less likely to develop type-2 diabetes compared with those who drank two cups a day or less.

The association was still seen when factors such as smoking, alcohol consumption and body mass were taken into account...

... This study backs up previous research which showed that when people increased their coffee consumption for 14 days, their blood glucose levels were reduced, but substituting regular coffee for decaffeinated coffee for 20 days did not affect glucose levels.

I bet this 50% reduction effect doesn't hold up. Seven cups is a lot -- that's getting into my range. Maybe they actually showed a continuous decline in incidence with coffee dose, but if it were a discontinuous effect then I'd be extremely skeptical.

They claim they controlled for body mass, but all the mega-coffee drinkers I can think of are relatively slender types. I suspect what they did was isolate a group of adults with ADD traits who manage that predisposition by using a legal and safe stimulant -- coffee. This group is notoriously fidgety and restless, and hence prone to a lower average lifelong body mass. Even if they controlled for present body mass, I'd wonder if they missed a difference earlier in life.

That doesn't mean there isn't some substance of interest in the coffee bean related to insulin activity, but I bet the effect is much less than a 50% reduction in onset of DM II.

So why doesn't al Qaeda attack the US directly?

Will America be the next terror target? / London attack shows al Qaeda's strategy

Post 9/11 it's fair to say that most people expected quite a few al Qaeda attacks on the US (though immediately post-Afghanistan some analysts thought al Qaeda was in very bad shape). John Arquilla is professor of defense analysis at the U.S. Naval Postgraduate School in Monterey. He discounts the theory that al Qaeda by reviewing their records of successful attacks, and he concludes that al Qaeda has strategically chosen to focus on Iraq and abroad:

So it seems that the invasion and occupation of Iraq, which many of us opposed beforehand, have become both our Achilles' heel and the single most important reason al Qaeda has chosen not to resume its terror campaign in America. Iraq provides our principal enemy with a place to fight us directly and a reason to mount an indirect campaign against our allies.

Some might now say that this makes our presence in Iraq worthwhile. As the president has put it, "We fight the terrorists in Iraq so that we do not have to face them at home."

Perhaps. Yet for a small fraction of what our involvement in Iraq has cost us in blood and treasure, we could have shored up our homeland defenses and made it well-nigh impossible for the terrorists to attack America again.

The rerouting of an even tinier fraction of these vast resources in support of a proactive campaign by small teams of special forces hunter networks would keep the terrorists perpetually on the run, unable even to think about coming back here or about striking elsewhere.

But we're still in Iraq, and we'll be there for years to come. Oddly, this probably means few, if any, attacks will be attempted on American territory. It also means there will be more Madrids and Londons. This should remind us that, in a war fought for all that we call civilization, feeling more assured about our own safety is hardly a sign that victory is near.

Hmm. I thought he made sense until he wrote "well-nigh impossible for the terrorists to attack America again". Only a police state to shame 1984 would make terrorist attacks truly impossible. Special forces hunter networks sounds more interesting, though he doesn't provide nearly enough detail about how that would work.

The UK went without an effective attack for years -- but al Qaeda was trying very hard. UK police and security forces were said to have stopped at least six serious attempts in the past five years. The post-911 "peace" in the US may be a combination of post-Afghanistan disruption of al Qaeda, reduction of their leadership and technical ingenuity, relative strategic deemphasis by al Qaeda, effective action by US security forces, distance from Eurasia, and a relatively small and loyal US Islamic community. It's a statisical phenomena in other words; it could persist or change at any time.

Are there any rational conservatives left? The Evolution Test

The New Republic Online: Evolutionary War

Brilliant. The best test for Reason among the right wing is the Evolution test. Ben Adler interviews 15 "commentators". In general they fail the test miserably, and they reveal a strong Christian-America predisposition.

Let's flog those insipid journalists until this test is applied to every politicican running for office anywhere.

How to sell a map and create a retail web site

This is a very clever business web site. Kudos to this Colorado business. They sell trail maps and books for outdoor activity. All very well, but what's clever is their combination of service and marketing. For example, the Minnesota Bicycle Trails Reference Map costs $5.00 or so. The site lists every trail on the map with supplemental information. So how does this help them sell the map? Each trail profile is followed by links to the maps and/or books that reference the trail. No mapping information is included.

So they combine value delivered for free with marketing, and intelligently link the products to the marketing. They also have an affiliate program for others who wish to set up store fronts.

This is the way web marketing and advertising ought to be done. Why can't others figure this out, darn it?!

Thinking about science in America, and the Catholic Church

I've been thinking more about science in America, and Pope Benedict's fracture of an unofficial truce between the Church and Science: Gordon's Notes: Another victory for the Discovery Institute: The Catholic church church attacks the enlightenment.

Science in America is being strongly challenged and occasionally defeated. That may not be entirely bad for science. Scientists tend to be politically flacid; it's long past time they woke up. Even if rationalists really do lose in this country, moreover, it's unlikely India, China and Europe will join a flight to superstition. It might not be an entirely bad thing to have another nation (or nations) lead for a while. A bit of economic and political decline might temper American arrogance and add a bit of wisdom.

As for the Catholic church, on reflection the truce of Vatican II was a false pause in a long conflict with science. One of the strongest logical outcomes of natural selection and our emerging understanding of consciousness is that there's nothing inevitable about the emergence of humans, or about human nature, or even about sentience. (I've a hunch that sentience is an almost inevitable byproduct of a longlived complex ecosystem -- but that's only a guess, there's no way today to test that hypothesis.)

The evitability of Man is a hard pill for the church to swallow; a God that finds humans to be a delightful byproduct of His creation rather than the Purpose thereof is a bit off-putting for traditionalists. (Frankly I can't believe the "delightful" part myself, but I'm not God.)

With this announcement the Catholic church is shifting to a traditionalist position, reversing the post-Vatican II agenda and firmly aligning itself with American Protestant fundamentalists -- just as it did when Catholic bishops came out against John Kerry. This is a very big deal for the Church. There will be consequences within the church.

The Jesuits must quite miserable.

Another victory for the Discovery Institute: The Catholic church church attacks the enlightenment

Leading Cardinal Redefines Church's View on Evolution - New York Times

I must doff my cap to the Discovery Institute. Not since the dark ages has reason, science, and enlightenment had such an effective and implacable foe (update: ok, so maybe Stalin/Lysenko, Mao, and a few hundred others were even more effective in their time). In the Benedict era the Discovery Institute has brought the Catholic church into their fold.

An influential cardinal in the Roman Catholic Church, which has long been regarded as an ally of the theory of evolution, is now suggesting that belief in evolution as accepted by science today may be incompatible with Catholic faith.

The cardinal, Christoph Schönborn, archbishop of Vienna, a theologian who is close to Pope Benedict XVI, staked out his position in an Op-Ed article in The New York Times on Thursday, writing, "Evolution in the sense of common ancestry might be true, but evolution in the neo-Darwinian sense - an unguided, unplanned process of random variation and natural selection - is not...

...Mark Ryland, a vice president of the [Discovery] institute, said in an interview that he had urged the cardinal to write the essay. Both Mr. Ryland and Cardinal Schönborn said that an essay in May in The Times about the compatibility of religion and evolutionary theory by Lawrence M. Krauss, a physicist at Case Western Reserve University in Cleveland, suggested to them that it was time to clarify the church's position on evolution.

The cardinal's essay, a direct response to Dr. Krauss's article, was submitted to The Times by a Virginia public relations firm, Creative Response Concepts, which also represents the Discovery Institute.

I would have opposed George Bush's election for his opposition to reason alone; I consider the Discovery Institute's progress a side effect of Bush's election. GWB has often declared himself as ingorant of science in general, and opposed to biology and climate science in particular.

What's next in Broadband

broadband news - Everything You Need to Know About Next-gen Broadband - New DSL flavors, DOCSIS 3.0, Bell TV, and more...

DB: In three to four years - because constructing facilities for millions of people take that long - expect that half of Verizon should have fiber at 15-100 meg, otherwise slow DSL. Half of SBC should have DSL at 10-20Mbps, from existing boxes 2,000-5,000 feet away (FTTN). The rest will be slow DSL and satellite resale. One-tenth of BellSouth customers should have 50Mbps service from fiber to the curb. Half of the rest should have 10-30Mbps DSL, often using two lines...

...DB: Verizon is going as fast as it can building fiber; one newspaper reported 2,000 crews working just in Virginia! It's really that big a job to rewire a third of the U.S. All the others are constrained more by their decision on how much to spend, not construction limits.

Verizon wants fiber to the home. That's the big deal. Three million homes passed by the end of 2005. They've budgeted for, and are likely to deliver - a total of 7 million by the end of 2006 and 15 million by the end of 2008. That's about half of their 1/3rd of the country target - an enormous build costing $15-20 billion. Verizon and NTT in Japan are the only two large carriers in the world doing large volumes of fiber.

Currently, Verizon has a BPON network with video that matches cable on one wavelength and 19 meg down/ 6 meg up. They intend to switch to GPON for new builds as soon as it's ready, and have pushed manufacturers to have equipment by mid-2006 and accelerated the international standard. That's designed for 100 meg symmetric and higher, for real.

For the 20 million plus other Verizon subscribers, they will continue offering DSL and have given no indication they'll jump from the 1-5 meg ADSL speeds to the 10-15 meg ADSL2+. They stopped the DSL build at 80% or so to concentrate on fiber, but I believe are now going back to reach 90%+. Because they were considering selling rural lines, they didn't invest, leaving half of Maine unserved.

Via Slashdot. Back in 1994 this is what we'd thought we'd have by 2000. We were off by quite a bit. One of the reasons the first Internet bubble blew up so dramatically was that broadband deployment was far slower than most analysts projected -- early 1990s business plans that relied on ubiquitous reliable broadband died.

This kind of infrastructure is, I think, closer to what South Korea has now.

The Google Firefox Toolbar: at long last

Google Blog: The platypus of the Internet

It's been a long time coming.

GMail and spam filtering: Google's engineers are not perfect after all

Google Accounts

I love GMail -- except for the spam filtering. It's broken in an impressive way. Google's spam filters miss a lot of spam (so it shows up in my inbox) and they label a lot of my email as spam when it isn't (possibly a problem with how they handle redirects). Of course since GMail is a free/beta product there's no-one to complain to -- or even give feedback to. Actually, there is a feedback form. Update: it's a Potemkin feedback form. Use it and you get a form letter email that says to resubmit feedback after reading the form letter -- but the form letter doesn't include what was written using Google's web page. This manages to be worse than nothing!

My regular ISP, using standard open source spam management solutions, does a far better job.

Google arrogance perhaps? definitely.

Update: When you mark a message as 'not spam', GMail is supposed to add the sender to one's contact list. Contacts are supposed to be 'white listed'. This is broken, GMail is not always adding the sender correctly. I'm adding the sender for miscategorized email manually to my contacts list.

Circumcision: required for all males now?

Circumcision may offer Africa AIDS hope / Procedure linked to much lower rate of new HIV infections

A year ago a study reported a 6 fold protective effect of circumcision. Now another study demonstrates about a 70% risk reduction.

I did infant circumcisions in the days before use of any local anesthesia. I hated doing them and always tried to persuade mothers (they made the decisions) that it was a peculiar American custom with minimal medical benefit and lots of pain. (As far as I know the US is the only industrialized country which practices circumcision for non-religious cultural reasons.)

Looks like I was wrong. Not the first time. If this really holds up we have a miraculously effective way to stop HIV. Nobel prizes all around!

Pricing futures contracts and call options: examples from oil futures

Econbrowser: $100 a barrel-- what are the odds?

This is a wonderful practical essay on a complex topic. I was trying to figure out the other day how to price a real estate futures option -- I figured out fairly quickly that it was complex. This says why.

The expected price for oil, based on the option calculation, is about $60 in 6 months. About what it is now.

Millennium Simulation: Visiting the universe by simulation

Millennium Simulation

Any feelings of recursion when viewing these videos are purely imaginary.

(Link to mirror site, the original has been slashdotted.)