NY Times Finally Speaks Out Against Financial Firms Blocking Wikileaks

from the took-'em-long-enough dept

One of the more annoying things about watching the major news publications discussing the Wikileaks controversy is how infrequently they seem to realize that many of the attacks they themselves have been directing (or redirecting) at Wikileaks could come back to haunt them as well, as many could apply to them when they do things such as publish information about leaked documents. In fact, just last week, we wondered how come all those financial firms (including Visa, MasterCards, Bank of America and Paypal) were not cutting off the NY Times after it revealed military secrets. It appears that some folks on the NY Times editorial board have realized the same thing and published an editorial condemning the decision to cut off Wikileaks by these financial firms:
[A] bank's ability to block payments to a legal entity raises a troubling prospect. A handful of big banks could potentially bar any organization they disliked from the payments system, essentially cutting them off from the world economy...

[...] Still, there are troubling questions. The decisions to bar the organization came after its founder, Julian Assange, said that next year it will release data revealing corruption in the financial industry. In 2009, Mr. Assange said that WikiLeaks had the hard drive of a Bank of America executive.

What would happen if a clutch of big banks decided that a particularly irksome blogger or other organization was "too risky"? What if they decided -- one by one -- to shut down financial access to a newspaper that was about to reveal irksome truths about their operations?
That said, part of the editorial is a bit worrisome, as it seems to be suggesting that banks themselves should not be able to decide who they can and cannot work with, and that since they are "not too unlike other public utilities," perhaps they should be regulated, in the same way that a telco cannot refuse to provide phone or internet service to an operation who it does not like. I'm not sure that's necessarily the lesson we should be taking from this, however. The larger lesson is more about the lack of real competition in the space, where a very small number of intermediaries are effectively able to block off much of the money supply. That's the real problem. The answer should be to encourage greater competition in the space, such that if a few firms decide to cut off a service, it doesn't really matter, since there are many others to step in and help in their place.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Miles (profile), Dec 27th, 2010 @ 7:50am

    Plagiarism!

    Okay, not really, but this editorial is no different than the response of MegaUpload's PR dept who also attacked financial institutions making the decision to cut off payment to sources they don't like.

    To big to fail? We'll see about that.

     

    reply to this | link to this | view in thread ]

  2.  
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    :Lobo Santo (profile), Dec 27th, 2010 @ 7:54am

    Dear Banks:

    We will just make our own money and leave yours alone.

    Signed,
    teh internets.

    ; P

     

    reply to this | link to this | view in thread ]

  3.  
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    The Infamous Joe (profile), Dec 27th, 2010 @ 8:02am

    Re: Dear Banks:

    If that Facebook-money thing becomes popular, I'm holding you responsible.

    Don't let me down.

     

    reply to this | link to this | view in thread ]

  4.  
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    Stephen Downes (profile), Dec 27th, 2010 @ 8:12am

    You find this worrisome because it may lead to the conclusion that banks may need to be regulated?

    Have you not been following recent events? Banks need to be regulated, because otherwise they will crash the economy and then hold it for ransom, demanding billions of dollars in payouts.

    Any time anything gets too powerful, it needs to be regulated. Governments, telcos, and yes, banks. Because, otherwise, they *will* deprive you of all your money, and hold you in indefinite servitude.

     

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  5.  
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    Anonymous Coward, Dec 27th, 2010 @ 8:17am

    What is worrisome is that Wikileaks itself doesn't seem to exist in any meaningful way, rather money is being laundered through any number of charities and private accounts. Some of those organizations (including the Lau foundation that is a tax deductible charity) are under investigation for financial irregularities.

    Can anyone point to me the company / organization that actually owns Wikileaks, and why the organization doesn't appear to take any money directly itself?

    Can anyone show me the books for this organization if it exists, and show how much the directors make each year?

    What is worrisome is that they appear to think they can live in the cracks between systems, while at the same time benefiting from those same systems.

     

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  6.  
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    Anonymous Coward, Dec 27th, 2010 @ 8:24am

    The response of the "Banks" is the same as the Governments.
    Rather than deal with the issues raised by the information it, is much more important to make sure we keep people uninformed.

    No one wants to talk about how the banks used the bail out cash to secure low interest loans, rather than help the people they successfully screwed over for the sake of profits. No one wants to dig to deeply into how much the banks knew before the bubble burst. The banks pay off the congress critters, who quickly paint them as poor victims of people taking out loans they shouldn't have been able to get, and skip over it was the bank who gave them the loan.

    Soundbites and quickly skimmed information is king, if it looks okay it must be okay. There is no in-depth research or questions asked, just a quick quote to get out there.

    Rather than the popular game of blame this party or that party for the problem we need to actually look at the problem and solve them rather than just engage in finger pointing that solves nothing.

     

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  7.  
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    Stuart, Dec 27th, 2010 @ 8:27am

    Re:

    If we did not federally insure deposits at these banks we would have less to worry about. People throw money into these banks and do not care what they are doing with it because they won't take a loss. If the federal government got out of insuring these deposits two things would happen.

    First people would think a little more about where they are putting their money and what is being done with it. Second there would suddenly be a market for a private company to offer deposit insurance to some banks. A private company would be much more studious about what institutions they would cover since unlike the federal government the payouts on claims are their money.

    Because of this we would have 2 types of banks. Ones where your deposits are insured by a reputable private company that are conservative and safe and higher yielding banks that take more risk for higher payouts.

    The customer can then decide what to do with their money.

     

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  8.  
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    ChurchHatesTucker (profile), Dec 27th, 2010 @ 8:31am

    Re:

    Yeah, I just don't see a downside to forcing banks to make payments to legal entities. Of course, there's an obvious drawback to government regulation in this particular case, since the government has a conflict of interest.

     

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  9.  
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    :Lobo Santo (profile), Dec 27th, 2010 @ 8:34am

    Re: Re: Dear Banks:

    Was thinking about it... given full access, it's not as if you're tied to physical currency anymore. I could live in Russia and do business in dollars, (or whatever, pick a country with internet and a dis-associated currency).

    There is space for a free-lance 'currency market.' It's entirely within the realm of possibility to have a website in which you buy and pay for things in 'tokens' AND you could get a credit/debit card from same and handily convert your tokens to currency in most countries on the planet.

    We've seen some previous failed attempts to do something like this, but I suspect we'll see a successful attempt sometime in the future. And the banks/governments will despise it... because they do not control it.

    We have open-source software, soon enough we'll have open-source decentralized TLD servers... how long until we deal in open-source currency? Free from countries, and dishonest banks.

     

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  10.  
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    Hulser (profile), Dec 27th, 2010 @ 8:54am

    Re:

    Any time anything gets too powerful, it needs to be regulated.

    While not uncommon, I think this attitude is quite dangerous. I don't throw this word around lightly, but it's this kind of thinking that leads towards socialism rather than the true ideals of capitalism. I'm not against regulation, but not the kind that tells a company what they can and cannot do in this way. As Mike points out, it's much better to set up a system where there is true competition rather than micromanaging corporate decision making via regulation. As just one possible example, instead of telling a bank "You can't cut off someone because you don't like what they're saying", mandate that all electronic payments have to use a common interface and the company managing each payment can be selected by the individual. Yes, this would involve exertion of control by the government, but it would be maximizing competition at a high level, obviating or at least minimizing the need for low level regulation.

     

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  11.  
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    Anonymous Coward, Dec 27th, 2010 @ 9:00am

    Re: Re: Dear Banks:

    Don't those MMORPG games (WOW) have their own currency ... what's it called, isn't it like gold coins or something? People exchange real money for game currency.

     

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  12.  
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    Anonymous Coward, Dec 27th, 2010 @ 9:00am

    Re: Re: Dear Banks:

    Don't those MMORPG games (WOW) have their own currency ... what's it called, isn't it like gold coins or something? People exchange real money for game currency.

     

    reply to this | link to this | view in thread ]

  13.  
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    Anonymous Coward, Dec 27th, 2010 @ 9:02am

    Re:

    In an ideal world, regulation would work. The problem is that in the US, regulation is effectively written by the affected business. For example, the recent net neutrality law that AT&T wrote.

     

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  14.  
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    peter john, Dec 27th, 2010 @ 9:54am

    private insurance on bank deposits

    Many of the Mortgages had private mortgage insurances and the Mortgage Backed Securities had private Bond Insurance and AGI sold Credit Default Swaps. All of these insurances were sold by salemen who got yearly bonuses based on their sales and the executives in these private companies got yearly bonuses based on their sales. So you can guess what happened. Banking should not be a "private" business. As long as there is a business cycle banking will be a bad business requiring government bailout ever 5 to 10 years. Just look at the history of banking and you will see the periodic failures of the banking business.

     

    reply to this | link to this | view in thread ]

  15.  
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    Anonymous Coward, Dec 27th, 2010 @ 9:56am

    Re: Re: Re: Dear Banks:

    Some games allow you to buy in-game currency, but WoW does not. (At least not officially.)

    "what's it called, isn't it like gold coins or something?"

    Riiiight! Like you don't know! Come on, you have a level 85 Worgen already, don't you?

     

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  16.  
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    ChurchHatesTucker (profile), Dec 27th, 2010 @ 10:53am

    Re: Re:

    I don't throw this word around lightly, but it's this kind of thinking that leads towards socialism rather than the true ideals of capitalism.

    Yeah, and oligarchies lead to fascism. Face it, we're not going to get a government that has free market ideals front and center.

     

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  17.  
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    Anonymous Coward, Dec 27th, 2010 @ 10:55am

    Re:

    Wouldn't that be Assange? Wikileaks is his property, after all. As to books, under what law is he required to keep books? And under whose? Australian? British? Sweden? US?

     

    reply to this | link to this | view in thread ]

  18.  
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    Hulser (profile), Dec 27th, 2010 @ 12:07pm

    Re: Re: Re:

    Face it, we're not going to get a government that has free market ideals front and center.

    Sadly, I think you're right. But I think the reason for that is the "there outa be a law!" reaction which you appear to agree with based on your "I just don't see a downside..." comment above. The problem is that there is a downside. It's that by addressing the symptoms of the problem, you end up with a million laws and regulations which actually makes the problem worse because that model promotes abuse. Instead of "forcing banks to make payments to legal entities", we just need to set up a system whereby people can route around the companies who censor.

    On a related note, I heard a story on the radio today about how some (I think state) legistlature was "unproductive" because it didn't pass as many new laws as last year. I don't know about you, but I consider this to be a huge success, not something that is worthy of the derogitory term of "unproductive". Contrary to their name, the job of lawmakers is not to make as many new laws as possible. I'd vote for a politician if their record was "Stopped 50 stupid laws and helped pass two good ones".

     

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  19.  
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    The eejit (profile), Dec 27th, 2010 @ 12:55pm

    Re:

    Seriously?

    THAT'S the best you can come up with? When the banks have been knowingly engaging in mortgage fraud and debt fraud?

    Some idiots are priceless. For everycensor else, there's Mastercard.

     

    reply to this | link to this | view in thread ]

  20.  
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    Chargone (profile), Dec 27th, 2010 @ 12:55pm

    there is a solution to this issue.

    it is unfortunately slow and mildly expensive, but any organization of reasonable size can completely bypass the banks if they want. (heck, to some degree so can individuals).

    you see, there's this little thing called precious metals...

    unfortunately, unlike the digital cash as employed by the banks these days, you can't fabricate entirely new money simply by running it through the system, nor can you make a transaction with someone on the other side of the world within seconds.

    so, slower, logistical issues...
    but on the up side the only way it can actually be 'blocked' is outright theft or Actual piracy at sea. additionally, even if the banks won't give you local currency for it, jewelers probably will... and if they won't you can probably find some kind of middleman... failing that, it probably wouldn't take too much effort to get people to just accept the silver itself if your 'coins' were reliable in their consistency.

    only really starts having major issues if you debase your coin.

    oh, best part? most places won't tax silver until you try to convert it into local currency (unless you start running into things like 'capital gains tax' and the like)

    (gold also works, and on certain scales bulk iron or other not so precious metals work too. the thing about precious metals is that you can actually physically posses the metals, not just a bit of paper saying you own the rights to the profits from the sale of a percentage of a certain stack of the stuff)

    another downside, of course, is that with modern currency being so ridiculously inflated compared to silver, and everything being priced in that inflated currency, it's hard to get a small enough quantity of silver for practical use in day to day activity. (inflation in the USA since the switch from a metal based standard to fiat currency is something ridiculous like 300% more than it ever had in the entire time before that. for exact numbers you'll have to look it up yourself though).

    the simple solution to this of course is to keep accounts and pay 'em when they get to a value where that actually works, but that doesn't work so well when making one off purchases...

    mind you, if you issue your own coin (not coin of the realm, exactly) using precious metals rather than fiat currency, you end up with a stockpile of said metals, and can return to the practice of writting notes to the effect of 'this note entitles the bearer to, upon it's redemption at (appropriate facility) (some amount of your currency) or equivalent at the going rate in other metals, gems, goods, or (coin of the realm) as desired and available.'

    best part of those notes is that you can then issue notes worth fractions of it... but never notes for things you don't actually Have.

    none of which, i admit, completely solves the problem of financial firms locking you out of the market internet wise... precious metals, being a finite, tangible, scarce good, are substantially more expensive to move around than random digital bits, which increases shipping and insurance costs. (though someone wealthy enough could actually employ trustworthy individuals specifically with the job of taking X amount of silver, going to place Y, giving it to person Z, getting object A in exchange, and returning with that item... loyal retainers are a great thing. )

    i would say it would slow things down, but when it already takes months for anything to get here if one isn't willing to pay shipping fees far in excess of any justification for the product in question under the Current system, i personally don't think i'd care much about speed....

     

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  21.  
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    Anonymous Coward, Dec 27th, 2010 @ 1:13pm

    natural monopoly?

    Why isn't the payment system a natural monopoly in the same way as the telcom infrastructure it's being compared to?

     

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  22.  
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    mosaic user, Dec 27th, 2010 @ 1:24pm

    cash equivilents

    Isn't this an opportunity for China or the Swiss to make headway in the payment card markets? After all, Paypal swam upstream at one time until they were seen as legitimate. I'm not sure how many cash cards were sold this past season,but I am sure it was a substantial amount. People may not trust WoW to hold their cash for convience purchases outside the game,but what about a prepaid "DragonCard" or "SwissPay". GreenDot has built a following on making payments for folks without bank accounts,how about "CaymanCashCards"? Although a "DragonCard" could be advertised as backed by the "full faith and obligations" of the US Treasury. Oh man, I hope the black helicopters dont start flying over my house for saying that..

     

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  23.  
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    The eejit (profile), Dec 27th, 2010 @ 1:30pm

    Re: natural monopoly?

    Because that would be UnAmerican.

     

    reply to this | link to this | view in thread ]

  24.  
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    Richard (profile), Dec 27th, 2010 @ 1:35pm

    Inevitable

    That said, part of the editorial is a bit worrisome, as it seems to be suggesting that banks themselves should not be able to decide who they can and cannot work with, and that since they are "not too unlike other public utilities," perhaps they should be regulated, in the same way that a telco cannot refuse to provide phone or internet service to an operation who it does not like. I'm not sure that's necessarily the lesson we should be taking from this, however. The larger lesson is more about the lack of real competition in the space,

    Mike - some things are natural monopolies - and even without a true monopoly big companies do exercise power over those that they deal with. For this reason I don't think that large organisations should be allowed to pick and choose their customers arbitrarily and I don't want the inconvenience of lots of fragmented and competing payment systems - its almost like dealing with multiple competing currencies.

    Perhaps we should have competing

     

    reply to this | link to this | view in thread ]

  25.  
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    ChurchHatesTucker (profile), Dec 27th, 2010 @ 7:02pm

    Re: Re: Re: Re:

    Instead of "forcing banks to make payments to legal entities", we just need to set up a system whereby people can route around the companies who censor.

    In principal, I agree. But EVERYONE, excepting consumers, wants fewer actors in any given space. It's easier to manage 'relations' with two or four big actors than thousands. It's how the RIAA wants web broadcasting to end up (hence their insane demands) and it's how the pols want the music industry to end up (problem solved, there.)

    I'm somewhat resigned to that as a given, at least short term, and am fine with slapping some 'don't be a dick' regs on them.

     

    reply to this | link to this | view in thread ]

  26.  
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    Anonymous Coward, Dec 27th, 2010 @ 9:00pm

    Re: cash equivilents

    Paypal only became legit when they started to deny large groups of customers the rights to their services. Processing companies that accept any and all types of business are seen as risky by their potential clients, who would prefer to do business with companies that are a little more conservative but likely to be around for a very, very long time.

    There have been all sorts of payment processing companies online in the last 16 years (since the arrival of the commercial internet). Alternate cards, micropayments, gold standards, offshore ATM cards, and a whole pile of alternate credit cards. Almost every one of them collapses because they get raked into someone else's scam and end up with no more money on account.

    Many of these alternate processors just don't have the financial support or controls to keep themselves on the straight and narrow. The latest big blowup was a company called Epassport, which failed dramatically when it appears to no longer be able to meet it's obligations. They did however appear to be able to bankroll a 22 million dollar movie about the company's owner, called Middlemen (how appropriate). There are no end of these financial dead ends waiting for the unsuspecting users.

     

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  27.  
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    GMNightmare, Dec 28th, 2010 @ 2:51am

    Missing Something...

    Whose money are we talking about again?

    Worrisome? Please, the banks are regulating you and your worried about them being stopped from doing just that? The banks are saying what you can and cannot buy or spend on with YOUR money, acting like it's theirs.

    It's criminal, not that that ever stopped them.

     

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  28.  
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    alternatives(), Dec 28th, 2010 @ 4:38am

    You already have "blacklisting" by the banking system - the credit rating system.

    Get a low rating:
    1) Various classes of jobs get blocked
    2) Your insurance is more expensive
    3) Access to credit cut off

    And now the banks use a service that checks to see if you have unpaid fees at other banks and won't open an account for you if you've not paid the fees of the other banks.

     

    reply to this | link to this | view in thread ]

  29.  
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    nasch (profile), Dec 28th, 2010 @ 10:54am

    Re: Re: Re: Dear Banks:

    And the banks/governments will ban it... because they do not control it.

    FTFY ;-)

     

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  30.  
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    Hephaestus (profile), Dec 28th, 2010 @ 4:37pm

    Re: Re: cash equivilents

    "Many of these alternate processors just don't have the financial support or controls to keep themselves on the straight and narrow. "

    More than likely you will see a group of individuals get together that creates a distributed version of paypal with ratings. This may be backed by a foreign nation, several corporations, or it may be an internet standard that come out of a working group. It will be in response to the US government shutting down sites banking ability. Wikileaks, low cost online pharma, porno sites, blogs, have all been hit in the past couple months by DOJ.

    Think about the money from just Viagra, 12-18 cent per pill in India selling for $2 USD online. That, by it self, is the financial motivation to create a secondary system outside US control.

     

    reply to this | link to this | view in thread ]

  31.  
    identicon
    Williams Connel, Feb 19th, 2014 @ 3:43am

    MyCaution - Vergleichen Sie SwissCaution, FirstCaution und EuroKaution

    Have you need Depot guarantees for tenants of residential properties! Our products easy Caution and business deposit are Depot guarantees for tenants of residential properties and commercial spaces. You can use your money for your personal projects.

     

    reply to this | link to this | view in thread ]


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