Bulk e-mail, says Albala, is under siege. A flurry of spam regulation bills looms on both federal and state legislative levels. A string of recent court decisions is steadily eroding spammer freedom. Blocking software installed at large Internet service providers like America Online and CompuServe is “making it almost impossible for people to get the mail out.” And worst of all, this spring, sales of Floodgate, which retails for about $400, suddenly plummeted.

“It’s the end of an era,” says Albala.

Most spam-ridden users today might snort at that idea. Spam stats are hard to come by, but a wealth of anecdotal evidence suggests that bulk e-mail is booming. A steady stream of complaints dot Usenet newsgroups, mailing lists and online conferencing systems. A systems administrator at one Internet service provider reports that 25 percent of his own mail is spam — and the numbers keep rising. Indeed, over the course of reporting this story, my daily spam count nearly doubled, as if just the act of thinking about spam exerted a magnetic attraction on “Lotto Buck$ 4 U!!!” e-mail messages.

Albala’s troubled bottom line has another, more likely explanation: competition. Floodgate may have been the first spam software product, but over the last year, a slew of increasingly powerful “address extractor” and “bulk mailer” programs have joined it in the market, flaunting gaudy, inflammatory names like Extractor Pro, Stealth Mass Mailer, CyberBomber, E-Mail Blaster and Web Weasel.

And those are just the most public weapons in the spam arsenal. A thriving not-so-underground spam economy flourishes in the interstices of the Net. There is a steady demand for “cloaking software” — programs that disguise, or hide, spammer identity — as well as for arcane little programs like “mailing list cleaners” that cull “bad” addresses from mailing lists. And finally, of course, there are the address lists themselves — for prices ranging from $19.95 to several hundred dollars, you too can purchase 25 million e-mail addresses.

Indeed, as I looked more closely at my daily dose of spam, I noticed that a significant portion, if not the majority, of my junk e-mail advertised tools designed to create more junk e-mail. Welcome to the ultimate post-industrial “service economy”! On the Net, everyone is in business selling business supplies. And the trickle-down effect of a vigorous spam software marketplace is, inevitably, more spam.

One can hope that before we’re completely overwhelmed, we’ll see the development of equally powerful anti-spam tools. But right now, spamming technology has the upper hand, and it is feeding on itself in a mad, spiraling frenzy.

And the spammers rejoice. Contrary to my initial assumption, I found that as a class, the authors of spamming tools and marketers of spamming services are a brash and highly visible crew. They stand united by a firm belief that any publicity is good publicity, by an absolute refusal to acknowledge that the tools that they are creating are being used irresponsibly, and by a strong wish that the government keep its hands off their business. As one reseller of the address extractor program NetContact told me, “Everything we’ve come to enjoy and take for granted in the Western world is at risk if we restrict the honest expression of salespeople.”

Neil Albala’s competitors airily dismiss his fears. Adverse legislation? No problem, we’ll just move our servers to another country. As Forrest Dayton, author of the Stealth Mass Mailer program observes, “They couldn’t ban porno on the Net. How are they going to ban bulk e-mail?”

Blocking software? So what — it’s just another market opportunity. Floodgate’s woes, say competitors, are due to its own deficiencies. Newer, smarter programs have become the spammer’s first choice. “My mail gets through,” asserts Dayton.

Depressed sales? Business has never been better, claims self-proclaimed “spam king” CyberPromo’s Sanford Wallace.

“Since the day we started this business we haven’t shown a loss,” says Wallace, who enjoys referring to himself by the nickname “Spamford.” Claiming revenues this year exceeding $2 million, he scoffed at assertions that the bulk e-mail biz is little more than a pyramid scheme in which the irresponsible rip off the clueless. “You’d have to make a mistake not to make money in this business.”

CyberPromo, boasts Wallace, is responsible for “80 percent of the bulk e-mail currently delivered across the Internet.” Wallace is eager to claim that CyberPromo moves 25 million e-mail messages a day for 11,000 clients. But CyberPromo markets no actual products itself — just the tools of the spamming trade. The company is a one-stop-buys-all spam clearinghouse, addressing, says Wallace, the biggest problem that would-be spammers face — the likelihood that they will lose their account at their local Internet service provider if they abuse spam policies.

That’s not a problem at CyberPromo, which — in addition to its flagship product, the bulk e-mailer Cyber-Bomber — also has its own network of mail server computers, and purchases connectivity to the Internet through a service provider, Agis, that remains deaf to anti-spammer outrage.

Wallace’s competitors aren’t crazy about his devil-may-care stance. To them, he is undermining the “respectability” of the bulk e-mail business.

“His ‘how are you going to stop me’ attitude is great for his publicity and great for his marketing, but as far as legitimizing this business and this industry, it’s not helping a whole lot,” says Todd Farmer, marketing director at Extractor Marketing, which sells the address extractor programs Extractor Pro and Web Weasel.

But is the business really legitimate in the first place? To most systems administrators and anti-spammers, the bulk e-mailers are taking advantage of technical loopholes in the Internet infrastructure to get a free marketing ride on an already overburdened system. And the fact that they seem mostly to be selling their own tools exposes their hollowness, argues Scott Mueller, a systems administrator at WENET, a mid-sized Internet service provider in San Francisco.

“If you think about it, if there were money to be made spamming ads, then wouldn’t you want to keep other people from competing with you?” asks Mueller.

Mueller is a leading force in the Coalition Against Unsolicited Commercial e-mail (CAUCE), a group that is backing federal legislation that seeks to financially penalize advertisers for unsolicited e-mail, rather than go after vendors of spamming services. He’s given up on techno-fixes to the spam problem, convinced that there is no way, “unless we have true artificial intelligence,” that spam blocking software can ever keep up.

First, there is the endless creativity of the spammers. Spammers change their return addresses constantly, and are always coming up with new formulations of the basic pitch. And software like the Stealth Mass Mailer makes it possible to use any mail server computer on the Net as a bulk e-mail relay station, even if the bulk e-mailer doesn’t have an account on the service provider that owns the mailer. Such a practice, referred to as “hijacking,” is considered one of the more egregious spamming sins. Even Dayton, the author of the program, says he frowns upon such “unethical” activity.

“I don’t police what my people use it for,” says Dayton. “I tell them up front you shouldn’t mail through a server you don’t have an account from. You can open up an account with a bulk e-mail Internet service provider and you’re doing it totally legit. All the program was designed for was speed.”

To anti-spammers, such assertions reek of disingenuousness. But questions of morality aside, the truth is that the open architecture of the Internet permits all kinds of abuses. Decentralized anarchy is one of the Net’s greatest strengths; but it doesn’t come for free. If you want the power of e-mail — cheap, fast and universal — you must pay the price of spam.

Or at least that’s how it seems right now, with the prospect of any significant legislation taking effect still at least a year away, according to Mueller. But the obvious health of the market for spam tools begs an obvious question — where is the market for spam blockers?

In its infancy, argues software engineer Ron Guilmette.

Guilmette is a leading anti-spam radical — a longtime spam hater who finally decided to bet his talent on an emerging market for anti-spam technology. Guilmette notes that new versions of popular e-mail programs such as Pegasus and Eudora come equipped with powerful and increasingly easy-to-use filter systems that allow users to configure their applications to reject unwanted mail. The problem, he concedes, is that spammers move too fast for users to keep up with — you’d have to spend more time updating your filters than it would take just to delete the messages by hand.

Guilmette believes he has an answer to the problem — a spam blocking program that is configurable by users, but constantly updates its own internal list of spam offenders by connecting to a central database. Guilmette says his program, Deadbolt, available for purchase in September, would be installed at the mail server level — thus catching, and blocking, spam before it ever is downloaded into a home computer.

And just as the spammers are constantly harvesting the Net for new e-mail addresses, Guilmette has spies lurking everywhere, watching for new spammers.

“We have a global network of listening posts,” says Guilmette. “E-mail addresses that we put on different Web pages, that we have posting to newsgroups and mailing lists. They are carefully disguised to look like normal e-mail addresses, but they actually forward every message that they receive back to our central database. The spammers will never find them all.”

Like most software engineers, Guilmette is confident that an acceptable solution is only a few lines of code away. Spam technology, he says, is kid’s stuff.

“As far as the arms race is considered — their tricks vs. our tricks — I think their tricks have been extremely trivial,” says Guilmette. “It doesn’t take a rocket scientist to figure out how to write a spam program. But our defenses, or our tools or weapons, have, to date, been very primitive in response. What I’m trying to do with Deadbolt is raise the bar to a much higher level. I agree with the people who assert that spammers may invent new tricks. But right now they are only using a small handful of tricks, and they have no others. Once we raise the bar on our side, the odds of them being able to jump over a higher bar is actually quite low.”

Would that it were so. Because without either the development of powerful defenses or punitive legislation, the spam onslaught is unlikely to slow. The bulk e-mailers like to talk about responsibility — some have even gathered together in consortiums aimed at coating their business with a respectable veneer. But when pressed, most authors of bulk e-mail software disclaim any real responsibility for what is done with their programs. In fact, Neil Albala, Forrest Dayton and Todd Farmer all immediately retreated to the identical clichis drawn from the libertarian arsenal of the National Rifle Association.

“A person selling a gun is not responsible if someone goes out and shoots someone,” says Albala. “Almost any tool can be used irresponsibly. Implying that I should be responsible is a bit of a stretch.”

“A gun can kill a person,” says Dayton. “It is very simple to go and kill someone. But that’s not what it was designed for.”

Right. And bulk e-mail software wasn’t designed to bombard your mailbox with crap, either.

If the consensus reporting from Capitol Hill is correct, sometime in the next two days, Republicans and Democrats will agree on a deal that keeps the payroll tax cut in place, extends unemployment benefits (albeit with a gradual reduction in the length of benefits put into place) and, once again, protects doctors from a cut in their Medicare reimbursement rate. The unemployment benefits and the so-called doc fix will purportedly be paid for by a combination of wireless spectrum sales, tweaks to how much the federal government contributes to federal worker pensions, and cash carved out of the health reform deal.

The politics of this are a lot easier to figure out than the economics. Simply put: It’s a win for Obama. The White House avoids putting the brakes on economic growth by preventing an imminent tax hike and keeping the safety net more or less intact for unemployed workers. In the run-up to an election that may be largely decided by the performance of the economy over the summer, that’s huge. If Republicans, as some have suggested, wanted to tank the economy to ensure new occupants in the White House, this is not the way to go about it.

And as a bonus, at least for the moment, the White House has also managed to avoid another game of budget showdown chicken. That said, the House has yet to vote, and over the past two years we’ve  witnessed several occasions in which recalcitrant conservative representatives have torpedoed deals that were supposedly set in place. On the other hand, it’s possible that the negative political consequences of the 10 percent approval rating currently “enjoyed” by House Republicans is beginning to sink in.

Economically, the deal doesn’t do anything to additionally stimulate the economy, it merely keeps in place measures that have already been enacted. The maximum length of eligibility for unemployment benefits will gradually contract, a process that will cause hardship for workers who drop through the safety net. But macroeconomically speaking, the effect isn’t going to be that huge. Nor will the offsets that pay for the unemployment extensions and the doc fix add up to much in the way of contractionary austerity, though it certainly won’t be pleasant for federal workers who may end having to contribute more to their own pensions.

All in all, it’s kind of a wash. The White House avoids sabotaging the economy, the Republicans avoid making themselves any more unpopular than they already are. It’s a sign of just how dysfunctional Washington has been over the last couple of years that the absence of drama seems like a masterful political stroke by Obama. Maybe, as James Fallows suggests, he really is learning how to be president.

Not only does the foreclosure deal add up to peanuts compared to the $350 billion tobacco settlement, but it also pales before the size of the problem that it is theoretically supposed to address. The amount of negative equity held by Americans in their homes is currently calculated at around $700 billion. As a result of the foreclosure settlement around 750,000 Americans who lost their homes to foreclosure will receive checks of around $2,000 and another million homeowners will see the size of their outstanding loans reduced by an estimated average of around $20,000. Sure, any additional stimulus will be sorely appreciated in today’s demand-constrained U.S. economy, but a $2,000 check isn’t going to make up for a foreclosed home, and it is silly to think the banks will feel more than a slight pinch. The banks have already reserved enough capital to cover the checks that they are going to have to cut (around $5 billion). Compared to the damage caused to American families by both the financial crisis and the rush to foreclosure, the banks are getting off easy.

Obama may be technically correct to say that the settlement “will deliver some measure of justice for some families who have been victims of abusive practices,” but it’s wrong to treat the news as any kind of real payback for bank misdeeds. It’s just nibbling around the margins.

So is it a sellout — “another raw demonstration of who wields power in America,” as Naked Capitalism’s Yves Smith, — undoubtedly the harshest critic of the Obama administration on housing policy and bank reform — argues? That’s a little harder to say, and a lot depends on the future course of events.

Some defenders of the settlement are arguing that the size of the deal is smaller than it might otherwise be because the government has retained the right to sue the banks for a wide variety of mortgage-related bad behavior stretching beyond the fraudulent processing of foreclosure paperwork at the heart of this deal. In particular, the states attorneys general of New York and California can continue their own separate investigations. As Felix Salmon writes, “other big-money lawsuits over securitization can and almost certainly will still be brought — which means that the big banks all still have significant litigation risk hanging over their heads.” As if to punctuate this point, on Wednesday night, the Wall Street Journal reported that federal regulators plan to sue some of the largest banks on charges of fraud related to the dodgy securitization of mortgages in 2007 and 2008.

The proof of this theory will only come when we see how hard the Obama administration and states like California go after the banks in the future. Given the track record of this administration, that may be doubtful. (Although, it may be worth noting that at least one conservative critic of the settlement, Douglas Holtz-Eakin, bases his critique precisely on the fact that banks still can’t put the whole crisis behind them. The administration can’t leave well enough alone, complains Holtz-Eakin, or “resist the political temptation to rouse its base with finger-pointing and lawsuits.”)

A more interesting question to consider, however, is how the housing relief contained in this settlement fits into other administration housing policy efforts currently in the works.

First off, government negotiators are still working on roping another nine mortgage providers into the deal, which could raise the overall settlement total from $26 billion to around $40 billion. In March, the rejiggered HARP refinance program will kick in, presumably allowing hundreds of thousands of homeowners to refinance at currently rock bottom mortgage rates. There is also strong pressure coming from the Federal Reserve and the White House to convert currently unoccupied foreclosed homes owned by the Fannie Mae and Freddie Mac into rental properties, a step that would remove excess inventory from the housing market.

Each individual nibble here is unlikely to make a profound difference, but taken together, all these initiatives add up to the most concerted effort the Obama administration has taken to date to bring relief to the housing sector. It’s also worth noting that it’s all happening without any help whatsoever from Congress. The approach does not address the desire for punishment that so many would like to see meted out upon the banks, but it will likely help spur additional economic growth. At a point when the economy already seems to have solid momentum toward recovery, every extra bit of help is gravy.

President George W. Bush cut taxes for almost everyone who paid income taxes. Romney would make the Bush tax cuts permanent. But that’s only a first step.

He would also raise taxes on poor families with children at home and those going to college.

Romney does this by reducing benefits from the child tax credit and the earned income tax credit and by ending the American Opportunity tax credit for college education.

To be fair to Romney, when the candidate made his comment on not caring about the poor, he did it in the context of noting that there is a “safety net” for the poor, and if it was broken, he would “fix it.” But it’s a little difficult to square the idea of fixing a broken safety net with the plan to eliminate tax breaks that benefit poor families with children who aspire to a college education. (Not to mention the little problem of figuring out how to pay for that safety net, while at the same time committing to making permanent budget-busting tax cuts.)

Romney’s tax plan appears tailor-made for an Obama attack team to rip to shreds. Of course, judging by the results from the primary and caucus contests so far, poor people don’t seem very inclined to vote for Romney, so maybe he figures he’s got nothing to lose.

Now, don’t get me wrong. I’ve got nothing against Jeremy Lin. He was a high school phenom in Palo Alto, Calif., and I know some Asian American kids out here in Berkeley who worship the ground he walks on. Lin didn’t make the NBA because he’s freakishly tall, like the 7-foot-4 Yao Ming (Lin is “only” 6″3′). He’s there because he can play ball, because he has a wicked fast first step when he drives to the basket, and he knows how to deliver the rock to the big guys (a skill a surprising number of “legitimate” NBA guards show little interest in mastering). He’s a triumph of will over genetic endowment, a fact that makes him inspiring to an entire generation of Californian kids restless with their model minority shackles.

But you can like Lin, and you can root for him, and yet still find his instantaneous, Tim Tebow-like ascent (in more ways than one!) to pop-cultural phenom — LINSANITY! — to be more than a little disorienting. Jeremy Lin is the latest example of how our socially-mediated, always-on world can churn any data point, any outrage, any act of heroism or moment of despair into a full-scale world-wide frenzy in less time than it took me to write this sentence.

We’ve seen this before. The same forces — social media, digital publishing tools, smartphone ubiquity — that are giving us Linsanity just blitzkrieged the Susan G. Komen Race for the Cure Foundation. They torpedoed Hollywood’s attempt to force SOPA and PIPA through Congress and blew up Bank of America’s plan to charge a $5 fee for debit card use. They fueled the Occupy Wall Street movement, magnified every Tebow prostration before God into a worldwide religious orgy and are ever-more ready to pounce on any misstep by a Mitt Romney or a Newt Gingrich and explode it into an instant political crisis.

And the crazy thing is, we’re figuring this out as it goes along — and giving the phenomenon more power. As we understand this new world, and submerge ourselves in it, we are beginning to take our cues from it.

Just want every one to know that I wrote about #linsanity this morning long before it became “hip” this afternoon: bit.ly/Apjdq4

— Jon (@viewmyseats) February 8, 2012

The mainstream media now seems to be adapting its coverage of events on the basis of whether something blows up in social media as much as it does from the perceived newsworthiness of the event itself. It’s startling, but also natural: When you see a fire start to blaze, you run to cover to it. And so Linsanity breeds more Linsanity.

You want highlights? Here’s a distilled package of nine minutes of Lin’s exploits from his 28-point explosion on Monday night. You want a tribute video with an original rap soundtrack on top of some T.I. beats?  Someone is recommending it to you on Facebook or Twitter right now. You want analysis, pro or con? Plug “Jeremy Lin” into Google News and say goodbye to the rest of your day.

You want vaguely disconcerting racially tinged jokes playing on Asian, black, and white stereotypes? Twitter’s going crazy:

Jeremy Lin is a huge pickup for the Knicks. Not only is he scoring a ton of points but he is also tutoring his teammates children in math.

— The Bill Walton Trip (@NotBillWalton) February 7, 2012

“We know that Lin has been playing along, but honestly, fellow Knicks, stop bowing to him after a great play.” nymag.com/daily/sports/2…

— Angry Asian Man (@angryasianman) February 8, 2012

Lots of sterile white folks offer to adopt Jeremy Lin, concerned with the all black family he is currently with.

— The Fake ESPN (@TheFakeESPN) February 7, 2012

On Monday, the social media world was also getting worked up about Michigan Republican Senate hopeful Pete Hoekstra’s racist Super Bowl ad, featuring a Chinese woman (labeled “yellowgirl” in the HTML code for the Web version) gloating over all the jobs her country was taking from the U.S. Once thrown into the 24/7 crazy cultural mashup perpetual motion machine, it didn’t take long before anger about that ad ran head on into Jeremy Lin pride. I have seen tweets urging Jeremy Lin to run for the Republican nomination for the Michigan senate seat, tweets warning that the only American jobs in danger from Asians are those belonging to New York Knick starting point guards, and even a tweet riffing off Kobe Bryant’s self-identification as “black mamba” — Jeremy Lin is suddenly  the “yellow mamba.”

It’s a tricky, tricky world. We get pissed off when we learn that an HTML jockey has labeled a Chinese woman “yellowgirl” but we grin when see Lin dubbed “yellow mamba.” Or maybe not; maybe we get mad at both. The tweet-stream moves too fast too tell for sure. It’s just one non-stop improv jazz riff frenzy.

The craziest thing is, from his record so far we know absolutely nothing about Lin’s staying power as a potential long-term starting NBA point guard. Lin won a state championship as a senior high school and broke all kinds of Ivy League records at Harvard, but he wasn’t drafted by a single NBA team, sat on the bench last year as a rookie for the Golden State Warriors, was cut by both Golden State and Houston before this season, and was playing in the NBA’s developmental league just two months ago. He’s had two great games against two bad teams, and once the league figures him out, he could easily become old news as quickly as he became the news. Or he might tear his ACL next week, be out for the season, and never manage a full comeback. His incredible domination of the basketball world right now tells us nothing about his future.

But one thing we do know for sure: There will be something to replace him, sooner rather than later. We’re strapped to a new kind of rollercoaster — the only thing we can be certain of is that our passions will be constantly roiled by whatever new outrage or delight seethes our way via our new information channels. You know that the Susan G. Komen foundation is reeling from their contact with this world. And you’ve got to guess Jeremy Lin is having a strange week.

Who’s next?

For New York’s bankers and traders, the new math suddenly reordered their assumptions about their place in a post-crash city. “After tax, that’s like, what, $75,000?” an investment banker at a rival firm said as he contemplated Morgan Stanley’s decision. He ran the numbers, modeling the implications. “I’m not married and I take the subway and I watch what I spend very carefully. But my girlfriend likes to eat good food. It all adds up really quick. A taxi here, another taxi there. I just bought an apartment, so now I have a big old mortgage bill.”

And there’s more where that came from! Banking analyst Dick Bove complains that the government has “basically castrated these companies.” Sorry, Dick, but it couldn’t have happened to a more deserving bunch of testosterone-crazed bulls in the entire global economy pasture. Hard times for investment bankers? It’s hard to imagine anything in the world that the average American could care less about, at this particular juncture in time.

2) As proof, amazing as it may seem, that the Dodd-Frank bank reform law is achieving exactly what the U.S. economy needs most: a reversal of the long-term trend in which the financial sector steadily gobbled up more and more of the U.S. economy.

Sherman makes a persuasive case that, even before the full implementation of Dodd-Frank, in anticipation of the new rules the big banks have been forced to make major changes to their businesses that have had a serious negative impact on their bottom line.

What is even more startling about this reversal is that few thought the much-vilified Dodd-Frank act would have much effect at all … And yet, from the moment Dodd-Frank passed, the banks’ financial results have tended to slide downward, in significant part because of measures taken in anticipation of its future effect. Since July 2010, Bank of America nosed down 42 percent, Morgan Stanley fell 25 percent, Goldman fell 21 percent, and Citigroup fell 16 — in a period when the Dow rose 25 percent. Partly, this is a function of the economic headwinds. But the bill’s major provisions — forcing banks to reduce leverage, imposing a ban on proprietary trading, making derivatives markets more transparent, and ending abusive debit-card practices — have taken a pickax to the Wall Street business model

If true, this is great news. In 1986, Wall Street accounted for 19 percent of all U.S. corporate profits. Just before the financial crash that figure had grown to 41 percent. That’s not a healthy economy. That’s an economy of speculators trading with each other and blowing up financial bubbles. Obama has gotten no end of grief from the left for not breaking up the big banks immediately after becoming president, even though one could make a good argument that to do so in the middle of the crisis would have damaged the U.S. economy even further. If, in fact, the long-run resolution of this drama is a Wall Street that is withering on the vine, while the “real” “Main Street” economy gradually strengthens, then we are looking at something remarkable: a profound transformation of the U.S. economy, the likes of which we haven’t seen since the Reagan administration.

3) As unwarranted hype.

Of course, Dodd-Frank has not been fully implemented, and financial sector lobbyists are busily exerting tremendous pressure to make sure every new rule gets written so as to have the weakest effect possible. At the same time, Wall Street will pour hundreds of millions of dollars into the campaign of Mitt Romney, who has promised to make rolling back Dodd-Frank one of the primary goals of his presidency. Profits may be bad this year, and bankers might be whining about their bonuses, but Wall Street will regroup, Dodd-Frank will be neutered, and it will be business as usual in just a few years.

Readings 2 and 3 are not necessarily in contradiction with each other. It’s possible for Dodd-Frank to already be having a salutary effect and for that effect to be short-lived. In some ways, Dodd-Frank’s legacy may be what November’s election ends up deciding — although whichever party wins the White House in 2012, the power of the financial sector over the political process is unlikely to diminish significantly.

But regardless of which reading you choose, the piece itself is amazing if only for the plethora of quotes from bankers lamenting how the times have changed. There’s a self-awareness of the fact that the country headed down the wrong road, that maybe, just maybe, there was something wrong with all the easy money. Wall Street sounds chastened. Whether or not the Occupy movement, or Dodd-Frank, or the bad economy is most responsible for this reality is impossible to say, but for now, let’s call it progress.