2 months ago

The economics of paying ransom

The cyberattack on the Colonial Pipeline by the hacker group DarkSide disrupted gasoline supplies across the Southeast. The company caused a stir by paying a 75 Bitcoin ransom to DarkSide. America historically has been opposed to paying evildoers, as reflected in the slogan, “Millions for defense, but not one cent in tribute,” and President Jefferson sending the Navy and Marines to fight the Barbary Pirates.

Ransomware raises many economic issues. A first question is, do hackers ever give the data back if paid? DarkSide provided Colonial Pipeline a key to decrypt their data. According to Proofpoint, this is the norm: 70% of ransom payers got their data back, 20% never got their data back and 10% received a second ransom demand.

From an economic perspective, this is not surprising. About two dozen groups, identifying themselves by name and known to insurance companies, carry out most of the sophisticated attacks. Insurers would never recommend payment in the future to a group which has reneged. The hackers must deliver as promised to make money.

Some have suggested making payment of ransom for cyberattacks illegal. If no one ever paid ransom, the hackers could not make money. Refusing to pay ransom though faces two significant economic challenges.

The first is time consistency. Kidnapping illustrates this concept. Before an event, the incentive exists to say, “We will never pay ransom.” If the bad guys believe this, they will never invest the time, effort and expense to stage a kidnapping. Once they hold hostages, however, our incentive changes; negotiating just this one time now makes sense. Our policy to never pay ransom is not credible.

Collective action poses the second challenge. Businesses collectively have an interest in not rewarding cybercrime, yet individual businesses suffer these attacks. A business which does not pay ransom benefits other businesses, creating the challenge. Why should Continental Pipeline suffer losses to make other businesses less likely to be attacked?

Why do businesses pay ransom? Reports mention several factors. A business may face a closure of unknown length and cost. Customers’ personal information will be sold if ransom is not paid, leading to fines and bad publicity. And the hackers might sell proprietary information to competitors.

Good economists know better than to second guess business managers’ decisions. Decisions to pay ransom often involve the business’ executives, its insurance carrier and tech security experts. They know the options and likely costs and should make a good decision, despite the pressure of a crisis.

Insurance companies and government regulations reduce organizations’ vulnerability to hackers, which is good. But what about channeling President Jefferson and going after the hackers? Most of the hacker groups operate in Russia, which provides Safe Haven as long as the hackers do not target Russian companies. Some law enforcement options may exist. Federal prosecutors apparently recovered most of the Bitcoins paid to DarkSide.

Crime is a very costly way to transfer wealth. Stolen merchandise typically sells for one-third (or less) of market value. A criminal might have to steal thousands in property to net $1,000. Ransomware appears much more wasteful than traditional theft. Consider just the value of the time Americans spent searching for gas during the disruption. Remember then that the ransom was about $4.4 million.

Cybercrime makes us poorer. The hackers and defenders at tech security companies are highly skilled computer programmers. But instead of making new apps or games, they are hacking or defending existing computer systems. Add to this the service disruption during cyberattacks, the reduced use of technology for fear of being hacked and the time spent on security training. The costs may be $1 trillion annually, or one percent of global GDP.

We must guard here against comparing the real world to an imagined utopia. We cannot costlessly protect our property from thieves or our computers from malware, or make people no longer willing to steal from others. Economics teaches that there are no perfect solutions in life, only tradeoffs. Vigilance, antivirus programs and backup are the tradeoffs we face with cybercrime.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.

3 hours ago

UAH’s Baudry Lab part of efforts to target COVID with drug therapies

Two different strategies to discover and perfect pharmaceuticals active against the COVID-19 virus have attracted a half million dollars in research funding to support five institutions, including the Baudry Lab at The University of Alabama in Huntsville (UAH).

The lab, led by Dr. Jerome Baudry (pronounced Bō-dre), a molecular biophysicist and the Mrs. Pei-Ling Chan Chair in the Department of Biological Sciences at UAH, a part of the University of Alabama System, will receive a portion of the funding, which originates from the National Institutes of Health (NIH) National Institute of Allergy and Infectious Diseases and from Saint John’s Cancer Institute, a private organization located in Santa Monica, Calif.

“Both awards are the recognition of our hard work and success of the last year, when we used supercomputers to identify natural products that have the potential to prevent infection by the COVID-19 virus or to prevent its replication in our cells,” says Dr. Baudry, who is also a professor of biological science.

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“We have had quite an impact, together with our collaborators at Oak Ridge National Laboratory (ORNL), Hewlett Packard Enterprise and the Alabama Supercomputing Authority,” he says. “And it led us to join these two new collaborative projects and apply for these two grants, which were both awarded, which is a pretty unusual and happy outcome, as research grants are usually very difficult to obtain.”

In their segment of the new research, the UAH scientists will continue to work with chemicals found in nature, which are called natural products. Dr. Baudry is joined in the work by Maher Mansur, a senior molecular physics doctoral graduate student, and the pair are training junior scientists to help with the effort.

“Natural products are very interesting chemicals. Sometimes, the natural products can work by themselves and it leads to phytotherapy or to nutraceuticals.” Dr. Baudry says. “Sometimes the natural products are not quite powerful enough, or they can be toxic for humans. In the latter case, medicinal chemists can modify the natural products’ chemicals to become very potent and safe pharmaceuticals.”

He says that could be a likely outcome as the new research progresses.

“We will still use our supercomputers to identify natural products that appear to do well, and we will use this information coming from nature and the expertise of the chemists to ‘chisel’ the natural products to be very efficient against the virus and very safe for our cells,” Dr. Baudry says.

“So far in our research what has usually taken many years has taken a few months, and that’s why we now can go on the offensive against the virus, instead of staying on the defensive.”

There’s a synergy between modern science and ancestral knowledge in natural products that allows advancement, he says.

“Natural products are a fantastic source of chemicals and medicine, and preserving our natural history, including our knowledge about what the plants and fungi do and how they work, is very important.”

Spikes and torpedoes

In the SARS CoV-2 research grant awarded by St. John’s Cancer Institute, Dr. Baudry’s team is working with Dr. Venkata Mahidhar Yenugonda, director of Saint John’s Cancer Institute Experimental Therapeutics Research Program. Dr. Yenugonda is an internationally known medicinal chemist who is leading the project.

“In this first project, we are going to identify molecules that have the potential to bind to the virus’ spike protein,” says Dr. Baudry. “That protein is on the outer surface of the coronavirus, which leads to its crown-like appearance and name, ‘crown’ being ‘corona’ in Latin.”

The virus’ spike protein allows it to attach to the cell, which is the first step in infection.

“Our strategy is to design a molecule that binds to the spike protein, preventing the virus from attaching to cells, and therefore preventing infection,” says Dr. Baudry.

In the other, NIH-funded project, the Baudry Lab is working with Dr. Jennifer Golden, the project’s lead principal investigator, who is an assistant professor and the associate director of the Medicinal Chemistry Center at The University of Wisconsin-Madison; Dr. Jeremy Smith, the Governor’s Chair Professor in the Department of Biochemistry & Cellular and Molecular Biology at the University of Tennessee (UT) in Knoxville and director of the UT/ORNL Center for Molecular Biophysics; and Dr. Colleen Jonsson, director of the University of Tennessee Health Science Center Regional Biocontainment Laboratory in Memphis.

The project uses promising compounds that might attack COVID-19’s polymerase inhibitors.

“These potential drugs torpedo some proteins that the virus forces the infected cell to make,” Dr Baudry says. “These proteins are indispensable for the virus to re-assemble itself in the infected cell and then to leave to infect new cells. If we can block that process, the virus cannot infect new cells in the body and it is doomed.”

Essential research

UAH has mobilized resources for research vital to establishing a strategy in the fight against COVID-19 and other, new viruses that may appear down the road, Dr. Baudry says.

“I have worked on COVID-19 with senior scientists and graduate students in my UAH lab, and it has established us on the research map, and UAH was present to help in many ways,” he says. “UAH students should know that if they do research here, they can be in the spotlight, that we do work at the very top level in the nation.”

The Alabama Supercomputer Facility, a state resource located in Huntsville, has been a valuable partner.

“I think it is important for the region, and indeed for all Alabamians, to know that their support of science, of research and development, and of universities pays dividends and goes a long way,” he says.

Discovering therapeutic pharmaceuticals is essential to helping COVID patients as the pandemic evolves, Dr. Baudry says.

“The vaccines are here and they are, literally, life savers,” he says.

“Now there are new variants coming all the time, in particular with mutations of the spike proteins we are going after, and we all have started to hear about variants such as Delta, which is more contagious than the original strains, or Epsilon, which may be partially resistant in some cases to vaccines.”

New vaccines probably can be created relatively quickly to address variants, he says.

“But there is still an immense need for pharmaceuticals, not vaccines, because pharmaceuticals could be used to fight new strains of the virus while new vaccines are being developed against new strains,” Dr. Baudry says.

“The nation’s effort has been supporting vaccines, with a remarkable success, and we are now kind of switching gears to augment our arsenal with pharmaceuticals. Pharmaceuticals and vaccines are not duplicating each other, they complement each other.”

The ultimate goal is to achieve a protocol much like exists for the flu, where vaccines help keep the disease in check but antivirals like Tamiflu are available to treat vaccinated patients with breakthrough infections or the unvaccinated who get ill. Tamiflu has as its starting material shikimic acid, which is present in the pods of star anise.

“The situation with COVID-19 can very well be similar: a vaccine that overall works very well and medications to help those who still get sick,” Dr. Baudry says. “And what we learn in this work against COVID-19 will also be a very important source of knowledge in case a new, different virus appears down the road.”

(Courtesy of UAH)

4 hours ago

Summer attendance booming at Alabama Power Preserves

The summer months are the perfect time of year to get out and appreciate the beauty of Alabama’s lakes and rivers. With 65 public-use spaces across 12 reservoirs, Alabama Power’s Preserves offer the chance for everyone to enjoy a day in the great outdoors.

The Preserves are protected lands around Alabama Power lakes created to enhance natural resources and allow the public to enjoy the rich, ecological diversity of the state. Sites have a variety of amenities, including boat launches, picnic tables, grilling areas, fishing piers, weigh stations, hiking trails and swimming areas.

Over the Fourth of July weekend, Flat Rock Park on Lake Harris, which features hiking, fishing, swimming and picnicking areas, had more than 4,000 visitors. D.A.R.E. Power Park on Lake Martin, which has similar amenities, was visited by more than 1,500 people.

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Explore The Preserves by Alabama Power along Alabama lakes from Alabama NewsCenter on Vimeo.

“Attendance numbers at our parks have been higher this year than we’ve seen in the past, especially over the holidays,” said Sheila Smith, Alabama Power land supervisor. “Visitors are telling us that they’re looking for outdoor activities closer to home and day trips they can enjoy with the entire family, so we are extremely pleased to provide these facilities for our communities. We’re even seeing visitors traveling to our parks from other states and areas over 100 miles away.”

To learn more or find a Preserve near you, visit apcpreserves.com.

(Courtesy of Alabama NewsCenter)

6 hours ago

Dr. Daniel Sutter: Shower freedom goes down the drain

The 1992 Energy Policy Act authorized imposition of energy and water efficiency standards on household and commercial products. Consumers have not been thrilled with the new products. As Jeffrey Tucker puts it, “Anything in your home that involves water has been made pathetic, thanks to government controls.”

President Trump repealed regulations on showers, but the Biden administration proposes to reinstate them.

Dozens of products now use significantly less water and energy. For example, showers cannot use more than 2.5 gallons per minute and toilets are limited to 1.6 gallons per flush. While described as efficient, efficiency here is used in an engineering and not economic sense.

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For engineers, efficiency involves using the least water or energy to accomplish a task. Department of Energy (DOE) engineers define showering, flushing waste or cleaning dishes, determine the minimum amount of water or energy needed for this, and only allow products meeting this standard to be sold.

Economists define efficiency in terms of consumer preferences. Consumer sovereignty is the basis on which we judge the economy’s performance. With the economic freedom and competition, manufacturers must cater to consumers. We get the showers and toilets we like.

The Energy Policy Act shifted control over product design from consumers to the DOE. All products have numerous dimensions of performance. Consumers choose products based on their personal tastes. Quality is also balanced against the cost because higher quality costs more; we do not always buy the best product on the market. DOE standards prioritize one dimension – energy or water use – over others.

Not surprisingly then, many consumers view the “efficient” products as worse. President Trump picked up on this during his 2016 campaign: “You have sinks where the water doesn’t come out. … You have showers where I can’t wash my hair properly, it’s a disaster!”

The government of a free country serves the citizens. The restriction of consumer choice can only be justified if it makes consumers better off in some way. Saving water is a bogus rationale.

For starters, households account for only a small fraction of water use. Furthermore, water-saving products do not always use less water: people end up repeatedly flushing low-flush toilets. But most significantly, water does not disappear when it runs down the drain. Property-treated wastewater can be safely discharged into a river or lake and remains part of the natural cycle.

“Saving water” amounts to reducing the demand on water and sewer systems. Delivering clean water to households requires the use of resources, and the cost is higher when water must be shipped great distances like in western states. Government supplies most water to Americans: cities operate water and sewer systems with the Federal government building large scale water delivery projects and funding most wastewater treatment plants.

Cities, however, generally supply water to households at an artificially low price. And Uncle Sam does not charge users the full cost of water delivered from large projects. Consequently, increased water use strains municipal water and sewer systems.

Elected officials are terrible at building, maintaining, and upgrading infrastructure. Replacing water mains is not an exciting way to spend tax dollars. Efficient household appliances provide a back-door way to avoid investing in water and sewer infrastructure.

Alternatively, suppose cities charged for water based on the full cost and used the proceeds exclusively for maintaining and expanding capacity. Americans wanting a surround shower delivering walls of water would pay a sizable bill every month, but the payments would cover the cost of providing extra water. Americans could enjoy shower freedom.

Although President Trump often spoke about regulations on consumer products, the shower rule was only repealed last December. Deregulation in 2017 would have given Americans time to upgrade their bathrooms, rendering the reimposition less relevant.

Reimposition of the shower rule is not official yet. Like with all proposed regulations, the DOE must accept public comments on the rule. I try to avoid prognostication, but I suspect that public comments will have little impact on the final decision.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.

6 hours ago

USA College of Nursing receives $1.9 million grant to boost nursing diversity

Increasing the diversity of the nursing workforce is a key focus of the University of South Alabama College of Nursing, which recently received a $1.9 million federal grant from the Health Resources and Services Administration to support the advancement of diversity in the nursing field.

The grant will fund a new initiative known as the EMPOWER project, which will serve two purposes. First, it will advance USA’s goal of educating a more diverse nursing workforce. Second, it will reduce health disparities in underserved communities.

EMPOWER will concentrate on recruiting, retaining and graduating bachelor of science in nursing students of diverse and underrepresented backgrounds. This is the first time USA’s College of Nursing has received the HRSA workforce diversity grant, which focuses on educating and supporting students from disadvantaged backgrounds.

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The College of Nursing EMPOWER Project Director, Dr. Shanda Scott, assistant professor and director of diversity, equity and inclusion, and Co-Project Director Dr. Christina Thompson, assistant professor of maternal child care, partnered to apply for the HRSA grant. Additional College of Nursing faculty members supporting this grant initiative are Dr. Nerkissa Dixon, assistant professor of adult health nursing, Dr. Loretta Jones, assistant professor of adult health nursing, and Dr. Dedra Reed, assistant professor of community mental health nursing.

“We are very excited to receive this significant funding to start the EMPOWER project,” Scott noted. “We plan to recruit, retain and graduate undergraduate nursing students from underrepresented backgrounds that will one day serve rural and underserved populations. We are striving to increase the number of minority students entering the nursing workforce. Understanding the needs of diverse student populations is critical for student retention through graduation.”

Research shows that to advance health equity, there’s a need to improve diversity in the nursing profession, Scott said.

“We understand that a more diverse healthcare workforce can reduce health disparities,” Scott explained. “Research has shown that by strengthening the skills and diversity of the nursing workforce, patients receive better healthcare.”

USA is one of 32 institutions of higher education nationally to be funded through this HRSA four-year award.

“I am proud of USA’s College of Nursing faculty who are leading this project to increase opportunities in nursing education for students who are from disadvantaged backgrounds, including racial and ethnic minorities,” said Dr. Heather Hall, dean of the College of Nursing. “The program will be developed to include recruitment, retention, and graduation goals that will provide a pathway for students of backgrounds underrepresented in nursing. It is vital for the nursing profession to include a more diverse nursing workforce to strengthen the understanding and awareness of the needs for individual patients.”

Under the EMPOWER project, 10 traditional BSN students will be in the first cohort. The grant funding will aid a total of 100 students over the four-year period. All grant recipients will receive a scholarship for tuition, books and fees, and a monthly stipend for personal expenses like food and gas.

“The scholarship will be paid annually, and students will receive additional funds each month from the stipend with a goal to alleviate some of their financial burden,” Scott said. “Our students must drive to attend their mandatory 8-12-hour clinical rotations located at various hospitals. Through the stipend, we are addressing these basic needs.”

It was determined by the EMPOWER project team that, in order to be successful, the initiative needs to include mentoring, peer tutoring, career, faculty and professional mentorship for each of the students in the cohort.

“As students navigate through the nursing program, they will participate in a clinical immersion experience at the USA Simulation Lab and through the community health partner, Franklin Primary Health,” Scott said. “We would like students to engage in learning experiences to enhance their knowledge regarding the care of culturally diverse and underserved patients. The students will also participate in academic success workshops to include test taking, resilience and mindfulness sessions”

The funding allows the South’s College of Nursing to receive holistic review training and a faculty mentorship plan to help with the recruiting and retention of minority faculty members.

“Increasing diversity of both students and faculty in the USA College of Nursing will prepare graduates to meet the important workforce needs,” Scott said. “The initiative’s goals align with the mission of the University’s diversity, equity and inclusion efforts.”

For more information about EMPOWER, send an email to shaston@southalabama.edu.

7 hours ago

Is the American alligator population in Tuscaloosa increasing?

In May, an alligator was struck by a train on Kauloosa Avenue in Tuscaloosa, and in June another gator was hit by a car on the same road.

In the past few years, there have been several reported gator sightings at Lake Tuscaloosa and at Van de Graaff Park.

Should alligators now be expected as a common part of the Tuscaloosa wildlife experience? And are their numbers growing?

Scott Jones, a University of Alabama New College LifeTrack instructor who specializes in herpetology, zoology and conservation biology, said Tuscaloosa has always been firmly within the natural territory range for the American alligator.

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He said Tuscaloosa is not generally considered well-known for alligators because their populations aren’t as dense in T-Town as they are in Florida and south Alabama.

“The American alligator’s range goes all the way up to North Carolina,” Jones said. “So seeing them here isn’t that unusual. In fact, seeing them here is a success story.”

In the 1970s, the American alligator was put on the endangered species list because they were hunted to near extinction. But in the past 50 years, their population in Alabama has grown to the point where hundreds of annual complaints about them are reported. In 2006, alligator hunting season in Alabama was reinstated by the Alabama Department of Conservation and Natural Resources.

Do increased sightings of alligators in Tuscaloosa mean their numbers are on the rise in the city?

Jones said not necessarily.

“They’re more active in the summer because it’s breeding season, so that’s one of the main reasons someone may spot one,” he said. “In addition, there’s been a lot of major rain events here. Heavy rain and flooding will wash them out of their typical habitats and into areas where they’re swimming on the street, like with the sightings on Kauloosa Avenue.

“I can’t say for sure that their population is experiencing a boom in growth here, but I can say that their population here is stable and slowly increasing, and that American alligator population in the South, in general, is growing.”

What should be done if a person encounters an alligator?

Jones said people need to be aware of their surroundings at all times when outdoors, particularly near bodies of water. Alligators like to sunbathe well away from populated areas, but if someone is out fishing early in the morning or late at night, their chances of seeing one will increase.

“They look a good bit like logs,” he said. “If you see a log all of a sudden emerge from the water, that might be a good sign that it’s actually an alligator. If you’re out at night and you see a pink eye shine on the water, it’s a good sign that it could be an alligator.”

Jones said they’re not generally a threat to people, especially on land. They primarily attack when on land if they’re harassed, so the best thing people can do if they see one is to leave it alone.

“They tend to be shy, so just give them space. Obviously, if you’re driving and one is in the way there’s nothing you can do if it crosses your path, but that’s rare. They’re generally content to stay in the water or around the water.”

However, alligators pose a threat to pets, Jones said.

“If you’re in an area where they’re known to be, don’t let your pet spend time by the water’s edge.”

This story originally appeared on the University of Alabama’s website.

(Courtesy of Alabama NewsCenter)