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And you're listening to radio station WBAI New York. Time is 7 o'clock, time for Off the Hook.
But if they could, they would. Bondedly bound for the best, expect the worst. I hope that's understood. Bondedly bound.
Bondedly bound.
Bondedly bound.
Oh, boy, is everything going to go wrong today? It's unbelievable. Okay, Bernie, are you there?
I'm here.
Oh, good, because you weren't picking up your damn phone, and we ran out of theme. Okay, so this is Off the Hook. Emmanuel here.
I'm going to introduce Bernie first, since I had to talk to you live on the air. Bernie, welcome.
Greetings from Philadelphia.
We're also joined tonight by Mike.
Hi there.
And Kyle.
Hello.
It's a joy to be here, it really is. Usually we just get here with one minute to spare. We were here for an hour beforehand, and of course everything goes haywire anyway, but that's just the nature of radio.
The rest of the show is going to be professionally produced.
I'd like to think that. I would definitely like to think that. We're going to try and do a bunch of things. Maybe even take phone calls if we can get the phone gizmo to work properly.
One programming note, we are not on next week, because the fundraiser begins.
Hooray.
Yes, and the cocktail party outside apparently has begun as well, because we have no soundproof in the studio at all, so hopefully people will keep it clean out there.
Hey, we went to Maker Faire over the weekend, Kyle.
Yeah, we did. It was a heck of a good time over at the Hall of Science in Corona, Queens.
Yes.
A two-day massive outdoor show-and-tell.
Can I just say, can I just say that...
You can.
Well, Corona, Queens, you know, I love Maker Faire, but I really love Corona as well. Just walking through the streets there, it's just such a cool neighborhood.
People cooking things on the street and kids running around everywhere. It's just one of those neighborhoods you really have to check out if you're in Queens.
And of course, Flushing as well.
And, you know, we drove through Maspeth today. Wow, that was something else, wasn't it, to get here?
Yeah, a mix of the industrial and residential. It's fascinating to check out new places and drive where you've never been before.
Yeah, and we did that courtesy of Waze, who suggested that you might want to try this route instead of the one you usually take.
And so we went down all these, like, windy streets. It's kind of cool that these GPS programs or apps on your phone occasionally suggest you do something different.
I guess for the reason of speed, getting there before the normal time. Sometimes it sends you on wild goose chases.
Other times you wind up seeing some really interesting things.
And today was one of those days where we got to go through Maspeth and see all kinds of industry and residential sections living together.
And it was really different.
It's just like SimCity.
Well, it's a little different than that, but anyway, back to Maker Faire.
Yeah, so that was, as always, an amazing event.
I think this year was better, though. This year was really incredible.
There was a spirit about the place that just was contagious.
Weather was great. All kinds of people coming up to the 2600 van.
Of course, we were wandering all over the place as well, checking out just the overall scene.
Any memories that stand out to you, Kyle?
Oh, yeah, a lot. I got one chance to run around and explore and see what's going on, what's available, what's exhibited, what people are up to.
And you really do have to steal yourself away, if you're a vendor or an exhibitor, to get that glimpse into each and every part of the site.
They really take over the whole field, the grounds, the parking lot.
The whole place becomes this massive fairgrounds.
Yeah, and it's getting bigger every year, too.
It's getting bigger and bigger. I had to actually kind of race walk to keep up just with my plan to make a full, complete trip around the place.
But I enjoyed the pavilions that they had.
Some of the large sculptures that were there were pretty amazing.
Interesting exhibits that we had seen in the past.
A lot of racing, like competitive stuff with both the big wheels competition as well as the power tools.
I heard them. I did not see the power tools.
Yes, you could hear them everywhere.
I saw one thing. Maybe you could explain this.
These people were riding what looked like a Segway around, except it didn't have anything except the wheels.
It didn't have the whole top handlebar thing.
They were just basically riding around with their feet and not holding on to anything.
How is that even possible?
Yeah, there's a couple of those as a product.
I think they've just gotten better with the balancing technology, the self-riding vehicles.
It's a new product, and I think a lot of people bought it and are playing around with it.
I saw that, too, and thought it was fascinating.
People seemed very comfortable without any kind of structure in front of them.
Maybe it's even safer in the sense you can just step forward or jump off.
These are like the powered skateboard type things?
No, it's not a skateboard. It looks exactly like a Segway except without the top part.
You basically just stand on it, lean forward or lean backwards.
I'm not sure how you stop. I guess you lean backwards.
The balancing question is something—
How do you know the people do stop? Maybe they're still going.
I think they got off at some point. I'm not exactly sure.
If we get these for Hope, they're a lot smaller, and we can probably get more of them.
In fact, maybe we just give them to everybody.
Definitely. That would be just a fantastically magical thing to have, but I don't think it's going to happen.
Anyway, the event also just had incredible art and performance going on.
A lot of people intermixing, kind of moving around the site.
Basically, performances moving around and going from place to place.
There were some marching bands, and that always adds to it. I think that's a lot of fun.
Anything in particular that struck you? Any performance?
We actually have video of these guys with saxophones, and they were basically just emitting a tone,
droning as they walked throughout every exhibit.
They came by and made this enormous loud noise into my face.
They got into your face.
It was great. It wasn't an actual band. It was just saxophones.
I thought that's just incredible that they all had this kind of flavor of different groups and so on.
They really did.
They stick together.
They had a second line from New Orleans that went through at one point.
It seemed like it was just really different themes at different times.
With made instruments, improvised horn sections.
They had a lot of tin, and obviously stuff that wasn't intended to be a musical instrument.
I like that because it really pushes people from just being one booth to just this moving kind of big community
that's all kind of at play over the weekend.
It really is playful, the whole experience.
Gosh, I could go on and on.
We had a lot of people come up to us, and I do want to mention this one group came up to us
and gave us a little circuit board.
It's called the Photon.
I don't know much about it, but it's a Wi-Fi development project.
It goes beyond me, but it looked really, really cool.
You're holding it in your hand right now.
I am holding it.
I promised them I would figure it out, but thank you very much for that.
It's really neat, and it's the kind of thing that we don't really know about,
and then people kind of say, you know what, you should check this out.
I think that you might find this interesting.
You might be able to get to use it.
They were adamant that we just want to give this to you guys, and you'll put it to good use,
or you might get something out of it.
That's the kind of thing that goes on, and we interact with the public a lot while we're there
and get the opportunity to tell people what hacking is about, what we're about,
and share different items.
We try to give as much stuff away as we can possibly give away
and just really evangelize and share, and people come by and want to share other things
that they're doing, and really that cross-pollination is the true magic.
So we had a lot of that going on, and I am really thankful to everybody who came by the booth.
And so many WBAI listeners came by as well.
This is the event where we actually get to meet the most listeners, and it's just incredible to see.
First of all, a lot of listeners learned about this through us,
but so many people have been listening to us for years.
I think we heard that, and the question, when is the next hope,
are the two questions I think we heard more than anything else, or two statements, basically.
I've been listening to you for years, and when is the next hope?
It's really, really cool to actually meet the listeners and have all kinds of back-and-forth
for various subject matter, mostly about technology or phones
or just how things are changing and have changed over the years.
Really, really cool.
And a lot of people were wanting to evangelize to their families.
A lot of people might say, oh yeah, I remember this when I was growing up.
They have families now, and they're telling their family what we're about
and how it's important, how it matters, the kinds of things that they grew up with
and how it's the same, how things have changed.
We always try to have phones and things that are playful that people can talk about the history,
and we love demonstrating that, and kids are really attracted to that.
Well, that's the thing.
You set up a bunch of rotary phones on the desk and encourage kids to come up
and try and figure out how to dial them.
And that was amazing because so many kids do know how to do it,
but so many don't know how to do it.
And you get the parents saying, yeah, this is what I'm talking about.
This is the kind of phone that I used to use when I was growing up.
It's just really cool to see the interaction and the learning,
the light bulbs going on above their heads as they see, oh, this is how telephony used to work
or still does work to this day.
How old are these kids or their parents that the parents had it growing up?
Oh, gosh.
I mean like people who are in their 30s or whatever who have young children now,
they didn't have rotary phones growing up?
Yeah, they did.
They could have easily.
I mean they could have had touch tone as well.
Do you remember the touch tone fee?
We talked about it quite a bit on the show.
Yeah, I do remember the touch tone fee.
That didn't go away until the 90s in some places.
It didn't go away at all.
But again, people do have old rotary phones in their homes if they grew up with them
or if their parents grew up with them.
Yeah, it's a good point Mike raises.
It is sort of fading out as far as the age ranges.
I mean parents are becoming quite young, but that's exactly why we do it.
We want to get a sense.
We want to gauge what people are aware of, what they're familiar with.
And if the parents themselves don't understand those types of systems or that equipment,
hadn't seen them, they might recognize them from their grandparents and so on.
But it is changing and we love watching that and trying to just make that –
capture that moment of discovery and the intrigue behind what is this clunky mechanical thing
and why is it important?
How has the past, how has these relics of history, how have they influenced,
how have they given us direction in some of the technologies that we use all the time now?
And parents, we had great stories.
There were some stories about kids that had figured out how to sync iOS devices
and bypass things and get their iPads to play games.
Parents have real concerns and they're convinced that their children are going to hack them
into oblivion or something.
So there's a lot of those kind of funny anecdotes when we talk to families at these events.
I actually talked to a couple of people who had written apps for VoIP connections
so that they would accept Pulse because apparently they don't by default.
That's important to them to be able to do that.
And the kids were fascinated by the fact that you could just flash a switch hook
and dial numbers that way.
I remember when I first discovered that as a kid, what a magical moment that was
because, hey, if you flash it twice, in fact, it still works to this day,
you're dialing two.
If you flash it eight times, you're dialing eight.
Ten times, you're dialing zero.
What happens when you dial 11 times?
I tried that right away and got into trouble because somebody on the phone company
wasn't happy with that.
Yeah, absolutely.
And there was a lot of teaching.
A lot of folks' parents were saying, yeah, this is how you do it
and I tried to explain Pulse dialing and how it works.
I even ended up suggesting analog telephone adapters.
So you can, in fact, still use rotary phones with modern systems,
even like VoIP and so on, but it takes a little extra doing.
But you certainly can still work with the instruments themselves.
Yes, and explaining the concept of phone freaking both to kids
and to people from the community who might have listened
but never really got into that part of the hacker scene.
That's incredible being able to do that, being able to say to people
that are just used to phone calls being free these days.
You can call anywhere, anytime for however long you want
and not get a big phone bill.
That's what we were doing back in the day.
We were trying to figure out ways to route around the billing computers
and, wow, look, we won.
We have exactly what we were asking for.
Maybe not exactly, but definitely something that's very, very different.
So it's cool to see that just be communicated to people
that never had a concept of that before.
A heck of a lot of that was built upon that spirit.
A lot of the projects, a lot of the technologies today
really do honor that to some degree or another,
that kind of spirit that people wanted to have that contact.
We met a cordboard operator too.
That's right, we did.
Talk about technology, Mike.
Yeah, people apparently were using cordboards
well into the 60s and 70s.
What does that mean?
What does it mean?
Not only are you unfamiliar with the technology,
you don't even know what it means.
I know the answer, but I don't think our listeners do.
Well, anyone who's watched an old movie probably has seen it.
It's basically where an operator connects different parties together
by literally plugging in cables into different inputs.
Bernie, you haven't said much on this,
so maybe this is something you can add some color to.
Yeah, sometimes it was called a panel system.
It was just a board with a bunch of holes in it,
and these cloth insulated cables
looked like large stereo headphone plugs.
And operators, live human operators,
would connect one jack to another
to connect one person to another.
I actually saw some in operation just a few weeks ago
up in northern Maine where there is a telephone museum.
And they had an operating cordboard there
connected to some phones.
And it was really interesting to see one working
and sit down and touch the tip and ring to the plug
to the different jacks.
And you can find pictures of it.
If you just look for telephone cord board online,
you can find pictures of these,
and you've seen them in old movies probably too.
She had some fascinating insights,
some stuff you don't normally hear about.
She talked a lot about the positioning,
how you would sit at the board,
how you would hold your hands,
how you would be ready to go right for connecting that call,
or how you would signal that you needed to take a break.
Those little details firsthand were really fantastic.
And we were a little confused at first.
We did the math in our heads.
We were kind of in the same camp as Mike was speaking to earlier
about just how long ago was it?
Was that really even possible?
Is there some description?
How old are you?
Yeah, well, she didn't look nearly old enough
to be doing that.
But I guess in certain parts of the country,
this kind of technology was used
for a little bit longer than we thought.
Absolutely.
On up into, I guess, the early 70s.
So it was fascinating to have those conversations.
So that gives you a sense as to the different kinds of people
who were there, people just starting out with technology,
people playing with new things, people playing with old things,
and just trying to figure out the history.
So that's the magic of it.
And hopefully we'll get to go to more of these events.
It's an extremely healthy environment, though,
just for people who are asking a lot of questions.
I just saw that repeated over and over again.
Not very many helicopter parents.
That's a good thing to see.
Kids just expressing themselves and experimenting.
I imagine, though, a fair amount of helicopters.
There were.
And the thing is, Kyle, I swore when we first went there
that I was going to leave with a drone.
And I didn't.
I did not get a drone.
They had drones that were practicing.
And they were so cool because they were hitting each other hard,
falling to the ground.
But they didn't break.
They were very impervious to damage.
And I want something like that.
Yeah, it was a competitive drone league
that hosted sort of a drag strip of sorts,
like a speed competition,
as well as sort of a battle cage or a net
where they would just fight in more of a ring.
I always took you for the type
who would prefer a non-military drone.
Well, I prefer something that is rugged
and can do the job.
And not necessarily take down other drones.
I don't need that.
I just would like to be able to wander around
and see what's out there.
It should be able to stick up for itself.
Well, if necessary.
Absolutely.
Anyway, that was Maker Faire this year.
I look forward to it next year.
And, you know, maybe other ones, too,
because they're happening all over the place.
If you go to MakerFaire.com, that's fair with an E.
You can find them in your area.
Maybe they're all over the world.
Yeah, we got some invitations, too.
We did.
We're not going to make San Diego this weekend.
Sorry to say, folks.
It's too far away and too short notice.
But Westport, Connecticut is a possibility.
Detroit is a possibility.
All kinds of places like that.
Rome might even be a possibility.
That would be awesome.
Do you want to ship the van over?
I don't know about that.
We'll have to figure something out as far as...
Or just get another van for that part of the world.
Speaking of old phones and phone museums,
some very, very sad news.
J.K.L. Phone Museum in Northern California
was completely destroyed in a wildfire,
and they're now accepting donations for support
to rebuild and acquire new specimens.
That's according to our listener, R.G.
Bernie, terrible news, huh?
It's tragic.
People spend probably thousands of hours in total
working on putting these telephone museums together
and just lovingly reconditioning these phones and switches,
which are an incredible amount of work.
And for it to all go up in flames is so tragic.
I'm hoping other telephone museums around the country,
and there's several, can help this one museum out.
Because a lot of this equipment just doesn't exist anywhere else.
All the phone companies have just dumped it
and sent it for scrap recycling.
So there aren't many switches left.
But you know, there aren't many switches left,
but there is plenty of old telephone equipment,
and lots of it exists in people's attics and garages.
And I'm sure that there are all kinds of specimens out there
that could be donated to museums or just, above all else,
not thrown out.
If you have an old phone in your house, don't throw it out.
It's lasted this long.
It'll probably last at least as long in the future,
and there are people who are very interested
with that kind of a thing.
So if you don't want it, donate it to somebody who does.
There are plenty of people out there who do.
Yeah, and some of these places even have storage.
There's annexes and extra overflow of equipment
because it really does pile up.
When you have a place that accepts donations like that,
people are more than willing to offload
large pieces of old switching gear,
which is incredible, and it tells a story
and has incredible craftsmanship in its own right.
Just as an artistic piece,
a lot of the stuff is made out of wood,
and you really cannot find anything made quite like it.
So it's very sad to hear that there was that kind of damage.
Okay, moving on to some things that are changing.
As of October 1st,
our credit cards are going to be working a little bit differently.
In fact, we were using credit cards as merchants this weekend,
and we insisted whenever possible
that we use the chips and not the strip,
although sometimes we had to use the strip,
especially when Amex is involved
because they haven't quite cut over yet.
What were some of the weird errors or problems that we ran into?
A lot of people are aware of it.
There was some conversation when we asked people
and definitely directing what card to use and so on.
Specifically for us, I mean, it was fairly smooth.
There's a couple cards that are not yet.
What is it, EMV? What is it, ECV?
I can't remember the chip's acronym,
but that are not incompliant yet.
I believe the card processor is going to roll that out
or has some sort of time frame here,
certainly before the holidays, I'm sure, to roll that out.
But our experience in general,
any card that had it worked fairly well with our equipment,
and we really only had, I think, signal and network issues,
but that's a little bit different when you're at an event.
Yeah, we had to stand on top of the van a couple times to get signal.
Maybe.
So people just were like,
here, hackers, here's my credit card.
Go stand on top of a van and use the chip part
that no one has ever used before.
It's that mentality that leads to all kinds of distrust.
I'm just impressed that the attendees of the Maker Faire
knew enough to trust you in this absurd situation.
Well, because if they know us, if they've listened to us,
if they've read the magazine,
they know that if anybody knows how to entrust privacy
or keep something secure, it's hackers.
It's not the companies that let all your information get out.
It's not the credit card organizations
that I'm about to read a story now
that tells how they're not doing it properly.
They don't care.
We do, because we have something to lose, mainly trust.
Credit card information in our hands,
obviously, is going to be protected and not abused
like it is in companies that don't care.
Yeah, and there are certain attributes to this technology
that will actually make it a bit more secure for our customers,
at least our audience,
because they're using something that doesn't require them
to put in some kind of pin in front of us.
We process everything without that.
Right.
Those decisions you make will dictate
how the things are handled and so on.
Well, it's the non-use of a pin, actually,
that is a point of contention.
Right.
For the NRF, which is the National Retail Foundation, I believe,
their general counsel, Mallory Duncan,
came out criticizing the new computer chip cards
because they are requiring customers
to provide a signature rather than a distinct pin,
and they say that won't eliminate online and phone fraud
with a stolen or lost chip card.
Very true.
It won't.
If you had to enter a pin,
then you'd have to have more information
if you had a stolen card
rather than simply entering the number.
Plus, you can't really tell,
hey, that's not that person's signature
if they give you a card,
whereas if they don't enter the right pin,
you'll know right away.
Mallory Duncan also said the financial burden
now in the tens of billions of dollars
of making the transition to chip card technology
unfairly rests mainly with retailers,
not banks and credit card providers.
We and our customers should not bear the burden
for flaws in a 50-year-old magnetic card system.
The transition to chip cards and chip terminals
has been all stick and no carrot,
and the technology doesn't work.
We would like it to work,
and we want a secure payment system.
Retailers who have not installed the new equipment
by the October 1st deadline, that's tomorrow,
will incur the financial liability
for fraudulent uses of a stolen or lost card.
Banks will incur the liability
if the payment terminals have been updated
just as they do today with magnetic striped cards.
Consumers face no liability under the new system.
While fraud with magnetic striped cards
is a widely recognized problem
recognized by U.S. merchants,
those retailers are also unconvinced
that chip cards with signatures for purchases
will be as secure as using a chip card with a PIN.
Now, Mike, when we go overseas,
we see this all the time.
We see chip and PIN being used everywhere.
Why don't they do that here?
I don't know.
And apparently it's up to the card itself
to decide what are the acceptable authorization methods.
So I now have a card with a chip
that works overseas finally,
but it's chip and signature,
and it's the card that makes the decision.
So I have to, you know,
if I'm overseas and I put the card in the thing,
it prints out a piece of paper
and the clerk is like,
what is going on?
Oh, we got another American.
We got to find the PIN.
It's a big production.
But I did encounter one machine.
I'll tell you,
it's the Danish Metro machines
that did ask me for a PIN.
So clearly my card knows about PINs
and can do it under duress,
but it really prefers not to.
Did you have a PIN?
Yeah.
Oh, okay.
Tell us about our Metro table.
Because many of the time
I've used my card overseas
and I've asked for a PIN,
and I don't have one.
I just say,
I don't have a PIN,
and there's a button they hit for no PIN,
which sounds really insecure.
But I guess if you truly don't have a PIN,
it'll go through.
And if you do have a PIN,
saying no PIN won't work.
That particular card
encouraged me to set a PIN online.
I got recently a new card
and they mailed it to me
on a piece of paper
that I have already shredded
and I don't know the PIN for that new card.
Well, the real question is,
why are banks not pushing
chip and PIN technology in the US?
According to analysts,
they say banks think
it'll be too difficult
for consumers to learn a four-digit PIN.
I mean,
come on.
We can handle it for ATM cards.
Yeah, we can handle it
for all sorts of things.
Give us a little bit of credit here.
I think we can handle,
no pun intended,
we can handle a four-digit PIN
and it'll keep our cards
much more secure.
Well,
some banks and credit card officials,
according to this story,
have said they prefer to wait
and see customer buying behaviors
with chip and signature approaches.
Banks will ultimately be responsible
for deciding whether to move
from chip and signature
to chip and PIN,
as has happened in Canada
in recent years.
Another advantage of the chip and PIN system
is generally the store employees
don't handle your cards at all
in most locations.
Yes.
That primarily is chip and PIN,
so there's reduced opportunities
for employee fraud as well.
Now, Bernie,
I know you've been the victim
of credit card fraud
as a result of some things
that have happened
in a hotel, right?
Yeah, well,
I wasn't actually a victim of fraud,
but I was,
my data was compromised,
but I never noticed.
I had to get a new card
and all this,
but I saw a couple times.
It happened with the Wyndham,
the Wyndham hotel chain.
I was at Nauticon a few years ago,
and then shortly after that stay,
I got a letter from Wyndham
saying,
oh, your credit card number
was compromised.
You should get a new card,
and then more recently,
there was the big,
what was it,
the Home Depot thing?
I forget what it was.
Yes, Home Depot.
Home Depot thing.
I had to get a new card then, too,
and a lot of times
they cancel your card
before they send you a new one
and you're left stranded sometimes.
That happened to me.
I was in a rural area
and I couldn't buy gasoline
when I needed to,
but I'm really perplexed
by this whole theory
by the Retail Merchants Federation,
or National Retail Federation.
Maybe not them,
but the banks.
They're saying that
people can't handle
a four-digit PIN code
or maybe it's going to take too long
and clog up the checkout lines,
but wouldn't it take longer
to sign your name
on a digital signature pad?
Wouldn't that take longer
than entering a four-digit PIN?
I can tell you it will,
especially if you can't find a PIN
like we had trouble with this weekend.
They have a stylus,
but I want to know,
are the networks going to be
analyzing our signatures now
with a chip and signature?
Will they be actually
comparing the signatures?
If you just draw a straight line,
will it work?
Do they use any criteria
to determine the veracity
of a signature,
or will they?
That's what intrigues me.
It's just another shortcut,
and I think it's something
that will be proven
to be a mistake,
and eventually we'll wind up
using the system
that the rest of the world is using.
I'm just amazed we have the chips.
I've been complaining about this
for many, many years,
and finally we have the chips at least,
so we're halfway there,
maybe even two-thirds
of the way there.
Now, Bernie,
I know there were some cases.
You mentioned the Wyndham Hotel case
where your credit card information
was taken.
There was a decision
on who was liable
for that recently?
I'm trying to remember
what happened there.
I think it was ruled
that a court ruled
that the Federal Trade Commission,
which is responsible
for regulating things
related to credit card fraud,
ruled that the Federal Trade Commission
can prosecute companies
over lax security.
Wyndham Hotel Chain
was the defendant in this case.
Wyndham was saying,
well, we shouldn't be held responsible
for all the credit card numbers
and names that we failed to protect,
and a federal court ruled
that the SEC can prosecute
these companies
for their lax security.
So this may be the first step
to actually having some accountability
to big companies
who are really careless
with our information.
I kind of thought
that they already had that right,
that if there is lax security,
that you had to answer
to the FTC,
among other organizations.
Well, Wyndham Hotel Chain
was fighting that,
saying, no, we shouldn't be,
and the court said,
no, you are responsible,
and you can be prosecuted
and held liable,
and that's going to also open up
civil liability
to companies that allow
our credit card information
and other personal information
to be exposed
to unauthorized parties.
So I think this is a positive step.
The only way this is going to stop
this kind of fraud
is if the companies
that are not protecting
our information
are held accountable financially
for their lax security.
So it's a small step
in that direction.
Well, it's interesting
you should mention the word fraud,
because that leads wonderfully
into our next segment,
which is something
you might have heard about
in the news
concerning automobiles,
namely VW, Volkswagen.
Yeah, it seems that there has been
some cheating going on
with regards to emissions.
How is this cheating possible?
It's possible through the technology
that's inside the car,
the computers that are
basically programmed
to sense when a car
is being tested for emissions
as opposed to when a car
is being driven,
and when it's tested,
it will give different results.
That is what's been happening.
It's unbelievable
what we're learning
on a daily basis,
but this affects people
who have diesel Volkswagen cars,
and guess what?
We have one.
We have one that actually
is right smack in the middle
of this controversy,
so it's of particular interest to us.
Kyle, you're a VW mechanic
and on top of everything else,
and you're into diesel
and biodiesel and all that,
so this has all kinds
of interesting points for you.
Yeah, yeah.
So this is a really impressive scandal
that has basically erupted
as a result of some compliance.
Basically, the clean air standards
in this country were being tested.
The vehicles were being tested
to basically check on the compliance
for I guess the 2016 model years,
and it was through some of this
that some discrepancies were found,
and it was brought to the manufacturer,
Volkswagen in this case,
brought to their attention,
and they made some token efforts,
but it didn't really erupt
until a couple months later,
until midway through the summer
or now, really.
They admitted that there was
an actual intentional software bug
put into the computer systems
to detect testing, as you said,
and basically they thought
they could get away
without further testing and oversight,
which is exactly what the EPA did.
They went and replicated a test
that had stumbled upon these results,
found that they had the same results,
and the crux of this
is mobile air quality testing,
so that's what was going on.
The EPA's test only called for them
to be tested on a dynamometer,
which is basically like two big rolling pins
that the front wheels are on,
and it tests it in a stationary position.
They have fans and all that,
but the thing they didn't do
is actually drive it
like you would maybe drive it
when you rent a car,
and this one university team did that,
found the discrepancies,
and that really prompted the EPA
to clamp down on this
because they had already received complaints
that there was evidence
that the sensors,
the state of the vehicle while testing,
if you move the steering wheel,
certain things would throw it off
or turn on emissions controls.
There was a suspicious activity with that,
which you can imagine
if it is sensing steering wheel movement
and you're in a stationary position,
who knows how they found it.
The point is when they replicated it,
the EPA found exactly the same results
that this other team had found,
and it supported
some of the other prior suspicions
that were brought up
but never really investigated.
What I find interesting about this,
fascinating really,
is the fact that because the systems
inside this car,
inside all new cars,
are what we refer to as black boxes.
We can't get access to them.
They're proprietary.
Only those people licensed to the car
have the right to even fix it these days.
Nobody could detect this,
and this is exactly,
this wasn't really the point
that we were trying to make.
The point we were trying to make
was that anybody should be able
to fix their car.
Any mechanic should be able to fix any car
to get access to it.
Shouldn't have to pay licensing fees
or be on a special list,
but wow, this makes the point much clearer
than anything we could possibly say
because we hadn't even considered
the possibility of nefarious actions
on the part of the auto dealers
to fraudulently change the data
and not be detected.
Yeah, yeah.
That's the really astonishing thing
that both of us realized immediately
when we started hearing the news about this
was that we had made these points.
We had talked about this on the air,
but in the context of working on
and tinkering with vehicle systems,
vehicle engine management systems
have been played with a little bit
and people have been definitely
wanting to have access
and we've talked with various people
that have worked for legislation on this.
The right to repair comes to mind.
We've talked about this over the years.
It's evolved into a situation
where we still have the dealers
and the manufacturers
protecting their software
and this happens actually more often
in industry and in consumer electronics
than we really care to acknowledge
as a society
and it's all around us really.
Every device you get
in some way has some attribute
that somebody wants to protect
the knowledge behind it.
And then by purchasing it
you sort of are forced into
these licensing agreements
and that's exactly the crux
of what arguments we had made in the past
was that these are essentially
licensing agreements
that bind you to something
that if it breaks
or if it is found in this case
to be in violation
or is in some way unhealthful
it is out of your control
and you had absolutely
no ability to audit
the system that you'd licensed
and paid for
and a myriad of other things.
It really is,
it makes it impossible
for people to understand
the devices that they're using
and or even innovate
and improve upon it
except for if you're a real
really dedicated
and willing to take the risk
of maybe breaking something
as with other scenarios like this
in consumer electronics.
Look how long it took
for this to be detected
how long this was out there
and had this university team
I believe in West Virginia
not been diligent enough
to actually investigate this
and try and find out
what was really going on
this could have gone on
for a much longer time.
We're talking about
up to 40 times
the allowable amount
of emissions
coming from these cars
that were bought
under false pretenses.
People driving around
thinking they're driving
environmentally friendly cars
are actually driving
environmentally hostile cars.
There's a whole world
of consumer issues
that are opened up by that
but the concept
of having this closed off system
that you don't have access to
that you can't analyze
that you can't adjust
you can't figure out
what is actually going on
this is the danger
this is the risk
of having that.
Mike?
All cars are environmentally hostile
but it's also
not reasonable to assume
that Volkswagen
is the only company
doing it.
Maybe they're the worst offenders
and they got lucky
and got caught
but according to the media
the team that ended up
finding this issue
was actually seeking
to demonstrate
that the cars were
environmentally friendly
and they just wanted to
test some new equipment
to show how great
these cars were
and they ended up
of course finding
quite the opposite
but the hubris
of the management
of Volkswagen
to think they were
going to get away with this
and the regulatory environment
that led them to reasonably
believe that they would
in fact get away with this
is really something.
That's exactly true
what you said
with regards to
the group
wanting to bolster
these kinds of
clean diesel technologies
that absolutely these
engines were branded
and marketed heavily
as being clean
and the team
themselves
I want to emphasize this
because you said it
in the conversation
let's just say this
one more time
the team did not
actually break
or violate
any of the software
like so-called
reverse engineering
and so on
they were not picking apart
the engine management system
they were not violating
any of the things
that we've talked about
in the past
as being quite hostile
to innovation
they actually used data
they found this
by actually analyzing
the emissions
and found that
there's something
turning this on and off
hmm
what is the
discrepancy
what is the difference
between when it does something
when it does not do something
and the other important point
is that these controls
were on the vehicle
so the ability for these cars
to be clean
is there
it's simply being bypassed
so that kind of
exasperates I think
and makes it a bit worse
considering there's not even
an attempt
so there must be a motive
behind this
that is business oriented
instead of
mindful
let me ask you this then
if they had actually
reversed engineered the code
do you think they would have found
even more
or could they find even more
if they could have access
to what actually is going on
yeah so that's a really
interesting question
it would
audits of engine management software
have caught this
or would this be something
you see only in the lab
I mean I'm not sure
the question
it stands
it's a good question
I don't really know
this is a little bit
it gets a bit
beyond my expertise
it's stuff I'm fascinated
and interested in
and have wanted to understand
and learn about
but it's certainly possible
that you know
when you have systems like this
that nobody gets to take a look at
at least we're missing out
on opportunities for innovation
and people improving upon the systems
and making it better
I also wanted to add
one other little fun fact
we were researching this Mike
and looked into precedent
for the so-called defeat devices
and it really has come about
in the 1970s
when emissions became something
very important
when a lot of the
like 60s muscle cars
and other big kind of gas guzzlers
as they were called
began to come under scrutiny
with Clean Air Act initiatives
and so on
so there were a couple
defeat devices
namely in 1973
Chrysler, Ford, General Motors
and even Toyota
were ordered to stop using
ambient temperature switches
which disabled pollution controls
at low temperatures
and then skip ahead
the same year also
Volkswagen settled with the EPA
1973 they admitted
no wrongdoing however
but paid $120,000
for failing to disclose
the existence of two
temperature sensing switches
the defected emissions functions
and that was yeah
1973?
so this happened before?
that's right
yes and in 1974
they were forced to remove them
and as Mike was saying
other car manufacturers
are probably doing this as well
the Cadillac and so on
and so on and so on
there are other cars
that have had defeat devices
for various reasons
but it's mostly due to
the emissions control policies
and their inability
to really innovate
and put the right
technology in there
and provide both
a car they can sell
and also one that is not
emitting toxic
yeah I mean so what they
learned from that is like
don't put a physical object
in that someone's gonna find
what they're gonna learn
from this is like
be a little more subtle
about it next time
you can get away with
this kind of thing
for five years
but you gotta be more subtle
if you wanna get away
for longer
and let's be clear
these crimes that these
car manufacturers are committing
have victims
people are dying
from the excess air pollution
that these cars are emitting
it's 3,000 people a year
so when they get away
with something next time
like we have to act
to stop them
I feel terrible
because our car
has been emitting 40 times
maybe up to 40 times
what we thought it was emitting
and that could have
that could have done
all kinds of damage
to the environment
and the exact reason
for getting a car
that gets in the mid 50s
miles per gallon
and has low emissions
is that you don't do that
and now here we are
stuck with something
that is polluting
that when they get around
to fixing it
isn't gonna be the car
that we thought
we were getting
there's all kinds of
consumer issues
attached to this
Bernie this is where
I wanna bring you in
because you're keenly aware
of consumer injustice
we were just talking about
what happens to people
whose credit cards
are laid out for all to see
but in a case like this
I don't know how VW
can make it right
they have to install something
that actually delivers
what they say
the cars are emitting
but when they do that
the cars are not gonna be
the same cars
that the consumers bought
they're gonna be cars
that have significantly
lower gas mileage
and not enough
as far as pickup
what do you think
they're gonna wind up doing?
Well first I think
the EPA is going to
hugely fine Volkswagen
probably in the billions
of dollars
but I think also
Volkswagen's gonna face
serious class action lawsuits
by Volkswagen owners
like yourself
who own these so-called
clean diesel vehicles
who were defrauded
by being sold
cars that were
said to emit
only a certain amount of
these toxic chemicals
and they're doing a lot more
now when your car
is gonna be recalled
and you will have to
get it
I don't even know how
they're gonna force people
to bring their cars in
I think some states
are saying
well if you don't take
your car in
to be retrofitted
with better emissions controls
your Volkswagen
that we won't
we won't renew
your vehicle registration
so that's maybe
the states are gonna have
to get involved in that
but I think you
and millions of other
Volkswagen so-called
clean diesel car owners
are gonna have serious
class action lawsuit
possibilities
you're probably gonna get
paid money on this
just without even trying
they're just gonna try
to pay you off
because you're not gonna
get the mileage
the mileage per gallon
that you ever got
if they're gonna
actually make your car
in compliance
with the emissions
that they were supposed
to have
so this is a huge nightmare
for Volkswagen
it's gonna cost them
billions of dollars
and I hope this is gonna be
a lesson to other car manufacturers
to not pull this
but they're gonna keep trying
all these companies
are gonna keep trying it
as long as they think
they can get away with it
like Mike said
so I'm a little bit
more optimistic
I actually think
that it is
it is in the interest
to both meet
the compliance standard
and honor
the mileage
and performance
that they promised customers
because of the very threat
that that poses
if they don't honor
the performance
or the fuel economy
and are still in violation
they're going to see
that kind of class action
up to and including
the entire value
of the car
so and I think
the real
the distinction I wanna make
about the fix
being something
that guarantees
a lower economy
or a power
isn't so
it depends on the fix
so it depends on
how much they actually
spend per car
to fix this
there are other methods
and I just would say
if they choose
the current method
and it is activated
in the software
and that is the only thing
they allow
is they turn on
the emission control
that's there
which is a NOx scrubber
a catalytic scrubber
if that's on
then yes
it will use fuel
if they augment it
and add a different technology
so it has several technologies
instead of just the one
that is on the vehicle
as it stands
there is a potential
to chemically alter
the emissions
but that would then take
the cost of the fix
and push it up higher
but at least
if they spend more money
on the fix
adding technologies
or augmenting
the existing one
as I said
it'll cost less than
the $37,000
they're expecting
to get in class
they would be
facing
if they don't actually
both fix it
in an emission sense
but also performance
and economy
with that in mind
so you're saying
that if they just spend
more money
retrofitting the cars
or adding something
to them
they can
actually get
to the point
where the car
is delivering
what was promised
to the consumer
and also satisfying
the EPA requirements
yeah I mean
I don't know
the exact
mechanical engineering
and the exact trade-offs
that they have to look at
as far as numbers
and how they do
the engine mapping
and so on and so forth
but I'm saying
that if
there's actually
thought and energy
put into fixing this
and having it
both perform
and comply
the way they advertise
you'll end up
with a car
that's actually better
than they originally
offered
because they'll address
all of these things
but it will cost money
for them to address it
and you always run into
cost benefit
when you're making
financial decisions
so it's gonna be
really fascinating
to see how they actually fix this
but this might actually
save their image somewhat
if they do put in more
that is the other
big attribute of this
is it is very much
in their interest
to do this the right way
because not only are they
under legal scrutiny
but this has
a serious
impact on their brand
and marketing
which is really important
to Volkswagen
this could destroy them
and this is a company
that was allied
with the Nazis once
so if that didn't destroy them
this definitely could
but Bernie
I want to ask you
the kind of absurd
rhetorical question
that you sometimes
ask me
do you think
the punishment
in fines
or jail time
for Volkswagen
Incorporated
or the executives
who made this decision
will actually
be high enough
to deter other
car manufacturers
from trying to pull
the same stunt
or do you think
it will cost them
billions of dollars
but they're a giant corporation
they can afford
billions of dollars
who cares
I don't think
even if they lock up
several executives
and criminally prosecute them
and put them
in federal prison
I still think
that the profit motive
for some of these
CEOs
and other
high ranking
car manufacturing
officials
I really think
that they know
that they can make
so much more money
if they cheat
that they're still
going to be very tempted
it's just like
on Wall Street
and the banking industry
investments
this is
they're going to keep cheating
just for the profit motive
even though
they think
they might get caught
if they're
raking in
millions of dollars
a year personally
in their pockets
I think
they're still going to
I'm not as optimistic
as Kyle is
on this
it's sad
but I think
that's what's going to happen
what's worse though
is that this is actually
killing people
as you said
like this nitrogen oxide
it causes really serious
problems
like asthma
and other
respiratory diseases
on a large scale
and
this is killing people
yeah
that's exactly true
no matter what fuel source
you're using
with these vehicles
you really do need
these
Nox scrubbing devices
that are installed
on all these vehicles
and they need to be used
the way they were intended
I just find it amazing
because we've been to Wolfsburg
at least twice now
in Germany
which is
a VW hub
yeah
it's like VW Mecca
and
blown away by just
the
atmosphere there
of positivity
and
just feeling like
we've been
misled
all these years
the company
I'm addressing
what you're saying Bernie
as far as
they're just going to
keep going after the profit motive
I think in VW's case
they at least have
their perception
of themselves
as being better than that
whether or not
they actually are
I don't know
but
I think
it matters a lot more
to them
than we might think it does
I think this actually
dips into a bit of nationalism
because let's
let's not get this
minced at all
a Volkswagen
is very much
a multinational
but they're very much
a German
multinational
and industrial
powerhouse
so
I think
it's
about integrity
and I really don't see them
cutting corners
under this kind of fire
I just find it amazing
that we're always in the middle of these things
why did we have to get a VW diesel
just in that particular
time frame
must be a reason
but you know
the thing that we've been railing about
the
right to repair
not having black boxes in cars
that we cannot access
and reverse engineer
that issue alone
makes this something
of interest to us
let alone the fact that we already have one of these things
I mean
and let's be clear
this was not some
rogue engineer
doing something
or some accident that was made
the next time it happens
they're going to put in enough
plausibility
deniability
that it might have been a mistake
but this particular case
is very clear
this was done on purpose
and this is not
this is going to cost billions of dollars
this is not the kind of decision
that some low-level engineer
was empowered to make
there will be an investigation
we'll find out if it went
all the way to the top
or merely very high up
but this was not just
some rogue
one-off thing
yeah
and across the board
I think people have communicated
that this is unacceptable
outright
interesting times ahead
that's for sure
and we'll keep reporting on this story
we're out of time though
boy that hour went fast
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