Monday, June 24, 2013

Land of the Surveilled & Home of the Afraid?


Land of the Surveilled & Home of the Afraid?

All the war-propaganda, all the screaming and lies and hatred, comes invariably from people who are not fighting.

George Orwell


By J.M. Hamilton  6-23-13

Osama Bin Laden (OBL), if what we have been told by our government is true, slumbers beneath the depths.  As Americans, we can only hope he suffers a wet dirt nap in hell for all eternity, for OBL enjoyed tremendous success during his time on this earth, in eroding America, her freedoms and her economy.  It is said that OBL learned at the hand of the CIA in Afghanistan, when America funded and armed an indigenous rebellion against Soviet occupiers, during the1980's.  OBL must have picked up from that experience that war very much has an economic component, as the U.S. with the help of the Afghanistan Mujahideen (today's Taliban), effectively bankrupted the Soviet Union.

When OBL subsequently turned on America, his goal was to launch a war of attrition against the United States, not unlike the war fought against the Soviets.  His stated goal was to bankrupt the U.S. financially, and arguably - through the use of terror and fear, he placed a sizable dent in our nation's collective will and U.S. world standing as the embodiment of freedom.  For OBL not only made a shambles of the U.S. federal budget (the Federal Reserve presently prints a trillion dollars annually to support our national debt, our global war on terror, our military and surveillance industrial complex, and in order to support a continued back door bailout of the Wall Street cartel), but worse yet, he instilled such a fear in ordinary Americans that many are willing to forgo the very freedoms and civil liberties that this nation was founded upon, and that many of our ancestors fought and died to preserve.  Or perhaps we have just grown apathetic?

We learned in the last several weeks, courtesy of Mr. Snowden, that the U.S. has a vast intelligence apparatus that allows it to tap into U.S. telecommunications, internet, and computer software and hardware monopolies.   This was all being done surreptitiously, globally, and with little oversight or review, except by the executive branch.  That the efficacy of this venture has been called into question by two U.S. Senators, et al., seems lost on many Americans who seem to believe that the government's surveillance program is just another price we must pay for safety.   If the program's effectiveness is dubious at best, what would drive such an enterprise?  Many have read that the NSA, and much of the defense and surveillance apparatus, is staffed by the nation's defense contractors, including Booz Allen - owned by private equity's Carlyle Group.

Per Bloomberg, about 70% of U.S. Intelligence is subcontracted out.  Booz Allen, Mr. Snowden's former employer, obtains 99% of its 5.76 billion in annual revenue from the government, with a quarter of that figure coming from intelligence agencies.   Your tax dollars, and our national debt, at work.  So like almost every other DOD program, replete with redundant systems, cost over-runs, obsolete hardware and weapons systems (much of it already hacked by the Chinese government) designed for yesterday's wars - now that Al Qaeda has been effectively eliminated, we see MIC defense contractors crowding into cyber systems and surveillance.  In short, follow the Benjamin’s once again to learn why you're being spied upon, your meta data harvested and mined, with limited results.  It's not just MIC contractors who are making out like bandits, but undoubtedly, the monopolies like our friends at Apple, Microsoft, and the major players in Silicon Valley, are getting in on the surveillance action.  Why Facebook must be nothing less than a treasure trove for Big Brother.  If what Bloomberg recently reported is true, most major corporations are swapping intel with our government.

Please check out the link describing a police state, or surveillance state, and ask yourselves are we not well on our way?

That this is probably an assault on our personal freedoms carried out by a constitutional law professor is mindboggling.  Then again, I've read of a state judge,who also teaches constitutional law, who has destroyed a child's and a family'scivil rights, so perhaps this is government by lawyer fiat.  Either way, NRA and second amendment proponents are often fond of talking about a slippery slope in regards gun rules and regs... but if there ever was a slippery slope, Americans are staring down the barrel of a slow and steady erosion of their civil liberties for the foreseeable future.  Our government has the ability to track your activities, movement, expenditures and nearly every personal detail of your life 24- 7- 365.  Our government may not be reading my emails, but the NSA probably has the capability to know in real time, and statistically, should they so desire, what I wrote on my computer, what I googled, when I log off, where I drove to, and what I bought on my ATM card.  For all we know there's a computer dossier on each and everyone of us; and if it's not already compiled, it certainly would not be hard to assemble.

Magnify this capability across an entire nation, and ponder how it will ultimately impact how people think, talk, act, and conduct their personal lives.

Americans have been made so afraid by OBL, and our state, elected, and MIC leaders have used this to such great advantage (witness the probable manipulation of the Homeland Security's terror alert system during the 2004 election cycle presumably to gain political advantage, described previously by this blog), that we now have surveillance program defenders stating that if you think this is bad, wait until the next attack.  Then our freedoms and civil liberties will really be stripped away, entirely.  So better to accept an ounce of prevention than a pound of cure.  There's just a couple of problems with this logic:  one, our own government - in the name of safety - arguably has assaulted more personal freedoms and civil liberties on a much more massive scale than Al Qaeda ever achieved; and two, when did Americans become so frightened and self absorbed that they are willing to sacrifice liberty and freedom for alleged claims of greater personal safety?  My guess is the "ends do not justify the means," and that the results of this surveillance are dubious at best.

As with most issues facing America today... we often suffer from fear and myopia, and often fail to ask and address the real questions and issues before us, like: 

If we are all under surveillance, we the people, than who is the surveillance state really designed to protect?  If we are all assumed to be guilty until proven innocent, who suspended habeas corpus and due process?

Why would denizens of the world desire to attack the U.S, could it be that the DOD, and our intelligence services, has its boot heal in almost every country in the world (often propping up dictatorship after oppressive dictatorship?)... for enlightening reading on this front, please see The Force by Jill Lepore.

Our founding fathers knew that one of the greatest tyrannies, and the father of many other tyrannies, was the standing army or what we would refer to as the DOD and the MIC.  What happened to that belief?  Why do not red state republicans protest the tax tyranny necessary to support the MIC, MIC welfare, and the DOD budget?

The third amendment states that citizens should not be obligated to quarter soldiers in their homes; and yet, is not the NSA, et al, quartered within our homes via the world wide web and its service and hardware providers?

President Obama said he's open to debate on this topic.  Perhaps it's time to enter into that debate in earnest?  But my guess is, it is a debate that the nation will never have - at least not a fair and transparent debate, as virtually nearly everything our government does is classified.



Just a few miles up the road from where I live is a State who's motto reads:  "Live Free or Die."  Sounds extreme.  Then again, given the amount of money taxpayers shell out for this government, particularly the DOD, why would it even be necessary for the government to intrude on our privacy, if the DOD was so highly competent at protecting U.S. citizens?  (The U.S. spends more money on defense than the G-20 combined, and is the number one arms merchant on the planet.)  The question is rhetorical because the DOD is not about protecting U.S. citizens.  Ironically, the "live free or die" ethos was the basis of our country's founding.  When we allow terrorist, and DOD/Surveillance advocates and fear-mongers to prey upon ordinary Americans fears and prejudice, so that they are willing to sacrifice freedom for specious claims about enhanced safety, we let the folks like OBL and the terrorists win.  So that the land of the free and the home of the brave, becomes but a former shadow of itself.

The world is watching, and the Chinese government must be laughing.

P.S.
"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist... We must never let the weight of this (MIC) combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together."

President Eisenhower

"Of all the enemies to public liberty war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few."

President Madison


 Copyright JM Hamilton Publishing 2013

Thursday, June 20, 2013

FORSYTH

 

Up and Down Wall Street    BARRON'S

 | TUESDAY, JUNE 18, 2013

A "Crumby" Business All Around

Scandals of abuse by a few, whether in government or in finance, are undermining confidence of many.

Picking up crumbs under the table. That was how the wife of Sherman McCoy, the rich, Wall Street protagonist of The Bonfire of the Vanities, derisively described to their young daughter what her bond-trader father did for a living. Arcane arbitrage trades produced pennies on the dollar, but when multiplied over millions, those pennies added up to fabulous sums -- enough to buy a Park Avenue co-op costing $3 million!

That number alone should tell you how much things have changed in the decades since Tom Wolfe wrote his tale of race and class in the pre-Giuliani New York City of the 1980s. Wealth and power have expanded exponentially in the subsequent years, adding zeroes to the numbers describing earnings and real-estate values. What is still a princely sum to average Americans, $1 million or more buys only an ordinary flat in Manhattan and even in now-hip Brooklyn.

Collecting those crumbs has become a challenge in recent years, especially following the near-collapse of 2007-08. So, in the face of diminished profit opportunities, traders have resorted to the next-best thing, manipulation and gaming the system.

In recent days, more instances of unseemly Wall Street behavior -- from gaining just a few seconds' advantage on key, market-moving data to outright rigging of markets -- have come to light. That this has happened at the same time as the revelations of spying by the National Security Agency is more than ironic. Both are shaking public confidence in the major institutions of finance and governments.
Consider the more recent dubious practice to gain attention: the release of privately issued but market-moving reports early to paying subscribers, most notably the widely watched Thomson Reuters/University of Michigan consumer confidence reports. As has been reported in various outlets, high-frequency traders who pay for the privilege get a two-second head-start on the numbers, a huge amount of time for computers to trade on the number based on algorithms.

Less ambiguous is the practice of rigging certain benchmark prices or interest rates, most prominently the London interbank offered rate. Libor, quipped Mervyn King, the outgoing Bank of England governor, was the "rate at which banks do not lend to each other," contrary to the textbook definition of the interest rate that is the basis of trillions of dollars of instruments, from derivative contracts to Americans' home mortgages. Libor is set by collecting data from major banks in London, who declare what they'll pay to borrow and lend dollars for various terms. Just tweaking Libor a fraction of a basis point (one-hundredth of a percentage point) up or down could make a trade pay off -- or not. More crumbs, in other words.

 

NOONAN

The Wall Street Journal
The U.S. surveillance state as outlined and explained by Edward Snowden is not worth the price. Its size, scope and intrusiveness, its ability to target and monitor American citizens, its essential unaccountability—all these things are extreme.

The purpose of the surveillance is enhanced security, a necessary goal to say the least. The price is a now formal and agreed-upon acceptance of the end of the last vestiges of Americans' sense of individual distance and privacy from the government. The price too is a knowledge, based on human experience and held by all but fools and children, that the gleanings of the surveillance state will eventually be used by the mischievous, the malicious and the ignorant in ways the creators of the system did not intend.

For all we know that's already happened. But of course we don't know: It's secret. Only the intelligence officials know, and they say everything's A-OK. The end of human confidence in a zone of individual privacy from the government, plus the very real presence of a system that can harm, harass or invade the everyday liberties of Americans. This is a recipe for democratic disaster.
If—again, if—what Mr. Snowden says is substantially true, the surveillance state will in time encourage an air of subtle oppression, and encourage too a sense of paranoia that may in time—not next week, but in time, as the years unfold—loosen and disrupt the ties the people of America feel to our country. "They spy on you here and will abuse the information they get from spying on you here. I don't like 'here.' "




Monday, June 17, 2013

Democratic power abhors a vacuum... Party of Fear!



Party of Fear

The only thing we have to fear is ignorance.

“It’s what people know about themselves inside that makes them afraid.”  - Clint Eastwood – High Plains Drifter

By J.M. Hamilton  (9-21-12)

I kept thinking about Candidate Romney this week, and his staff.  This is a man who gave up being a private equity billionaire, so that he could help us all, or at least 53% of us, by becoming President.  Mr. Romney has been running for the nation’s highest office for years, the opportunity costs for this candidate are enormous.  And yet, Mr. Romney’s defeat hangs in the air, like Napoleon fleeing Russia at the onset of winter, and leaving behind his Grand Armee.  Ravenous Russian wolves in pursuit of the emperor’s sleigh, snapping at the trace horses for miles upon miles in a desolate winter scape.

Maddening.  Or for Mr. Romney’s team is it like Hitler, and staff, spending final moments with his bride, with U.S and Russian soldiers closing in, a mighty German nation ruined.  Feelings of despair and of what might have been – dashed hopes and dreams – deep down in the bunker. Valhalla beckons.

Mr. Romney’s fall, like Napoleon’s and Hitler’s, is largely self-inflicted.

Granted the candidate is no megalomaniac; but if the video that Mother Jone’s offered up this week is any indication, Mr. Romney does appear to be suffering from an acute form of socio-economic prejudice, having written off nearly half the nation (only to tell us this week, it was all a mistake and he loves 100%of us, after all).  Of course, many of those Mr. Romney wrote off as parasitic are the Republican faithful, including tax dodging U.S. soldiers (as noted by Mr. Kristof in the Times).  The very people who lay their lives down for us, the plutocracy, and the DOD.  But we can’t blame this all on Mr. Romney; he’s just the most recent incarnation of a long line of Republican Party leaders, who have suspended rational thinking for a failed ideology, with ruinous results for the country.

Mr. Romney is rich and his party represents the wealthy, and those who wish to be.  Today’s GOP is quite possibly more reactionary than ever, and it refuses to change, even at the risk of extinction.  This is a party that preys upon your fear, and has no reservation about prevarication or stretching the truth, witness Mr. Ryan’s GOP convention speech (which even his own Party assailed).   The antidote for fear is knowledge and education, and as GOP Candidate Santorum conveyed earlier in the Republican campaign, education is no good.  You see, education and knowledge gets in the in way of your exploitation, and makes things harder on the ruling oligarchs.  The only question that remains this election season is will Mr. Sheldon Adelson and the Koch brothers double-down?  How much money is the plutocracy willing to spend in support of a failed candidacy and an attempt to purchase the White House?  My guess is a lot more.  Cost-Benefit analysis would suggest upping the ante.

Contained is this week’s New Yorker is an extraordinary piece on the very first political consulting firm, Campaign Inc (CI).  The piece is entitled the Lie Factory, and was written by Jill Lepore.  Needless to say it is outstanding and, among other things, draws the connection between political consulting and advertising campaigns.   Both enterprises are selling something.

Among the tried and true principles of Campaign Inc. were:  make it personal; candidates are easier to sell than issues; attack, attack, attack; never underestimate the opposition; never explain anything; fan flames (embrace and win controversy); simplify, simplify, simplify.  

Said Mr. Whitaker, a partner in Campaign Inc. (CI), which was formed in the 1930′s, “A wall goes up when you try to make Mr. and Mrs. Average American Citizen work or think.  The average American doesn’t want to be educated.”

Today, political consulting is big business.  Campaign Inc.’s principals are on full display this election season, and they have been a key part of most successful campaigns for the last eighty years.  Perhaps by no coincidence, CI’s primary clients were big business and the GOP.

If we think long and hard about it, one could easily argue that nearly a century of political consulting has brought the country to where it is today.  Where glib one-liners and sound bites are not only used to gain political advantage, and admission to political office, but become public policy itself.  It’s much easier to trot out negative advertising, than to explain a highly complex problem, and the detailed solution to that problem (and the reality is few candidates have the skills to pull it off, and many have lost office trying).  Many of our problems today are so complex that the quick lie or one liner can no longer stand up to scrutiny, and so as we have seen in this election cycle, the candidates don’t even try.   Again, observe the GOP’s criticism of the Romney/Ryan tickets refusal to fill in the blanks on their proposed fiscal and tax policies.  And they are the experts?

Or witness both candidates, Messrs. Romney and Obama, failure to address the financial crisis, and the resulting mortgage debacle, four years on-going, and the cornerstone of the nation’s economic problems.

Other key examples where the quick fix, or simple solution, have failed the nation are:

Endless rounds of quantitative easing, which is nothing more than code for back door bank bailouts.  The Cartel is so powerful now that it appears to be dictating Fed policy.  The Fed has become the go to market for MBS and CDO’s, the liabilities and moral hazard for bank excess have been transferred from private sector balance sheets and onto the public’s.  And the result of the Fed’s efforts:  Stagflation in commodity prices, and Stagdeflation in home prices.  Central banks around the world have swaddled zombie banks in a cocoon of soothing liquidity, so that the inevitable write-downs can be postponed at taxpayer, market, worker and business expense.  Contagion is spreading and sound healthy currencies and economies are being dragged down with the bad, all so that we can prop up banks.  The “lost Japanese decade” scenario is with us to stay now.  One can gather from Mr. Romney’s reticence on the matter that he would have done nothing different than the President’s team, Messrs. Geithner, Summers and Bernanke.   Banking uber alles!

Check out Mr. Romney’s criticism of this administration and its handling of the Middle East.   The GOP’s solution to every problem involving an Arab country is to subcontract out foreign policy to the state of Israel, play the fear card, and reach for the DOD. That’s right, order two air strikes and call me in the AM.  That sound bite, the Arabs are the problem, and Islam is the issue, entirely misses the boat.  Some in-depth analysis might conclude that there is extreme poverty throughout much of the Middle-East, brought about by wide disparities in economic opportunity and education, and concentrated wealth and power into too few hands.  Successive authoritarian regimes, with the economic and military support of Western democracies, have amassed fantastic wealth, at the expense of Arab citizens.  Poverty stricken, these Arab citizens have turned to all that they have left, religion and the Prophet Mohammad.  In some instances these citizens have been radicalized by poverty, and are all too easily manipulated by their religious and political leaders.  The antidote for Arab radicalism is democracy, education, and greater economic opportunity; but that solution will take patience and time, indeed generations, with many problems for U.S. companies operating in the region along the way.  This scenario doesn’t fit into Big Oil’s or the DOD’s agenda, so don’t look for Candidate Romney to trot that out any time soon.  Besides the proceeding doesn’t fit into a neat power point presentation, or a Campaign Inc. style sound bite, so forget about it.

Better to sound bellicose and rattle the saber, it plays nicely into many American’s fears and prejudice.  Campaign Inc. would advise a candidate, and a political party, to have an enemy at all times, and if one can’t be found than create one!

And finally, Mr. Romney appears to have an issue with the 47%, who receive some sort of government benefit, many of whom are Republican.  The Campaign Inc. sound bite is that these folks are moochers, the state is growing, and the solution is more tax cuts for the wealthy.  What doesn’t fit neatly into this paradigm is the fact that economist after economist will tell you that concentrated wealth and power (like that which has occurred in this country over the last 35 years, with ever declining upper income tax rates) correlates into lost educational and economic opportunities, and therefore, greater reliance upon the state for solutions.  Democratic power abhors a vacuum:  and if U.S. entrepreneurs and major corporations are no longer going to hire American, pay a living wage, or provide retirement benefits, than these free market institutions are ceding authority and power to the state, and building an ever growing Democratic base.

America needs an industrial policy that includes favorable policies for business, the market, and the worker.  However, industrial policy might also include telling CEOs something that they haven’t heard from the GOP in several decades, that is the laissez faire fairy tale is dead, markets do not have perfect knowledge and are not self-regulating; hence the need for a new industrial policy.

But that’s not very “Campaign Inc.”

Much better to stick to playing the fear card, campaign on ignorance, and continue to let things slide into crisis.


 Copyright JM Hamilton Publishing 2013

Saturday, June 15, 2013

“There was of course no way of knowing whether you were being watched at any given moment,” George Orwell wrote in “1984.”

June 8, 2013 NYTIMES

Peeping Barry

WASHINGTON — THE acid that corroded George W. Bush’s presidency was fear — spreading it and succumbing to it.

You could see the fear in his eyes, the fear that froze him in place, after Andy Card whispered to W. in that Florida classroom that a second plane had crashed into the twin towers.

The blood-dimmed tragedy of 9/11 was chilling. But instead of rising above the fear, W. let it overwhelm his better instincts. He and Dick Cheney crumpled the Constitution, manipulated intelligence to go to war against a country that hadn’t attacked us, and implemented warrantless eavesdropping — all in the name of keeping us safe from terrorists.

Americans want to be protected, but not at the cost of vitiating the values that make us Americans. 

That is why Barack Obama was so stirring in 2007 with his spirited denunciations of W.’s toxic trade-offs. The up-and-coming senator and former constitutional law professor railed against the Bush administration’s “false choice, between the liberties we cherish and the security we provide.”

Now that we are envisioning some guy in a National Security Agency warehouse in Fort Meade, Md., going through billions of cat videos and drunk-dialing records of teenagers, can the Ministries of Love and Truth be far behind?

“There was of course no way of knowing whether you were being watched at any given moment,” George Orwell wrote in “1984.” “How often, or on what system, the Thought Police plugged in on any individual wire was guesswork. It was even conceivable that they watched everybody all the time. But at any rate they could plug in your wire whenever they wanted to.”

It was quaint to think we had any privacy left, once Google, Facebook, Twitter and Instagram braided themselves into our days and nights.

 

Thousands of technology, finance and manufacturing companies are working closely with U.S. national security agencies... Bloomberg

U.S. Agencies Said to Swap Data With Thousands of Firms

Thousands of technology, finance and manufacturing companies are working closely with U.S. national security agencies, providing sensitive information and in return receiving benefits that include access to classified intelligence, four people familiar with the process said.

These programs, whose participants are known as trusted partners, extend far beyond what was revealed by Edward Snowden, a computer technician who did work for the National Security Agency. The role of private companies has come under intense scrutiny since his disclosure this month that the NSA is collecting millions of U.S. residents’ telephone records and the computer communications of foreigners from Google Inc (GOOG). and other Internet companies under court order.
Many of these same Internet and telecommunications companies voluntarily provide U.S. intelligence organizations with additional data, such as equipment specifications, that don’t involve private communications of their customers, the four people said.

Makers of hardware and software, banks, Internet security providers, satellite telecommunications companies and many other companies also participate in the government programs. In some cases, the information gathered may be used not just to defend the nation but to help infiltrate computers of its adversaries.

Along with the NSA, the Central Intelligence Agency (0112917D), the Federal Bureau of Investigation and branches of the U.S. military have agreements with such companies to gather data that might seem innocuous but could be highly useful in the hands of U.S. intelligence or cyber warfare units, according to the people, who have either worked for the government or are in companies that have these accords.

Microsoft Bugs

Microsoft Corp. (MSFT), the world’s largest software company, provides intelligence agencies with information about bugs in its popular software before it publicly releases a fix, according to two people familiar with the process. That information can be used to protect government computers and to access the computers of terrorists or military foes.

Redmond, Washington-based Microsoft (MSFT) and other software or Internet security companies have been aware that this type of early alert allowed the U.S. to exploit vulnerabilities in software sold to foreign governments, according to two U.S. officials. Microsoft doesn’t ask and can’t be told how the government uses such tip-offs, said the officials, who asked not to be identified because the matter is confidential.

Frank Shaw, a spokesman for Microsoft, said those releases occur in cooperation with multiple agencies and are designed to give government “an early start” on risk assessment and mitigation.
In an e-mailed statement, Shaw said there are “several programs” through which such information is passed to the government, and named two which are public, run by Microsoft and for defensive purposes.

Willing Cooperation

Some U.S. telecommunications companies willingly provide intelligence agencies with access to facilities and data offshore that would require a judge’s order if it were done in the U.S., one of the four people said.

In these cases, no oversight is necessary under the Foreign Intelligence Surveillance Act, and companies are providing the information voluntarily.

The extensive cooperation between commercial companies and intelligence agencies is legal and reaches deeply into many aspects of everyday life, though little of it is scrutinized by more than a small number of lawyers, company leaders and spies. Company executives are motivated by a desire to help the national defense as well as to help their own companies, said the people, who are familiar with the agreements.

Most of the arrangements are so sensitive that only a handful of people in a company know of them, and they are sometimes brokered directly between chief executive officers and the heads of the U.S.’s major spy agencies, the people familiar with those programs said.

‘Thank Them’

Michael Hayden, who formerly directed the National Security Agency and the CIA, described the attention paid to important company partners: “If I were the director and had a relationship with a company who was doing things that were not just directed by law but were also valuable to the defense of the Republic, I would go out of my way to thank them and give them a sense as to why this is necessary and useful.”

“You would keep it closely held within the company and there would be very few cleared individuals,” Hayden said.

Cooperation between nine U.S. Internet companies and the NSA’s Special Source Operations unit came to light along with a secret program called Prism. According to a slide deck provided by Snowden, the program gathers e-mails, videos, and other private data of foreign surveillance targets through arrangements that vary by company, overseen by a secret panel of judges.

U.S. intelligence agencies have grown far more dependent on such arrangements as the flow of much of the world’s information has grown exponentially through switches, cables and other network equipment maintained by U.S. companies.

Equipment Specs

In addition to private communications, information about equipment specifications and data needed for the Internet to work -- much of which isn’t subject to oversight because it doesn’t involve private communications -- is valuable to intelligence, U.S. law-enforcement officials and the military.
Typically, a key executive at a company and a small number of technical people cooperate with different agencies and sometimes multiple units within an agency, according to the four people who described the arrangements.

Committing Officer

If necessary, a company executive, known as a “committing officer,” is given documents that guarantee immunity from civil actions resulting from the transfer of data. The companies are provided with regular updates, which may include the broad parameters of how that information is used.



“Freedom is the right to tell people what they do not want to hear.” – George Orwell


             Turkey   (www.bagnewsnotes.com)















Blowback

“Freedom is the right to tell people what they do not want to hear.”  – George Orwell
By J.M. Hamilton (2-20-11)

It’s been awhile, but the arguments still hang in the air.  One of the resolutions for my collegiate debate team went something like this:  Resolved, the U.S. should not trade arms to non-democratic regimes.  The affirmative argued that the U.S. should not provide arms to dictatorships, which are by their very nature oppressive; the negative argued that by providing arms to military dictatorships and authoritarian regimes, the U.S. was able to influence these regimes and had a greater opportunity to bring about democratic reform.   The resolution came up in the eighties, as President Reagan turned the screws on the Soviets with amped up defense spending, and the cold war was rapidly coming to an unexpected conclusion.   At the time the world to this young and naïve Republican appeared bi-polar, comprised either of democratic governments, or right wing dictatorship headed toward democracy, versus communist and/or socialist/totalitarian regimes.  The ends appeared to justify the means, as, nearly, any regime that was a foe of godless communists bent on global domination, appeared to this debater worthy of U.S. military support.

The balance of the debate team, all of them liberals, thought I was mad, and that my case for supporting right wing dictatorships (the case for the negative) was “repugnant.”

Nearly a quarter of century later, and with hindsight being twenty-twenty, I couldn’t agree with my teammates more, that is to say, supporting military dictatorships and authoritarian regimes is, indeed, repugnant.  A practice that unfortunately, the U.S. did not abandon at the conclusion of the cold war… when America road tall, was the only superpower left standing, and for a couple of decades anyway, truly had an opportunity to push these regimes towards democracy, reform, and may have helped to shape democratic institutions and parties within these countries.

We can see the results of U.S. foreign policy in the current wave of democracy sweeping the member states of the Arab League.  For the last several decades the U.S., and Western Europe, have propped up dictatorships throughout the middle-east in the name of commercial “stability,” by providing billions in economic and military assistance and a steady stream of petrol dollars into the region.   In the case of Egypt, we know that the U.S. gave between 1.3 and 1.5 billion in military aid, annually.  Of course, there is nothing as unstable as authoritarian or totalitarian regime, if we believe Presidents Kennedy and Reagan, who both said that communism (i.e. authoritarian and totalitarian rule) was not the wave of the future, freedom is.

And it’s really that simple, man craves freedom.   As important to man’s inner core as air and water, political and economic freedom, for all educated citizens of the world, is an imperative.  Freedom is instinctual.   In the present day, for U.S. leadership not to have seen the uprising in the middle-east coming makes one wonder what other blind spots exist?  And now, instead being able to help shape events, the U.S. and the world must depend upon a military dictatorship, on the heels of Mubarak’s departure, to bring about the necessary reform. 


Omar Suleiman, Mr. Mubarak’s vice-presidential appointee (aka Mr. Torture!), now runs the show, and the Egyptian economy, which is also said to be dominated by military run monopolies (sounds a lot like Iran’s Revolutionairy Guard).  Per the N.Y. Times: “…Mr. Suleiman has outraged members of the anti-government protest movement by saying that he does not think it is time to lift the 30-year-old emergency law that has been used to suppress and imprison opposition leaders and that he does not think his country is yet ready for democracy.”  So this story and democratic revolution is still very much playing out.


Of course, if the U.S. really wants both economic and political stability in the region, it should support democracy and democratic movements.  Realpolitik would suggest backing dictatorships, but given demographics, the rising levels of education, and informational and social networks provided by the internet… true long term stability, economic and political, will come from democracy, not from authoritarian or even theocratic regimes.


The counter argument against democracy for the region offers up the same old bogey man, that of Muslim religious extremist, such as the Muslim Brotherhood.   This argument is specious at best, and at worst may only come to fruition, if democracy is not allowed to flower and take hold.  The fact that some of the arguments made in this piece are even remotely novel, or even contrarian to U.S. foreign policy, shows the extent to which the short term thinking of commercial interests dictate both U.S. foreign policy and political trajectory within the region.   Observe German President, Horst Koehler, who was forced to resign in 2010 over remarks he made demonstrating that German foreign policy and military support in Afghanistan was not backed by idealism for democratic reform (the line we are often fed in this country), but rather, commercial, trade and economic self-interest.  Shocking!  Truth spoken here, so fire the poor man.


Fortunately, in this instance, doing the right thing, supporting democracy in the region, is actually in the United States foreign policy, commercial and geo-political self- interest.   Military dictatorship is so passé.  Democracy is de rigueur.  

And the man of the hour for the middle-east… the catalyst, the spark, the dynamo who started the whole process?   Well that would be Chairmen of the Fed, Ben Bernanke, whose policy of QE2/devaluing the dollar, has lead to rising headline inflation, and a speculative bubble in commodities.  The Arab Leagues reluctant and nascent move towards democracy is fueled by hungry bellies.  Many years from now, history may state that Mr. Bernanke, directly and indirectly, contributed to the birth of Pan-Arab democracy.  Chinese and Iranian political leadership would do well to take note.


 Copyright JM Hamilton Publishing 2013

Saturday, June 8, 2013

Your Tax Dollars At Work


Your Tax Dollars At Work

“The general American public should not have to make up the balance as corporations avoid paying billions in U.S. taxes,” Senator McCain said.  NYTIMES 5-23-13

“The middle class and future generations are being robbed by U.S. tax policy, as it presently stands.  The middle class, what remains of it, cannot escape paying taxes, and pay a higher rate to subsidize those entities, individuals and organizations, which often pay at half the tax rate we do, that is if they pay any taxes at all.”  JM Hamilton Blog, 3-17-12 – Mr. Demagogue?

By J.M. Hamilton (6-8-13)

This blog has gotten a number of things wrong, but over the last couple of years, it’s nailed a few calls, too.  Among the issues it has correctly called is the grand heist the American taxpayer suffers daily, when it subsidizes major corporations and wealthy private enterprise, and the numerous tax loopholes these entities lobby for, write, and embrace.  Tim Cook, Apple CEO, was recently before a Senate committee, and elaborated on how Apple dodges taxes by shifting earnings to subsidiaries that do not exist anywhere.  That is to say these subsidiaries are domiciled nowhere on this planet (maybe – this being Apple- they are in the cyber realm?).  The “check the box” loophole, along with the “Double Irish, and Dutch Sandwich” loopholes, et al., are said to allow Apple to avoid paying $9 billion dollars in taxes last year, per a recent Insight piece written by Reuters (5-31-13).  

Even the CBO estimates the wealthiest will enjoy a tax break of $12 trillion in the coming decade.


Apple is not alone.  G.E., Facebook, Google, you name it, if a major multinational isn’t deploying these strategies, their tax department would probably be responsible to their shareholders for errors and omissions, and fiduciary liability.  What’s galling is not that these corporations deploy these lawful strategies, but that our elected officials allow these loopholes to exist at the taxpayer’s expense, and that nation states – and these United States - allow themselves to be played off upon one another, in a tax arbitrage/tax code race to the bottom.  Meanwhile, Europe and America suffers from economic malaise, wage stagnation, fiscal austerity, record budget deficits, and high unemployment and underemployment.  Politicians being what they are, and in many cases owned by these corporate and private interests, it should not surprise any of us that this goes on.

Mr. Cook was recently filmed and quoted, as shown on Bloomberg, telling students from his alma mater, Duke, that they should break existing rules, and write their own rules.  Sounds like a recipe for anarchy, civil disobedience, and nihilism that the elites are said to abhor.  Then again, these same executives are often fond of talking about capitalism’s “creative destruction.”  Yes, their creativity (1%), and our destruction (99%).  Perhaps Mr. Cook is merely stating the obvious:  that he who owns the gold makes the rules.

It’s not just that the average taxpayer is paying a higher tax rate to subsidize the low rates corporate and private enterprise pay, and that this means the public has less discretionary income to spend within the economy, but an even bigger problem is what the G.E.s, Apples, Googles, and private equity does with tax dollars they are able to retain, as a result of the public’s tax assistance for the wealthy. 

A quick digression: Taxes are not only meant to pay for the various services government affords to maintain the capitalist system, but they also are used to guide and direct social policy (e.g. the child tax credit and/or the punitive tax on tobacco). 

Therefore, we can read into today’s tax code that you, Dear John Q Public, are being penalized for being an ordinary citizen, and the tax code is rewarding the aristocracy and the elite for being wealthy.  In short, you are being penalized for minding the rules, while they make up the tax laws as they go along.  But I stray.   Back to what these monopolies do with the tax dollars that they are able to retain and dodge paying, as a result of our dysfunctional political leadership and government institutions.

What these entities do with your tax subsidy, mixed in with earnings and ldebt, is eradicate and buyout competition, which often eliminates management and jobs from going concerns.   It’s all over the news that Apple has purchased nine companies in the last fiscal year.  With those purchases comes synergy and pink slips, and a growing Apple monopoly on products and services, which translates into fewer jobs and opportunities for the American public, not to mention fewer product and service options.  It also means fewer investment opportunities for those who would like place their money into Silicon Valley stocks and bonds. 

Private Equity, a classic example, enjoys numerous tax loopholes and dodges, including but not limited to the tax deductibility of debt and carried interest.  When, we the people, allow our politicians to dole out tax favors to our friends in private equity, at our collective expense, not only do we have to underwrite the resulting tax liability; but we also allow private equity to turn around and gut businesses, merge, strip, and often enough bankrupt them with our tax dollars; which again, results in the 99% having fewer economic opportunities, fewer product and service options, and fewer investment opportunities. 

In short, your tax dollars at work! 

And you are paying higher taxes to allow this to happen, and incurring an ever growing mountain of Federal and State debt, and the resulting interest on same, to allow this to be done to you.   As result of all this M&A activity and taxpayer subsidized globalization, your wages stagnate, due to the lack of entrants and competition in a given business sector.

If you are middle class, or wealthy and cannot escape paying taxes, when you give a corporate or privately held monopoly a tax break, you are quite often giving them more money with which to leverage up and destroy and eliminate their competition, and solidify their economic, political and financial hold on power.  

Much of this corporate money is said to be parked offshore, which is really a euphemism for Wall Street banks (remember the offshore subsidiaries, who are domiciled no where?).  The corporates are crying out for a tax holiday, so that they can repatriate these funds to America, and pay themselves a huge dividend.  If our politicians agree to this, there will almost assuredly be no quid pro quo.  If the prior Bush Holiday is any indication, our elected officials will not insist that these tax breaks (not even a portion) contribute to jobs or investment in America… but almost assuredly, our politicians will request a campaign contribution or donation.  No direct linkage of course.

Seeing as how our tax dollars are spent by the elite, and often the resulting elimination of jobs and opportunity, perhaps it is time for the American taxpayer to insist upon their own tax holiday?  What better way to stimulate the economy?  At the minimum, the American people should insist that the corporates pay at an equitable rate.  If our corporate friends and private partners had to pay at the same rates the middle and upper middle class pay, real tax reform would begin in earnest.

P.S. 

Another thing J.M.H. called in a recent editorial (ThePolitical Tide Breaks?  Roll Tide!) was the nature of the current Presidency and our government.  Believing he was clearly the lesser of two “concerns,” I voted for President Obama twice.  Americans are often distracted by political labels (Republican versus Democrat), and social policy, which is really the only thing remaining that differentiates the two political parties, both in practice and reality (all campaign rhetoric aside)… that said, we should make no mistake about it, both parties are dedicated to the military & cyber industrial complex, monopolies, and big government.  As such, we really do live in a one party state, and this state has increasingly encroached upon your freedoms since, and at the excuse of, 9-11.

Arguably, this government is no longer by and for the people, but apparently by and for the protection of the elite. 

Given NSA data mining and intelligence gathering on U.S. citizens by the government, of which Apple and Silicon Valley appears to play an exceptional and extraordinary role, it would appear that we are all assumed to be guilty, until proven innocent.


 Copyright JM Hamilton Publishing 2013