Guarding and Post break story of the NSA's PRISM domestic spying

http://www.guardian.co.uk/world/2013/jun/06/us-tech-giants-nsa-data
http://www.guardian.co.uk/world/2013/jun/06/nsa-phone-records-verizon-court-order

We know that some quasi-legal, mostly-secret spying programs were launched post-9/11 by the Bushies, and were continued/reauthorized by Obama. The Senate Intel. Cmte. has sent a letter to AG Holder expressing concern for the magnitude of domestic surveillance that our intel. infrastructure wants legal authority to conduct. They think that there is a major gulf between what Americans think the gov't is entitled to do, and what the gov't actually interprets their authority to allow.

The FISA (Foreign Intel. Surveil. Act) was recently reauthorized and grants the gov't the power to monitor int'l and non-American comm. But recently the Guardian and WP broke the story that the NSA has had a program called PRISM since 2007 that would basically grant them direct access to the data on the servers of major internet comm. companies like Microsoft, Skype, Google, Yahoo, and most recently Apple - for the purpose of domestic spying that FISA doesn't allow (they were tired of FISA's legal red tape too). And the program was conducted with basically zero oversight. This is all described in a PowerPoint training deck that was leaked (BTW the NSA makes really crappy slides). So far the NSA has not denied the legitimacy of that source.

The Director of Nat. Intel., James Clapper, has also not denied the existence of PRISM (and its $200M/year budget). In line with the Obama admin's "war on whistle-blowers", he lashed out that leaking the story would harm national security. Right, like how Jane Fonda helped the Viet Cong. By Clapper's own words, secret surveillance has foiled one (= 1, uno) domestic terror plot on record since the program started (target unknown, potential losses averted unknown). Democrats on the Senate Intel. Cmte. say they have no evidence that surveil. stopped any plots. So the benefit of the program is 0-1 plots stopped over 12 years. I don't think exposing the program is going to matter at all, except maybe compromise their surveil. budgets and autonomy. Also, what terrorist worth his weight in salt doesn't already know to "stay off their airwaves"?

Interestingly, the tech companies issued statements saying that they have no knowledge of PRISM, and do not give the gov't a backdoor to their servers. So either they are lying and actively colluded with the gov't, or the gov't broke a ton of laws and hacked into those companies totally discreetly (eat your heart out, China). I have no data to back this up, but my suspicion is the cyber security folks at those prestigious companies are a lot better than the hackers at the NSA. So the likelihood that Google would get caught with their pants down is low. But maybe those were the terms of the agreement: they would let the gov't snoop, but in return they get full denial and release of liability, so their users don't revolt and sue.

Another revelation is that the gov't got access to the "metadata" on Verizon's telco network. So they weren't actually eavesdropping without a warrant on calls, but instead knew which #s were talking to each other, when the calls were made, and what was the closest cell tower. Tracking and call patterns in other words. While that was probably clever by "Zero Dark Thirty" standards, I am not sure if it is legal to do it indiscriminately without probable cause.

This leak comes at a horrible time for Obama, who is about to sit down with Chinese leaders to chastise them for hacking US companies (we previously blogged about this). It kind of undermines his credibility and moral high ground when our gov't is caught hacking its own people and companies too.

What I don't understand is why Greenwald was permitted to publish these articles. I saw "Bourne"... isn't he supposed to get whacked in a London train station?

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He was on DN this morning.  Amy Goodman asked him, 'Are you concerned that you will be attacked for publishing such things?'  His response was basically, 'I'm emboldened by the attacks.  Let them attack me.'  Basically, he can't be silenced.  What are they going to do?  Out him?  Um, too late.  If i was boarding a plane and saw GG and Jeremy Scahill boarding, I would take a different plane....those two will very soon NOT be seen on MSM, is my guess.  GG will never be on Bill Maher after his calling Maher out for being an Islamophobe(and, he is).   These two are the heroes of our time.  Oh, add Bradley Manning and you got the makings of a superhero cartoon!

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Yeah the Manning case is interesting. He has already pleaded guilty to some major crimes, but the gov't wants to convict him for "aiding the enemy" (presumably his leaks helped Al Qaeda? Impossible to prove unless we have a smoking gun - which we don't). And they won't even accept all his prison time up to this point as time served, to reduce his remaining sentence (not to mention the torture).

But I think what makes him ineligible for hero status is his indiscriminate data dump to Wikileaks. At least with the Pentagon Papers, Ellsberg "edited" them and only leaked snippets of the docs that would tell the story with minimal exposure of gov't sources/processes (apart from the guilty parties). In Manning's case, he didn't even know all the stuff he was leaking, and just trusted Wikileaks to decide what was fit to print. I am glad that he exposed some horrible war crimes from Iraq that the gov't was trying to bury. But I think he also set back our peaceful State Dept. diplomatic efforts in other parts of the world. Clearly people like Rummy and Cheney have hurt this nation a lot worse than Manning ever could.

http://www.kqed.org/a/forum/R201306030900




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I don't know if it helps the moral high ground but the verizon thing was signed by a judge.

I just have a hard time understanding who, anywhere in the us, thinks this should be an ok thing to do.  Who thinks it makes sense to have a secret court issue secret orders unreviewable and unchallengeable by those it affects?  And it always begs the question what are they doing we DON'T know about?

Extra embarrassing with a nominally dem president in charge.

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Yeah, though a judge also approved Bush's harsh interrogation and rendition policies too. Heck a judge ruled that Bush won the election. :)

As you said, lord knows WTF is going on that we don't know about. Makes those conspiracy guys a little more credible at times. It was embarrassing to see Obama in Si Valley today defending the programs like a stooge. Same argument with the drone kills: TRUST us that we are making these decisions carefully (in secret) and we are protecting you from the bad men. Either Obama doesn't truly believe that and is just delivering lines that will please the defense establishment (which makes him a coward, appeaser, and poor leader), or he really believes it (which makes him dumber and less moral that I previously gave him credit for). Nixon would have loved the 21st Century.

M sent me this which was thought-provoking: http://m.theatlantic.com/magazine/archive/2007/11/just-asking/306288/?mrefid=twitter

Thanks, I haven't seen this before. I think the author has a point. 9/11 was a freaking OUTLIER. Yes the stakes are higher now with WMDs and the borderless global world, but even an event as horrific as 9/11 was not a society-ender (we'll it was... for Iraq). "Sacrifices for freedom" are often much smaller than that, and would be even smaller if our brash and unjust foreign and economic policies didn't piss off so many. Even today, Obama said "We can't have 100% security and 100% freedom." It is a false choice as many have said (http://www.kqed.org/a/forum/R201306070900). But we're NEVER going to have 100% security, even if we have 0% freedom. Random violence and tragic accidents are part of the human condition, even in the Utopia of Scandinavia (Brevik shooting, car accidents with reindeer, suicides inspired by 6 months of darkness). Americans are hysterical and selfish, and they don't want to fear that one day they may be the victim of a crazy bomber. So they endorse all these stupid policies to just "feel safer". The soccer mom philosophy of "I'll do anything to protect my kids", even if that means ironically supporting policies that put many other no-less-worthy people's kids in danger. And we wonder why they hate us.

Strangely this line of thinking doesn't apply to the gun debate, where the opposite psychology reigns: freedom is the precious thing worth dying for (or letting children die for), where thousands more brown-skinned youth have to be sacrificed each year just so said soccer mom's husband can dream about stopping a home invasion (perpetrated by Mookie Hernandez) with his Bushmaster. And in the gun debate, there can be no gray area; limitless magazines and no paper trails of gun purchases. Any encroachment on that is fascist tyranny. It's not like the constant pushing-of-the-envelope with the privacy-security debate as the tech evolves (that has gone on since the times of J. Edgar), where it's "OK" to secretly gather metadata, but not actual telephony content. And we promise to not cross that line. It's OK to kill Americans without trial, as long as they're overseas and saying hateful things. But we won't go past that, trust us.

Should we find new ways to use technology in uncontroversial ways to make our society safer (not just from terrorism, but from car accidents, sickness, etc.)? Certainly. Should we have a debate on when other priorities need to trump privacy? Sure. So let's talk it out in public rather than let a few scheming powerful men make all the decisions in secret, because we're too scared to live up to our civic duty.

Bank hysteria misplaced, equal justice for all?

A couple points for thought:

1) Is the bank crisis mostly imaginary, due to people's hysteria and exploiting panic?

The comments below are from a CNBC banking analyst, made before the good news about Wells Fargo and Goldman Sachs came out.

http://seekerblog.com/archives/20090325/richard-bove-hysteria-about-banks-financial-condition/
In the last 3 months of 2008 depositors put $100 billion per month into new bank deposits - deposits which cost the banks half the interest rate of a year ago. 98% of loans are paying interest and principle. 97% of loans are also current. Home equity loans - most people think they are awful, no longer supported by real estate equity, etc. But the facts are that only 1.6% of home equity loans are non-performing. Almost all of the banks have positive cash flow - how can they go out of business given the cash flow. Exceptions are Citigroup and In Q1 - 2009 banks are going to show an operating profit. Loan losses are going to go up in credit cards and commercial real estate. But so far the loan losses are not enough to make the banks unprofitable. But note that in Q4 only .25% of CRE loans were in default (per the FDIC). That default rate is increasing.

The Financial Times and other economists don't seem to like the Obama-Geithner toxic asset plan either:
http://www.ft.com/cms/s/0/b3e99880-1991-11de-9d34-0000779fd2ac.html?nclick_check=1
http://www.nydailynews.com/opinions/2009/03/25/2009-03-25_the_new_geithner_plan_is_a_flop.html

2) Equal justice for all?
http://www.tcpjusticedenied.org/
A legal group recently conducted a very extensive analysis of indigent defense (court-appointed public defense for people who cannot afford any better) in all 50 states, in order to evaluate whether the Sixth Amendment ("In all criminal prosecutions, the accused shall have the assistance of counsel for his defense") is being carried out. Counsels do get assigned, but if they are unable to provide adequate defense (due to excessive workload, poor skills/resources, and other disadvantages vs. prosecutors), then what is the point? The actual report is attached.
"You should not have a better shot at justice, a better opportunity for an adequate defense, depending upon who arrests you in this country or where you were when you were arrested or what court system a defendant winds up in," [co-author] Tim Lewis said. "This is a basic constitutional right." [...] The report goes into detail about the wide range of ways public defender systems fail poor defendants. Sometimes people don't get lawyers at all. Other times they get a lawyer who is so overworked and underpaid that there's no way the accused can get a real defense. -NPR

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On the Geithner plan, yeah, it looks like a massive wealth transfer from my tax-paying pocket to a bunch of assholes in the finance industry. Steiglitz wrote a NYT editorial attacking it as ersatz capitalism a couple weeks ago: http://www.greenchange.org/article.php?id=4209

Krugman had a fairly interesting editorial last week as well about making banking boring: http://www.nytimes.com/2009/04/10/opinion/10krugman.html The essential argument is that too many smart people are spending too much time pushing money around, rather than actually going out and building something. There's been a huge amount of backlash from the hardcore finance propellerheads arguing Krugman's data, and I honestly don't know enough about it to evaluate the strength of his empirical claims. But I remember being at Stanford and seeing a depressingly large number of really smart people going off to push money around on the plate in finance, rather than going into an industry where they could actually build something useful (and let's not even get started on the consultants).

There's this guy who went back through historical records looking at the percentage of Harvard's graduating class of MBAs each year and correlating that number with the stock market. Essentially what he discovered is that the percentage is negatively correlated with the long-term performance of the US equity market. That is, when ~10% of HBS grads are going into finance, the stock market goes up. When ~30-40% of HBS grads are going into finance, the market's headed for a big correction. It was in the high 30's for each of 2006 and 2007, as the market headed towards the crash. Here's the historical reports: http://www.soiferconsulting.com/soifer_consulting_articles.htm And here's a somewhat tongue-in-cheek reporting about it: http://www.slate.com/id/2109982/ It makes an interesting argument for regulating finance to be a lot less interesting, forcing those big brains can go do something more useful.

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On the equal justice thing ...

First off, clearly the way indigent defense is handled in this country is shameful, and should be fixed. That said ..

I read over their recommendations for state and federal governments, and they all essentially seem to come down to "put more money into public defense." I think that's probably a reasonable thing to suggest, given the problems. But looking at their reporters and committee, the vast majority of whom seem to be deep in the legal profession, I can't help but wonder if this is really the most efficient way to solve this.

I'm not a lawyer, nor do I play one on tv, so I'm mostly full of it here. But it seems like some part of the reason that rich people get a better defense than poor people is because of the unbelievable complexity of the law. The advantage the rich have is not that they can actually bribe the court into a better settlement (I mean, ignoring the corruption cases, which are admittedly embarrassing but I think relatively unrepresentative of the overall problem). It's that they can hire a huge team of people to go through and look for loopholes: lawyers to look for weird holes in the law, investigators to look for weird holes in the evidentiary process (I heard that phrase on tv once!), etc.

Seems like the most efficient solution is to simplify the law. If these processes were easier to work through, without so many crazy holes and trapdoors and so forth, it might make it a lot easier to provide even representation to everyone. Some of that complexity is useful, but we need to start acknowledging as a nation that the complexity also has a huge adverse effect on our ability to build fairness. Admittedly, though, it would force a lot of lawyers to go find something useful to do with their big brains, so it seems unlikely we'll be seeing that recommendation from any lawyerly review panels.

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Thanks for the comments and I agree. Yes it would be good to kind of de-incentivize interest in the financial sector and creative investing. I mean, we'll always need fund managers, brokers, and such, but maybe in a more reasonable scale. What can we do though - salary limits? I think 900 people at Goldman Sachs had over $1M compensation last year. They are famous for high pay, so obviously debt-ridden Ivy League MBAers would want to go there (also it's the best place to try to take over the world). It would be better if we could attract more talent towards more tangible innovative pursuits, maybe even education. I guess it does take some creativity and intellect to play these futures markets and move debt around to make money. But yeah, it's clearly not real LABOR. I haven't had a chance to look at your links yet but the correlation is hilarious. Too bad we don't have enough data points to track how HBS US presidents affect the econ, but the first one doesn't look good.

Re: legal fairness - for some problems, throwing money at it can help a lot. Clearly we need to invest more in improving public defense. But if you're talking about re-writing the laws to make them less complex, it's a much bigger challenge than the tax code. Presidents have talked about de-mystifying the tax code for decades, but it's only gotten MORE complex. Heck the recent Obama stimulus bill created 300 changes to the tax code. So you are right that the privileged are better poised to exploit complexities and loopholes to their advantage, yet the long arm of the law comes down hard on lower-income recreational drug users or Earned Income Tax Credit abusers. But getting Congress to do anything large scale is obviously tough.

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Oh, so I guess in my excitement I missed explaining what I meant by limiting how interesting finance is and how many people get into it. I honestly don't believe that limiting pay really works ... it usually just forces people to get more creative about how they pay (like back when software firms didn't account for stock options as an expense, though clearly that was how they were paying their people). I think the fix is just more serious regulation of the finance industry: putting limits on how creative you can get with derivatives and related instruments, forcing these instruments to be standardized and over the counter, adding more restrictive capital requirements (and making the requirements counter-cyclical), forcing the markets to be more transparent, blah blah. Krugman's editorial is more detailed about it.

And yeah, I agree that you need more money in public defense. But when I see a report written by a bunch of lawyers which reaches the conclusion that the government should pay a lot more money to the legal profession, it sets off a big red siren in the back of my brain :)

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Yeah you're right about the compensation. Even with the "pay limits" imposed on bailed out bank execs, I am sure they are getting other forms of compensation. But just as people get creative about pay, they are doubly creative on derivatives and exotic investment schemes. It seems that the schemers are always one step (or many leaps) ahead of the regulators. But maybe after learning the lessons of this bubble, coupled with increased transparency & restrictions, it can only get better.

Sure lawyers griping about pay looks silly, but of course there is a wide range of pay in the legal profession. Public defenders right out of school get $45k, and 5 years exper. get $61k. Their associate DA opponents get at least $80k in most metro areas. A "general attorney" gets $99k on average in the private sector, and we know some can net much more. I suppose I should use the physician analogy - who would want to be a GP when a radiologist specialist can make 4X more money while maybe even less work? If we can't attract bright people to the dirtier, less glamorous jobs in law or medicine, then those areas will continue to underperform.

http://www.payscale.com/research/US/Job=Public_Defender/Salary
http://www.indeed.com/salary/Attorney.html