The West’s Ideological Vacuum

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One point I tried to make in this post on George Orwell’s fighting in Spain is that the fight between Bashar al-Assad and ISIS is one that has become an ideological magnet. I was trying to argue that we’re offering little by way of positive ideology to combat ISIS, particularly among those most susceptible to its draw.

Two recent commentaries have made related points. This Jocelyne Cesari NYT op-ed on Europe’s need to more fully embrace Muslims notes the “collapse” of ideologies in Europe.

Third, the collapse of all major ideologies in Europe — nationalism, Communism, and liberalism — has left room for new radical options. For some young Europeans, adherence to radical Islam provides a viable alternative ideology, comparable to that of radical leftist groups in the 1970s.

And at the New Yorker, Steve Coll notes that ISIS is the kind of thing that arises when people feel they have no other avenue for security and justice.

The group’s lightning rise is a symptom, however, of deeper instability; a cause of that instability is failed international policy in Iraq and Syria. If the United States is returning to war in the region, one might wish for a more considered vision than Whack-a-Mole against jihadists.

The restoration of human rights in the region first requires a renewed search for a tolerable—and, where possible, tolerant—path to stability. ISIS feasts above all on the suffering of Syria, and that appears to be unending. The war is in its fourth year, with almost two hundred thousand dead and nine million displaced, inside the country and out. The caliphate now seated in Raqqa is the sort of dark fantasy that can spring to life when people feel they are bereft of other plausible sources of security and justice.

Though the very terms Coll discusses may betray part of the problem — and the neoliberal ideology Cesari doesn’t account for in her piece.

It is not yet clear that ISIS will endure as a menace. Fast-moving extremist conquerors sometimes have trouble holding their ground. ISIS has promised to govern as effectively as it intimidates, but its talent lies in extortion and ethnic cleansing, not in sanitation and job creation. It is vulnerable to revolt from within.

Conceiving of governance as “job creation” may undersell what a destabilized region is looking for — not to mention ignore what ISIS has done in Syrian areas they control.

The group also has a surprisingly sophisticated bureaucracy, which typically includes an Islamic court system and a rovingpolice force. In the Syrian town of Manbij, for example, ISIS officials cut off the hands of four robbers. In Raqqa, they forced shops to close for selling poor products in the suq (market) as well as regular supermarkets and kebab stands—a move that was likely the work of its Consumer Protection Authority office. ISIS has also whipped individuals for insulting their neighbors, confiscated and destroyed counterfeit medicine, and on multiple occasions summarily executed and crucified individuals for apostasy. Members have burned cartons of cigarettes and destroyed shrines andgraves, including the famous Uways al-Qarani shrine in Raqqa.

Beyond these judicial measures, ISIS also invests in public works. In April, for instance, it completeda new suq in al-Raqqa for locals to exchange goods. Additionally, the group runs an electricity office that monitors electricity-use levels, installs new power lines, and hosts workshops on how to repair old ones. The militants fix potholes, bus people between the territories they control, rehabilitateblighted medians to make roads more aesthetically pleasing, and operate a post office and zakat (almsgiving) office (which the group claims has helped farmers with their harvests). Most importantly for Syrians and Iraqis downriver, ISIS has continued operating the Tishrin dam (renaming it al-Faruq) on the Euphrates River. Through all of these offices and departments, ISIS is able to offer a semblance of stability in unstable and marginalized areas, even if many locals do not like its ideological program.

I’m not saying this is the societal solution the Middle East seeks. Read more →

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On Laughter and Forgetting Our EU Spying

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I’ve long been intrigued by the response to the discovery of CIA spies in Germany, starting last week when seemingly everyone wanted to admit that the alleged spy was CIA’s. Unlike the Pakistani, Mexican, Afghan, and other precedents, the government either didn’t succeed or didn’t care to prevent Americans from learning about our overseas spies.

Now we’ve got competing explanations for why we spy in Germany.

According to Eli Lake source David Albright (whom Jim regularly embarrasses for his Iran propaganda), we spy on Germany because AQ Khan got much of his plans for Pakistan’s nuclear program in Germany. Lake also points to Germany’s close relations with Russia. The CIA has to spy on Germany, then, because Germany is not very good at spying on others, including Russian spies.

And of course, the forerunners to Russia’s modern spy services had plenty of experience operating on German soil. Vladimir Putin famously ran agents for the KGB from 1985 to 1990 out of Dresden, which was then in communist East Germany. His successors are still in the country, albeit on less friendly terms. “There is a huge Russian presence in Germany,” said the senior U.S. intelligence official.

Part of the current concern about Russia’s activities in Germany stems from unease about Berlin’s equivalent of the FBI, known as the Bundesamt für Verfassungsschutz (BFV). One former U.S. intelligence officer who worked on European issues said the BFV had a strong reputation for identifying and neutralizing domestic threats inside Germany, but was not very good hunting so-called “moles” – foreign agents burrowed into their spy services. “I can tell you they never watched us very carefully at all,” this official said. “That is almost definitely going to change now.”

Meanwhile, German Die Zeit editor Jochen Bittner relied on CIA’s former German Station Chief Joseph Wippl for explanation; Wippl provided a bizarre suggestion that CIA was accidentally treating Germany like it treats “Third World” countries, and anyway the Germans aren’t willing to do the dirty work to gain full membership in a Five Eyes like relationship.

I asked Joseph T. Wippl, who was the C.I.A.’s Berlin station chief in the early 2000s, why the agency had recruited German sources. “The C.I.A. has developed strongly in the direction of a third world agency, in that its officers work in places where the U.S. has great leverage over others and where there is no rule of law,” he said. “They are not used to or have not been trained to work in countries with similar democratic, constitutional institutions.” At the same time, he went on, the Germans had never seemed interested in the level of cooperation that might obviate this sort of unilateral snooping — the sort of treaty relationship that America has with Australia, Britain, Canada and New Zealand, the so-called Five Eyes intelligence alliance.

To suggest that the Germans could be treated as a Sixth Eye is a flattering idea. Yet I doubt the Germans would accept the honor. As is the case with America’s nuclear umbrella, we’re happy to have the protection while being still happier not to have to carry the responsibility. If Germany entered into a real intelligence alliance with America, the government would have to deal with a load of dirty knowledge — and lose the benefit of plausible deniability.

As you read Wippl’s comments, remember his own rather dubious exploits in Germany.

This whole conversation feels a lot like Keith Alexander’s spectacularly successful effort to use a few journalists to cover up his admission that we do spy in Europe, but only for targets — Chinese, Russian, and al Qaeda — that can be deemed not-European.

But it ignores the great deal of spying we do on the European Union, which has long served to strengthen Germany, but the recent collapse of which has eliminated the most viable competing reserve currency in the world.

There has been a tremendous adjustment in the European power base in recent years, which largely stems from the EU, which in turn largely stems from Germany’s successful effort at making the rest of the EU absorb the pain of the financial crisis. I guarantee you we were aggressively spying on that, all in the name of preparing for instability (but surely using that intelligence to preserve the dollar’s competitive advantages).

Meanwhile, all this takes place against the background of negotiations on the TTIP, in which the US would demand concessions from Europe that gut many of the better policies of the EU.

We may be concerned that the Germans have good reason to want closer relations with Russia than we want them to have. But we also have a financially competitive relationship with Germany, and there’s no reason to believe we’re not doing a ton of spying to our advantage. Key details of that spying has not (yet) been fully revealed. But I do wonder if that’s part of the issue here.

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US Trade Rep Complains Other Countries Aren’t Letting NSA Spy

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In the NYT, David Sanger describes US efforts to develop some common understanding over cyberattacks with China by briefing it on what our escalation process would be. Unsurprisingly, China (which hasn’t had a massive data leak as an excuse to admit to information now in the public domain) has no reciprocated.

And while Sanger makes it clear the US is still not admitting to StuxNet, his US sources are coming to understand that the rationalizations we use to excuse our spying aren’t really as meaningful as we like to tell ourselves.

Mr. Obama told the Chinese president that the United States, unlike China, did not use its technological powers to steal corporate data and give it to its own companies; its spying, one of Mr. Obama’s aides later told reporters, is solely for “national security priorities.” But to the Chinese, for whom national and economic security are one, that argument carries little weight.

“We clearly don’t occupy the moral high ground that we once thought we did,” said one senior administration official.

I especially love the spectacle of an SAO coming to grips with this, but doing so anonymously.

Yet this anonymous admission will not stop the US from imposing such double standards. On Friday, the US Trade Representative issued  its yearly report on barriers to trade in telecom and related industries.  (Reuters reported on the report here.) None of these complaints are explicitly about the NSA. And some of USTR’s demands — that Turkey stop shutting down services like Twitter — would make it harder for other countries to spy on their own citizens.

But many of the USTR’s complaints single out measures that are either deliberately meant to undermine NSA’s spying advantages, or would have the effect of doing so. So these complaints also amount to whining that other countries are making NSA’s job harder.

Consider some of the complaints against China, whose top equipment manufacturer Huawei the US has excluded from not only the US, but also Korea and Australia.

It complains about China’s limits on telecom providers — and pretends this is exclusively a trade issue, not a national security issue.

Moreover, the Chinese Government still owns and controls the three major basic telecom operators in the telecommunications industry, and appears to see these entities as important tools in broader industrial policy goals, such as promoting indigenous standards for network equipment.

USTR criticizes China’s categorization of business that can be used for spying — such as cloud computing firms — as a telecoms subject to licensing restrictions.

China’s equity restrictions on foreign participation constitute a major impediment to market access in China. These restrictions are compounded by China’s broad interpretation of services requiring a telecommunications license (and thus subject to equity caps) and narrow interpretation of the specific services foreign firms can offer in these sub-sectors.

[snip]

Several VAS definitions in the draft Catalog also raise trade restriction concerns. First, the draft Catalog created a new category of “Internet Resource Collaboration Services” that appears to covers all aspects of cloud computing. (Cloud computing is a computer service or software delivery model, and should not be misclassified as a telecommunications service.) MIIT approach to cloud computing generally raises a host of broad concerns. Second, the draft Catalog significantly expanded the definition of “Information Services” to include software application stores, software delivery platforms, social networking websites, blogs, podcasts, computer security products, and a number of other Internet and computing services. These services simply use the Internet as a platform for providing business and information to customers, and thus should not be considered as telecommunications services.

USTR complains about Chinese requirements for encryption both for information systems tied to critical infrastructure.

Starting in 2012, both bilaterally and during meetings of the WTO’s Committee on Technical Barriers to Trade, the United States raised its concerns with China about framework regulations for information security in critical infrastructure known as the Multi-Level Protection Scheme (MLPS), first issued in June 2007 by the Ministry of Public Security (MPS) and the Ministry of Industry and Information Technology (MIIT). The MLPS regulations put in place guidelines to categorize information systems according to the extent of damage a breach in the system could pose to social order, public interest, and national security. The MLPS regulations also appear to require buyers to comply with certain information security technical regulations and encryption regulations that are referenced within the MLPS regulations. If China issues implementing rules for the MLPS regulations and applies the rules broadly to commercial sector networks and IT infrastructure, they could adversely affect sales by U.S. information security technology providers in China.

And for providers on its 4G network.

At the end of 2011 and into 2012, China released a Chinese government-developed 4G Long-Term Evolution (LTE) encryption algorithm known as the ZUC standard. The European Telecommunication Standards Institute (ETSI) 3rd Generation Partnership Project (3GPP) had approved ZUC as a voluntary LTE encryption standard in September 2011. According to U.S. industry reports, MIIT, in concert with the State Encryption Management Bureau (SEMB), informally announced in early 2012 that only domestically developed encryption algorithms, such as ZUC, would be allowed for the network equipment and mobile devices comprising 4G TD-LTE networks in China. It also appeared that burdensome and invasive testing procedures threatening companies’ sensitive intellectual property could be required.

In response to U.S. industry concerns, USTR urged China not to mandate any particular encryption standard for 4G LTE telecommunications equipment, in line with its bilateral commitments and the global practice of allowing commercial telecommunications services providers to work with equipment vendors to determine which security standards to incorporate into their networks.

Finally, USTR dubs China’s limits on outsider VOIP services a trade restriction.

Restrictions on VoIP services imposed by certain countries, such as prohibiting VoIP services, requiring a VoIP provider to partner with a domestic supplier, or imposing onerous licensing requirements have the effect of restricting legitimate trade or creating a preference for local suppliers, typically former monopoly suppliers.

All of these complaints, of course, can be viewed narrowly as a trade problem. But the underlying motivation on China’s part is almost certainly about keeping the US out of its telecom networks, both to prevent spying and to sustain speech restraints behind the Great Firewall.

It’s not just China about which USTR complains. It issues similar dual purpose (trade and spying) complaints against India and Colombia, among others.

And of course, it finds European plans to require intra-EU transit limits — a plan done largely to combat US spying — a ‘draconian” trade restriction.

In particular, Deutsche Telekom AG (DTAG), Germany’s biggest phone company, is publicly advocating for EU-wide statutory requirements that electronic transmissions between EU residents stay within the territory of the EU, in the name of stronger privacy protection. Specifically, DTAG has called for statutory requirements that all data generated within the EU not be unnecessarily routed outside of the EU;

[snip]

The United States and the EU share common interests in protecting their citizens’ privacy, but the draconian approach proposed by DTAG and others appears to be a means of providing protectionist advantage to EU-based ICT suppliers.

Meanwhile, even as I was writing this, one of the EU’s top Data Privacy figures, Paul Nemitz, just floated making the reverse accusation against America, that its NSA spying is a trade impediment to European businesses trying to do business in the US.

Fun stuff.

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Taking Kaplan’s Defense of Empire on Its Face

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Robert Kaplan wrote a predictably horrible defense of empire that a number of people are giving the appropriate disdainful treatment.

Against my better judgement, I’d like to take a different approach and treat it as a useful piece (though not one I agree with or find palatable at all).

I think its useful, in part, against the background of the NSA disclosures. Key players in NSA discussions — people who travel some of the same circles as Kaplan, even — premise their treatment of the disclosures from an exclusively national perspective, completely ignoring that the NSA (and its GCHQ poodle) is different precisely because it depends on and serves as a key instrument of authority in an empire (or global hegemon, if the term empire gives you the willies). Approaching and assessing NSA’s behavior solely from a national perspective not only represses the obvious reasons why NSA’s dragnet of other countries’ citizens matters, but it also fails to assess our actions in the proper light, even from the standpoint of efficacy. NSA’s tasking choices reflect not our national interest, but rather the needs of the empire, which is why a relatively minor country like Venezuela gets prioritized along with Russia and China. That’s why we made Huawei such a high priority target: because it presents a unique threat to the functioning of our empire.

I would like to get to the point where we can discuss the NSA disclosures not just in terms of what they mean for Americans’ civil liberties as well of those who may not enjoy Fourth Amendment protection but nevertheless are citizens in a US order, but also whether the prioritization of complete dragnet and offensive spying and hacking serves the interests to which they’ve been put, that of the American global hegemon.

And here’s where I think Kaplan, in spite of his racism and paternalism and selective history, serves a useful role at this point in time. He claims, cherry picking from history, that only empires can provide order.

Throughout history, governance and relative safety have most often been provided by empires, Western or Eastern. Anarchy reigned in the interregnums.

And then he asks whether or not America can afford to sustain its own empire.

Nevertheless, the critique that imperialism constitutes bad American foreign policy has serious merit: the real problem with imperialism is not that it is evil, but rather that it is too expensive and therefore a problematic grand strategy for a country like the United States. Many an empire has collapsed because of the burden of conquest. It is one thing to acknowledge the positive attributes of Rome or Hapsburg Austria; it is quite another to justify every military intervention that is considered by elites in Washington.

Thus, the debate Americans should be having is the following: Is an imperial-like foreign policy sustainable?

[snip]

Once that caution is acknowledged, the debate gets really interesting. To repeat, the critique of imperialism as expensive and unsustainable is not easily dismissed.

Perhaps predictably Kaplan dodges his own question, never seriously answering it. Instead of answering the question that he admits might have answers he doesn’t much like, he instead spends a bunch of paragraphs, in all seriousness, arguing that Obama is pursuing a post-Imperial presidency.

Rather than Obama’s post-imperialism, in which the secretary of state appears like a lonely and wayward operator encumbered by an apathetic White House, I maintain that a tempered imperialism is now preferable.

No other power or constellation of powers is able to provide even a fraction of the global order provided by the United States.

And by dodging his own question by launching a partisan attack, Kaplan avoids a number of other questions. Not just whether the American empire is sustainable, but whether there’s something about the means of American empire that has proven ineffective (which is really a different way of asking the same question). Why did Iraq end up being such catastrophe? Why did we lose the Arab Spring, in all senses of the word? Why, even at a time when the US still acts as global hegemon, is instability rising?

There are some underlying reasons, like climate change, that the imperialists would like to distinguish from our oil-based power and the dollar exchange it rests on.

But even more, I think, the imperialists would like to ignore how neoliberalism has gutted the former source of our strength, our manufacturing, has led us to increased reliance on Intellectual Property, and has not offered the people in our realm of influence the stability Kaplan claims empire brings. People can’t eat, they can’t educate their children, they can’t retire because of the policies Kaplan and his buddies have pushed around the world. And the US solution to this is more trade pacts that just further instantiate IP as a core value, regardless of how little it serves those people who can’t eat.

The NSA is intimately a part of this, of course. The reason I find it so hysterical that NSA’s one defense against China is effectively the IP one — the NSA doesn’t steal IP and give it to “private” companies to use. But that’s just another way of saying that the empire we’ve rolled out has failed to protect even the increasingly ineffective core basis of our power, its IP.

I’ve said this before, but what is happening, increasingly, is that the US has to coerce power rather than win it through persuasion — persuasion that used to be (at least for our European allies) increased quality of life. It’s a lot more expensive to coerce power, both in terms of the military adventures or repression you must engage in, but also in terms of the dragnet you must throw across the world rather than the enhanced communication of an open Internet. Nevertheless, the Obama Administration, for all of Kaplan’s claimed post-Imperialism, seems to be doubling down on more coercive (or, in the case of trade agreements, counterproductive) means of retaining power.

And so Kaplan, who’s so sure that empire is a great thing, might be better considering not empire in the abstract (indeed, abstracted to the point of suppressing the many downsides of empire), but the empire we’ve got. He seems to implicitly admit he can’t rebut the claim that our empire is no longer sustainable, but since he can’t he changes the subject. Why is our empire unsustainable, Robert Kaplan? And for those who believe the US offers a good — or even a least-bad — order for the globe, what do you intend to do to return it to sustainability?

Dragnets and austerity aren’t going to do it, that’s for sure.

Update: Thanks to Wapiti for alerting me to my huge error of substituting Kagan (generic neocon name) for Kaplan’s actual last name. Sorry for the confusion.

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Super Bowl Sex Trafficking Trash Talk 2014

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Now that the super exciting Pro Bowl is over (shoot that thing and put us all out of its worthless misery), we are down to just one last football game. But it is a good one, with the top ranked team in each conference representing, and the best offense versus the best defense. And all that jazz.

And, really, what else is there to say about the game at this point? It has been the fascination of sports, general and entertainment media for two weeks of hype now. I could take you through the normal rundown on the teams, but why? My one real take is that the game boils down not to Denver’s offense or Seattle’s defense, but rather to Denver’s defense. Peyton and the Broncos will score some points no matter how well they are defended. The same cannot necessarily be said about the Seahawks. So, if the Broncos defense plays big, Denver wins. If not, they don’t.

Can’t wait to find out; will be one hell of an exciting game to watch. If you can’t wait and want a simulation, this Breaking Madden piece is pretty great.

So, let’s talk for a bit about the game itself in terms of what it means and does for the host city. Does hosting a Super Bowl mean as much to a city as is commonly claimed?

Here is a report on the effects of 2008 Super Bowl XLII on the greater Phoenix area by the Arizona State University WP Carey School of Business. The results claim:

Super Bowl festivities generated a record $500.6 million in direct and indirect spending by visiting fans and organizations, according to the newly released Super Bowl impact study produced by the W. P. Carey MBA Sports Business program.

The gross impact of a half billion dollars in the Arizona marketplace brings rejuvenation to an economy that has been weakened by a recession.

The ripple effect of return visits, family and company relocations, and word-of-mouth marketing nationally could equal or exceed the record Super Bowl spending in years to come.

That is in line with many of the claims that are commonly pitched for Super Bowls, but is that right?

Well, maybe not. There are a lot of demands on a host city, and they really add up. One of the best journalists out there writing on the intersection of sports and society is Travis Waldron, and he reported this on the eve of last year’s Super Bowl in New Orleans:

Those estimates, though, are likely fool’s gold, according to an assortment of academic research into the actual economic impact of Super Bowls and other major sporting events. When professors Victor Matheson and Robert Baade studied the economic impact of Super Bowls from 1973 to 1997, they found that the games boosted city economies by about $30 million, “roughly one-tenth the figures touted by the NFL” and an even smaller fraction of what New Orleans officials predict. A later Baade and Matheson study found that the economic impact of a Super Bowl is “on average one-quarter or less the magnitude of the most recent NFL estimates.”

Similarly, a 1999 paper from professor Philip Porter found that the Super Bowl had virtually no effect on a city’s economy. Research on other events New Orleans has hosted, including the men’s Final Four, is similar. When Baade and Matheson studied Final Fours, they found that the events tend “not to translate into any measurable benefits to the host cities.”

There are multiple reasons the estimates are often overstated. Impact estimates usually take into account how much money will be spent in the city during an event like the Super Bowl without examining how much potential spending will be lost because people don’t visit or leave the city to avoid the crowd — that is, the impact studies account for gross spending, but not net spending. And the estimates rarely include the additional cost of putting on the event, further distorting the disparity between gross and net spending figures.

Frankly, I find the Williams College study undergirding Travis’ argument far more persuasive than the happy face one put out here by ASU that is cited above. Still, even if the net impact is “only” 150-200 million dollars, that is a good thing for a city’s economy. And I don’t know what people going to the Super Bowl in cold weather place like New Jersey/New York are going to come away Read more →

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NSA: The Hegemon’s Economic Spying Is Okay, Unlike the Challenger’s Economic Spying

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As part of an NYT story on implants the NSA has placed in 100,000 computers around the world, some of them via radio, it lists “trade institutions inside the European Union” among the targets for Computer Network Exploitation.

It must be particularly sensitive to that declaration above others, because the NSA spokesperson offers a tired excuse for why our economic spying is not bad, while China’s is.

While refusing to comment on the scope of the Quantum program, the N.S.A. said its actions were not comparable to China’s.

“N.S.A.’s activities are focused and specifically deployed against — and only against — valid foreign intelligence targets in response to intelligence requirements,” Vanee Vines, an agency spokeswoman, said in a statement. “We do not use foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of — or give intelligence we collect to — U.S. companies to enhance their international competitiveness or increase their bottom line.”

I wonder whether the people who parrot this line really have so little understanding of the distinctions between the way China’s government presses its economic advantage and the way we do? I wonder if they’ve never seen cables showing our diplomats pressuring other countries in ways that benefit specific, named US companies (or trade organizations), surely relying on intelligence gained from both SIGINT and HUMINT?

We are neither better or worse capitalists than China because of the way we spy. Both countries are cheating on behalf of ostensibly “national” companies (though cheating and illicitly gained intelligence are an established feature of even the best regulated markets).

For some reason the NSA thinks that so long as it doesn’t spy on one of the few remaining areas where the US has the biggest competitive advantage — its Intellectual Property — its economic spying is morally better than China’s economic spying.

That’s nonsense. It’s all cheating in the name of national strength. If it’s acceptable for us to do it, we really can’t perform moral outrage that our rivals are doing it.

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Dilma Throws Obama a BRIC

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Screen shot 2013-09-17 at 2.57.28 PMI was actually surprised, back in May, when the White House announced a State Visit for Brazil’s President, Dilma Rousseff.

After all, not long after Obama visited Brazil in March 2011, the real started gaining value against the dollar, significantly slowing the boom Brazil had enjoyed in the wake of our crash.

When she was here in April 2012, Dilma explicitly blamed US Quantitative Easing for the reversal in currencies, and suggested the policy was meant to slow growth in countries like Brazil. Before that, Brazil’s boom and its advances in energy independence had put Brazil in a position to assume the global stature a country of its size might aspire to. And Dilma (partly correctly) blamed US actions for undercutting that stature.

I interpreted the State Dinner to be an attempt to woo Brazil away from natural coalitions with the Bolivarist governments of Latin America and the BRICS (Brazil, Russsia, India, China, and South Africa).

Fast forward to today, when the Brazilian government announced that it has postponed the visit that had been scheduled for October 23.

The usual suspects are mocking Dilma’s decision, insisting that everyone spies, and that Brazil is just making a stink for political gain. The White House statement echoes that, suggesting that it was the revelation of US spying, and not the spying itself, that created the problems.

The President has said that he understands and regrets the concerns disclosures of alleged U.S. intelligence activities have generated in Brazil and made clear that he is committed to working together with President Rousseff and her government in diplomatic channels to move beyond this issue as a source of tension in our bilateral relationship.

There is something to that stance. Dilma’s government faces a lot of unrest and the tensions of preparing for the World Cup. The portrayal that the US was taking advantage of Brazil caught her at a politically sensitive time.

All that said, those poo-pooing Brazil’s complaints ignore the specific nature of the spying as revealed. As I noted, even James Clapper’s attempt to respond to concerns raised by the original reports in Brazil didn’t address (and indeed, may have exacerbated) concerns that the US is engaging in financial war, including manipulating its currency to undercut other countries as they rise in relative power. If the US is using its advantages in SIGINT to engage in such financial war, Brazil has every reason to object, because it’s not something Brazil’s currency or telecommunications position make possible.

US disclaimers of industrial espionage no longer matter if the US is collecting SIGINT that would support substantive financial attacks, especially since Clapper in March made it clear the US envisions such attacks (even if they only admit to thinking in defensive terms).

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Darrell Issa’s Net Worth Goes Up 152% in One Year

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Screen shot 2013-09-17 at 1.23.12 PM

It is wealth inequality day, in which, on the same day, the Census Bureau releases information on poverty and CQ releases the list of richest members of Congress.

As for poverty: things didn’t get statistically worse, but things didn’t get better at all, not even with decreasing unemployment (which, admittedly, is largely about labor market participation). (In good news, President Obama today extended minimum wage and overtime protections to home healthcare workers, though he bizarrely delayed implementation of the rule until 2015.)

As for wealth, 50 members of Congress are worth $6.67 million or more.

No wonder they seem so distant from the worries of their constituents.

But the truly mind-blowing detail from CQ’s wealthiest list is the remarkable luck Darrell Issa had in the last year. In just the last year, his net worth has increased from $140.55 million to $355.38 million — or a net worth increase of 152.8%. (He also became the richest member, but would have anyway on account of John Kerry’s retirement.)

No wonder he gins up factually problematic attacks on the IRS.

Here’s how CQ describes Issa managed such a feat:

The longtime denizen of the 50 Richest list finally reached the No. 1 spot after making about $135 million in 2012, mostly from investments that swelled in a bull market.

[snip]

Issa appears to make his money in the stock market. He ended 2012 with at least $390 million in bonds and stocks. His true worth, however, could be far greater. Members of Congress aren’t obligated to disclose exact figures, only ranges, and Issa has seven accounts with a minimum of $50 million, which is the highest category available on standard disclosure forms.

Issa also has about $75 million in outstanding loans, owing at least $50 million to Merrill Lynch and $25 million to Union Bank. Whether he truly is the richest member of Congress actually depends on precisely how much money he owes to Merrill Lynch.

So in the last year in which insider trading was legal for members Congress, Darrell Issa managed to make at least $100 million.

And yet he believes Benghazi is the most urgent matter facing this country.

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James Clapper’s Financial War on the World

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I’m fundraising this week. Please support me if you can. 

Yesterday, TV Globo published details of NSA spying on Brazil’s oil company, Petrobras, SWIFT, and financial organizations. Besides revealing that man-in-the-middle attacks are sometimes used, the report didn’t offer details of what the NSA was actually collecting. Its sources suggest NSA might be seeking Brazil’s leading deep sea drilling technology or geological information that would be useful in drilling auctions, but it is also conceivable the NSA is just trying to anticipate what the oil market will look like in upcoming years (this is one area where we probably even spy on our allies the Saudis, since they have been accused of lying about their reserves).

To some degree, then, I await more details about precisely what we’re collecting and why.

But what I am interested in is James Clapper’s response. He released this statement on the I Con site.

It is not a secret that the Intelligence Community collects information about economic and financial matters, and terrorist financing.

We collect this information for many important reasons: for one, it could provide the United States and our allies early warning of international financial crises which could negatively impact the global economy. It also could provide insight into other countries’ economic policy or behavior which could affect global markets.

Our collection of information regarding terrorist financing saves lives. Since 9/11, the Intelligence Community has found success in disrupting terror networks by following their money as it moves around the globe. International criminal organizations, proliferators of weapons of mass destruction, illicit arms dealers, or nations that attempt to avoid international sanctions can also be targeted in an effort to aid America’s and our allies’ interests.

What we do not do, as we have said many times, is use our foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of – or give intelligence we collect to – US companies to enhance their international competitiveness or increase their bottom line.

As we have said previously, the United States collects foreign intelligence – just as many other governments do – to enhance the security of our citizens and protect our interests and those of our allies around the world. The intelligence Community’s efforts to understand economic systems and policies and monitor anomalous economic activities is critical to providing policy makers with the information they need to make informed decisions that are in the best interest of our national security.

Let me take this extraordinary statement in reverse order.

In the fourth paragraph, Clapper reiterates the final defense that NSA defenders use: that we’re better than, say, China and France, because we don’t engage in industrial espionage, stealing technology with our spying. That may be true, but I suspect at the end of the day the economic spying we do might be more appalling.

In the third paragraph, he retreats to the terror terror terror strategy the Administration has used throughout this crisis. And sure, no one really complains that the government is using financial tracking to break up terrorist networks (though the government is awfully selective about whom it prosecutes, and it almost certainly has used a broad definition of “terrorism” to spy on the financial transactions of individuals for geopolitical reasons). But note, while the Globo report provided no details, it did seem to describe that NSA spies on SWIFT.

That would presumably be in addition to whatever access Treasury gets directly from SWIFT, through agreements that have become public.

That is, the Globo piece at least seems to suggest that we’re getting information from SWIFT via two means, via the now public access through the consortium, but also via NSA spying. That would seem to suggest we’re using it for things that go beyond the terrorist purpose the consortium has granted us access for. Past reporting on SWIFT has made it clear we threatened to do just that. The Globo report may support that we have in fact done that.

Now the second paragraph. James Clapper, too cute by half, asserts, spying on financial information,

could provide the United States and our allies early warning of international financial crises which could negatively impact the global economy

Hahahahahaha! Oh my word! Hahahaha. I mean, sure, the US needs to know of pending financial crises, in the same way it wants to know what the actual versus claimed petroleum reserves in the world are (and those are, of course, closely related issues). But with this claim, Clapper suggests the US would actually recognize a financial crisis and do something about it.

Hahahahaha. Didn’t — still doesn’t — work out that way.

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The Black Budget

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Screen shot 2013-08-29 at 2.50.28 PMThe Washington Post just published an excellent package on the FY2013 Black Budget for intelligence. I’m reading through the summary now.

I’ll put working comments below. But one of my first impressions is that all of this is useful information, and in some ways really encouraging information (in others, horrifying).

For that reason, this is one of my favorite parts of the story itself:

Lee Hamilton, an Indiana Democrat who was a former chairman of the House Intelligence Committee and co-chairman of the commission that investigated the Sept. 11 attacks, said that access to budget figures has the potential to enable an informed public debate on intelligence spending for the first time, much as Snowden’s disclosures of NSA surveillance programs brought attention to operations that had assembled data on nearly every U.S. citizen.

“Much of the work that the intelligence community does has a profound impact on the life of ordinary Americans, and they ought not to be excluded from the process,” he said.

“Nobody is arguing that we should be so transparent as to create dangers for the country,” he said. But, he said, “there is a mindset in the national security community — leave it to us, we can handle it, the American people have to trust us. They carry it to quite an extraordinary length so that they have resisted over a period of decades transparency. . . . The burden of persuasion as to keeping something secret should be on the intelligence community, the burden should not be on the American public.”

Hamilton is absolutely right. There’s no reason why information at this level of detail shouldn’t be shared with American taxpayers ponying up the $52.6 billion to pay for it all.

Working comments on Budget Justifications

4: The IC is apparently going to start researching trade disputes. I assume that’ll be primarily targeted at China. But it’s an interesting development.

 

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