China Is Hiding Its Counterfeit Electronics Parts

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The Senate Armed Services Committee is trying to investigate how allegedly counterfeit parts get into the military supply chain. But China won’t give visas–or promise freedom of movement without minders–to its investigators.

Two key US senators on Tuesday accused China of hampering a congressional probe into how counterfeit electronics end up in the US military supply chain by denying entry visas to investigators.

[snip]

And the senators said China had required that government minders attend any interviews conducted in China as part of the investigation, which was announced in March, but agreed that request was a “non-starter.”

Levin and McCain said that they had worked for weeks to get entry visas for staff to visit the city of Shenzhen in Guangdong province, which they described as the epicenter of the fake parts trade based on US government reports.

The development is interesting for several reasons. First, while the article cites F-15 and USMDA parts as the problem, most cybersecurity initiatives these days suggest we’ve got parts that are helping people hack our network. Thus, while Levin suggests China isn’t really our adversary, these “counterfeit” parts may well be designed for more than failure. It seems someone has gotten a backdoor into some of our networks because of hardware vulnerabilities.

Then there’s the more obvious issue raised by this. If military contractors can’t source parts to China without being “infiltrated” with counterfeit parts, and if China won’t let us investigate how these counterfeit parts keep getting into our supply chain, then why are we still allowing contractors to use Chinese parts? It seems to me this shows precisely why our outsourcing–and the consequent loss of manufacturing capacity–is really a defense issue.

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The Chambermaid’s Revenge: IMF Hacked

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Usually, the apparent purpose of hacks is fairly banal. To steal defense secrets. To profit organized crime. To embarrass a political opponent.

But a reported sophisticated hack on the IMF is far more intriguing.

Because the fund has been at the center of economic bailout programs for Portugal, Greece and Ireland — and possesses sensitive data on other countries that may be on the brink of crisis — its database contains potentially market-moving information. It also includes communications with national leaders as they negotiate, often behind the scenes, on the terms of international bailouts. Those agreements are, in the words of one fund official, “political dynamite in many countries.” It was unclear what information the attackers were able to access.

The concern about the attack was so significant that the World Bank, an international agency focused on economic development, whose headquarters is across the street from the I.M.F. in downtown Washington, cut the computer link that allows the two institutions to share information.

The story mentions market-moving information, so I assume it could just be someone trying to play the bond markets.

But what is the scenario under which hackers compromise IMF’s top secret files to get information on the deals signed between the banksters and debtor nations? While I’d like to see that information–and I’m sure the Greeks rioting in the streets and the Irish stoically bearing down accepting their fate would like to see that information–I don’t understand what entity would sponsor the hackers? Organized crime? China? Hacktivists? If it were the latter–which seems most plausible to me–wouldn’t we already be looking at the demands German banksters made of Greek leaders?

I’m sure we’ll learn more about this in the future. But for now, I’m really curious about who had the means and motive to hack the IMF.

Aside from a bunch of chambermaids, of course.

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E. Coli EFMs

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Chris Savage (Eclectablog) continues to track what the Emergency Financial Managers have been doing around Michigan. In new developments, the EFM for Pontiac MI, Michael Stampfler, broke the Police Dispatcher’s union contract, dissolved the Planning Commission, fired the water and wastewater department, and outsourced the latter function to a private company, United Water Services.

Now, Pontiac has had compliance problems with its wastewater treatment since 2009. Which is why Stampfler’s chosen replacement for Pontiac’s wastewater department is troublesome. As Savage points out, United Water was indicted in December for tampering with E Coli testing in Gary, IN.

Because United Water was indicted by the U.S. Department of Justice last December for violating the Clean Water Act.

United Water Services Inc., the former contract operator of the Gary Sanitary District wastewater treatment works in Gary, Ind., and two of its employees, were charged today with conspiracy and felony violations of the Clean Water Act in a 26-count indictment returned by a federal grand jury, the Justice Department announced today.

United Water Services Inc., and employees Dwain L. Bowie, and Gregory A. Ciaccio, have been charged with manipulating daily wastewater sampling methods by turning up disinfectant treatment levels shortly before sampling, then turning them down shortly after sampling.

~SNIP~

According to the indictment, the defendants conspired to tamper with E. coli monitoring methods by turning up levels of disinfectant dosing prior to E. coli sampling. The indictment states that the defendants would avoid taking E. coli samples until disinfectants had reached elevated levels, which in turn were expected to lead to reduced E. coli levels. Immediately after sampling, the indictment alleges, the defendants turned down disinfectant levels, thus reducing the amount of treatment chemicals they used.

That would be a neat way to save money on wastewater treatment, huh? To hire a company allegedly willing to tamper with water quality readings to appear to have fixed water treatment problems.

Of course, the cost of infecting a city with E Coli might end up being a bigger problem.

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“As I plan to inform the White House”

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DDay already noted Peter Diamond’s op-ed withdrawing his nomination as a Fed Governor. But I wanted to emphasize one thing:

It is time for me to withdraw, as I plan to inform the White House.

It appears that this very public complaint was how Diamond informed the White House he was withdrawing–not a discrete phone call.

That’s not the normal way nominees handle communications with the White House.

To be fair, Diamond focuses all of his criticism in the op-ed on the Republicans who believe a Nobel prize winner is unqualified to serve on the Fed. The op-ed itself does not criticize the White House’s handing of the nomination.

But if it’s true that this was Diamond’s way of informing the White House, then it suggests he’s pretty damned pissed at the White House as well. As well he should be–he got the same treatment Dawn Johnsen and Goodwin Liu did, with repeated renominations but no public fight (or recess appointment).

That club of good nominees hung out to dry by this White House is growing longer.

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How’s that Plan Going, Mr. President?

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I was going to write about this story–about a confrontation between Henry Waxman and Barack Obama over the latter’s ineffective negotiating strategy–yesterday.

The president has heard the complaint before. Democrats have accused Obama repeatedly of ceding too much ground to the GOP, especially on health care and the extension of the Bush-era tax cuts for the wealthy. But attendees said the critique appeared to rub him the wrong way on Thursday.

“He was a little testy with the Waxman question. Essentially, Mr. Waxman was urging him to fight more,” one legislator said. “The president reminded folks that he’s the president sitting in that chair and he knows how to negotiate.”

Obama also told the assembled Democrats not to count on more fiery rhetoric from the Oval Office.

“He said, ‘There’s a difference between me and a member of Congress,'” another lawmaker said, paraphrasing the president as saying: “When I say something the markets react, all of society reacts, other countries react. I’ve got to be careful with what I say. I can’t just say it for brinkmanship. I’ve got to say it in a way so that I get what I want said, but I don’t upset markets and so on.”

But I’m sort of glad I waited until after today’s announcement that unemployment has gone up and declining public sector employment is dragging down the economy. Because it makes it all the more appropriate to highlight Obama’s claim that he has a plan.

But Obama responded that he has to be more careful and more considered than that, and that he is executing an existing plan. [my emphasis]

Not only does the crummy economic news weaken what had been a position of relative strength for the President, but it shows that if he’s got a plan, it’s either not working or not designed to work. Obama’s plan–to focus on the deficit–only makes it more likely we’ll see ongoing cuts to public employment.

Is that really the plan, Mr. President?

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Can’t We Call this “Counter-Terrorism Preparedness”?

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Jared Bernstein (whose blog I still recommend) has responded to his 2-day PEPCO power outage by posting the crummy infrastructure report card the US got in 2009:

Check out the 2009 Report Card from the American Society of Civil Engineers:Aviation D

Bridges C

Dams D

Drinking Water D-

Energy D+

Hazardous Waste D

Inland Waterways D-

Levees D-

Public Parks and Recreation C-

Rail C-

Roads D-

Schools D

Solid Waste C+

Transit D

Wastewater D-

America’s Infrastructure GPA: D

Estimated 5 Year Investment Need: $2.2 Trillion

Bernstein’s take (channeling Atrios) is that fixing all this infrastructure ought to be a good way to get 20 million people back to work.

But fixing just about every single one of these infrastructure problems is also a way to make our country more resilient to terrorism. Bridges? Dams? They make attractive terrorist targets, particularly if they’re already crumbling. Drinking water? Another vulnerability to terrorist attacks. Rails? We know Osama bin Laden was reviewing plans to derail trains (as it crossed a bridge–this one’s a twofer).

So can’t we start fixing this stuff and, rather than calling it stimulus, call it “counter-terrorism preparedness”? There’s no way, of course, the idiots in DC would support 2 trillion of stimulus, but their willingness to keep funding multiple wars in the name of terrorism–to the tune of trillions–show they might do so if we can give it a national security spin.

And between us? If we fixed things like levees and energy plants, we’d also be more resilient to things like earthquakes and climate change. Mind you, if Republicans found out about that, it’d be enough reason to defund it. So we’ll just keep that part a secret between us.

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Chiquita: The Guns and Drugs and Union Killing CNN Didn’t Mention

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CNN has a report today on some of the many lawsuits victims of right and left wing violence have taken against Chiquita.

Family members of thousands of Colombians who were killed or who disappeared are suing Chiquita Brands International, alleging the produce company is liable because of its payments to paramilitaries.”We’re holding them accountable,” said Paul Wolf, a Washington-based attorney who is handling cases for family members of more than 2,000 victims.

[snip]

A federal judge in Florida is weighing whether the lawsuits, which constitute more than 4,000 claims against Chiquita, will go to trial.

I’m glad CNN has called attention to the suits. But I wanted to point out some of the important details, including the following details from a suit filed last March.

There’s the way Chiquita helped the right wing AUC import 3000 AK-47s.

In 2001, Chiquita facilitated the clandestine and illegal transfer of arms and ammunition from Nicaragua to the AUC.

[snip]

Instead of docking in Panama, the Otterloo [a ship registered in Panama and carrying 3000 AK-47s] instead went to Turbo, Colombia, where Chiquita, through Banadex, operated a private port facility for the transport of bananas and other cargo.

After the Otterloo docked at Chiquita’s port in Turbo, Banadex employees unloaded crates containing the assault rifles and ammunition. On information and belief, the AUC, which had free access to the port, then loaded these rifles onto AUC vehicles and took possession of them.

And there’s the way Chiquita helped the AUC export coke.

Colombian prosecutors have charged that the AUC shipped drugs on Chiquita’s boats carrying bananas to Europe.

[snip]

More than one and a half tons of cocaine have been found hidden in Defendant’s produce, valued at over 33 million dollars. Two of the ships on which drugs were found were named the Chiquita Bremen and the Chiquita Belgie.

And finally, there’s the way Chiquita relied on AUC to break the unions.

After its agreement with Chiquita, the AUC understood that one goal of its campaign of terror was to force laborers to work in the plantations. Anyone who disobeyed the order knew what would happen  to them. For example, one individual who worked in Chiquita’s offices at a plantation in Urabá, was present when paramilitaries arrived at the plantation and summarily executed a banana worker who had been seen as a troublemaker because his slow work held up the production line. Another individual saw paramilitaries arrive to threaten banana workers after a salary dispute.

[snip]

In addition to directly suppressing labor activity, the paramilitaries regulated the banana-growing population and protected Chiquita’s profitability by controlling the provision of medical services in the towns of Urabá. Residents of Apartadó reported that they feared seeing doctors because they believed that medical personnel were under the control of the AUC. On information and belief, this arrangement benefited Chiquita because it allowed the paramilitaries to inform the company of its employees’ medical issues that could potentially affect labor productivity, including pregnancy.

Whether or not this suit goes forward (and new documents released in April by National Security Archive make it clear that Chiquita considered their ties to terrorist groups a quid pro quo), it’s important to document what it means when corporations team up with terrorist organizations.

Obama wants to extend “free” trade with Colombia, when it’s not all that clear that these practices have ended.

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As with Voting, in Marketing, Real People Don’t Count Anymore

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For some time, it has become increasingly clear that our politicians can pursue policies that benefit just their rich donors–austerity, killing Medicare, bailing out banksters at the expense of homeowners–while ignoring their purported constituents.

So I guess it comes as no surprise that advertisers are beginning to adopt the same approach.

The top 10 percent of American households, [AdAge] adds, now account for nearly half of all consumer spending, and a disproportionate share of that spending comes from the top 10’s upper reaches.

“Simply put,” sums up Ad Age’s David Hirschman, “a small plutocracy of wealthy elites drives a larger and larger share of total consumer spending and has outsize purchasing influence — particularly in categories such as technology, financial services, travel, automotive, apparel, and personal care.”

[snip]

“As the very rich become even richer,” as Ad Age observes, “they amass greater purchasing power, creating an increasingly concentrated market for luxury goods and services as well as consumer goods overall.”

In the future, if current trends continue, no one else but the rich will essentially matter — to Madison Avenue.

“More than ever before,” the new Ad Age paper bluntly sums up, “the wealthiest households will be the households with significant disposable income to spend.”

Why market to the mere middle class (which is busy, in any case, falling out of the middle class) when marketing to the super rich is so much more lucrative?

If advertisers really do start blowing off the middle class, it might have an interesting mixed result. On one hand, there may be a greater gap between what people see on TV commercials and shows, driving insecurity about not matching the lifestyles you see on TV (then again, maybe advertisers will just stop advertising on TV).

But if the middle class isn’t the target of a barrage of advertising, it may lead to a less materialist lifestyle, leaving people to invest in their communities rather than their toys.

Who knows? One thing is clear: increasing inequality is totally defining our society. And it’s not entirely clear how the newly redefined society is going to end up.

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Dear DNC: Automotive “I Told You Sos” Need to Be Directed Down-Ticket, Too

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The DNC and Midwestern state Democratic Parties are rolling out an extravaganza today, using the occasion of Chrysler paying back some of its federal loans to mock GOP presidential candidates for opposing the auto bailout.

The DNC had a press conference with Jennifer Granholm, Ted Strickland, and Bob King to mock people like Mitt, T-Paw, Gingrich, and Huntsman. “Many of these naysayers now want to be President,” Strickland said.

MI posted a release (though apparently didn’t care enough send it to members):

Chrysler is reportedly set to announce that it will repay $5.9 billion in loans to the U.S. government and American taxpayers. Chrysler’s good news comes on the heels of a report that Chrysler made its first quarterly profit since emerging from structured bankruptcy reorganization.  Chrysler posted a 22.5% increase of sales in April compared to the same month last year and first quarter net income of $116 million, marking a remarkable turnaround for Chrysler and the domestic auto industry.“This is a great sign for Chrysler communities across the state and another positive sign of the recovery of manufacturing here in Michigan,” said Michigan Democratic Party Chair Mark Brewer. “Though it was unpopular in many parts of the country, President Obama and Democrats did what was needed to save the more than 1.4 million jobs that the American auto industry supports. If the President hadn’t acted to prevent Chrysler and GM from shutting their doors permanently, the entire state could have seen further economic disaster.”

After receiving loan packages and emerging from structured bankruptcy reorganization, Chrysler and General Motors are both hiring again and operating at a profit. Right here in Michigan, more than 12,100 manufacturing and auto dealer jobs have been created in the last year.

IN posted a release and sent it to DFH journalists from adjoining states:

In response to today’s news that Chrysler has repaid $5.9 billion in loans to the U.S. government and American taxpayers, Indiana Democratic Party Chair lauded President Obama for his strong economic leadership and success taking action to prevent the collapse of America’s domestic auto industry.Parker also said Indiana Republicans who voted against or publicly opposed Obama’s auto plan now find themselves on the wrong side of history.

“Indiana’s auto industry was hard hit by the recent economic crisis, and this is a great sign both for Chrysler and Hoosier workers,” Parker said. “President Obama’s plan wasn’t popular in many parts of the country, but Democrats did what was necessary to save the more than 1.4 million jobs that the American auto industry supports. Without that kind of strong leadership, many of our communities would have suffered economic disaster.”

Chrysler’s good news comes on the heels of a report that the company made its first quarterly profit since emerging from structured bankruptcy reorganization. Chrysler posted a 22.5% increase of sales in April compared to the same month last year and first quarter net income of $116 million, marking a remarkable turnaround for Chrysler and the domestic auto industry.

After receiving loan packages and emerging from structured bankruptcy reorganization, Chrysler and General Motors are both hiring again and operating at a profit.

Parker noted that Indiana Gov. Mitch Daniels and U.S. Rep Mike Pence, who is seeking the Republican gubernatorial nomination, both opposed the President’s auto plan.

(I haven’t seen one from OH yet, but they sent this wonderfully catty release earlier this month.)

Update: Here’s Obama’s statement (which lacks any “I told you sos”):

Chrysler’s repayment of its outstanding loans to the U.S. Treasury and American taxpayers marks a significant milestone for the turnaround of Chrysler and the countless communities and families who rely on the American auto industry. This announcement comes six years ahead of schedule and just two years after emerging from bankruptcy, allowing Chrysler to build on its progress and continue to grow as the economy recovers. Supporting the American auto industry required making some tough decisions, but I was not willing to walk away from the workers at Chrysler and the communities that rely on this iconic American company. I said if Chrysler and all its stakeholders were willing to take the difficult steps necessary to become more competitive, America would stand by them, and we did. While there is more work to be done, we are starting to see stronger sales, additional shifts at plants and signs of strength in the auto industry and our economy, a true testament to the resolve and determination of American workers across the nation.

But there’s something missing, perhaps because the DNC is too focused on national races and doesn’t appear to know much about the local industry. The DNC is focused on the GM and Chrysler headlines, not so much the suppliers, where the bulk of the jobs are. More importantly, the Democrats as a whole don’t seem to be cataloging the many examples where down-ticket Republicans are claiming credit for government investments in new technology that are just now paying off in jobs.

The problem is particularly acute here in W MI, home of some of the GOP’s biggest evangelists claiming business simply needs government to get out of the way. But it’s also home to a good number of factories–including, increasingly, clean energy factories supported by Granholm credits and federal stimulus dollars–that rely on government funding.

As Wizardkitten ranted wonderfully earlier this months, GOPers routinely show up to claim credit for these plants, even while ignoring that Democratic investments rather than GOP austerity made the plants possible.

Governor Snyder, who spent a campaign trash-talking both the state economic development team and the tax credits that are now growing a clean energy economy here in Michigan, not only used an advanced battery plant created with state incentives and stimulus money to introduce the Republican ticket last August, now has given his “Reinventing Michigan” award to another Governor Granholm/MEDC/Recovery Act success story – and tries to play it off as a victory surrounding his political talking points.

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Jared Bernstein’s Glorious Diarrhea of Quashed Ideas

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I rarely post solely to recommend you follow a blog or twitter feed. But I am here.

You see, Joe Biden’s economic advisor, Jared Bernstein, was recently liberated from the White House.

And, as part of that liberation process, it seems, he got himself a blog and twitter feed. His inaugural post explained he could do more and better on the outside, speaking truth.

Democrats lately seemed to be trapped in a position that amounts to: “sure, we have to cut and shrink—just not as much as the other guys want.”

There’s got to be a better way—a way to widen this terribly narrow debate.

Why couldn’t I do more to help from the inside?  One reason is that in order to move the ball forward, you need consensus, and in today’s politics, that is particularly elusive.  And that makes it especially hard to call out people and their arguments.  There’s a reason why Jon Stewart can speak truths that highly-placed elected officials cannot.  When you’re on the inside at a time like this, you’re constantly balancing the risk of losing the support of people you need to lead.

So, not meaning to be at all grandiose, I’m going to try to do my part to improve the debate from the outside, to make sense out of the arguments, to go for truth over truthiness, to elevate the facts of the case in a way that’s respectful to all sides of the case.  It’s also my hope that by dint of my recent experience at the White House, I can imbue this blog with a sense of political realism that’s sometimes missing in critical commentary.

And he’s got all the smarts of Paul Krugman with–excuse me, the Shrill One–better voice.

But what’s more fascinating to me is the way his blog reads like the exploding diarrhea of common sense ideas that were quashed within the Obama White House:

Social Security Benefits: They’re Important!

The Correct Diagnosis

Family Budget Not Equal to Government Budget

This Just In: Wars Are Expensive

What’s Going Down with Real Wages?

Along with this line from a post on the auto bailout I heartily endorse:

You’d be hard-pressed to find a policy intervention that did as much good yet engendered so much disdain.

Partly I want to say “duh!”

Partly I want to cheer that someone with an economist badge is finally putting these ideas into circulation.

And partly I’m fascinated by the seeming free association going on at the moment, with every reaction a seeming opportunity to expound on something–it seems–that has been gnawing on Bernstein for the last two years.

Finally, there’s the recognition that the entire time the White House was shunning truth-tellers like Krugman and Joe Stiglitz, there was apparently someone on the inside speaking many of the same obvious truths.

And with that recognition, the evidence that Bernstein’s truth-telling didn’t do anymore good from the inside than Krugman and Stiglitz did on the outside.

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