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Did ACLU and EFF Just Help the NSA Get Inside Your Smart Phone?

EFF ACLUThe ACLU and EFF normally do great work defending the Fourth Amendment. Both have fought the government’s expansive spying for years. Both have fought hard to require the government obtain a warrant before accessing your computer, cell phone, and location data.

But earlier this week, they may have taken action that directly undermines that good work.

On Wednesday, both civil liberties organizations joined in a letter supporting Patrick Leahy’s version of USA Freedom Act, calling it a necessary first step.

We support S. 2685 as an important first step toward necessary comprehensive surveillance reform. We urge the Senate and the House to pass it quickly, and without
making any amendments that would weaken the important changes described above.

ACLU’s Laura Murphy explained why ACLU signed onto the bill in a column at Politico, analogizing it to when, in 2010, ACLU signed onto a bill that lowered, but did not eliminate,  disparities in crack sentencing.

Reform advocates were at a crossroads. Maximalists urged opposition despite the fact the bill would, in a very real way, make life better for thousands of people and begin to reduce the severe racial and ethnic inequality in our prison system. Pragmatists, fearing that opposition to the bill would preclude any reform at all, urged support.

It was a painful compromise, but the ACLU ultimately supported the bill. It passed, astoundingly, with overwhelming support in both chambers.

And then something amazing happened. Conservative lawmakers, concerned about government waste, increasingly came to the table to support criminal justice reform. Liberals realized they could vote their conscience on criminal justice without accusations of being “soft on crime.” It has not been easy and there have been many steps backward, but in recent years, we’ve seen greater public opposition to mandatory minimum sentences and real movement on things like reducing penalties for low-level drug offenses.

The analogy is inapt. You don’t end crack disparities by increasing the number of coke dealers in jail. But Leahy’s USA Freedom Act almost certainly will increase the number of totally innocent Americans who will be subjected to the full brunt of NSA’s analytical authorities indefinitely.

That’s because by outsourcing to telecoms, NSA will actually increase the total percentage of Americans’ telephone records that get chained on; sources say it will be more “comprehensive” than the current dragnet and Deputy NSA Director Richard Ledgett agrees the “the actual universe of potential calls that could be queried against is [potentially] dramatically larger.” In addition, the telecoms are unlikely to be able to remove all the noisy numbers like pizza joints — as NSA currently claims to — meaning more people with completely accidental phone ties to suspects will get sucked in. And USA Freedom adopts a standard for data retention — foreign intelligence purpose — that has proven meaningless in the past, so once a person’s phone number gets turned over to the NSA, they’ll be fair game for further NSA spying, the really invasive stuff, indefinitely.

But that’s not the reason I find ACLU and EFF’s early support for USA Freedom so astounding.

I’m shocked ACLU and EFF are supporting this bill because they don’t know what the NSA will be permitted to do at the immunized telecoms. They have blindly signed onto a bill permitting “connection chaining” without first understanding what connection chaining entails.

As I have reported extensively, while every witness who has talked about the phone dragnet has talked about chaining on phone calls made — all the calls Anwar al-Awlaki made, all the calls those people made — the language describing this chaining process has actually been evolving. Dianne Feinstein’s Fake FISA Fix last fall allowed the NSA to chain on actual calls — as witnesses had described — but also on communications (not just calls) “to or from any selector reasonably linked to the selector.” A February modification and the last two dragnet orders permitted NSA to chain on identifiers “with a contact and/or connection” with the seed, making it clear that a “connection” is something different than a “contact.” The House bill USA Freedumber adopted the same language in a legislative report. Leahy’s bill adopts largely the same language for chaining.

(iii) provide that the Government may require the prompt production of call detail records—

(I) using the specific selection term that satisfies the standard required under subsection (b)(2)(C)(ii) as the basis for production; and

(II) using call detail records with a direct connection to such specific selection term as the basis for production of a second set of call detail records;

Now, it’s possible that this language does nothing more than what NSA illegally did until 2009: chain on both the identifier itself, but also on identifiers it has determined to be the same person. Back in 2009, NSA referred to a separate database to determine these other identifiers. Though that’s unlikely, because the bill language suggests the telecoms will be identifying these direct connections.

It’s possible, too, that this language only permits the telecoms to find “burner” phones — a new phone someone adopts after having disposed of an earlier one — and chain on that too.

But it’s also possible that this language would permit precisely what AT&T does for DEA in its directly analogous Hemisphere program: conduct analysis using cell site data. The bill does not permit NSA to receive cell site data, but it does nothing to prohibit NSA from receiving phone numbers identified using cell site data. When Mark Warner asked about this, Ledgett did not answer, and James Cole admitted they could use these orders (with FISC approval) to get access to cell location.

It’s possible, too, that the telecoms will identify direct connections using other data we know NSA uses to identify connections in EO 12333 data, including phone book and calendar data.

The point is, nobody in the public knows what “connections” NSA will be asking its immunized telecom partners to make. And nothing in the bill or even the public record prohibits NSA from asking telecoms to use a range of smart phone information to conduct their analysis, so long as they only give NSA phone identifiers as a result.

In response to questions from Senators about what this means, Leahy’s office promised a letter from James Clapper’s office clarifying what “connections” means (No, I don’t remember the part of Schoolhouse Rock where those regulated by laws get to provide “clarifications” that don’t make it into the laws themselves). That letter was reported to be due on Tuesday, by close of business — several days ago. It hasn’t appeared yet.

I asked people at both EFF and ACLU about this problem. EFF admitted they don’t know what this language means. ACLU calls the language “ambiguous,” but based on nothing they were able to convey to me, insists getting smart phone data under the guise of connection chaining would be an abuse. ACLU also pointed to transparency provisions in the bill, claiming that would alert us if the NSA starting doing something funky with its connection language; that of course ignores that “connection chaining” is an already-approved process, meaning that existing processes won’t ever be need to be released. It also ignores that the Administration has withheld what is probably a directly relevant phone dragnet opinion from both ACLU and EFF in their dragnet FOIA.

I get Laura Murphy’s point about using USA Freedom to start the process of reform. But what I don’t understand is why you’d do that having absolutely no idea whether that “reform” codifies the kind of warrantless probable cause-free access to device data that ACLU and EFF have fought so hard to prevent elsewhere.

ACLU and EFF are supposed to be leaders in protecting the privacy of our devices, including smart phones. I worry with their embrace of this bill, they’re leading NSA right into our smart phones.

Verizon Counsel Speaks Out Against “Outsourcing” Intelligence

One of the concerns I’ve raised about HR 3361 — AKA USA Freedumber — regards who will do some of the data analysis that the NSA “data integrity analysts” currently do before the contact-chaining stage. As I’ve noted, the most privacy protective thing would be to have the telecoms do it, but that would put them in an inappropriate role of performing analysis for the intelligence community.

Apparently, Verizon agrees with that. As part of Verizon Associate General Counsel Michael Woods’ testimony to the Senate Intelligence Committee the other day, he emphasized how inappropriate it would be for the telecoms to serve as surrogates for the intelligence community. (He emphasized this in his answers as well.)

Included in the reform discussions has been the idea that the collection, searching, and perhaps even analysis, of potentially relevant data is best done not by the government, but by the private holders of that data. One recommendation that garnered particular attention was that bulk collection of telephony metadata might be replaced by a system in which such metadata is held instead either by private providers or by a private third party.

This proposal opens a very complex debate, even when that debate is restricted to just traditional telephony, but the bottom line is this: national security is a fundamental government function that should not be outsourced to private companies.

Verizon is in the business of providing communications and other services to our customers. Data generated by that process is held only if, and only for long as, there is a business purpose in doing so. Outside of internal business operations, there typically is no need for companies to retain data for extended periods of time.

If a company is required to retain data for the use of intelligence agencies, it is no longer acting pursuant to a business purpose. Rather, it is serving the government’s purpose. In this context, the company has become an agent or surrogate of the government. Any Constitutional benefit of having the data held by private entities is lost when, by compelling retention of that data for non-business purposes, the private entity becomes a functional surrogate of the government. Public trust would exist to the extent that companies are believed to be truly independent of the government. When the companies are seen as surrogates for intelligence agencies, such trust will dissipate.

Nor would outsourcing offer any promise of efficiency. Technology is changing too rapidly — telecommunications networks are evolving beyond traditional switched telephony. Voice over Internet Protocol (VoIP) technologies handle voice traffic over the Internet (as opposed to the public switched telephone networks) and already account for a substantial portion of voice traffic. Even more dramatic has been the rise of “over-the-top” applications that use peer to peer or other technologies to establish direct connections between users over the Internet. In 2012, one such application accounted for 34% of all international voice calling minutes. VoIP and over-the-top applications traverse IP networks as Internet traffic and thus do not generate CDRs or similar telephony business records. U.S. intelligence agencies would need to approach application owners to establish access equivalent to the CDRs they obtain under the existing program. The technical difficulties multiply if the intelligence agencies were to eventually seek the same sort of access to IP metadata from Internet Service Providers.

Finally, the commercial effect on U.S. companies of outsourcing collection ought to be considered. No company will be eager to undertake the increased responsibility, scrutiny, and liability entailed by having its employees become surrogates for the government in the collection of intelligence. More troubling for large companies is the negative effect in the international market of overt association with a U.S. intelligence agency.

H.R. 3361 does not include any provisions which would require data retention by telecommunications companies. For all the foregoing reasons, that is a good thing. A framework under which intelligence agencies retain and analyze data that has been obtained from telecommunications companies in a “arms length” transaction compelled by a FISA order should continue. [my emphasis]

I quote this in full not to make you laugh at the prospect of Verizon balking at “becoming” a surrogate of the government.

I think this statement was clearly meant to lay out some clear principles going forward (and I suspect Verizon is by far the most important player in USA Freedumber, so Congress may well listen). Whatever Verizon has done in the past — before Edward Snowden and after him, ODNI exposed it, alone among the telecom companies, as turning over all our phone records to the government — it has made several efforts, some half-hearted and some potentially more significant to establish some space between it and the government. If Verizon has decided it’s time to set real boundaries in its cooperation with the government I’m all in favor of that going forward.

Much of this statement is just a clear warning that Verizon won’t abide by requests to extend their data retention practices, which it terms acting as an agent of the government. That will, by itself, limit the program. As Woods explained, they don’t really need Call Detail Records that long (and I assume they need smart phone data even less). What they keep the required 18 months is just billing records, which doesn’t provide the granular data the government would want. So if Verizon refuses to change its data retention approach, it will put a limit on what the government can access.

That said, that’s clearly what a number of Senators would like to do — mandate the retention of CDRs 18 months, which would in turn significantly raise the cost of this (about which more in a later post). So this could actually become a quite heated battle, aside from what privacy activists do.

There are a few more details of this I’m particularly intrigued by (aside from Woods’ warning that the records of interest will all be Internet-based calls within very short order).

Note that Woods admits there has been some discussion of having telecoms do “analysis” (and I assume he’s not talking just about me). Given his statements, it seems Verizon would refuse that too (good!). But remember: the last round of USA Freedumbing included compensation and immunity for Booz-type contractors in addition to the telecoms, so NSA may still be outsourcing this analysis, just to other contractors (and given that this was a late add, it may have come in response to Verizon’s reluctance to do NSA’s analysis for it).

When Woods claims this is difficult, “even when that debate is restricted to just traditional telephony,” he suggests the debate may not be restricted to traditional telephony. Obviously, Verizon must still be involved in upstream production. And it either is or may well be asked to resume its involvement in Internet metadata collection, because USA Freedumber doesn’t hide the intent to return to Internet dragnet collection. Then there’s the possibility Mark Warner’s questions elicited, that the telecoms will be getting hybrid orders asking for telephony metadata as well as other things, not limited to location.

When we talk about the various ways the NSA may try to deputize the telecoms, the possibilities are very broad — and alarming. So I’m happy to hear that Verizon, at least, is claiming to be unwilling to play that role.

Mark Warner Lays Out How USA Freedumber Will Put the NSA in Your Smartphone

I noted this yesterday in a quick post, but I wanted to post the video and my transcription of Mark Warner’s efforts to lay out some of the privacy problems with HR 3361, which I call USA Freedumber.

Warner, who made his fortune as a telecom mogul, points out that USA Freedumber will be able to access calls from smaller cell companies that are currently not included as primary providers to NSA (he doesn’t mention it, but USA Freedumber will also be able to access VOIP).

Warner: It was reported when we think about 215 in the previous program that that collected metadata that was with those entities — those companies — that entered into some relationship with the IC, and I believe there was a February WSJ article that reported — and I don’t want to get into percentages here — that while the large entities, large companies were involved, that in many cases, the fastest growing set of telephone calls, wireless calls, were actually a relatively small percentage. Is that an accurate description of how the press has presented the 215 program prior — previously?

Ledgett: Yes, that’s how the press represented it.

Warner: And if that was an accurate presentation, wouldn’t the universe of calls that are now potentially exposed to these kind of inquiries be actually dramatically larger since any telco, regardless of whether they had a relationship with the IC or not, and any type of call, whether it is wire or wireless, be subject to the inquiries that could be now made through this new process.

Ledgett: Uh Yes, Senator, that’s accurate.

Warner: So, again, with the notion here that under the guise of further protecting privacy, I think on a factual basis, of the number of calls potentially scrutinized, the universe will be exponentially larger than what the prior system was. Is that an accurate statement.

Ledgett: No, Senator, I don’t believe so, because the only calls that the government will see are those that are directly responsive to to the predicate information that we have.

Warner: No, In terms of actual inquiries, correct, but the the universe of potential calls that you could query, when prior to the calls were only queried out of the 215 database that was held at the NSA, which as press reports said did not include — in many cases — the fastest growing number of new calls, wireless calls, now the universe of — even though the number of queries may be the same, because the protections are still the same, the actual universe of potential calls that could be queried against is dramatically larger than what 215 has right now.

Ledgett: Potentially yes, that’s right Senator.

From there, Warner focuses on a more troubling issue: the likelihood that NSA could get cell location data and call detail records with the same request. Read more

Mark Warner Confirms USA Freedumber Expands Surveillance

The Senate Intelligence Committee is in the middle of its Snowden Day hearing on the USA Freedumber Act. I’ll have more to say about it later (spoiler alert: the hearing has proven that the overseers don’t understand the program they’re currently overseeing).

The highlight was, surprisingly, when Mark Warner questioned the government witnesses.

Warner (who used to be a telecom mogul) got the government witnesses to concede to two key points.

First, Warner noted that under the new scheme, every telecom would be subject to government requests. As a result, he said, “On factual basis, the number of calls scrutinized universe will be exponentially larger.” Deputy Attorney General James Cole at first tried to prevaricate. But then admitted that more records would be exposed.

Then, Warner noted that telecoms have to keep cell location, and that the current Section 215 program does not obtain cell location. He asked if the NSA could use or obtain cell location going forward. Cole did not deny that; he admitted that sometimes it is very helpful.

Thanks to Mark Warner for getting these two details on the record, as I have been arguing both were true, but now can confirm they are.

 

Do Senators Collins, King, and Warner Like Being Spied On?

Over the last few days, I’ve tracked the accusations and counter-accusations between CIA and the Senate Intelligence Committee.

A number of people have asked why, as a way to end this issue, the Committee doesn’t just declassify the entire SSCI Report.

But it’s not so simple as that.

It’s not clear there are the votes to release the Report.

Recall that when the Committee approved the Report back in 2012, the vote was largely split on party lines, with the exception of John McCain, who voted as an Ex Officio member (as Ranking Member of Senate Armed Services Committee) to release the Report. McCain is no longer SASC Ranking member: Jim Inhofe is, and I’m betting he’s not going to vote to release the Report.

There are few other changes in the Committee proper since the report was originally finalized. Martin Heinrich and Angus King have replaced Bill Nelson and Kent Conrad, and Susan Collins and Tom Coburn have replaced Olympia Snowe and Roy Blunt.

And while Heinrich has quickly become one of the better overseers on the Committee, including on torture, it’s not actually clear whether King would vote to release the report. Collins, too, has been reported to be undecided (and her vote would be critical to making this a “bipartisan vote,” now that McCain doesn’t have a vote). There are even hints that Mark Warner wouldn’t vote to support its declassification (though he supported its finalization).

And importantly, King and Collins have been reported to be undecided after the time when, in January, the Committee at least began to suspect they’d been surveilled.

There are, obviously, two different issues (though Saxby Chambliss, at least, sides with CIA on both counts). But there’s been little outcry from the swing votes on releasing the underlying report itself.

Update: h/t to JK for the link to the Collins/King report I was not finding.

Mark Warner Thinks It’s Bold for a $200M Man to Cut Seniors’ Pensions

I suggested the other day that Mark Warner’s position on the Gang of Six might bode poorly for SuperCongress being anything but a pre-gamed attack on Social Security and Medicare.

Well, it turns out he has already been running around to the press campaigning for the job, with a conference call and an appearance on Fox.

Sen. Mark Warner (D-Va.) would “love” to serve on the new, bicameral committee established by the debt-limit deal passed Tuesday by the Senate.

“My fear is that this could be made of a group that could be the more ideologically rigid in both parties, and I’m not sure that gets us to where we need to be,” Warner said in a conference call Monday, according to The Richmond Times-Dispatch.

[snip]

Warner said Tuesday on Fox News Channel that the new committee needs to address the two major components missing from the debt-limit deal: entitlements and tax reforms.

“The fact that I’m willing to do that probably means that I’m not actually going to get on the committee,” he said. “Chances are that there will be enormous pressure on leadership in both parties to put members that might not be willing to be as bold.”

Of the three Democrats who were on the Gang of Six–Warner, Durbin, and Conrad–Warner is most excited about cutting Social Security. Plus he’s gunning for things like the home mortgage deduction. And all that while he talks “tax reform,” not increased taxes on people, like him, who have far more than they’ll ever need.

Sure, it’s bold for someone who is worth $200 million to ask seniors and struggling families to make sacrifices to balance the budget.

But that doesn’t mean it’s smart.

Is Mark Warner the Designated Social Security Killer?

The propaganda the Administration has put out to spin the debt capitulation as a win–“victory!” “bipartisan!” “compromise!”–would be amusing if the deal weren’t so dangerous. In addition to all the language claiming that cutting expenditures during a Depression–described here as “remov[ing] the cloud of uncertainty– will help the economy, there are these two bullets:

  • Establishes a bipartisan process to seek a balanced approach to larger deficit reduction through entitlement and tax reform;
  • Deploys an enforcement mechanism that gives all sides an incentive to reach bipartisan compromise on historic deficit reduction, while protecting Social Security, Medicare beneficiaries and low-income programs;

Bulllet 3 says this deal establishes a process to bring about entitlement reform. Bullet 4 claims the deal protected Social Security and Medicare. Both of these bullets can’t be true.

Which has set off a discussion about whether SuperCongress is only possibly going to cut Medicare and Social Security, or will almost certainly do so.

I wanted to look at how the membership of the predecessor committees to SuperCongress–the Catfood Commission and the Gang of Six–to suggest which is more likely.

As you recall, the Catfood Commission members voted 11-7 in favor of passing the Commission’s recommendations, which included raising the retirement age. The members of Congress on the Commission voted this way:

  • Tom Coburn: Yes
  • Judd Gregg: Yes*
  • Mike Crapo: Yes
  • Kent Conrad: Yes
  • Dick Durbin: Yes
  • Max Baucus: No
  • Paul Ryan: No
  • Jeb Hensarling: No
  • Dave Camp: No
  • Jan Schakowsky: No
  • Xavier Becerra: No
  • John Spratt: Yes*

Assuming for the sake of argument that the members who are still in Congress would be part of SuperCongress, that would make for a stalemate–though Republican opposition focused on Obama’s healthcare reform, not on the package of entitlement cuts and tax breaks for the rich that the commission recommended.

Both Judd Gregg and John Spratt are gone. Rather than replace Judd Gregg, the former Ranking Member of the Budget Committee with his functional equivalent, Jeff Sessions, Mitch McConnell will likely put Saxby Chambliss on SuperCongress, as Chambliss has been involved in the Gang of Six discussing a deficit reduction plan. John Spratt’s functional equivalent would be Chris Van Hollen, a not horrible addition for liberals. (Update: Or maybe he’s just like Durbin, a so-called liberal who will support this crap.)

But it’s not safe to assume Harry Reid will just pick the Senators who served on the Catfood Commission for SuperCongress. After Max Baucus voted no on the Catfood Commission, saying, “we cannot cut the deficit at the expense of veterans, seniors, ranchers, farmers and hard-working families,” he was replaced on the Gang of Six. Joe Biden and Harry Reid replaced him with Mark Warner, a man worth more than $200 million who has spent much of the tenure of the Gang of Six insisting that working Americans with whom he shares little in common won’t mind so much if they have to work another two years before they can retire.

In other words, one change we’ve already seen happen between the Catfood Commission and the Gang of Six is the replacement of Max Baucus, who proved unwilling to push through the $4 trillion deficit plan Obama has been chasing, with Mark Warner, who is all too willing to champion entitlement cuts for poor people.

If his newly central role in these discussions stands, we can be pretty sure we’ll see cuts to Social Security. And heck, if he won’t do the deed, then alleged liberal, Dick Durbin, and Kent Conrad seem prepared to do the work themselves.

Yet More Proof Big Business Is Unamerican

The WaPo notes with some curiosity that the business community did almost nothing to get the debt ceiling passed. It’s a remarkable story: perhaps unintentionally noting that while our banana republic status was being confirmed, the Chamber of Commerce was lobbying not to prevent that, but to get a Panama trade deal; describing a betrayed Third Way executive pissed that business had not done more; describing two centrist Dems and Obama’s Chief of Staff imploring the business community to do more.

With the U.S. government on the verge of a historic default, the country’s largest business lobbying group took to the halls of Congress last week to press lawmakers to support the Panama Free-Trade Agreement.

The U.S. Chamber of Commerce sponsored a “door knock,” with 80 members handing out Panama hats to tout a trade deal with a country that has a smaller economy than Akron, Ohio. To critics, the Chamber event illustrates what has been a deafening silence from U.S. executive suites on the gridlock in Washington over raising the country’s $14.3 trillion debt ceiling.

“They haven’t done nearly enough to sound the alarm,” said Jim Kessler, vice president for policy at Third Way, a Washington research group that describes itself as advocating “moderate policy” and has executives from Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) on its board. Executives “think this is all Washington theater, and it will all get done in the end.”

[snip]

At a closed-door meeting with Chamber lobbyist Bruce Josten last month, Democratic Senators Mark Begich of Alaska and Mark Warner of Virginia upbraided the group and its member companies for not twisting arms hard enough to get a compromise package worked out, according to two people familiar with the discussion whospoke on condition of anonymity because the meeting was private.

[snip]

“It’s unfortunate that the business interests have not stepped forward as loudly as they should have,” Bill Daley, the White House chief of staff, said in an interview with Bloomberg Television July 26. “You’ve had a silence from the business community to the political establishment over the last number of years that’s been unfortunate.”

The article later offers the opinion of just one business professor, which attributed the inaction of businessmen to embarrassment that their party, the Republicans, were doing what they were doing, to explain the business community’s inaction on the debt ceiling.

“They’re caught,” [business professor Warren] Bennis said in an interview July 29. “They tend to be Republican and they are embarrassed by what they see from Republicans,” Bennis said. “It’s a real stalemate and CEOs want to stay clear of it.”

Yet nowhere does the article–or people like Kessler, Begich, Warner, or Daley–consider the possibility that the business community got just what it wanted with this debt fiasco.
They never consider the possibility that the business community might be thrilled with inane cuts to the federal government–probably, ultimately, targeted at the social safety net. They never consider the possibility that they business community might benefit from the chaos and uncertainty that this debate generated. They never consider the possibility that the business community might like how this legislative fight made our country even more of a banana republic.

I’d suggest it’s worth considering more seriously. After all, the business community has embraced (you could say, returned to) a model that relies on the insecurity of workers to demand compliance and cheap labor. The cuts this deal will ultimately bring about add to worker insecurity.

And just as importantly, most of these multinationals don’t much care for the US, except insofar as it has a big military to defend “US” business interests overseas. The ones describes that did lobby for a debt ceiling–banksters like JP Morgan or health care companies like Blue Cross or Pfizer–have been beneficiaries of big help from the federal government in recent years. They’re not done looting it yet! But the others are multinational companies; the US is just a convenient place to incorporate.

Moreover, businesses have been pushing an ideology for the last 30 years that the government is dysfunctional and therefore society must cede more control to businesses. Even as businessmen like Rick Snyder and Rick Scott prove failures at governance, the follies in DC still, at least, provide evidence that government is worse.

Of course these businessmen didn’t lobby for a reasonable solution to this false crisis. They liked the false crisis.

Chris Dodd Uses Hearing to Call on Geithner to Do His Job

Chris Dodd didn’t have many questions in yesterday’s hearing on the foreclosure crisis. But he did use the opportunity to call on Tim Geithner to convene the Financial Stability Oversight Council to prevent this crisis from blowing up the economy.

Dodd: Attorney General Miller, at the outset of my opening comments I talked about the importance of getting the, this Financial Stability [Oversight] Council that we established in the Financial Reform Bill to anticipate systemic risk and to collectively work as a body chaired by the Secretary of the Treasury, along with the FDIC and the OCC–there are ten members of that, an independent member and five others that are part of it. This seems to me like a classic example–one that we did not anticipate necessarily when we drafted the legislation, but exactly, we are in a crisis with this. Now you can argue that it’s not yet a systemic crisis that poses the kind of risk we saw in the Fall of 08, but no one can argue that we’re not in the middle of a crisis. Now the idea of this, of course, was to minimize crises so they don’t grow into a large, systemic crisis. Have you had any contact with the Secretary of Treasury? Or is there any communication going on between the Attorney Generals and this Council or the Chairman of it, the Secretary of the Treasury, or their office, to begin to talk about what the role of the federal government might be in formulating an answer to all of this?

Miller: We haven’t had any contact with the Council. We have had repeated contact with the Department of the Treasury, with Assistant Secretary Michael Barr and his staff. We’ve developed a terrific ongoing relationship with them. We talk about these issues and try and help and support each other on these issues. So we’ve had a lot of discussions with Treasury but not with that particular Council.

Dodd: Again I saw [mumble] privately with Senator Warner and others may, Senator Merkley has a similar thought. I’m going to use this forum here, obviously in a very public setting, to urge the Secretary of Treasury and others to convene that Council to begin to work with you and others, so there is a role here to examine this question in seeking broad solutions. So my hope is they’ll hear that request to pick up that obligation that we laid out in that legislation.

You know, when the Chairman of the Senate Banking Community has to use a forum like this to try to remind the Secretary of Treasury of his obligation under Dodd-Frank, it does not inspire a lot of confidence.

Mark Warner’s Chocolate Fountain Remorse

Once upon a time in 2006, a dirty fucking hippie blogger had an opportunity to ask aspiring presidential candidate Mark Warner a few questions. Mark Warner had just dedicated part of a speech to talking about how Iran was the biggest WMD threat. So with her questions, the dirty fucking hippie blogger asked Mark Warner how, if the NIE had said Iran was years away from having nukes whereas Pakistan and its al Qaeda favoring Generals and unstable government already had nukes, Iran could be the biggest WMD threat. Warner then listed three reasons why Iran was the biggest WMD threat: its support of Hezbollah and Hamas, its nutty president, and its aspirations for hegemony in the Middle East. “But none of those things are WMD,” the blogger said.

Matt Bai, who observed the entire exchange, would later blame the dirty fucking hippie’s questions (which, after all, proved correct on several counts and served mostly to highlight to Warner how blindly he had embraced a popular talking point) for single-handedly driving nice moderate Mark Warner from the presidential race and with him potentially the ability to succeed as a party.

The dirty fucking hippie blogger took from that exchange the following: 1) Mark Warner doesn’t have the analytic ability to understand what threatens this country 2) Matt Bai tends to spout stupid centrist ideology even when reality proves him wrong.

More than four years have passed since that exchange. In that time, Warner became a centrist Senator. As a Senator, he has been one of those who claimed no one knew the financial crisis was coming. And he was part of a group of centrist Senators that stripped the too-small stimulus bill in early 2009.

In other words, Warner continues to be unable to identify real threats to this country. It’s in that context–and specifically in the context of picking a time of almost 10% unemployment to cut the deficit–that Mark Warner chose to equate the “far left” of his own party with the TeaBaggers.

But the question will be will the super-left on my party – the MoveOn crowd in my party – and the Tea Party crowd on the other party, you know, they don’t compromise, so you know, I for one am…you know, there were too many times I bit my lip in the first year, or bit my tongue…I’m done…

[snip]

But I think an equal threat to our country’s national security is that we don’t get our balance sheet in order.

Now, Mark Warner and his friends that maintain the deficit as a bigger threat than a stagnant economy are precisely what we dirty fucking hippie bloggers point to as the problem with the last two years. Because these centrists put their own pet theories ahead of real analysis of what our country needed, the legislation they passed failed to do the job. It’s the economy, stupid, and the economy is still so shitty at least partly because deficit scolds like Mark Warner cut the already too-small stimulus package back when it could do some good.

Which is what Matt Bai fails to understand with his piece trying to refute the theory that Democrats failed because they catered to people like Mark Warner.

The theory here, embraced by a lot of the most prominent liberal bloggers and activists, is that centrist Democrats doomed the party when they blocked liberals in Congress from making good on President Obama’s promise of bold change. Specifically, they refused to adopt a more populist stance toward business and opposed greater stimulus spending and a government-run health care plan. As a result, the thinking goes, frustrated voters rejected the party for its timidity.

No, Matt, you misunderstand completely (or simply build another of your favored straw men). The problem is not that “frustrated voters rejected the party for its timidity.” Frustrated voters rejected the party because its watered down legislation didn’t do the job. And the centrists were the ones that watered down that legislation and made it ineffective.

And the biggest problem both Mark Warner and Matt Bai make is in pretending that they’re stuck in an ideology-free zone between two extremist ideologies. Leaving aside the TeaBaggers, whose ideology was very diverse up until the Koch brothers made them a wholy owned but less ideologically consistent subsidiary, this is not about a left ideology and a right ideology and the nice non-ideological centrists in between. Rather, this debate is about progressives who insist that legislation not be compromised by a blindly ideological insistence on things like deficit cutting, all because some think tanker has been paid to claim that issue, like Iran, is a greater threat than millions of Americans losing their jobs and homes. It’s about efficacy versus the flabby centrist ideology that got us into this mess.

What Bai and Warner choose not to understand is that centrism is an ideology even more stubborn than the left or right they love to attack, but an ideology that got us into the mess we’re in now, both fiscally and electorally.