OK, something has to be done.
Dilemma Politics -- Putin is protecting Snowden, and persecuting
N.S.A. Able to Foil Basic
Safeguards of Privacy on Web
Security Agency is winning its long-running secret war on encryption, using
supercomputers, technical trickery, court orders and behind-the-scenes
persuasion to undermine the major tools protecting the privacy of everyday
communications in the Internet age, according to newly disclosed documents.
The agency has circumvented or cracked much of the
encryption, or digital scrambling, that guards global commerce and banking
systems, protects sensitive data like trade secrets and medical records, and
automatically secures the e-mails, Web searches, Internet chats and phone calls
of Americans and others around the world, the documents show.
Many users assume or have been assured by Internet
companies that their data is safe from prying eyes, including those of the
government, and the N.S.A. wants to keep it that way. The agency treats its
recent successes in deciphering protected information as among its most closely
guarded secrets, restricted to those cleared for a highly classified program
code-named Bullrun, according to the documents, provided by Edward J. Snowden,
the former N.S.A. contractor.
Beginning in 2000, as encryption tools were gradually
blanketing the Web, the N.S.A. invested billions of dollars in a clandestine
campaign to preserve its ability to eavesdrop. Having lost a public battle in
the 1990s to insert its own back door in all encryption, it set out to
accomplish the same goal by stealth.
The agency, according to the documents and interviews
with industry officials, deployed custom-built, superfast computers to break
codes, and began collaborating with technology companies in the United States
and abroad to build entry points into their products. The documents do not
identify which companies have participated.
The N.S.A. hacked into target computers to snare
messages before they were encrypted. In some cases, companies say they were
coerced by the government into handing over their master encryption keys or
building in a back door. And the agency used its influence as the worlds most
experienced code maker to covertly introduce weaknesses into the encryption
standards followed by hardware and software developers around the world.
For the past decade, N.S.A. has led an aggressive,
multipronged effort to break widely used Internet encryption technologies, said
a 2010 memo describing a briefing about N.S.A. accomplishments for employees of
its British counterpart, Government Communications Headquarters, or GCHQ.
Cryptanalytic capabilities are now coming online. Vast amounts of encrypted
Internet data which have up till now been discarded are now exploitable.
When the British analysts, who often work side by side
with N.S.A. officers, were first told about the program, another memo said,
those not already briefed were gobsmacked!
An intelligence budget document makes clear that the
effort is still going strong. We are investing in groundbreaking cryptanalytic
capabilities to defeat adversarial cryptography and exploit Internet traffic,
the director of national intelligence, James
R. Clapper Jr., wrote in his budget request for the current year.
In recent months, the documents disclosed by Mr.
Snowden have described the N.S.A.s reach in scooping up vast amounts of
communications around the world. The encryption documents now show, in striking
detail, how the agency works to ensure that it is actually able to read the
information it collects.
The agencys success in defeating many of the privacy
protections offered by encryption does not change the
rules that prohibit the deliberate targeting of Americans e-mails or phone
calls without a warrant. But it shows that the agency, which was sharply
rebuked by a federal judge in 2011 for violating the rules and misleading
the Foreign Intelligence Surveillance Court, cannot necessarily be restrained by
privacy technology. N.S.A. rules permit the agency to store any encrypted
communication, domestic or foreign, for as long as the agency is trying to
decrypt it or analyze its technical features.
The N.S.A., which has specialized in code-breaking
since its creation in 1952, sees that task as essential to its mission. If it
cannot decipher the messages of terrorists, foreign spies and other adversaries,
the United States will be at serious risk, agency officials say.
Just in recent weeks, the Obama administration has
called on the intelligence agencies for details of communications
by leaders of Al Qaeda about a terrorist plot and of Syrian
officials messages about the chemical weapons attack outside Damascus. If
such communications can be hidden by unbreakable encryption, N.S.A. officials
say, the agency cannot do its work.
But some experts say the N.S.A.s campaign to bypass
and weaken communications security may have serious unintended consequences.
They say the agency is working at cross-purposes with its other major mission,
apart from eavesdropping: ensuring the security of American communications.
Some of the agencys most intensive efforts have
focused on the encryption in universal use in the United States, including Secure
Sockets Layer, or SSL; virtual
private networks, or VPNs; and the protection used on fourth-generation, or
4G, smartphones. Many Americans, often without realizing it, rely on such
protection every time they send an e-mail, buy something online, consult with
colleagues via their companys computer network, or use a phone or a tablet on a
For at least three years, one document says, GCHQ,
almost certainly in collaboration with the N.S.A., has been looking for ways
into protected traffic of popular Internet companies: Google, Yahoo, Facebook
and Microsofts Hotmail. By 2012, GCHQ had developed new access opportunities
into Googles systems, according to the document. (Google denied giving any
government access and said it had no evidence its systems had been
The risk is that when you build a back door into
systems, youre not the only one to exploit it, said Matthew D. Green, a
cryptography researcher at Johns Hopkins University. Those back doors could
work against U.S. communications, too.
Paul Kocher, a leading cryptographer who helped design
the SSL protocol, recalled how the N.S.A. lost the heated national debate in the
1990s about inserting into all encryption a government back door called the
And they went and did it anyway, without telling
anyone, Mr. Kocher said. He said he understood the agencys mission but was
concerned about the danger of allowing it unbridled access to private
The intelligence community has worried about going
dark forever, but today they are conducting instant, total invasion of privacy
with limited effort, he said. This is the golden age of spying.
A Vital Capability
The documents are among more than 50,000 shared by The
Guardian with The New York Times and ProPublica, the nonprofit news
organization. They focus on GCHQ but include thousands from or about the N.S.A.
Intelligence officials asked The
Times and ProPublica not to publish this article, saying it might prompt
foreign targets to switch to new forms of encryption or communications that
would be harder to collect or read. The news organizations removed some specific
facts but decided to publish the article because of the value of a public debate
about government actions that weaken the most powerful privacy tools.
The files show that the agency is still stymied by
some encryption, as Mr. Snowden suggested in a question-and-answer
session on The Guardians Web site in June.
Properly implemented strong crypto systems are one of
the few things that you can rely on, he said, though cautioning that the N.S.A.
often bypasses the encryption altogether by targeting the computers at one end
or the other and grabbing text before it is encrypted or after it is decrypted.
The documents make clear that the N.S.A. considers its
ability to decrypt information a vital capability, one in which it competes with
China, Russia and other intelligence powers.
In the future, superpowers will be made or broken
based on the strength of their cryptanalytic programs, a 2007 document said.
It is the price of admission for the U.S. to maintain unrestricted access to
and use of cyberspace.
The full extent of the N.S.A.s
decoding capabilities is known only to a limited group of top analysts from the
so-called Five Eyes: the N.S.A. and its counterparts in Britain, Canada,
Australia and New Zealand. Only they are cleared for the Bullrun program, the
successor to one called Manassas both names of an American
Civil War battle. A parallel GCHQ counterencryption program is called
Edgehill, named for the first battle of the English Civil War of the 17th
Unlike some classified information that can be
parceled out on a strict need to know basis, one document makes clear that
with Bullrun, there will be NO need to know.
Only a small cadre of trusted contractors were allowed
to join Bullrun. It does not appear that Mr. Snowden was among them, but he
nonetheless managed to obtain dozens of classified documents referring to the
programs capabilities, methods and sources.
Ties to Internet Companies
When the N.S.A. was founded, encryption was an obscure
technology used mainly by diplomats and military officers. Over the last 20
years, it has become ubiquitous. Even novices can tell that their exchanges are
being automatically encrypted when a tiny padlock appears next to a Web address.
Because strong encryption can be so effective,
classified N.S.A. documents make clear, the agencys success depends on working
with Internet companies by getting their voluntary collaboration, forcing
their cooperation with court orders or surreptitiously stealing their encryption
keys or altering their software or hardware.
According to an intelligence budget document leaked by
Mr. Snowden, the N.S.A. spends more than $250 million a year on its Sigint Enabling Project, which actively engages the U.S. and foreign IT industries to
covertly influence and/or overtly leverage their commercial products designs
to make them exploitable. Sigint is the acronym for signals intelligence, the
technical term for electronic eavesdropping.
By this year, the Sigint Enabling Project had found
ways inside some of the encryption chips that scramble information for
businesses and governments, either by working with chipmakers to insert back
doors or by exploiting security flaws, according to the documents. The agency
also expected to gain full unencrypted access to an unnamed major Internet phone
call and text service; to a Middle Eastern Internet service; and to the
communications of three foreign governments.
In one case, after the government learned that a
foreign intelligence target had ordered new computer hardware, the American
manufacturer agreed to insert a back door into the product before it was
shipped, someone familiar with the request told The Times.
The 2013 N.S.A. budget request highlights
partnerships with major telecommunications carriers to shape the global network
to benefit other collection accesses that is, to allow more eavesdropping.
At Microsoft, as The
Guardian has reported, the N.S.A. worked with company officials to get
pre-encryption access to Microsofts most popular services, including Outlook
e-mail, Skype Internet phone calls and chats, and SkyDrive, the companys cloud
Microsoft asserted that it had merely complied with
lawful demands of the government, and in some cases, the collaboration was
clearly coerced. Some companies have been asked to hand the government the
encryption keys to all customer communications, according to people familiar
with the governments requests.
N.S.A. documents show that the agency maintains an
internal database of encryption keys for specific commercial products, called a
Key Provisioning Service, which can automatically decode many messages. If the
necessary key is not in the collection, a request goes to the separate Key
Recovery Service, which tries to obtain it.
How keys are acquired is shrouded in secrecy, but
independent cryptographers say many are probably collected by hacking into
companies computer servers, where they are stored. To keep such methods secret,
the N.S.A. shares decrypted messages with other agencies only if the keys could
have been acquired through legal means. Approval to release to non-Sigint
agencies, a GCHQ document says, will depend on there being a proven non-Sigint
method of acquiring keys.
Simultaneously, the N.S.A. has been deliberately
weakening the international encryption standards adopted by developers. One goal
in the agencys 2013 budget request was to influence policies, standards and
specifications for commercial public key technologies, the most common
Cryptographers have long suspected that the agency
planted vulnerabilities in a standard adopted in 2006 by the National Institute
of Standards and Technology and later by the International Organization for
Standardization, which has 163 countries as members.
Classified N.S.A. memos appear to confirm that the
fatal weakness, discovered by two Microsoft cryptographers in 2007, was
engineered by the agency. The N.S.A. wrote the standard and aggressively pushed
it on the international group, privately calling the effort a challenge in
Eventually, N.S.A. became the sole editor, the memo
Even agency programs ostensibly intended to guard
American communications are sometimes used to weaken protections. The N.S.A.s
Center, for instance, invites the makers of encryption technologies to
present their products to the agency with the goal of improving American
cybersecurity. But a top-secret N.S.A. document suggests that the agencys
hacking division uses that same program to develop and leverage sensitive,
cooperative relationships with specific industry partners to insert
vulnerabilities into Internet security products.
By introducing such back doors, the N.S.A. has
surreptitiously accomplished what it had failed to do in the open. Two decades
ago, officials grew concerned about the spread of strong encryption software
like Pretty Good Privacy, designed by a programmer named Phil Zimmermann. The
Clinton administration fought back by proposing the Clipper Chip, which would
have effectively neutered digital encryption by ensuring that the N.S.A. always
had the key.
That proposal met a backlash from an unlikely
coalition that included political opposites like Senator John Ashcroft, the
Missouri Republican, and Senator John Kerry, the Massachusetts Democrat, as well
as the televangelist Pat Robertson, Silicon Valley executives and the American
Civil Liberties Union. All argued that the Clipper would kill not only the
Fourth Amendment, but also Americas global technology edge.
By 1996, the White House backed down. But soon the
N.S.A. began trying to anticipate and thwart encryption tools before they became
Each novel encryption effort generated anxiety. When
Mr. Zimmermann introduced the Zfone, an encrypted phone technology, N.S.A.
analysts circulated the announcement in an e-mail titled This cant be good.
But by 2006, an N.S.A. document notes, the agency had
broken into communications for three foreign airlines, one travel reservation
system, one foreign governments nuclear department and anothers Internet
service by cracking the virtual private networks that protected them.
By 2010, the Edgehill program, the British
counterencryption effort, was unscrambling VPN traffic for 30 targets and had
set a goal of an additional 300.
But the agencies goal was to move away from
decrypting targets tools one by one and instead decode, in real time, all of
the information flying over the worlds fiber optic cables and through its
Internet hubs, only afterward searching the decrypted material for valuable
A 2010 document calls for a new approach for
opportunistic decryption, rather than targeted. By that year, a Bullrun
briefing document claims that the agency had developed groundbreaking
capabilities against encrypted Web chats and phone calls. Its successes against
Secure Sockets Layer and virtual private networks were gaining momentum.
But the agency was concerned that it could lose the
advantage it had worked so long to gain, if the mere fact of decryption became
widely known. These capabilities are among the Sigint communitys most fragile,
and the inadvertent disclosure of the simple fact of could alert the adversary
and result in immediate loss of the capability, a GCHQ document warned.
Since Mr. Snowdens disclosures ignited criticism of
overreach and privacy infringements by the N.S.A., American technology companies
have faced scrutiny from customers and the public over what some see as too cozy
a relationship with the government. In response, some companies have begun to
push back against what they describe as government bullying.
Google, Yahoo, Microsoft and Facebook have pressed for
permission to reveal more about the governments requests for cooperation. One
e-mail encryption company, Lavabit, closed rather than comply with the agencys
demands for customer information; another, Silent Circle, ended its e-mail
service rather than face such demands.
In effect, facing the N.S.A.s
relentless advance, the companies surrendered.
Ladar Levison, the founder of Lavabit, wrote a public letter to his disappointed customers,
offering an ominous warning. Without Congressional action or a strong judicial
precedent, he wrote, I would strongly recommend against anyone trusting their
private data to a company with physical ties to the United States.
Before too long, we may be hearing of NSA employees using "inside
information" to make a lot of money in the stock market. Actually, it will
be their relatives and close friends who do the trading.
DALGA, Egypt (AP) The Coptic Orthodox priest would only talk to
his visitor after hiding from the watchful eyes of the bearded Muslim outside,
who sported a pistol bulging from under his robe.
So Father Yoannis moved behind a wall in the
charred skeleton of an ancient monastery to describe how it was torched by Islamists and then
looted when they took over this southern Egyptian town following the ouster of
the country's president.
"The fire in the monastery burned intermittently for three days. The looting
continued for a week. At the end, not a wire or an electric switch is left,"
Yoannis told The Associated Press. The monastery's 1,600-year-old underground
chapel was stripped of ancient icons and the ground was dug up on the belief
that a treasure was buried there.
"Even the remains of ancient and revered saints were disturbed and thrown
around," he said.
A town of some 120,000 including 20,000
Christians Dalga has been outside government control since hard-line
supporters of the Islamist Mohammed Morsi drove out police and
occupied their station on July 3, the day Egypt's military chief removed the
president in a popularly supported coup. It was part of a wave of attacks in the
province that targeted Christians, their homes and businesses.
Since then, the radicals have imposed their grip on Dalga, twice driving off
attempts by the army to send in armored personnel carriers by showering them
Their hold points to the power of hard-line
Islamists in southern
Egypt even after Morsi's removal and their determination to defy the
military-backed leadership that has replaced him.
With the army and police already fighting a burgeoning militant insurgency in
the Sinai Peninsula, there are growing signs that a second insurgency could
erupt in the south particularly in Minya and Assiut provinces, both Islamist
strongholds and both home to Egypt's two largest Christian communities.
The takeover of Dalga has been disastrous for the Christian community in the
town, located 270 kilometers (160 miles) south of Cairo in Minya, on the edge of
the Nile Valley near the cliffs that mark the start of the desert.
In the initial burst of violence, the town's only Catholic church was
ransacked and set ablaze, like the Monastery of the Virgin Mary and St. Abraam.
The Anglican church was looted.
Some 40 Christian families have fled Dalga since, Yoannis said. Nearly 40
Christian-owned homes and stores have been attacked by Islamists, according to
local Minya activists. Bandits from the nearby deserts joined the looting and
burning, they said. To ensure the spread of fear, the attackers torched houses
in all Christian neighborhoods, not just in one or two.
Among the homes torched was that of Father
Angelos, an 80-year-old Orthodox priest who lives close to the monastery.
Yoannis' home was spared a similar fate by his Muslim neighbors. A 60-year-old
fired from his roof to ward off a mob was dragged down and killed, the activists
"Even if we had firearms, we would be reluctant to use them," said Yoannis.
"We cannot take a life. Firing in the air may be our limit."
Those who remain pay armed Muslim neighbors to protect them. Yoannis said his
brother paid with a cow and a water buffalo. Most Christian businesses have been
closed for weeks.
Armed men can be seen in the streets, and nearly every day Islamists hold
rallies at a stage outside the police station, demanding Morsi's
Most Christians remain indoors as much as possible, particularly during the
rallies. They say they are routinely insulted on the streets by Muslims,
including children. Christian women stay home at all times, fearing harassment
by the Islamists, according to multiple Christians who spoke to the AP. Most
requested that their names not be published for fear of reprisals.
"The Copts in Dalga live in utter humiliation," said local rights activist
Ezzat Ibrahim. "They live in horror and cannot lead normal lives."
None of the town's churches held Mass for a month, until Wednesday, when one
was held in one of the monastery's two churches. About 25 attended, down from
the usual 500 or more.
"They don't want to see any Christian with any power, no matter how modest,"
Yoannis said of the hard-liners now running Dalga. "They only want to see us
poor without money, a trade or a business to be proud of."
Like other Christians in town, he said police and authorities were helpless
"Everyone keeps telling me that I should alert the police and the army," he
said. "As if I hadn't done that already."
At intervals, the 33-year-old father of three would stop talking, move
carefully to the edge of a wall, stick his head out to check if someone was
His big worry was the bearded Muslim at the gate, Saber Sarhan Askar.
Skinny with hawk-like hazelnut eyes, Askar is said by Dalga's Christians to
have taken part in the torching and looting of the monastery. Outside the
monastery that day, Askar was telling priests he was there to protect it. But
the orders he yelled to other priests left no doubt who was in charge.
"Bring us tea!" he barked at one priest. "I need something cold to drink!" he
screamed at another soon after.
School teacher and part-time entrepreneur Kromer Ishaq fled Dalga a day after
the Islamists took over. The Islamists already were accusing his father in a
family blood feud a charge that could prompt the killing of Ishaq. Then on the
night of the takeover, Ishaq's gold shop was broken into and looted.
The son of a wealthy family, Ishaq fled with his extended family all the way
to the Nile Delta north of Cairo, where he is now looking for work.
"I used to employ people and now I'm looking for work. I once lived in a
house I own and now I live in a rented apartment. You ask me what life is like?
It's like black tar," Ishaq said by telephone.
Dalga is the most extreme example of Islamist power in Minya no other towns
are known to be under such extreme lockdown. But the province in general has
seen a surge in Islamist violence since the coup against Morsi.
In the province, 35 churches have been attacked, including 19 completely
gutted by fire. At least six Christian schools and five orphanages have been
destroyed, along with five courthouses, seven police stations and six city
council buildings. A museum in the city of Malawi was looted and ransacked.
On Aug. 11, policemen suspected of loyalty to Morsi stormed the provincial
police headquarters in Minya city. They dragged out the province's security
chief and his top aide from their offices and ordered them both to leave the
province. They did.
Minya was the epicenter of an Islamic
militant insurgency against the rule of autocrat Hosni Mubarak in the 1980s and
1990s. It remains a stronghold of Islamists, including the extremist Gamaa
Islamiya group. It also has the largest Christian community of any of Egypt's 29 provinces
at 35 percent of Minya's 4 million people, compared to around 10 percent
Over Egypt's past 2 ½ years of turmoil, Islamist strength has grown. Hundreds
of jailed radicals who purportedly forswore violence though not their
hard-line ideology were freed after Mubarak's 2011 fall and given the freedom
to recruit. The south has seen a flood of heavy weapons smuggled across the
desert from neighboring Libya.
A top Interior Ministry official in Cairo said the Minya police force
suffered large-scale infiltration by pro-Morsi Islamists. The local force is now
under investigation by the ministry. The official spoke on condition of
anonymity because the probe was still undergoing.
The Minya security chief who fled the province, as well as two top aides,
were replaced on Wednesday for what the Interior Ministry called the failure to
maintain law and order.
In the security vacuum, it has been Christians largely paying the price.
Christian businessman Talaat Bassili recounted how on Aug. 15, dozens of men,
some armed, stormed his home in the city of Malawi, not far from Dalga. For
three hours, with no police or army in sight, the attackers made off with TV
sets, washing machines, mobile phones, jewelry and cash.
The attackers descended on the house from the scaffoldings of a mosque next
door. In footage from Bassili's security camera, shown to AP, men in robes and
boys in sandals try to force their way into the house, then finally blast away
the lock with Kalashnikov assault rifles. Some loaded their loot into a donkey
Later, the footage shows Bassili, his wife Nahed Samaan in a nightgown and
a house robe and son Fady leaving to take refuge with a neighbor.
A week later, Bassili said a man called him on his mobile phone to ask
whether he wanted to buy some of his stuff back.
"I said no."
Echos of the distruction of the Library at Alexandria.
By Zelie Pollon
SANTA FE, New Mexico (Reuters) - Republican lawmakers
in New Mexico lined up on Tuesday to join the legal fight against gay marriage in the
state, arguing that a county clerk who voluntarily began issuing
licenses to same-sex couples last month overstepped his authority.
New Mexico state law does not expressly
permit or prohibit gay unions, and Doña Ana County
Clerk Lynn Ellins began handing out marriage licenses to gay
couples two weeks ago, saying he believed "equal protection should apply to
With that move, and a pair of legal rulings in favor of same-sex marriage
elsewhere in the state, at least six counties have begun issuing licenses to gay
and lesbian couples in recent weeks, including counties that encompass
Albuquerque and arts hub Santa Fe.
On Tuesday, as opponents of gay marriage sought to stall momentum toward
allowing gay marriage across the state, eight Republican lawmakers joined in a
lawsuit filed on Friday by seven other Republican lawmakers against the Doña Ana
"It's really a separation of powers issues," said Representative Paul Bandy,
who on Tuesday joined the case filed in district court. "I don't think the
county clerk has the power to make this decision."
The state's attorney general said at the time he would
not step in to stop the Doña Ana clerk's move.
The lawsuit follows a pair of rulings over the past two weeks that appeared
to strongly favor the right of same-sex couples to marry and which gay rights
advocates hope will set the stage for expanding marriage rights statewide.
Thirteen U.S. states and the District of Columbia allow same-sex
In New Mexico's Bernalillo County, which includes Albuquerque, a state
district court judge ruled last month that denying gay couples the right to
marry violates the state constitution, which prohibits gender-based
discrimination and guarantees the right to equal protection.
"Gay and lesbian citizens of New Mexico have endured a long history of
discrimination," Judge Alan Malott ruled. "Denial of the right to marry
continues this unfortunate, intolerable pattern and establishes irreparable
injury on plaintiffs' part."
That ruling in late August came just days after a Santa Fe district judge
ruled that the state constitution did not prohibit gay marriage, and ordered a
clerk to either issue such licenses or appear in court to explain why she could
The New Mexico Supreme Court has so far declined to rule on lawsuits seeking
the right for gays and lesbians to marry, but asked lower courts to handle them
As the battle over gay marriage heated up last week, all 33 of New Mexico's
county clerks submitted court papers in the case decided by Malott, asking to
have it escalated to the state Supreme Court so a decision would apply
statewide, said ACLU of New Mexico Executive Director Peter Simonson.
Some of the clerks agree that same-sex marriage should be allowed under the
state constitution and some disagree, he said.
"We believe that the county clerks intervening in our lawsuit puts New Mexico
on an expedited path towards a statewide marriage solution which would provide
more certainty for the same-sex couples who married in our state," Simonson
Political analyst Brian Sanderoff, president of politically independent
Research and Polling Inc, said that in targeting the Doña Ana county clerk with
a lawsuit, the Republican lawmakers were acting where they "would have their
That is because there appears to be a legal question about whether that
official had the right to issue same-sex marriage licenses without a prior court
Republican lawmakers could eventually be joined by conservative Democrats in
putting a measure on the ballot to restrict marriage to between a man and a
woman, Sanderoff said.
Democrats hold a majority in both the New Mexico House of Representatives and
the state Senate.
(Additional reporting by Alex Dobuzinskis in Los Angeles; Editing by Ken
Good comments at the URL.
The Supreme Court -- bless Scalia's heart -- has already ruled that they
don't have standing. [ Prop 8. ]
Rightwing Republican Christians are wonderful -- keep up the good [ sick ]
Don't miss the comments at the URL.
One of the millions of uninformed robots posted the urban legend about
Pastor Jeremiah Steepek. Not a true story, though the story was
likely inspired by real events.
Eleven o'clock on Sunday morning remains one of the most segrated hours in
Propped up with lots of christian academies established soon after the
1960's civil rights laws.
In a few days, well reach the fifth anniversary of
the fall of Lehman Brothers the moment when a recession, which was bad enough,
turned into something much scarier. Suddenly, we were looking at the real
possibility of economic catastrophe.
And the catastrophe came.
Wait, you say, what catastrophe? Werent people
warning about a second Great Depression? And that didnt happen, did it? Yes,
they were, and no, it didnt although the Greeks, the Spaniards, and others
might not agree about that second point. The important thing, however, is to
realize that there are degrees of disaster, that you can have an immense failure
of economic policy that falls short of producing total collapse. And the failure
of policy these past five years has, in fact, been immense.
Some of that immensity can be measured in dollars and
cents. Reasonable measures of the output gap over the past five years the
difference between the value of goods and services America could and should have
produced and what it actually produced run well over $2 trillion. Thats
trillions of dollars of pure waste, which we will never get back.
Behind that financial waste lies an even more tragic
waste of human potential. Before the financial crisis, 63 percent of adult
Americans were employed; that number quickly plunged to less than
59 percent, and there it remains.
How did that happen? It wasnt a mass outbreak of
laziness, and right-wing claims that jobless Americans arent trying hard enough
to find work because theyre living high on food stamps and unemployment
benefits should be treated with the contempt they deserve. A bit of the decline
in employment can be attributed to an aging population, but the rest reflects,
as I said, an immense failure of economic policy.
Set aside the politics for a moment, and ask what the
past five years would have looked like if the U.S. government had actually been
able and willing to do what textbook macroeconomics says it should have done
namely, make a big enough push for job creation to offset the effects of the
financial crunch and the housing bust, postponing fiscal austerity and tax
increases until the private sector was ready to take up the slack. Ive
done a back-of-the-envelope calculation of what such a program would have
entailed: It would have been about three times as big as the stimulus we
actually got, and would have been much more focused on spending rather than tax
Would such a policy have worked? All the evidence of
the past five years says yes. The Obama stimulus, inadequate as it was, stopped
the economys plunge in 2009. Europes
experiment in anti-stimulus the harsh spending cuts imposed on debtor
nations didnt produce the promised surge in private-sector confidence.
Instead, it produced severe economic contraction, just as textbook economics
predicted. Government spending on job creation would, indeed, have created jobs.
But wouldnt the kind of spending program Im
suggesting have meant more debt? Yes according to my rough calculation, at
this point federal debt held by the public would have been about $1 trillion
more than it actually is. But alarmist warnings about the dangers of modestly
higher debt have proved false. Meanwhile, the economy would also have been
stronger, so that the ratio of debt to G.D.P. the usual measure of a countrys
fiscal position would have been only a few points higher. Does anyone
seriously think that this difference would have provoked a fiscal crisis?
And, on the other side of the ledger, we would be a
richer nation, with a brighter future not a nation where millions of
discouraged Americans have probably dropped permanently out of the labor force,
where millions of young Americans have probably seen their lifetime career
prospects permanently damaged, where cuts in public investment have inflicted
long-term damage on our infrastructure and our educational system.
Look, I know that as a political matter an adequate
job-creation program was never a real possibility. And its not just the
politicians who fell short: Many economists, instead of pointing the way toward
a solution of the jobs crisis, became part of the problem, fueling exaggerated
fears of inflation and debt.
Still, I think its important to realize how badly
policy failed and continues to fail. Right now, Washington seems divided between
Republicans who denounce any kind of government action who insist that all the
policies and programs that mitigated the crisis actually made it worse and
Obama loyalists w
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