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8355NEWS -- 2013.09.16.Monday

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  • James Martin
    Sep 16, 2013
      Monday 16 September 2013
      1) Inside the mind of NSA chief Gen Keith Alexander
      2) Time to tame the NSA behemoth trampling our rights
      3) Five Years Later, Lehman Brothers Fall Still Stings
      4) Top 5 Dangers That Remain After the Financial Collapse, Lessons Learned
      5) Barney Frank Leaves Wall Street Defenders Speechless: Why Are Bankers ‘Paying Themselves So Much Money?’
      6) followup on Steve Young, and other links
      comment received from a friend ---
      The posting is long, especially if you go to the links. The displayed megalomania of NSA chief Keith Alexander (with photos) is frightening. "Harvard Law Professor Yochai Benkler has an excellent Op-Ed in the Guardian arguing that the NSA is so far out-of-control that radical measures, rather than incremental legislative reform, are necessary to rein it in" is yet another thing I want to excerpt from and send to chief NSA enabler, Democratic Senator Dianne Feinstein. The Russell Brand link is good. I read his op-ed in the Guardian, and he makes a sad point, which I will paraphrase: If him insulting the sponsors (GQ/Howard Boss(?)) of the worthless award he received was considered unacceptable, what about politicians and political parties who accept money and favors from powerful groups?

      His exact quote is: "
      if you can't criticise Hugo Boss at the GQ awards because they own the event, do you think it is significant that energy companies donate to the Tory party?"

      The referenced columns --->

      Inside the mind of NSA chief Gen Keith Alexander

      A lavish Star Trek room he had built as part of his 'Information Dominance Center' is endlessly revealing

      theguardian.com, Sunday 15 September 2013 08.14 EDT

      It has been previously reported that the mentality of NSA chief Gen. Keith Alexander is captured by his motto "Collect it All". It's a get-everything approach he pioneered first when aimed at an enemy population in the middle of a war zone in Iraq, one he has now imported onto US soil, aimed at the domestic population and everyone else.

      But a perhaps even more disturbing and revealing vignette into the spy chief's mind comes from a new Foreign Policy article describing what the journal calls his "all-out, barely-legal drive to build the ultimate spy machine". The article describes how even his NSA peers see him as a "cowboy" willing to play fast and loose with legal limits in order to construct a system of ubiquitous surveillance. But the personality driving all of this - not just Alexander's but much of Washington's - is perhaps best captured by this one passage, highlighted by PBS' News Hour in a post entitled: "NSA director modeled war room after Star Trek's Enterprise". The room was christened as part of the "Information Dominance Center":

      "When he was running the Army's Intelligence and Security Command, Alexander brought many of his future allies down to Fort Belvoir for a tour of his base of operations, a facility known as the Information Dominance Center. It had been designed by a Hollywood set designer to mimic the bridge of the starship Enterprise from Star Trek, complete with chrome panels, computer stations, a huge TV monitor on the forward wall, and doors that made a 'whoosh' sound when they slid open and closed. Lawmakers and other important officials took turns sitting in a leather 'captain's chair' in the center of the room and watched as Alexander, a lover of science-fiction movies, showed off his data tools on the big screen.

      "'Everybody wanted to sit in the chair at least once to pretend he was Jean-Luc Picard,' says a retired officer in charge of VIP visits."

      Numerous commentators remarked yesterday on the meaning of all that (note, too, how "Total Information Awareness" was a major scandal in the Bush years, but "Information Dominance Center" - along with things like "Boundless Informant" - are treated as benign or even noble programs in the age of Obama).

      But now, on the website of DBI Architects, Inc. of Washington and Reston, Virginia, there are what purports to be photographs of the actual Star-Trek-like headquarters commissioned by Gen. Alexander that so impressed his Congressional overseers. It's a 10,740 square foot labyrinth in Fort Belvoir, Virginia. The brochure touts how "the prominently positioned chair provides the commanding officer an uninterrupted field of vision to a 22'-0" wide projection screen":

      The glossy display further describes how "this project involved the renovation of standard office space into a highly classified, ultramodern operations center." Its "primary function is to enable 24-hour worldwide visualization, planning, and execution of coordinated information operations for the US Army and other federal agencies." It gushes: "The futuristic, yet distinctly military, setting is further reinforced by the Commander's console, which gives the illusion that one has boarded a star ship":

      Other photographs of Gen. Alexander's personal Star Trek Captain fantasy come-to-life (courtesy of public funds) are here. Any casual review of human history proves how deeply irrational it is to believe that powerful factions can be trusted to exercise vast surveillance power with little accountability or transparency. But the more they proudly flaunt their warped imperial hubris, the more irrational it becomes.

      Related issues

      (1) Harvard Law Professor Yochai Benkler has an excellent Op-Ed in the Guardian arguing that the NSA is so far out-of-control that radical measures, rather than incremental legislative reform, are necessary to rein it in.

      (2) The Federation of American Scientists' Steven Aftergood, usually a reform-minded transparency advocate somewhat hostile to massive leaks, examines the serious reform which Snowden's disclosures are enabling, as reluctantly acknowledged even by the FISA court and James Clapper himself.

      (3) British comedian Russell Brand attended an event sponsored by GQ and Hugo Boss and gave a speech, while accepting an award, which offended almost everyone in the room (that speech is here). He then wrote a genuinely brilliant (and quite hilarious) Op-Ed in the Guardian about the role elite institutions play in reinforcing their legitimacy and how they maintain control of public discourse. It is well worth taking the time to read it.


      Speaking of rampant, Strangelove-like megalomania in the National Security State, do read these remarkable comments from former NSA and CIA chief Gen. Michael Hayden regarding how the US views the internet.


      Time to tame the NSA behemoth trampling our rights

      From leaks and Fisa court papers, it's clear the NSA is a bloated spying bureaucracy out of control. It can't be reformed by insiders

      theguardian.com, Friday 13 September 2013 08.15 EDT

      The spate of new NSA disclosures substantially raises the stakes of this debate. We now know that the intelligence establishment systematically undermines oversight by lying to both Congress and the courts. We know that the NSA infiltrates internet standard-setting processes to security protocols that make surveillance harder. We know that the NSA uses persuasion, subterfuge, and legal coercion to distort software and hardware product design by commercial companies.

      We have learned that in pursuit of its bureaucratic mission to obtain signals intelligence in a pervasively networked world, the NSA has mounted a systematic campaign against the foundations of American power: constitutional checks and balances, technological leadership, and market entrepreneurship. The NSA scandal is no longer about privacy, or a particular violation of constitutional or legislative obligations. The American body politic is suffering a severe case of auto-immune disease: our defense system is attacking other critical systems of our body.

      First, the lying. The National Intelligence University, based in Washington, DC, offers a certificate program called the denial and deception advanced studies program. That's not a farcical sci-fi dystopia; it's a real program about countering denial and deception by other countries. The repeated misrepresentations suggest that the intelligence establishment has come to see its civilian bosses as adversaries to be managed through denial and deception.

      We learned months ago that the Director of National Intelligence James Clapper lied under oath to Congress. Now, we know that General Keith Alexander filed a "declaration" (which is like testifying in writing), asserting an interpretation of violations that the court said "strains credulity". The newly-disclosed 2009 opinion includes a whole section entitled "Misrepresentations to the Court", which begins with the sentence:

      The government has compounded its noncompliance with the court's orders by repeatedly submitting inaccurate descriptions of the alert list process to the FISC.

      General Alexander's claim that the NSA's vast numbers of violations were the consequences of error and incompetence receive derisive attention. But this claim itself was in a court submission intended to exculpate the agency from what would otherwise have been an intentional violation of the court's order. There is absolutely no reason to believe the claims of incompetence and honest error; there is more reason to assume that these are intended to cover up a worse truth: intentional violations.

      Second, the subversion. Last week, we learned that the NSA's strategy to enhance its surveillance capabilities was to weaken internet security in general. The NSA infiltrated the social-professional standard-setting organizations on which the whole internet relies, from National Institute of Standards and Technology to the Internet Engineering Task Force itself, the very institutional foundation of the internet, to weaken the security standards. Moreover, the NSA combined persuasion and legal coercion to compromise the commercial systems and standards that offer the most basic security systems on which the entire internet runs. The NSA undermined the security of the SSL standard critical to online banking and shopping, VPN products central to secure corporate, research, and healthcare provider networks, and basic email utilities.

      Serious people with grave expressions will argue that if we do not ruthlessly expand our intelligence capabilities, we will suffer terrorism and defeat. Whatever minor tweaks may be necessary, the argument goes, the core of the operation is absolutely necessary and people will die if we falter. But the question remains: how much of what we have is really necessary and effective, and how much is bureaucratic bloat resulting in the all-to-familiar dynamics of organizational self-aggrandizement and expansionism?

      The "serious people" are appealing to our faith that national security is critical, in order to demand that we accept the particular organization of the Intelligence Church. Demand for blind faith adherence is unacceptable.

      What did we actually know about what we got in exchange for undermining internet security, technology markets, internet social capital, and the American constitutional order? The intelligence establishment grew by billions of dollars; thousands of employees; and power within the executive. And we the people? Not so much. Court documents released this week show that after its first three years of operation, the best the intelligence establishment could show the judge overseeing the program was that it had led to opening "three new preliminary investigations". This showing, noted Judge Walton in his opinion, "does not seem very significant".

      If this was the best the intelligence community could put on the table when it faced the risk of judicial sanction, we can assume that all the hand-waving without hard, observable, testable facts is magician's patter, aimed to protect the fruits of a decade's worth of bureaucratic expansionism. Claims that secrecy prevents the priesthood from presenting such testable proof appeal to a doctrine of occult infallibility that we cannot afford to accept.

      In August, 205 members of the House voted in favor of the Amash-Conyers Amendment that would have rewritten Section 215 of the Patriot Act, the section used to justify bulk collection of domestic phone call metadata. At the time, this was a critically important move that was highly targeted at a narrow and specific abuse. But the breadth and depth of organizational deception and subversion force us to recognize that we need reconstruction that goes much deeper than any specific legislative fix.

      We need a fundamental organizational reform. The so-called "outside independent experts" committee which the president has appointed, with insiders' insiders like Michael Morell and Richard Clarke, will not come close to doing the trick. Nor is it likely to allay anyone's fears who is not already an Intelligence Church adherent.

      Given the persistent lying and strategic errors of judgment that this week's revelations disclosed, the NSA needs to be put into receivership. Insiders, beginning at the very top, need to be removed and excluded from the restructuring process. Their expertise led to this mess, and would be a hindrance, not a help, in cleaning it up. We need a forceful, truly independent outsider, with strong, direct congressional support, who would recruit former insider-dissenters like Thomas Drake or William Binney to reveal where the bodies are buried.

      Anything short of root-and-branch reconstruction will be serving weak tea to a patient with a debilitating auto-immune disease.

      • The spelling of Richard Clarke's name was amended at 9.30am (ET) on 13 September 2013

      Don't miss the comments at the URL.
      Don't miss the comments at the end of this political cartoon.

      Five Years Later, Lehman Brothers Fall Still Stings


      September 11, 2013 4:39 PM
      Sept. 15 is the anniversary of collapse of Lehman Brothers, which many see as a watershed moment in the financial crisis. We look back at a time when fear and uncertainty gripped financial markets and policymakers around the world and drove the world economy into the Great Recession.
      --- click on the URL to listen to the story on All Things Considered ---

      Top 5 Dangers That Remain After the Financial Collapse, Lessons Learned

      ABC News, Sunday 15 September 2013


      On the fifth anniversary of Lehman Brothers' bankruptcy filing, which many say catalyzed the financial collapse that began in 2008, five experts share the biggest lessons from that era and dangers that could spark another crisis. We asked how much has changed since the crisis that nearly brought down the world's financial system and whether it can happen again.

      Biggest Losers: U.S. Taxpayers and the Uncle Sam

      The thing that drives Dennis Kelleher, president and CEO of Better Markets Inc., "crazy" about the bailouts, he says, is the idea that the government made a profit after the $700 billion Troubled Asset Relief Program, or TARP, plus the trillions of dollars in commitments it made.

      Better Markets hosted a conference on Thursday in Washington, D.C., posing the question: are we better prepared for the next financial crisis?

      "The number one lesson learned is that we must do whatever is necessary to prevent another financial crash because the crash and economic crisis it caused is going to cost the American people tens of trillions of dollars," he said.

      Kelleher said it's a "lie and a fraud" to say the government made money from the bailout with a "1 percent return,"

      "It's like saying you and I went to the bank and I got a one percent return and you got 50 percent return," he said. "It's true: we both got a return, but you did a lot better but I look like a fool. And I am a fool if you got 50 and I got 1 percent; that's the U.S. government."

      Former Senator Ted Kaufman was one of the panelists who spoke at Thursday's Better Markets conference. As former chair of the congressional oversight committee for TARP, Kaufman reflected on working on Dodd Frank Wall Street reform in 2009 and 2010.

      He said there was "little agreement" on most issues between the Democratic and Republican Senators.

      "In spite of this, there was one thing all the Senators agreed on; the American taxpayer should never again have to bail out a big bank," he said. "Here we are five years later and the big banks are bigger than ever, much bigger than they were in 2008 when we know they were too big to fail. Many respected bankers, including both Fed Chair Ben Bernanke and Bank of England head Mark Carney have said that our banks are too big to fail. In spite of this, the President and the Congress are doing nothing to fix this basic problem."

      A Banking System That's Too Interconnected?

      Back in 2009, Federal Reserve Chairman Ben Bernanke defended the multi-trillion direct and indirect bank government bailouts by explaining, "it wasn't to help the big firms that we intervened . . .when the elephant falls down, all the grass gets crushed as well."

      "Yet, today, the elephants are even larger than ever and the grass is still crushed," says Jennifer Taub, Vermont Law School professor.

      In addition to the large size of many banks, Taub is concerned that giant firms are still permitted to borrow excessively, up to $97 for every $100 in assets they own.

      "Of greatest concern to me is a point often overlooked -- in addition to size and leverage, banks are still dangerously interconnected and prone to wholesale runs due to their excessive dependence on short-term, often overnight lending," said Taub, author of the forthcoming book, "Other People's Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business."

      Taub points out that the run on Bear Stearns in March and the run on Lehman in September 2008 was by other financial institutions through the wholesale funding market, known as the tri-party repo market. Yet today there's nearly $2 trillion in this "fragile" funding outstanding, she said.

      Regulators and bankers have also expressed concerns about the risky conditions of the financial industry. Goldman Sachs CEO Lloyd Blankfein testified at a Financial Crisis Inquiry Commission hearing in 2010, saying, "Certainly, enhanced capital requirements in general will reduce systemic risk. But we should not overlook liquidity. If a significant portion of an institution's assets are impaired and illiquid and its funding is relying on short-term borrowing, low leverage will not be much comfort."

      "It is high time to consider restrictions on short-term funding throughout the system," Taub said. "This is the tinderbox that awaits an asset reversal or shock to ignite."

      Lehman Was Symptom, Not Cause, of the Financial Crisis

      Norbert Michel, research fellow with The Heritage Foundation, said the "key policy failure" that led to the crisis was the government's bail out of Bear Stearns investment bank in March 2008. Michel said it set the expectation that Lehman would also be bailed out, "setting up investors and creditors for a fall," he writes in a Heritage report.

      "The notion that allowing Lehman to file bankruptcy caused the financial crisis is both wrong and dangerous," Michel said. "The danger in this myth is that it perpetuates the policy of bailing out financial institutions with taxpayer money—and that it allows policymakers who caused the crisis to escape responsibility for their actions."

      The Power of Banking Lobbying

      John Coffee, professor at Columbia Law School, said some regulatory agencies have put forward "cosmetic" changes in assuring history does not repeat itself with another financial crash.

      "My view is that we've made at best uneven and modest progress towards curbing systemic risks for a variety of reasons," he said.

      The most important barrier, he says, is that the financial services lobby "is most powerful interest group in U.S. and doing everything possible to slow down the pace of change," he said.

      Coffee said he has dozens of examples where lobbyists have prevented regulatory action to support financial stability. For example, without a required capital buffer by law, Coffee is concerned about a future run on money market funds.

      He blames lobbyists for influencing Congress, which oversees federal agencies.

      "The SEC won't dare move in that direction. Congress would curb their budget if they move in that direction," he said.

      Households on Shaky Savings Ground

      Don't miss the comments at the URL.
      Watch this short video, although it shows how pathetic the "liberal" media is. Barney Frank stuns them into embarrassed laughter. But David Gregory rescues them, because that's what he's paid millions of dollars to do.

      Barney Frank Leaves Wall Street Defenders Speechless: Why Are Bankers ‘Paying Themselves So Much Money?’

      By Alan Pyke on September 15, 2013 at 1:23 pm

      As his fellow panelists sought to sidestep criticisms of the financial industry on the five-year anniversary of the bank failure that kicked the financial crisis and Great Recession into full swing, former congressman Barney Frank asked a simple question that brought Wall Street’s defenders up short. “To your question about those poor beleaguered bankers who have been forced to do so much,” Frank said, “why are they paying themselves so much money? Where did these enormous salaries come from if they were in fact in such serious trouble?”

      Frank was responding to CNBC host Maria Bartiromo’s call to “get beyond the conversation of is Wall Street evil, are the bankers evil and causing pain” and instead look to economic growth as a cure-all for the vast inequality in income and wealth that has been exacerbated since the end of the recession. (Nevermind that the deregulation of the financial sector is a primary driver of inequality in the U.S.) His question produced several seconds of silence as Bartiromo and former Treasury Secretary Hank Paulson laughed nervously and looked to Meet The Press host David Gregory for help. As Bartiromo seemed about to respond to Frank, Gregory stepped in to change the subject.

      Watch the exchange below:

      BARTIROMO: We need to get beyond the conversation of is Wall Street evil? Are the bankers evil and causing pain? And toward the conversation of, how do you create sustainable economic growth? That will answer the issue of inequality. Because with growth comes jobs.


      BARNEY FRANK: I do want to add one thing, though, to your question about those poor beleaguered bankers who have been forced to do so much to keep from not being able to pay their debts they can’t lend money. if they really are running businesses that are so stressed that they can’t do their basic work, why are they paying themselves so much money? Where did these enormous salaries come from if they were in fact in such serious trouble?

      BARTIROMO: (laughing) Thank you for giving me that one. Okay.

      GREGORY (Host): But your point is to get beyond — to get beyond some of the resentment of the bankers and get to a place where we actually have more hiring going on, more investment going on and washington plays a more constructive role beyond whether it was the bailout of the banks which changed our politics.

      It would have been interesting to hear Bartiromo’s response had Gregory not intervened to prevent anyone answering Frank’s question. Wall Street executive pay seems difficult to defend five years on from the crisis. It isn’t just that banker bonuses and bank profits have returned to or even surpassed pre-crisis highs. It’s that a third of the highest-paid executives of the past 20 years have been failures or frauds. It’s that companies routinely manipulate performance-based compensation schemes to effectively guarantee executive payouts. It’s that taxpayers subsidize payments in the form of stock, which also give executives incentive to the sorts of fraud and risk-taking that created the financial crisis.

      The financial reform law that Frank co-authored with then-Sen. Chris Dodd (D-CT) included rules meant to change executive compensation. Those changes have yet to materialize. Five years on from the Lehman Brothers bankruptcy, former Lehman chief Dick Fuld is far from the only former executive to have retained hundreds of millions of dollars in pay and bonuses for their work that contributed to the crisis. Efforts to change the culture of the financial industry appear to have failed, as traders still report a high willingness to break the rules for personal gain.

      follow up on Steve Young ---
      stupidity knows no limits ---
      see also