There’s something that bugged me about this article (indeed, bugs me about most economic analyses of our current crash). Amidst a discussion that fairly lays out some of the problems with the global economy (all the while ignoring that one critical issue in the US is a gutting of manufacture and unions and therefore increasing inequality), it talks about how to rebalance the global economy so as to return to “sustainable growth.”

What it failed to create, however, was the kind of virtuous cycle of growing sales, growing profits and growing employment, all feeding off of one another, to keep the economy growing even as the stimulus wears off — “escape velocity,” to borrow a term from aerodynamics.

[snip]

The truth is we’re in something of a trap. Until imbalances are corrected, the U.S. and global economies are unlikely to return to robust and sustainable growth. And yet to the extent that we address these imbalances, the correction process will inevitably be a short-term drag on an already weak economy.

I mean, aside from Pearlstein’s blind reverence for the market, he’s right about the notion of balance. It is true, for example, that the newly rebalanced globe, America will play a smaller role as the consumer of last resort.

But it’d be nice if, at the same time as analysts think about rebalancing the global economy, they’d consider what their idea of “sustainable growth” meant in the past–and what it would mean in the future if it continued unchecked. After all, the sustainable-growth-that-turned-out-to-be-unsustainable of the last 60 years of a globalized economy caused climate change which will be an increasing drain on even a growing economy as disasters become worse and more frequent.

The spending on unnecessary consumer goods, the transportation miles driven, the dietary patterns, the waste. Those things caused climate change. Those are the things economists would like to return to, if slightly adjusted around the globe.

Since we’re going to be spending the next couple of years trying to find “sustainable growth,” do you think we could also keep in mind what would be truly sustainable for the globe?

As anticipated, the French have just opened an investigation into whether IMF Chief Christine Lagarde intervened in a settlement Bernard Tapie won with a state-owned bank during her tenure as Finance Minister. At the rate we’re going, the developing world might just get their demand for a President from one of their countries.

The government has joined on the side of big oil in an anti-fracking lawsuit initiated by Eric Schneiderman. Schneiderman says a project is going forward without required NEPA review; the government says the case is not yet ripe.

Salon says JSOC will be operating in 120 countries by the end of the year. That would mean the US’ transnational gang of illegal combatants would be active in 60% of the world’s countries. This is another case where we’re still insisting on our legal rights as a nation, while leading the push to undermine the nation-state with illegal transnational organizations.

A Boston tax lawyer has helped someone–no one knows whom–form and dissolve a corporation for the sole purpose of funneling $1 million into Mitt Romney’s Presidential race.

Chris Soghoian finally got DOJ to hand over numbers for how many emergency warrantless requests it submitted to ISPs in 2009. Whereas in 2008, they had asked for the information from 17 accounts, in 2009 they asked for communications content from 91 accounts.

The can, on the FAA shutdown, has been kicked. One month down the road.

SEC’s Inspector General has reported that one of the guys who missed the Madoff Ponzi scheme in 2005 and 2006 got an award in 2010. Effectively, it seems he got $1,200 extra for cleaning up the catastrophe he missed the first two times he reviewed it.

The Guardian has liberated the UK’s policy on cooperating with liaison services that torture. ((h/t Rosalind) As the Guardian explains the policy basically sets up a bureaucracy to weigh whether the value of the information outweighs the imperative not to torture.

The interrogation policy – details of which are believed to be too sensitive to be publicly released at the government inquiry into the UK’s role in torture and rendition – instructed senior intelligence officers to weigh the importance of the information being sought against the amount of pain they expected a prisoner to suffer. It was operated by the British government for almost a decade.

[snip]

One section states: “If the possibility exists that information will be or has been obtained through the mistreatment of detainees, the negative consequences may include any potential adverse effects on national security if the fact of the agency seeking or accepting information in those circumstances were to be publicly revealed.

“For instance, it is possible that in some circumstances such a revelation could result in further radicalisation, leading to an increase in the threat from terrorism.”

The policy adds that such a disclosure “could result in damage to the reputation of the agencies”, and that this could undermine their effectiveness.

It’s bad enough that the Brits have taken such a calculating approach to torture–effectively saying, well, sometimes you’ve got to let the US or Uzbekistan torture for you.

But in their discussions–in effect, the last two paragraphs of the guidelines–about whether information gathered by torture is reliable or not suggests the strong possibility that they’re better not asking if information came from torture.

The circumstances in which detainee information has been obtained will be relevant in assessing its reliability. Accordingly, the Agency should wherever possible seek as much context as possible, particularly if the intelligenece is threat-related. However, the Agencies’ ability to do this is often limited and, in any event, they may not press to be told the precise sourcing where to do so might damage co-operation and the future flow of intelligence from the liaison service in question.

It is established as a matter of law that information may be used as the basis for operational action, whatever the circumstances in which it has been obtained. However, where it is established that information has been obtained by torture, it is not possible to rely on that information in legal proceedings, for instance to justify the Agency’s operational actions or to support the taking of steps against an individual, such as deportation or exclusion. LAs are able to advise on the possible application of this evidential bar in particular cases.

Much of this policy appears to designed to allow for the use of torture, while pretending that doing so doesn’t implicate Britain in the torture.

But because of this insulating effort, the Brits seem likely to avoid asking about the conditions under which information was collected.

And yet they would treat it as potentially reliable intelligence, precisely when knowing torture elicited it might cause the government to reassess its accuracy.

It all seems designed to set up a industry of torture, in which abusive allies confirm their value in the war on terror by using torture to produce “leads,” which the Brits will then treat as accurate in an effort to pretend that torture doesn’t lie at the heart of this industry.

Charlie Savage tells the headline story from Leonie Brinkema’s opinion on whether or not James Risen must testify in Jeffrey Sterling’s leak trial.

“A criminal trial subpoena is not a free pass for the government to rifle through a reporter’s notebook,” wrote the judge, Leonie Brinkema of the United State District Court in Alexandria, Va.

But I’m just as interested in a few other things she says. First there’s the way she dismisses the government’s claim that two of the people who testified to the Grand Jury–Jeffrey Sterling’s ex-girlfriend and a former CIA officer with knowledge of the MERLYN operation–would be unable to testify at he trial.

The government had argued that the girlfriend was protected by spousal privilege and that the former CIA officer would be hearsay.

Separate and apart from Risen’s concession regarding the admissibility of his grand jury affidavit at trial, see Mot. p. 45, other evidence relied upon by the Court in its Memorandum Opinion similarly would be inadmissible at trial. For example, the grand jury testimony of the witness cited by the Court at page 7 of its Memorandum Opinion would be inadmissible under Rules 801(c), 802 and 803 of the Federal Rules of Evidence and United States v. Acker, 52 F.3d 509, 514-515 (4th Cir. 1995)(availability of spousal privileges to testifying and non-testifying spouses). The grand jury testimony of the witness cited by the Court at pages 7, 9, 10, 20, and 34 of its Memorandum Opinion – testimony that this Court deemed one of the key facts in its conclusion – is inadmissible hearsay on its face absent some exception; yet Risen treats the admissibility of the testimony of both witnesses as a foregone conclusion.

But as Risen’s lawyer Joel Kurtzberg pointed out during the hearing on Risen’s subpoena, she’s not his wife!

They actually cite in their papers as to the testimony of Mr. Sterling’s ex-girlfriend, suggest that it wouldn’t be admissible because they cite to a Fourth Circuit case about the marital privilege.

And in fact, if you look at the case they cite, the case holds the exact opposite. It holds that if you are not married, even if you have been living together I believe for 26 years in that case, the marital privilege doesn’t apply.

Here’s how Brinkema dismisses this William Welch gimmick.

Although the government argues that the spousal privilege would prevent this witness from testifying, nothing in the record indicates thta Sterling and the witness are married now or were married during the time of Sterling’s alleged statements.

More interesting still is the way Brinkema dismisses the government’s claim that the CIA officer’s testimony would be inadmissible hearsay.

Brinkema starts by citing Federal Rules of Evidence describing the exception for a statement against interest.

A statement is admissible under this exception if: (1) the speaker is unavailable; (2) the statement is actually adverse to the speaker’s penal interest; and (3) corroborating circumstances clearly indicate the trustworthiness of the statement.

After noting that Risen’s testimony would be unavailable if she found that reporter’s privilege prevented his testimony or if he refused to testify, she then invokes the Espionage Act.

Risen’s statements are adverse to his penal interest because receiving classified information without proper authorization is a federal felony under 18 U.S.C. 793(e); see U.S. Sentencing Guidelines Manual 2M3.3 (providing a base offense level 29 for convictions for the “Unauthorized Receipt of Classified Information.”). 6

6 The government clearly recognizes Risen’s potential exposure to criminal liability and has offered to obtain an order of immunity for him.

Brinkema uses the overzealous interpretation of the Espionage Act the government itself has been floating lately as a way to force the government to have the former CIA officer testify, which I suspect they’d much rather not do.

And note that footnote about immunity. I’m not sure whether we knew the government had discussed offering Risen immunity or not, but particularly given claims they’re pursuing his testimony so aggressively as a way to jail him for protecting his sources, it is an interesting revelation.

Finally, there’s one more passage I find telling. In the middle of a passage discussing whether the government has access to the information Risen would testify to via other means, she notes,

The government has not stated whether it has nontestimonial direct evidence, such as email messages or recordings of telephone calls in which Sterling discloses classified information to Risen; nor has it proffered in this proceeding the circumstantial evidence it has developed.

In a case in which the government has pointed to records of emails and calls, Brinkema notes, the government has never said whether or not it has the content of those emails and calls. Given that this statement is a non sequitur (it appears amid a discussion of circumstantial evidence), and given that Brinkema knows the government may have improperly accessed Risen’s phone records in the warrantless wiretap case, I find her comment mighty suggestive.

Susie linked to this clip.

And while she’s right to point to all the evidence that L’il Luke Russert is an ignorant toad about how many jobs Obama’s trade deals will send overseas, I’m more amazed by his arrogant response to being asked about slave and dead labor.

Here’s my take on the exchange, starting from where Dylan Ratigan first interrupts L’il Luke to call him on the claim trade deals will create jobs.

L’il Luke [reciting a script]: A few things where they could find common ground are free trade agreements that are pending with South Korea and Colombia and Panama. It’s unclear whether or not [overtalk]

Ratigan: Hold on, hold on.

[Luke adopts self-satisfied smile]

Ratigan: Are you referencing those free trade deals?

L’il Luke: I am referencing the free trade deals.

Ratigan: I mean, come on now Luke, let’s talk about that for a second.

[Luke bites his lips]

That Panama deal’s nothing but a bank secrecy haven–

[Luke bursts out laughing]

That’s basically what that Panama deal is.

[Luke finally manages to look serious]

The South Korean deal is a way to hire North Korean slaves to make South Korean products so that we can refund the North Korean government–

[Luke has lost it again, openly laughing]

–After giving them sanctions, I call that the “let’s give them a nuke anyway plan,”

[Luke looking down, trying to compose himself, looks up again, biting his lips]

You know, what are we talking about? [Relents]

I’m giving you a hard time.

L’il Luke: No, I know you are. [Laughs] You threw me off my game there a little bit.

Ratigan: Tell me the truth, Luke.

L’il Luke: Aw look, —

Ratigan: When they discuss the South Korean trade agreement around Congress, do they refer to it as “hey let’s give North Korea a nucl- anyway plan?”

L’il Luke [finally adopting his serious pundit face]: No they do not.

Ratigan: They don’t?

L’il Luke: They say it’s a job creator.

Ratigan: For who? For North Korean slaves?

L’il Luke: For the United States, no, they say for the United States. They say it’s a job creator, can immediately [create] thousands and thousands of jobs.

[finally finding comfort in the Village script again, but trying to move on]

You also heard today from President Obama–

Ratigan: How?

L’il Luke [completely sheepish look]: The [??] of free trade, you take the tariffs away, people, you know, build things here,

Ratigan: No, no no. But the tariffs are away, and if I’m exploiting the ability to access a rigged Chinese currency system and North Korean slave labor,

[L’il Luke furrows his brow slightly, affects to look concerned, bites his lips again, shifts his head]

Seems interesting.

L’il Luke: It does.

Ratigan: My Colombian, the Colombian deal’s my favorite. That’s a big job creator.

[L’il Luke looks worried. He hasn’t studied for this test.]

Whaddya say we do a deal with the only country in the world that openly murders all labor organizers–

[L’il Luke has just decided he’s not having fun anymore; juts out chin, peeved now that Dylan is making him play this game]

–to ensure that they will never ask for a raise ever.

L’il Luke [apparently grasping on something he read in college or heard at a cocktail wienie fest]: Well, Colombia, though, in all fairness, Colombia has had massive strides in improvement in terms of their security. I mean, you’re bringing up something that George Miller–

Ratigan: But I’m saying the murder rate of union organizers on a per capita–

[Juts out chin, affects his serious look]

L’il Luke: Well, that’s why there’s Democratic opposition in the House for it right now and they have to figure out that, you know, technicality there.

“That, you know, technicality.” That Democrats think maybe it’s a bad idea to open into unfettered competition with a country that kills labor organizers. But that slave labor in Korea, that cheap labor in China? That–that sounds interesting.

L’il Luke is only where he is because Daddy combined his down to earth Buffalo roots with actual knowledge and–in the years before his death–access, access, access.

But it’s L’il Luke’s smugness that makes me want to vomit. Ratigan is trying to talk about how working people die over this shit. And Luke, shaken for the moment off his tight Village script, not only doesn’t have the knowledge to engage with Ratigan, but doesn’t even have the respect for the subject to avoid laughing openly.

What do you think of your kid, now, Timmeh Russert? Laughing at the idea of slaves and dead workers?

Our Dying Economy

The National Employment Law Project has a report showing how this Depression is hollowing out middle class jobs, with 8.4% of all middle wage jobs gone (and that’s on top of a process that had already started before the Depression). One profession that has shown growth among middle wage jobs, though, is “bailiffs, correctional officers, and jailers”–they make up over 81,000 of the news jobs. Sarah Jaffe has more. Meanwhile, ALEC is pushing policies that allow private prisons to employ inmates at less than prevailing wages, effectively undercutting real businesses.

The DC Circuit has shot down an SEC rule that would make it easier to get dissident Directors in corporate board elections. To back it’s decision, the panel seems to have badly cherry-picked studies to claim that giving stockholders greater say in corporate governance is a bad thing.

Obama missed an opportunity to blame Republicans for letting Delta’s union-busting get in the way of FAA reauthorization–and instead losing billions in the process. Instead, he blamed Congress generally.

Reuters reports on reverse mergers, in which companies use dormant shell companies to get listed on US exchanges, while avoiding the scrutiny an IPO would require. Of 122 Chinese companies that used reverse mergers to list on US exchanges, they have lost $18 billion in market capitalization.

Our Dying Empire

David Axe reports that the arms we’re giving to African troops to fight al-Shabaab in Somalia ending up in al-Shabaab’s hands; the troops are selling the weapons because their paychecks are withheld from them.

Joshua Foust looks at how a shift of aid–things like USAID–to the Defense budget just as we start talking about cutting big money from national security puts such aid at risk. Meanwhile, Nancy Youssef catches the Republicans doling out an extra $50 billion to DOD.

In 2009, USA Today reported that retired officers were getting up to $330/hour to consult with DOD on things like weapon systems as part of a mentor system. So DOD passed rules that required those retirees to reveal their ties to defense contractors. The result? Most of the participants–all but 20 of the 158 mentors in the program when they first identified this gravy train in 2009–have left the program. (h/t POGO) No wonder Republicans are working so hard to prevent Obama from passing an Executive Order requiring transparency on other contracting–because transparency actually works.

Justice and Injustice

Radley Balko writes about Corey Maye’s return home after being released from death row.

Rummy’s effort to claim qualified immunity in a suit a US citizen filed for the abuse he was subjected to at Camp Cropper has failed. Here’s the opinion.

Ron Wyden says he will block the Intelligence Authorizaiton bill over FISA changes and transparency. I hope he keeps his word.

In one of my posts on drones, I noted that we have had more deaths this year in AL (238) and MO (159) because of extreme tornadoes the severity of which is probably at least due partly to climate change than we have from terrorism.

But there’s something else that seems to have happened.

Meteor Blades has a post cataloging how many more people are relying on food stamps this month–45.8 million, or close to 15% of the country. He links to the state-level data, which reveals  a huge spike in AL’s use of food stamps. In April 2011, 868,813 Alambamans used food stamps–a worse than average but not abysmal 18% of its population. In May, that number spiked to 1,762,481, over 37% of the population, almost 900,000 new people getting food stamps.

Incidentally, the only people from AL’s congressional delegation to vote no on the debt ceiling vote this week–Martha Robey, Mo Brooks, Richard Shelby, and Jeff Sessions–did so from the right.

Assuming these numbers are right (the numbers reported for new applicants–100,000 from hard-hit Jefferson County–seem to support them), there’s still a good reason why so many Alabamans are relying on federal aid to feed themselves: the devastating tornadoes in April. In response, the state rolled out special sign-up processes, turning around applications in three days time. Though, at least from some quarters, there was skepticism about whether people were applying because of the tornado, or more generalized need.

At the very least, the reliance of over a third of Alabamans on food stamps, half of them in response to the tornadoes, suggests one more cost from this crazy weather.

But it will be interesting to see what happens to these numbers in subsequent months. Will these numbers return to “normal,” reflecting an appropriate and short term response to a disaster (even if it is one Alabama’s legislators all refuse to pay for)? Or are we seeing a poor state come to rely on the government for bare necessities once it becomes easy to apply?

Okay, okay, I should have used a pun on “Echelon” for my title here, not “Carnivore.” After all, it was that earlier SigInt program that the US and its Anglophone partners used to steal industrial secrets in the 1990s.

The point being that, while I am concerned by McAfee’s description of the extent of the data theft carried out in the last six years using a hack it calls Shady RAT, I am also cognizant that the US has used equivalent tactics to steal intellectual property in the past and present.

What we have witnessed over the past five to six years has been nothing short of a historically unprecedented transfer of wealth — closely guarded national secrets (including from classified government networks), source code, bug databases, email archives, negotiation plans and exploration details for new oil and gas field auctions, document stores, legal contracts, SCADA configurations, design schematics and much more has “fallen off the truck” of numerous, mostly Western companies and disappeared in the ever-growing electronic archives of dogged adversaries.

What is happening to all this data — by now reaching petabytes as a whole — is still largely an open question. However, if even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team’s playbook), the loss represents a massive economic threat not just to individual companies and industries but to entire countries that face the prospect of decreased economic growth in a suddenly more competitive landscape and the loss of jobs in industries that lose out to unscrupulous competitors in another part of the world, not to mention the national security impact of the loss of sensitive intelligence or defense information.

 

McAfee provides all the clues to make it clear China is behind these hacks–though it never says so explicitly.

The interest in the information held at the Asian and Western national Olympic Committees, as well as the International Olympic Committee (IOC) and the World Anti-Doping Agency in the lead-up and immediate follow-up to the 2008 Olympics was particularly intriguing and potentially pointed a finger at a state actor behind the intrusions, because there is likely no commercial benefit to be earned from such hacks. The presence of political non-profits, such as the a private western organization focused on promotion of democracy around the globe or U.S. national security think tank is also quite illuminating. Hacking the United Nations or the ASEAN (Association of Southeast Asian Nations) Secretariat is also not likely a motivation of a group interested only in economic gains.

The report is perhaps most interesting because of some of the entities–along with the defense contractors and US and other government agencies–described as targets of this hack: a number of construction companies (which could include companies like KBR), real estate firms, various state and county governments, two think tanks, and the NY and Hong Kong offices of a US media company. These are where the secrets China wants to steal are kept.

The problem, of course, is that our intellectual property is one of the few advantages the US has left. Our exports are increasingly limited to things that rely on legally enforcing intellectual property to retain its value: drugs, movies and music, software, GMO ag. Which sort of makes China’s ability to sit undetected in the servers of these kinds of organizations for up to 28 months a bit of a problem.

Good thing the FBI is busy going after hacktavists and whistleblowers instead.

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.

Justice and Injustice

Amanda Terkel describes how the state-level budget cuts are putting courts and justice out of the reach of Americans.

Dahlia Lithwick transcribes highlights of the remarkable panel she moderated over the weekend.

The Whistleblower–the trailer for which is above–opens on Friday. Nick Schwellenbach provides background on the story it tells–how DOD Contractor Dyncorp was involved in human trafficking–here.

The other day I noted that former Director of ISOO, Bill Leonard, wanted to file a complaint against those in NSA who improperly classified one of the documents charged in the Thomas Drake case. about which he said, “I’ve never seen a more deliberate and willful example of government officials improperly classifying a document.” Leonard received permission and has now submitted that complaint. In related news, Thomas Drake and Jesselyn Raddack have an op-ed on the Obama Administration’s war on whistleblowers.

Surveillance Nation

The Obama Administration says the guidelines it uses to decide what–in addition to a Muslim’s faith–gets them targeted for FBI infiltration is a state secret. That’s an excellent way to protect the First Amendment, don’t you think?

Not only did Bill Nelson join Republicans in blocking more reporting on FISA, but the entire Intelligence Committee took a voice vote to reject Mark Udall and Ron Wyden’s attempt to make James Clapper tell us they are using our phones to track us.

Josh Gerstein reported last week that TSA was going to roll out Israeli-style behavioral screening at airports. It looks like they’re rolling it out at Boston. The idea in principle might be great (it sure beats stripping granny of her adult diaper); but no one is going to pay TSA workers enough to do this competently, I’m betting. Meanwhile, scanner machines introduced for airport security in Australia are set off by sweaty armpits.

The US had to relax its guidance on al-Shabaab so that humanitarian groups could work with the terrorist organization to get relief to famine victims. They really ought to just rewrite the law to get rid of the stupid Holder v. Humanitarian Law interpretation.

Jeff Kaye has a story cataloging the range of uses of water in torture by DOD. Some of these pretty clearly fall into descriptions of water dousing (which DOD wasn’t authorized to use, either; the others are clearly attempts to simulate drowning, like waterboarding). But I think that shows that the ways the government was stretching whatever guidance it had.