Never Fund a Bank without Strings

Among the provisions in the 1933 federal statute – the Glass-Steagall Act – that created the Federal Deposit Insurance Corporation was a provision preventing the same holding company from controlling both a commercial bank and an investment bank. The notion was to keep banks from being torn between their trading interests and the normal lending/savings business inherent in commercial banking. Since commercial banks can borrow money from the Federal Reserve at a vastly reduced rate (well under a percentage point today), that their trading division might borrow money and use it for their own account (investing and speculating for themselves) troubled regulators in that Depression era… so they created what they perceived to be a necessary separation.

Unfortunately, in the free-wheeling days of deregulation, via the Gramm–Leach–Bliley Act of 1999 (signed by then President Bill Clinton), Congress felt that this separation of traditional banking from trading was no longer necessary; that separation provision was repealed, and mega-financial institutions embraced both speculation and investment banking, on the one hand, and old world commercial banking, on the other, within the same house. The results were the acceleration of sprawling financial institutions where the big bucks were made in creating financial instruments and trading them, but where cheap money was always available to those entities that also embraced commercial banking. More than a few of these “too big to fail” institutions fell, and the entire American financial system lurched towards a collective bankruptcy, “rescued” by a massive federal bailout that restored the companies, but did nothing to get these conflicted companies to put the interests of their customers and society in front of their addiction to greed-driven speculation.

Europe had followed suit, as their banks absorbed or created trading/investment banks based on the American model, and of course, they faced many of the same problems, such that the European Union is now actively considering imposing a requirement that commercial banking would no long be allowed to have a trading arm, even though the proposed legislation, if passed, would allow these financial institutions at least seven years to divest.

Between all of the sovereign debt (like that of Greece, Italy or even the United States), the uncertainty of asset values and the ability of those US banks with trading arms to use the money they get from the Federal Reserve for their own purposes, there is very little credit available for small and medium businesses – where most of the new job growth is coming from – and certainly a whole lot less for those seeking traditional mortgages (especially outside of the federally insured lending programs). In short, we rescued these big financial institutions and continue to allow them to borrow money from the Federal Reserve at well under one percent interest without the slightest requirement that they open up credit to those sectors of the US economy that need it most or that can fuel growth most efficiently. Perhaps it’s time to “un-repeal” that controversial provision of Glass-Steagall.

Writing for the January 2012 Vanity Fair, economist Joseph Stiglitz writes: “If we expect to maintain any semblance of ‘normality,’ we must fix the financial system. As noted, the implosion of the financial sector may not have been the underlying cause of our current crisis—but it has made it worse, and it’s an obstacle to long-term recovery… What’s needed is to get banks out of the dangerous business of speculating and back into the boring business of lending. But we have not fixed the financial system. Rather, we have poured money into the banks, without restrictions, without conditions, and without a vision of the kind of banking system we want and need. We have, in a phrase, confused ends with means. A banking system is supposed to serve society, not the other way around.” For people who truly believe that deregulation is the cure, they are obviously those who have simply failed to understand – or perhaps even look at – the massive failure that the repeal of sensible legislation had on our economy.

I’ll end this blog with this little snippet from the December 20^th, LBNelert: “Many tout the U.S. as the Roman empire of the modern world. But as it turns out, that comparison may not be all good. Income inequality in America is at levels even higher than those in ancient Rome, according to a recent study from two historians, Walter Schiedel and Steven Friesen, cited by Per Square Mile. After analyzing papyri ledgers, biblical passages and other previous scholarly estimates, the researchers found that the top one percent of earners in Ancient Rome controlled 16 percent of the society’s wealth. By comparison, the top one percent of American earners control 40 percent of the country’s wealth, according to Vanity Fair.” Not particularly good news for a country where the miscreant bankers are making more money than ever, the US middle class is eroding at an alarming rate, and according to the US Census, 1 out of 2 Americans is living at a “low income” level… or less.

I’m Peter Dekom, and simply repeating the obvious mistakes of the past is hardly the path out of this economic debacle.

What Did We Learn from Iraq?

As bombs blast away at random targets, mostly in Baghdad, as the Shiite Iraqi government we installed and Iran grow even closer together, exactly what did we learn about attacking this purported resting place of so many “weapons of mass destruction”… which were never found? As majority Shiites push and shove their way against the once ruling Sunni minority, who literally blast back. 4,500 American deaths and well over a trillion dollars later. I submit… NOTHING. Even as we are gone, the government is beginning to unravel: “One of the largest and most powerful political groups in Iraq began a boycott of Parliament on [December 17^th], signaling fresh waves of political dysfunction that threaten to unravel Iraq’s year-old governing coalition just days after the formal end to the American military mission here.

“The standoff pits Prime Minister Nuri Kamal al-Maliki, a Shiite, against one of his most nettlesome partners in Iraq’s government, the Iraqiya coalition, a multisectarian group with wide support among secular Iraqis and Sunni Muslims… In announcing its boycott, Iraqiya accused Mr. Maliki’s government of arbitrarily arresting aides and security guards who work for Iraqiya leaders, and blamed him for failing to stem a recent welter of unrest in the largely Sunni province of Diyala. Local leaders in Diyala recently voted to seek more autonomy from the Shiite-led government in Baghdad, a move that provoked unruly demonstrations, mostly by Shiites.” New York Times, December 18^th.

We learned nothing from Vietnam, and nothing from Iraq. Yet we are still in Afghanistan. Consider what we are fighting for in the latter theater of war:

1. This is the legal system we support: “An Afghan woman who was jailed on charges of ‘forced adultery’ after being raped, then pardoned following an international outcry, has been released nearly two weeks after a judicial panel said she could go free, her lawyer said Wednesday. But the future of the Afghan woman, Gulnaz, remains unclear. Gulnaz, who uses one name and is now 21, was attacked by her cousin’s husband in 2009 and gave birth to a daughter behind bars. The government announcement of the pardon made it clear that there was an expectation that she would agree to marry her rapist, a way of ensuring the child was not treated as illegitimate. But her lawyer said that since Gulnaz’s attacker was still in jail, the question of whether she would marry him was off the table for the moment.” New York Times, December 14^th. [Emphasis added]

2. This is the government we support: “Corruption is a corrosive that destroys the legitimacy and viability of the government…That is why the failure of Afghan President Hamid Karzai to crack down on corruption in his administration and among his political allies is so dangerous. Instead of cleaning up government, Mr. Karzai has been blocking efforts to clean out corrupt politicians. The result is not only eroding support for his government among Afghans, but deepening divisions among allied countries trying to stabilize Afghanistan… The scale of the problem is staggering. Not only is there theft — it is reckoned that $1 billion intended to rebuild Afghanistan is illegally taken out of the country through Kabul airport — but the readiness of government officials to look the other way has led to an explosion in opium production, and a virtual flood of heroin around the world. The diversion and misuse of billions of dollars of reconstruction funds contributes to the strengthening of local warlords, a commensurate weakening of the power of the central government, and the alienation of growing numbers of Afghans. The Taliban may be harsh, but they are generally perceived as honest. (And sometimes corruption results in the diversion of money, weapons and information directly into the hands of the Taliban.)” Japan Time, September 8, 2010. Most major periodicals have reported on this massive corruption.

3. This is the area of Afghanistan where the Karzai government has control after more than a decade of US military intervention: Kabul and its environs… only. Between local warlords and the Taliban – the latter being the supporters of the 9/11 attack on the Pentagon and the Twin Towers – the rest of the nation is not under governmental control. For that segment of the population that is Pashtu, that same Taliban has disproportionate control: “The country, the Pashtuns are about half the population of the country. This is where the Taliban has almost all of its support. It has no support among the well armed, well organised other groups in the country - the Tajiks, the Hazaras, the Uzbeks - and so in the Pashtun areas today the Taliban control the countryside, they control much of Kandahar city, Afghanistan's second city, and if the NATO forces withdraw I think the situation would continue to be approximately that.” Round table discussion of regional experts televised on Australia’s ABC network November 5, 2011.

You don’t “win” civil wars as an outsider. You don’t change tribal and religious animosities that have soured over many generations (centuries even) in a couple of years. You don’t have Western Judeo-Christian nations invade Muslim nations to impose a new system of government based on their models and expect warm acceptance. We are actually in direct talks with the Taliban, hoping we can work it all out with them, and that they will honor their commitments when we leave: “After 10 months of secret dialogue with Afghanistan's Taliban insurgents, senior U.S. officials say the talks have reached a critical juncture and they will soon know whether a breakthrough is possible, leading to peace talks whose ultimate goal is to end the Afghan war.” Huffington Post, December 18^th. Yeah, right? Who’s smoking the local produce now? Whether we leave Afghanistan today or in ten years, the aftermath of chaotic tribalism and civil war will simply resume. How many billions of additional dollars will we spend? How many additional civilian casualties will we inflict? How many American lives will be lost or ruined in the remaining time? Leave now!

I’m Peter Dekom, and while we must retaliate against nations that attack us with a clear show of force, this does not mean we have to invade the country and impose our view of a “proper” government.

Soar Like My Healthcare Costs

“The Supreme Court announced [December 19^th] that it will use an unprecedented week’s worth of argument time in late March to decide the constitutionality of President Barack Obama’s historic health care overhaul before the 2012 presidential elections.” Washington Post, December 19^th. A full week of arguments never happens. With massive unemployment (where health insurance benefits, where they existed, end), half the workforce at a Census Bureau “low income or less” level, and average premiums rising 9% in the last year, you’d think that this denigration in finding affordable health insurance would be more in everyone’s focus. Instead, the deficit (yes, it’s related) and tax policy seem to dominate the headlines, even as the Supreme Court is set to take on the pejoratively-labeled Obamacare legislation, which the GOP is planning to repeal (if the Supreme Court allows it to exist) “when we get elected.”

The “pre-existing conditions” and “lifetime cap” provisions don’t go into effect until 2014, and the mandate for states to create healthcare “exchanges” by January 1^st of that year – where insurance coverage is pooled and information about rates and other options is made available to the public – is being ignored by most states, either because they lack the funding or because they oppose the mandate (and believe the Supreme Court will toss out the legislation anyway). There is an undercurrent that if the states fail to provide this massive organizational benefit (with a huge computer database that has to be generated), the federal government may opt to step in and substitute its version of an exchange instead of suing and trying to force the states to live up to their mandate… assuming that the law survives the legal challenge.

Since state exchanges would be electronically linked to a national system anyway, this alternative structure is not so far from what would effectively happen anyway. The difference is that by allowing the feds to step in and create this bigger exchange, states that are opposed to national healthcare would effectively be helping move that policy into existence by ceding any power they might be able to exercise with a state-sized exchange that they would control.

What’s going on in the real world? “Matt Salo, executive director of the National Association of State Medicaid Directors, said computer systems in some states are old and may need substantial upgrading. There is some doubt, he said, about whether there is enough “physical capacity in the IT systems world” to get it all done in time.‘Our members have been having conversations with the vendors since the law was passed, and they are coming to the gradual conclusions that no, they don’t have the capacity to do this everywhere in the time frame,’ Salo said.

“Political threats also abound. No one knows whether the Supreme Court will invalidate part or all of the law next year; it is not clear how much funding will be available to launch and operate the federal exchange; and the outcome of the presidential and congressional elections could delay or derail the entire process… Although federal officials are saying very little about their progress, they have signed contracts worth more than $150 million with several private contractors who are working on creating the federal exchange. Last month, Oregon’s top insurance regulator, Teresa Miller, was hired by [the Department of Health and Human Services] to oversee development of health-insurance exchanges.” Washington Post, December 16^th. By opposing the legislation and not preparing for its implementation, we may be one giant step closer to true national healthcare. Clearly, the biggest failure of all attempts at healthcare has been the rather complete inability to contain costs.

I’m Peter Dekom, and in these perilous economic times, too many Americans are falling by the wayside and being ignored by the terrified remaining folks who remain in the middle class.

Throw Them All Out!

The anti-incumbent mood in this country is mounting, just as exceptionally-well funded Congressional Super Political Action Committees are flooding the market with their messages, looking for the willing and compliant candidates to support, in an election year that will break all records for campaign money spent. Billionaires and ultra-conservative corporations, still blessed under Citizens United with the ability to spend anonymous cash with very few strings, are letting Republican candidates know that if they toe the line on raising any taxes and fight for a deregulation in every corner from Clean Air to Wall Street trading practices, they will be blessed by these denizens of cash. And with the massive use of such Super PACs, Republican candidates who tout other principles can be viewed as out-of-step with this pervasive message. But well-connected candidates, Democrat or Republican, are playing this game… even though they have to skirt the edge of a rule that prohibits direct control and cooperation between PAC and candidate (the latter are still regulated).

“Several new super PACs have sprung up in recent months with the explicit aim of helping a particular lawmaker, including Sen. Orrin G. Hatch (R-Utah) and Rep. Howard L. Berman (D-Calif.). There are also super PACs that have formed to oppose the reelections of Sens. Scott Brown (R-Mass.) and Thomas R. Carper (D-Del.)... Former Minnesota senator Norm Coleman (R) has launched the Congressional Leadership Fund super PAC, which will focus on preserving the Republican majority in the House. A former top aide to House Majority Leader Eric Cantor (R-Va.) launched a super PAC in October called YG Action Fund, named for Cantor’s “Young Guns” conservative recruitment effort... Brett G. Kappel, a campaign-finance lawyer at Arent Fox, said the emerging system is rife for abuse because the FEC rarely seeks to enforce rules prohibiting coordination between candidates and independent groups.” Washington Post, November 30^th.

The willingness to appease “funders with messages” in order to benefit from the funding is a pretty nasty “how much will you pay for my vote” seeming conflict of interest, but given the massive cost of seeking office – particularly in elections for House seats that run for only two years – anyone who thinks “pay-for-play” is illegal and enforced is living on another planet. If you track the expenditure of money on political campaigns by big corporations and America’s richest people, your graph comparison will pretty much parallel the increase in wealth attributed to this top segment of our population. They have bought special treatment and are clearly enjoying its fruits.

Obviously, conflicts of interest are nothing new on Capitol Hill. Try another one on for size: As a piece that ran on CBS’ 60 Minutes on November 13^th pointed out with examples of stock purchases by sitting members of Congress, while people are not permitted to trade stocks on non-public, inside information under federal statutes, Congress currently has a huge loophole through which armored cars carrying vats of cash can drive through: “Classic insider trading usually involves senior company officials who use their inside knowledge about their firms to benefit themselves financially. It is prohibited by law. No law explicitly prevents members of Congress from profiting on information they pick up in briefings about companies, industries or the economy...

“The potential conflicts posed by lawmakers’ investments have received growing media coverage in recent years, in articles in The Washington Post, the Wall Street Journal and the Atlantic magazine. [Peter] Schweizer [author of the recent book, Throw Them All Out, and a Hoover Institution fellow] said he decided to focus on congressional stock trades after reading a Post article in December 2010 about how Armed Services Committee members are allowed to own stock in major defense companies, even though they require presidential appointees to divest in any company that does at least $25,000 in business with the Pentagon.” Washington Post. Prominent Democrats Barney Frank and Nancy Pelosi stand accused of engaging in this practice in addition to a number of Republican Congressional members.

With the public mood dark and nasty, Congress seems to have realized that they need to clean up their own act, and suddenly bills that would ban this Congressional insider practice are gathering momentum. While she had been totally ignored for months, “[Representative Louise] Slaughter [D-NY, now] has 127 co-sponsors, up from the nine she had on Nov. 12, the day before ‘60 Minutes’ aired a piece highlighting investments that congressional leaders made in companies while legislative efforts were underway that may have affected stock values... Indiana University law professor Donna M. Nagy, an expert in securities law, [believes] congressional ‘insider information’ would be treated as property of the United States. Prosecutors could make a fraud case against lawmakers who ‘secretly misappropriated government property for their own personal benefit,’” she said.” The Post.

It’s no surprise that the purported home of free-wheeling capitalism would base who wins or loses in most national campaigns all-too-often on the candidate with the biggest war chest, and today, that war chest doesn’t even have to be generated by candidates soliciting direct campaign contributions. Super PACs are waiting in the wings. I am beginning to think that we can solve our deficit issues and become a vastly less hypocritical nation if we simply put public office out to the highest bidders and use the cash to reduce the deficit directly!

To make matters worse, we are addicted to military spending, and it reaches into so many Congressional districts that depend on the fact that the US spends between 44-47% of the world’s total military budget. Military manufacturers know how to apply local political pressure (and spend lots of money) in an election. “Much if not most, of today’s financial imbalance stems from America’s addition to military spending, which ‘has warped virtually every aspect of national life, with consequences that are quite radical in their cumulative effect on the economy, as well as on the vast machinery of official secrecy, on the country’s sense of itself, and on the very nature of national government… Almost no one alive today has a mature, firsthand memory of a country that used to be very different – that was not a superpower…committed to JFK’s vow to ‘pay any price, bear any burden, meet any hardship, support any friend, oppose any foe in order to assure the survival and success of liberty’; …that did not shroud the workings of its government in secrecy; that did not use ends-justify-the-means logic to erode rights and liberties; that did not undertake protracted wars on the president’s say-so; that had not forgotten how to invest in urgent needs at home; that did not trumpet its greatness even as its shortcomings became more obvious.’ Sadly, in the America which has evolved over roughly the last fifty years, Washington DC bureaucracy, ‘with its bottomless pot of military contracts and homeland-security consultancies… its long arms and trillions of dollars in spending reaching out to every congressional district in the country… has warped almost every aspect of society, split the country into two classes, and deflected attention from urgent problems.’” [VANITY FAIR – Jan 12] as cited in the Duitch Consulting Group, Bulletin for December 18^th.

Given our proclivity to reward spending money with public office, here’s a thought that could apply equally to the United States: “In 1972, U.S. President Richard Nixon asked China’s first premier, Zhou Enlai, for his assessment of the French Revolution, 183 years after the revolution’s conclusion. Zhou’s response: “It is too early to say.’” FastCompany.com, December 1^st. What would Lincoln do?

I’m Peter Dekom, and wouldn’t it be nice to live in a country, as I am sure our founding fathers intended, that is truly representative of the people – er “human” people?

Separation Anxiety

Back in 1967, City University of New York social psychology professor Stanley Milgam, with the efforts of 296 volunteers, showed how closely people from all over the earth were actually linked (the famous “six degrees of separation”): “In the experiment, Milgram sent several packages to 160 random people living in Omaha, Nebraska, asking them to forward the package to a friend or acquaintance who they thought would bring the package closer to a set final individual, a stockbroker from Boston, Massachusetts. Each ‘starter’ received instructions to mail a folder via the U.S. Post Office to a recipient, but with some rules...

“Starters could only mail the folder to someone they actually knew personally on a first-name basis. When doing so, each starter instructed their recipient to mail the folder ahead to one of the latter's first-name acquaintances with the same instructions, with the hope that their acquaintance might by some chance know the target recipient. Given that starters knew only the target recipient's name and address, they had a seemingly impossible task...

“Milgram monitored the progress of each chain via returned ‘tracer’ postcards, which allowed him to track the progression of each letter. Surprisingly, he found that the very first folder reached the target in just four days and took only two intermediate acquaintances. Overall, Milgram reported that chains varied in length from two to ten intermediate acquaintances, with a median of five intermediate acquaintances (i.e. six degrees of separation) between the original sender and the destination recipient.” Wikipedia. Whew!

But that “small world” experiment was before the Internet and, more importantly, social networking, and, even more importantly, the massive influence of one particular network: Facebook. A new scientific study, through the combined efforts of researchers from both Facebook and the University of Milan traced relationships within a universe of 721 Facebook users that literally ran through 69 billion lines of “friends” to produce the latest results, released on November 21^st: “The experiment took one month. The researchers used a set of algorithms developed at the University of Milan to calculate the average distance between any two people by computing a vast number of sample paths among Facebook users. They found that the average number of links from one arbitrarily selected person to another was 4.74. In the United States, where more than half of people over 13 are on Facebook, it was just 4.37.” New York Times, November 21^st.

Not everyone buys into the metrics used in this study, however, and the notion of who really is a genuine “friend” (other than a fairly loose definition thereof in Facebook-speak) challenges the veracity of the results: “A Microsoft study in 2008, using a more conservative definition of friend, found an average chain of 6.6 people in a group of 240 million who exchanged chat messages. Eric Horvitz, a Microsoft researcher who led the study in 2008, said that network was based on people who exchanged messages, rather than those who identified as ‘buddies.’… ‘There is an issue of how many friends you actually have,’ he said. But, he said, the Internet might have altered the definition...

“Jon Kleinberg, a computer science professor at Cornell [who believes some] links might be more meaningful than others… offered the example of a man wanted for a crime. A random Facebook user might discover that she took a class with someone who rented an apartment from someone who grew up with the suspect. They may all be connected as Facebook ‘friends.’

“We are close, in a sense, to people who don’t necessarily like us, sympathize with us or have anything in common with us,” Dr. Kleinberg said. “It’s the weak ties that make the world small.” … Still, he noted that such ties were hardly meaningless. ‘We should ask what things spread well on weak ties,’ he said. ‘News spreads well on weak ties. Those people I met on vacation, if they send me some cool news, I might send that to my friends. If they send me something about a protest movement, I might not.’” NY Times. Hey, maybe Milgram’s initial study is still valid. What do you think?

I’m Peter Dekom, and I have to admit, I’d probably be more comfortable with ten degrees of separation, actually.

Riot Gear

The clothing and equipment carried by American police officers to quell civil disturbances has changed significantly over the years. While the tank-like water cannons we see in overseas footage are often the stuff of news footage about the Arab Spring are not standard issue here, the actually physical clothing and “stuff” that individual officers carry today has evolved significantly. Transparent plastic shields can be used when stones and other objects may be thrown, when a mobile wall is desired or when a recalcitrant prisoner needs to be extracted from his cell, but let’s look at the evolution of standard issue personal equipment – as featured in the December 3rd New York Times – since the riots at the Democratic National Convention in Chicago in the summer of 1968.

1968 “Special Equipment” – Gas mask, helmet, Billy club, tear gas grenades

1995 (Million Man March) – Soft hats, coordination with march organizers by telephone and mobile walkie-talkies and overwhelming numbers of officers.

2011 (Occupy Oakland Eviction) – Riot helmet with face shield, gas mask, Kevlar tactical body armor, 12 gauge shotgun (loaded with “non-lethal” bean bags and tear gas canisters), flash grenades, overwhelming numbers of officers and strategic arrests.

We are watching the increasing frequency of use of non-lethal assault technology including the application of old-world tear gas, the more violent use of rubber projectiles, bean bags, etc. (some of which can still maim or kill), mace, pepper spray and the exceptionally controversial

Taser (with its share of deaths as well). These latter forms of crowd control were intended to prevent the kind of severe casualties that attached to the use of real bullets, set off by the horrible Kent State tragedy on May 4, 1970, when an anti-Vietnam War protest was shattered by 67 rounds of live ammunition fired off in 13 seconds by a National Guard unit called in to contain the campus disturbance. Four students were killed and nine injured from that attack.

As the years have progressed, police have resorted to using such “non-lethal” devices in more routine police work as well, citing the ability to subdue “uncooperative” suspects and reduce the risk of physical harm to the arresting officer. This description of a local police department’s instruction to its officers is pretty typical: “Manhattan, Kan. (AP) - Riley County police soon will be more likely to use Tasers and pepper spray than their hands to subdue uncooperative suspects… Department administrators said this week that several officers had been injured during physical force training, leaving some disabled for weeks or months… Because of that, patrol officers will be encouraged to use Tasers and pepper spray to take unwilling suspects down.” Associated Press, September 23^rd [emphasis added]. In the other Manhattan – New York – police used mace and Tasers to dislodge Occupy Wall Street protestors earlier this fall.

Since the impact of using such devices on suspects is supposedly non-lethal, and supposedly the effects don’t last long, the definition of “uncooperative” or “unwilling” can often be pretty loose and profoundly subjective, as the recent incent at the University of California at Davis with officers spraying very peaceful protestors with pepper spray attests. The risk here is not only the bad publicity or the fact that occasionally “non-lethal” actually is lethal, but the litigation against police who “shoot first and ask questions later” – the issue of whether excessive force was used – also ties up municipal defense lawyers and subjects such localities to massive liability if their officer(s) are deemed to have overreacted. In short, that which appears to be expedient and justifiable – based on decisions made in a split second – can often subject financially impaired communities to serious financial liability without any genuine benefit to that municipality. Not to mention some unnecessary deaths and serious injuries along the way.

In the end, we have to ask the bigger questions: 1. Are our police actually sufficiently trained to use such non-lethal force? 2. How do we teach police officers to treat the use of such devices and chemical agents more like bullets and less like non-lethal inconveniences? We’re certainly not going to give up such tools of control, but those who are empowered to make the deployment decision need to notch up their decision threshold in way too many circumstances.

I’m Peter Dekom, and we have to make sure that when it comes to deciding guilt or innocence and appropriate punishment, it is the courts and not the police who decide.

ICU

The machinery needed to tap phones, peer around corners and through closed curtains or listen to distant conversations with crystal clarity is the stuff of terrorist hunters, police, spies and… just about anybody with the money to buy the equipment. Want your own drone, one that can fly over your target’s property, mimic a cellphone tower and intercept phone call and WiFi signals, while using an infrared camera to spot movement behind drawn curtains? No problem. “Northern Virginia technology entrepreneur Jerry Lucas hosted his first trade show for makers of surveillance gear at the McLean Hilton in May 2002. Thirty-five people attended… Nine years later, Lucas holds five events annually across the world, drawing hundreds of vendors and thousands of potential buyers for an industry that he estimates sells $5 billion of the latest tracking, monitoring and eavesdropping technology each year. Along the way these events have earned an evocative nickname: The Wiretappers’ Ball.

“The products of what Lucas calls the ‘lawful intercept’ industry are developed mainly in Western nations such as the United States but are sold throughout the world with few restrictions. This burgeoning trade has alarmed human rights activists and privacy advocates, who call for greater regulation because the technology has ended up in the hands of repressive governments such as those of Syria, Iran and China.” Washington Post, December 1^st. Add paparazzi with electronics? Sure! News crews with drones? Why the hell not?! I guess all the sturm und drang over News Corps tabloids’ hacking into private phone calls suggests that this is nothing new.

Writing in his ConcurringOpinions.com blog (August 2008), Ryan Calo notes: “Although the media mostly covers drones for their capacity to carry out assassinations, their greatest use by far is surveillance. Industrial-grade drones can fly for miles searching for objects of interest or hover at a particular location and report any movement. Not only can they record high-resolution video, but some drones come equipped with thermal-imaging and other sensors capable of seeing what people cannot. There have even been reports of a drone capable of impersonating a cell tower so as to intercept phone conversations.

“Some of these activities are surely covered by privacy laws. A surprising number are not. Neither constitutional nor common law, for instance, recognizes a right to privacy in public or from a public vantage. In one famous Fourth Amendment case, the Supreme Court found no search where local police flew over the defendant’s backyard with a private plane. In another, the Court admitted evidence spotted by an officer in a helicopter looking through two missing roof panels in a greenhouse.”

We’re used to cops and gumshoes pasting wiretaps and hidden cameras to ferret out organized crime as well as infidelities and even industrial secrets. We’ve seen television programs showing people behaving badly through hidden cameras almost since television began. But now, literally, the sky’s the limit: “It was recently reported that a Linux powered flying spy drone had been developed which was able to crack WiFi passwords and access GSM networks by posing as a mobile phone mast. A drone with a camera on board – and a flight time of 30 minutes – can be purchased in the UK for less than £10,000 [about $16,000].” The Guardian (UK), September 5^th.

The complications from such surveillance technology, from the chilling effect on free speech and assembly particularly in nations with a strong history of repression to the erosion of the few vestiges of privacy we think we have left, invite regulation and protective legislation, including a ground up review of our assumptions of what is or is not legally “public.” How do you feel about the possibility of a drone hovering outside your window with all of this technology? At least be grateful it isn’t armed with a Hellfire missile pointed at your bedroom!

I’m Peter Dekom, and it is truly amazing what we think is safe and private these days…

He Was a Retiring Sort

The fiscal winds are blowing cold in state capitols as legislators face the inevitable conclusion that their tax base and committed capital simply cannot handle the existing, much less the expected future, load of retiree benefits, both pensions and healthcare. Older state and municipal employees are smelling burning flesh in the air, hoping that it is not their own. While so many workers in the private sector, with home values and investments decimated, are expecting to work much longer, perhaps never retiring, state workers are beginning to believe that if they stay too long, the plans under which they have expected to retire for so many years may actually be terminated, reduced, negotiated down or simply de-funded.

So their reaction has been quite different from the private sector: retire earlier so you can claim that your rights have already vested and cannot therefore be changed. “The numbers of retirees are way up in Wisconsin, where more applications to retire have been filed this year than ever before. Workers in California’s largest public employee pension system have retired at a steadily increasing rate over the last five fiscal years. In New Jersey, thousands more teachers, police officers, firefighters and other public workers filed retirement papers during the past two years than in the previous two years.” New York Times, December 5^th.

Traditionally, government jobs have lured applicants because of their purported job security and solid health and pension benefits. Uniformed services – from the US military to firefighters and police officer – have further benefits from shorter required work periods until full vesting to larger percentages of terminal salaries being the determiners of the level of retirement benefits, many of which come with luscious cost-of-living escalators. Indeed as private retirement plans move increasingly to defined contribution plans (where you just get what’s in the kitty when you retire), governmental employees usually enjoy defined benefit plans where retirement income is simply set at a fixed percentage of terminal earnings.

But in today’s era of financial collapse, the myth of low paying government jobs seems to have vaporized in a flurry of downsizing and wage cuts in the private sector. Indeed, the aurora of government job security and indestructible retirement and health benefits also threatens to join the world of nostalgic mythology, particularly as private taxpayers, facing their own reduced lifestyles, are increasingly bitter that they are paying government workers for benefit that such private workers will never see.

What makes this scenario worse is that 13% of the population of the United States is over 65, and with the massive population bulge we call the Baby Boom generation retiring in waves, the number of retirees sipping at the government pension/retirement trough is expanding more rapidly than ever. Combined with this is a substantial decrease in traditional employment, where such younger workers at least contribute to pension plans for older workers… a seeming Ponzi scheme that appears destined to fail.

For some communities, these accelerating retirements have at least moved people off one set of active books into secondary accounts where allocations are made for retirements and layoff payments: “In some places, the rise in retirement has brought welcome and needed financial news. Kansas announced last month that it would save $34.5 million over two years because more than 1,000 workers had agreed to accept cash and health insurance incentives to leave. State officials said they had yet to determine which of the positions of departing workers they considered critical enough to refill.

“But some experts and workers question the ultimate result of so much leaving, saying it is already leaving some governments short-staffed (and, in some cases, obliged to pay overtime) and at risk of losing institutional knowledge and technical expertise as older workers vanish.” NY Times. The system is being taxed, perhaps inevitably to the breaking point, and while all the attention is on Washington and the federal deficit, the problem at the state and municipal level is reaching “intolerable,” and local communities don’t have the federal government’s ability to “print money.”

“Still, even with lingering queasiness over jobs and the larger economy, there are other signs that the mood of public workers is turning toward retirement, a worrisome possibility for some already precarious, underfunded pension plans… In 2009, a survey of more than 400 state and local governments found that about 85 percent of public workers were postponing retirement (presumably because of the grave economy), while fewer than 9 percent were accelerating their retirement dates. This year, a similar survey by the Center for State and Local Government Excellence, a nonprofit research group, found 40 percent still delaying their retirements, with nearly a quarter speeding up their retirement dates.

“Already, the trend is apparent in places where lawmakers have made the clearest calls for decreasing workers’ benefits or increasing their contributions for health care insurance and pension plans. And in the last two years, 41 states have made significant changes to at least one of their retirement plans, the National Conference of State Legislatures found.” NY Times. Major cities like Harrisburg, Pennsylvania and Birmingham, Alabama have sought protection under federal bankruptcy laws, and while those actions are anything but clear, the harsh reality is that states and municipalities are running out of money with nowhere to turn. They most certainly are looking for relief from their retirement obligations.

What we are seeing around us is a big “reset” in the way we will be paid and how we will live. Those with benefit that were created and vested prior to the big reset are seen to have inherited a windfall that most taxpayers never envisioned. The answer lies not just in figuring out how to continue governmental retirement benefits, but on how to retrofit our entire society to survive through the downsizing we call our future.

I’m Peter Dekom, and I find myself squirming uncomfortably when I do the math.

“Airplanes Don’t Flap Their Wings”

When inventors mirror, expand and “improve” on inherent abilities in nature, the general trend is to create functioning machines that are quite different from their inspirational counterparts in nature. Imagine a computer that forgot stuff or got angry easily. And sitting in an aircraft with flapping wings would have to be a pretty uncomfortable journey. The above quote pretty much says it all, but sometimes, a “back to nature’s model” may be just their ticket in complex technology.

As the sum total of data seems to double every couple of days, the quest for the Holy Grail of computing seems to be taking three distinct tracks: smaller size for personal tasks, supercomputers for the biggest and most complex analytics and calculations and contained machines that teach themselves (learning computers) that don’t require the massive programming inherent in most such instruments. The latter is simply referred to as “artificial intelligence” and has obsessed science fiction writers for quite some time: Commander Data from one the Star Trek franchises and Steven Spielberg’s entire A.I. film are prime examples, although they seemed to explore the complexity of replicating human emotions. But such “human thinking” capacities have also obsessed scientists, whether combining robotic capacity or simply looking at computing power and functionality.

The computer that has infinite intelligence is not particularly containable, so computer engineers pursuing artificial intelligence have reverted to the fuzzy logic of human brains. They have long since realized that even with the tiniest microcircuits, computers that approach human functionality without the frailties of human thinking are simply too big, run too hot and consume too much power to be of much use in a smaller autonomous unit. “To meet the challenge, without gobbling the world’s energy supply, a different approach will be needed. And biology, scientists say, promises to contribute more than metaphors. ‘Every time we look at this, biology provides a clue as to how we should pursue the frontiers of computing,’ said John E. Kelly, the director of research at I.B.M.

Dr. Kelly points to Watson, the question-answering computer that can play ‘Jeopardy!’ and beat two human champions earlier this year. I.B.M.’s clever machine consumes 85,000 watts of electricity, while the human brain runs on just 20 watts. ‘Evolution figured this out,’ Dr. Kelly said.” New York Times, December 5^th. Working with a number of major universities and feeding off of government (Defense Dept.) funding, IBM “has developed prototype ‘neurosynaptic’ microprocessors, or chips that operate more like neurons and synapses than like conventional semiconductors.” NY Times.

“A brain does its computing with a design drastically different from today’s computers. Its processors — neurons — are, in computing terms, massively distributed; there are billions in a human brain. These neuron processors are wrapped in its data memory devices — synapses — so that the brain’s paths of communication are extremely efficient and diverse, through the neuron’s axons, which conduct electrical impulses.

“A machine that adopts that approach, Dr. [Dharmendra S. Modha, the I.B.M. computer scientist leading the project] said, would represent ‘a crucial shift away from von Neumann computing.’ He was referring to a design with processor and memory physically separated and connected by a narrow communications channel, or bus, and operating according to step-by-step sequential methods — the von Neumann architecture used in current computers, named after the mathematician John von Neumann…

“It is an appealing vision, but there are [still] formidable obstacles. The prototype chip has 256 neuron-like nodes, surrounded by more than 262,000 synaptic memory modules. That is impressive, until one considers that the human brain is estimated to house up to 100 billion neurons. In [I.B.M.’s San Jose-based] Almaden research lab, a computer running the chip has learned to play the primitive video game Pong, correctly moving an on-screen paddle to hit a bouncing cursor. It can also recognize numbers 1 through 10 written by a person on a digital pad — most of the time. But the project still has a long way to go” NY Times.

Given the rate that computing power has changed over the past few decades, I only wonder what will happen in this field when the big breakthrough skyrockets this technology to breathtaking levels. Meanwhile, anyone for a game of Pong? Can I have a beer with that?

I’m Peter Dekom, and looking at technology before it breaks through can be most amusing.

Arrested Development

A Brooklyn cop became concerned that NYPD policies where no longer serving the public interest. “To document his concerns, he began carrying around a digital sound recorder, secretly recording his colleagues and superiors… He recorded precinct roll calls. He recorded his precinct commander and other supervisors. He recorded street encounters. He recorded small talk and stationhouse banter. In all, he surreptitiously collected hundreds of hours of cops talking about their jobs.

“Made without the knowledge or approval of the NYPD, the tapes—made between June 1, 2008, and October 31, 2009, in the 81st Precinct in Bedford-Stuyvesant and obtained exclusively by the [Village] Voice—provide an unprecedented portrait of what it's like to work as a cop in this city… They reveal that precinct bosses threaten street cops if they don't make their quotas of arrests and stop-and-frisks, but also tell them not to take certain robbery reports in order to manipulate crime statistics. The tapes also refer to command officers calling crime victims directly to intimidate them about their complaints.

“As a result, the tapes show, the rank-and-file NYPD street cop experiences enormous pressure in a strange catch-22: He or she is expected to maintain high ‘activity’—including stop-and-frisks—but, paradoxically, to record fewer actual crimes.” VillageVoice.com, May 4, 2010. Bottom line: “[There’s] increasing evidence that the NYPD is paying less attention to violent crime... [C]urrent and former NYPD officers told the publication that supervising officers encouraged them to either downgrade or not even bother to file reports for assault, robbery and even sexual assault. The theory is that the department faces political pressure to produce statistics showing that violent crime continues to drop. Since then, other New Yorkers have told the Voice that they have been rebuffed by NYPD when trying to report a crime.” Huffington Post, November 21^st.

Indeed, in economically impaired times when municipalities are looking for new sources of revenue, cops tend to be ordered to do what generates the most money for the department, often in the form of federal grants and other rather direct support. So if the department wants to show a decline in violent crime, it’s just as easy to avoid investigating and reporting such incidents. And if the federal government is shoving money into cracking down on drug trafficking, it’s equally easy to reemphasize that aspect of criminal activity at the expense of everything else.

“Arresting people for assaults, beatings and robberies doesn't bring money back to police departments, but drug cases do in a couple of ways. First, police departments across the country compete for a pool of federal anti-drug grants. The more arrests and drug seizures a department can claim, the stronger its application for those grants….‘The availability of huge federal anti-drug grants incentivizes departments to pay for SWAT team armor and weapons, and leads our police officers to abandon real crime victims in our communities in favor of ratcheting up their drug arrest stats,’ said former Los Angeles Deputy Chief of Police Stephen Downing. Downing is now a member of Law Enforcement Against Prohibition, an advocacy group of cops and prosecutors who are calling for an end to the drug war.

“‘When our cops are focused on executing large-scale, constitutionally questionable raids at the slightest hint that a small-time pot dealer is at work, real police work preventing and investigating crimes like robberies and rapes falls by the wayside,’ Downing said.” Huffington Post.

As Mexico screams for help from the United States to stop the flow of illicit machine gun and other heavy weapons traffic from the US to Mexican drug cartels, the US does nothing to stop unlicensed gun dealers, operating perfectly legally in gun shows in states like Texas, from selling virtually unlimited supplies of automatic weapons to total strangers without the slightest background check or appropriate paper trail. “More than 70% of 29,284 firearms submitted to the U.S. Department of Alcohol, Tobacco, Firearms and Explosives for tracing by the Mexican government during 2009 and 2010 originated in the United States...” CNN, June 14^th. We are obsessed with drug trafficking, yet unwilling to contain the pressures from the National Rifle Associate to keep the uncontrolled flow of automatic weapons that inevitably reinforce the cartels’ rather powerful ability to flow narcotics into the United States.

This current system is a total and complete failure. Half the criminal activity in the US is linked to drug use, and one quarter of our actual convictions are directly related to drug trafficking. But the flow of narcotics into the United States continues without the slightest sign of abatement. We allow violent crime to go unpunished in order to deploy our police efforts towards illicit narcotics. It’s time to reinvent our approach to drugs. Tax them, control them and make them legal. Take the incentive out of trafficking drugs, and generate revenue for our economically impaired cities and counties. And let our police force protect us from the thugs and cheats who currently just laugh at our efforts to arrest them. Even if we do convict them, so many states and municipalities just give them token time in prison, because overcrowding necessitates a massive early release program all over the US.

I’m Peter Dekom, and when something hasn’t work for as long as our anti-drug program, it’s for a ground-up review.

The Eye in the Sky

Two American companies dominate the commercial satellite imagery business – Virginia-based GeoEye and Colorado-based DigiGlobe. DigiGlobe manages most of the work you see on Google Earth, but both companies are major providers to the U.S. government. The above image was taken of the recent Bangkok, Thailand floods, for example, by DigiGlobe. For those of us who have scoped out our home or neighborhood on Google Earth, the images only go so far… good to a point, but blurry when you get down to the last few meters of view. So, we assume, satellite images really aren’t particularly revealing or intrusive. Not exactly.

You see, in the United States, regulations prohibit civilian commercial sales of such imagery to the extent there is half a meter or better of ground resolution. But that doesn’t mean that vastly superior images aren’t available to those with licit access to the product, folks like police departments, the FBI and any number of government intelligence agencies. DigiGlobe currently has three satellites circling the earth that sample most of the planet up to six times a year.

But they are gearing up for a 2014 launch of a new satellite (“WorldView 3”), with improved optics and electronic resolution capacity. “The best images to make it out of the WorldView-3 will have a considerably better resolution than .5 meters. Once complete, the satellite will have an image resolution that ranges between .3 and .46 meters. Government regulations require images from the WorldView-2 and WorldView-3 to be resampled to a lower resolution before being offered to private customers… Intelligence services and the Defense Department will be able to use WorldView-3 for satellite imagery that is crisper and clearer than anything currently on the market. Instead of Google Earth's blurry (though admittedly cool) close-up imagery, government customers will have access to images that look like they jumped out of a science fiction movie.” FastCompany.com, November 29^th.

Whatever the technology, the privacy concerns from this capacity have generated protests and actions to attempt to limit what images can be shown and under what circumstances. While U.S. law tells us that there can be no expectation of privacy in public places, the ability of satellites to peak over fences and into private areas of personal residences is troubling. “[O]ne of Google's responses to concerns about privacy laws outside the United States has been a pledge to blur the faces of people who are filmed on Street View photos taken both inside, and outside the U.S. Google began blurring faces on May 13, 2008 and the images published since then, including the first launch of images in Europe on July 2, 2008, have all used face blurring (this process is automated; as a result even facial images on posters and billboards are often blurred).

“Google delayed the release of its Street Views of the Baltimore-Washington Metropolitan Area following concern expressed by the United States Department of Homeland Security that some of the images taken might be of security-sensitive areas... The Department of Defense has banned Google from publishing Street View content of U.S. Military bases and asked Google to remove existing content of bases. Google has complied with this order.” Wikipedia. Some nations want posted warnings when the cameras are operational and covering a particular area. The chorus demanding increasing limitations is rising in Europe, particularly Germany, such that Google may pull its Street View from the EU. As satellite mapping increases, nations with severe cultural and religious proscriptions – such in many parts of the Middle East – are quite concerned that such images would present private images in a public forum.

But even if Google withdraws its publication of such images, they are still there. Maybe some local voyeur might not have easy access to this capacity were such a ban to be enforced, but the government has more than enough imagery to make most of us wince. Throw in the private use of drones, and you have an ability to penetrate some of the most private areas of our lives, even allowing high resolution cameras to peer into unblocked windows (infrared sensors can reveal a bit more, even with curtains closed). How often do you wonder if someone is actually watching you? Are you paranoid or is it real?

I’m Peter Dekom, and the notion of living in a complex, modern society has certain elements that I find a touch unsettling.