The Basic Proposal

I'm establishing this blog to discuss just one concept:

The United States collects and can analyze all voice & electronic communications that pass through our country, a system called "PRISM", in an effort to prevent terrorism. Supposedly originating from a handful of fanatics living in caves, terrorism -- though it is a shocking and heinous crime -- kills fewer Americans than does lightning strikes. On the other hand -- as documented extensively by many reporters such as Matt Taibbi and Bill Moyers -- currency manipulation, front-running, insider trading, rate-fixing, public bid-rigging, and related types of financial fraud have stolen many scores of billions or likely hundreds of billions of dollars over the past ten years alone, from the pockets of nearly every single citizen in the First World, on a daily basis, still ongoing. Yet nobody seems to think we can do anything about that.

Wouldn't the eavesdropping technology be a good match for the crime of sophisticated financial fraud?

I propose that the US Government, presumably through an Act of Congress, order the NSA, who runs the PRISM system, to share its database and its analysis capability with financial law enforcement agencies, such as the SEC, FinCEN, national and local Consumer Protection agencies, even FERC and the FEC, including regional or local law enforcement such as State Attorney Generals, for the express purpose of combating inter-State and international finance collusion, bid-rigging, market manipulation, energy price-gouging, election rigging, and similar crimes.

Please bring this proposal to the attention of your Federal representatives, senators, your neighbors, and the media voices you listen to.

Reasons Why

Here are some reasons why I believe this proposal is important, appropriate, and why it would help improve our country. Here are some answers to some common objections I anticipate.

* The reason PRISM scoops up all US communications, they say, is simply because the majority of world communications pass through our computers even when sent between people outside the US. This is certainly true of financial communications.

* The reason PRISM proponents say that the eavesdropping overrides privacy concerns, such as the 4th Amendment, is because terrorism costs lives, threatens the security and stability of entire countries, and is one of the most illegal activities on the planet. Even though many sophisticated financial frauds exist in legal gray areas... rate-fixing, bid-rigging, and many similar practices are also blatantly illegal. And as their damage piles up to tens of billions of dollars in the middle of a worldwide recession, surely these activities are also a clear and present threat to the security and stability of communities, industries, and even entire countries, including our own. Arguably this threat is even more important than the threat of terrorism, which while heinous and shocking, is far more rare. Fraudulent financial communication over electronic networks occurs virtually every hour of every single day.

About This Proposal -- and What Do I Think Will Happen

I don't believe it is constitutional for the US government to be engaging in massive surveillance of its citizens. But most people seem to agree that the government is going to do this no matter what, and many people argue it's necessary for American safety. If it must be done, then, let's apply it equally. As I imply elsewhere, what's good for the goose is good for the gander. If all 300 million of us Americans' private communications need to be monitored in order to protect our personal safety against a threat that is about as common as shark attacks, then it seems only fair and appropriate that our financial apparatchiks' communications should all be monitored too. In order to prevent a clear and present crime that is not only picking people's pockets directly, as well as depleting the budgets of our States and Cities and major retirement funds, but also sapping tens of billions of dollars from the world economy in a time of incredibly severe economic downturn.

I suspect our politicians and our financial elite share a common belief: that surveillance is for the "little people", that they themselves are above the law and above reproach. I don't believe the financial elites will want this high-tech scrutiny turned upon them, and I believe the financial elites have the power to make sure it doesn't happen.

So if we manage to insert this concept into the public political discussion -- and if we are successful to the point where perhaps some Senators start drafting legislation that would bring this about... it's going to be fun to watch...

Latest Evidence, #1 in a series

Matt Taibbi's reports, "Everything Is Rigged", will obviously figure prominently on this blog. Matt isn't the only reporter covering this beat, but he aggregates everything conveniently. Scratch the surface of how our finances are handled by major players, mainly by private mega-banks like Goldman Sachs, but also including government agencies such as the Federal Reserve and Fannie Mae, and you quickly realize that the scale of the financial fraud that occurs every hour dwarfs the economy of some entire First World countries.

"Everything Is Rigged, Vol. 9,173: This Time It's Currencies"

Traders at some of the world's biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice... Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said the current and former traders, who requested anonymity because the practice is controversial. Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years. The $4.7-trillion-a-day currency market, the biggest in the financial system, is one of the least regulated. The inherent conflict banks face between executing client orders and profiting from their own trades is exacerbated because most currency trading takes place away from exchanges.

One after another, it's the same thing: Insiders rigging benchmark rates, shaving money from basically everyone on earth, systematically and over periods of many years. It's the ultimate taxation-without-representation story...

Do Two Wrongs Make a Right??

I've read several people telling me that this campaign is pointless, and more recently I've read several people telling me that my proposal is immoral because it essentially is adding another wrong to the wrong already being committed. If we truly respect the 4th Amendment, people say, we can't in good conscience propose that we break the 4th Amendment, even if targeted against our political "enemies", in this case, the bankers and financiers committing illegal acts that threaten our entire nation.

Obviously, I disagree with this reasoning, so this is my soapbox to explain why.

In brief: The government is already promulgating the abuse, and my argument revolves around the fact that this abuse is one-sided. Proposing to share the abuse against those in power is, I believe, rectifying the abuse, not adding further abuse.

Recall, the government is already collecting, monitoring, and analyzing the financial data in question. I am not proposing to further the abuse by collecting new data -- nobody is -- that would not be possible, because the government is collecting all existing data. What we are talking about is a different abuse or crime: that of selective law enforcement.

If you acquiesce to selective law enforcement without any protest, you are laying the foundation for the establishment of tyranny. The NSA can get dirt on us, but _we_ can't get dirt on the powerful. In that situation, we are establishing a protected, privileged class who is not accountable. As the Founding Fathers knew, that is a recipe for tyranny of a few connected, privileged elites.

Spying: the Drunk Says The Light Is Better Over Here

It bears consideration to think about the day-to-day operations when people decide what to look for, amid the mountains of eavesdropped conversations collected by PRISM and other local or corporate surveillance operations.

When you consider the deadliest terror attacks, in terms of taking lives, in recent history -- from 9/11 to the Boston Bombings, from the Anthrax letters to Timothy McVeigh to the Spanish train bombings... they were generally perpetrated by a few individuals, at most small rogue groups, operating within a relatively small network. They didn't smear their plans all over communications systems. They relied on their own systems and networks, their own resources, because they already knew the US and other Western countries were pretty good at monitoring transactions within their own systems. So by traditional wiretapping methods, that made them hard to catch, and that was their plan. The surveillance authorities' response was, we have to Hoover up ever more information in order to catch the tiniest rarified interactions that these dangerous people have with the rest of our bigger System.

A much easier and more tempting target for eavesdropping authorities is, of course, the large networks of political dissenters working within the system. According to the logic of bureaucracy, well, it's difficult and expensive to try and ferret out these Black Swan threats like terrorists that come from nowhere. So we can show our paymasters much better results if we spy on publicly known organizations that our paymasters don't happen to like, e.g., political protesters. According to this chain of logic, if YOU contribute a few bucks to the Sierra Club every month, that means you're ecologically minded, which means there's a small chance you may have some connection to the Earth-First! people who burn SUV's in dealerships at night and set fire to unfinished apartment complexes. And then from those crimes, somehow we move from there to assuming there's a connection to political terror bombings that actually take lives. So therefore, because the real bomb-throwing political terrorists are hard to find, we can "show results" and "get promoted" if we monitor a lot of normal, peaceful citizens who might have some convoluted connections to a disfavored ideology. By the twisted logic of economics and statistics, if we just monitor a few hundred million Sierra Club fans, we're more likely to hit upon an actual terrorist, than by doing police work. Or at least, the electronic monitoring _costs_ less money, so let's go for it.

As you can guess, this logic ends up being pretty much equivalent to that old joke about the drunkard looking for his lost keys under a lamp-post. He probably dropped them over in the darkness by his car, but he's searching under the lamp-post because "The light is better over here". These wiretapping authorities keep expecting the next big terror attacks to emanate from Greenpeace or, to be fair to the other side of the aisle, they expect geriatric Tea Partiers to jump up off their Rascal scooters and bomb a Federal building. To the credit of both organizations, Greenpeace and the Tea Partiers keep disappointing the eavesdroppers.

So it makes you wonder, when the government says "PRISM has averted 50 terrorist attacks this year," how many of those supposed terror plots actually rose much above the level of environmentalists slashing SUV tires or Tea Partiers super-gluing the doors to an IRS building.

I've already touched-on, briefly, the fact that PRISM, gigantic as it is, is only a part of an even more massive data-gathering plan -- what else should I call it? A "culture" on the part of large agencies? A "movement"? A "lifestyle"?? -- where everyone from your local police to your ISP to your grocery store, seeks to amass your data and communications. And even if we believe the Federal Government when it swears it's only using your eavesdropped data for purposes of combating terrorism, the other agencies -- including your local police department -- may not be so nobly motivated.

Boston Police Accused of Spying on Protesters and Intimidating Dissidents

Latest Evidence, #3 in a series

In this post I'm straying away from the evidence about the financial crimes -- the financial crimes including insider trading, front-running, currency manipulation, bid-rigging etc. being the reason for the proposal, so I'm straying from my original purpose.

But I'm bringing these things into the discussion because there is an equality aspect, which I will focus on in another post today.

With these articles, I am attempting to show that the PRISM surveillance operation is intrusive on people's lives, even if they think of themselves as not committing crimes. Now there is a special type of inequality involved here. When a government performs pretty much universal surveillance, and can keep all the data on every single citizen in storage indefinitely -- this has just been a sci-fi dystopian fantasy in the past, until now, until PRISM. But the implications of the inequality aspects have been thought out, as I mentioned in that book review post at the bottom of the list.

When all our data is collected and stored indefinitely, a future government can search back through it and begin causing problems for people based on things people had no idea would run them afoul of the government at the time they did them. Heck, even with present laws, this can happen.

Wired: Why ‘I Have Nothing to Hide’ Is the Wrong Way to Think About Surveillance

Satire: About ready to destroy the world again [ONION]

There are often cases where people quote the satirical newspaper, "The Onion", by mistake, thinking The Onion is fact -- because it's so damn close to reality. With that in mind, I feel I should label this post clearly as satire.

"Financial Sector Thinks It's About Ready To Ruin World Again"

Representatives from all major banking and investment institutions cited recent increases in consumer spending, rebounding home prices, and a stabilizing unemployment rate as confirmation that the time had once again come to inflict another round of catastrophic financial losses on individuals and businesses worldwide.

“It’s been about five or six years since we last crippled every major market on the planet, so it seems like the time is right for us to get back out there and start ruining the lives of billions of people again,” said Goldman Sachs CEO Lloyd Blankfein.

“Plus, it’ll be nice to finally wipe out the Euro once and for all this time,” Gorman added.

Latest Evidence, #2a in a series

Back to the Taibbi again...

Remember that "climategate" furor a few years ago, where somebody leaked 50,000 e-mails from a British climate science center, and out of the 50,000 e-mails they found about three or four showing that graphs on public presentations (not the data, just the presentations) had been fudged? For clarity of presentation, not for pay or whatnot? Well it turns out the financial ratings agencies, in a far more widespread manner, have been fabricating the actual ratings on your retirement investments, out of whole cloth. In exchange for pay. Will these scandals receive the same outrage as the "climategate" revelations?

"The Last Mystery of the Financial Crisis"

In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.
"Lord help our f*cking scam ... this has to be the stupidest place I have worked at," writes one Standard & Poor's executive. "As you know, I had difficulties explaining 'HOW' we got to those numbers since there is no science behind it," confesses a high-ranking S&P analyst. "If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value," complains another senior S&P man. "Let's hope we are all wealthy and retired by the time this house of card[s] falters," ruminates one more.

Latest Evidence, #2 in a series

I bet you know people, at least friends-of-your-friends, who were foreclosed upon in a very rushed manner, who were in the middle of negotiations and trying to comply with their banks, but their own paperwork was going slow as molasses. That scenario happened to two of my best friends. The banks in the past few years have had perverse financial incentives such that they could pick up expensive real estate for pennies on the dollar just by rushing through foreclosures and throwing a few people out on the street. So, guess what? That's what the banks made to happen. By hook or by crook.

"We Were Told To Lie" -- Bank of America Employees Open Up about Foreclosure Practices

Employees of Bank of America say they were encouraged to lie to customers and were even rewarded for foreclosing on homes, staffers of the financial giant claim in new court documents. Sworn statements from several Bank of America employees contain a number of damning allegations, the latest claims entered as evidence in a multi-state class action lawsuit that challenges the bank’s history with foreclosures.
In one of the sworn statements, an ex-bank staffer said he would be directed to deny upwards of 1,500 loan modification applications at a single time with no apparent reason. “To justify the denials, employees produced fictitious reasons, for instance saying the homeowner had not sent in the required documents, when in actuality, they had,” William Wilson, Jr., a former underwriter for the bank, wrote in his statement.
Simone Gordon, a senior collector at B of A from 2007 through 2012, said, “We were told to lie to customers and claim that Bank of America had not received documents it had requested.

Multimedia -- Satire, "NSA Data Backup"

Just to lighten the tone a little, here's a brief two-minute spoof ad about the NSA and the PRISM program:



The above satire is a portion of the current episode of the "Extra-Environmentalist" podcast, a fascinating news analysis podcast focused on understanding the collapse of the current American culture from an outsider's point of view. Even though its producers and many listeners are Americans, we still think that trying to step outside of the current culture is key to understanding it.

Multimedia: Why The Distinction Between Collected And Analyzed Is Useless

To address one comment that many, including President Obama, have made about PRISM: They say that the PRISM system is not an unreasonable, widespread search and seizure of communications because it is only a computer that collects and aggregates the communications, and no NSA human employee listens to the conversations until such time as they have reason to believe the conversation is connected to terrorism.

"Nobody is listening to your phone conversations right now," the President said, in so many words.

I believe this is a distinction without a difference. No person is on your phone line tapping your conversations right now, but thirty seconds from now, somebody can order it up for whatever reason they can get past the bureaucrats. Or 10 seconds from now. Or 5 seconds from now.

Good science-fiction always attempts to address present concerns by cloaking them in a disguise about a compelling problem in some imagined future world. One thing science-fiction has taught us is, when it comes to digital surveillance, the past begins a fraction of a second ago. If you can store up complete and accurate records of the past, and call them to your ears or fingertips at any moment, that's effectively the same as if you are eavesdropping all the time. Because the "past" begins a fraction of an instant ago, as far as computers are concerned. There isn't any scenario in the real world where it makes a difference, between storing all records of the "past" starting a half a second ago and making them instantly available, versus sitting on the phone line in real time. There is no difference versus having somebody eavesdropping on your conversation right now since he could just as well be doing it a half a second from now.

That's one of the topics the following book review discusses: