Tells the Facts and Names the Names

April 1-15, 2010                Alexander Cockburn and Jeffrey St. Clair                                             vol. 17, no. 7

Hard Times for the Many                         The Cloud Panopticon
The Masters                                     Google, Cloud Computing
of Spin                                         and the Surveillance-
By Carl Ginsburg
                                                Industrial Complex
    t is, to say the least, a formidable
    challenge for the Masters of Spin
    running this country: how to take a
                                                By Christopher Ketcham and Travis Kelly

nation with enormous wealth and cast                 n June 2007, Privacy International,       cies, says Bankston, “drool with antici-
it as a place where recession, though                a U.K.-based privacy rights watch-        pation.” And drooling they are. Stephen
technically departed the scene, contin-              dog, cited Google as the worst pri-       Arnold, an IT expert who formerly
ues to cast a shadow, leaving millions in       vacy offender among 23 online compa-           worked at the defense and intelligence
poverty for years to come?  How to see          nies, ranking the “Don’t Be Evil” people       contractor Booz Allen Hamilton Inc.
announced a $25 billion purse for top           below Microsoft, Apple, Amazon, eBay,          and who once consulted for Google, ad-
hedge fund managers in 2009 and simul-          LinkedIn, Facebook and AOL. According          dressed this in a speech before a confer-
taneously dispatch a Treasury secretary         to the report, no other company was            ence of current and former intelligence
to explain that “unemployment will stay         “coming close to achieving [Google’s]          officials in Washington, D.C., in January
unacceptably high for a long period of          status as an endemic threat to privacy.”       2006. According to an audio recording in
time” on the Today show? How to fash-           What most disturbed the authors was            our possession, he reported Google was
ion a quote from President Obama, “We           Google’s “increasing ability to deep-drill     increasingly sought out by the U.S. in-
are beginning to turn the corner,” for the      into the minutiae of a user’s life and         telligence services because click-stream
nation’s lead news stories on Friday, April     lifestyle choices.” The result: “the most      data – and everything else Google ar-
2, while booking Christina Romer, chair         onerous privacy environment on the             chives – “is a tremendous opportunity
of the White House Council of Economic          Internet.” Indeed, Google now controls         for the intelligence community.” Google,
Advisers, on NPR’s All Things Considered        an estimated 70 per cent of the online         he said, “has figured out everything there
the same day to tell listeners that “9.7 is a   search engine market, but its deep-drill-      is to know about data-collection.” The re-
terrible number … our forecast is for the       ing of user information – where we surf,       lationship with the government had be-
unemployment rate to stay pretty high           whom we e-mail, what blogs we post,            come intimate enough, Arnold said, that
through this year”? Indeed, how to con-         what pictures we share, what maps we           at least three officers from “an unnamed
vince the people that jobs are the number       look at, what news we read – extends far       intelligence agency” had been posted at
one national priority when plainly they         beyond the search feature to encompass         Google’s headquarters in Mountain View,
are not?                                        the kind of “total information awareness”      Calif. What they are doing there, Arnold
   To follow the Masters of Spin is truly       that privacy activists feared at the hands     did not reveal.
dizzying.  Under a headline containing          of the Bush Jr. administration’s much-            “We don’t comment on rumor or
the words, “Payrolls Surged in March,”          maligned Total Information Awareness           speculation,” said Google spokesperson
the New York Times lead item on April           program.                                       Christine Chen. When asked separately
2 cited these numbers in calling 162,000           Kevin Bankston, a privacy expert            how many former intelligence agency
jobs a “surge,” when most everything had        and attorney at the Electronic Frontier        officials work at Google, she responded,
the word “temp” next to it – temp jobs,         Foundation, a nonprofit advocacy group         “We don’t release personnel information.”
temp census takers, etc. – and while not        engaged in questions of privacy, free             The conference, under the aegis of the
informing readers that at least 100,000         speech, and intellectual property in the       Open Source Solutions Network, was
jobs a month are needed to keep pace            digital age, warns of the possibilities. “In   hosted and organized by Robert David
with U.S. population growth. Do the             all of human history,” he says, “few if any    Steele, a former Central Intelligence
math: a surge it is not.                        single entities, other than the National       Agency officer who left the agency 20
   Undaunted by paltry job numbers, the         Security Agency, have ever possessed           years ago and is now the founder and
Times characterized the temporary cen-          such a hoard of sensitive data about so        CEO of Open Source Solutions Network
sus job workers this way: “To them, a job       many people.” This is the sort of thing        Inc., otherwise known as OSS.Net, an
is a job, a closed hole in their resumes        that should make the intelligence agen-        educational corporation that has worked
Ginsburg continued on page 6                                                                   Ketcham/Kelly cont. on page 2
april 1-15, 2010

with more than 50 governments to “ad-         Google toolbar, the company can watch        priest.” Think about your most recent
vance the use of open source intelli-         the amount of time you surf a website        queries, say, about your “anal warts” or
gence.” Steele considered Arnold’s item       – the three minutes or three hours you       “inability to love in marriage,” or “self-ha-
to be a bombshell. U.S. intel was now         spend on every page of that website.         tred,” or your interest in the mechanics of
seated in the heart of the “Googleplex,”      With Google’s acquisition of YouTube         “making a pipe bomb.” The search box is
learning all it could from the masters in     in 2006, viewing habits can be tracked.      as good a place as any to understand how
the private sector. Among Google’s crit-      Google’s FriendConnect and Orkut ar-         the Googleplex keeps tabs on its users.
ics, Steele who, since leaving the CIA,       chive your social networks. Google           When you do a search, “cookies” installed
has spent 20 years promoting the digi-        News, Books, Feedburner or Blogger           on your computer record your IP address
tal commons, is about as fierce as they       log your reading habits. The writing         (a series of unique numbers that may
come. “Google would have been an abso-        you produce is stored on Google Docs,        be used to identify your computer), so
lutely precious gift to humanity,” he says.   and your purchase habits and credit          Google can, in many contexts, identify a
“But Google is positioning itself to take     card numbers are captured by Google          user. And it can do so with any of its ap-
over the digital commons. I personally        Checkout. Also gathered are voiceprint       plications.
have resolved that unless Google comes        and call habits, through Google Voice;          All this, one would think, ceases once
clean with the public, the company is         travel interests, patterns and place asso-   your PC is shut down and you leave
now evil.” The question today is whether                                                   home. However, Google released a “geo-
Google, in fact, will be forced to change     One of the big prob-                         location” application in 2008, Gears
its ways – and whether Congress and the                                                    Geolocation API, that can “obtain the
intelligence agencies want it to.
                                              lems with the Cloud,                         user’s current position,” “watch the user’s
   Google’s powers of data-collection de-     and the danger it pres-                      position as it changes over time,” and
pend on consumer choice – how much                                                         “quickly and cheaply obtain the user’s last
of your computing you put in Google’s
                                              ents, is that the Fourth                     known position.” According to a Google
hands. The more you choose Google             Amendment’s protec-                          tech blog, the Gears application “can
applications, the more Google can                                                          determine your location using nearby
know about you. At the extreme end of
                                              tions against search                         cell-towers or GPS for your mobile de-
the spectrum, your every move can be          and seizure do not                           vice or your computer’s IP address for
tracked by some feature of Google. When                                                    your laptop.” A 2006 Technology Review
you use the Google search box, as tens of     apply. The caveats are                       article reports that Google’s director of
millions of people do daily (with Google      buried deep in the text                      research, Peter Norvig, even proposed
handling roughly 11,000 searches per                                                       the use of built-in microphones on PCs
second), the company can track all your       that users usually skip                      to identify television shows playing in
search queries and the websites you visit     over and click “I agree.”                    the room, in order to display related ad-
as a result of those queries. If you use                                                   vertising. Such data, it seems, could be
                                              ciations, through Google Maps, Google        processed as an audio fingerprint, which
                                              Earth and Google StreetView; medical         might aid in geolocation and profiling of
                                              conditions, medical history and prescrip-    users. (“Google had no plans to develop
                   EDITORS                    tion drug use, through Google Health;        this,” Google spokesperson Christine
      Alexander Cockburn                      photos of friends and family, through        Chen responded by e-mail. “And we
                                              Google’s Picassa images; and general ac-     haven’t.”)
        Jeffrey St. Clair
                                              tivities, through Google Calendar. Then,        Google’s data-mining interests go even
           ASSISTANT EDITOR                   there’s Google Desktop, which, at one        deeper, to the core of our physical and
            Alevtina Rea                      point, offered what appeared to be an        mental being. Google co-founder Sergey
                                              innocuous feature called “Search Across      Brin and his biotech specialist wife, Anne
                                              Computers.” This allowed Google to scan      Wojcicki, according to The Economist,
            Becky Grant                       your computer to archive copies of text      have “brainstormed” with at least one
           Deva Wheeler                       documents. In other words, just about        prominent human genome researcher
                                              everything on your PC – love letters, tax    and approach genetics as a “database and
          Tiffany Wardle                      returns, business records, bad poetry –      computing problem.” This would tie in
                                              was duplicated on a remote Google serv-      nicely with Google Health, launched in
               COUNSELOR                      er. (This function was discontinued on all   2008 to take advantage of the growing
          Ben Sonnenberg                      platforms in January of this year.)          trend of storing health records online, for
                                                 Taken alone, the Google search box is     easier access among diverse health care
                                              an exquisitely intimate repository of user   providers. Google has invested $3.9 mil-
                PO Box 228
                                              information. “People treat the search box    lion in Wojcicki’s biotech firm, 23andMe,
            Petrolia, CA 95558                like their most trusted advisors,” says      whose “mission is to be the world’s trust-
             1-800-840-3683                   Kevin Bankston, the Electronic Frontier      ed source of personal genetic informa-            Foundation (EFF) attorney. “They tell the    tion,” and which offers a basket of genetic                 Google search box what they wouldn’t         tests to allow its customers to uncover
            All rights reserved.              tell their own mother, spouse, shrink or     ancestry, disease risks, and drug respons-

                                                                                                                      april 1-15, 2010

es. Speaking before a Google “Zeitgeist”      a look at this,” said Poulsen. Bankston       are appealing. You get software that is
conference in 2008, Brin revealed that he     was not pleased. “At the time,” he says, “I   mostly free or relatively cheap; automatic
carried a Parkinson’s gene and then advo-     had represented to my family and other        upgrades; data backed up on redundant
cated the recording of individual genetic     people that I had cut down on my smok-        remote servers, thus crash proof (unless,
codes to enhance health maintenance           ing and even stopped smoking.” When           of course, Google crashes); accessibility
and medical research. Taken to its logi-      Bankston emailed Google requesting to         from any computer or wireless device;
cal conclusion, this suggests the prospect    have his face blurred, the spokesperson       and there’s less strain on your desktop
of your body’s blueprint registered with      from the legal department told him he         or laptop as most of the computation is
an eventual “Google Genome,” perhaps          needed to fax in his driver’s license and     handled by remote processors and data
with the help of the databases gathered at    a sworn statement to prove his iden-          drives. Greasing the transition to the
23andMe. To drill further into the mind,      tity. “I had to give up my privacy,” says     cloud, a new wave of inexpensive hard-
Google has teamed up with marketing           Bankston, “to protect my privacy.” Finally,   ware – compact Netbooks specifically
giant WPP to fund $4.6 million for re-        after a week of prodding – and a pair of      designed to configure with the cloud – is
search into online advertising, including                                                   capturing a growing share of the PC mar-
one grant in the emerging field of “neuro-    To drill further into                         ket. Most ship with Windows, but, in a
marketing”: tracking everything from on-                                                    direct challenge to Microsoft, Google has
line navigation behavior to biofeedback       the mind, Google has                          announced the development of its own
metrics like heart rate, eye movement         teamed up with mar-                           operating system, Chrome, to work more
and brain wave activity in response to                                                      efficiently with its Chrome browser, both
advertising stimuli. Google’s Chen points     keting giant WPP to                           optimized for connecting online.
out that the results of this research will    fund $4.6 million for                            But one of the big problems with the
be available to industry as a whole and                                                     cloud, and the danger it presents, is
that “Google has no special right over,       research into online                          that the Fourth Amendment’s protec-
nor plans to use, any of the research         advertising, including                        tions against search and seizure do not
funded by these grants.”                                                                    apply. The caveats are buried deep in
   From Google’s standpoint, market-          one grant in the emerg-                       the text that users usually skip over, and
ing – not surveillance – is the purpose of    ing field of “neuromar-                       click “I agree,” to install a new applica-
the informational harvest, as advertising                                                   tion. But the consequences are huge, says
generates most of Google’s $23 billion in     keting”: tracking ev-                         Bankston. “When private data is held by
annual revenue. The company is driving        erything, from online                         a third party like Google, the Supreme
the evolution of the behavioral advertis-                                                   Court has ruled that you ‘assume the
ing model: more personal information          navigation behavior to                        risk’ of disclosure of that data.” When you
gathered on consumers means more ef-          biofeedback metrics.                          store e-mail at Gmail – or, similarly, in
fectively targeted ads, thus higher ad                                                      the cloud at Yahoo or Hotmail – “you lose
rates and profits. (Gmail users often note    articles in Wired – Google removed the        your constitutional protections immedi-
how advertising, directly related to the      photos that showed Bankston puffing           ately.” To search and seize the informa-
subject matter of recently sent mails or      away on 19th Street. In the summer of         tion on your desktop, a law enforcement
searches, pops up on their browsers.) The     2008, Google instituted face-blurring for     or intelligence agency requires a warrant
unsurprising offshoot of the behavioral       all its StreetView shots.                     or grand jury subpoena, after demon-
advertising model is political advertising,      But what most concerned Bankston as        strating probable cause before a judge or
a new market being pursued by Google’s        a privacy lawyer was that he had no clear     magistrate; or an order from the Foreign
Elections and Issue Advocacy Team in          legal protections against Google. “In legal   Intelligence Surveillance Court (autho-
Washington, D.C. Campaigning online           terms, Google is in the Wild West,” says      rized by FISA); or a National Security
has become as important as dominating         Bankston. “The law hasn’t kept up.” The       Letter issued by the FBI, Department of
the broadcast networks for candidates         reason for the lag is due to the revolution   Defense or CIA. But to obtain that same
and advocacy groups, and this will re-        in how Google stores information.             information stored on Google’s servers,
quire broader profiling of political behav-      Google has developed into a soft-          there is a shortcut: Google, like a telecom
ior – an area of compelling interest for      ware provider rivaling Microsoft, with        provider, may supply the information
the intelligence agencies.                    this major distinction: almost all Google     voluntarily as long as the government
   EFF attorney Bankston had his own          software is server-side, residing on mas-     can argue the information is needed as
personal run-in with the company in           sive Google computer banks, not your          part of an “emergency.”
2007. He was walking outside his office       local PC, which means they own the               “Your data is less legally protected
on 19th Street in San Francisco, when         content, not you. This is the paradigm        in the cloud,” says Bankston. “That’s a
one of Google’s StreetView photogra-          shift of “cloud computing,” and the at-       big issue when you have companies like
phy crews – who gather surreptitious          mospheric analogy is apt. Information         Google that are soliciting more and more
pictures of practically every street in the   evaporates from your desktop or laptop        data into the cloud.” Take, for example,
world – caught him smoking a cigarette.       and condenses in the “cloud,” held there      those records cached at Google Health:
Wired magazine editor Kevin Poulsen           for whenever and wherever the user            The Health Insurance Portability and
tracked down Bankston at a Silicon Alley      wants it to rain down. For the customer,      Accountability Act protects the privacy
party, and pulled out his laptop. “Take       the advantages over desktop computing         of medical records stored with health

april 1-15, 2010

care providers and insurance companies          users across the Intelligence and Defense    munity,” says Soghoian, “who knows how
– but the law does not apply to the pri-        Communities.”                                they work, and maybe is sympathetic to
vacy of those records stored with third            In turn, Google has sold versions of      their cause. Google doesn’t put former
parties. Or, take Bankston’s smoking epi-       its technology, especially Google Earth,     ACLU lawyers in charge of its compli-
sode: Bankston had no recourse against          to many U.S. agencies, including the U.S.    ance team.” According to Google’s Chen,
public exposure. Google removed the             Coast Guard, National Oceanographic          such numbers are not publicly available.
photos simply as a sop to an outspoken          and Atmospheric Administration,              “Obviously, we follow the law like any
privacy activist who made an outcry in          National Highway Traffic Safety              other company,” she says. “When we
the media.                                      Administration, the state of Alabama,        receive a subpoena or court order, we
    As for search queries, we have no           and Washington, D.C. For the CIA,            check to see if it meets both the letter
idea how the law applies. Presumably,           Google provided servers to support           and the spirit of the law before comply-
the stipulations of the Electronic              Intellipedia, a Wikipedia-like intranet      ing. And if it doesn’t, we can object or ask
Communications Privacy Act of 1986              for sharing intelligence. For the NSA, it    that the request is narrowed.” She points
would come into play. The ECPA man-             supplied four “search appliances” and        out that, in 2006, Google went to court
dates different standards for privacy of        a maintenance contract, according to a       to fight a Department of Justice subpoe-
information stored with a third party,          FOIA investigation by the San Francisco      na for millions of search queries on the
depending on how old the information            Chronicle in 2008. (When asked about         grounds that it invaded user privacy. The
is. “But this has never been litigated,” says   whether Google had supplied any other        judge ruled in Google’s favor.
Bankston. “I think it’s very important for      products or services to the National            Soghoian, however, suggests a per-
Congress to amend this 23-year-old law,         Security Agency or other intelligence        verse incentive for cooperation: by law,
so that’s it clear how it applies. To the ex-   agencies, Google’s Christine Chen wrote      Google and the telecoms must be com-
tent that the law is uncertain, it benefits     by email, “We don’t comment on any           pensated for their time and effort. Thus,
the government.”                                discussions we may or may not have had       the feeding of information to spooks and
    Certainly, the government has a variety     with any national intelligence agency.”)     cops can become a profitable enterprise.
of means for getting at Google’s data, but,        According to Christopher Soghoian,           Google also works with some of the
again, this is shrouded in the unknown:         a former CNet blogger and a doctoral         top players in the surveillance indus-
the processing of national security let-        candidate studying privacy and comput-       try, notably Lockheed Martin and SRA
ters, for example, is entirely conducted in     ing at the University of Indiana who has     International. SRA is listed as a Google
secret, with gag orders on all parties in-      researched Google, the intelligence ser-     “enterprise partner” – more than a
volved. In other words, the determinant         vices would be particularly interested in    hundred such partners are listed on
of your privacy is what Google and the          Google’s “backdoor” programs for sur-        the Google website. Both companies,
government decide behind closed doors.          veillance. Soghoian notes that Google        Lockheed and SRA, have engineered and
“The threat is real that the government is      applications launch without telling users    sold data-mining software to the intelli-
accessing more Google information than          that the processing and data storage is      gence agencies. SRA’s NetOwl program,
it should,” says Bankston. The company’s        conducted on remote servers, as long         for example, has been described by a
privacy policy is not exactly reassuring:       as an Internet connection is maintained      blogger at Pennsylvania State University,
“In some cases, we may process personal         — easy enough, given the ubiquity of         who watched the application in action at
information on behalf of and according          wireless broadband. Even with no con-        a corporate recruiter forum, as “search-
to the instructions of a third party, such      nection, software such as Google’s Gears     ing all kinds of documents using Google
as our advertising partners … We restrict       enable “offline” access to the cloud, run-   for a certain person.” In response to our
access to personal information to Google        ning applications and storing data on a      inquiries for further information on these
employees, contractors and agents who           PC (again, no cost, no fuss) until a con-    programs and how they might have been
need to know that information in order          nection is re-established and the new        developed in cooperation with Google, a
to operate, develop or improve our ser-         data can be uploaded to Google. Thus         Lockheed Martin spokesperson told us,
vices.”                                         the naive user transmits information         “The work we do with Google is exclu-
    Google’s links with the intelligence        to a third-party unwittingly – a modus       sively related to their Google Earth sys-
agency may stretch back to 2004. In 1999,       operandi close to the definition of covert   tem.” SRA International’s vice president
the CIA founded an IT venture capital           surveillance.                                for public affairs, Sheila Blackwell, states,
firm called In-Q-Tel to research and in-           Soghoian notes that Google likely re-     “We don’t discuss the specifics of our in-
vest in new digital technologies focused        ceives thousands of subpoenas and war-       telligence clients’ business.”
on intelligence gathering. An In-Q-Tel-         rants every year from government agen-          Former CIA officer Robert Steele says
funded company, Keyhole, Inc., devel-           cies demanding information (AOL gets         that the CIA’s Office of Research and
oped the satellite mapping technology           approximately 1,000 requests a month         Development had, at one point, pro-
that would be acquired in 2004 to be-           related to civil and criminal cases), and    vided funding for Google. According to
come Google Earth. In-Q-Tel’s former            it has hired former DOJ officials and U.S.   its literature, ORD has a charter to push
director of technology assessment, Rob          intelligence officers as corporate legal     beyond the state of the art, developing
Painter, joined Google as a senior man-         compliance officers handling the traf-       and applying technologies and equip-
ager of Google Federal, his focus the           fic. “The government gets somebody on        ment more advanced than anything
“evangelizing and implementing [of ]            the other end of the line who’s from the     commercially available, including com-
Google Enterprise solutions for a host of       intelligence or law enforcement com-         munications, sensors, semi-conductors,

                                                                                                                        april 1-15, 2010

high-speed computing, artificial intel-        in other words, privacy is a threat to the     complex and the security surveillance
ligence, image recognition and database        economy.                                       complex have many common interests
management. Steele says that Google’s             Google has also managed to install          and methods: the ad gurus’ neuromar-
liaison at the ORD is Dr. Rick Steinheiser,    favorites in the White House. Andrew           keting research complemented by the
a counterterrorism data-mining expert          McLaughlin, formerly chief of Google’s         intel agencies’ longstanding research
and a long-time CIA analyst. (No CIA           Global Public Policy and Government            into mind control, from the CIA’s MK-
response about Steinheiser’s work was          Affairs division while also serving as as-     ULTRA to the NSA’s current “cognitive
forthcoming.)                                  sistant treasurer for Google’s NetPAC          neuroscience research”; the profiling of
   Then, there are the intelligence of-        lobby, has been appointed as Obama’s           political behavior for campaign advertis-
ficials allegedly working at Google’s          deputy chief technology officer for            ing complemented by the DHS’s elastic
Mountain View headquarters. When               Internet policy, despite protests from         definitions of dissidents and “potential
tech guru Stephen Arnold first revealed        privacy advocates. Vivek Kundra, now           terrorists.”
this information in the 2006 OSS confer-       posted as the Obama administration’s              Google is now anonymizing IP ad-
ence. Anthony Kimery, a veteran intel-         chief information officer at the Office        dresses from search logs after nine
ligence reporter at Homeland Security          of Management and Budget, formerly             months, down from its previous eigh-
Today, followed up with a report al-           served as the chief technology officer         teen-month retention policy. Company
leging a “secret relationship” between         for the city of Washington, D.C., where        spokesperson Chen states, “We’re com-
Google and U.S. intelligence. Google           he ditched the use of Microsoft pro-           mitted to using data both to improve our
was “cooperat[ing] with U.S. intelligence      grams for municipal operations in favor        services and our security measures for
agencies to provide national and home-         of Google products. Concerns were              our users and to protect their privacy,
land security-related user information         heightened last spring by an administra-       and we remain convinced that our cur-
from its vast databases,” with the intel-      tion initiative, proposed in Senate Bill       rent logs retention policy represents a re-
ligence agencies “working to ‘leverage         773, to grant the executive branch au-         sponsible balance.” This is in contrast to
Google’s [user] data monitoring’ capabil-                                                     Microsoft, which after six months throws
ity as part of an effort to glean from this    G oogle also works                             out the search query data altogether.
data information of ‘national security in-     with some of the top                           “Remember that totally anonymized
telligence interest’ in the war on terror.”                                                   search queries can be linked together to
In other words, Google’s databases – or,       players in the surveil-                        build an identity,” says Bankston. “Why
some targeted portion – may have been          lance industry, nota-                          does Google need to store our data per-
dumped straight into the maw of U.S. in-                                                      petually? They’re very vague about it.”
telligence agencies.                           bly Lockheed Martin                               Indeed, Google could, without violat-
   Like the giants of the surveillance-        and SRA International.                         ing the law, reveal a lot more about how it
industrial complex, Google has backed                                                         cooperates with the intelligence agencies
its federal sales force in Reston, Virginia,   thority to disconnect and assume some          – how many requests for information it
with a D.C. lobbying operation – spend-        measure of control over private networks       receives, from what government entities,
ing $2.9 million on lobbying in 2009 – to      in a declared “cybersecurity emergency.”       how many it complies with. “They could
make sure that privacy is not a priority in    That could be a quarantine operation to        talk about all this, but they don’t,” says
the Obama administration. It also works        isolate and defeat a viral attack. It could    Bankston. “Google may not care a lot
with several industry-supported inter-         also be an excuse for censorship of cer-       about your privacy, but they care a whole
est groups: the Interactive Advertising        tain sites – or, for the cybersecurity agen-   helluva lot about your perception of your
Bureau, the Technology Policy Institute,       cies to data-mine where they have been         privacy. To remind people of the risk of
and the Progress & Freedom Foundation,         hitherto forbidden. Google could be de-        government access to your data is anath-
whose mission statement espouses “an           clared “critical infrastructure” in such       ema.” CP
appreciation for the positive impacts of       an emergency, and its management tem-
technology with a classically conserva-        porarily assumed by federally certified        Christopher Ketcham, a freelance re-
tive view of the proper role of govern-        “cybersecurity professionals,” as defined      porter in Brooklyn, NY, is writing a book
ment… Those opportunities can only             in S.773. It’s not wholly unfeasible that      about secession movements and the
be realized if governments resist the          Google’s massive and much coveted be-          break-up of the United States.  Write him
temptation to regulate, tax and control.”      havioral profiles could then be fed into       at or find
All these groups are funded by Google,         the NSA’s computers. And even without          more of his work at christopherketcham.
along with a who’s-who of communica-           S.773, a long accumulation of executive        com. 
tions behemoths. Their mission: subvert        orders over three decades has likely laid
any congressional legislation extending        the groundwork for executive authority         Travis Kelly is a writer, cartoonist and
Fourth Amendment-style prohibitions            to take over critical communications net-      web designer in Moab, UT. Write him
to the data-mining private sector. Their       works in a “national emergency.”               at or find more of his
argument, per the Technology Policy               But long before such an emergency           work at
Institute: “More privacy … would mean          comes to pass, if ever, the government
less information, less valuable advertis-      and the regiments of data-mining com-          Research support for this article was pro-
ing, and thus fewer resources available        panies it contracts with are seeing eye        vided by The Investigative Fund at The
for producing new low-priced services” –       to eye. The commercial surveillance            Nation Institute.

april 1-15, 2010

Ginsburg cont. from page 1 Col. 1             little by way of observation. He sought his    four-square behind the banks was tak-
and maybe even a bridge to permanent          political fortune, honing his spin in the      ing shape – a necessary effort to keep the
employment elsewhere.” (No holes in top       governments of both LBJ and Nixon, thus        world spinning, or so goes the spin. 
White House economic adviser Larry            displaying his role as an effective biparti-      This is hardly the first time the spin
Summers’ resume – including his day-a-        san conciliator, spinning the Democratic       masters have spun prosperity in the face
week gig at hedge fund D.E. Shaw & Co.        Party to the right. In 1976, he was elected    of economic turmoil. In Age of Extremes,
prior to moving into the West Wing, for       narrowly to the U.S. Senate, and only          historian Eric Hobsbawm observed:
which stint over 16 months he earned in       after the Sulzberger family, owners of the        “The foundations of the prosperity of
excess of $5 million – less than the $16      New York Times, intervened on the pa-          the 1920s … were weak … and money
million Rahm Emanuel made in his days         per’s editorial pages, pulling an already      wages, contrary to the myth of the great
at Wasserstein Parella as an energy spec-     drafted primary endorsement for Bella          jazz age, were not rising dramatically, and
ulator but okay for a part-time gig. In any   Abzug and replacing it with an endorse-        actually stagnant in the last mad years of
event, it pays to plug a resume hole.)        ment for Moynihan.                             the boom. What was happening, as often
   One number not so easy for the                 That’s the same New York Times,            happens in free market booms, was that,
Masters of Spin to negotiate is the un-       owned by the same Sulzbergers, which           with wages lagging, profits rose dispro-
employment rate for black teens – 41 per      took a tally of temp workers and fash-         portionately and the prosperous got a
cent. On March 20 in Chicago, President       ioned a headline about surging payrolls        larger slice of the national cake … When
Obama’s home turf, at a forum hosted by       that Friday. Talk about irresponsible.         the collapse came, it was of course more
Tavis Smiley with leading black writers           It helps that the spin master-in-chief     the drastic in the U.S.A. because, in fact,
and politicians, Dorothy Tillman, former      is an African American willing to talk         a lagging expansion of demand had been
city alderman, said she had never seen        about the lack of “responsibility” of black    beefed up by an enormous expansion of
blacks as “fearful” and “scared” as they      males in urban America and for that            consumer credit … Banks, already hurt
are today.  And this is from a 62-year-old    same president to craft an economic re-        by the speculative real estate boom, with
black woman with a distinguished track        covery tied to savings and exports and to      the usual help of self-deluding optimists
record battling for civil rights, who mi-                                                    and mushrooming financial crookery,
grated north from Montgomery.  Who            One number not so                              had reached its peak some years before
wouldn’t be scared? What if the steep         easy for the Masters                           the big crash, loaded with bad debts, re-
and enduring economic demise going on                                                        fused new housing loans or to refinance
today is permanent? Nothing indicates a       of Spin to negoti-                             existing ones.”
different outcome.                            ate is the unemploy-                              In order to have any credibility, Barack
   The spin on modern black unemploy-                                                        Obama needs to take responsibility for
ment has been in play for decades. It was     ment rate for black                            giving jobs a backseat to Wall Street. Big
spinning wildly in 1965, when the U.S.        teens – 41 per cent.                           Business has no problem with transpar-
Department of Labor published and dis-                                                       ency when it comes to jobs – they are
seminated The Negro Family: The Case          eschew direct aid to cities. What he really    impediments to profit.  The president
for National Action, authored by Daniel       means by “saving” is living on less – not      needs to change direction immediately
Patrick Moynihan. The Negro Family of-        so easy in a country increasingly defined      and start filling government payrolls by
fered a discussion of black family demo-      by low-wage work. To export, you need          the millions on all levels with hires other
graphics in place of an explication of the    manufacturing and, so far, the banks, res-     than temp census takers.  All the spin
plan underway that excluded blacks from       urrected with our tax dollars, seem disin-     that can be mustered won’t offset this
meaningful participation in the economy,      clined to support such investment.             economic reality: the private sector is
a plan with a long legacy and which re-          Further evidence that the reappear-         not hiring much this year, or the next, or
mains in place today, as Tillman and her      ance of manufacturing jobs is elusive:         after. 
colleagues recently described.                the administration talks about job cre-           Rather than confront this hard real-
   Had Moynihan done his homework,            ation, and the word “good” is no longer        ity, Obama, Geithner and Romer engage
he would have considered, for example,        included. It’s gone, de-linked: no more        in group spin on the source of enduring
these issues, taken up by Thomas Sugrue       “good jobs,” in what constitutes spin wor-     high unemployment.  Jobs are scarce,
in his book Sweet Land of Liberty: “The       thy of honorable mention in the sinister       Geithner told Today, “because of the
heavy industries that had opened their        category.                                      damage done by the recession.”  
doors to black workers during World              You gotta dance with them what brung           The recession that defies human cal-
War II were shuttering their urban plants     ya, as the saying goes, and the banks that     culation, such that even in its aftermath
and relocating production to suburbs          so generously helped elect the “responsi-      a schedule of recovery cannot be fully
and small, rural towns, most of them          bility” president were given top priority,     known, much less altered, expanded or
all-white … New York City underwent           above job creation, at a moment in his-        sped up; or, as the president says, “It’s
a massive economic restructuring.  The        tory that surely will be remembered for        going to take time.” Simply put, all the
finance and real estate sectors were ex-      its conformity.  Whatever leverage the         news that’s fit to spin.  CP     
panding, but they employed few minori-        federal government had was abandoned,
ties.”                                        even before Chief Justice Roberts mis-         Carl Ginsburg is a journalist in New
   It was in that restructuring New York      spoke the oath of office, as a West Wing       York City. He can be reached at carlgins-
City that Moynihan grew up, taking in         committed to the art of speculation and

                                                                                                                         april 1-15, 2010

Good Times for the Few                                                                       acerbates systemic risk. The main lesson
                                                                                             of Lehman’s crash is that, when highly
Chairman Bernanke and the Bailout                                                            leveraged, undercapitalized institutions
                                                                                             can’t meet their margin calls, the whole
of the Banks                                                                                 system caves in.
                                                                                                 Presently, Bernanke is rebuilding this
By Mike Whitney                                                                              same crisis-prone system, brick by brick.
                                                                                             If shadow banks are going to create

     t’s been a year and a half since         the digital abyss.                             credit, they need to be regulated like de-
     Lehman Bros. collapsed, and the             Before the crisis, the shadow banking       pository institutions and held to the same
     economy is just now beginning            system accounted for more than 50 per          capital standards. Otherwise, one disas-
to show signs of life.  At first, Federal     cent of the credit flowing into the econ-      ter will follow the other.
Reserve chairman Ben Bernanke was             omy. Now, wholesale credit has slowed              In truth, the financial meltdown had
caught flatfooted, when two Bear Stearns      to a trickle.  The market for mortgage-        little to do with “subprime contagion” or
hedge funds blew up in July 2007. But, as     backed securities and asset-backed se-         even Lehman’s default. It was mainly the
the crisis deepened, Bernanke swung into      curities is a fraction of what it had been     result of deregulation, a process in which
action using all the tools at his dispos-     in the peak years. The securitization boy-     all of the traffic lights, road signs and
al. He slashed interest rates to near-zero,   cott is still in force.  The Fed’s loans and   guardrails were removed, so that a hand-
set up emergency swap lines with banks
in  Canada, England, Japan, Switzerland
                                              The rescue operation                           ful of Wall Street uberbanks could fatten
                                                                                             the bottom line.
and the EU, and transformed the Central       has focused exclusively                            While Bernanke deserves some credit
Bank into a government-backed hedge
fund to stem the downward slide. 
                                              on the financial sector,                       for slowing the cycle of debt deflation (by
                                                                                             propping up asset prices), on balance, his
     Even before Lehman had failed,           while everyone else                            efforts have hurt the country. Trillions
Bernanke started setting up lending fa-
cilities to provide liquidity to ailing fi-
                                              has been expected to                           in aid have gone to broken institutions,
                                                                                             while 8.5 million workers have been
nancial institutions. The $700 billion        fend for themselves.                           shunted off to unemployment lines. The
Troubled Asset Relief Program fund gave                                                      rescue operation has focused exclusively
the banks enough capital to roll over
                                              Main Street was sav-                           on the financial sector, while everyone
their debts and keep the lights on, while     aged so Wall Street                            else has been expected to fend for them-
the new facilities provided the temporary
hosing, needed to replace the ruptured
                                              could be salvaged.                               Subscription Information
plumbing of the shadow banking system.        quantitative easing have made up for the         Subscription information can be found
   Bernanke brushed aside the Fed’s man-      losses in credit-production, but it won’t
                                                                                               at or call
date to only accept Triple A bonds in ex-     last. As deflation begins to resurface,
                                                                                               toll-free inside the U.S.
change for loans and Treasuries. The Fed      securitization will need to be revived,
accepted all kinds of dodgy bonds and         or the vicious contraction will surely re-
junk securities to maintain the vital flow    sume.                                            Published twice monthly
of liquidity to the markets. As the toxic        But there’s a structural flaw in secu-        except July and August,
assets piled up on the Fed’s balance sheet,   ritization that poses a serious danger to        22 issues a year.
the banks and other financial institutions    the system. The process creates incen-           1 - year hardcopy edition $45
resumed their speculation in high-risk        tives for fraud by placing intermediar-          2 - year hardcopy edition $80
instruments, which plumped up quar-           ies between borrower and the lender.             1 - year email edition $35
terly earnings and boosted their stock        The banks merely act as “loan origina-           2 - year email edition $65
prices. With Bernanke’s help, the banks       tors” who quickly sell off the mortgages         1 - year email & hardcopy edition $50
emerged Lazarus-like from the crypt           to other financial institutions. Naturally,      1 - year institutions/supporters $100
and raked in record profits in a matter       the bank is less motivated to make sure
                                                                                               1 - year student/low income $35
of months. Tens of billions of dollars in     the borrower is creditworthy if the risk
bonuses were issued to banksters who –        is pushed onto someone else’s balance            Renew by telephone, mail or on our
just weeks earlier – had been pulled from     sheet. It’s just “garbage in, garbage out.”      website. For mailed orders please
choppy waters by Uncle Sam.                   And this gets to the heart of the matter,        include name, address and email
   Most people don’t understand the           which is the reason why regulated banks          address with payment, or call 1-800-
roots of the crisis because they don’t        no longer keep mortgages on their books,         840-3683 or 1-707-629 3683. Add
understand the workings of the modern         because it’s not profitable for them to          $17.50 per year for subscriptions mailed
banking system. This isn’t the “take de-      do so. And the only thing that makes it          outside the U.S.A.
posits and hold to maturity” model that       profitable for shadow banks is that they         Make checks or money orders payable to:
most of us grew up with. This is a shad-      ignore the standard rules for adequate           CounterPunch
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selves. Main Street was savaged so Wall        are wildly out of sync with his lavish gifts   public assets for pennies on the dollar.
Street could be salvaged.                      to Wall Street, which exceed the amount        What we really need is a strategic plan to
   Many believe that Bernanke helped to        of the new jobs bill ($15 billion) by more     lift us from the muck and point the way
restore the banking system to solvency,        than a hundredfold.  What he seems to          forward. Here’s an excerpt from an inter-
but this is a myth. In April 2009,  The        be saying to Congress is that the costs of     view with James Galbraith who sums it
Financial Accounting Standards Board           the meltdown should be seen as a justi-        up perfectly:
suspended its “mark to market” rule,           fication for looting Social Security. In          “I’ve always taken exception to the refer-
which required financial institutions to       other words, the victims should pay for        ence to ‘stimulus’ as ... a relatively short-term
assign a true market value to the assets       what the fraudsters stole. Such is the         spending spree, … that will somehow return the
on their balance sheets. This gave the         logic of Chairman Ben.                         economy to … a path of what economists like to
banks the green light to lie about how            So, where will Bernanke steer the           call ‘self-sustaining growth.’ ... In the present en-
much red ink was really on their books.        economy now that unemployment is               vironment, there is no such thing as a return to
The truth is, accounting fraud helped          stuck officially at 9.7 per cent (with un-     self-sustaining growth. There will be no return
the banks stay afloat more than anything       official estimates that one in five in         to the supposedly normal conditions, which
Bernanke ever did.                             America are either unemployed or doing         were, in fact, from a historical point of view,
   However, the issue now is not               part-time work), private consumption           highly abnormal.
Bernanke’s past performance but what           is below trend, the credit markets are in         “What one needs is to set a strategic direc-
comes next. Will he do what’s necessary        disarray, household balance sheets are in      tion for renewal of economic activity. We need
to strengthen the recovery, or will he         tatters, and housing stumbling toward          to create the institutions that will support that
tighten the screws? He appears to have         the precipice?                                 direction. Those institutions are public insti-
chosen the latter. Bernanke opposes a             Instead of fiscal stimulus, strong de-      tutions, which create a framework for private
second round of stimulus and the admin-        mand, and full employment, Bernanke            activity. This is the way it is done. It is the way
istration’s jobs bill. Instead, he’s pushing   has thrown his weight behind  hybrid           countries have always developed in the past
for fiscal consolidation, which means he       derivatives, securitization,  and too-big-     and, to the extent that they are successful, they
supports cuts to Social Security and           to-fail megabanks. His misguided focus         will always do so in the future or they won’t suc-
Medicare.                                      on  “fiscal consolidation” and “deficit re-    ceed. “CP
   Bernanke doesn’t try to hide his anti-      duction” is a liquidationist ploy to further
big-government bias or his enthusiasm          unravel the social safety net, cut public      Mike Whitney lives in Washington state.
for “fiscal austerity.” But his comments       services, crush the unions, and scoop up       Email:

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