Gasoline and the rule of 72

Gasoline has hit $3.40 a gallon in Saint Paul, MN. It's $3.60 in Chicago. These numbers don't get all that much attention nowadays. It's much less than the price in most of the industrialized world of course (lower taxes here), and gas is probably still relatively cheap by historic standards. The price will doubtless decrease in the fall.

Still, it's an opportunity to reflect on the economics of oil and gasoline. Imagine that you were in the petroleum business and that your horizon for investment decisions was 10 years. Imagine (now don't faint!) that you were more than 90% confident that the price of gasoline in 9 years would be, assuming no changes in taxes, $28 a gallon.

That's a doubling every 3 years, and by the "rule of 72" that's a 24% rate of annual compounding (72/3=24). Wow. That's a fantastic rate of return. You could just borrow money at 8% to keep your business going, store the oil in the ground, and then sell it later. The 16% difference is a great way to run a business.

That's outrageous of course. Almost nobody expects gasoline to sell for almost $30 a gallon by 2016.

Still. There's some smaller rate of return that would make retaining rather than selling petroleum products the right way to invest. This is what all the "peak oil" crowd get excited about; but the term is a bit misleading. It's not that oil production needs to peak, it's simply that demand has to persistently outstrip supply. Prices, of course, don't wait for demand to outstrip supply, they begin rising as soon as a demand/supply gap can be reasonably anticipated within the time frame of investment decisions (10 years roughly).

This, by the way, is a very good thing. It means that prices rise long before we run out of oil, giving everyone time to adapt and adjust.

I do wonder what the sober experts calculate. They can look at supply curves and demand curves and the available substitutions within the next decade. Do they see a significant supply/demand gap opening up? If the price of gas will be $7/gallon in six years (well within the lifespan of your next Ford F-250), is that enough of rate of return to justify holding products now?

I wish Brad DeLong would say something about this.

Advice for Fraud 2.0

What rules should we follow in the age of Fraud 2.0? It's very difficult to protect your financial data and personal data, but there appear to be a few measures that may reduce the probability of a successful attack:

1. Never respond to an email or phone call initiated by a bank, governmental agency, financial entity, etc. These should all be assumed fraudulent. If a phone call demands urgent action and you believe it to be real, you may consider the option of hanging up and calling your bank at a known valid number. If you want to be truly safe, however, you probably have to go in person. (Who knows if the VOIP router has been hacked?)

2. Never, ever, enter any kind of sweepstake or contest. They now exist primarily to identify victims. As a general rule, never provide information about yourself through any avenue that suggests you are vulnerable, naive, or gullible. If you buy a lottery ticket, pay cash. You don't want to establish yourself as a mark.

3. Never, ever, respond to any telemarketers of any kind, including legitimate sounding charitable fund raisers. Always say - "I don't do anything by phone". Tell them to remove you from the call list. Tell them you have no money at all. It doesn't matter who they say they are, tell them "mail only". If you respond to a telemarketer you are marking yourself as vulnerable. If you deny them all then you establish yourself as a hard-case and the crooks will seek easier prey elsewhere.

My last bit of advice is more controversial. It's ironic because fifteen years ago I scoffed at those who claimed eCommerce was significantly more risky than regular credit card transactions. Now that we have ultra-effective phishing attacks and a decade of inaction by credit card companies my opinion has changed. So we have recommendation #4:

4. Commerce over the net, including internet banking, is a risky activity which should be avoided by all but the most technically savvy and well defended.

Number four is extreme. Our situation, however, is getting extreme.

InfoUSA and Wachovia Bank sell out the vulnerable elderly

I wrote three years ago about how VOIP technologies reduce the cost of preying on the weak and one year about how eFraud targets the weak, vulnerable and (especially) the elderly. The sophistication of attacks on the vulnerable continues to grow, as classic techniques incorporate new technologies.

As in all such attacks there are the direct criminals, and there are the arms dealers. The arms dealers exist in a twilight zone. Microsoft is clearly not responsible if Word is used to write a ransom note, but what if the market for a particular product is almost entirely criminal? If you sell radar detectors [1] that's a bit questionable. If you sell diethylene glycol to a glycerine manufacturer you belong in Hell.

The blessed New York Times (all is forgiven now) continues a smash season of superb journalism with an expose of arms dealers who sell the elderly, and other cognitively impaired people, to the jackels who prey upon them.

Note these names. No moral person should do business with either of them.

Wachovia Bank: (a once reputable company)
infoUSA

Now read the article. I bet the VOIP technologies I mentioned in 2004 were an integral part of this operation. Emphases mine. If you don't tear with outrage and start pounding the desk please send me your name so I can avoid you.

Send whatever portion of this story you think is appropriate to any vulnerable person in your life.

Bilking the Elderly, With a Corporate Assist - New York Times
By CHARLES DUHIGG

The thieves operated from small offices in Toronto and hangar-size rooms in India. Every night, working from lists of names and phone numbers, they called World War II veterans, retired schoolteachers and thousands of other elderly Americans and posed as government and insurance workers updating their files.

Then, the criminals emptied their victims’ bank accounts.

Richard Guthrie, a 92-year-old Army veteran, was one of those victims. He ended up on scam artists’ lists because his name, like millions of others, was sold by large companies to telemarketing criminals, who then turned to major banks to steal his life’s savings.

Mr. Guthrie, who lives in Iowa, had entered a few sweepstakes that caused his name to appear in a database advertised by infoUSA, one of the largest compilers of consumer information. InfoUSA sold his name, and data on scores of other elderly Americans, to known lawbreakers, regulators say.

InfoUSA advertised lists of “Elderly Opportunity Seekers,” 3.3 million older people “looking for ways to make money,” and “Suffering Seniors,” 4.7 million people with cancer or Alzheimer’s disease. “Oldies but Goodies” contained 500,000 gamblers over 55 years old, for 8.5 cents apiece. One list said: “These people are gullible. They want to believe that their luck can change.”

As Mr. Guthrie sat home alone — surrounded by his Purple Heart medal, photos of eight children and mementos of a wife who was buried nine years earlier — the telephone rang day and night. After criminals tricked him into revealing his banking information, they went to Wachovia, the nation’s fourth-largest bank, and raided his account, according to banking records.

“I loved getting those calls,” Mr. Guthrie said in an interview. “Since my wife passed away, I don’t have many people to talk with. I didn’t even know they were stealing from me until everything was gone.”

Telemarketing fraud, once limited to small-time thieves, has become a global criminal enterprise preying upon millions of elderly and other Americans every year, authorities say. Vast databases of names and personal information, sold to thieves by large publicly traded companies, have put almost anyone within reach of fraudulent telemarketers. And major banks have made it possible for criminals to dip into victims’ accounts without their authorization, according to court records.

The banks and companies that sell such services often confront evidence that they are used for fraud, according to thousands of banking documents, court filings and e-mail messages reviewed by The New York Times.

Although some companies, including Wachovia, have made refunds to victims who have complained, neither that bank nor infoUSA stopped working with criminals even after executives were warned that they were aiding continuing crimes, according to government investigators. Instead, those companies collected millions of dollars in fees from scam artists. (Neither company has been formally accused of wrongdoing by the authorities.)

“Only one kind of customer wants to buy lists of seniors interested in lotteries and sweepstakes: criminals,” said Sgt. Yves Leblanc of the Royal Canadian Mounted Police. “If someone advertises a list by saying it contains gullible or elderly people, it’s like putting out a sign saying ‘Thieves welcome here.’ ”

In recent years, despite the creation of a national “do not call” registry, the legitimate telemarketing industry has grown, according to the Direct Marketing Association. Callers pitching insurance plans, subscriptions and precooked meals collected more than $177 billion in 2006, an increase of $4.5 billion since the federal do-not-call restrictions were put in place three years ago.

That growth can be partly attributed to the industry’s renewed focus on the elderly. Older Americans are perfect telemarketing customers, analysts say, because they are often at home, rely on delivery services, and are lonely for the companionship that telephone callers provide. Some researchers estimate that the elderly account for 30 percent of telemarketing sales — another example of how companies and investors are profiting from the growing numbers of Americans in their final years.

While many telemarketing pitches are for legitimate products, the number of scams aimed at older Americans is on the rise, the authorities say. In 2003, the Federal Trade Commission estimated that 11 percent of Americans over age 55 had been victims of consumer fraud. The following year, the Federal Bureau of Investigation shut down one telemarketing ring that stole more than $1 billion, spanned seven countries and resulted in 565 arrests. Since the start of last year, federal agencies have filed lawsuits or injunctions against at least 68 telemarketing companies and individuals accused of stealing more than $622 million.

“Most people have no idea how widespread and sophisticated telemarketing fraud has become,” said James Davis, a Federal Trade Commission lawyer. “It shocks even us.”

Many of the victims are people like Mr. Guthrie, whose name was among the millions that infoUSA sold to companies under investigation for fraud, according to regulators. Scam artists stole more than $100,000 from Mr. Guthrie, his family says. How they took much of it is unclear, because Mr. Guthrie’s memory is faulty and many financial records are incomplete.

What is certain is that a large sum was withdrawn from his account by thieves relying on Wachovia and other banks, according to banking and court records. Though 20 percent of the total amount stolen was recovered, investigators say the rest has gone to schemes too complicated to untangle.

Senior executives at infoUSA were contacted by telephone and e-mail messages at least 30 times. They did not respond.

Wachovia, in a statement, said that it had honored all requests for refunds and that it was cooperating with authorities...

.... He had lived alone since his wife died. Five of his eight children had moved away from the farm. Mr. Guthrie survived on roughly $800 that he received from Social Security each month. Because painful arthritis kept him home, he spent many mornings organizing the mail, filling out sweepstakes entries and listening to big-band albums as he chatted with telemarketers.

“I really enjoyed those calls,” Mr. Guthrie said. “One gal in particular loved to hear stories about when I was younger.”

Some of those entries and calls, however, were intended solely to create databases of information on millions of elderly Americans. Many sweepstakes were fakes, investigators say, and existed only to ask entrants about shopping habits, religion or other personal details. Databases of such responses can be profitably sold, often via electronic download, through list brokers like Walter Karl Inc., a division of infoUSA.

The list brokering industry has existed for decades, primarily serving legitimate customers like magazine and catalog companies. InfoUSA, one of the nation’s largest list brokers and a publicly held company, matches buyers and sellers of data. The company maintains records on 210 million Americans, according to its Web site. In 2006, it collected more than $430 million from clients like Reader’s Digest, Publishers Clearinghouse and Condé Nast.

But infoUSA has also helped sell lists to companies that were under investigation or had been prosecuted for fraud, according to records collected by the Iowa attorney general. Those records stemmed from a now completed investigation of a suspected telemarketing criminal.

By 2004, Mr. Guthrie’s name was part of a list titled “Astroluck,” which included 19,000 other sweepstakes players, Iowa’s records show. InfoUSA sold the Astroluck list dozens of times, to companies including HMS Direct, which Canadian authorities had sued the previous year for deceptive mailings; Westport Enterprises, the subject of consumer complaints in Kansas, Connecticut and Missouri; and Arlimbow, a European company that Swiss authorities were prosecuting at the time for a lottery scam.

(In 2005, HMS’s director was found not guilty on a technicality. Arlimbow was shut down in 2004. Those companies did not return phone calls. Westport Enterprises said it has resolved all complaints, complies with all laws and engages only in direct-mail solicitations.)

Records also indicate that infoUSA sold thousands of other elderly Americans’ names to Windfall Investments after the F.B.I. had accused the company in 2002 of stealing $600,000 from a California woman.

Between 2001 and 2004, infoUSA also sold lists to World Marketing Service, a company that a judge shut down in 2003 for running a lottery scam; to Atlas Marketing, which a court closed in 2006 for selling $86 million of bogus business opportunities; and to Emerald Marketing Enterprises, a Canadian firm that was investigated multiple times but never charged with wrongdoing.

The investigation of Windfall Investments was closed after its owners could not be located. Representatives of Windfall Investments, World Marketing Services, Atlas Marketing and Emerald Marketing Enterprises could not be located or did not return calls.

The Federal Trade Commission’s rules prohibit list brokers from selling to companies engaged in obvious frauds. In 2004, the agency fined three brokers accused of knowingly, or purposely ignoring, that clients were breaking the law. The Direct Marketing Association, which infoUSA belongs to, requires brokers to screen buyers for suspicious activity.

But internal infoUSA e-mail messages indicate that employees did not abide by those standards. In 2003, two infoUSA employees traded e-mail messages discussing the fact that Nevada authorities were seeking Richard Panas, a frequent infoUSA client, in connection with a lottery scam.

“This kind of behavior does not surprise me, but it adds to my concerns about doing business with these people,” an infoUSA executive wrote to colleagues. Yet, over the next 10 months, infoUSA sold Mr. Panas an additional 155,000 names, even after he pleaded guilty to criminal charges in Nevada and was barred from operating in Iowa...

...“Red flags should have been waving,” said Steve St. Clair, an Iowa assistant attorney general who oversaw the infoUSA investigation. “But the attitude of these list brokers is that it’s not their responsibility if someone else breaks the law.”

... Within months of the sale of the Astroluck list, groups of scam artists in Canada, the Caribbean and elsewhere had the names of Mr. Guthrie and millions of other Americans, authorities say. Such countries are popular among con artists because they are outside the jurisdiction of the United States.

The thieves would call and pose as government workers or pharmacy employees. They would contend that the Social Security Administration’s computers had crashed, or prescription records were incomplete. Payments and pills would be delayed, they warned, unless the older Americans provided their banking information.

Many people hung up. But Mr. Guthrie and hundreds of others gave the callers whatever they asked.

“I was afraid if I didn’t give her my bank information, I wouldn’t have money for my heart medicine,” Mr. Guthrie said.

Criminals can use such banking data to create unsigned checks that withdraw funds from victims’ accounts. Such checks, once widely used by gyms and other businesses that collect monthly fees, are allowed under a provision of the banking code. The difficult part is finding a bank willing to accept them.

In the case of Mr. Guthrie, criminals turned to Wachovia.

Between 2003 and 2005, scam artists submitted at least seven unsigned checks to Wachovia that withdrew funds from Mr. Guthrie’s account, according to banking records. Wachovia accepted those checks and forwarded them to Mr. Guthrie’s bank in Iowa, which in turn sent back $1,603 for distribution to the checks’ creators that submitted them.

Within days, however, Mr. Guthrie’s bank, a branch of Wells Fargo, became concerned and told Wachovia that the checks had not been authorized. At Wells Fargo’s request, Wachovia returned the funds. But it failed to investigate whether Wachovia’s accounts were being used by criminals, according to prosecutors who studied the transactions.

In all, Wachovia accepted $142 million of unsigned checks from companies that made unauthorized withdrawals from thousands of accounts, federal prosecutors say. Wachovia collected millions of dollars in fees from those companies, even as it failed to act on warnings, according to records.

In 2006, after account holders at Citizens Bank were victimized by the same thieves that singled out Mr. Guthrie, an executive wrote to Wachovia that “the purpose of this message is to put your bank on notice of this situation and to ask for your assistance in trying to shut down this scam.”

But Wachovia, which declined to comment on that communication, did not shut down the accounts.

Banking rules required Wachovia to periodically screen companies submitting unsigned checks. Yet there is little evidence Wachovia screened most of the firms that profited from the withdrawals.

In a lawsuit filed last year, the United States attorney in Philadelphia said Wachovia received thousands of warnings that it was processing fraudulent checks, but ignored them. That suit, against the company that printed those unsigned checks, Payment Processing Center, or P.P.C., did not name Wachovia as a defendant, though at least one victim has filed a pending lawsuit against the bank.

During 2005, according to the United States attorney’s lawsuit, 59 percent of the unsigned checks that Wachovia accepted from P.P.C. and forwarded to other banks were ultimately refused by other financial institutions. Wachovia was informed each time a check was returned.

“When between 50 and 60 percent of transactions are returned, that tells you at gut level that something’s not right,” said the United States attorney in Philadelphia, Patrick L. Meehan.

Other banks, when confronted with similar evidence, have closed questionable accounts. But Wachovia continued accepting unsigned checks printed by P.P.C. until the government filed suit in 2006...

...Prosecutors argue that many elderly accountholders never realized Wachovia had processed checks that withdrew from their accounts, and so never requested refunds. Wachovia declined to respond.

... By 2005, Mr. Guthrie was in dire straits. When tellers at his bank noticed suspicious transactions, they helped him request refunds. But dozens of unauthorized withdrawals slipped through. Sometimes, he went to the grocery store and discovered that he could not buy food because his account was empty. He didn’t know why. And he was afraid to seek help.

“I didn’t want to say anything that would cause my kids to take over my accounts,” he said. Such concerns play into thieves’ plans, investigators say.

“Criminals focus on the elderly because they know authorities will blame the victims or seniors will worry about their kids throwing them into nursing homes,” said C. Steven Baker, a lawyer with the Federal Trade Commission. “Frequently, the victims are too distracted from dementia or Alzheimer’s to figure out something’s wrong.”

... Today, just as he feared, Mr. Guthrie’s financial freedom is gone. He gets a weekly $50 allowance to buy food and gasoline. His children now own his home, and his grandson controls his bank account. He must ask permission for large or unusual purchases.

And because he can’t buy anything, many telemarketers have stopped calling.

“It’s lonelier now,” he said at his kitchen table, which is crowded with mail. “I really enjoy when those salespeople call. But when I tell them I can’t buy anything now, they hang up. I miss the good chats we used to have.”

I'm not furious with the criminals. They're just criminals. Wachovia, InfoUSA, and the like -- put their execs on a desert island and walk away. I learned, by the way, about the ambiguous relationship between banks and predators in 1998. Banks play in a lot of murky worlds.

InfoUSA's web site claims to have information on 210 million American consumers. You can search by age, income, geography, home value and other "great selections":

Our consumer data is continuously updated and processed against both the USPS National Change of Address (NCOA) and Delivery Sequence File (DSF), producing a database that is 93% deliverable. The information is also carrier route and ZIP+4 coded using the USPS certified Coding Accuracy Support System (CASS).

What to do? The Dems control the House and the Senate, but Bush controls the regulatory bodies. We won't see a lot of reform until 2008. One obvious reform is to prevent the use of "unsigned checks"; Wachovia is one of the relatively few shady banks that accept these checks. It's time to end that loophole.

Sweepstakes were always shady operations, but now it's obvious that their main function is to identify the gullible. We should either shut them down or severely limit their ability to traffic in the information gathered.

Lastly, stop targeting the crooks and start targeting the arms dealers. We need regulations that put the CEOs of Wachovia and InfoUSA behind bars for 10-20. One Wacovia CEO in an orange suit will go a long way towards cleaning up the industry.

Lastly, the article focuses on the elderly, but anyone with a non-adjusted IQ of less than 90 is natural prey for these people. That's millions of Americans of all ages, and as our population ages that number increases every day.

[1] I'm the only person I know who bought a radar detector so I'd get notice of hidden Wisconsin speed zones and decrease my speed. So I was using it as a way to reveal speed zones that I'd otherwise miss, and adjust my legal speed to the new legal speed. Northern Wisconsin has an interesting attitude towards local fund raising.

Poisoned Toothpaste from China: this would be a good time to start freaking out

A week ago I wrote:

I've written quite a bit about globalization lately, particularly in the context of toxic food, medicine, and consumer products. Not to mention the toaster problem, or those DVD/VCR combo units that last (at most) six months. Cheap goods from Walmart aren't cheap if you need to buy 3 times as many of them. (Incidentally, this shows up as increased productivity rather than increased inflation.)

Not to mention counterfeit surgical supplies and suspiciously murky globalized supply chains.

Today the NYT (bless them, they're on a roll now!) adds Diethylene glycol poisoned toothpaste to the list (emphases mine). Note that children, incidentally, often don't spit out toothpaste. Also note one significant difference from the other toxic products - diethylene glycol was an official ingredient of the product.

Poisoned Toothpaste in Panama Is Believed to Be From China - New York Times

Diethylene glycol, a poisonous ingredient in some antifreeze, has been found in 6,000 tubes of toothpaste in Panama, and customs officials there said yesterday that the product appeared to have originated in China.

“Our preliminary information is that it came from China, but we don’t know that with certainty yet,” said Daniel Delgado Diamante, Panama’s director of customs. “We are still checking all the possible imports to see if there could be other shipments.”

Some of the toothpaste, which arrived several months ago in the free trade zone next to the Panama Canal, was re-exported to the Dominican Republic in seven shipments, customs officials said. A newspaper in Australia reported yesterday that one brand of the toothpaste had been found on supermarket shelves there and had been recalled.

Diethylene glycol is the same poison that the Panamanian government inadvertently mixed into cold medicine last year, killing at least 100 people. Records show that in that episode the poison, falsely labeled as glycerin, a harmless syrup, also originated in China.

There is no evidence that the tainted toothpaste is in the United States, according to American government officials.

Panamanian health officials said diethylene glycol had been found in two brands of toothpaste, labeled in English as Excel and Mr. Cool. The tubes contained diethylene glycol concentrations of between 1.7 percent and 4.6 percent, said Luis Martínez, a prosecutor who is looking into the shipments.

Health officials say they do not believe the toothpaste is harmful, because users spit it out after brushing, but they nonetheless took it out of circulation.

Mr. Martínez said at a recent news conference that the toothpaste lacked the required health certificates and had entered the market mixed in with products intended for animal consumption.

He said laboratory tests had found up to 4.6 percent diethylene glycol in tubes of Mr. Cool toothpaste. The Excel brand had 2.5 percent...

,,,In Panama City, a consumer notified the pharmacy and drugs section of the Health Ministry after seeing that diethylene glycol was listed as an ingredient in toothpaste at a store...

...Over the years, counterfeiters have found it financially advantageous to substitute diethylene glycol, a sweet-tasting syrup, for its chemical cousin glycerin, which is usually much more expensive.

Is anyone so naive as to imagine we're detecting 100% of these incidents? This would be a very good time for the American public to, you know, freak out.

Comey, Gonzales, and Godfather IV

Oddly enough, I hadn't read the James Coney testimony until I read this excerpt: The Bayesian Heresy: Godfather IV.

Bush as Corleone. Yes, the metaphor works for me.

Ashcroft put on an impressive performance when Gonzales went after him, but don't forget Aher. On the other hand, much of what we blamed Ashcroft for now seem to have come directly from Bush.

The IQ of an ecosystem and other questions of emergence

What is "the IQ of an pond ecosystem"? How clever is Gaia? What kind of desires does a corporation have, as distinct from its stakeholders, owners and managers? These are emergence questions. Once upon a time they were posed in the domain of "Cybernetics", then later in systems theory and the study of complex systems. It's a Santa Fe kind of question and a favorite science fiction theme (explored in great depth by some writers of the past decade). I probably first came upon it reading Analog in my misspent youth. Ecology, game theory, and especially Economics have been the most established homes for studying emergent systems.

I don't know of a shared concept set for discussing these questions, though I'm sure there are many specialist languages. I think of an "emergent" space as quite different from the domain in which we experience and reason, though the two will obviously meet. Looking "down" into the micro our cells, hormones, ionic equilibria, fingers and consciousness clearly interact, but we are not all that conscious of our bladder lining and it's presumably quite unaware of us.

So what does a corporation "see" in economics space? I imagine a world of protozoans and worms, interacting in some n-dimensional world. The corporation has a "will" to live, and solves problems in its "space", to some extent distinct from the prosaic reality [1] in which we live.

So how smart is the American electorate in its "space"? I imagine something almost human, but with a 60-80 IQ. A wide but shallow thinker with vast knowledge but little imagination. It It learns slowly and unlearns slowly; it's fearful, sulky, and sullen with intermittent sunshine.

If we can raise the effective emotional and analytic "IQ" of the abstract entities living in our planet's "political space" from 80 to 120 we might survive the next 60 years. Here's hoping that better communication, connection, search, retrieval, storage and translation technologies will improve the de facto neural net of our political creatures!

[1] I'm being ironic of course. Reality is looking inadequately prosaic.

Edwards - why 615,000 hits on his hair?

Why are there over 615,000 hits on "john edwards" hair? Why has the gestalt shifted away from attacking Hilary and lauding Obama to attacking Edwards?

What is it about Edwards that's different?

I'll answer. Of course.

The serious presidential candidates fall into these flavors:

• Clinton I/Ford: Hilary, Obama. Good conventional presidents who will not disrupt the established order.
• Bush II/Nixon: Giuliani and Romney. Lousy presidents who will not disrupt the established order.
  
• Bush I: McCain: Mediocre president who will not disrupt the established order.
• Teddy Roosevelt: Edwards. An unpredictable and potentially very disruptive force.

The establishment is not afraid of Hilary, Obama, or McCain. It's not even as afraid as it should be of Bush II, probably because it can't believe anyone could ever again be so disastrously bad. Edwards is scary. Edwards must be destroyed.

But if Edwards is destroyed, then Gore will run. Then we'll see hellfire from all directions.

Don’t Blame Bush, the enemy is us

Romney, Giuliani and every GOP candidate save McCain have come out in favor of torture, national surveillance, suspension of law and brutality. The GOP core is enthused.

Krugman points out the obvious, Bush is aligned with his base. He has been a disaster, but he accurately reflects the modern GOP. The GOP, of course, also reflects a chunk of America:

Don’t Blame Bush - New York Times

....What we need to realize is that the infamous “Bush bubble,” the administration’s no-reality zone, extends a long way beyond the White House. Millions of Americans believe that patriotic torturers are keeping us safe, that there’s a vast Islamic axis of evil, that victory in Iraq is just around the corner, that Bush appointees are doing a heckuva job — and that news reports contradicting these beliefs reflect liberal media bias.

And the Republican nomination will go either to someone who shares these beliefs, and would therefore run the country the same way Mr. Bush has, or to a very, very good liar...

No matter the name of the GOP candidate running in 2008 (it won't be McCain), the policies will be those of a sick party. More Bush, in other words.

The GOP needs 10 years in the wilderness to rebuild and reform.

Reframing history as life in a small town - the Peasant's Revolt

As I drive to work I'm listening to Melvyn Bragg's guests speak of the 14th century "Peasants Revolt". It's a fascinating story and period, and Melvyn is on game. He gets anxious and confused with modern physics, but history and culture are his home field advantage.

His professors are discussing the march on London, when, incidentally, a guest happens to mention that London at that time held perhaps 40,000 people. (This was 20 years after a spot of trouble known to us as the Black Death and around the time of the onset of the "Little Ice Age". London was a bit shrunken.)

Huh? So a few thousands (not 60,000 as was once reported) people march on a small town and history is made?

It's a framing problem. It's hard for us to imagine that almost all of human history occurred in what we now consider small communities. Boston was a village during most of the American Revolution -- everyone must have met Franklin personally.

In a town of 40,000 the "movers and shakers" all know one another, and the wealthy community can pretty much fit in an auditorium.

It's so hard for us to get our heads into this work that historians don't even bother to take much note of it themselves ...

PS. Liberate In Our Time!

American fear and our shredded honor - two ringing voices against torture

American has stunk of fear since 9/11. From fear comes torture. Torturer-in-chief Bush will hopefully leave office in about two years, but would-be torturers-in-chief Guiliani and Romney strive to succeed him. Now two former military officials join in a brutal and necessary rebuttal of the GOP's spineless front runners and a body slam against the Office of the Torturer. In this matter they join General Petraeus. (Emphases mine).

Charles C. Krulak and Joseph P. Hoar - It's Our Cage, Too - washingtonpost.com
Torture Betrays Us and Breeds New Enemies
By Charles C. Krulak and Joseph P. Hoar
Charles C. Krulak was commandant of the Marine Corps from 1995 to 1999. Joseph P. Hoar was commander in chief of U.S. Central Command from 1991 to 1994.
Thursday, May 17, 2007

Fear can be a strong motivator. It led Franklin Roosevelt to intern tens of thousands of innocent U.S. citizens during World War II; it led to Joseph McCarthy's witch hunt, which ruined the lives of hundreds of Americans. And it led the United States to adopt a policy at the highest levels that condoned and even authorized torture of prisoners in our custody.

Fear is the justification offered for this policy by former CIA director George Tenet as he promotes his new book. Tenet oversaw the secret CIA interrogation program in which torture techniques euphemistically called "waterboarding," "sensory deprivation," "sleep deprivation" and "stress positions" -- conduct we used to call war crimes -- were used. In defending these abuses, Tenet revealed: "Everybody forgets one central context of what we lived through: the palpable fear that we felt on the basis of the fact that there was so much we did not know."

We have served in combat; we understand the reality of fear and the havoc it can wreak if left unchecked or fostered. Fear breeds panic, and it can lead people and nations to act in ways inconsistent with their character.

The American people are understandably fearful about another attack like the one we sustained on Sept. 11, 2001. But it is the duty of the commander in chief to lead the country away from the grip of fear, not into its grasp. Regrettably, at Tuesday night's presidential debate in South Carolina, several Republican candidates revealed a stunning failure to understand this most basic obligation. Indeed, among the candidates, only John McCain demonstrated that he understands the close connection between our security and our values as a nation.

Tenet insists that the CIA program disrupted terrorist plots and saved lives. It is difficult to refute this claim -- not because it is self-evidently true, but because any evidence that might support it remains classified and unknown to all but those who defend the program.

These assertions that "torture works" may reassure a fearful public, but it is a false security. We don't know what's been gained through this fear-driven program. But we do know the consequences.

As has happened with every other nation that has tried to engage in a little bit of torture -- only for the toughest cases, only when nothing else works -- the abuse spread like wildfire, and every captured prisoner became the key to defusing a potential ticking time bomb. Our soldiers in Iraq confront real "ticking time bomb" situations every day, in the form of improvised explosive devices, and any degree of "flexibility" about torture at the top drops down the chain of command like a stone -- the rare exception fast becoming the rule.

To understand the impact this has had on the ground, look at the military's mental health assessment report released earlier this month. The study shows a disturbing level of tolerance for abuse of prisoners in some situations. This underscores what we know as military professionals: Complex situational ethics cannot be applied during the stress of combat. The rules must be firm and absolute; if torture is broached as a possibility, it will become a reality.

This has had disastrous consequences. Revelations of abuse feed what the Army's new counterinsurgency manual, which was drafted under the command of Gen. David Petraeus, calls the "recuperative power" of the terrorist enemy.

Former defense secretary Donald Rumsfeld once wondered aloud whether we were creating more terrorists than we were killing. In counterinsurgency doctrine, that is precisely the right question. Victory in this kind of war comes when the enemy loses legitimacy in the society from which it seeks recruits and thus loses its "recuperative power."

The torture methods that Tenet defends have nurtured the recuperative power of the enemy. This war will be won or lost not on the battlefield but in the minds of potential supporters who have not yet thrown in their lot with the enemy. If we forfeit our values by signaling that they are negotiable in situations of grave or imminent danger, we drive those undecideds into the arms of the enemy. This way lies defeat, and we are well down the road to it.

This is not just a lesson for history. Right now, White House lawyers are working up new rules that will govern what CIA interrogators can do to prisoners in secret. Those rules will set the standard not only for the CIA but also for what kind of treatment captured American soldiers can expect from their captors, now and in future wars. Before the president once again approves a policy of official cruelty, he should reflect on that.

It is time for us to remember who we are and approach this enemy with energy, judgment and confidence that we will prevail. That is the path to security, and back to ourselves.

They did not waste words. They did not mince words. What an astounding and exceptional work. We need fear, we have things to be afraid of. When we let fear rule us, however, we become mindless victims. I think military people understand that more deeply than we civilians.

Fraud and global supply chains - unanticipated consequence

I've written about vulnerable global supply chains, melamine fraud, poisonous fake glycol and non-fake fur recently. Now I'll add a story from surgeon about a mesh used in a hernia repair in the US ... (emphases mine)

Meanwhile: Bad medicine, sneaking in - International Herald Tribune - Atul Gawande - May 15, 2007

... The mesh manufacturer, Johnson & Johnson, was reporting that the mesh I'd put in was counterfeit. It was fake.

Someone had infiltrated the supply chain somewhere between Sherman, Texas, where the authentic mesh was manufactured, and Boston, where I'd operated on the patient. Apparently, mesh can travel through many hands. The original lot had gone to a Memphis, Tennessee, warehouse, and then through at least two hospital goods distributors, which sell and trade medical supplies on what turns out to be a worldwide market, like oil. Somewhere along the way, a counterfeiter replaced the lot with fake mesh packaged exactly like Johnson & Johnson's, right down to the lot number. It is believed this happened someplace in Asia. But no one really knows.

The material looked like ordinary mesh to me. But according to the alert from the Food and Drug Administration, it wasn't sterile. And although it seemed to be polypropylene, the fibers and weave were different from the manufacturer's...

I'd love to know why a shipment of mesh went from Memphis to Asia and back, and how the switch was made. Global supply chain management is an underrated topic. I suspect these long multinational supply chains make it possible to play quite a few games with taxes, revenue recognition, earnings, inventory, price manipulation, buy low/sell high strategies and more. We also know from the glycol story that traders are incented to conceal their partners (business secrets). This shadowy, anonymous, and amoral network likely creates many "dark alleys" where switches can be made.

I suspect even "honest" supply chain vendors may have arguably legal financial incentives to keep this world in the shadows.

At this rate we won't need terrorists to destroy the world economy, petty crooks and, perhaps, aggressive corporations will suffice ...

Mr. Giuliani, meet General Petraeus

From the most respected leader in the American military:

General Petraeus Writes Letter Condemning Torture | The Moderate Voice

...Some may argue that we would be more effective if we sanctioned torture or other expedient methods to obtain information from the enemy. They would be wrong. Beyond the basic fact that such actions are illegal, history shows that they also are frequently neither useful nor necessary. Certainly, extreme physical action can make someone “talk”; however, what the individual says may be of questionable value. In fact our experience in applying the interrogation standards laid out in the Army Field Manual (2-22.3) on Human Intelligence Collector Operations that was published last year shows that the techniques in the manual work effectively and humanely in eliciting information from detainees.

We are, indeed, warriors. We train to kill our enemies. We are engaged in combat, we must pursue the enemy relentlessly, and we must be violent at times. What sets us apart from our enemies in this fight, however, is how we behave. In everything we do, we must observe the standards and values that dictate that we treat noncombatants and detainees with dignity and respect.

From the leading GOP candidates:

...76 minutes. Giuliani tries to appear tougher than McCain. "I would tell the people who had to do the interrogation to use every method they could think of. Shouldn't be torture, but every method they can think of." It's unclear what he means, but it sounds a lot like torture. The crowd likes it. Applause.

77 minutes. Now Romney tries to appear tougher than McCain. "I don't want them on our soil. I want them in Guantánamo where they don't get the access to lawyers they get when they're on our soil. I don't want them in our prisons. I want them there," he says. "Some people have said we ought to close Guantánamo. My view is, we ought to double Guantánamo." More applause. Habeas corpus sucks!...

Please get these two off the stage. Now.

The state of the GOP candidates

Competing to demonstrate their psychopathic features -- the GOP candidates are a mess ...

Hullabaloo

... These guys have just spent the last fifteen minutes of the debate trying to top each other on just how much torture they are willing to inflict. They sound like a bunch of psychotic 12 year olds, although considering the puerile nature of the "24" question it's not entirely their fault.

This debate is a window into what really drives the GOP id. The biggest applause lines were for faux tough guy Giuliani demanding Ron Paul take back his assertion that the terrorists don't hate us for our freedom, macho man Huckabee talking about Edwards in a beauty parlor and the manly hunk Romney saying that he wants to double the number of prisoners in Guantanamo "where they can't get lawyers."...

...John McCain is the only adult on that stage and that scares the living hell out of me considering that he's half nuts too. Wow.

I think Rudy won it. These people don't care if he's wearing a teddy under his suit and sleeping with the family schnauzer as long as he promises to spill as much blood as possible.

These guys are losers. They know it. It's time for the second tier to come forward, probably starting with Gingrich.

Hacking war and the end of globalization: Wired interviews John Robb

Wired has a brief interview with John Robb. He's written a book on the modern warfare, with a subtitle of 'the next stage of terrorism and the end of globalization'. From the interview it sounds a lot like the 'falling cost of havoc' stuff with a flavor of emergent networks, hacking war, distributed systems, etc. Fairly prosaic for anyone who's been awake since 2001.

The interesting part is the 'end of globalization'. I can't tell exactly what he means, but from the interview I gather he's saying the global supply chain is extremely vulnerable to disruption. The best way to "attack" the US is to attack our supply chain, since that would drive our economy into deep depression. Sounds plausible to me, the one caveat being the 'x factor'.

X factor? Whatever it is that has allowed us to avoid inevitable doom since Oct 31, 1952.

Phil Carter on the "war czar"

Bush has appointed a "war czar" to deal with his bureaucracy. Phil Carter has written the definitive summary of the situation. It's worth reading the whole piece.

INTEL DUMP - Doug Lute: dream the impossible dream

Okay, I'm still scratching my head over this one. None of my thoughts are new on this, but I thought I'd air them anyway:

1) Isn't this guy supposed to be the "war czar"? If he can't make the interagency process work by knocking a few heads and firing a few cabinet officers, who can?

2) What's going to happen the first time that Lt. Gen. Lute doesn't get his way? Imagine a hypothetical where Gen. David Petraeus asks for more Justice Department personnel to promote the rule of law , and Al Gonzales tells him to go swimming in the Tigris....

3) How are the other agencies going to react to having yet another general in charge of policy? Maybe about as well as State reacted to having Jay Garner appointed as the head of ORHA during the early stages of the war?...

4) How broken is the U.S. national security apparatus that we need a "czar" to run it? Is the NSC that f---ed up that it needs a 3-star with some juice in the Pentagon to make things work? (This is a rhetorical question; the only possible answer is yes.)...

and the first comment is well chosen ...

Someone needs to tell President Bush that if you're sitting in the Cabinet Room and you don't see a President, then it's you.

Why did Lute take the job? Does Rove have incriminating photos of him with a North Korean agent? (that's a joke) Weird. Very weird.