Democrats in the Senate held hearings on contracting abuses in Iraq and Afghanistan. This is a woefully under-reported topic in our media. Some of the companies operating in Iraq have a deplorable record of over-charging the government, providing sub-standard and possibly even dangerous services to our soldiers, and abusing Iraqi civilians. Some of these companies make the war profiteers form the Second World War and the Civil War look like pikers by comparison.
The video for the hearings can be found here.
April 29th, 2008
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General, Politics, Economics, Iraq, How Capitalism Will Ruin You |
no comments
OK, so Amazon.com offers these “Daily Deals”, right? They pick some item, discount it, and sell a certain number of that item on a given day at the discounted price, until they run out.
Recently they offered a deal on an item that, by coincidence, I had purchased not long before at the regular Amazon price. This annoyed me, because I thought I had been getting a good deal at the regular price (well below MSRP), but they were now selling the same thing for about $20 less than that. I wanted to get in on the really good deal, not just the regular good deal - but of course there was no point in my buying one now, since I already had one.
Then a brilliant plan occurred to me: I could buy one at the discounted price, wait until they had sold out, and then sell it at the regular Amazon price on eBay - thus earning the difference between the sale and regular prices, and essentially reducing my own previously-paid price to equal the sale price, after the fact. But then an even more brilliant plan occurred to me: I could buy a whole bunch of them, wait until the sale was over, sell them on eBay at the regular Amazon price, and earn 20 bucks per unit profit.
So, not to be greedy, I ordered 5 units at a cost of close to $300, and sat down to wait to start shipping them out and earn mass profits. At some point I discovered that I had misremembered my original purchase price; the price differential was actually only $14, not $20, but still, I stood in the way to earn a cool 70 smackers, and that ain’t hay. And at any rate, I knew I had a guaranteed market at that price, since that’s the price they were currently selling for (non-discounted) on Amazon. What could go wrong?
Well, the first thing that went wrong, in fact the moment I clicked the “Buy” button on Amazon, was that I began to feel like a dick. Yes, it’s cool to find deals and it’s the American way to buy and sell schlock merchandise like a bazaar barker in desperate pursuit of the most minimal cash payout, but I realized that I was essentially taking advantage of Amazon’s discount offer to make a profit for myself - and because the discount sale quantity was limited, in doing so I was blocking someone else from getting a good deal who probably only wanted it to enjoy the item for themselves. You can argue that that’s just capitalism at work, but it’s (in a very, very tiny way) one of the ugly things I object to about the way capitalism works - that the constant grinding pursuit of self-interest in every way and form overrides even the most minimal sense of generosity toward others’ welfare. And here I was behaving like an oil company in a nature preserve, just to get 14 fucking dollars out of somebody who wasn’t fast enough to get the discount. So as soon as I had thought about it, I went back to my Amazon account to cancel the order - and found that, in less than 15 minutes, they had already begun processing the order and it couldn’t be canceled. So not only did I feel like a dick, but I couldn’t undickify myself.
So, I sat down again to wait, feeling guilty and wishing I wasn’t in this mess. I began to wonder if I should donate the profits to a charity or something.
Eventually, a big box arrived with 5 identical items in it, all duplicating the one already sitting on my shelf at home. I stashed it away guiltily and didn’t deal with it for a couple of weeks.
Big mistake.
Eventually, I entered 5 identical sale notices on eBay and sat down to wait some more, because it takes a week for the auctions to end. Now, I’m not stupid, right? - before I began this whole adventure I had checked sale prices on eBay and confirmed that they were doing a brisk business in this item, at prices roughly approximating the Amazon non-discounted price. In part because I had only previously sold things on eBay once or twice and didn’t really know the system, in part because I wasn’t sure it would help, I hadn’t specified a minimum sales price on the auctions - but what difference would it make? The going market price was well above my purchase price, so my profits were secure.
After entering my items for sale, I checked a few similar listings just to re-confirm that the market was strong. And then made a sickening discovery.
Somehow, in the intervening couple of weeks between ordering the items and placing them on eBay, the bottom had dropped out of the market for them. eBay sale prices were now running well under the Amazon non-discount price; “Buy It Now” offers at the Amazon price were going totally unclaimed, and some auctions were actually ending below the discounted price that I had paid! And because I hadn’t specified a minimum price, I could potentially lose almost everything I had paid! But I couldn’t do anything about it - if I waited longer, the price would probably just drop further, and I had to get as much of my $300 investment back as I could. So I left the auctions up and hoped I was just seeing a momentary aberration in sales prices.
I forced myself not to monitor the auctions more than once every day or so for the next week, but on the ending day I was mortified: every single auction had ended within a dollar or two of the Amazon discount price that I had already paid, and most of them had ended well below that - in one case almost $10 less! The total combined sales of all items was $25 less than I had paid for them at the discounted price! Luckily, I had specified a $10 flat shipping fee, thinking it would cost less than that, so I had some buffer room, but it wasn’t looking good.
And of course, three of my buyers were from the midwest - not cheap to ship to - and the rest were all from California - as far away as it’s possible to get in the 48 States. And then PayPal took about $2 off the top of each order they processed, and eBay itself charged me more than $3 per order in fees . . .
End result, after splurging on a bulk purchase of a highly popular item at deep discount, selling into a strong, virtually guaranteed market with demonstrated demand almost $20 above my break-even price point, and paying all associated transaction fees (including the cheapest possible shipping method, even at the risk of not keeping my promises regarding shipping dates, because every other alternative was a disaster): I still felt like a complete dick and I lost $18.81.
Which, paradoxically, had the effect of making me feel a lot less like a dick. Instead of elbowing out others’ discount purchases for my own benefit, I actually wound up subsidizing my buyers’ discounts to the tune of an average of $3.76 below my own purchase price - which would have been a substantial savings for any Amazon customer who had not paid for “free” Prime shipping privileges, and at worst no more than $2 above discount (and as much as $10 below) even for those who had. So I did shift the market from Amazon to eBay, which is not what Amazon wanted, but from the broad perspective the only real loser (in various senses) in this scenario is me. So I’m really a kind of altruist.
Great.
April 7th, 2008
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General, I do too have a life, Economics, Math, Fiasco, How Capitalism Will Ruin You |
6 comments
So Illinois finds a toy that has too much lead in it and informs the company, Mattel in this case, and Mattel takes it off the market. In Illinois, and only in Illinois:
Dozens of members of Congress sent a letter Tuesday to the chief executive of Mattel, accusing the company of not living up to its promise to keep lead-tainted toys out of children’s hands.
The letter was prompted by Mattel’s decision not to issue a nationwide recall of a blood-pressure cuff in a toy medical kit sold under the Fisher-Price brand. The legislators said they were disturbed by the company’s “lack of action.” Lead was found in a plastic part of the toy, and current federal laws ban lead only in paint on toys. Lawmakers are considering a law to limit lead in all material in toys.
… Consumer Reports magazine discovered lead in the armband of the toy blood-pressure cuff in November and notified the attorney general in Illinois, where there are stricter lead standards, including limits in plastic. State officials found that the cuffs contained 4,500 to 5,900 parts per million of lead, roughly eight times the federal limit for lead in paint.
In December, Mattel recalled the toy in Illinois and began accepting it back from any retailer or customer nationwide who called a toll-free number.
But it did not recall the toy nationwide, nor did it widely publicize the problem as would have been required in a national recall. The company’s recall page on its Web site does not include information about the toy.
I have two questions. First, does anyone believe that Mattel is not recalling these toys for any other reason that it would cost the money? Second, why is the CEO of Mattel not in jail? They have been told that the toys contain more than eight times the federal levels of lead, have been forced to remove the toy from one state and yet they still refuse to recall the toy nationwide. Since they can make more money poisoning children than saving them, the toy stays on the shelf. This CEO is scum, pure and plain and simple, and in a decent society he would be facing poisoning charges. In our society, Congress has to beg him to stop poisoning children.
Link via Consumerist.
February 2nd, 2008
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General, How Capitalism Will Ruin You |
13 comments
This is an excellent post on how the financial incentives of our intellectual property regime are drying up new medicine research and production:
The report then critiqued the drug industry’s corporate culture, framed by the demands of Wall Street. The financial incentives formed by the stock market force R&D decision-makers to focus most of their attention on developing blockbuster drugs for proven mass markets. Minor aches and pains, allergies, depression, cholesterol management, acid indigestion – the rewards for a successful new entry in one of these categories, whether or not it represents a significant new advance over previous therapies, are measured in the billions of dollars in sales.
… This trend, noted in the GAO report, led the auditors to conclude that the nation’s patent laws were one of areas in need of reform if industry was going to refocus its attention on medically significant products. A series of laws and court rulings have given manufacturers the right to obtain new patents for minor changes in chemical structure, changes in routes of administration, and new uses for old products. These patent extenders provide substantial financial rewards to firms that focus their research attention on extending the marketability of their existing products instead of focusing on the truly new and innovative – always an inherently risky proposition.
The logic of modern capitalism dictates this situation. Companies will do what it is easiest and safest to make money, and that means hundreds of knock off drugs and drugs for minor or nuisance problems at the expense of therapies of major medical problems. Investors want the blockbusters, and so pharmaceutical companies try to provide those in the fastest and most-risk averse way. Combine that attitude with the existence of patents and with the ability to extend a patent for minor changes, and you have an industry where real innovation is being driven out.
The patent problem is rather interesting. Patents, whatever ill they do, are a requirement for modern capitalism. If anyone can sell your ideas, then there really is little incentive to commercialize them. In fact, since you may have to include the cost of research and development in your pricing, you could start out at a serious price disadvantage to your thieving rivals. But the existence of patents opens up another way to make money: manipulating patent rules. Coming up with new discoveries and then translating those discoveries into new treatment regimes is hard work, filled with uncertainty. Manipulating the patent laws to allow you to monopolize a market for an extra number of years is comparatively easy and comparatively less risky. Given those facts, the situation we find ourselves in today was pretty much inevitable. The rules of modern capitalism ensure that.
The only way out of this mess is fairly intrusive government regulation. Patent laws have to be changed to prevent the kind of extensions we see know, and the government has to use the power of its research budget to force the companies that benefit form that research to be less blockbuster focused and more general needs focused. Without those kinds of changes, the rule sof modern capitalism will ensure that the drying up of new medicines will continue.
Link via Ezra Klein at his fancy new digs.
December 12th, 2007
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Health, How Capitalism Will Ruin You |
10 comments
It seems that the best way to feed starving nation is to ignore the free market fundamentalists at the World Bank:
But this year, a nation that has perennially extended a begging bowl to the world is instead feeding its hungry neighbors. It is selling more corn to the World Food Program of the United Nations than any other country in southern Africa and is exporting hundreds of thousands of tons of corn to Zimbabwe.
In Malawi itself, the prevalence of acute child hunger has fallen sharply. In October, the United Nations Children’s Fund sent three tons of powdered milk, stockpiled here to treat severely malnourished children, to Uganda instead. “We will not be able to use it!” Juan Ortiz-Iruri, Unicef’s deputy representative in Malawi, said jubilantly.
Farmers explain Malawi’s extraordinary turnaround — one with broad implications for hunger-fighting methods across Africa — with one word: fertilizer.
Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have periodically pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers. But after the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached.
The notion that the free market can solve every problem in the world is idiotic on its face. There has never been and I suspect that there never will be any one tool that is appropriate for every job you might face. It was clear that the soil in Malawi need replenishment, and it was also clear from watching Western countries that technical farming and the use o fertilizers can make an enormous beneficial impact on farm output. It was also clear that a country as poor as Malawi was going to need someone to step in and subsidize at least the first round of funding that would be required to provide poor farmers with fertilizer. It was a role perfectly suited for the government.
The World Bank knew all of this, and yet they still insisted that a hungry country stop growing food and start growing cash crops for export so that it could one day buy food from other countries. It was an insane idea on its face, and yet, because it adhered to the notion of capitalism uber alles, the Word Bank insisted on it. Their free market lead to starvation and privation. The government intervention lead to record crops, and end to famine, and even the growth of the economy driven by an increase in employee wages:
“The government has taken the bull by the horns and done what farmers wanted,” he said. Some economists have questioned whether Malawi’s 2007 bumper harvest should be credited to good rains or subsidies, but an independent evaluation, financed by the United States and Britain, found that the subsidy program accounted for a large share of this year’s increase in corn production.
The harvest also helped the poor by lowering food prices and increasing wages for farm workers. Researchers at Imperial College London and Michigan State University concluded in their preliminary report that a well-run subsidy program in a sensibly managed economy “has the potential to drive growth forward out of the poverty trap in which many Malawians and the Malawian economy are currently caught.”
In a very real sense, the Word Bank’s insistence on a free market and an end to government intervention helped prolong starvation. Governments and free markets are human created tools, nothing more, nothing less. What matters is not which tool is used but rather which tool produces the desired outcome. You forget that and you get the World Bank, an organization religiously wedded to only one tool and insistence on the uses of the one tool in the face of all contrary evidence. You forget that and you get famines and near-famines that last longer than they should and kill people who should have lived.
December 2nd, 2007
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General, Politics, Economics, How Capitalism Will Ruin You |
53 comments
Who would ever have thought that bottom-dwelling conservative hack shop Regnery Publishing was sleazily ripping off its own sleazy authors? Not those authors, apparently. Now the moral beacons who brought us Swiftboating and various hack jobs attacking Bill Clinton and praising George Bush have suddenly discovered that the press that was low enough to publish their bilge was also not above stealing their royalties. Forgive me while I laugh my goddam ass off . . .
In a suit filed in United States District Court in Washington yesterday, the authors Jerome R. Corsi [founder of the Swift Boat Vets], Bill Gertz, Lt. Col. Robert (Buzz) Patterson, Joel Mowbray and Richard Miniter state that Eagle Publishing, which owns Regnery, “orchestrates and participates in a fraudulent, deceptively concealed and self-dealing scheme to divert book sales away from retail outlets and to wholly owned subsidiary organizations within the Eagle conglomerate.” . . .
“They’ve structured their business essentially as a scam and are defrauding their writers,” Mr. Miniter said in an interview, “causing a tremendous rift inside the conservative community.” . . .
The press negotiated a standard advance fee/royalty package with the authors, but added a clause providing lower royalty percentages for books sold at discount. It then began selling as much as half their books at cost to its own subsidiaries, to use as incentive gifts or to re-sell at a profit. Because the books were sold at or just above cost, the authors got virtually no royalties on them, but the company got to keep the profits from the resale by its own subsidiaries. The authors got double-screwed because the giveaways don’t count in the standard industry calculations of sales volume, thus leaving them at a disadvantage when they later tried to negotiate deals with other publishers.
Now, that’s just straightforward fraud. But what’s delicious about it - aside from the fact that the authors so righteously deserved it - is that these writers seem so nonplussed that an explicitly conservative business operation would rip off the people who provide their saleable goods! What’s that? A privately-owned right-wing business is underpaying its workers and chiseling its contracted partners out of greed? There’s something about fuck-you capitalism that actually works to the disadvantage of the people under its thumb? That’s . . . amazing. Somebody should do something about this! Why didn’t anyone warn them?!
It really just sums up right-wing hackery in a nutshell. These tools, having made their careers on the fringes of the self-congratulation society that is right-wing “scholarship”, really believed that they’d be taken care of. They figured that the cushy deals and uncritical flattery that rain down on AEI think-tank lapdogs like Dinesh D’Souza would be guaranteed to them also, simply because they were equally willing to say what their overlords wanted to hear. They forgot that Regnery was a profit-making enterprise - and quite possibly they’d never been on the supply end of the profit equation before. Their dazed sense of injury is just priceless:
Mr. Miniter said. “It suddenly occurred to us that Regnery is making collectively jillions of dollars off of us and paying us a pittance.” He added: “Why is Regnery acting like a Marxist cartoon of a capitalist company?”
Dude: because they can.
What a maroon. He actually believed they wouldn’t screw him if they got a chance. He really seems to think that capitalist companies don’t act that way - that there’s something unreal or cartoonish about it when they do. He stumbles to the obvious conclusion but still can’t bring himself to believe it: the company is making money off its workers and paying them as little as possible, just like critics of capitalism have always said they do. Somehow, he manages to call that a cartoon while simultaneously complaining that it’s really happening to him. He is obviously stunned that his preferred fairytale, in which companies gladly provide wealth and comforts to anyone who can build a better mousetrap for them, doesn’t actually work, but he shows no sign of abandoning that fairytale in favor of the descriptive narrative of capitalism that he himself provided, and which he himself states is actually true in this case, but he still implicitly insists is false. Well, he’s one step closer to seeing the light. Couldn’t happen to a more deserving bunch.
November 7th, 2007
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General, Politics, Legal Issues, Economics, Culture, Libertarian Problem Solving, News & Current Events, How Capitalism Will Ruin You |
7 comments
Rumor has it that telecom amnesty is working its way back into the telecom bill in the Senate. People who support the amnesty like to claim that the companies should not be punished for doing what the government asked of them. That is a terrible notion.
First, it makes no sense. The law is not what any particular Administration says it is. Companies as powerful and profitable as the ones in question have more lawyers than you can count in a day. It is not unreasonable to expect that such well defended companies would have the legal brainpower to realize that they were, in fact, being asked ot break the law. And break it they did, for years past the immediate emergency, mooting any notion that they were just trying to be good citizens in a time of immediate crisis. They were trying to curry favor with the Administration in power, their obligation to respect the laws of the land be damned.
Which brings us to the real problem with telecom amnesty. These companies were perfectly positioned to defend both themselves and the rule of law form the overreach of the Bush Administration. If we let these companies off the hook, if we say to them, well, it’s okay, the government asked you to, then we are setting a very dangerous precedent. One of the very few things that keeps corporations in line, outside of government regulation, is the notion that any particular bad act would be more costly to them in lost good will and at trial than profitable by itself. The amnesty would not only prevent future governments form criminally prosecuting them, but would also shut down ongoing civil cases. The public would never know the extent to which these companies betrayed thier fellow citizens and their would be no concrete punishment for that betrayal. If we allow that, then we have a created a situation where any Administration could ask a private company to violate any one of the provisions of the Bill of Rights for it and suffer no consequences, since it would be then established that no company should be punished for being a “good citizen” and doing as their government asks.
Your freedoms can be taken away by an employee of ATT just as easily as they can be taken away by a government employee. Telcom amnesty and the mainstreaming of the notion that a company should not be punished for doing what any given White House told them to do would essentially allow the outsourcing of the death of the Bill of Right.
November 6th, 2007
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Legal Issues, Economics, How Capitalism Will Ruin You |
one comment
I’m thinking about ditching my Gmail account. It’s gotten to be too big brother for me. What bugs me is the “sponsored link” line at the top, where it targets ads and news links based on the contents of my e-mail messages. My sister sent me an e-mail with pictures of Jack-O-Lanterns she carved, and Gmail happily put up a link for Halloween decorations. A Saab dealer sent me an e-mail follow-up to a test drive my wife did some months ago, and a SAAB link shows up there. But the last straw was today, when I got an e-mail from Say Uncle, and Gmail conveniently gave me a link to a news story about a shooting somewhere. That’s just too damn wiggy for me.
Has anyone else had this experience?
The more time passes, the more I miss the good old days of POP3.
October 26th, 2007
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Technology, How Capitalism Will Ruin You |
11 comments
Joe, over at Evangelical Outpost, cites “Another example of the economic ignorance of Americans“:
close to 46 percent of those surveyed in a new CNN-Opinion Research Corporation Poll out Thursday morning say the country’s economy is in a recession . . .
69 percent of black Americans questioned in the survey say the country’s in a recession while only 42 percent of white Americans feel the same way.
First of all, this isn’t evidence of economic ignorance - just of the difference between a technical definition and people’s common-sense understanding of the situation.
Joe quotes the technical definition of recession:
[T]he National Bureau of Economic Research defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.
[emphasis added]
That is, by definition the recession is over when things literally get so bad they can’t get any worse. Most people would think the recession was still going on at that point.
Most people understand “recession” to mean “economic bad times”, but technically it just meanst anytime economic indicators turn negative. If you think of the strength of the economy following a kind of sine curve, the popular notion of recession would be the period when the curve is below the middle point, either rising or falling, while the technical definition would be whenever the curve is falling, even if it starts from a high point.
So, by the technical definition, we’re kind of weakly out of the Bush recession - that is, some of the things that got so bad they couldn’t get worse have now started to get better. But by any reasonable understanding of the situation, things are in fact still bad in absolute terms. Joe thinks it’s “ignorant” to believe that.
Among other features of Bush’s “recovery”:
- he remains the worst President since at least Eisenhower in terms of average monthly employment gains over his term
- he remains the only President since at least Eisenhower to average negative monthly job growth
- his best month ever in terms of job growth still puts him behind 5 other recent Presidents considered on average over their entire terms (top three finishers: Clinton, Carter, and Johnson)
- even periods of “expansion” and of positive net job growth under Bush have always lagged population growth - there has never been a period under Bush in which more jobs were becoming available to the working population overall
- he is the only President in recent history to sustain continual lagging job growth, with respect to population, throughout his term
- the Bush recession officially “ended” almost two years ago - Bush has averaged a net 33,000 jobs lost per month during the “expansion” period
- Unemployment rates for both blacks and whites declined steadily under Clinton, and rose dramatically under Bush
- the gap between black and white unemployment rates narrowed under Clinton and has widened under Bush
- the black unemployment rate is more than twice the white rate (and would be three times higher if you include the larger percentage of non-imprisoned working-age blacks who are categorized as “not in the labor force” because they’ve simply been unemployed too long)
- GDP growth under Bush has been below the 10-year moving average for most of his term (contrast Clinton: both Bush and Clinton sat through “official recessions” lasting about a year in the first year of their terms - Clinton then not only posted record job-growth for the rest of his Presidency, but GDP growth above the 10-year average almost every quarter therein; George Bush, as we note, has put people out of work by the trainload, while also posting below-average GDP growth most quarters; the “Economic Snapshots” Website notes: “Historically, we have seldom seen real GDP growth this weak except when a recession was near”)
Re: real income, the Economic Policy Institute reports:
despite low unemployment and strong productivity growth, these measures of living standards have yet to recover to their levels of the previous business cycle peak in 2000. . . . in 2006 [there was] an increase in the poverty rolls of 4.9 million persons, including 1.2 million children; median household income in 2006 was . . . about $1,000 dollars (-2.0 %) below its 2000 level (in 2006 dollars). In other words, economic growth over the last six years has totally bypassed the typical middle-class household. . . .
Since 2000, the share of the population without health coverage has increased 2.1 percentage points, an increase of 8.6 million uninsured Americans. . . .
Reflecting the narrow extent to which the growing economy has been showing up in the paychecks of many working-age households, median annual earnings by full-time, year-round workers fell in 2006, for the third year in a row, down about 1% for both men and women. . . .
The unequal distribution of growth between profits and compensation is playing a critical role in this result. . . . the earnings declines among male and female full-year workers last year can be accounted for by a profit squeeze on wages.
Note also that this very weak wage performance has occurred while productivity growth increased 3% per year (2000-06). While economists and policy makers typically stress the positive performance of such indicators as productivity, GDP, or low unemployment, these earnings results clearly reveal that positive macro-conditions have not led to wage growth for typical full-year workers, as customarily had been the case.
So, yes, we’re technically in an “economic expansion” - one that has seen consistently increasing gaps between available jobs and needy workers, declining real income, increasing lack of health insurance, a widening unemployment gap between blacks and whites, record levels of net job losses, and recession-level GDP growth, all during this supposed “expansion”, and all arising uniquely under the Bush administration.
But Joe thinkd it’s a sign of “economic ignorance” that so many workers think they’re worse off only because they’re losing wages, benefits, and employment opportunities, and that blacks are more likely to think they’re worse off only because their unemployment rate is two or three times that of whites and they’re more likely to be counted out of the workforce entirely.
Corporate net profits are up, largely on the basis of those declining wage expenses, so anyone who thinks the economy is bad is clearly wrong. It’s only bad for for the people who do the work - you know, the little people, the ones who don’t count, the ones whose actual personal economic status has no bearing on the real economy, the ones who are “ignorant” for believing that they matter.
October 23rd, 2007
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General, Politics, Economics, Culture, Media, News & Current Events, Race, How Capitalism Will Ruin You |
17 comments
So it seems that the Bush Administration apparently started spying on Americans without warrants before 9/11:
Mr. Nacchio said last year that he had refused an N.S.A. request for customers’ call records in late 2001, after the Sept. 11 attacks, as the agency initiated domestic surveillance and data mining programs to monitor Al Qaeda communications.
But the documents unsealed Wednesday in federal court in Denver, first reported in The Rocky Mountain News on Thursday, claim for the first time that pressure on the company to participate in activities it saw as improper came as early as February, nearly seven months before the terrorist attacks.
The significance of the claim is hard to assess, because the court documents are heavily redacted and N.S.A. officials will not comment on the agency’s secret surveillance programs. Other government officials have said that the agency’s eavesdropping without warrants began only after Sept. 11, 2001, under an order from President Bush.
But the court filings in Mr. Nacchio’s case illustrate what is well known inside the telecommunications industry but little appreciated by the public: that the N.S.A. has for some time worked closely with phone companies, whose networks carry the telephone and Internet traffic the agency seeks out for intercept.
If this is true, and it does fit their history, there are a couple of points here aside form the Bush Administration’s strange and overwhelming desire to be remember as less competent imitators of Pinochet. All but one company went along with this power grab and 9/11 happened anyway. Obviously, the spying program did little good to protect the country. Which is expected. If you have read the 9/11 Commission report, the problem was almost never a lack of intelligence. The problem was that intelligence was not shared, out of professional jealousy and incompetence primarily, and we did not have enough trained analysts to review the intelligence we did have in time to prevent the attacks. So the next time someone on the right whines about how having to obey the Constitution means hat we are all going to die! die! die!, remind them that the Bush Administration has been ignoring the Constitution since before 9/11 and it did us no damn good.
The second important point in this story is that the telecom companies all bowed before the government, at least in part, because they were afraid of losing large contracts. Their economic well being demanded that they comply with spying on their customers and so they did. There may have well been other reasons for their capitulation, but it needs to be noted that when the government failed to provide strong oversight of their behavior, they ran for the quick buck, regardless of the effect of their actions on their customers, their fellow citizens, and their country. From the standpoint of business, it makes perfect sense. Which, absent strong government oversight, is why it will happen again and again.
Without a strong reason not to, telecom companies will almost always put their economic interests ahead of any other considerations; it is what corporations are designed to do. Markets cannot keep you free, because markets care only about profit and loss. The pressure to produce profit and avoid loss eventually means that, in an unfettered marketplace, the scrupulous will almost certainly be driven out of the market by the unscrupulous. When government oversight breaks down, as it did spectacularly in this case, the free market will chain you as fast as any government. They might, if they are very clever, even get you to pay for the chains yourself.
October 16th, 2007
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Economics, Terrorism, NSA, How Capitalism Will Ruin You |
25 comments
