Greek voters last month rejected continuation of an austerity program that has plunged their economy into depression, voting in a government determined to break out of the current terms on which Greece gets help from the Troika.
On Monday, it looked as if the negotiations had reached an impasse. Euro members refused to provide Greece with a bridging loan, demanding adherence to the austerity bailout terms negotiated under the previous government.
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European officials, so far, have refused to budge. They are betting that Greece will seek to avoid a default at all costs to dodge a possible banking crisis, which could inflict more hardship on the population and undermine confidence in the new government.
Default on its debts is not an appealing option to Greece, although the consequences of such a move may not be as dire as some expect. Greece currently runs a primary surplus, and may well have enough cash on hand to pursue its stimulus reforms for a while. But at some point, the funding problem will re-emerge. Greece is hoping that improvements to the economy, including rapid growth in employment, incomes and profits that would bring more tax revenue and reduce anti-poverty spending would be sufficiently swift to produce rapid short-term growth, all of which would improve Athens’ ability to borrow from private markets for long-term public investment projects. The fundamental problem, however, remains a loss of monetary sovereignty.
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Fears of a banking crisis in Greece in the event of a default, though, may be overstated. Greek banks are all already regulated by the European Central Bank (ECB). Continuing the U.S. analogy, would the Fed shut down Citibank if the state of Georgia went rogue and refused to pay its debts?
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Germany may be determined to hold the eurozone together, but on terms that enforce the conservative economic orthodoxy first championed by President Ronald Reagan and Prime Minister Margaret Thatcher across Europe. If, indeed, all parties at the table seek to make the EU a political union, Varoufakis will be arguing that cannot be achieved on the basis of the Troika recipe, but requires broad embrace of more progressive pro-growth principles.
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Greece takes to the negotiating table a desire to stem the humanitarian crisis created by austerity, while avoiding the go-it-alone option of ditching the euro and reintroducing the drachma. But convincing the powers that be in the eurozone, and the vested interests behind them, of the need for a fundamental policy re-orientation toward a more progressive consensus remains a tall order.
As we’ve said from the outset, as much as we’d liked to see Greece prevail in its efforts to restructure its relationship with its creditors, not just for its own sake but for the benefit of other periphery countries and the Eurozone project, it was unlikely to prevail unless it could rally support. One possible source was the anti-austerity and anti-Eurozone parties in the rest of Europe. Perhaps we’ve missed it, but we’ve seen nary a sign of Marine Le Pen in France or Spain’s Podemos, the two proximate threats to business as usual in the Eurozone, using the extraordinary hostility of the Eurogroup to economically rational proposals from Greece as a talking point.
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And as we pointed out at the time, the Administration had legitimate reason to try to push the recalcitrant Germans and northern countries to relent. The Eurozone is on utterly unsustainable foundatoins. It isn’t just that its structure is defective, with monetary integration but no Federal fiscal structure to allow for Eurozone-wide government spending to help equilbrate economic performance across regions. It is also that the design of the Eurozone is far too skewed to Germany’s advantage. Germany continues to run large trade surpluses with the rest of the Eurozone; they’ve even widened to a record 7.4% of GDP. Germany wants the impossible, to run persistent trade surpluses with its trade partners, yet not finance their purchases.
Unlike the Eurocrats, the Administration, along with most financial analysts, knows that persisting in this course of action assures a Eurozone breakup. And unlike Germany and its allies in the Eurogroup, it believes that a Grexit would pave the way for other countries leaving, and that the consequences of a Eurozone implosion would be catastrophic for Europe and not too pretty for the US either. So the intervention was hardly selfless. And our sources tell us Treasury did expend some effort on Greece’s behalf, although given the lack of movement from the Eurogroup side over the last week, we doubted how forceful a case was made.
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The Greek government should have imposed capital controls by now but was loath to do so, since any leak of that line of thought would increase the deposit run. While it could be done in isolation, simply as a protective measure to prevent deposits being moved out of the country and to reduce daily withdrawals. it would be entirely logical to see it as a step on the way to a Grexit. Anyone with an operating brain cell would want to minimize their exposure to having cash in the bank turned into less valuable drachmas.
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The irony here is that if Greece were willing to default, Germany would have turned an intended subjugation of Syriza into a devastating political wound to the ruling German parties. Refusing to extend the ELA any further, if it were to come to that, merely limits ECB losses. If Greece were to default, it would suddenly expose the size of the commitments to Greece through the Target2 system, the vehicle used to launder the bailout money from Greece to French and German banks. Most Germans have the inaccurate picture than the rescue funds went to stereotypically lazy Greeks, when 91% of the payments actually went to banks.
While there have been many egregious CFAA cases, one of the most high-profile, of course, was that of activist Aaron Swartz, who was arrested for downloading too many research papers from JSTOR from the computer network on the MIT campus. The MIT campus network gave anyone — even guests — full access to the JSTOR archives if you were on the university network. Swartz took advantage of that to download many files — leading to his arrest, and a whole bunch of charges against him. After the arrest, the DOJ proudly talked about how Swartz faced 35 years in prison. Of course, if you bring that up now, the DOJ and its defenders get angry, saying he never really would have faced that much time in prison — even though the number comes from the DOJ’s (since removed) press release.
Swartz, of course, tragically took his own life in the midst of this legal battle, after facing tremendous pressure from the DOJ to take a plea deal as a felon, even as Swartz was sure he had done nothing illegal or wrong. Since then, there have been a few attempts to update the CFAA to block this kind of abuse, but they have been blocked at every turn by a DOJ that actually wants to make the law even worse. This includes the White House’s latest proposal for CFAA reform, which would actually make more things a felony under the CFAA, and could drastically increase sentencing for things that many of us don’t think should be a crime at all — such as tweeting out a list of worst passwords on the internet.
Outgoing Attorney General Eric Holder has done his best to ignore or downplay any suggestion that his Justice Department abused the CFAA in going after Swartz. And it looks like his likely replacement is trying to do the same.
Senator Al Franken questioned nominee Loretta Lynch about Swartz and the CFAA (.pdf) and got back a response that is basically her avoiding the question. She doesn’t say anything about Swartz, but goes off on some FUD about the dangers of malicious hackers and how the DOJ needs the tools to fight spyware. She then claims that the newly proposed CFAA changes are okay because they only increase the possible maximum sentences, but not the minimums, leaving things up to the discretion of judges (and prosecutors).
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This is such a total braindead law enforcement view of things: that if only there were greater punishment it would scare the “bad people” out of doing what they’re going to do. That’s never really worked, and especially not in this area, where the law is being abused to go after people who don’t think they’re actually doing anything wrong.
Second, it just plays up the FUD that “bad stuff is happening” so “something must be done.” But it ignores how vague the law is and how it’s wide open to abuse. A good law enforcement official would ask for clearer laws that more narrowly target actual bad behavior, rather than celebrating a broad and vague law that can be, and is, widely abused just to rack up more DOJ headlines and “victories.”
Suppose that by enacting a particular law we’d increase the U.S.Gross Domestic Product. But almost all that growth would go to the richest 1percent.
The rest of us could buy some products cheaper than before. But those gains would be offset by losses of jobs and wages.
This is pretty much what “free trade” has brought us over the last two decades.
I used to believe in trade agreements. That was before the wages of most Americans stagnated and a relative few at the top captured just about all the economic gains.
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The fact is, trade agreements are no longer really about trade. Worldwide tariffs are already low. Big American corporations no longer make many products in the United States for export abroad.
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To the extent big American-based corporations any longer make stuff for export, they make most of it abroad and then export it from there, for sale all over the world – including for sale back here in the United States.
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In fact, today’s “trade agreements” should really be called “global corporate agreements” because they’re mostly about protecting the assets and profits of these global corporations rather than increasing American jobs and wages. The deals don’t even guard against currency manipulation by other nations.
According to Economic Policy Institute, the North American Free Trade Act cost U.S. workers almost 700,000 jobs, thereby pushing down American wages.
Since the passage of the Korea-U.S. Free Trade Agreement, America’s trade deficit with Korea has grown more than 80 percent, equivalent to a loss of more than 70,000 additional U.S. jobs.
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The old-style trade agreements of the 1960s and 1970s increased worldwide demand for products made by American workers, and thereby helped push up American wages.
The new-style global corporate agreements mainly enhance corporate and financial profits, and push down wages.
That’s why big corporations and Wall Street are so enthusiastic about the upcoming Trans Pacific Partnership – the giant deal among countries responsible for 40 percent of the global economy.
That deal would give giant corporations even more patent protection overseas. It would also guard their overseas profits.
And it would allow them to challenge any nation’s health, safety, and environmental laws that stand in the way of their profits – including our own.
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Global deals like the Trans Pacific Partnership will boost the profits of Wall Street and big corporations, and make the richest 1 percent even richer.
Third Way (h/t TPM), a Democratic pro-trade think tank, has released a new study, “Are Modern Trade Deals Working?” It examines the various “free trade” deals the U.S. has signed since 2000 to conclude that 13 of 17 have led to an improvement in our goods (not including services; see more below) trade balance with the countries involved, giving a net improvement over the 17 agreements studied of $30.2 billion per year.
I did a similar analysis of this very question (though in less detail than the Third Way study) in 2012. Unlike the Third Way report, my post included all U.S. free trade agreements (rather than starting in 2001 like Third Way) as well as the effect of the 2000 agreement for Permanent Normalized Trade Relations (PNTR) with China. So, compared to the Third Way study, my post includes the FTAs with Israel, Canada, and Mexico, but did not consider the Panama FTA, which had not yet come into effect when I posted. My conclusion was essentially the same as Third Way’s, that the effects of the agreements on our trade in goods were usually positive, but of small size (the effect of the Israel FTA was also small). Because the Third Way study begins in 2001, however, it omits the impacts of NAFTA and PNTR with China. However, as my post showed, they are the most important by far.
This fact is not lost on opponents of the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). Lori Wallach of Public Citizen Global Trade Watch told the Associated Press that “studies such as Third Way’s make a big deal out of modest trade improvements with countries like Panama, and gloss over huge trade deficits with major trading partners such as South Korea, Mexico and Canada.” She’s right.
In 1993, the year before NAFTA went into effect, the United States had a surplus with Mexico on trade in goods of $1.7 billion. In 1995, it went to a deficit of $15.8 billion, and in 2014 the goods trade deficit was $53.8 billion, down from 2007′s peak of $74.8 billion. This was in sharp contrast with the analysis of Gary Hufbauer and Jeffrey Schott, who predicted trade surpluses on the order of $9-12 billion through the 2000s, even as they admitted that the peso was overvalued (it collapsed in value in the December 1994 “Tequila crisis”).
Meanwhile, the balance of trade in goods with Canada went from a deficit of $10.8 billion in 1993 to $34.0 billion in 2014. Note that the U.S. had a peak deficit of $78.3 billion in 2008, which collapsed to $21.6 billion in 2009.
In 2000, the year PNTR was adopted, the United States had an $83.9 billion goods trade deficit with China. In May of that year, the International Trade Commission (h/t David Cay Johnston) released a report estimating that the trade balance would worsen by a further $4.3 billion. According to the article, the U.S. Trade Representative and the White House both criticized this study strongly. And in fact, the 2001 deficit fell to $83.1 billion. However, in 2002 it was $103.1 billion, an increase more than four times the ITC prediction, and by 2014 it had grown to $342.6 billion.
By including trade in goods but not trade in services, Third Way is admirably the stacking the deck against its own position. It points out that the U.S. has a global surplus in trade in services of $232 billion in 2014, including a $45 billion surplus with Canada and Mexico. However, it doesn’t mention that the U.S. goods trade deficit was $737 billion in 2014, or that the country’s overall 2014 trade deficit was $505 billion, up from $477 billion in 2013.
The ultimate question is whether TPP and TTIP are going to be more like the U.S.-Australia Free Trade Agreement, or more like NAFTA and PNTR. Considering that the TPP includes all the NAFTA countries, Australia, Chile, Japan, and six others, comprising “nearly 40 percent of global GDP,” I think it’s safe to assume that it will have a much bigger impact than the FTAs with Australia or Chile, for instance. Similarly, since the European Union has an economy about the same size as the U.S. economy, I believe the TTIP will also have big consequences.
Moreover, we have to remember that these are much more than trade agreements. Both of them have increased protections for investors, patents, trademarks, and other intellectual property, and in both of them the U.S. is advocating the inclusion of investor-state dispute settlement so companies can sue governments through arbitration rather than courts, something that has proven more favorable for companies vis-a-vis both governments and consumers. So, in addition to the negative effects on U.S. workers that we would expect on the basis of the Stolper-Samuelson Theorem, all signatory countries are likely to suffer from higher prices for medicine and assaults on their regulations through investor-state dispute settlement.
Speaking of the lesser evil, while there are many things to hate Vladimir Putin for, the Ukrainian Civil War does not appear to be one of them.
One year after the fascist coup that overthrew the elected government of Viktor Yanukovych it is clear that it was engineered with at least the tacit complicity of the United States and the CIA. Since then Russia has reclaimed the Crimean Military District (and what genius decided Russia would give up its only warm water port, Sevastopol?) and the Kiev regime has been unable to reestablish control of the secessionist Donbass region, center of most of its heavy industry and coal mining.
The attempt to quell this insurrection has been extremely costly and now Kiev is seeking financial assistance from the EU and IMF. Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, argues that this will result in the fire sale of assets to Western Plutocrats in accordance with Neo-liberal plans for financial hegemony, but may also backfire on the very same people who instigated it.
The fate of Ukraine is now shifting from the military battlefield back to the arena that counts most: that of international finance. Kiev is broke, having depleted its foreign reserves on waging war that has destroyed its industrial export and coal mining capacity in the Donbass (especially vis-à-vis Russia, which normally has bought 38 percent of Ukraine’s exports). Deeply in debt (with €3 billion falling due on December 20 to Russia), Ukraine faces insolvency if the IMF and Europe do not release new loans next month to pay for new imports as well as Russian and foreign bondholders.
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How much of Ukraine’s budget will be spent on arms? Germany and France made it clear that they oppose further U.S. military adventurism in Ukraine, and also oppose NATO membership. But will Germany follow through on its threat to impose sanctions on Kiev in order to stop a renewal of the fighting? For the United States bringing Ukraine into NATO would be the coup de grace blocking creation of a Eurasian powerhouse integrating the Russian, German and other continental European economies.
The Obama administration is upping the ante and going for broke, hoping that Europe has no alternative but to keep acquiescing. But the strategy is threatening to backfire. Instead of making Russia “lose Europe,” the United States may have overplayed its hand so badly that one can now think about the opposite prospect. The Ukraine adventure turn out to be the first step in the United States losing Europe. It may end up splitting European economic interests away from NATO, if Russia can convince the world that the epoch of armed occupation of industrial nations is a thing of the past and hence no real military threat exists – except for Europe being caught in the middle of Cold War 2.0.
For the U.S. geopolitical strategy to succeed, it would be necessary for Europe, Ukraine and Russia to act against their own potential economic self-interest. How long can they be expected to acquiesce in this sacrifice? At what point will economic interests lead to a reconsideration of old geo-military alliances and personal political loyalties?
The is becoming urgent because this is the first time that continental Europe has been faced with such war on its own borders (if we except Yugoslavia). Where is the advantage for Europe supporting one of the world’s most corrupt oligarchies north of the Equator?
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IMF loans are made mainly to enable governments to pay foreign bondholders and bankers, not spend on social programs or domestic economic recovery. Sovereign debtors must agree to IMF “conditionalities” in order to get enough credit to enable bondholders to take their money and run, avoiding haircuts and leaving “taxpayers” to bear the cost of capital flight and corruption.
The first conditionality is the guiding principle of neoliberal economics: that foreign debts can be paid by squeezing out a domestic budget surplus. The myth is that austerity programs and cuts in public spending will enable governments to pay foreign-currency debts – as if there is no “transfer problem.”
The reality is that austerity causes deeper economic shrinkage and widens the budget deficit. And no matter how much domestic revenue the government squeezes out of the economy, it can pay foreign debts only in two ways: by exporting more, or by selling its public domain to foreign investors. The latter option leads to privatizing public infrastructure, replacing subsidized basic services with rent-extraction and future capital flight. So the IMF’s “solution” to the deb problem has the effect of making it worse – requiring yet further privatization sell-offs.
This is why the IMF has been wrong in its economic forecasts for Ukraine year after year, just as its prescriptions have devastated Ireland and Greece, and Third World economies from the 1970s onward. Its destructive financial policy must be seen as deliberate, not an innocent forecasting error. But the penalty for following this junk economics must be paid by the indebted victim.
In the wake of austerity, the IMF throws its Number Two punch. The debtor economy must pay by selling off whatever assets the government can find that foreign investors want. For Ukraine, investors want its rich farmland. Monsanto has been leasing its land and would like to buy. But Ukraine has a law against alienating its farmland and agricultural land to foreigners. The IMF no doubt will insist on repeal of this law, along with Ukraine’s dismantling of public regulations against foreign investment.
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A generation ago the logical future for Ukraine and other post-Soviet states promised to be an integration into the German and other West European economies. This seemingly natural complementarity would see the West modernize Russian and other post-Soviet industry and agriculture (and construction as well) to create a self-sufficient and prosperous Eurasian regional power. Foreign Minister Lavrov recently voiced Russia’s hope at the Munich Security Conference for a common Eurasian Union with the European Union extending from Lisbon to Vladivostok. German and other European policy looked Eastward to invest its savings in the post-Soviet states.
This hope was anathema to U.S. neocons, who retain British Victorian geopolitics opposing the creation of any economic power center in Eurasia. That was Britain’s nightmare prior to World War I, and led it to pursue a diplomacy aimed at dividing and conquering continental Europe to prevent any dominant power or axis from emerging.
America started its Ukrainian strategy with the idea of splitting Russia off from Europe, and above all from Germany. In the U.S. playbook is simple: Any economic power is potentially military; and any military power may enable other countries to pursue their own interest rather than subordinating their policy to U.S. political, economic and financial aims. Therefore, U.S. geostrategists view any foreign economic power as a potentially military threat, to be countered before it can gain steam.
We can now see why the EU/IMF austerity plan that Yanukovich rejected made it clear why the United States sponsored last February’s coup in Kiev. The austerity that was called for, the removal of consumer subsidies and dismantling of public services would have led to an anti-West reaction turning Ukraine strongly back toward Russia. The Maidan coup sought to prevent this by making a war scar separating Western Ukraine from the East, leaving the country seemingly no choice but to turn West and lose its infrastructure to the privatizers and neo-rentiers.
But the U.S. plan may lead Europe to seek an economic bridge to Russia and the BRICS, away from the U.S. orbit. That is the diplomatic risk when a great power forces other nations to choose one side or the other.
Much of the West’s power comes from our financial hegemony. Our ability to cut people off from loans, payments and so on. Since this new system is Russian only, it isn’t, right now, that big a deal.
But start connecting other countries to it, say China, Iran, India and so on, and it becomes a way of breaking financial blockades. Include some calculable financial law (less of a challenge than it used to be as New York and London courts make increasingly punitive decisions), and start lending in Yuan (with which one can buy much of what one needs in the world, since the Chinese make so much of it), and you have a fully credible financial system.
The key is to get one major manufacturing country in. Most of the nations the West is punishing these days, financially, are oilarchies ( Venezuela, Iran, Argentina). They need the ability to buy manufactured goods. The obvious country is China. If China agrees to go in, Western financial hegemony is broken.
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Even before then there are deals which can be cut. Say Greece wants to buy Russian oil. Russia can lend them Rubles, the use those rubles to buy Russian oil, in exchange Russia gets use of Greek ships and ports and access to the EU.
This is, then, in one sense, not a big deal. As long as its only Russia, it’s a defensive move of somewhat limited utility.
But if it expands beyond Russia, well then, it’s earth-shaking.
Before the collapse of the Soviet Union, there was a two-world system. If you didn’t like the deal that US was offering you, you could go the USSR. If you didn’t like the deal Russia was offering you could go to the US.
While the US probably offered a better deal, especially in later years, you could have a pretty decent life as a client state to the Soviets. Cuba under Castro had a higher standard of living in practically every way than it did pre-Castro, when it was an American client state.
Equally, you could play the two off against each other, looking for the best deal. This made it harder for them to screw you over.
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So the creation of a Russian SWIFT, while woefully inadequate by itself, was a first step towards meeting one of the needs of a new bloc with rivals the West.
The linchpin nation in any new bloc would be China. China can credibly provide development, credit and consumer goods (they make much of them anyway.) But China will also need countries which can supply oil and raw materials: Russia, Venezuela, Iran, Argentina, and so on. Much of South America would rather sell food and raw materials to China (or Russia, or whoever) than to the US, because they remember, well, not being treated very well by America during and after the Cold War.
Russia’s military technology, while not as good as America’s, is good enough for most purposes, and China, as is usually the case, has vast amounts of shipbuilding capacity for those who want a navy. America’s space program is charging forward (mostly privately) but Russia still has plenty of lift capacity for satellites, and China is working hard on its space program.
The BRICS have created their own development bank, as well, so combined with an expansion of the new SWIFT, credit which can be used to buy almost anything you want, or need, will be available.
This, my friends, is the configuration in which the unipolar moment (which has lasted two and a half decades so far) ends.
It was always going to end, for all things do, the question was how soon. American actions have accelerated what should have taken a couple decades more, significantly, by marginalizing too many countries. Marginalizing or destroying the occasional country was acceptable, but the number marginalized is just too high, and they have too many resources. Combined with a great manufacturing nation, they have essentially everything they need: they don’t need the West.
And they may be wondering why they are paying intellectual property taxes (that’s what they are) and interest fees to the West, when the West clearly isn’t acting in their interest. Why have America and Britain gain all this, when they can reap the money themselves.
Oh, there are still some areas where the West is clearly ahead, from turbines to aerospace. But they tighten by the year, and they aren’t anything necessary any more. Virtually everything you want, save a few luxury items, you can get without America or Europe being involved.
The question now, then, is the timing and the exact events. But the broad outline is visible and will accelerate, because it is in too many countries self-interest.
You know, it’s one thing to think that somehow you can magically erase all your incriminating e-mails (and their back-ups, and the ones that ended up in people’s In-Boxes) but it’s just a whole other level of idiocy to contact the recipients of your e-mails and tell them to delete VIA E-MAIL!
There are multiple ways to handle a super-sensitive situation like this one. The following is none of them.
Far too many politicians and legislators aren’t happy with the fact that their emails are subject to public records requests. Some attempt to dodge this layer of accountability by using personal email accounts to handle official business. Oregon governor John Kitzhaber is one such politician.
Rumors of possible influence peddling led to this public records request. Kitzhaber’s last-minute attempt to set fire to his email legacy doesn’t exactly plant a halo over his head, seeing as it came one day before the Oregon DOJ opened up an investigation into these allegations. But he might have gotten away with it if only his own executive assistant hadn’t completely sabotaged the coverup.
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There has been no word as to whether Kitzhaber required emergency surgery to remove his face from his palm after his assistant informed him that she had EMAILED orders to delete his EMAILS to EMAIL accounts that were subject to open records requests.
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The lesson here is: if you want to run a successful coverup, you need to make sure you’ve got more than one person on board with your plan. And you need to make sure that one person won’t cheerfully pitch in with “help” that only hurts.
Among other allegations, Kitzhaber is accused of steering contracts to his fiancee’s environmental consulting firm. His fiancee, Cylvia Hayes, is accused of using public office to further private interests.
In the past two weeks, the Oregonian learned that close associates of Kitzhaber may have attempted to “make jobs” for Hayes. The paper called for the governor’s resignation. Adding to an ongoing Oregon government ethics commission investigation, the state attorney general, Ellen Rosenblum, launched a criminal investigation into Kitzhaber’s administration and Hayes’s role within it.
It’s not amazing that politicians can be bought, what is amazing is how incredibly inexpensive they are.
President Obama conceded that TPP won’t live up to even a minimal labor goal when he made the rhetorical statement that organized labor wants union recognition in Vietnam or open markets in Japan, replying, “well, I can’t get that for you.” (indeed, the U.S. just dropped their effort to require Japan to open their auto markets in the deal, something that has led to the displacement of over 800,000 jobs). He says that the best possibility is to make something somewhat better than the status quo. But Obama is a terrible messenger for this message, having spent six years presiding over and passing trade agreements that fit neatly into that status quo, and of course remaining mute on the real goals of TPP: expanding corporate power over sovereign countries. And an incremental improvement won’t alter the balance of power between the U.S. and China, which Obama says is his overall goal.
But the most amazing part of Obama’s pitch on new trade deals is this statement: “Those experiences that arose over the last 20 years are not easily forgotten, and the burden of proof is on us, then, to be very transparent and explicit in terms of what we’re trying to accomplish.”
Maybe Obama didn’t realize he was talking about one of the most secretive major policy deals in recent history. Most of what we know about the TPP has come from leaked texts, with periodic bombshells like the impact on copyrights, prescription drug access and even financial regulation. The public has no access to the text, and members of Congress can only view it in the U.S. Trade Representative’s office, without staff members or experts, and without taking copies with them. The European Union recently published the entire text of a proposed U.S.-Eurozone trade agreement under negotiation, but the U.S. hasn’t come close to this level of transparency.
You’d think that, before Obama would say that his Administration must be transparent to the public in describing the benefits of free trade, he would at least share even a few lines of the text with the public. The TPP has been marked only by secrecy.
So the Administration case for the TPP is incredibly weak, based on “trust-us” arguments from those who haven’t earned that trust, who won’t discuss the real issues and who argue for transparency while hiding the true agenda. But the combination of a media that generally depicts anything with the word “trade” in it as a universal good, and a Republican Party hungry to reward their corporate funders, means that Obama’s arguments don’t have to be good to be successful.
Recognizing that claims of substantial growth don’t stand up to scrutiny, boosters of TTIP in Europe have resorted to a fallback technique: anecdote. If you can’t prove something is good in general, show that it will be good for someone — anyone — and then extrapolate. Of course, that means you need to find an example of an industry that would definitely benefit from a US-EU trade agreement. An EU document on regulatory harmonization (pdf) from September 2013 gave a strong hint of which that might be.
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It is striking how the anecdotal stories about the various ways in which the automotive industry would benefit from TAFTA/TTIP have become even more widespread recently. Here’s the British MP John Healey, one of the main cheerleaders for TTIP in the UK, writing in October 2014 about the “potential gains” of the agreement. Guess which example he chooses?
Negotiators have been made well aware [PDF] that there is no economic rationale that can justify this extension. The fact that they have chosen to ignore what is a clear consensus among economists points to the fact that this agreement has not been driven by reason, but by the utter corruption of the process by lobbyists for multinational entertainment conglomerates, who have twisted what is notionally a trade negotiation into a special interest money-grab. After all of the trouble that public interest advocates have gone to educate negotiators about the folly of term extension, the fact that they have gone ahead anyway is the last straw for us. We’ll now be pulling out all the stops to kill this agreement dead.
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The White House justifies TPP by claiming it will promote economic growth and create jobs. But the continued enclosure of culture under exorbitant copyright terms would have the opposite effect. Creators who want to build new culture out of the shared building blocks of the public domain have to wait ever longer and use more and more distant and obscure materials. We squander the promise of the Internet and digital tools promise to make it more possible to make, sell, and distribute creative works if we cut out the common resources artists and authors would use to build them.
The copyright term extension provisions in TPP embody everything that is wrong with the TPP’s digital policy rules, namely that the rules are put there for and by corporate interests that are privy to these secret negotiations, at the expense of users and the public interest. If TPP passes with these copyright terms, the agreement will be pointed to as a standard for “copyright protection”, when in fact, they are just the result of lobbying from big corporate interests who got such laws passed in the US. TPP is just the latest vehicle for copyright policy laundering, and now more than ever, we need to stop it all costs.
The US is pushing for a broad definition of a criminal violation of copyright, where even noncommercial activities could get people convicted of a crime. The leak also shows that Canada has opposed this definition. Canada supports language in which criminal remedies would only apply to cases where someone infringed explicitly for commercial purposes.
This distinction is crucial. Commercial infringement, where an infringer sells unauthorized copies of content for financial gain, is and should be a crime. But that’s not what the US is pushing for-it’s trying to get language passed in TPP that would make a criminal out of anyone who simply shares or otherwise makes available copyrighted works on a “commercial scale.”
As anyone who has ever had a meme go viral knows, it is very easy to distribute content on a commercial scale online, even without it being a money-making operation. That means fans who distribute subtitles to foreign movies or anime, or archivists and librarians who preserve and upload old books, videos, games, or music, could go to jail or face huge fines for their work. Someone who makes a remix film and puts it online could be under threat. Such a broad definition is ripe for abuse, and we’ve seen such abuse happen many times before.
Fair use, and other copyright exceptions and limitations frameworks like fair dealing, have been under constant attack by rightsholder groups who try to undermine and chip away at our rights as users to do things with copyrighted content. Given this reality, these criminal enforcement rules could go further to intimidate and discourage users from exercising their rights to use and share content for purposes such as parody, education, and access for the disabled.
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Like the various other digital copyright enforcement provisions in TPP, the criminal enforcement language loosely reflects the United States’ DMCA but is abstracted enough that the US can pressure other nations to enact rules that are much worse for users. It’s therefore far from comforting when the White House claims that the TPP’s copyright rules would not “change US law”-we’re still exporting bad rules to other nations, while binding ourselves to obligations that may prevent US lawmakers from reforming it for the better. These rules were passed in the US through cycles of corrupt policy laundering. Now, the TPP is the latest step in this trend of increasingly draconian copyright rules passing through opaque, corporate-captured processes.
These excessive criminal copyright rules are what we get when Big Content has access to powerful, secretive rule-making institutions. We get rules that would send users to prison, force them to pay debilitating fines, or have their property seized or destroyed in the name of copyright enforcement. This is yet another reason why we need to stop the TPP-to put an end to this seemingly endless progression towards ever more chilling copyright restrictions and enforcement.
“There’s so many similarities between the Lynch nomination and the Carter nomination,” said Sen. Chuck Schumer (D-N.Y.), one of Lynch’s biggest boosters. “And to move Carter so quickly and to slow down Lynch is very troublesome, and I think they ought to move her ASAP.”
One reason for the lag on Lynch is that after Obama nominated her in November, Senate Democrats agreed to postpone her confirmation into the new Republican-led chamber at the GOP’s request. Democrats meant it as a gesture of goodwill, and they also believed Lynch would be confirmed in either a Democratic- or GOP-controlled Senate.
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Under the committee’s rules, any senator can ask for business, such as consideration of a nominee, to be held over for one week – a practice that doesn’t have to be deployed but has become routine. Lynch is officially on the agenda for Thursday, but Republicans have already said she’ll be held over, which means a vote will be delayed until after the recess. So the next opportunity for a committee vote will be Feb. 26.
Media and political elites singled out Dr. Martin Luther King as the favored face of what they called the civil rights movement before his 30th birthday. They awarded him the Nobel Peace Prize at the age of 36, but shunned and denounced him in the final year of his life when he condemned not just racism, but economic injustice at home and imperial war abroad. King’s death at only 39 enabled the US elite to construct their own useful tool, the Dreamer, who is the Martin Luther King we mostly hear about today.
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Lynch did her undergrad and law school at Harvard. She went from there to the prestigious NY firm Cahill Gordon & Rendall, the folks who represent Bank of America, Merril Lynch, Barclays, Citigroup, Credit Suisse, JP Morgan, Wells Fargo and the like.
Lynch served her first term at the Justice Department co-chairing something called the White Collar Crime Subcommittee. But you won’t hear Lynch bragging about how many white collar criminals, fraudulent bankster, predatory speculators and greedy CEOs she’s locked up. Departments of Justice under both Democrats and Republicans simply don’t much go in for that kind of thing. It seems the only thing that qualified Lynch for a “White Collar Crime Subcommittee” was her expertise in advising and defending the few white collar criminals who got close to seeing the inside of a courtroom.
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At the beginning of the Obama administration there was an urgent need for Lynch’s unique talents. Greedy speculators, banksters and hedge fund sharpies had crashed the US economy in 2007, leading to millions of foreclosures and the most catastrophic loss of black family wealth since the US began measuring it. But banking, insurance and finance had been the incoming administration’s biggest contributors. So Loretta, the “white collar crime specialist” answered the call to protect the pillagers and perps who made her career, and the Obama administration possible.
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That’s her specialty, that’s who and what she is. Loretta Lynch is the lawyer who writes the fine print on the “get out of jail free” cards the Justice Department hands out to banksters, speculators and too-big-to-jail CEOs. She’s the vicious federal DA who prosecuted thousands of poor defendants on petty drug charges eacn month, but ignored the official crimes of NYPD excepting a single case that put tens of thousands of New Yorkers in the street. Lynch sees nothing wrong with the NSA harvesting everyone’s email, phone and other communications, she has no problem with the president ordering the drone murder of US citizens or foreigners, whoever, and is not interested in lowering the prison population, curbing asset forfeitures, or restraining and demilitarizing the police.
Those who imagine that there’s some virtue in having black faces in high legal places need to ask why black lawyers who file suits against corporate polluters, who defend the victims of police torture and abuse, who represent the evicted and afflicted, who expose the abuses and war crimes of the CIA, NSA and the Pentagon are never considered for leading roles at the Department of Justice. In his day, Thurgood Marshall defended scores of people accused of capital crimes. This alone would disqualify him from the federal bench nowadays. Like Eric Holder, Loretta Lynch has never represented anyone facing eviction or dispossession. She has never sued a polluter or a violator of human and civil rights. She’s pro-death penalty, anti-marijuana legalization, and as far as we know, has never defended a poor person accused of a crime.
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But those with eyes open know who Loretta Lynch is. She’s Condoleezza Rice with a law degree. She’s a corporate fixer and enabler. She’s a vicious prosecutor and a soulless corporate operative. She’s a black woman, and likely the next US Attorney General.
Every (advanced) country has realized that making capitalism work requires giving individuals a fresh start. The debtors’ prisons of the nineteenth century were a failure – inhumane and not exactly helping to ensure repayment. What did help was to provide better incentives for good lending, by making creditors more responsible for the consequences of their decisions.
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The idea of bringing back debtors’ prisons may seem far-fetched, but it resonates with current talk of moral hazard and accountability. There is a fear that if Greece is allowed to restructure its debt, it will simply get itself into trouble again, as will others.
This is sheer nonsense. Does anyone in their right mind think that any country would willingly put itself through what Greece has gone through, just to get a free ride from its creditors? If there is a moral hazard, it is on the part of the lenders – especially in the private sector – who have been bailed out repeatedly. If Europe has allowed these debts to move from the private sector to the public sector – a well-established pattern over the past half-century – it is Europe, not Greece, that should bear the consequences. Indeed, Greece’s current plight, including the massive run-up in the debt ratio, is largely the fault of the misguided troika programs foisted on it.
So it is not debt restructuring, but its absence, that is “immoral.” There is nothing particularly special about the dilemmas that Greece faces today; many countries have been in the same position. What makes Greece’s problems more difficult to address is the structure of the eurozone: monetary union implies that member states cannot devalue their way out of trouble, yet the modicum of European solidarity that must accompany this loss of policy flexibility simply is not there.
Seventy years ago, at the end of World II, the Allies recognized that Germany must be given a fresh start. They understood that Hitler’s rise had much to do with the unemployment (not the inflation) that resulted from imposing more debt on Germany at the end of World War I. The Allies did not take into account the foolishness with which the debts had been accumulated or talk about the costs that Germany had imposed on others. Instead, they not only forgave the debts; they actually provided aid, and the Allied troops stationed in Germany provided a further fiscal stimulus.
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Seldom do democratic elections give as clear a message as that in Greece. If Europe says no to Greek voters’ demand for a change of course, it is saying that democracy is of no importance, at least when it comes to economics. Why not just shut down democracy, as Newfoundland effectively did when it entered into receivership before World War II?
One hopes that those who understand the economics of debt and austerity, and who believe in democracy and humane values, will prevail.
Not from here of course, all we ask is that people get preapproved if they want to write about I/P and that you refrain from stalking, harrassment (bullying), hate speech, and outing, otherwise you can insult my intelligence and your fellow readers to your heart’s content because blogging is not crochet and best bring your sharpest needles and thickest skin if you want to play.
I recall a different time (2009) and a different place that is now a shadow of what it once was. Barack Obama and his Administration had just decided to withold thousands of photographs of prisoner abuse and torture from Abu Ghraib and other sites under U.S. control.
The United States government has been given a week to appeal or comply with a federal judge’s order to provide a justification for why approximately 2,100 photographs of torture and abuse of prisoners must remain secret.
The American Civil Liberties Union has pursued the release of records related to detainee treatment and “the death of prisoners in United States custody and abroad after September 11, 2001, since October 2003.
In October 2009, the Protected National Security Documents Act (PNSDA) amended the Freedom of Information Act (FOIA) to “provide that photographs could be made exempt from disclosure for a three-year certification by the Secretary of Defense to the effect that publication would endanger American lives.” Prime Minister Nouri al-Maliki asked President Barack Obama not to release photographs of detainees abuse, for “fear of the consequences.” Secretary of Defense Robert Gates filed a certification to prevent the release of photographs and the court upheld that certification.
Three years later, Secretary of Defense Leon Panetta renewed the certification, even though US troops had withdrawn and the war in Iraq had been declared over.
Judge Alvin Hellerstein found that Panetta’s certification failed to show why the release of the photos would continue to “endanger the citizens of the United States, members of the United States Armed Forces or employees of the United States Government deployed outside the United States.” He ordered the government in August 2014 to go through each of the photos and explain why they should not be released.
On February 4, Hellerstein informed the government he was skeptical of Panetta’s reclassification. He had already seen a small sample of the photos and did not think a national security exemption covered many of the photos he reviewed, according to The Guardian. He requested the government put forward a plan for assessing each individual photo to justify withholding them from the public.
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According to The Intercept, government lawyers invoked the Islamic State’s use of past abuses to justify executions of hostages. A government lawyer stood in court and argued the government had already fulfilled its obligation to “review” the photos when associate deputy general counsel in the Department of the Army, Megan Weis, was designated in 2012 to look at the photos on Panetta’s behalf.
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Hellerstein was not satisfied with this process.
The judge said he would be willing to go through the photos one by one in a closed session with the government. The government could explain why each one had to remain secret. But, at one point, Hellerstein added, “I did not enjoy seeing the pictures the first time. I would not want to see them again.”
He did not believe any threat posed by the Islamic State was justification for secrecy. Newsweekreported Hellerstein contended soldiers and citizens were as “exposed” as they were when the court favored release in 2005.
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When Obama refused to release the photos in 2009 and responded to criticism, one of his remarks in defense of the decision was that they were not “particularly sensational.”
Journalist Jason Leopold reported last year that documents from the Defense Department show the photos come from “203 closed criminal investigations into detainee abuse in Afghanistan and Iraq.”
The Defense Department had actually planned to “mitigate the threat to security and political stability” by offering apologies to “regional partners” and “audiences who find [the] images humiliating.”
The photos the government are afraid of releasing depict scenes such as soldiers zip-tying Iraqi detainees to bars in stress positions, a soldier pointing a pistol at a prisoner tied up with his head covered while lying on the ground, a dead Afghan national shot and killed and a female soldier holding a broom near a detainee as if she was going to stick it into his rectum.
Leopold’s report suggested the soldiers had wanted to hold on to these photos as “mementos.”
Like all court orders where judges refuse to show the utmost deference to the government’s secrecy arguments, the government does not think the court is correctly interpreting the law passed to effectively help the Pentagon conceal embarrassing photos. However, PNSDA clearly says the Secretary of Defense must issue a certification for a photograph. It does not refer to photographs collectively. So, a process that attempts to justify blanket certification for secrecy is not in line with the law.
The judge may decide that all or most of the photos should remain secret, but the judge has decided he will not defer to the government when it is not doing what the law says the Defense Department is supposed to do.
Hmm…
When Obama refused to release the photos in 2009 and responded to criticism, one of his remarks in defense of the decision was that they were not “particularly sensational.”
The photos the government are afraid of releasing depict scenes such as soldiers zip-tying Iraqi detainees to bars in stress positions, a soldier pointing a pistol at a prisoner tied up with his head covered while lying on the ground, a dead Afghan national shot and killed and a female soldier holding a broom near a detainee as if she was going to stick it into his rectum.
The proximate cause of my banishment was that I said that people who wanted to suppress these images were no better than the “Good Germans” who ignored the evidence of the Nazi Death Camps and when a particular member objected to that characterization I said that he too was behaving like a “Good German”.
I put it to you, gentle reader, how much acumen is required to ignore the trains arriving full of humans every day and leaving empty? How insensate do you have to be to consume your dinner downwind of the stench of decay and the stink of burning flesh that you can claim not to know what crimes your leaders are committing in your name?
Or are you also worried that the irrefutable evidence of this will inflame the victims’ sentiments?
Why should they not be inflamed at this injustice? What kind of excuse is that?
After slightly less than 2 years I was reinstated. I never apologized, I have nothing to apologize for. I was later banished again for defending a rape survivor against a drunken bully, but that’s another story.
The man who built the free email encryption software used by whistleblower Edward Snowden, as well as hundreds of thousands of journalists, dissidents and security-minded people around the world, is running out of money to keep his project alive.
Werner Koch wrote the software, known as Gnu Privacy Guard, in 1997, and since then has been almost single-handedly keeping it alive with patches and updates from his home in Erkrath, Germany. Now 53, he is running out of money and patience with being underfunded.
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Koch’s code powers most of the popular email encryption programs GPGTools, Enigmail, and GPG4Win. “If there is one nightmare that we fear, then it’s the fact that Werner Koch is no longer available,” said Enigmail developer Nicolai Josuttis. “It’s a shame that he is alone and that he has such a bad financial situation.”
The programs are also underfunded. Enigmail is maintained by two developers in their spare time. Both have other full-time jobs. Enigmail’s lead developer, Patrick Brunschwig, told me that Enigmail receives about $1,000 a year in donations – just enough to keep the website online.
GPGTools, which allows users to encrypt email from Apple Mail, announced in October that it would start charging users a small fee. The other popular program, GPG4Win, is run by Koch himself.
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For almost two years, Koch continued to pay his programmer in the hope that he could find more funding. “But nothing came,” Koch recalled. So, in August 2012, he had to let the programmer go. By summer 2013, Koch was himself ready to quit.
But after the Snowden news broke, Koch decided to launch a fundraising campaign. He set up an appeal at a crowdsourcing website, made t-shirts and stickers to give to donors, and advertised it on his website. In the end, he earned just $21,000.
The campaign gave Koch, who has an 8-year-old daughter and a wife who isn’t working, some breathing room. But when I asked him what he will do when the current batch of money runs out, he shrugged and said he prefers not to think about it. “I’m very glad that there is money for the next three months,” Koch said. “Really I am better at programming than this business stuff.”
Yesterday, we reposted Julia Angwin’s article from ProPublica about how the guy behind GPG, a key tool for email encryption, Werner Koch, was basically broke, and that attempts to crowdfund money to keep going hadn’t been all that successful. The story seemed to resonate with lots of people, and the donations started flowing. After getting a grand total of just about €34,000 in 2014, he’s already well over €100,000 this year, with most of that coming yesterday after Angwin’s story went up. On top of that, Stripe and Facebook each agreed to fund him to the tune of $50,000 per year (from each of them, so $100k total), and the Linux Foundation had agreed to give him $60k (though, Koch admits that the deal there was actually signed last week).
Either way, this is great to see, though it’s unfortunate that it had to wait until an article detailing his plight came out.
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It really is quite incredible when you realize how much of the internet that you rely on is built by people out of a true labor of love. Often, people have no idea that there even is an opportunity to support those projects, and it’s great that Angwin was able to highlight this one and get it the necessary funding to keep moving forward.
More documents have been yanked out of the NSA’s hands, thanks to a New York Times FOIA lawsuit. The documents are from 2007, and they further detail the agency’s warrantless surveillance program which swept up not only phone numbers but also email addresses and content. The program wasn’t actually legal at the time it rolled out. It took the FISA Amendments Act of 2008 to codify this. In the meantime, the agency used interim legislation (2007’s Protect America Act) and some hubris to enhance its haystacking business.
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Rather than use the standard definition of a “facility” — that being a base of operations — the NSA chose to read it as an impossible combination of noun and verb. An email address is a “facility” because it “facilitates communications.” Vinson wasn’t too impressed with this, or the fact that the application didn’t contain much in the way of probable cause. As he noted, the NSA’s intention was to collect both sets of data in bulk, far from the targeted surveillance it attempted to portray in its application.
The May 2007 order (also by Roger Vinson) shows that the NSA found a way to get its aims accomplished, despite Vinson’s reluctance. A “new legal theory” was offered by the agency in an amended application and buttressed by Keith Alexander’s declaration that it was all totally legal.
Unfortunately, the order doesn’t detail the NSA’s legal theory, or at least not in any visible way. Vinson’s musings on the NSA’s Plan B turns out to be a bunch of wasted typing. His declaration that on the “basis of facts submitted by the applicant, there is probable cause to believe that…:” is followed by four completely redacted pages.
Following that, Vinson authorizes the NSA’s “roving, multipoint” surveillance, based on the opinion that Congress would have authorized that (and apparently pretty much anything else it may or may not have conceived of) considering the “Government’s national security interests are so great.” This rationale again. And again, presented by an agency whose livelihood depends on the depiction of security threats as perennially “great” and everlasting. Vinson also agreed to contact-chaining using these numbers and email addresses as selectors.
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And so, the domestic surveillance that wasn’t (this order — and past ones — draws a very clear line between foreign targets and known US persons) becomes a handy tool for domestic surveillance. As the court notes earlier in the order, because of where the communications and data are collected, there’s no real way to separate US/non-US data without digging through the collection. When it’s discovered, minimization procedures are to apply — except, apparently, if it can hand the data/communications off to the FBI. (The CIA, on the other hand, gets everything, domestic or foreign, apparently only subject to the NSA’s discretion.)
Again, this entire line of surveillance still hadn’t been determined to be completely legal. It took the FISA Amendments Act to codify this particular program. Despite that, it was approved anyway, thanks to the NSA’s willingness to explore as many legal theories as necessary in order to secure the FISA judge’s approval.
That’s the problem with these two orders. We don’t get to see the NSA’s legal wranglings. Those are redacted. And what is actually revealed doesn’t explain much. The May 2007 order notes that the NSA’s arguments are still on shaky ground and the earlier (and much longer) April order handles the entirety of the agency’s legal discussions on its contact-chaining of unrelated “facilities” in a single paragraph.
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Simply mentioning a targeted email in the body of an email message is enough “probable cause” for the FISA court, which goes on to note that it’s perfectly OK (in the search for supporting probable cause) for the agency to read nearly any communication that crosses its desk, provided it’s within a step or two of its selectors.
The NSA didn’t get to where it is today overnight. It took a decade of legal wrangling and the steadfast assertion that the terrorist threat to the US is just as strong as it was September 10, 2001. With the assistance of obliging courts and sympathetic legislators, the NSA has become a data and communications behemoth, sucking in vast quantities of both from all over the world.
